Ultimovacs ASA

OSE:ULTI

Earnings Call Transcript

[Carlos de Sousa, Chief Executive Officer]

Okay. So good morning, everybody, and welcome to Ultimovacs' Quarter 2 Results Presentation. My name is Carlos de Sousa. And since June 1, I'm the new CEO. So it is a pleasure for me to be giving you this first quarterly presentation and, of course, look forward to many more.Together with me is Jens Bjørheim, that is our Chief Medical Officer; and Hans Eid, that is our Chief Financial Officer. So they will also be presenting. And please, during the presentation, send your questions through the net. So we will have a Q&A session at the end of the presentation.So this quarter 2 was a very successful quarter for Ultimovacs. As you know, we initiated the enrollment of patients in our 2 Phase II studies. The INITIUM trial that is in metastatic malignant melanoma and also the Phase II NIPU trial in mesothelioma, with 4 patients enrolled in the NIPU and 3 patients enrolled in the INITIUM study. Of course, we had some delays, as you are aware, for the initiation of these enrollments due to the COVID pandemic. But we are happy that the activities initiated, and we expect now that the -- all these patient enrollment to start picking up. We also announced on Tuesday that the last patient in our Phase I melanoma study in combination with pembrolizumab in the U.S. was enrolled. So we have now concluded enrollment in the study, and this was the last patient in the second cohort, and Jens will be providing you more information.The COVID pandemic, of course, affected everybody in all different types of our personal lives, our professional lives. We were able to have delayed not that long, 2 to 3 months. So happy that we could initiate enrollment of patients. But of course, we need to stay alert and see how the pandemic develops in the coming months and see how that will affect the activities not only, of course, at Ultimovacs but the biotech and the pharma industry in general. We also announced in May a third Phase II study. This one is still undisclosed, but it's a different large pharma company and also in different indications from the other Phase II studies. So we are very excited to have a third Phase II study in another collaboration. And we expect to disclose information on this collaboration during this quarter.What is important here for a small biotech like Ultimovacs is that we have quite a broad Phase II program. In these 3 studies, we are going to enroll more than 400 patients, what is a big number. And there, of course, very important to provide us in the future with very valuable data.Also, by the end of May, we had significantly oversubscribed private placement with no discount to the market price. And this was in the amount of gross proceeds of NOK 160 million. So very successful private placement that, of course, will fund all the activities that we have now currently in our plan, together with the cash that we had in the company. And as you all know, I joined the company in June, 1st of June. So we have quite, as you see, quite a broad development pipeline. It's important, and we'll give you details on also the second -- our second project, our second platform. But we have the UV1 product in different indications. And this is very important when we talk about the future of the company, potential partnerships that we have as much information as possible with the use of UV1 in different types of cancers and in combination with different therapeutic classes. So we have concluded 3 Phase I studies, and Jens will give you a little bit more update on the already long survival. We also have the other Phase I study in combination with pembro that we now concluded the enrollment, and Jens will also give you an update on that. And of course, we have the 3 Phase II studies, 2 of them already started enrolling and the other one expected to start enrolling before the year-end.And for our second platform, the TET-platform with a very big potential, we are going to initiate a clinical safety study in patients with prostate cancer. And we expect that to be initiated towards the end of the year, beginning of next year. And of course, we are also doing a lot of preclinical activities with the platform, in general, that has a large potential to be extracted several products from this platform. So a lot of exciting activities also on our second platform.And with this, I will also give you an update on the time lines, the current time lines for our clinical trials. No changes from the previous guidance because at the moment, of course, we need to continue following the major impact that can come to this program. It's like for everybody else, the unknown impact of the pandemic on all the activities related to clinical trials and, of course, everything else in our professional and personal lives. And with this, I will give now the word to Jens to take us through an update on the clinical program.

[Jens Egil Torbjørn Bjørheim, Chief Medical Officer]

