Nykode Therapeutics AS (NYKD) Earnings Call Transcript & Summary

Greetings, and welcome to the Nykode Therapeutics Q2 2026 Financial Results Presentation. [Operator Instructions] As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to CEO, Michael Engsig. Please go ahead, sir.

Thank you very much, Kevin, and also from my side, a very warm welcome, and good morning to all participants on this quarterly results presentation. We assume you are familiar with our forward-looking statements. And on that note, we'll move forward. As usual, I am very pleased to have with me here today, Agnete Fredriksen, our Co-Founder and Chief Scientific Officer and Head of Business Development; as well as Harald Gurvin, our CFO. For those not familiar with Nykode, just a few words on the company. Nykode is a clinical-stage immunotherapy company with a focus on oncology and autoimmune diseases. Our lead asset is abi-suva, a therapeutic cancer vaccine targeted against HPV16-driven cancer types. We have encouraging results across 3 different indications, 3 trials with close to 100 patients in total, which gave us the confidence to move into the first randomized Phase II trial in first-line head and neck, which is ongoing and called Abili-T, on track to deliver the first interim results in 2027. Our second clinical asset is VB10.NEO, which is an individualized neoantigen therapy. We saw some very important validating results from the field last week, and we'll, of course, be discussing that more in depth at this call here. We have clinical data from VB10.NEO from more than 10 tumor types. And based on the manufacturing process, which, of course, around pDNA as the rest of our technology, we do feel that we have a much simpler manufacturing process, which compared to the mRNA will support a competitive COGS and turnaround time at commercial stage. Furthermore, we have, over the years, developed an AI-driven target selection, which we also believe strongly will add to the competitive edge of VB10.NEO. The strategy for VB10.NEO has been to position ourselves as the most attractive unencumbered asset or INT asset in the area, to leverage the type of validating data that we saw last week. Third asset is our tolerance platform, which is right now focused on autoimmune diseases, utilizing the same technology as we use in the cancer vaccines currently in preclinical stage. We're strongly capitalized with a runway into 2028, which can be extended to 2029 pending the outcome of the tax case. Very briefly on the highlights before I hand over the word to Agnete. It's been another interesting period. Starting from the back, last week, we saw what we consider probably the most important cancer vaccine data ever when Moderna came out with positive Phase III data for their individualized neoantigen cancer vaccine, which clinically validated not only individualized cancer vaccines, but we feel in general, all cancer vaccines. So that means also the off-the-shelf. And we'll have Agnete discuss that in more details in a few seconds. We also showcased our data at the Neoantigen Summit in July from the Neo asset. And we will also have Agnete say a little bit more about that when she goes through it. Finally, we also disclosed we have a new patent granted for VB10.NEO, which further solidifies the IP protection around our asset. Finally, I just want to highlight that our Abili-T trial, the randomized Phase II trial with abi-suva in first-line head and neck is progressing as planned, which brings us online for an interim result in 2027. I will just say a few words on that a little bit later in this call again. With those words, I'm going to hand over to Agnete to take us through an update on VB10.NEO.

