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

Welcome everybody to this event, and thanks for being here despite the short notice. The event is organized following the exciting announcement on October 16th, in which we conveyed that Phase III trial of Nidlegy in locally advanced resectable melanoma met the primary objective. And now you're probably wondering what's happening now and what are the consequences of this announcement, and this is exactly the reason of why we're here today. As always, on the call, we have Professor Dario Neri, CEO and CSO of the company; Dr. Laura Baldi, our CFO; and myself as Investor Relations. We will have a presentation of about 25 to 30 minutes, which is being recorded, followed by a Q&A session, which is not recorded. [Operator Instructions] And with this, without further ado, I'll hand over the stage to Dario Neri to start the presentation.

Well, Emanuele, many thanks for the introduction. And together with you, we will run this presentation. Our aficionados know that every 2 months or so, we give a webinar update about what's happening. But this time, it was really useful to have an extra event so that we could reflect not only on what has been achieved with the pivotal trial for Nidlegy in melanoma, but also what is hot at Philogen at the moment, what are the prospects for the future? For those of you who joined for the first time, again, Philogen is an Italian-Swiss biotech company. We have headquarters in Siena with 2 GMP production facilities. We are just in the middle of an EMA inspection for the commercial facility, so these are busy times. And in Zurich, we have a fully-owned subsidiary called Philochem that focuses on small organic molecule therapeutics. So throughout the presentation, you will see green for Philogen, blue for Philochem, always with this common focus of innovating targeting. Next slide, please. So this is the pipeline. We have a series of antibody products, either proprietary or which have been partnered, which are at different stages of clinical development. We will reflect on the Phase III trial in melanoma, which has been successfully completed. But we want to give you also a glimpse of what's happening with Fibromun and what's happening with this blue portion of the pipeline, which is rapidly getting populated, in my opinion, with very good products. So let's start with Nidlegy, our dermato-oncology product. So this is an important product for us, not only for what it means therapeutically, but also, because this is the first immunocytokine product that has shown activity in a control Phase III clinical trial. So in a way, it's the first representative of a class of products to be successful. Now what class of products? Cytokine-based pharmaceuticals have a growing importance in immuno-oncology for the therapy of cancer. But different companies rely on different approaches. For example, there are products like the ones depicted in the left, in which a certain cytokine is just extended in terms of its circulatory health life, either through PEGylation or through Fc fusion. There are gene therapy approaches in which intralesional injection aims at driving local production of cytokine. And the first 2 approaches have the possible limitation that they are not really suitable, for example, to reach disseminated disease, at least not really suitable to get preferential accumulation at the site of disease. There are a number of companies that work with antibody cytokine fusions. Our good colleagues at Roche have a number of very exciting products, typically based on IgG format for the antibody. And in our experience, the IgG is maybe too large to efficiently extravasate and get to the tumor. And this is the reason why Philogen has worked now for more than 20 years on antibody fragments with exceptionally good targeting performance, fused to cytokines. And we aim to achieve fast and efficient selective tumor targeting. And we are harnessing the fruits of these investments over the years. Indeed, this slide is a summary of some of the publications of our group. What you see is a number of cytokine payloads, which have been fused to antibodies of proven tumor targeting performance, like the L19 antibody. And these are just some of the articles that our group has published. For the presentation of today, we focus on those payloads illustrated in red. So interleukin-2 and tumor necrosis factor. But you see really a commitment of the company to thoroughly explore antibody-based delivery of cytokine payloads to cancer and beyond. Next slide, please. Now Nidlegy, which is the subject of the discussion of today. It's an immuno-oncology product. It's a dermato-oncology product. It consists of 2 active ingredients, L19IL2 and L19TNF, for which we have obtained a Combipack authorization by EMA, an important regulatory milestone. And the basic idea is that the green antibody moiety, the L19 antibody moiety, anchors those cytokines interleukin-2 and TNF at the site of disease. For these applications, we go for skin tumors. And it makes sense to inject the products intralesionally because the tumors are superficial. But we treat locally and act globally, as you will see. Intense development activities in locally advanced melanoma, so Stage 3 melanoma, for which we have completed Phase III trial, but also non-melanoma skin cancers, as you will see. Next slide, please. So this is a pictorial representation of these 2 classes of conditions. Stage 3 melanoma means metastatic melanoma of the skin and of lymph nodes, which has not yet spread to visceral organs. So the name of the game is to get rid of the disease at this stage, render patients no evidence of disease, and keep them tumor-free as long as possible. That was the aim of the PIVOTAL trial. Because if patients progress to Stage 4 disease, unfortunately, this