Philogen S.p.A. (PHIL.MI) Earnings Call Transcript & Summary

Hello. Welcome, everybody, to our new webinar. Today, as always, we will give an update on the latest financial and industrial results. We'll focus on the first half 2025. And we have very good news also to provide that we have also enclosed in the recent press releases about the new licensing agreement with RayzeBio that brings a lot of, let's say, new resources for the company. And we will tell you also how we will think to invest these new resources. As always, we have Dario Neri, our CEO and CSO; Laura Baldi, our CFO, and we'll split the presentation among the 3 of us. And the presentation is being recorded and will be followed by a Q&A session, which is not recorded. I will start off with the presentation and then hand it over to Dario and I will alternate. For those who are the first time attending these webinars. So Philogen is a Swiss-Italian biotech company. So the Philogen mother company focuses on antibody therapeutics based in Siena, while the Philochem, the fully fully owned subsidiary of the Philogen Group based in Zurich, in Switzerland, focuses on small molecule therapeutics. And you will see over and over during the presentation a split between these 2 colors, green antibodies and blue small molecule therapeutics. The group is listed on Italian Stock Exchange since 2021 and enjoys collaborations with the different pharmaceutical companies. So as a company, we developed -- discovered and developed drugs, which targets mostly tumors. So you see that normally, they feature this ligand that can be either an antibody or small molecule ligand that we discover in-house through and collaborate technologies that we've been practicing for the last 25 years plus. And once we discover a ligand then we couple it to payloads, that can be cytotoxic radionuclides. If the ligand is small, the payloads are small as well. While with cytokines, we mostly focus on antibody-cytokine infusion. You also see here the color matching between green antibodies and blue small molecules. Why ligands are important? You see it from this slide, if you just inject the chemotherapy, here on the left, this goes everywhere except to the tumor. These are patient, for example, with mesothelioma, you expect the tumor on the lung, but the chemotherapy goes to the liver, the intestine, but never goes to the tumor. If you use IgG antibodies, those are better but they're very big forever to extravasate from the bloodstream. You may start getting a decent tumor, let's say, to organ ratios at 7 days post injection. You normally also see a steady uptick in the liver for a long period of time. You can do much better using antibody fragments, which are smaller than the conventional IgG. You have good tumor to organ ratio already at 1 day post the intravenous injection. And you see, as an example, a patient with liver mets of breast cancer. Of course, the world record can be achieved using small molecule with ultra high affinity to tumor cited antigen. This is an example of OncoFAP. You get excellent tumor-to-organ ratio, [ 20:1 ] already 1 hour after the injection. So in June announced a new deal with RayzeBio on our new ligand called OncoACP3 that has been cleared by the antitrust also in August recently. And the partner is RayzeBio. It's a BMS company and a big focus on Radiopharmaceutical for oncology. The product has said is a small molecule ligand targeting ACP3 with ultra-high affinity and specificity. As disclosed also in the press release, we have an ongoing Phase I clinical trial, company-sponsored on a diagnostic agent, but also ongoing -- they are ongoing IND-enabling activities for a therapeutic agent based on Actinium 225 that are ongoing as we launch also Phase I clinical trials for a therapeutic agent. This is what we disclosed in terms of key economic terms $350 million upfront and plus, let's say, $1 billion in development, regulatory and commercial milestones that we expect and up to $1 billion, plus also mid-single to low double-digit royalties on global net sales. So now, most of -- we have receive also many questions or what do you do with all these resources. So it's very simple. We'll invest on late-stage products like Nidlegy and Fibromun. We've also just launched 3 additional global trials in non-melanoma skin cancer, which Dario will expand. On Fibromun, we launched also the Phase II part of Gliosun, the first-line trial. We will bring, let's say, new, let's say, pipeline. For example, we started a new Phase I with [ L19IL2 ] with Darleukin. We will start also the dose expansion of Dodekin, This is [ L19IL12 ], and we expect additional 4 programs to start Phase I that we have discovered also recently here in Zurich. And we expect the Phase I to start in the near future. For the small molecules, we will present here for the first time, excellent data from the Phase I clinical trial of ONCOC9 Gallium-68, a new imaging agent that we have -- they are investigating in the clinic, and we are now already planning the launch of Phase III. And we also are planning the launch of a Phase I of the SMBC OncoFAP-GlyPro-MMAE, it's a nonradioactive derivative of OncoFAP targeting fibroblast activation protein that also showed very good data in dogs with spontaneous tumor. Lastly, we also expanding the clinical team to new Milan offices. We have revamped the facility for Montarioso that has been operational since 2004. It was very important for all clinical trials that have been conducted so far. And also, we are expanding the research activities here, let's say, in Zurich, Otelfingen that have been instrumental, for example, for all new molecules that we have discovered so far. So with this, Dario will start off with Nidlegy. I will take over for Fibromun, and I will hand over to Dario again for the small-molecule therapeutics and Laura will finish off with one slide on financials.

