ReNeuron Group plc (RENE) Earnings Call Transcript & Summary

Good morning, and welcome to the ReNeuron Group plc investor presentation. [Operator Instructions] Before we begin, I would like to submit the following poll. And I would now like to hand you over to Executive Chairman, Iain Ross. Good morning to you.

Good morning, everybody. I see on the screen, we've got a number of attendees, and we're really pleased to give you an update on our preliminary results. The first page talks about developing a valuable and differentiated drug delivery platform. And you will recall at the beginning of the year that we made it very clear that that's where we're going to focus and that's where we're going to produce data. And so what we want to do this morning is just to take you through our presentation. You will have all read the announcement this morning. And I have to be honest, there's not a huge amount to tell you because we are actually doing what we said we would do at the beginning of the year is that we are working hard to produce the data. And I can say to you that we're on course to producing data within the next 2 to 3 months. And from that data, we hope we will be able to conclude a number of discussions that are already in progress. So just moving through the disclaimer, which everyone, I'm sure, has read in detail. Moving on to the first slide. The story for ReNeuron is very simple. We have leading-edge science, and I believe that drug delivery is not easy. If it was easy, then many of the different modalities that are out there would have succeeded. But the truth is you have to actually tailor things to where you want to deliver the particular cargo in the body. And we believe that our delivery platform really gives us that flexibility. But it's not just enough to have an exosome. It's essential to have the right sort of exosome in order to deliver the right sort of payload to a specific target in the body. And we have continued over the last -- particularly over the last 6 months, we've continued to develop our platform. And I believe that our proprietary stem cell technology differentiates us from the competitors, and we believe that we will produce data to show that. We have cut the team down to focus very specifically on the development of the exosome technology platform. We have 23 of us now. We've reduced the headcount by about 40%. We have Randolph, who's sitting beside me here, who is supported by an excellent Scientific Advisory Board. But Randolph, of course, was the person that originally started the exosome research in ReNeuron a number of years ago, and we were very lucky for him to rejoin us. We've also appointed Simon Dew as our CBO, who has a lot of experience in doing specific deals with exosomes. And so the other thing I'd say is that it's really important -- it's all very well to have a good delivery technology, but you have to be able to manufacture and you have to be able to manufacture at scale. And that's one thing that ReNeuron certainly has a lot of experience on. And the last thing to say here is we have a strong patent estate, and we are filing patents as we continue to go forward. So if I move to the next slide and just look at some of the operational highlights. And by the way, I've had a number of questions that were presubmitted. So I'm going to try and answer some of those questions as we go along. But firstly, we are focusing on exosomes. We did proof-of-concept studies last year -- last calendar year in, in vitro. And to be absolutely honest, that was not enough to convince people to either invest in the company or go into a collaboration with us. We have continued to do more in vitro work. So we have broadened our expertise in that area. But the real question is doing in vivo work. And that is what we set out at the beginning of the year that we would do in vivo work to provide data to support the uploading of the cargo, the delivery of that cargo in terms of biodistribution in the body and also the unloading of that cargo at the specific site and to show some functionality. We're doing that. We're on track. I've had huge number of questions saying, "When are you going to give us data?" We're going to give data when we have that data. And we're very excited about what we're seeing as we move forward with our external advisers and also the companies that are working with us. But at the moment, we don't have that data in a form that actually we can present. But we did say at the beginning of the year that we would do that within the second and third quarter, and we're on track to do that. We have changed the leadership. Basically, I am now full time running the business. John has stepped up to CFO. Randolph is the CSO, and Suzanne Hancock is in charge of our operations. And we were joined by Simon Dew. Stefano, our Chairman of the Scientific Advisory Board, has revised that Board and brought in some real experts in that area. And just before end of the -- is that costing us money? No, it's not costing us money. It's people who want to work with us because they're excited by our platform. So operationally, we've moved forward. John, maybe you want to cover the finances?

Yes. Hello, everybody. Yes, as Iain mentioned, in January, we undertook a restructuring of the business to realign our resources towards the validation of CustomEX. We are very much focusing on preserving cash. The cash is the shareholders' money, and we're only spending it where we think we can achieve the maximum payback. The restructure resulted in a 40% reduction in headcount and a lowering of variable costs. That result in reduction in the underlying cost base has enabled us to preserve our cash, such that at the 31st of March, we had cash of GBP 7.2 million, which is ahead of market expectation and the runway extending into 2024. So you can see there, I won't go into detail on the items on the slide, you can see our revenue was up slightly. You can see our cost base did reduce quite significantly on the prior year, and that led into the reduction in the loss for the year. Okay. So that was all in...

