PCI Biotech Holding ASA
OSE:PCIB
PCI Biotech Holding ASA
OSE:PCIB
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Good morning, and welcome to our quarter 3 report webcast. I'm Per Walday, I'm the CEO of PCI Biotech. I have with me also Ronny Skuggedal, who is the CFO of PCI Biotech.We will begin with the highlights for the third quarter, followed by a close look at our 3 development programs. And an overview of key financial figures and outlook for the coming year. After that, we will open up to questions from the room as well as questions that can be submitted via our web link.So let's start with our customary disclaimer statement. Please recognize that this presentation will include forward-looking statements. And of course, any projections and expectations will involve risks and uncertainty. With that, let's go to the highlights of the third quarter 2018. For the fimaCHEM program, our lead program that is nearing development in pivotal phase, we see continued positive early signs of efficacy from Phase I. We have now reached the median overall survival in the cohort with the dose that we will develop further in the pivotal study. Preparations for the pivotal study are progressing towards initiation early 2019. And we have, in this quarter, also presented the Phase I dose-escalation results at the large ESMO conference in Europe. For the fimaVACC, we have entered into collaboration with renowned international cancer immunology institute for analysis and characterization of the clinical immune response of the Phase I study. And we have also, in this quarter, had a U.S. -- or just after this quarter, had a U.S. patent granted for this BAND-AID-like device that you probably have seen if you follow these presentations before for skin illumination and also possibly injection. And I'll come back here to that as well. fimaNAc, we established in the third quarter a new research collaboration with Bavarian Nordic, which is an immunotherapy-focused biotechnology company. We have also, not least importantly, completed a fully underwritten rights issue of NOK 360 million just after this quarter. And we have also further strengthened the clinical organization to meet what we need to be able to deliver the pivotal study. So those are the main highlights for the third quarter. So let's take a look at the company. We are a listed cancer-focused company listed at the Oslo Stock Exchange. We have a platform technology called Photochemical Internalization or PCI, which originates from the Oslo University Hospital, the Radium Hospital, which is just the next building to where we are located. We are developing this technology in 3 different programs. We've named these programs fimaCHEM, fimaVACC and fimaNAc. fimaCHEM is chemotherapy enhancement, localized chemotherapy enhancement, by using this technology. And we have a program in bile duct cancer, which will start pivotal development early in 2019. We have some very encouraging Phase I results that we just presented, as I said, at ESMO. And for fimaVACC, the second clinical program we have that is in Phase I, we have some initial immune response results that looks very promising. We have 1 research collaboration there as well. And we are now working on in depth analysis of the immune responses that we've seen in this study.And the third program, fimaNAc, where NAc stands for nucleic acid therapeutics, is a collaborative program where we work with other companies that work -- use our technology to see whether they can enhance the effect of their gene therapy, their nucleic acid therapeutics. And we have 6 research collaborations that are established in this program. So I want to give also a quick review of how the technology works for those of you who may listen to this for the first time. PCI, Photochemical Internalization, it's photochemistry -- we're using light and an active substance to open up small capsules inside cells that might harbor therapeutic agents and thereby increase the effectiveness of these therapeutic agents. So a number of therapeutic agents have a tendency to get locked into these capsules called endosomes in cells, and we have a system with a photosensitizer, fimaporfin, which locates on the inside of those membranes in the endosome and when we illuminate the tissue, we will activate that photosensitizer that activation will be transferred to something called singlet oxygen, a very reactive molecule that will react with components in the endosomal membrane and make that membrane leaky. And thereby, therapeutic agents that have been trapped in these capsules, in these endosomes, can leak out and become effective. So that's the idea of -- that's sort of the mode of action of the technology, of Photochemical Internalization, a way of getting molecules into cells in high enough concentrations to become therapeutically active. And it is the solution to a key challenge to several modalities, not least large molecules that needs to come into cells to be effective. We are, as I said, applying this to enable drugs to fulfill unmet local treatment needs, chemotherapies in the fimaCHEM program, and for fimaVACC, use this technology to enhance the cellular immune response that is very important for therapeutic effect of vaccines like cancer, therapeutic cancer vaccines. And also for nucleic acid therapeutics, large and charged molecules that need to get into cells to be effective, but can't get into cells by themselves. They get trapped in these endosomes inside cells -- they get engulfed by the cells, but trapped in endosomes and we have a method of actually releasing them very efficiently out of endosomes. I have some more information here, I will just briefly touch on that. fimaCHEM, we have had 2 Phase I studies. First one in more or less [ old comers ] that can be illuminated by this technology that was published in Lancet Oncology, and then thereafter, a Phase Ib study in bile duct cancer and those results we will come back to later in this presentation. We are, on the basis of those very promising results, ready to start in early 2019, a pivotal study with fimaCHEM in bile duct cancer -- inoperable bile duct cancer as a first-line treatment in this disease. For fimaVACC, this is for enhancement of peptide vaccines. And therapeutic cancer vaccines have had a rough time, to put it mildly. A number of those projects have failed in late-stage phases. And probably partly because they don't get enough cytotoxic T-cells stimulated by the vaccine. And we have a