Thalia Therapeutics Plc (THAT) Earnings Call Transcript & Summary

Good afternoon, and welcome to the ShareSoc Discovery Company webinar sponsored by Investor Hub. My name is Mark Northway, I'm a Director of ShareSoc. I'll be your host for this evening. Starting with disclaimer, the usual. Actually, before we go to disclaimer, starting with an explanation of Investor Hub, this Discovery webinar series is sponsored by Investor Hub. Investor Hub is an engagement tool or runs an engagement tool. They give public companies the tools and data to build direct relationships with retail investors at scale. It reduces reliance on third parties and intermediaries and improves the impact of market engagement activities. Their ethos around the usefulness of engagement, both to companies and to investors is very much aligned with our own, and they've been a sponsor of this series, and we're very grateful to them for it. Please feel free to take a look at their website, www.investorhub.com. And also for sponsoring companies, please we'd be delighted if you met with Investor Hub and took a look at how they can help you in your engagement. Thank you, Pravelena. Now, the usual disclaimer. We like to present interesting companies. They're not recommendations. They are, as usual, for you to listen to, research, do your own work and come to your own conclusions. But hopefully, you will enjoy the session. ShareSoc, we're not for profit. We have 2 real planks to what we do. The first is campaigning where we look at what governments are up to. We look at what regulators, companies, brokers are up to. And if we see things that we think are not in the interest of individual investors, we make a noise about it. So we're sort of lobbying advocacy for investors -- for individual investors. But also, we're a membership organization, and we provide services to members, and that includes information services, webinars, seminars, company visits, newsletters and the like. We produce voting guidance for AGMs, which is on the website and is worth running through. That's in conjunction with Minerva. And on the education front, we produce masterclass. We haven't done too many of those. It was one recently, Steve talked, but they're usually interesting and worth attending. We have our Investor Academy online, and we also have Signet, which is an investor meeting organization, which works around the country, physical and virtual. Online forums from a connection perspective, seminars and, again, Signet, but also, we look to save you money with reduced fees on the likes of Stockopedia, SharePad, Research Tree and so on and so forth. And you will have seen on today's webinar that the link carries a -- the e-mail carries a hyperlink to Stockopedia information on the 2 companies that are presenting today. [Operator Instructions] Before you write one, please take a look and see if there is a question that's very similar to the 1 you were going to ask them if there is rather than repeating it, just upvote it and I will try and focus on making sure that the questions, which are received, the most votes get answered. So tonight, we have 2 companies presenting to you. We have N4 Pharma, and we have SEEEN. And first, the first presenter this evening is Nigel Theobald, who is Chief Executive Officer of N4 Pharma. Nigel, are you ready to go?

Yes, I am. I'll just share a screen and get the slide show running.

You have control.

