Transgene SA (TNG) Earnings Call Transcript & Summary

Hello, and welcome to the Transgene conference call. My name is Josh, and I will be your coordinator for today's event. Please note that this conference is being recorded. [Operator Instructions] I will now hand you over to your host, [Cecile Razimbaud], Corporate Communication and Investor Relations at Transgene to begin today's conference. Thank you very much.

Thank you. Hello, everyone. I'm [Cecile Razimbaud], Transgene Corporate Communication and Investor Relation Manager on team. With me today are Hedi Ben Brahim, CEO of Transgene; and Eric Quemeneur, Chief Scientific Officer at Transgene. Thank you all for being with us today. We are extremely pleased to share with you that AstraZeneca has exercised its first license option for an oncolytic virus generated by Transgene in the IO platform. I remind you that today's discussion contains forward-looking statements, which are subject to numerous risk and uncertainties. [Operator Instructions] I will now hand over to Hedi Ben Brahim.

Thanks, Cecile, and hello, everyone. I'm really happy to be talking with you today, and we are very proud that AstraZeneca has decided to exercise its first license option for an oncolytic virus generated from our ongoing Invir.IO collaboration. We will receive for that an $8 million option exercise payment. This oncolytic virus is based on Transgene double-deleted Vaccinia Virus TK-RR- patented virus backbone and codes for an undisclosed payload chosen by AstraZeneca. As a reminder, Transgene and AstraZeneca entered into a collaboration and exclusive license option agreement for innovative Invir.IO based oncolytic immunotherapies in 2019. The agreement included a collaborative research, option and exclusive license agreement to codevelop 5 armed oncolytic Vaccinia Virus candidates. At the signature of the agreement, we received $10 million upfront. We are also eligible to receive development, regulatory and sales-based milestone payments as well as a royalty based on future commercial sales. Since 2019, we have received some ongoing payments related to the delivery of the products and production costs. Through this agreement, we are providing AstraZeneca with our oncolytic virus expertise including viral design and engineering. We also provide access to our novel and improved Vaccinia Virus double-deleted backbone, which form the basis of our Invir.IO platform as you know. We are fully responsible for the in-vitro preclinical development of the oncolytic various candidates generated from the collaboration. In addition to the R&D, we are able to provide CMC, regulatory or toxicology expertise required to move the candidate forward. We also have the ability to manufacture GMP batches of Invir.IO Oncolytic Viruses, thanks to our own unique parent plant. Under the agreement, AstraZeneca can select several transgenes to be integrated within this candidate and other potential candidates and is responsible for further in vivo preclinical development. AstraZeneca is also able to progress the clinical developments and commercialization for this candidate and each of the other 4 potential candidates by taking up a license. Today's announcement is especially positive for Transgene and its Invir.IO platform, reflecting its attractiveness to the pharma industry. Our Vaccinia Virus double-deleted patented background has unique properties that make it a promising vector for cancer treatments. In addition, our expertise in virus engineering allows to move this type of immuno therapy to a new level by including a wide range of potential anticancer weapons. This important milestone also reinforces the value of our other OVs in development based on the same platform, including TG6002 and BT-001 as well as future drug candidates. I will now hand over to Eric to give more details and introduce our novel and improved Vaccinia Virus double-deleted backbone used for this oncolytic virus covered by the exercise of AstraZeneca's license option.