Thank you, Michael. And you may notice that we start off with Neo today on the back of the very exciting news from Moderna and Merck last year. For those of us that have worked in cancer vaccines for decades, we have been waiting for this moment to see what we expect will be the first approval of a cancer vaccine ever. So first, I'm going to just remind you a little bit of individualized neoantigen therapy as a class. It's a personalized cancer vaccine targeting specific mutations found in the tumor of the patient. So we identified these by sequencing the tumor and compared to healthy tissue from the same patient and identify these neoantigens, which are tumor-specific mutations can also be fully patient-specific. So the INT platform means it is fully personalized per patient. That also means you need to manufacture 1 vaccine per patient, which makes the algorithm-driven neoantigen selection part very important and that you have a validated method in order to find the relevant neoantigens. It's also important that the manufacturing process is less complex as possible, so it can be scaled to expand into multiple tumor indications at a stage that can be competitive commercially both on turnaround time and also cost of goods. As individualized neoantigen therapy basically takes a tumor sample from the patient, you can do that no matter which tumor type. And that means this therapy can be applicable across solid tumors wherever you can find mutations. Importantly now, the first trial that we've seen been successful now with Merck and Moderna INterpath trial is in melanoma adjuvant setting early stage where you have surgically removed the tumor and then vaccinated to delay or prevent recurrence. When you treat patients at this early stage, there is obviously a high patient number, but it's also important that the treatment can combine, can have a nice safety profile and combine effectively with whatever other immunotherapies that will be given in that time period for each indication. First, a little reminder on what we saw last week. The readout of the Phase III INterpath-001 trial, which is the first Phase III trial of any cancer vaccine and in principle, individualized cancer vaccine in patients, as I mentioned, that is in the locally advanced or adjuvant setting. This first one is in melanoma patients in adjuvant setting, Stage 2b to 4. It's more than 1,000 patients enrolled in the trial. And we saw with the very first readout that they already met the primary endpoint, which is the recurrence-free survival. They also already announced that they met one of the key secondary endpoints, which are distant metastasis-free survival. So these data seem very impactful. We expect to see all the data in detail at the conference later, most likely at ESMO. Importantly, without seeing the data, they announced that both MSD and Moderna will jointly pursue regulatory approval on the back of these results, which means we are most likely looking at the first cancer vaccine being approved for commercial use. So this is a big change for the cancer vaccine field. Cancer vaccines are now suddenly derisked as a modality. And now, it's about finding the right setting and the right technology that can support competitive commercial case across lots of different indications. We will see more data coming out now in the future, both in early-stage locally advanced adjuvant setting. Also some data will read out in the future in the first-line setting. So we will see the breadth of the potential for cancer vaccines. Then again, it's for us also important that this not only validates individualized neoantigen therapies, but also off-the-shelf cancer vaccine. For individualized, there are 2 important points in order to be competitive and build the best commercially attractive case in as many indications as possible. One of them comes from the technology. It's really important that you have this target selection that can work across indications, also those indications where there are few tumor mutations and technology that can elicit immune responses against the sufficient breadth and quality that can correlate with clinical outcome. And obviously, also, as I said, safety reactogenicity that permits combinations with a range of standard of care. Another very important part here is economics per patient manufacturing turnaround time and cost of goods will have a much bigger role of the attractive case when it comes to an individualized therapy than an off-the-shelf. So this is going to be super important here. VB10.NEO is unencumbered. It's clinically validated individualized neoantigen therapy. Nykode was one of the first companies, biotech companies that went into the clinic with individualized neoantigen therapy already in 2018. Neoantigen selection platform is something we have used from the beginning as a proprietary wholly owned, wholly developed neoantigen selection platform. We've also proven that, that works. We can use that to identify neoantigens in more than 10 different tumor types, and that includes indications with low tumor mutational burden. We do manufacture and provide this as a plasmid DNA vaccine, which is per definition, a manufacturing process with fewer steps, which should give faster turnaround time and lower cost of goods. And we believe that VB10.NEO then will be very attractive for this kind of therapy and capture the broad potential of the market. So going a little bit back to the data we have with VB10.NEO. You know our technology, we incorporate the neoantigens in the antigenic unit per patient and it's linked to our dimerization and targeting unit. Compare this as you see to the right, we can identify a stronger immune response against the set of neoepitopes here shown for the MC38 model. And we have clinical experience with VB10.NEO across 2 trials, both basket trials, both in late-stage cancer patients we have been able to show that our neoepitope selection algorithm that we call NeoSELECT systematically prioritizes the most immunogenic neoantigens even within the, up to 20 neoepitopes that we include in the vaccine is in principle the #1 that is the strongest immune response, eliciting a strongest immune response in the clinic compared to #20. We have not seen that with other trials. To our knowledge, we also reported a correlation between immune responses against the neoantigens in the vaccine and overall survival. To our knowledge, we're the only one that has shown this. It's, what's shown here is even in those patients with low baseline immune response and those then in this group that elicits strong immune responses against the neoantigens in the vaccine also do survive longer. When it comes to the manufacturing process, we have worked for multiple years on the manufacturing process with a set of selected providers that are distributed around the world. So even with this setup and all the experience we gained, we have reduced the manufacturing turnaround time from 18 weeks in the beginning to lower and lower across the clinical experience. And since we got the product back, we have some key improvements that now gives us a current optimized manufacturing process with the setup that we have with less than 6 weeks that includes drug substance and drug product manufacturing processes has now been consolidated under one roof, which is important for optimized slot utilization and shipment time lines. We have improved DNA isolation methods and optimized DNA plasmid synthesis process. And this has led us now to a less than 6-week manufacturing process time. And then we know we are still working with multiple providers and that includes shipments and it include weekends, et cetera. So further development of a simple more consolidated in-house process with removal of all these holding steps can give us a clear path to 4-week manufacturing time. So we're already competitive at this stage and should be competitive with the further optimization that will be very logical to implement before commercial use. And to support the cost of goods statements, when you look at the number of steps in manufacturing plasmid DNA compared to mRNA, there are just simply fewer steps in the manufacturing process, which supports why we strongly believe this would lead to a shorter turnaround time and cost of goods just by the fact that we do plasmid DNA. We are very happy with where we are and with the clinical data and the stage of the program, we have still, we are still an innovative company, and we have worked over the last period with further improvements of our APC-targeted technology platform. And you can see here some of the data generated over the last year, where we are able to find improvements that can even further enhance the immune responses against also here in the neoantigen context. So these can be important for even further competitive edges in the future across different indications. So to sum up, it has been an emotional week for Nykode when it comes to the strong now validation of cancer vaccines in general, but also giving us all this confidence back on the individualized neoantigen therapy and VB10.NEO in particular. We have 2 completed trials actually across certain different tumor types, including tumor types with low tumor mutational burden. We have seen between [ 88% ]and also in the latest trial, 100% of the patients responding with immune responses to our vaccine even in late-stage cancer. And it does have a very clean safety profile, not only safety, but also very low reactogenicity. Interestingly enough, the immune responses that we see also correlate with overall survival from what we can see with the basket trials. So to our knowledge, that is unique to this class. And not to forget competitive manufacturing turnaround, competitive manufacturing turnaround already less than 6 weeks, 100% batch success, simpler manufacturing process compared to mRNA and good timing by the U.S. patent now also extending into a broader protection potential against our construct. Then I hand back to you, Michael. Abi-suva is still super important, although we are enthusiastic about VB10.NEO as well.