Thanks a lot, Emanuele. So I'm delighted to give you an update about Nidlegy, our advanced dermato-oncology drug. You remember that it's a combination of 2 active principles to immunocytokine cell 19 IL-2 and 19 TNF mixed together in a combination pack approved by EMA, and this is given intralesionally to patients with melanoma and other types of skin cancer. So in melanoma, we are actively working towards the resubmission of the marketing authorization application. We are diligently doing activities that have been discussed with EMA, and we are also seeking regulatory advice from authorities, which means we are busy, and we think we know what we are doing. The [ SISTER ] trial, which is the [indiscernible] trial in the United States is making progress, and now we are devoting a lot of energy to the activation of additional sites in multiple geographies, including U.S., Canada and within Europe. Now I would like to focus more on non-melanoma skin cancer because these are activities where we can draw some conclusions from the completed Phase II clinical trials, but also we can look at registration trials that have just been launched. So as presented in the past, we had 2 Phase II clinical trials in basal cell carcinoma and squamous cell carcinoma. The Duncan trial enrolled 94 patients, 2 more than the planned 92 patients has been completed. It will be presented at ESMO next month. And the intrinsic trial is also well advanced, 50 patients treated out of 70, which are planned. So I think we have a good understanding of how the drug works in basal cell carcinoma and squamous cell carcinoma. I'd like to show you 3 examples here in this slide with basal cell carcinoma in the nose, in the check, in the scalp, usually, these tumors are frequent and they occur at light exposed parts of the body. If you treat them by surgery, the outcome can be really disfiguring. And you see a lady with a lesion in the nose, which really disappear completely, and you have a complete response at week 52. Quite diffuse lesion in the cheek, and you see the response to treatment and progressively the; lesion goes away. And again, you see a complete response by biopsy analysis at week 52. And here, you see an ultra large region in the scalp. It's one of the largest tumors that we have treated. And again, we were delighted to see a complete response even for a lesion of this size at week 52. So these are results that, of course, they fill us with pride and also with motivation to do well in the future. Couple of additional examples, a young patient and a 94-year-old patient, again, to show that the treatment is well tolerated that can be administered to different patients. You go here from a situation, you would say this is a small lesion, it's a BCC that would have required the surgical amputation of 2 centimeters of lip, which means it's horrible. It's disfiguring for the rest of the life. And you can see with, again, 1 year follow-up that the outcome is perfect. And this was a 94-year-old lady with squamous cell carcinoma in the cheek, again, very large lesion. And you can see the week 52 photograph confirming a durable complete response. So we are proud of these results, which triggered the launch of new trials, namely, we have submitted 3 trials with registration potential. One in cutaneous squamous cell carcinoma second line Phase II, which means last line, single-arm 92 patients, similar trial in BCC third line, single-arm 92 patients and a trial which could treat anything between 60 and 180 patients in earlier BCC patients. The protocols have been approved by the U.S. FDA and the expansion to Europe is ongoing, demonstrating our commitment to a global registration program. A head-to-head first-line trial in BCC is in planning, and we will update you when the data mature. With this, I hand over to Emanuele, who will drive us through the Fibromun programs.