So good morning. My name is Jens Bjørheim. I'm the Chief Medical Officer in Ultimovacs. As Carlos already have shown the development plan for the further development of UV1 and also the TET-platform, I will now go into the different lines in that slide to tell you something more about each of the studies.So this is the INITIUM trial. As you have heard of before, it's a trial in the first-line setting in metastatic malignant melanoma patients. We included the first patient in this study in June this year. Very happy about that. We have started to open sites in Norway and Europe and then also in the U.S. And we expect the opening of new sites to the speed of that to increase during the next months. And we expect to have at most or if not all sites open by end of this year. As of today, there are 3 patients included in this study. And totally, 154 patients will be included. The principal investigator in this trial, I'm not sure if we have mentioned that before, is Steve O'Day from John Wayne Cancer Institute in Los Angeles in the U.S. I'm very happy to have him as a PI. He's also part of the [ 103 ] study that has just recently finalized recruitment. Then there is this NIPU trial, and this is also a Phase II trial, randomized. It's sponsored by Oslo University Hospital in patient with mesothelioma, and that is a rare thorax cancer in the lining of the lungs and the kind of cancer that you attract if you are exposed to, for example, asbestos. Totally, 118 patients will be included in this trial. Sites are already opened, and 4 patients are included from June this year. There are 7 sites in total in the Scandinavian countries as well as in Barcelona, Spain and also in Australia. 118 patients will be included in this study in total. And the PI, the principal investigator, of this trial is Åslaug Helland from Oslo University Hospital. Both of these trials are expected to have a readout of the primary end point second half of 2022. Then there is a third Phase II trial, as Carlos said. We announced in May this year that we are working with a collaboration with a European network of experts and also a big pharma to conduct a third Phase II trial. This trial will be in a different indication and in different combination as compared to the other trials we have run this far. And final agreements are expected to be signed during Q3 now, and the first patient in this study is expected to be enrolled around Christmas time.Then this is the [ 103 ] study, and one of the studies we do haven't given a name. And this is a study that is currently ongoing in the U.S., full recruitment as of Tuesday this week. This is a Phase I study in the malignant melanoma first-line patients. The study consists of 2 different cohorts. One cohort with the lower dose of the adjuvant GM-CSF and one cohort with a higher dose. The 2 cohorts will give us important information when we are starting to prepare for filing of UV1. As of September this year, cohort 1 will have 1 year of follow-up time. Results from that cohort will be reported later this year in Q4. The cohort 2 will have, as you understand, since their enrollment were fulfilled Tuesday this week, will have 1 year of follow-up next August and results from that cohort as well as 2 years reporting of the cohort 1 will be presented next autumn.In this study, we have looked at a new combination. We have looked at the vaccinations together with our PD-1. And that has been important for us to understand also the safety when you combine those 2 products because PD-1 and also PD-L1 is our important immunotherapy in several cancer indications. We have not seen any unexpected safety issues in this trial. This slide compiled results from the 3 first studies we run at the Radium Hospital. As you have heard about earlier, prostate cancer trial in 22 patients; non-small cell lung cancer, 18 patients; and a combination trial with UV1 and ipilimumab in malignant melanoma. There are not that many changes in this table as of now. One change is that we have reached the median overall survival in the prostate cancer trial. And the median overall survival is 61.8 months in this trial. This is a Phase I trial, and it's also a single-arm trial. So it's tricky to directly compare it with historical controls, how this median overall survival reads out. There is one trial out there, the LATITUDE trial. That is a large trial, and the arm we can compare with is around 600 patients. Those patients were given anti-androgen treatment as in our prostate cancer trial. But there is somewhat higher Gleason Score in that trial, so it's not directly comparable. But still, we see this as an interesting signal of efficacy. And then it comes to the second part, the second pillar or the other project and project in Ultimovacs, the TET-platform and the TENDU project. First, a few words about the TET-platform. So in summer 2018, Ultimovacs acquired the immunological part of Immuneed. That is a biotech company in Uppsala, Sweden. Not only the technology, but also some of the experienced people from Immuneed also followed over to Ultimovacs. The patent technology in there -- from there is a Tetanus-Epitope Targeting-platform. That is a platform that is intended to increase the strength of an increase of T cell responses against cancer peptides. After acquiring this platform, Ultimovacs, of course, pursuing the development of new first-in-class cancer vaccines, solutions based on this platform. As you know from earlier lectures and probably from other companies as well, when you are doing vaccinations, you need to give this adjuvant prior to vaccination or at the same time as a vaccination to, in a way, activate the immune system. With the TET-platform, the adjuvant part and the vaccination part is together in one molecule. The TET-platform is based on a previous vaccination of -- against tetanus bacteria. Patients that are vaccinated, they will have antibodies towards tetanus. And part of this molecule includes sequences that are recognized by these antibodies, and therefore, can enhance an immunological activity. So the TET-platform, as such, can be seen as a general adjuvant technology for peptide-based vaccines not limited to cancer vaccines only.And then there is the TENDU project. The TENDU project is a Phase I clinical trial to test the safety of the TET technology. We are preparing for a Phase I study to test the TET technology in prostate cancer patients, and the study is expected to start end of this year. As I said, the main objective is to assess the safety of the TET technology.In this first study, the TET technology will be applied together with antigen -- prostate cancer-specific antigens and not the telomerase peptides, as we have used in the UV1 project. And the project is called TENDU. Based on the safety information from this project and also the parallel preclinical development of the TET technology, will give us, hopefully, an opportunity to move new cancer vaccine candidates into clinical development in the years to come.I think that was -- thank you. Next one.