technology here, which can enhance the number of cytotoxic T-cells and how quickly the cytotoxic T-cells can be enhanced into the patient. So we have some very, very strong preclinical data with this. And we have a Phase I study where we have included a number of different healthy volunteers and have a vast number of samples that we are now characterizing the immune response within -- with some very encouraging early response results.And then for fimaNAc, the hurdle really is, as I said, delivery because these are large molecules and need to get into cells in order to be effective. This is more of a collaborative approach so we have 6 collaborations with some of the key players in this field established. And the aim here is, as it is with fimaVACC, to out-license the technology on a non- or semi-exclusive basis to companies that are developing these different technologies. So that's the overview of the company and the different programs. Now I want to go into each of them and start with fimaCHEM. This is just a mode of action showing that therapeutic agents are trapped in endosome. And with the PCI technology, we can release them and they can reach their target. And this goes for a number of different agents that we have tried to screen and we've seen that more than 20% of relevant chemotherapeutics we can actually enhance. We are focusing on bile duct cancer for the development of fimaCHEM. It is an orphan disease, a rare cancer, with yearly incidence of 1 to 2 per 100,000 in the Western world, but higher in Asia. The 5-year survival rate is less than 5% when you include those that have been surgically resected. But it's almost 0 when -- if you consider only inoperable patients. The average survival of inoperable patients is about a year with current standard of treatment. And the current management of these patients involve, firstly, surgery. The thing you want to do with these patients, if you can, is to take out the tumor, but only a small fraction of the patients are actually resectable. The tumors are resectable in only a small fraction of patients, less than 1/3 at presentation. And then with the patients, what you do is to stent the bile duct. To keep it open, you put in a stent, a plastic or a metal pipe so that the biliary drainage can continue. And after that, you give chemotherapy and there is nothing approved. No drugs approved for this disease. But the recommended chemotherapy is gemcitabine in combination with cisplatin. When we select an indication for PCI, there needs to be a local treatment need -- unmet treatment need, with that indication. There needs to be a possibility of actually illuminating the disease, and we need to have an active chemotherapy that we can enhance with our technology. And all of those 3 criteria are fulfilled with bile duct cancer. We can enhance the recommended chemotherapy. Although not approved, we know that gemcitabine is the chemotherapy that is used and we can enhance that. It's easy actually to illuminate the bile duct because all of these patients are treated with endoscopes anyway, so it's just to take a fiber into the endoscope and illuminate the bile duct from the inside. And most of these patients actually die from local effects of the tumor, not from distant metastasis, and therefore, local regional control of the tumor is very important. We have also, with this technology, in preclinical setting and also indications from what we've seen in the clinic seen that we can induce probably what is immunogenic tumor cell death. We can, in mice and rats, if we treat and inoculate the tumor and eradicate that tumor with this technology, you cannot afterwards inoculate and build up the same tumor in that same animal. They become immune against that. So somehow, this has an immunogenic death that triggers the immune system, which may have an effect also when you have metastatic disease even though it is a local treatment. It's a bit more speculative, but we will probably get indications in the pivotal study of whether this is true or not because we will include metastatic patients as well. So what we do with this technology is that we enhance the first treatment with gemcitabine and then they go into standard treatments, standard of care, which is up to 8 cycles of gemcitabine and cisplatin. And for the dose-escalation study, we've done this single treatment at 4 different dose levels in 4 different cohorts. And what you see on the screen right now is the best overall response during the first 6 months after the treatment where we followed the patients. And the Cohort I to IV are with increasing dose levels of fimaCHEM -- increasing doses of fimaCHEM. This is a waterfall plot showing the baseline tumor size is 0%. And if it increases, it goes upwards. And if, during the treatment, decreases, it goes downwards. So this is the best overall response seen during those 6 months. And as you can see here, these are few patients. It's a Phase I study, it's primarily a safety study, but the indications are quite encouraging. You can see that in Cohort III and IV, the tumor responses are much more dramatic than we see in the early cohorts where we have increased the fimaCHEM dose. The interim average overall survival of all 16 patients in this dose-escalation study was 18.9 months per October 2018 with 19% of the patients still being alive. We had a median overall survival that ended across all of these dose levels at 14.4 months. And as I mentioned before, the standard of care normally provides for similar patients approximately 11.7 or around a year of overall survival.So what happens then if we take the dose Cohort IV, which is the dose that we want to continue with to see what is the response in that specific dose. We have 6 patients that were included, four were radiologically evaluable, and what you see here is radiologically evaluable patients at 11 in total. We had 4 of those in -- that we could follow in Cohort IV. This is a demonstration or a table showing Cohort IV versus the full study. You can see some of the baseline parameters, average number of gemcitabine patients with radiologically measurable lesions and average overall tumor size at the top 3 and see that there is not much difference between Cohort IV and the full study. So it's representative in that sense. You can see that the objective response rate is, in number IV, 3 out of 5 patients; while it's 4 out of 12 patients. So it's a 60% objective response rate in Cohort IV. The objective response rate you