Excellent. Hopefully, that is working fine for everybody. Okay. So thank you, everybody, for coming along tonight. And thank you very much, Mark, for inviting myself and N4 along today. I'm just going to run you through a short overview of the company presentation. Now, this presentation is available on our website, and it will be sent out afterwards. So I'll go through it fairly quickly because we've only got 20-odd minutes tonight, and then there'll be some questions afterwards. And we do use investor hub. So if you'd like to go on to the our website after this, if you have any further questions that we either don't get time to answer today, or you think of something later on, please do submit a question via our Investor Hub site. So we are an existing -- we're a biotech. So we're a differentiated biotech and we believe we have significant upside potential in our value. What we are doing is we're developing a gene delivery platform, so it's something to delivering RNA therapeutics into the body. We call that Nuvec, and it's our unique system that's a spiking meteor silica system, which you can find out a lot more about on our website. Our lead program, we call N4 101, and that's a special orally delivered RNA therapeutic that's got dual targeting on side it, and it's designed to improve patients' lives who suffer from inflammatory bowel disease. Now, we were established back in 2014 and listed on the stock market back in 2017. So we've been developing our system for some time now. And we're really excited by what we've learned and the area that we're looking at now for RNA therapeutics. We have a very strong board. I set the company up, let's say, back in 2014. We have a nonexec -- 3 nonexecs, Chris Britten, who's our Chair; Dr. Alastair Smith; and Dr. Mike Palfreyman, all with considerable expertise across the biotech and pharma space. And they are very strong guides towards what we're doing and helping us develop both the program we're working on and the commercial strategy. And we also have Luke Cairns, who's an Executive Director from the sort of corporate capital side as well. So again, a very strong Board. I won't go into each of the resumes now. You can find them on our website. So reason we're looking at RNA therapeutics, it's a massively growing market. It's around about GBP 18 billion size by 2028. But even though it's a strong growing market, the products being developed in this space face significant issues delivering drugs to the right part of the body and the right tissues and the right cells. So we believe that our Nuvec platform has got the potential to significantly revolutionize gene therapy because it solves a lot of the challenges that exist with the -- both the manufacturing and delivery of specific RNA therapeutics. And as I mentioned earlier, our lead program, N4 101, looking forward in inflammatory bowel disease, showcases all of the benefits that Nuvec brings. So what we've done is we've chosen a product that not only is clinically relevant and exciting, and I'll go through that a little bit more in a minute, it also shows exactly how our system works. So we're killing 2 birds with 1 stone. So we're developing a product actually through the clinic, but it's also showcasing and highlighting the platform itself. And by building that data set for our platform, we believe that's going to give us significant partnering and licensing deals and new term because that's the way we're going to grow the business before we actually have the right -- that we're ready to take a product into clinic ourselves. So we believe we're well positioned now to deliver some longer-term and some short- to medium-term significant shareholder value. I see our market cap is incredibly low for the potential that we have. And as I said, we're looking at developing this program in RNA therapeutics. And it's a proven business model for a lot of companies. So I'll just pull that here. 5 companies that all started life as technology platform companies delivering something that very, very similar to what we're doing. So looking at our Arrowhead, for example, they have got a targeting siRNA platform, and that's exactly what we've got. And now they've got a market cap of over GBP 3 billion. We've got Dicerna, who have got over GBP 3 billion, and they have just 2 products in Phase II. We've seen deals for sort of GBP 500 million upfront fees rising to GBP 1 billion for companies like DTX Pharma who have a ligandized fatty acid system. So these are all companies with delivery systems for delivering therapy, DNA, RNA therapeutics into the body and have made significantly progressed transforming themselves just from a platform company to a platform company developing their own assets, and that's exactly what we're looking to do. So what do we have with our system? So the Nuvec system, we've been -- as I say, we've been doing a lot of research on this over a while. And we started out looking at vaccines. We got a lot of that through the COVID crisis, but we now know a lot about how it works and how it behaves. And one of the things that's really important is that we can get multiple payloads onto our particle. So this allows for controlled uptake and it delivers multiple payloads to the same cell. And that's really important if you're wanting to work on an area like oncology, where you potentially have 2 pathways responsible for the tumor growth, one path where you can control, but then you get escape down through the cell and that can lead to mutation. So delivering multiple pathways, but multiple products into similar -- multiple pathways in the same cell is a huge benefit in the RNA therapeutic space. The other thing that's crucial about Nuvec is it's very good at protecting the payload. I mentioned the spiky structure. That's what we have as our unique position with our silicon particle. And that spikey structure basically protects the RNA once you load it on to it. It's a simple learning process and then it's stuck within those spikes. But what that means is that we can actually facilitate oral delivery. And that's something that other systems like viral vectors and lipid