[Hans Vassgård Eid, Chief Financial Officer]

Okay. So my name is Hans Vassgård Eid. I'm the CFO of Ultimovacs. I'll take you through the key financial news. This is a summary page, and Carlos has already touched upon many of these points. I'll just repeat them quickly.A main event to the last quarter was the share issue, the private placement that we completed in May this year. Based on very strong support from our existing main shareholders who are underwriters in the share issue, we saw a very positive response from investors and the -- it was significantly oversubscribed. And as Carlos mentioned, it was done at market, so there was no discount compared to the prevailing market price. Gross proceeds of NOK 160 million. So together with the existing cash, the total cash by the end of the second quarter amounted to NOK 483 million. With a small typo on this slide, it says NOK 482 million. But the correct number, as you will see on the next slide, is NOK 483 million. Based on the current development plan and time line, we expect the existing funds to bring Ultimovacs through the readout of the primary endpoints in the 3 Phase II trials. And these readouts will be partly 2022 and partly 2023, as Jens has described.In terms of cash flow and development in the cash flow, as previously reported, there are still no revenues in Ultimovacs. So the cash flow is negative, and the cash flow has -- the negative cash flow has increased significantly in these 2 quarters this year compared to previous quarters. And that is according to plan. As we are ramping up the development activities, in particular the clinical trials, the costs will increase as expected. And we expect a further increase in the costs in the second half of 2020. We gave some rough guidance on this in the previous quarterly presentation, and there is no update or changes to that guiding that we gave last quarter.Okay. Going a bit more into detail on the key financials. The first line here, the payroll and payroll-related expenses increased from -- compared to last year the same period. There are 3 main drivers behind this. One is that we have 2 more full-time equivalents, 2 more people employed this year compared to the same period last year. And then there is one -- a one-off related to the resignation of our former CEO. So there is a recognition of the severance pay liability of NOK 5 million accounted for in the second quarter of this year.And then when you compare this quarter with the same quarter last year, the second quarter, you should note that there was extraordinary, I would say, post in '19 when we reversed the liability related to the share-based payment. This program for synthetic shares was terminated, as we have described earlier, and that led to a reversal of the liability of NOK 10 million. And that's why you see that the payroll expenses in the second quarter of last year was actually negative due to this reversal.Moving on to the biggest line item, R&D expenses. We see that it has increased, as we said. And that is due to the ramp-up of the R&D activities, in particular the initiation of the INITIUM trial and the NIPU trial. Looking at the third line, other operating expenses, there are no significant changes to previous quarters. Cash position, NOK 483 million by the end of the quarter, as mentioned. And the -- looking at the cash flow of the last quarter, because of the share issue that brought gross proceeds of NOK 153 million, the cash flow was positive with NOK 115 million. If you adjust for the share issue, the cash flow would have been negative by NOK 38 million.Here is an overview of the operating cash flow. We have been through the main items. So it's an illustration, and there are not any significant details that I haven't already described. So I'm not going into more detail here. And also, as previously, we -- as a reference for analysts, we have a quarterly overview of the operating costs. But I'm not going into details here either.So with that, I leave the word back to Carlos to take us through news going forward and a summary. Thank you.

[Carlos de Sousa, Chief Executive Officer]