Certainly, Agnete, thank you very much for that review. We'll do, keep it short on abi-suva this time here. As you all know, our current focus for abi-suva is on first-line head and neck and head and neck cancer does represent a very sizable patient population with more than 60,000 new cases of HPV16-driven head and neck cancers across the EU and U.S. every year. The unmet medical need is still significant for this patient population with only 1 in 5 patients actually responding to the standard of care and the median overall survival no longer than 12 months for the standard of care. Furthermore, although head and neck does receive a lot of attention right now across the field of drug developers, the main bulk of drug candidates in development for head and neck are actually focused on the HPV negative population. So here, we are targeting a population that is not well served or addressed by current drugs in development. Finally, we are looking forward at an expected future significant growth in the HPV16 head and neck cancer cases and a very attractive projected market increase for the next decades. Worthwhile noting is this is not the only area for potential area for abi-suva. There is also very sizable patient populations, particularly in the cervical cancer that can be addressed. Right now, our focus is on first line. But if we also start looking towards the early-stage settings, the locally advanced to the adjuvant, then the potential increases even more. This, of course, is something we will have in mind as we plot the future for abi-suva going forward. Most important activity in abi-suva right now is, of course, our randomized Abili-T trial, Phase II trial enrolling up to 100 patients and randomizing into 2 arms. The experimental arm is abi-suva in combination with pembrolizumab, which is the standard of care in this patient population. The other arm, the control arm is pembrolizumab alone. And we will be assessing objective response rate and progression-free survival as the co-primary endpoint in this trial. The protocol is now approved in 8 European countries, so 7 EU and on top of that U.K. The first patient was enrolled in Poland in May 2026. And since then, the patient enrollment have further expanded across additional sites in the U.K., Spain and France. So we do see progress as planned in this trial. Focus going forward is, of course, to further expand the number of sites and countries. We do expect to add 2 to 3 additional countries to the list and ensure that we have full engagement and motivation from our investigators across these countries. All in all, we are still on line, our target for an interim readout in 2027. And we'll, of course, keep you updated further as we get a better view on when in 2027, we can expect to see these data. We have also started looking in particular on the back of the Moderna data last week, we feel further encouraged to that. We've started to look into exploring abi-suva in a locally advanced setting. We believe there is a huge potential for abi-suva in that setting also. More on that later. Just a very few words on tolerance, our third asset and the ASIT platform that we feel represents an entirely new approach to treating autoimmune diseases. It relies on the same core technology, so targeting of the antigens to the antigen-presenting cells, which is also in autoimmune diseases, a key regulator of the immune response. And for our ASIT platform, we have adapted our technology to restore the immune tolerance in the autoimmune diseases, which we believe is a key to addressing autoimmune diseases going forward. We are progressing the ASIT platform forward towards the first clinical development program, and we will be guiding you more on that path in the coming period. With those words, I'll hand over to Harald to take us through the financial results.