normally see with gemcitabine and cisplatin is below 20%. The interim average duration of response, which we don't measure in this study, but we've gone to the investigators with responding patients that asked this question [ once ], to see how much it was at that time. And it was, when we measured this, 15.4 months in Cohort IV and 12.4 months in the full Phase I study as an average. So it is above that now, but we are not following these patients any further. We don't own the data, so we don't know exactly how much it is. That's why we have this bigger or equal than in that part of the table. And as you can see, the overall survival has now ended in Cohort IV on 21.7 months, which is quite much more than the 11.7 months that is normally seen with this patient population. And the -- as I said, the median overall survival was 14.4 in the Phase I full study. So small patient numbers, but quite encouraging results.So what is the status and strategy going forward then? This is a rare disease. We have orphan designation in both U.S. and EU, and by this, we have recognition from both EMA and the FDA that there is a medical need and that there is a potential therapeutic benefit with this treatment. We have completed the Phase I dose escalation. We see good tolerability and we see some promising early signs of efficacy. Tumor shrinkage in almost all radiologically evaluable patients as you could see on that waterfall plot. And encouraging overall survival data at the selected dose level. We have had discussions last year with the regulators about how -- what needs -- what is needed to take this to the market because this is a population without any approved drugs and with a very high unmet medical need. And we have got agreement with the authorities that a single randomized pivotal study with an interim read for a potential accelerated or conditional approval is sufficient for this indication. So on the basis of that, we have now designed a study and are initiating that study early in 2019. We have also, in parallel with this, done an extension study because what we want to do in the pivotal study is to repeat the treatment. The data you've seen on the Phase I dose escalation was with a single treatment. So no doubt even if we repeat the treatment, wouldn't be tolerable, we would go into a pivotal study with the single treatment because these data are quite strong. But we might be able to even increase the data or get even better data with repeated treatment, that's normally what you do in oncology patients. And therefore, we started this extension study in parallel with what we're doing to get some safety on repeated treatments so that we can initiate the pivotal study where we repeat the treatment. And that is the plan now, we reported in the launch of the proposed rights issue that -- and in the prospectus related to that rights issue that we have had, at that time, 4 patients through what we call the safety window after the second treatment without any schedule-limiting toxicity. And we think this is enough. This is quite good safety data. So we have delinked the extension study from the initiation of the pivotal study and will initiate that on the safety data that we have.We have also had some issues with recruitment into the extension study. We anticipated that recruitment to be quicker than it was. And what we've done in relation to that is to focus on a large feasibility study to reach out to a large number, over 200, sites across Europe and the U.S. to identify the best site with large catchment areas that have a high number of patients and are willing to be included in our study. So we're right now in that site selection process to finalize who are the different sites that are going to be in that study. We have also now just recently strengthened the clinical organization by appointing Karin Staudacher as the Clinical Project Director responsible for this study. She has a long experience from running clinical studies, most recently worked in Targovax, and before that, in Algeta and was responsible for the Xofigo study, so with a very good experience from previous development. And what is the study she will be responsible for? It is a randomized pivotal study in newly diagnosed patients with inoperable extrahepatic bile duct cancer. It is with or without liver metastasis. The study design, as I said, is based on thorough discussions with both European and the U.S. medical agencies. It will involve approximately 40 key hospitals then selected out of this extensive feasibility study across Europe and the U.S. It'll take, according to our calculations, approximately 36 months to get to the interim analysis and approximately 50 to a final analysis. But as I mentioned, there is an opening for potential accelerated approval based on the interim analysis.The study has a randomization, one arm of patients get only standard of care, gemcitabine plus cisplatin. The other arm gets the standard of care, but up to 2 treatments of fimaCHEM in addition.The primary endpoint of the study is progression-free survival. And overall survival will be a key secondary endpoint. Of course, the regulators want to see that this translates over to survival, not just that you get progression-free -- or the patients are progression free. But there's a very good link between progression-free survival and overall survival in this specific disease. The interim analysis primary endpoint is also PFS then followed by objective response rate that you have seen data on previously here. We will establish an independent data monitoring committee that have regular reviews, but there is no planned formal futility stop for this. So it's not like planned stop for if this is futile. But there is -- but there will become -- come recommendations from the IDMC and those recommendations will be made public when they are made.So with regard to that, what is the progress reporting that we're going to do with this pivotal study? We will communicate key milestones in press releases such as start of the study, which is first patient dosed, and whatever IDMC recommendations we get during their review. We will be blinded to the data ourselves, but the IDMC will be open to the data and can give us recommendations on a general basis on what to do. Any clinical trial results presentations, filing, et cetera, those key milestones that you have through development. And progress will be updated in quarterly reports where we will report number of country approvals and