is often fatal in spite of advances in the field. And seeing melanoma lesions disappear, we have become greedy and we have started to use the product in other skin cancers with very encouraging results, as you will see. Next slide, please. So this is the type of patients with locally advanced Stage 3B/C melanoma that we have treated in the pivotal trial. These patients may be newly diagnosed patients. They may have progressed from Stage 1/2 melanoma, but most of the time, we had patients relapsing from previous Stage 3 disease. And we see many of these patients, essentially, if they fail, for example, PD-1 blockade, typically they don't have an efficacious drug to consider for the management of their disease. So these 3 baskets of patients are typically fully resectable. And this is the patient population that we deal with. But basically, our scientific bet was to have neoadjuvant Nidlegy before surgery so that we could not only get rid of the tumor, but also stimulate the immune system that would fight distant lesions. You see the product is shaded because it's not yet approved, but it has completed successfully the Phase III trial. Patients were allowed to receive adjuvant treatment, which may be BRAF, MEK inhibitors or PD-1 blockers or other forms of immunotherapy. And so, we have performed a real-life Phase III clinical trial of adequate size, as you will see, to really address the issue, can we do better than the standard of care? The next slide basically summarizes some of the topics which are described in the press release of Monday, namely, number one, Nidlegy met the primary objective in its Phase III clinical trial, the first Phase III clinical trial that has been completed by Philogen, demonstrating not only statistically significant, but also clinically meaningful improvement in recurrence-free survival in patients with locally advanced fully resectable melanoma. The intratumoral Nidlegy followed by surgery, as indicated in the previous slide, significantly improved recurrence-free survival compared to surgery alone. And again, for both arms, adjuvant treatment was allowed. So the PIVOTAL trial, this Nidlegy trial is the first and so far only Phase III trial demonstrating success, which means statistically significant and clinically meaningful benefit of a neoadjuvant therapy in locally advanced melanoma patients. There have been Phase II trials in the neoadjuvant setting, but no Phase III trial. This is the first trial and it has been successful. More broadly, even though there are many immunocytokines in clinical development, this is the first immunocytokine product to show success in a Phase III randomized trial. And for this reason, I believe that Philogen's data may also spark further activities in the field in which we have been active now for more than 20 years. So in total, we treated more than 250 patients, you see, 257 patients in Europe across 22 clinical centers. And we have a similar study ongoing in the U.S. and other geographies involving 32 clinical centers. So really a big effort, and for this, I'm grateful not only to patients and families and clinical centers, but also to the collaborators of Philogen, which have made this trial possible. Next slide shows what types of activities are to be expected. The press release has taken place on Monday. The next important activities are the preparations of manuscript and also the submission of abstracts for presentation at major congresses, ASCO, ESMO, EADO. And at the same time, we have the pre-submission meeting with EMA for the regulatory submission of the marketing authorization application. Applications in other geographies will follow shortly afterwards. Next slide reminds us that the success in melanoma has sparked interest in basal cell carcinoma, the most frequent tumor in the world, where about 1% to 2% of patients have high risk disease, locally advanced, highly disfiguring, and we are observing really good results in this setting. But we are also investigating squamous cell carcinoma, Merkel cell carcinoma, keratoacanthoma, malignant adnexal tumors of the skin, cutaneous T-cell lymphoma, Kaposi's sarcoma. So Nidlegy has really the potential to be a broadly applicable dermato-oncology drug with excellent tolerability and excellent performance, now we can say. The next slide shows the geography of the non-melanoma skin cancer trials, which are ongoing in Europe, and U.S. trials are to be started soon. Again, confirming our commitment to a global development of the product. Next slide, please. We show one of the success stories, a patient with really disfiguring, locally advanced, high risk basal cell carcinoma in the nose, a patient candidate for amputation of the nose. And you see this beautiful biopsy confirmed the complete response as early as 2 months after the onset of treatment. The current complete response rate is certainly above 50%, actually, according to some indications greater than 70%. And this is much higher in the same patient population compared to the 3 products which are approved for high risk, locally advanced basal cell carcinoma, namely, Libtayo, Erivedge, and Odomzo. And also, the exponential rate -- growth rate in recruitment, I think, confirms the fact that centers like the product. Some doctors have told us that if Nidlegy was approved for non-melanoma skin cancer, they would give it to all patients. And so we are working very hard to make sure that this need -- this medical need becomes reality very soon. With this, I hand over to Emanuele, who will reflect on the fact that melanoma is very important to us, and it's an important market opportunity and medical opportunity, but possibly there is more within Nidlegy. He will guide us through Fibromun, and I will finish off with the new members of the pipeline, hopefully with exciting results.