Thank you, Michael. Looking at the income statement, other income of $106,000 for the second quarter relates to government grants. Employee benefit expenses for the quarter were $2.3 million compared to $2.9 million for the same period in 2025, reflecting a reduction in organizations. Other operating expenses were $4.1 million in the second quarter, up from $3.4 million in the same period in 2025, reflecting increased clinical activities following initiation of the Abili-T trial. Finance income and costs were net $400,000 negative in the quarter, which mainly relates to interest income and unrealized currency movements on Norwegian kroner exposure. So overall, we recorded a net loss of $7.2 million for the second quarter compared to a net profit of $800,000 (sic) [ $859,000 ] for the same period in 2025. Moving on to the balance sheet. We are still well capitalized with a cash position of $44.8 million at the end of the second quarter. With disciplined execution and strong financial focus, we will reach key inflection points within the estimated cash runway into 2028. This does not include the pending tax case where we have booked a noncurrent receivable amounting to $33.4 million at the end of the second quarter as further described in the quarterly report. Nykode is confident that we will receive a positive ruling in the tax case also based on advice from third-party tax experts. The latest we have from the secretariat in the Tax Appeal Board is that we can still expect to receive a draft recommendation from the Secretary in August. We expect to communicate to the market immediately once the draft recommendation is received, and we will have time to process the information. A positive outcome will push the cash runway into 2029. Moving on to equity and liabilities. We had total equity of $80 million, which represents a strong equity ratio of 93%. And with that, I will give the word back to Michael.

Thank you very much. And I will just conclude with the outlook before we open up for questions. As stated earlier, well capitalized with a runway into '28. And as we said, this will further extend with a positive outcome on the pending tax case. That brings us well past a number of significant inflection points for our assets. Focus for the coming period will, as said before, obviously be on the execution of the Abili-T trial, where the priorities right now is to expand the number of countries and sites, get the sites engaged, motivate the investigators to identify the patients currently on plan for an interim readout in 2027. In addition to that, we see a number of potentially very exciting data reading out from peers across the cancer field, similar to what we saw last week. So we will, of course, be keeping a keen eye on our most important peers in the field for the coming period. As Agnete said, the period has never been more exciting than what we're seeing right now for cancer vaccines. We are expecting, based on guidance from the authorities a first, a draft recommendation on the tax case in August. And we will continue to progress and mature the ASIT platform, bringing us forward towards the first clinical development program. And that continues into 2027, where we do expect to see further peer data from our peers reading out as well, of course, the being able to report the Abili-T interim results during 2027. So exciting periods ahead of us. And with those words, I think we are ready to conclude the formal part of this call and move to the questions, Kevin?

[Operator Instructions] Our first question today is coming from Geir Holom from DNB Carnegie. You state that the Abili-T Phase II trial ais progressing according to plan and reiterate that the first interim efficacy readout is expected in 2027. Could you elaborate on the key parameters and milestones you're monitoring to assess the likelihood of being able to present interim data by year-end 2027?