number of sites open for enrollment. And also, of course, whether the study is going according to plan or not. So this concludes the report on the fimaCHEM program. So let's go over to fimaVACC. This is, as I said, a vaccination technology. And the primary aim of this vaccination technology is to enhance the cellular immune response of vaccines. We just mix fimaporfin, our agent, with the vaccine injected into the skin, wait a few hours and illuminate the skin afterwards. And by doing this, we can affect or modify the intracellular trafficking in immune cells of the antigen of the vaccine and thereby make it express a higher level of cellular responses. And what we have proven mechanistically is that we can release antigens from endosomes, which shall then transported into -- cut off by proteasomes and then transported up with MHC I -- MHC class I presentations generate more specific set of toxic T-cells, which can attack cancer and virus-infected cells more efficiently thereby being better as therapeutic vaccines. So strong potential in this technology. It has a unique mode of action, can be combined with a number of different adjuvants. It has a broad applicability across both protein and peptide antigens, can be used for both prophylactic and therapeutic vaccinations. There are a number of prophylactic uses that also need stronger cellular immune responses. Excellent stability and user-friendliness in that there are few logistical changes -- challenges. The product is stable at room temperature and can be autoclaved and stable for a number of years. And we have some very important recent IP generation around this, so very good protection on this vaccination technology. We have some very strong preclinical results that we have shown before and moved on the basis on that into a clinical translation with the objective to determine safety, tolerability and immune response of fimaVACC with 2 different -- one peptide and one protein, the HPV E7 peptide and KLH protein. Three parts of this study, tolerability, fimaVACC vaccination and then an optional part with optimization of the fimaVACC regimen if that is needed. We have included more than 90 subjects in this. We've completed part 1 and part 2 and we have released the early [ L ] spot results showing that we see a higher number of T-cells, higher response rates and also that they appear quicker. This is up to 3 vaccinations and you can monitor how quickly the immune response comes.Now our near-term focus is on characterization of the immune response further to see exactly what this immune response looks like. And for that, we have now established a collaboration with the Department of Medical Oncology at Leiden University Medical Center, together with Professor Sjoerd van der Burg, which is one of the leading persons in the world for this kind of immune analysis. And we will report the results of this as soon as the results are available. And we have said that this study will be completed by second half 2018. So in the near future, we expect to have something to tell you about the results of this study.And then the last program, fimaNAc, nucleic acid therapeutics. As I said, large molecules need to come into cells to work. It cannot enter cells by themselves, but need some kind of mechanism to get in there. This is perfectly suited for nucleic acid therapeutics. We are not putting a lot of resources ourselves into this, but we have very good preclinical data on the technology. And we have shown that data to a number of the companies that are working in this space with siRNA, microRNA, mRNA, DNA, et cetera, and there is quite a lot of interests. So this is still -- getting these into cells still quite a big hurdle. There are large companies working on mRNA today like Moderna, you've probably heard about them and BioNTech and other companies, CureVac, et cetera. A lot of investment going into the area. But there's clearly still issues in relation to how to deliver this efficiently. We have established 6 collaborations within nucleic acid therapeutics with key players in this field. And this collaborations are research collaborations so we test the synergies between the technologies and what we will report out of this is when we have a change or we report something together with the company. We don't own the data alone. We own it together with the companies that we are working with. Two research collaborations have been established this year, IMV in the first half of the year; and now in the third quarter, Bavarian Nordic. We also have one collaboration within the fimaVACC area with Ultimovacs, which is a company that is here in the Oslo Cancer Cluster. And this was what I was going to say on the 3 different program before we go into a review of the finances. So I give the podium to Ronny Skuggedal, the CFO.
Yes, some words about financing. First of all, we completed the fully underwritten rights issue of NOK 360 million in October. This is, of course, a very important milestone for the fimaCHEM development program. It's expected to fund the pivotal study beyond the interim readout for potential accelerated approval. So the financial risk is taken out of the project. The rights issue was supported by the major shareholders and it was subscribed for by 87% of the subscription rights. Net proceeds is estimated to NOK 328 million. And to hedge the currency risk in the project, some of the funds are placed in euros.Net proceed -- sorry, the use of proceeds for the company going forward here is not changed since the release of the proposed transaction. And as you can see here, the total estimated proceeds is within the range of the net proceeds after the transaction. And here also for the fimaCHEM program, it's notable here that additional funding requirement after the interim read. That, of course, at that stage we know the outcome of the interim read and if successful, this is the additional funds needed.So the key figures for Q3. Public grants in line with the previous years. The operating results year-to-date, around NOK 30 million this year compared to NOK 27.5 million last year and that's impacted by the clinical activity in both the clinical stage programs. And cash position by end of September was NOK 20 million and that's, of course, prior to the net proceeds from the share issue. And it's also in addition, I can mention that usually the Q4 is less cash intensive quarter because then we receive the SkatteFUNN grant in the fourth quarter. I think that was it.