Thank you, Hedi, and hello, everyone. So this conference is a good opportunity to remind you what the Transgene has developed over the years and its long experience in developing armed VVs based on [indiscernible] vectors. We are very confident that this approach of armed viruses has the potential to be very transformational in immuno-oncology. The potency of the approach lies in the fact that it combines 3 complementary modes of actions in order to target, control and ultimately destroy the tumor -- the solid tumors. The first mechanism is the selective replication of the virus in cancer cells and its ability to induce direct cell lysis after induction of tumor host cell lysis. The second mechanism is the local immunogenic impact of the viral patient to ignite the immune system, to recruit the immune cells, and particularly, to induce this effect in the so-called cold tumors that are immune to that and to transform them into odd phenotype with more infiltrate lymphocytes. Thirdly, we also exploit the viral vector as a targeted gene delivery system to deliver particular payload in the tumor microenvironment in order to change the phenotype of the tumor in terms of immune response, ability to respond to immune therapies and other therapies. At Transgene, our Invir.IO products are based on the Copenhagen strain of Vaccinia Virus, which has demonstrated in comparative trials, several strong -- several very strong cytologic properties and very good safety profile in comparison with other Vaccinia strains. The sparing of the LC cells, in particular, the sparing of immune cells has been enhanced by the 2 targeted deletions that we have made in viral genome. The first one in the [indiscernible] creatine kinase, the second one in the [indiscernible] for the alpha-subunit of Ribonucleotide reductase. The vector obtained in this way, the so-called double-deleted VVcopTK-RR- has been patented 4 years ago and has served as the basis for our technological platform on which we are developing this large series of products and coding for specific recommended payloads to be expressed in the tumor environment and to adapt to the specific characteristic of the tumor. Of course, we have in mind when designing this product that it would be combined with other treatment modalities and some of those are designed to optimize the activity of additional treatment modality. The ability of the VVcopTK-RR- to induce immunogenic cell death and thus favor tumor infiltration by lymphocytes and NK cells was reported 3 years ago, and you might refer to our cancer research paper and stated publications to have a full idea on the immunologic ability of the virus. At the conference this year, we presented some data that would complement those we published last year on BT-001, the product that we codeveloped with BioInvent, which is one of our most clinically advanced oncolytic virus in the clinic. It demonstrated -- this study demonstrated that such armed OV can drastically remodel the immune phenotype of cold tumors. We have examples with MC38 and also additional tumors and [indiscernible] tumor. And we demonstrated really the potency of the vector and the ability to control the expression of the payload in the . Thanks to the very large genome capacity of our Invir.IO backbone and our expertise in virus engineering, we are able to design under the control of gene promoters, a large series of product, expressing various immune modulators like full-length antibodies, synthetic multidomain antibodies, full-length enzymes or cytokines and combination of those products. The flexibility of the platform and the ability to optimize the recommended expression of selected payloads are major strength for the technologies and were key factors in the launching of the collaboration with AstraZeneca. In addition to this very attractive part of virus, we have also demonstrated in the clinic that our Invir.IO-based product can be administered via several routes such as intratumoral or intravenous routes. And this was an important point in discussion with AstraZeneca. Indeed, our Phase I data with TG6002 presented at ESMO this year confirmed that vector can reach liver metastasis, replicate therein and express its recommended payload if you want for up to 2 weeks. These data are very significant in the field as they suggest that our Invir.IO product could be used to address a broad range of solid tumors, which is encouraging for cancer patient and also very important in supporting our collaboration with AstraZeneca. In summary, the unique properties of our platform as well as our capabilities in bioengineering and manufacturing are really major assets. We have developed a very productive working relationship with the team at AstraZeneca. Both our scientists and AZ scientists have had very stimulating and challenging interactions and mindsets. It is a pleasure to work so close together and we are happy with this first achievement in the program and of course, motivated to succeed in the other defined product. Now I will let Hedi tell you more about this first outcome of the collaboration.

Thank you, Eric. AstraZeneca and Transgene have developed a very productive collaborative relationship. Indeed, we have developed a fruitful working relationship with the team at AstraZeneca and they have been very appreciative of Transgene's deep and longstanding expertise in developing unique and oncolytic viruses. They are supporting Transgene with the aim to design oncolytic viruses able to access payload of interest to them, enhance the OV's anti-tumor properties in an effective manner. Today, the first of this program has successfully completed the codevelopment stage. This license option exercise is a validation of our innovative Invir.IO platform, and we are confident AstraZeneca would exercise further license options in the future. We hope that the resulting armed Oncolytic Virus immuno-therapies will have the potential to provide cancer patients with better treatment options. In parallel, we will continue the development of our proprietary Invir.IO pipeline and are looking forward to seeing other oncolytic virus candidates progress into clinical development. With that, we will now take your questions.

[Operator Instructions]. Again, there are no questions coming through, so I'll hand you back over to the hosts.

Sure. Thank you, and thanks for your time and interest. I think the communication is very straightforward and probably that's why we don't have any questions today. So to conclude, we are very pleased that AstraZeneca has exercised its first license option for an oncolytic virus generated by Transgene Invir.IO platform, leading to them making an $8 million payment to Transgene. This milestone which was part -- which is part of an important collaboration with AstraZeneca further validates the potential of our novel Invir.IO oncolytic virus platform and its unique capabilities. We are looking forward to seeing this exciting OV candidates progress into clinical development. Today's news concludes a very positive year for Transgene, which started with the acceleration of the clinical trials in H1, the very promising data of our individualized vaccine myvac and now this option exercised from AstraZeneca. I'm sure that 2020 will be another year of important value-adding development for Transgene. Thank you for your time.

Thank you very much for joining today's call. You may now disconnect your handsets. Hosts, please stay on the line. Thank you.