nanoparticles just can't do. So we can enclose our system in an encapsulated capsule, deliver it into the gut through the place of the passthrough just some into the gut where it's released there, and it's still protected once it reaches the harsh environment of the gut. The third element we can do, which is really important for RNA therapeutics is targeting. As I mentioned before, if you're delivering an RNA into the body, you want to get it to a specific tissue. And what happens with lipids, they go to the liver. And with viral vectors, they have a lot of side effect issues. Now, with these systems, you need to be able to target them. So what we have is a very easily modifiable base system. So we can add different ligands, different peptides to the new basic silicon nanoparticle and then that will basically deliver that payload to a specific cell and increase the cellular uptake for a particular target. And I'll explain a little bit more about what we're doing with that with our N4 101 for IBD. But being able to modify it, being able to protect it and being able to put multiple elements on our 3 key differences that we have with our system. All that, they wouldn't really work if we didn't have a really simple commercial product, and we do. It's very easy to make our system. We can load it very easily. It's just a mixing process. It's very stable at room temperature. That protection element I talked about means it's very good at freeze drying and keeping stable, so you don't need to have it at minus 80 or so, which some of these -- remember those early vaccines were. And it's also a lower cost of goods, so it doesn't add significantly to the price of the product unlike lipids and viral vectors, which are incredibly expensive. So just a brief overview, the I've mentioned some of the key things, the interchangeable payload and our ability to target cells. The lack of toxicity, you get a lot of toxicity with viral vectors and some with lipids. The fact that we have a very strong background IP for our product, whereas you see legal disputes everywhere with various lipid particles. We are, though, in preclinical stage compared to some of the viral vectors and lipids that are already approved. But as I also mentioned, the protective nature of it means we can deliver orally. And that's really important because viral vectors are just too toxic to deliver orally and lipid nanoparticles, once they get into the harsh environment of the gut, they just break down and not deliver the payload. So we feel we've got a number of significant advantages to our system. So what we've decided to do is we are bringing our own product forward with for the IBD market. It's an oral product, and it's an RNA product for treating IBD. It has 2 different nucleic acids on. It has an mRNA to promote the body's natural inflammatory treatment, and it has an siRNA to knock down something called TNF alpha. TNF alpha is the basic inflammatory agent that's associated with IBD. The other thing that's really important is we -- I talked about targeting. In the gut, you want -- the macrophages are the cells that are actually causing this extra production of the information of TNF alpha. So you want to get the payload into the macrophage cells. So what we do is we add a ligand to our basic system. I mentioned various ligands or peptides. And that will basically target the macrophage cells. So we have a targeting element, we have a protecting element, and we have a dual loading element. So all 3 of the key benefits for the Nuvec system are present in this one product that we're developing. But as I said, it's not just about the actual showcasing the platform. Whilst that's incredibly important to us is also a highly attractive market opportunity in itself. So the current treatments for IBD are predominantly TNF alpha inhibitors. They're effective, but they do come with tolerance issues, they're injectables, they lead to lack of patient compliance. And even though that may still uptake up 78% of the market, but the research has shown that people want an oral solution to this rather than having an injectable solution. And that oral market is already starting to grow with certain products being developed called oral kinase inhibitors. But these, again, have got some quite significant toxicity issues in other organs. So it's a highly attractive market, GBP 20 billion now and expecting to grow over to around GBP 28 billion by 2030. So it's a strong clinically relevant, commercially relevant opportunity that showcases the best of the Nuvec system. The other reason for looking at this system, as I mentioned, we want to do license deals. We need to take these products as far as we can into clinic and then license them. And there are a few very large players in this space. These companies are all active in the IBD market. They have products approved. They have products going through developments. They are very acquisitive. So it gives us a really neat group of companies to target rather than every pharma company, which we obviously are targeting with our platform per se, but this gives us a smaller group of highly, highly attractive and very, as I say, inquisitive and acquisitive companies who're very active in the IBD space. So what are we doing? What we're doing -- with N4 101, we have a number of key value inflection points. We're looking to drive the value of our company from the low market cap that we have to date through to a company that can take these products ourselves into Phase I clinical trial. So we finished all the in vitro work on our N4 101, say, TNF alpha and the mRNA. For -- the mRNA for something called IL-10. I didn't go into that detail, but it's a TNF IL-10 product, so a dual loading product. And we're going into animal studies very shortly, and we'll have those results in the first half of this year. We're then looking to reach out and get pre-IND approval on the oral iron IBD product, talking to the FDA going through the whole program that we need to do to actually take it into clinic in 2006 and then on to further studies in 2027. So we have a very exciting program with N4 101 program, but