Very good. So a review of the key near-term milestones and what have happened in 2018. In the spring, we transferred from Oslo Axess to Oslo Børs, the main list, the Oslo Stock Exchange. We have taken out the financial risk in the company by financing of the pivotal fimaCHEM study being in place through a rights issue that we did -- that we completed now in October.We have also completed the design and showed you the design of the pivotal study.The remaining things for this year: the safety of repeated treatment to be reported and Phase I in healthy volunteers to be completed for, respectively, fimaCHEM and fimaVACC, and then in early 2019 initiation of the pivotal bile duct cancer study.So that completes the presentation for today, and we can open up for questions from the room to start with.
[indiscernible] I think we have to start a little bit with the right issue there. Back in 2016, you had a right issue, very successful at that time there. And this fall you had another one here, I guess, not as successful. If you go into Hegnar Online, Tech Investor, read the comments there, there's a lot of disappointed and angry stock owners. My, I guess, simple interpretation is that NOK 360 million was probably too much for the owners of PCI Biotech here. So to finance new stocks, they had to sell old stocks to finance the new stocks there. So that put a lot of pressure on the stock price. Looking back, knowing what you know today, is there anything you could have done different, anything you regret, and not least, anything you would like to say to these very disappointed stock owners?
So do you want me to start on this or -- in hindsight, you can always be much more wise than you are looking forward. That's always the case. We had deliberations with our major shareholders. We had a board that was very active in discussing this. And what it ended up with for us to be able to raise this amount of money was to do a rights issue. And rights issue is, by definition, the most shareholder friendly in the sense that you can also -- you have subscription rights and you can also sell subscription rights. But we considered, together with the advisers, all different kinds of ways of getting this done and what was doable and that the board landed on was the rights issue. I don't know if you want to add anything to that, Ronny?
No, it's in line with what you say, Per. And as you said here in the audience that looking back at the history, this had been a success before. So yes, those kind of considerations.
And what to say with the -- to the shareholders that are disappointed, we hope that we can provide some good news in the future and we have very strong hopes for this project and these programs and that we can lift the value of the company again to this becoming a lucrative investment. We are working in an area with very long time lines and high risk. And one need to take that into account when looking into how you invest into this business. But we are working very hard to create value on the long term.
Okay. I must admit that I was very disappointed that you were not able to get a partner agreement to finance the pivotal II study. However, if you look forward, not having signed an agreement now, I guess, that means that you will get a much larger revenues from the sale in the future with signing a contract later on. I guess, if you had signed a contract now, you probably got 25%, 30% of the revenues. If you are waiting until later on now, you probably get significant more, I'm not sure, maybe 50%, 60%, 70% of the revenues.
It is always -- so that if you bear yourself the risk and take out the risk by moving a program forward and are successful, the revenue part on the other end will be much higher because, otherwise, the partner will bear the risk. So that is absolutely the case.
You want to say anything about what kind of revenues you can expect percentage-wise, 50%, 60% is that too high, I guess...
It depends on what kind of deal you make and how you share territories and what kind of territories and what kind of results you get out of this. So I don't want to go into speculate on those levels. But it's a significant difference in licensing something out on the basis of a Phase I study and doing it on the result of a pivotal study. That's 2 completely different scenarios and the amount of revenues or reward you get from that is completely different. And that is because you have taken out the risk, of course, and you have something, if you are successful, that is approved.
Is the type of partner you will be looking for in the future, is it a different type of partner than you were looking for to finance the pivotal study -- will it be a different type of partner?
No, not necessarily. I mean, specialty pharma companies or kind of large to mid- companies with a specific focus within oncology is really what we're -- our best candidates for licensors, I think, in this area.
And the timing. Is it after you had the interim results, is that the most likely time for when you will sign an agreement? Or could it happen before that? I guess it could, but is it likely it is supposed to happen before that?
I mean, the most likely scenario is that you take this -- we now have the funding to bring this all the way to interim analysis and a potential successful approval. Then the most likely scenario is to wait to -- until you actually have those results available. Now there are other areas in the world as well that we are not discussing. We have been discussing with EMA and the FDA. As I mentioned, Asia is a big territory and there are possibilities of looking into how to attract interest from that area and that might be done at an earlier stage than we do for the Western world. But these are strategic considerations and open discussions that we have.
[ Trond Johannsen ]. Regarding Asia, will you have Asian sites also into the study? You had an open possibility for that a little bit earlier?
Yes, we still have an open possibility for that. But we're considering how to do this the best possible way, so we'll get back to that when we have concluded those deliberations. But it is important -- it is an important region so somehow we need to define a strategy for how we handle that region.
Yes, because there's a lot of -- the population there is...
It's large and there's a higher incidence.
Yes, that's right. And regarding fimaVACC, as I can understand, we will see the results before the end of the year. And these results -- or if you want to say something?
No, no.
No, okay, that's good. These results would be presented by you or by this new investigator you have here?