So just before we move to Randolph, who's going to tell -- cover some of the questions that we've had in terms of the science and where we are with producing the data, it's worth saying that a number of questions are coming in and saying, where are we with commercial partnerships. We are exactly where we want to be. We are setting those up. We are talking to people. Simon is extensively traveling and talking to companies and saying, "If we produce this data, will you actually enter into an agreement with us?" Now it's very easy for them to say yes. But obviously, the data will be the test. And so that's where we're really focused at the moment is producing that data and using shareholders' funds judiciously. So perhaps we move to Randolph, and you can tell us how you're getting on.

Great. Thank you, Iain. So as Iain mentioned, we are developing that next-generation drug delivery platform. And we're doing that by harnessing the natural capabilities of exosomes, stem cell-derived exosomes, because they have a natural ability to overcome some of the limitations around current delivery platforms, for instance, safety. Viral vectors have been plagued by side effects. They also are limited on the type and the size of the cargo they carry. And lipid nanoparticles suffer from efficiently delivering their cargo. And all of them really suffer from a limited or a small amount of targeting. However, when you look at stem cell exosomes, these exosomes are safe. They are naturally occurring nanoparticles that evade the immune detection. This opens up the possibility of repeat administration. They have a broad applicability when it comes to delivering different bioactive cargoes. We've shown that they can simultaneously deliver proteins as well as nucleic acids. But the key thing for our platform and the critical thing is that they can target recipient cell types via different surface proteins [ on them ], and they do this by changing where the cell of origin is. So really, the exosome [ cell source ] is an important consideration when targeting drug delivery. And we've already shown this in vitro. So the last 12 months, we've shown -- as Iain mentioned, we've shown this categorically in vitro that actually, starting on the left-hand side of our slide, we show that there are different exosomes that have different sort of like cell markers, so unique cell surface markers. When you put these different exosomes on different cell types, so looking at the middle graph here on the slide, you can show that by putting these on different recipient cell types, things like epithelial cells, endothelial cells and neuronal cells, and comparing them with a HEK293-derived exosome, you can see a significant improvement in delivery from 10- to 20-fold improvement. That uptake, we then took that one step further, on the right-hand side, and looked at whether that uptake of exosomes, that specific targeting of exosomes, actually relates and is part of the delivery of the cargo. And what you can see on the right-hand side there, the pink line illustrates the fluorescently labeled siRNA delivered to by HEK293, and the 2 lines above illustrate an up to 6-fold improvement in that delivery. So we've shown that we can target and deliver cargoes in vitro. So this is why we've developed the CustomEX platform, a customizable exosome platform made up of multiple producer cell lines which allow different exosome candidates to be selected for their ability to target specific cell types. On the left-hand side, we show what the standard approach is by many of our competitors using a single cell line, giving you a single outcome, a single exosome candidate, the one-size-fits-all approach. Whereas in the blue box, you see what ReNeuron has with that CustomEX platform. They have multiple conditionally immortalized producer cell lines. So we currently have 4 neuronal stem cell lines and 3 non-neuronal stem cell lines, which can be chosen depending on their specific targeting ability. But it doesn't stop there. We also have an induced pluripotent stem cell line. So if that [ exosome ] candidate doesn't exist, we can make new -- existing -- new lines which can target different regions of the body. So you can choose the exosome that you would like based on tissue targeting, both on and off-target effects, how it delivers. And coupled with some of the engineering and loading capabilities, we can show that we can deliver this cargo in vitro. But it's not just the cell lines that is critical to our platform. What is also critical and what actually differentiates us from many people in the industry is our technology which allows us to stably produce cells and the exosomes to a scale that is clinically relevant. And this technology is called ReNeuron's conditional immortalization technology. It allows -- stem cells has a tendency to change in culture. But what we can do by this technology is actually control the proliferation of these stem cells. So by adding -- by genetically engineering the cell lines, we can now add a small molecule which allows us to switch on cell proliferation or switch off proliferation, which keeps the cell type vary, the phenotype maintained over multiple different passages. So we have stable producer cell lines. This process is fully qualified to GMP and tightly regulated with strict release criteria. It is therefore scalable. We can then produce the cells, and hence the different exosomes, at commercially relevant scales. And the exosomes are stable and safe. The technology isn't transferred into the exosomes, and we've recently gained safety data for the cells with 10 years in man. So basically, what we've done over the last sort of calendar year is actually, we have already shown that our exosomes, our CustomEX platform, can deliver a range of biologically active cargoes. As I said, we've shown with nucleic acids, but also with proteins. We have shown that they can target recipient cells via the surface markers in vitro depending on where those exosomes came from. So not all exosomes are the same, and it really shows that you need a catalog of exosomes to be able to target different areas. So what we've done is everything so far to date that we have shown that we can do this in vitro. The key next stage is to show this in vivo. And my last slide really shows is what is ongoing. And as mentioned -- as Iain mentioned briefly before, the last 6 months, we have been focused on looking at that ongoing in vivo validation. So the key things that we are showing right now is that we are to demonstrate in vivo demonstration that our exosomes can target tissues and cells in vivo with that different capabilities of those different exosome candidates. We want to confirm the safety profile of our assets and basically show that we -- this then opens up repeat administration; demonstrate a clear advantage of the stem cell-derived exosome, the CustomEX platform, over the HEK-based platform, that one size fits all; and then finally, demonstrate that targeted and functional ability -- that functional delivery in vivo of a therapeutic payload.