Thank you very much, Dario, you anticipated well this slide. We want here to showcase that the potential of Nidlegy goes beyond also locally advanced melanoma, which is a very important indication. And we also envision that this will be the first [ orphan ] indication which will market the product. And when we consider the incidence of particularly locally advanced resectable melanoma in Europe and in the U.S., we speak about 23,000 new cases every year. You remember that we will commercialize the product through Sun Pharma in Europe, Australia, New Zealand. Australia and New Zealand are an important market and have the highest incidence rate on [indiscernible] melanoma. And with regards to the rest of the world, and especially the U.S., we retain full rights on Nidlegy. As Dario mentioned before, BCC represents a big market, bigger than the melanoma one. You see, when you count the incidence every year of locally advanced BCC in Europe and the U.S., we at least count 40,000 new cases every year. And we also, as Dario mentioned, we're exploring other opportunities in the ongoing Phase II trials in other non-melanoma skin cancers, like cutaneous squamous cell carcinoma, Merkel cell carcinoma, and also other stages of melanoma, we have an ongoing Phase II study in a resectable Stage 3 melanoma in combination with anti-PD-1. Regarding Fibromun, you remember it's our second most advanced asset, studied in 5 pivotal studies in soft tissue sarcoma and glioblastoma. Glioblastoma, the most malignant primary brain tumor, we gave an update at the beginning of the month. And I won't repeat -- I won't have a slide today. And we'll have a slide to update you on the ongoing programs in metastatic soft tissue sarcoma, both in first-line setting and in third-line setting. So Fibromun or LNT and TNF is one of the 2 active ingredients of Nidlegy, consisting of this LNT antibody that preferentially localizes TNF at the site of disease, the active moiety of the pharmaceutical product, we have orphan drug status in soft tissue sarcoma and glioblastoma, both in Europe and in the U.S. And we have proven in several publications the excellent tumor targeting performance of Fibromun, and with the excellent tumor-to-organ [ ratio ] at 24 hours post IV injection. You see that we have, from this slide, 3 ongoing registration trials in soft tissue sarcoma. We have a Phase III study in Europe in first-line setting, a Phase IIb study in the most common subtype of soft tissue sarcoma called leiomyosarcoma, and a Phase II study still in Europe in a third-line setting. The European studies are ongoing in 5 different countries, so Spain, France, Italy, Germany, and Poland. For the European -- first-line study, we opened 22 centers, for the third-line, 17 centers, and more are about to be opened. Here you see the enrollment rates. In that case, for the first-line setting, you see that the predicted in blue and the actual enrollment rate curves that match. At present, we have enrolled 80 out of 118 patients. The same story applies also to the third-line setting. We have enrolled and treated 39 out of 86 patients, so circa 45% of the envisioned patients by the protocol, and we expect the readout of the both studies somewhere at the end of 2024. And with this, I hand over the stage back to Dario.