That hasn't really been decided. It might be a joint presentation. But I mean, they are absolutely part of this. This is a collaboration, so it will be presented by both, to put it that way.
And you say, regarding this, that you have very fast response and you have very strong response. I expect this is when you look or compare it with standard of care? Is that...
It's when you compare it with -- we use an adjuvant together with the fimaVACC, Hiltonol, a toll-like receptor 3 adjuvant. And this is -- adjuvant is used in a number of clinical studies, and the control group in this study gets the adjuvant but not fimaVACC. So that's the comparison with only using the standardly used -- standard-used adjuvant that are being used in a number of clinical studies today for therapeutic cancer vaccines.
This standard is also what they are using, the big pharma and all the companies are using?
Not all the companies. I mean, there are a number of different adjuvants being used, but there's a large number of companies using this Hiltonol, as I just called, is poly-IC is the -- Hiltonol is the brand name of it more or less, poly-IC is the generic name.
Okay. Many of us shareholders are not doctors. We are dishwashers and taxi drivers and oil people and so on. So fimaVACC is a little bit complicated. When you present this, will you try to tell us like how good is this actually? There is a measurable possibility for us, normal shareholders, to understand. Is this good or this is just okay? Or is this very good?
Yes, yes. So absolutely, we always try to do that and I'm sorry if we're not always successful in doing that. But we always try to do that. But we don't want to -- we want to be sure on what we say before we say it, so we want to really characterize and make sure that we understand what kind of immune response we have before we tell how strong we think the results of the fimaVACC is. We see, as you say, that we get earlier responses, we get more responders, we get stronger responses. But this is for the [ c23, ] the total T-cell population. We want to characterize what kind of cell is it because some of these cells are more difficult to enhance or to induce and this is the population that we hope that we will be able to induce. Also, that we've induced so strongly in mice and we hope we will also be able to induce in man.
Regarding big pharma and so on, can you tell a little bit about how much money are they actually using on delivery for the -- in vaccination.
I don't have a figure for that, I'm sorry. But there are -- I mean, they have -- big companies have normally a pharmaceutical development or pharmaceutical sciences department of maybe 50 people or something that are working on different number of pharmaceutical formulations and delivery technology and so on. It varies from company to company, depend on what their focus is. But quite a large amount of money is being used on this, but not only of nucleic acid therapeutics, for a number of different drugs.
And do you expect any kind of deals on this during 2019 or...
I'm not going to guide anything on deals. People have done that before and it's never wise to do that.
You're saying that you have the safety result here now, so you can start up with a pivotal II study here. So what's preventing you from starting up already now here? Is it just that you have to, I guess, decide on hospitals? Or is there anything else that also need to be taken care of before you can start up?
So let me take a step back then and just give an overview of what we're doing when we do -- when we start a pivotal study. You can say that it's divided into 3 main phases. There's the design phase where you really decide how are you going to do the study. What does the study look like? You talk to all the different advisers, you put up advisory board, you discuss with the regulatory authorities, et cetera, and you get an understanding of what the medical need is and how you best can address this and what the market will accept. And also what's important for reimbursement and sort of healthy economics in the other end. Then you -- when you have sorted all of this and there's a clear overlap between these different phases, but these are sort of, in broad terms, the different phases. Then you have a documentation phase. You need to produce the protocol, the case report forms, the informed consent forms in all different languages and all different countries, all the regulatory applications that you are going to put into all the different countries, all the ethics submissions that you put into ethics in all the different hospitals that you're applying for starting this study in. And then, in the third phase, when all of this is done and these are -- this is a huge job to do. And when all of this is done, you start to go into what you call the regulatory submission phase where all of these documents are sent into the different ethics committees and R&D committees in hospitals and regulatory authorities and they start to provide questions. And you sometimes need to modify some things and you need to monitor everything, so you don't modify things that sort of invalidate the total protocol across different countries and so on. And then you have the approval. And when you have that approval, you can start the study. Now in parallel with that, you need to identify who are the investigators, which countries do you want to go to, where are the best sites. And that's why we're doing a big feasibility study, and that goes in parallel. And in parallel with that, when you have identified these, you contact the hospitals, you do sort of a precheck with all the hospitals that they have all systems in order to actually be included in this kind of study and that what they've told us about patient, the recruitment and so on seems sensible. And then you start contract negotiations and budget negotiations with every hospital and put in place contracts with them. And these are also -- this goes in parallel with the other. So it's a large job, and I can say that we are now in -- we are in the regulatory submission phase to put it that way. So sending in things to regulatory authorities, to ethics committees, getting their responses and finalizing everything to get approvals and also then to get the contracts in place with all the different hospitals.
But I guess, in the presentation, you said you expect to start up this early 2019.
Yes, we do.
You had the study going on to decide on the 40 hospitals. How many hospitals have you, I guess, decided on to include, I guess, in this study here now?