So what we're looking at, and if we look at the goals for the coming year, is we're going to continue to do what we said we would do. And that is to actually develop the platform, produce data to verify and validate that platform, to then take that data and use that in our discussions in looking in terms of partnering, licensing discussions. We also have plans how we can take things forward thereafter. We are looking at nondilutive funding, and a number of questions are saying, "Are you going to need more cash?" Of course, we're going to need more cash, but we are committed to doing that through collaborations and partnerships. If the data is stunning and we believe it's in the interest of the shareholders to further invest, we would come to the shareholders. But my view is that partnering is the way that we take this forward, and we have a number of discussions ongoing. People are asking where we are with our collaborations. We are so focused in producing data. Simon is talking to all those people, updating them exactly when we believe we will have data that will be relevant to them. And we will take those discussions forward. I think it's also important to emphasize, people are coming to us now. It was the other way around a year or so ago. It was we were going out touting our platform. Now people are coming and asking us, "When we have the data? We're interested to see." And I'm telling you, some of these people are very large groups. So I believe that, in summary, that we are looking after your money, which I think is really important. We're using it very judiciously. We have a catalog of different cell lines, so we can have a catalog of different types of exosomes. We are producing the data, and we are progressing those third-party discussions. And I would very much hope in the next 2 to 3 months, we will make a number of announcements along those lines. Yes, somebody has just asked us about our thoughts on Codiak. I have to say that we were very close to Codiak. We're very sorry to see what actually happened to them. But that is a case of whether they really were betting the farm on the therapeutic pipeline. We have no intention of going down the therapeutic pipeline. We will work with partners. We will work and solve their problems, delivery problems. So yes, Codiak have gone. But there are a number of other exosome companies out there. And yes, we do talk to them because they may well have technology which can improve our situation or is complementary to us, and we're continuing to talk to everybody. Is there any other specific questions? Sorry, I'm just looking down the list. Are there any competitors doing this work? We are not aware of any competitors using the technology that we are. There tends to be a very much a view is like one size fits all, and we just don't believe the data is out there to support that. And so we are going head-to-head when we are producing this data. We're not just producing data to say we can do this. We are actually producing data to differentiate ourselves against the competitors. Somebody said they worked with me at Celltech, and they played golf with me. This is very interesting. What is the half-life of the exosomes?

Well, those studies are ongoing right now. So we are doing the biodistribution studies right now. That's the sort of the question that we are answering that targeted ability. Many exosomes are excreted rapidly. But obviously, if you get targeted delivery, that won't be the case. So this is very much sort of like in the package coming forward, which we'll have that data in the next 2 to 3 months.

Somebody has asked a question about one of the legacy assets about the retinitis pigmentosa. We have basically played down the legacy assets. So any upside we get from that will be a positive. But the question was, have we been under CDA with any potential partnering of the retinitis pigmentosa? The answer is yes. What timetable are we looking at in terms of -- to start achieving value? That's a really good question because we really have to create some value this year, this calendar year. And we believe that we are doing that based on the data and the partnership discussions that we've got ongoing. Somebody said, answer the pre-submitted questions. Well, we have several pre-submitted questions. So do you just want to have a look, Randolph, and see if there's any science ones there?

Yes. One of the questions asked about the -- there appears to be inherent variation in the exosome populations produced from cell lines. That's absolutely correct. There is, and we've shown that in our preclinical. Each cell line produces a unique exosome that has distinct targeting abilities. So that's what our platform does. It has a catalog of different exosomes. From manufacturing from batch to batch, that's where we are significantly different from others. We have the conditional immortalization of those stem cell lines, which means from batch to batch, we get not only scale but high degrees of consistency. So that was something that we answered ourselves at the beginning, and we are convinced that we have a very stable product.