So we are very excited, of course, to see Fibromun developing so well, not only in glioblastoma, but also in soft tissue sarcoma. Next year, we will have important readouts also in that setting. Still in the last 3 or 4 minutes, I'd like to give you an update about what we are doing, growing the pipeline of Philochem, and you see these blue bars populating, and these are all small molecules capable of selective localization in tumors. Next slide, please. So why do we care so much about small molecules? A few years ago, together with Samuele Cazzamalli, who actually leads the chemistry activities within the company, we started asking an important question. In our quest for selectivity, is it better to use full antibodies, antibody fragments, or small organic molecules for targeted delivery? We are happy with the antibody fragments, as you have heard, but the full antibodies, the conventional IgGs, which are used by so many companies at the scrutiny of nuclear medicine, they are not so good. So when you look at their ability to target tumors, you see that the selectivity that can be achieved in vivo is not fantastic. Here, in the left, we see a patient with a tumor positive for fibroblast activation protein that was imaged with a radiolabel preparation of the antibody in IgG format, and you see that the contrast is not fantastic, and it could only be achieved several days after injection. To the right, we see one of our patients imaged with OncoFAP, and you will see more in a split second. And it's clear that the small molecule approach is better, not only macroscopically, but also at the microscopic level, as you see with this uniform green staining of the tumor. And the picture that you see there is 1-hour after intravenous administration. Really, this is the dream of selectivity that we want to achieve. We had first published this statement in 2018, and we have by now confirmed this principle in many different experimental settings. So what do we do with these targeting agents? The first product, and this is next slide, please, is OncoFAP. You see the chemical structure equipped with radionuclide, gallium-68, for imaging of tumors. This is a program which is partnered. And you also see some snapshots of patients with different types of cancer that have been imaged with OncoFAP. We always see an excellent clean background. So in the clinical setting, doctors tell us that OncoFAP is a problem solver, because very often they can detect metastatic masses and also stage patients with cancer. So we have big hope that OncoFAP may become a generally applicable tool for the imaging of patients with different types of malignancies. But of course, when we have this beautiful localization, we want to do more. We want to do also therapy. And here, in general, we capitalize on a platform which can be used for several targets. I first show it for Fap, but then I want to show the breadth of the approach. So we capitalize on DNA-encoded chemical libraries to discover and perfect the binders. And once we have ultra-high affinity ligands for good quality targets, we can either equip them with lutetium-177, that would be a therapeutic radiopharmaceutical, lutetium-177, OncoFAP-23, or equip them with innovative linker payloads such as GlyPro-MMAE. And this is a small molecule drug conjugate, an alternative to antibody drug conjugates. Well, the radiolabel product is at IND stage. We expect that the company-sponsored trial to start in 2024 and compassionate patients will probably be treated before, whereas OncoFAP-GlyPro-MMAE has received authorization to be used for the treatment of animal patients with spontaneous tumors. So we will learn a lot and hopefully provide the benefit to these dogs with cancer in the near future. And we expect the start of a company-sponsored trial in human patients in 2024. So you see a commitment to exploring the best strategy, either with radiopharmaceuticals or with drug conjugates. And I wouldn't be surprised if some tumors responded better to radioactivity and other tumors responded better to potent drugs. The next slide shows that, of course, what we have done successfully with Fap can be done with carbonic anhydrase IX. This is a concept that we have already proven at the clinical level with PSMA, where there are already radioactive products on the market, such as Pluvicto, with somatostatin receptor 2, again, products on the market such as Lutathera. And we will disclose very soon imaging agents with a novel tumor targeting agent discovered with our DNA-encoded chemical libraries, ultra-high affinity, and an extremely attractive tumor targeting agent, as we will disclose perhaps already in the next webinar. So you see a platform capable of generating products which have in common selectivity achieved by means of preferential localization at the site of disease. The next slide summarizes some of the news that we expect for the next 12 months. Of course, the submission of the marketing authorization application for Nidlegy is our very important focus also with our partners at Sun Pharma, but also, we expect the consolidation of the BCC data, knowing that products in this indication have previously been approved with Phase II trials. The initiation of similar studies in the United States, the readout of PIVOTAL trials in soft tissue sarcoma in first and third-line, the expansion of glioblastoma PIVOTAL trial in second-line patients, Fibromun in combo with lomustine. The readout actually of the first-line trial in Phase I in glioblastoma, hopefully kicking development also in the first-line setting, but also the development of the program in the United States. We have an interleukin-12 program which is partnered and which is approaching completion of Phase I. We have the small molecules that I've just described and additional drugs that we have not yet disclosed. So I hope you could see that we keep ourselves busy not only with late stage developments and with profit, but also with innovation at the level of new molecules in the pipeline, as we had promised in 2021 at the time of IPO. And the next and last slide summarizes basically where we stand. We have a strong financial position with good liquidity that we intend, of course, to keep in the spirit of running a company that has very solid financial foundations, but also, of course, we don't make compromises on clinical development. We have the declared goal to bring both Nidlegy and Fibromun to registration while starting 1 or 2 new clinical programs every year. Commercially, we are proud of the commercial agreement reached with Sun Pharma for the distribution of Nidlegy in Europe, Australia, New Zealand, and we have the opportunity to set up commercial structures ourselves in the United States and in other geographies. And science drives everything we are doing. We believe we are among the leaders in the encoded combinatorial libraries and in the ligand-based pharmacodelivery strategies, and we continue to invest in discovery to enable new INDs and to advance the field of targeting. And with this, I'll stop. I thank you for your attention. It's 30 minutes sharp, as indicated by Emanuele, and we will be delighted to answer any questions, either now or in dedicated meetings that you may want to request.