that will take time before it gets to some commercial valuation. So it's our longer-term huge opportunity to grow value for the business. In the medium and shorter term, we have some interesting things that will give lots of news flow. We have recently acquired a product we would call ECP 105. It's a glaucoma product, a company called Nanogenics, and they are surely awaiting a response from the FDA on getting an orphan drug status on that product. And that orphan drug status will significantly alter the valuation of that business. And that's something we're looking to see come through very soon. There might be further comments from the FDA, but we're hoping that orphan drug status will be approved. We then talked about the platform. So as well as doing the in vivo work on the N4 101, we're also developing the data for the key elements of the Nuvec system in terms of how it targets, all the manufacturing data, it's biodistribution, early preclinical toxicology studies, exactly how much we get on the system, how quickly it releases into the cells. All these are data that we know licensing companies want to see. So by doing the 2 things together, we're working with both the platform, looking at IBD product and the IBD product showcasing developments of the platform, it allows us to build our data set because it's data that will lead to deals. Having good data is the thing that's going to get us a good license deal for our platform. And that's why we are putting all of our efforts in developing this data package. We're also doing some work with a company called SRI International. So they're a U.S.-based company, and we're hoping to have a collaboration through working with them sometime this year as well. So just explain a little bit more about that. I mentioned the targeting nature of Nuvec. And what SRI have is they have a series of different peptides that are special targeting peptides for delivery into certain cells. They call those Fox 3, MGS. That's the name for it. And what we've shown with them already, we have taken the MGS peptide. We've combined that with our Nuvec system. And we've shown that it only gets taken up into the target cells for that particular peptide. But what we've also shown is by doing that take-up into those cells, we still get strong cellular knockdown. So we get knockdown of the target gene in that particular cell. So having developed that early data, we're now starting to present that data to major pharma players together because we're looking to do some joint development work with ourselves and with SRI. And the model is really a triumvirate that we're looking for. So we've got our background IP with the Nuvec system. SRI have got their background IP with their MGS systems. And what we're looking to do is to create a further bit of IP that will come from working with a partner, be it J&J, Glyco, however, who has a compound, you put the 3 things together and new IP will be created out of that, which will be shared across all 3 parties. And the way we're doing that work is we're doing that with a certain collaboration deal between SRI, ourselves and the third party. So that's really our commercial strategy. So we have platform, proof-of-concept data that we're developing, and we're doing that in 2 ways. One, specifically on the platform itself and the other, by working on our N4 101 IBD program. And we're looking to, say, present that data so that we can get platform deals, licenses for people to use our Nuvec system to develop their own products in the RNA therapeutic space. And that -- but that licensing -- that work will help us because that drives the value of the business. So that's the short to medium term side. But the long term, having our own products that we can take into clinical stage ourselves, initially the IBD product, but subsequently, there will be loads of other products using the multi approach and the targeting nature of the Nuvec systems in oncology, in gene therapy. So we were looking to build a whole suite of assets to become a company like those ones I sort of said earlier, the ones with really large valuations, but we know we have to get there step by step. And the priority at the moment is expanding our data set on our platform so we can get a license deal, but that allows us to bring in the cash to start developing a wider portfolio of products that ultimately we can take into Phase I and Phase II clinical trials ourselves. The further you can take it yourself down the actual clinical trial program, a much, much greater the sort of valuation deals that you can do. I mentioned some of those earlier companies who are doing 500 million deals because they've got something into Phase II clinical trial. So it's a proven business model, and it's one that we need to work through slowly bit by bit as we build our data set because it's the data that's going to deliver the deals for the company. So in the summary, we're rapidly growing RNA therapeutics market that we're competing in, but we know these still face significant issues in delivering drugs to the right tissue in the right parts of the body. But as I mentioned, we believe our Nuvec platform basically overcomes those issues, and it has the ability to really become the sort of Intel Inside, if you like, of RNA delivery, working on the targeting, the protection and the multiple loading of the RNA therapeutics. And we're focusing on progressing our lead program, our IBD product, into clinic and working in partnership with that. But also, as I mentioned, that's showcasing all our key benefits, keep in mind in protection, multiple loading and targeting. And that data set that we keep building is going to allow us to drive platform partnering and licensing deals in the near term. So we believe we are well positioned to deliver long-term significant shareholder value, but also building that share price up through the short and medium term as well. And in particular, we'll be having in vivo results coming through very soon in April, maybe May through 2025. So that gives you an overview of N4, and I'll just hand over now and stop sharing to see if there are any questions.