Yes, sure. Thanks for the question, Geir. And it's getting a little bit technical here, but just to give you a feeling for the kind of KPIs that we are measuring here and reviewing against that plan is obviously getting the protocol approved in countries and getting the sites up and running. So once we have approval in country, the next task for a site is to get the site contract, clinical trial agreements signed and get the site staff trained on all the parameters that need to be trained before we can give every site a so-called green light. And at that time point, they can start enrolling patients. So we have projections both for countries getting approved and sites getting approved. So that's the most important parameter in the beginning of the trial. Then from there, of course, we begin to monitor the number of patients entering screening before they subsequently and subject to a successful screening enters the enrolled stage. So that is where they get the first dose. So it's a multitude of different KPIs that we are monitoring and ramping up against a predefined plan together with the Board to be able to gain confidence that we are on track towards 2027. I think that's enough said on that question, Kevin.

Our next question is a follow-up from Geir Holom from DNB Carnegie. Could you elaborate on the potential paths you're considering to bring your first tolerance asset into clinical development, including the key steps and milestones required to reach the clinic?

Yes, sure. So it's a pretty standard path to the clinic from where we are today. So we have worked on the platform and made sure we can be confident on the modality and the targeting units, et cetera. And from there on, when we are selecting the indication that dictates the antigenic part of our molecule. So then we move on to what we call lead selection, which is when we nail down the exact construct and the product that we want to pursue into the clinic. And from there on, we both need to do what's called non-clinical tox. So there is a tox program, you need to make sure that the exact product manufactured under a similar manufacturing process as you will do for the clinical trial is safe and considered to be safe to be given to patients. And as part of that, you need to move that manufacturing process on to also a GMP manufactured product. And then all the documentation of this goes into a regulatory filing to the authorities together with then designed clinical development plan for the first trial. And when we get that approval, we're basically back to what Michael just explained from getting the approval in each country and setting up the sites, et cetera. Part of this, depending on which indication will decide whether we do these studies for the first part in-house or with a commercial partner or an academic partner or any partner.

Our next question is coming from [indiscernible]. mRNA Vaccines are believed to have more efficient delivery as the mRNA only needs to reach the cytoplasm, whereas plasmid DNA has to cross both the cell membrane and the nuclear membrane before expression can occur. However, your vaccines encode protein that targets antigen-presenting cells, APCs. Would you say you can compensate for less efficient DNA delivery through biological targeting after expression?

So this is a long, I can talk about for a long time. mRNA and DNA are both genetically based, but they do have very different mechanisms of action in principle. So DNA is basically the template for making the mRNA. So if you inject the DNA, the DNA will make mRNA. So there is a huge difference. You can either give the mRNA directly. It's a product that only needs to reach the cytoplasm. That's true. But if you don't have the DNA, the mRNA you inject will be the mRNA that you can rely on. There will not be a new DNA that can encode the mRNA and multiple new mRNAs. So meaning when you give the mRNA, you give it, it reached the cytoplasm and when that is degraded, there is no new genetically encoding new vaccine proteins, which means there is a very different kinetics. So DNA needs to go into the nucleus, but they will then start to make mRNA and can do that over a longer period of time than giving the mRNA as the only product. Then obviously, the protein that we're encoding, maybe one point first, the dose that we give of DNA is higher than what you give of RNA. So that also tells you something. And that is also based on the safety process because both RNA and LNPs as they formulate is more reactogenic than DNA. So we can give a higher dose of the DNA than you can of RNA. Then the protein that is being encoded, whether it first starts with the DNA, goes through the mRNA and encode the protein or you give it as mRNA yourself, needs to be taken up, processed by antigen-presenting cells processed and presented on the surface of these antigen presenting cells to T cells. And that's where the, our technology with the 3 components we have in our protein makes that part more efficacious as to how we elicit the immune response. So they all have different methods in order to achieve the end goal and the end goal is to elicit the optimal T cell response. So there are lots of things coming into consideration here. I think importantly for us, DNA, manufacturing costs, durability of expressing new proteins and also the, our technology and the way we elicit the T cell responses is of importance.

Our next question is a follow-up from [indiscernible] Your current time for VB10.NEO from biopsy to injecting the vaccine in a patient is approximately 6 weeks. How fast can you compress it to 4 weeks? And what needs to happen to achieve this?