Yes. Thank you. So remember that we have 3 programs in soft tissue sarcoma and 3 programs in glioblastoma. The product is partnered with Sun Pharma. This is a global deal, whereas the partnership with Sun Pharma, Nidlegy is focused on Europe, Australia and New Zealand for skin cancer applications. So glioblastoma is the most malignant and early primary brain tumor. There are at least 15,000 patients in the U.S. every year that are diagnosed with the disease. And unfortunately, virtually all of them succumb at some stage within 14 months. Soft tissue sarcoma, the situation is not much better. There are 13,600 new cases according to the numbers of the United States. Around 40%, 50% of them are metastatic and all these metastatic patients, unfortunately, also succumb to the disease. So with this TNF, anti-TNF, which is Fibronum, is still an antibody cytokine fusion protein. This time is given systemically by intravenous infusion. And we have shown in several publications that it goes to the tumor sparing health issues, which is exactly what you want to achieve with targeted therapies. So in soft tissue sarcoma with regard to the 3 programs, the one in first line in combination with doxorubicin. You see we have complete enrollment exactly matching our expected industrial time lines. We have treated a bit more patients than the one foreseen by the protocol, which is allowed from the protocol. The primary endpoint is progression-free survival, and we have reached all the events. It's a 92 out of 92. We are finishing the analysis of the data that will be communicated in the coming weeks. In the third line setting, also we have completed enrollment, matching our internal timelines. We treated also here, let's say, a bit more patients than one expected from the portocol, which is allowed and here we're missing 4 PFS events for the final readout of the trial. So in the coming weeks, we will communicate the results of the first-line trial. In the glioblastoma, also we are running 3 trials. So the Gliosun is in first line, so newly diagnosed patients. We have completed the Phase I, and we are now also seeking regulatory advice, also in collaboration with Sun Pharma with FDA and EMA to directly transition from Phase I to Phase IIb and see -- and this regulatory advice will happen in the coming months. In the second -- so we'll be able to update you as soon as we have this information. For Gliostar is the second-line trial, so glioblastoma at first progression. Remember, they have enrolled patients much faster than expected. And those are the updated predicted, let's say, timelines. We actually observed the enrollment rate of patients, which match with the updated prediction. We have also here completed enrollment with 163 patients out of 158 foreseen by the protocol. We expect the OS events here because the primary endpoint is overall survival in early 2026. Of course, we don't have a control on when patients have an event. But I think based on our, let's say, internal projections, we expect that to happen in early 2026. With regards to the other study so-called GLIOSTELLA, which enrolls patients with a second or later or more progressions. So those are more advanced patients compared to the Gliostar. So also here, we have enrolled patients faster than expected, and we have enrolled all patients, so the 90th patient was enrolled this month. Out of 90, so also here, I think we are -- we need to wait for the U.S. events to mature, and we'll be able to communicate the results somewhere in 2026...

And as promised, we finished with some information on the blue part of the pipeline, namely the chemicals. This is a part, which has grown very rapidly over the last few years. And I think last year, probably we took 3 new molecules to the clinic and I think, are very excited about the results, which are emerging. The potential is the one that Emanuele had already explained before. These are 2 patients with FAP-positive tumors in the first case. The patient had received the radiolabeled antibody in the second case, the patient had received our radiolabeled OncoFAP. It's clear that at least for this target, small molecules work better for targeting. And this is true at the macroscopic level, but we have extensively published also on the fact that at the microscopic level small molecules, maybe better delivery agents than antibodies, more homogeneous. So we want to give you an impression of what we are doing. Once we discover our ligands by the encoded chemistry, of course, many different opportunities can, in principle, be performed, but I will focus on radionuclide delivery and drug delivery. First, I'll give you an update about FAP, fibroblast activation protein. The update is that basically we have the program for imaging partnered with Barcco, we have our own therapeutic product, which is still on. But then it's attractive to show you what we can do in terms of drug delivery. Where OncoFAP basically, and this becomes explicit. In the next slide, you see in blue the OncoFAP portion of the moiety than a cleavable linker here depicted in green and then the payload is monomethyl auristatin E, which is a highly cytotoxic payload. So the logic is very simple, to deliver MMA to the site of disease, helping spare normal tissues. This is twice selective, so to say, because we enjoy the selectivity of ligand-based pharmacodelivery, but also we enjoy the selectivity that we have chosen as cleavable linker GlyPro dipeptide, which is the substrate of FAP. So FAP is both the target and enzyme, which liberates the drug at the site of disease. And we have previously reported on the really exciting results observed in spontaneous tumors in the veterinary setting, you see sarcoma in the mouse, with 3 centimeters of diameter responding rapidly to the treatment with drug conjugate, and this is the caliper measurement, the same animal at some stage relapsed because we were not allowed to treat more than 4x. When the tumor relapse, 1 year later, it was very big. You see 15 centimeters in diameter, and again responded nicely to 4 injections of the drug. We are running GMP manufacturing and safety tox activities are also ongoing with the goal to be in the clinic next year. And this is very exciting. And I think it will be a small molecule drug conjugate that hopefully has the potential to show activity. If we look at carbonic anhydrase IX, this is a target where we have probably been the first group in the world to show that small ligands can be used for targeting and I'll show you data with our second-generation product. We had first-generation product in the clinic, which was good. It's published but had some accumulation in normal organs, including the kidney. And so we wanted something more specific, and we used DNA-encoded chemical libraries. This is the work of Sebastian Oehler and colleagues to discover molecules here represented at dots that bind very specifically to carbonic anhydrase IX, but not to other carbonic anhydrase isoforms. You see [indiscernible] profiles here for carbonic anhydrase IX, the intended target and no binding for example, to carbonic anhydrase II in a logarithmic plot. Again, you can see how the new generation molecule in blue is extremely selective for carbonic anhydrase IX, whereas the old generation products were not selective and many other competitors in the clinic lock this selectivity. So the question is, okay, what can we expect? We have published that in animals, the molecule looks very nice. So Onco C9, radiolabel that has a good accumulation in the tumor percent injected dose per gram, which is saturated only at about 1 micromole per kg with an excellent tumor-to-organ ratio, and it's a durable accumulation in the tumor. And here, you see a PET image in mice, showing again this beautiful selectivity. We moved the molecule to the clinic in collaboration with clinical centers in normally, Italy in Northern Italy. And I would like to highlight here the collaboration -- acknowledge the collaboration, in particular, with [ Arturo kitty ] the 3 patients, which are indicated in the slide come from his clinic, you see with the green arrow very strong accumulation in kidney tumors. The normal kidney is completely clean at 1 hour, there is an uptake in stomach and in the small intestine, which is expected because carbonic anhydrase IX is completely clean in the rest of the body, but is present in stomach and small intestine. For diagnostic reasons, this is not an issue at all because the intended use of this molecule is to show if there are masses in the kidney, which are clear cell renal cell carcinoma, and plan adequate management of the patients. The data are so good. We show you only 3, but they are so good that as a company, we are considering moving directly from Phase I to Phase III, and we know that there is a medical need in the field of radiopharmaceuticals. [ Telix ] has just completed Phase III clinical trials with the radiolabeled antibody called girentuximab, and they showed good sensitivity and specificity. We feel that we can get to the tumor much more rapidly and with less radiation burden compared to an antibody, which needs several days for adequate imaging. And so we are really working towards, hopefully, making this product a reality in the market. And so with this, I give you an impression of what we are doing, again, continuing to do with small molecules, taking them to the clinic. And with this, I hand over to Laura -- Laura Baldi, our Chief Financial Officer, for the last slide that summarizes the breakdown of the net financial position at the end of first half 2025. Laura?