Thank you very much, Dario. I see already Clemence with a question from Stifel.

All right. I have a couple of questions. First, is there any number you could provide beyond the HR, such as RFS at 1 or 2 years, or do we have to wait for the article or the medical conference? Similarly, could you give us a baseline characteristic of the population and whether the 2 arms were balanced, especially in terms of adjuvant use? And also, why did you increase the number of patients from 214 to 257, I think? Was it a recommendation following the interim analysis or because of a high discontinuation rate? And 2 last questions on the safety side, we're not too far off, I'd say, but the percentage of grade 3 adverse events seems a bit higher than other trials, so Phase II study with pembro it was all around 14. Is there a topic here? And can you maybe give us more color on the type of events? Was it mostly at injection side? And finally, before going back to the queue, do you consider filing with the FDA based on the data? I know it's a lot in one shot.

5 questions, Clemence, and I'll try to go through the questions one by one. Now the trial had a very positive readout, both according to investigators assessment and according to blinded independent central review committee. This is good because you may have seen in the recent past that there were examples of discordant evaluations in other trials by other companies. So the picture that is emerging is extremely clear and it shows a very long extension of recurrence free survival time wise. Now this is something that I think our clinicians would kill me if I would disclose the results before they publish and before they communicate at ASCO. So we are working very closely with them, but we please be reassured that the extension of recurrence free survival is very substantial, is coherent over time at all different time points. And the picture is extremely clear. Now the safety aspect is also clear. The safety profile is very benign, and there are Grade 3 and Grade 3 events. Let me be specific on this point. Our toxicities are typically injection site reactions, which are desired toxicity. This is what we want to see. We want to see the tumor melting away and sometimes these tumors are very big. And this is what you observe. We didn't have a single case of autoimmunity triggered by our drug. And this is in stark contrast with real life experience with immune checkpoint inhibitors. So time will tell what is the proportion of the market, which is taken by Nidlegy and the proportion of the market, which is dedicated to immune checkpoint inhibitors. But we start from a very good safety profile, a very benign safety profile. And again, I would really wait until our clinicians can speak themselves on this particular topic. Now the number of patients was increased for the following reason. It was not requested by the Data Safety Monitoring Board and it was not done because we had fears of not getting the endpoint or something like this. It was simply that we had, according to the protocols, the duty to study at least 214 patients. We reached that in June 2022. And at that time, we were at about 85 events. We needed to reach 95 events. It's allowed by protocol to continue enrolling patients by about 10% to 15% because you want to make sure that the events mature. And that's what we did. We allowed centers to continue treating patients. And when it was clear that we were reaching the 95 events requested by the protocol, then we stopped enrollment and it happened to be 257 patients. So rather than 214, 257, having more patients doesn't hurt. When you will see the subgroup analysis, you will see that there is no difference. I mean, we could have stopped earlier. We could have stopped later. We are happy to have a clear and consistent picture from a big study with 257 patients. And the commitment of