It's around -- so it's not like you decide all the different hospitals you want to have and then you start sending in. You identify hospitals in sort of a sequential order. And we might increase the number of hospitals, we might take out hospitals if they don't deliver appropriately, so it's a dynamic thing. But we think it's going to be around 40 hospitals that are included in the study. We have reached out to more than 200 hospitals and get the responses back to see which ones are positive to actually take part in the study, how many patients do they have and what's their system for managing these patients that are relevant for us, do they have all the different specialties and so on in place -- in the same place or is this scattered around, how big catchment area do they have and do the patients need to travel very far to get into the hospital? A number of different things that we need to try to understand to select the right hospitals.
Inclusion rate in the extension phase was very slow. Is there anything you can do? Or anything you will do to improve on that, I guess, in the pivotal study, except from, I guess, from picking 40 hospitals with a lot of patients. Anything you can do to follow up the hospitals better than...
Yes. Yes, there are. I mean, we have not focused on the recruitment of the extension study to be honest. We have focused on the pivotal study and get everything in order for that and the extension study has gone in parallel. You need to work very closely with these hospitals because it is a rare population. So most hospitals will not have very many patients. And if it's several months between you see 1 patient until you see next patient in a hospital then it's easy to forget about the study because there are a number of different things, these are very busy people. So you need to work closely with them and establish a relationship with the hospitals. But I'm -- so the way you handle hospitals is very important. We have a big CRO that we have established for this also. We had a small CRO, a good but a small CRO for the extension study. We're now having a big machinery of a CRO that can help us and provide the attention that is needed in the different hospitals. So that's one thing. The other thing that is very important and that we initiated based on what we saw was the feasibility study to really to go out to a large number of sites to be able to identify the best sites.
Okay. You're saying that you are happy with the safety result from the extension study. Will there be any result on the effect data presented or being public this year?
No, not on the effect data this year. So what we will do is when we have completed the study, we will go through and publish the efficacy data based in the same way that we've done for the dose escalation study. So we need to have -- it's a small population. We need to have all the patients in with all the data in on efficacy before we go out with that. So I don't think you can expect to see an efficacy data this year.
On fimaVACC, you have finished the 2 first phases. You are saying that the third phase is, the optimization phase, is to be decided. But you're also saying that this study is going to be completed, I guess, this year 2018. So I guess, that means that you're probably not going to do an optimization study?
So this is an optional part and it depends on the results that we get in. But our base case scenario is that the study will be completed this year.
Coming back to the hospitals -- possible hospitals in Asia. When do you think you will know if there's going to be included any hospital in Asia in the pivotal II study?
First half of next year, I would think, we would have a clear picture of that.
Regarding the Phase II study, this CRO, will they have people on-site also helping the doctors to remember these patients? Or how will that be?
No, we don't have a system for that. I mean, they have people close to sites. They have people scattered all around the world close to hospitals and working closely with hospitals. It is a big CRO so they also have established collaboration or sort of established systems with a number of different hospitals. But we don't -- it's not like they are on the hospital and doing work exclusively to find patients or anything.
Okay. Do you have the name of this CRO?
There's no reason not to tell the name, I guess. It's PPD.
Could you please help me a little bit about regarding the fimaCHEM, the competitive landscape? Has any competitors surfaced, NuCana, for example or...
Yes, NuCana is clearly a competitor. They have recently presented some data at ESMO. We had people at ESMO, of course, going through and looking through all the different presentations there. There is nothing that has changed the competitive landscape from what we have reported previously. We think we're in good shape in relation to most of this and also timing-wise. But there are -- I mean, most -- in most indications you have a large number of competitors. It's relatively small and manageable number of competitors within this specific indication. I think this will be your last question, [ Zunic ] because we need to see whether there are questions on the web as well that we need to answer.
There's a lot of information, I guess, to get from this presentation. But often people, they remember some bold statements from presentations. A good example is the in-depth presentation back in 2016 where the Chairman of the Board said [Foreign Language], we will succeed. You had something 1 year ago where you said 2017 was going to be a good year but 2018 was going to be even better. I'm not sure if all the stock owners agree on that, but 2018 is not over yet. So still things could happen. I guess, I would like to challenge you about 2019. Do you have a bold statement you would like to make for 2019?
Well, I think, for the company -- I mean, for shareholders, the rights issue, as you mentioned was probably not a clear success in the sense that the shareholder value or the stock price reacted the way it did. With regard to the company, the shape of the company to actually tackle what we need to get forward, we are in a much better shape. We don't have any financial risk. We now have funding to take this all the way to the market. So in that sense, I would say it's been a fantastic year for the company in itself. And we also had been able to report, in the Cohort IV this year that we have an overall survival of almost 2 years -- a median overall survival of almost 2 years, which is also a very good result. So I think it's all depending on what kind of perspective you have and what kind of glasses you take on before you -- when you asked that question.
2019.
2019 is going to be a fantastic year. So we are going to start the pivotal study in that year and we have some very exciting collaborations ongoing. We have a fimaVACC study that is nearing completion, so I think we have some important and good steps just ahead of us. [ Oner ]?