Thank you, Dario. Only 1 slide on financials to show in the graph the cash burn of the first half 2025. The year opened with a cash and cash equivalent of [ EUR 117.7 ] million, increased by EUR 5.3 million of new proceeds from contract with a client we have in place. Operating costs absorbed cash for approximately EUR 17 million. CapEx, EUR 1.7 million and EUR 1.4 million is the buyback program that the group is going on. All these amounts are compensated in part of approximately EUR 1 million of positive financial items. And the first half of the year closed with cash and cash equivalent of EUR 100 million. As Dario and Emanuele said before, after the clearance of antitrust, the contract with RayzeBio is effective and the upfront payment of $370 million has been cashed in September. So now the position, the financial position, cash and cash equivalent is more than EUR 350 million. So the group enters in the second part of the year with a very ample liquidity and solid long-term financing capacity. And from my side, that's all. Thank you.

Thanks a lot, Laura. And I think now we will stop the recording. And if there are any questions, we'll be glad to discuss with you. We can do it online now or otherwise, of course, as always, we are available to interested parties and investors and analysts and dedicated calls, some of which have been scheduled.

I just was wondering if we could get an update on the EMA refiling process for Nidlegy, please. We know that there were 2 issues that needed to be resolved, which was a CMC and then also the additional data analysis. And I was just wondering if you could provide an update on progress on either or both of those. And on the data piece, in particular, you mentioned that you needed additional EFS analysis and longer OS data. Do you have those now?

Yes. We are working on both activities. The GMP activities, the factor involved additional characterization and validation activities that have been performed. In addition, we are anyway continuing to manufacture our product because we need it for our trials. And we have arranged a meeting with Paul Ehrlich Institute, the German authority in November. This is the authority of [indiscernible] for our product. And so we look forward to this meeting because it will allow us to discuss technical issues, again, in preparation for the resubmission. At the clinical level, we were very explicit mentioning that on one hand, we need additional evaluations. And as time goes by, overall survival data mature and will allow us to resubmit the dossier with more mature data and adding data to the submission. So we are pleased with the process. And if there are news from the interaction with the Paul Ehrlich Institute or other authorities, we will update you at the next webinar.

Yes. So for the timelines are kept also compared to the last time we spoke about, so we still plan to resubmit next year. And of course, we'll keep you updated as a dialogue with the authorities continues.

Other questions?

Isacco also has...

Yes. Isacco.