the company is certainly to use the data to file for marketing authorization in the United States. But I want to be very clear. I've done it before. While we have a trial in Europe, which has been designed for complete approval in Europe and hopefully other markets which are relevant to us, such as United Kingdom, Switzerland, Australia, New Zealand, the interaction with FDA in type C meeting was very clear. We may use the European data for marketing authorization. The authority will reserve all rights either to accept the data for conditional approval or not to accept the data and request the completion of the American trial, which is well underway. So we are very committed to the geographies that I've mentioned. But with the United States, we are committed to submitting a marketing authorization and we will see what FDA responds. Of course, our commitment to the United States doesn't finish with melanoma. We have announced a few minutes ago that we are about to submit now the start of the trial in BCC. And we wish to have the same breadth that we have in Europe also in the United States because those markets are also important to us. I don't know if I've missed something or if you have follow-up questions.

No, it's all clear. I'll leave the floor to others.

I see Rajan. Rajan, please go ahead.

So maybe just a slight follow-up on the U.S. piece. And I guess, could you maybe just kind of remind us of your strategy for commercialization in the U.S.? And I'm conscious kind of that the Sun Pharma partnership doesn't include that geography, and whether with data in hand now, you may kind of more actively look to kind of seek a partner for U.S. commercialization?

It's a good question. And again, first of all, let me reiterate, we are absolutely delighted by the collaboration with Sun Pharma. It's a great company. And I think this is a win-win situation for both companies in these markets where Sun Pharma is present. Europe, New Zealand, Australia, countries in which there is a very high incidence not only of melanoma, but also BCC and other skin conditions. Now in the United States, we have the ambition to do it alone. Our minority shareholder, Sergio Dompe, has successfully done it alone, setting up from scratch commercial operations for Oxervate with really a big success. And so, we are also grateful to Sergio for the advice in shaping our commercial strategy. Then never say never. If a better commercial agreement can be reached, so be it. But we are committed to at least in one country, one language, large country, 330 million persons to set up those activities ourselves. And this is the next growth step for our company, at least we have the ambition to do so.

I see a question from Fausto Artoni. Fausto Artoni, please go ahead.

I cannot hear, Emanuele.

Okay.

If Fausto Artoni can just unmute, so click on the mute icon, it should be possible to hear the question. Bottom left of the screen.

It can happen with me if you press accidentally.

May be it was pressed accidentally. Are there other questions, Emanuele?

No, I don't see other questions and…

Okay. Appreciate that you took the time for this update. With many of you, we will be in touch for bilateral meetings. And I hope you are excited as we are by the fact that the first successful Phase III clinical trial with immunocytokines has read positive. And this hopefully paves the way for even better things in the future. So from my side, many thanks. And I don't know, Emanuele or Laura, if you want to give concluding remarks.

No, I thank everybody as well for the time to be here, again, for the short notice. And as always, we're available for any questions or follow-up calls just write us. You have the email address on our website, so please write us if you have any questions, and we will respond as fast as possible. Bye-bye.

Thank you. Bye-bye.

Many thanks. Bye.