Thank you very much, Nigel. I have a few questions coming through. We'll run questions on to about 25 too because we start added a 5 minute intro. So a question as to whether the Nuvec silicon component is basically the same as capital and aerosol, which are microcoloidal silica and which are used in a tablet excipients. And if not, how does it differ?

Right. Well, it's not -- so being -- I don't know those specific errors, but being micro, they are significantly larger than us. So we're a nano size. So the new particle itself is around 200. It's a 180-nanometer particle. And what it has is a spiky structure. So it looks -- I know if you've ever been to the Far East, you might have seen something called a Rambutan fruit, which is a fruit with spikes or us in the U.K., quite often, if we go walking in the summer, you get these little graspers stick to your socks. And that's what it looks like. Within this spiky structure, we trap the RNA. So it's very, very different to those microbial excipients we talked about. This is a specific thing that actually attaches the RNA into the spikes, delivers it into the cell. And when it's into the cell, the spikes breakdown, there's a charge reaction as well that gets it out of the cytoplasm and into the cell. And there's a series of different videos we are doing at the moment on the N4 site, which helps us describe a little bit more about the science and how Nuvec differs from other silicon systems as well as how it differs from lipids.

I was going to go with arcane that's probably not as good a marketing number...

We're more in than that.

Fantastic. Question on cost. If it's low cost and easy to produce, isn't open to produce -- to easy competition and why aren't others doing this, which I suspect is an IP?

Yes, Very much. Yes, very much around IP. So it's patent protected. We have licensed the patent exclusively from the University of Queensland in Australia. It's granted in all major territories. So U.S., Europe, India, China, Japan is long way with Australia and Canada. And what it is, it's a pattern around that structure. So it's a pattern around the spiky structure around mesoporous silica particle. So no one else to make a spiky silicon nanoparticle with a halo mesoporous core. And that's what we have patented. The actual process itself, as I say, is a sort of standard stub process for making the part. It's a 3-step process. We make the call. We then surround it with the spiky silica structure and then we burn off the thing that was used to make the core and that leaves us with this organic silica structure. But the actual process of making it is fairly straightforward. But then really importantly, the mixing process is just literally that you take the RNA, you take the silica particle and you mix the 2 things together. If you want to do an RNA into a lipid, it's a very, very complex system of encapsulation and very, very expensive. So we are not expensive to do that sort of mixing formulation side in any way.

And 1 more clinical, which I'll ask you to rattle through, if you don't mind, because I want to get on a couple of financial questions. Which particle is providing the active substance for N4 101? Is the active currently approved by the regulatory authorities for any indications, including IBS?

No. It's actually, in the moment, it's IBD. So it's not -- it's an important distinction because IBD is Crohn's disease and ulcerative colitis rather than just the standard IBS. So no -- we have -- we get an off-the-shelf siRNA that's used to knock down TNF alpha. But that hasn't been approved yet. I mean that will all be approved as you go through the regulatory process. The regulatory process is quite long and challenging for -- especially for lipid, any nanoparticle because nanoparticles are only just coming to the market, so the regulators don't have a set of complete guidance. So that's what we'll be doing as we go through Phase I clinical trials and ultimately into Phase II and III to get that particular siRNA knockdown -- siRNA gene to knock down the TNF alpha approved.

Cool. Can I ask you something about the costs of the -- your pre-Phase I, the cost of bringing this to market and the funding would be that share funding or debt funding that you'll need to get there?