Three quick questions from my side. The first one is on initiatives you mentioned, if you can help us quantify the CapEx associated to investment to revamping in Montarioso and investments in Zurich and how hiring in the clinical say, section should impact your cost -- overall cost base -- annual cost base? Second question is on your strategy for the U.S. route to market, does the cash in from the recent agreement on OncoACP3 change your ambitions to go direct in the U.S. for Nidlegy? Last question is on the multiple non-melanoma trials. You mentioned, if you can share a bit more color on sort of indicative timetable to complete these trials?

With pleasure. So the first topic -- so the cost of revamping. I can tell you that the revamping of Montarioso was about EUR 1 million of investments, but we have really very nice facility. We will seek now the confirmation of our license up to Phase III clinical trials and the facility is really nice. We have separation between pre-viral and post-viral processes that we didn't have before. And we have presented it at least in a dedicated teleconference to authorities, but the formal procedure is to submit now the documentation asking for the reapproval of the facility, and we expect it to happen in the coming months. With respect -- now with respect to Milan, this is an important decision for the company because until now, we have operated in Zurich and Siena sometimes, especially for clinical activities, it's extremely important to be able to rely on skilled persons, and it is a fact that it's easier to find these professionals in the Milan area, not to say that actually, Milan is half the way between Zurich and Siena, which again it makes interactions and meetings easier. So there is -- we have already offices in Milan but the new headquarters will open in January. And so this is an important step forward for the clinic. In terms of Otelfingen it's really seeing how productive Philochem has been, we have the intention to expand further the laboratories. We want to build a dedicated or safety level II lab. These are technicalities, but these are activities that probably they don't need to go into a financial plan because we are not speaking about huge figures that the core of the labs has been built and its operational and will continue to be operational. And then when we speak about the route to the market for U.S., yes. So this is -- certainly, we are very pleased with our financial position, and we expect it to continue to be good also for the future because we are very pleased with the various activities of the group. So it's nice. We are a company in a good financial position. I think we have shown our ability to generate technologies. We don't have products on the market yet. As you have seen, this is our ambition, and we try very hard. So at this moment in time, our focus is more on getting our programs always as global registration programs. The partnership with Sun is very good, at least from our side, we are very pleased with Sun Pharma as a partner. And for this reason, I confirm what we said before. I think the most logical development would be to have Sun Pharma's distribution partner for the U.S. But again, this is something which we will have to see. We have the option to do it ourselves for the dermato-oncology product. So this is something which is not yet decided. Now for the non-melanoma skin cancer, I can be more specific because this is an area which we consider to be very attractive. It's a high, high incidence market, both for basal cell carcinoma and squamous cell carcinoma. Basal cell carcinomas, for example, are the most common tumors on earth, about 4 million new cases per year in the United States. Luckily, most of them you can cut away, but about let's say, 1%, 2% are high-risk tumors, but even 5% of tumors that you can cut, but then you pay consequence in terms of disfiguration. So there are opportunities. So what has been our thought process and what are the time to development. The thought process was that the product is probably going to help patients, both in BCC and SCC, but you need to run dedicated trials. Hence the dedicated programs. When we ask the authorities, can we do it with single-arm trials, should we do it with controlled randomized trials, I think the answer was very clear, which means that if there is a standard of care, you have to be the standard of care in a controlled trial. If you are in last line, you go with single-arm trials. And so for the third line, BCC and second-line SCC, there is no standard of care. We go with single-arm trials, but we are working very hard now to launch our first-line trial in BCC because we believe that our product has what it takes to offer a benefit to patients. Now I don't want to make forward-looking statements, and I will not make them, but I will state a few facts that were presented in the slides. So for example, in the slides of Emanuele, he showed that we were able to run complex trials in Glioblastoma. So running trials in Glioblastoma is much more difficult than running trials in business basal cell carcinoma. Basically, the Gliostar prior was recruited in 2 years. The GLIOSTELLA trial was recruited in about 1 year. And these were trials, respectively, of 160-plus patients and 90 patients for GLIOSTELLA. So this gives you an idea of the type of recruitment rate that we have shown in the recent past. Of course, for BCC, it's easier because the typical patient who has a lesion receives 4 injections once a week and then is in follow-up. So also the time to follow up is faster. Typically, their responses come up in 2 to 3 months and they're durable. I see, Isacco, maybe you have follow-up questions on this.

No, I guess that's enough. Very clear.

Thanks a lot. Are there additional questions? If this is not the case, we would like to thank all participants, of course, all patients, all clinical centers that work with us and also, of course, our partners. Thank you very much. Have a nice weekend. Bye-bye.