I'd like to challenge you and your board and your main shareholders on something that's -- a long time ago, you came out of Photocure. Photocure has, the last 10 years, had a broad focus. They've wasted a lot of money on Allumera, on Visonac and Cevira. Now you are aiming high with 3 different products. Before you said you had 3 different products in order to diversify risk. You are now set to use NOK 300 million on the first stage of fimaCHEM. Then after that, you are supposed to use NOK 80 million to NOK 90 million, NOK 100 million more to finish. At the same time, you try to succeed in 2 other areas. We know that the only company that so far has really succeeded in Norway was Algeta that had a single focus all the way. Perhaps they had now once they have succeeded. How do you think you're going to be able to handle that risk? Or is it the desire to do broad research on the cost of the shareholders? I think that if you're going to get return on what you say is NOK 400 million invested in 1 product and you are willing to spend NOK 20 million on the other and NOK 10 million on the third, I think that you have too broad focus. So I think that if we are going to get 10x our money back on the first NOK 400 million you spent -- because that is the risk-reward. Either you become a NOK 5 billion company or you fail. So I think that there is not room to have too broad focus and you have to sometime give priority or diversify of those companies that you think -- or those areas that you think is survival candidates, but you cannot focus on 3 different areas because then the risk for failing on your main source of income is increasing.
That was not a question, but a view, I would say.
Yes, but you can comment.
Yes, and I will say that our full focus is on the fimaCHEM program. And that is if you look at how we use the proceeds, it's clear that there we have our focus. This is our lead project. And I've also said that fimaNAc is a pure collaborative project. We don't spend almost any resources on that project, but there is a clear upside. A clear upside to that project, which could come, so it's more like an opportunistic area. The fimaVACC is something in between, I will admit that. But again, it's an area where we wanted to do something with this technology to be able to out-license it, not to bring it to the market for us in a high-risk manner, but to show that what we've seen preclinically is actually translated over demand. And if so, we have probably something that other people are interested in without taking it further ourselves. So that has been the thinking around these 3 programs. That's the platform technology we have. It's not a single product. And that platform technology has different use areas. So I think, for me, this is absolutely the best strategy. Now you mentioned Algeta and they had a single focus. Well, they didn't really. They had a research program where they also looked into a number of different products. But they have 1 flagship, so to speak, that was the big project that most the resources went into. And that's the same approach that we have in the fimaCHEM area.
Yes, but I do think that you failed to find a partner that you wanted for the fimaCHEM because that was when you raised money the last time, NOK 70 million, it was clearly said that the next bile duct program would be too expensive to go alone, and still you do. So why should we trust that you will be able to find any good solution for the big 10 pharma, for instance? How should you guys be able to do that because you clearly failed on your objective on the first -- on the main area?
I wouldn't say that. There was an opportunity to take this forward by ourselves or to do it with a partner, and you look strategically what is the best option going forward. And the best option with the results we had was to actually raise funds and take this because we -- when we went to the regulatory authorities, we discussed with them what is needed. And what is needed here is not 2 randomized big Phase III studies. It is one single Phase III study of a moderate size even with an interim read that can get approval. So that changed the picture and that makes it possible for a company like us to actually take that all the way to the pivotal phase.
That's good. That means that you did do a risk-reward analysis. So what is the reward? We know the risk is about NOK 0.5 billion with the money that is spent and the money that is being raised and the money that is needed. So what is the reward? Since you took a qualified decision based on risk-reward, what is the reward?
So we have not gone out publicly with that analysis and we will not do that because there are partnering discuss...
But is that only for the people that was on the syndicate for raising that money?
No, they had no idea and they have no more information than you do.
Okay. So the reward is not something that you will elaborate on.
The syndicate has no more information than you do.I think we need to move on because this is -- now I'm going beyond an hour and we may have some questions from the web as well.
There is one relevant question here regarding fimaVACC. In what form and when will the results be presented? And is the ESMO in December an alternative?
The ESMO in December would be an alternative, but we will not present at the ESMO in December. The deadline for that has passed and that's not the place that this will be presented. We will not -- we -- when we have a presentation accepted and a presentation slot is when we tell the market that we will present. We don't guide and say that we will try to present on this or that conference.I was about to close actually now because...
Just one quick question. Regarding your new specialist investor, do you see this investor as a resource? And has that, your view on this investor, changed during this financing period regarding their somewhat limited ownership now after it has been completed? I think a lot of us expected them to become a larger owner than they actually have.
I'm not sure if I have the figures here on how large owner they are. Ronny, is this something you can comment on?
Do you see them as a resource in the coming years?
We see them as a resource, absolutely, because they are a specialist investor in this sense. They don't take board seats and those kind of things so they don't put themselves into those positions. But they are a network resource and they have quite deep pockets as well. So absolutely, we see them as a resource.
But they will -- you do not expect them to take a board seat?
No, no. That's not their model. They don't do that.Okay, thank you all.