So we -- I think to get into Phase I clinical trial for an IBD product, you're looking somewhere around 5 million plus, maybe 5 million to 7 million to get you into a Phase I clinical trial. So we don't have the ability to raise that now at the moment. But what we are doing is say we're building our data set on our platform. So beginning a license deal -- if we get a license deal for our platform, that's going to move our share price stratospheric anyway. And on the back of that move, we will then be able to raise the funds that we need that 5 million to 10 million to take it into Phase I clinical trial. There's also a nondilutive grant funding that we can look for, specifically for taking products into Phase I clinical trial as well, and there are different opportunities that we're also considering. So it's a combination of step of nondilutive funding and slower platform deals that get -- with the data that we are able to generate with our existing funds to basically get a license deal to increase the value of the business so that we can then raise further funds to take products in the clinic.

Okay. I think non-dilutive was the key word I was looking for. Then what is N4 Pharma's growth strategy for the next 18 to 24 months?

So I think I sort of mentioned it. So what we're looking to do is we're looking to build our existing data set around our platform, showcasing all the key benefits, looking at all the elements that -- questions that we need answering when we have our business development conversations with the major players to build the short- to medium-term size of the company. So we're growing the value as we go through that program before we can then take our N4 101 program into clinic. So that's the sort of the next 18 to 12 (sic) [ 24 ] months. Our license deal will be built on the back of good data. So we are continuously generating good data on our Nuvec core system to drive short- to medium-term value.

And the expected ROI -- it's a difficult question for you to answer, but ROI for investors.

Absolutely, very difficult questions. So I deliberately picked up some companies earlier that you looked at that have got multiple valuations, the valuations in the hundreds of millions and some that have even gone into the other GBP 3 billions because these are all companies that have started life as a platform tech. So we do know that we have a system that we can use in a number of different areas. So ultimately, we could have a whole range of different products. So the ultimate return is very, very high, but we need to get there and that's our challenge. How do we move through that process from being a small biotech now to a larger biotech with multiple product opportunities? And as I said, that's what we're doing with our platform and licensing deal.

And what do you see as the most likely licensing deal or the best opportunity for a licensing deal in the near term?

I think the best -- the near term, the best licensing opportunity will be someone who's already got an RNA therapeutic that they are struggling with in clinic maybe not -- they're looking for an alternative to a lipids system or a viral vector system and so they'll want to look at an alternative system. Using our platform, that will get us into a deal with a company like that. As I say, the more medium term is us doing a licensing deal on our IBD product and other ones later on. So it's looking at a company that's I think struggled with something. It may well be that they failed a clinical trial because of cytotoxicity issues or they couldn't deliver enough of it to the right cell. And there will be a number of reasons why they're looking for an alternative to their existing system. So that's who we're trying to reach out to at the moment.

Would they not simply acquire -- look to acquire you?

They could. That's one of the things that we could see as a route from the company. But we do have a number of -- we can license this in many, many different places. So if the company was big enough and the value opportunity was strong enough for our shareholders, and the price was right, then they could look to acquire the whole technology because it would be able to work across our wide portfolio from one of those major pharmas. But typically, they don't do these sorts of acquisitions until they get to those sort of late clinical stage trials. So it's a sort of catch-22. We'd love someone to look at acquiring us early when we've got sort of million, GBP 50 million, GBP 60 million valuation, but most companies, they're quite happy, these big companies, to spend GBP 1 billion having seen the biotech companies do all the hard work themselves giving them through to the Phase I/II clinical trials.

Super. Nigel, thank you very much. Indeed, that was very interesting. There are 2 unanswered questions, which I'm afraid I'm going to press dismissed on here. But if we may, we will ask you to scribble a response to both.

Absolutely. Or again, if those people who ask those questions, if they want to submit it on our own investor hub platform, please they can do that do so as well in there. But we've got the presentation up. They can just get on to the presentation and submit those questions on the back of that.

Fantastic. Thank you very much indeed. Thank you. Much appreciated.