Thank you, Jens. Thank you, Hans. So this is to give you an idea of what you can expect in terms of news flow for the rest of this year and next year. As you see, there are going to be a lot of news coming out from us. Of course, on the top, you see the information about this new Phase II study that, as I mentioned, we expect to communicate more details during this quarter and to have the first patient enrolled by the end of the year. Also, the different time lines for more data on the Phase I malignant melanoma study. As we mentioned and Jens gave you details, we will have top line results from the 1-year follow-up of the first cohort on the fourth quarter. And of course, also next year, update on the -- 1-year update on the second cohort and the 2-year update on this first cohort. So a lot of information coming.We are also going to have, by the end of the year and beginning of next year, update on the 5-year survival on the Phase I studies. And then we expect that will be then the final information on these studies in terms of survival.And of course, regarding the -- our second platform in product, the project TENDU, we will also give you -- inform when the first patient is enrolled that we expect towards the end of the year. And of course, next year, we will give you information about the main and the primary end point of the study that is the safety results that we'll find in the study.Of course, we have several data being submitted to medical conferences for publications. And as all these news will come up, we will be informing you accordingly. So to conclude and then open for the questions, we have, at Ultimovacs, a very strong platform for further development. Two, a lead product with UV1 but also the TET-platform, really a universal vaccine technology that is broadly applicable to different cancer types and in combination with different cancer therapies. So far, we have been having a very good safety profile. So this, and together with clinical signs of efficacy, was really the base for the start of all these very broad Phase II development program that is quite ambitious for a company like us with 3 Phase II studies in different combinations and also, very importantly, in collaboration with 2 different large pharma companies and also with -- through 2 networks of oncology centers. So very important because this is a validation of our science, our results when we enter into these collaborations. And we have all this interest from the medical community in really be part of the development of UV1.We have a very strong shareholder base with very -- with our top investors in a very long term, very supportive, as Hans mentioned, even in the recent private placement. So this, of course, provides the company with a very solid place to really focus the activities in where we bring value to the company, that is making sure that studies are running on time and we get the data to move to the next stage. We have a very experienced team in place, a very high scientific recognition in the founders of both the technology behind UV1 and the UV2, but also very experienced in other areas like clinical development, the finance, regulatory research. So very strong team that I'm very happy to have joined and leading this team.We -- it's important that we continue as we are expected to monitor closely how the pandemic COVID-19 develops and because we will try, of course, to be anticipating as much as we can and try to minimize the impact that the pandemic may have on the timings of the clinical development program. We are recognized as a company that is very solid, very -- also very fair, very serious on the way we communicate. So far, we always communicate on facts. We give you very fair expectations. And normally, we have been delivering on what we have been promising you. And we will continue to do that. So we will continue very serious, very fair communication as transparent as we can towards you.What will we be doing in addition to this is, of course, to increase the visibility and the awareness of Ultimovacs among different communities, the community of investors both here in Norway, but also, of course, in the rest of the Nordic countries, Europe and the U.S. Also, really raise the awareness and the visibility that's already quite significant among the scientific and medical community. And also because it will be very important in the future to also raise the awareness at Ultimovacs, our science and what we do among the potential partners when we have the data.So this is -- we are not going to be any different in terms of how we communicate you and the surgeons -- the way we communicate it, but we definitely are going to have different initiatives that you will be able to follow to really increase the awareness of Ultimovacs. For instance, until the end of the year, next month, we are going to be presenting Ultimovacs at the investor conference. That normally would have happened in Stockholm. But of course, now, because of the pandemic, all these conferences are virtual conferences. But -- so we will be presenting there. Another investor conference in October, and we will also be presenting at the biggest partnering conference in Europe, that is BIO-Europe. So these are already some of the initiatives that we are -- to spread the message about Ultimovacs and the value of our science and clinical data. And of course, we will have also other activities that you will start to see really targeting more of the investor community.So we also saw that we continue delivering on our programs. And of course, this is reflected on the fact that we are going to have very multiple near-term milestones and, of course, linked to news flows. So very successful second quarter. We continue -- dedicated and committed to continue delivering and really raising the value of the company and what we do for the benefit of cancer patients. Because when you benefit the cancer patients, you, of course, benefit all the company that is supporting Ultimovacs, all the investors, all the team and, of course, all the medical community. So thank you for your attention, and we will be now answering questions.

[Unknown Executive]

Yes. We have some questions from the viewers first. Carlos, you can still be standing. With the 3 patients in INITIUM and 4 patients in NIPU, is the recruitment on track with regards to your time line? Or is it a bit slower than expected?

[Carlos de Sousa, Chief Executive Officer]

Thank you for the question. As we already mentioned in our studies, in the beginning, always starts slower. We were all impacted as many other biotechs through the pandemic. So that now is gone. And as Jens mentioned, we are opening more and more centers. And as these centers come into place and start recruiting patients, we will start seeing a ramp-up of this recruitment. So at the moment, it will be too early to tell you what are the -- any projections in terms of the number of patients. For the time being, we keep our previous guidance.

[Unknown Executive]

Thank you. Follow-up question. Will you provide enrollment update for each quarter going forward?

[Carlos de Sousa, Chief Executive Officer]

That is a plan. We will, each quarter, continue to give you an update on the patients being enrolled in the different clinical trials.

[Unknown Executive]

Thank you, Carlos. The next questions are related to TET and TENDU. So Jens can...

[Carlos de Sousa, Chief Executive Officer]

What are the -- what is the question?

[Unknown Executive]

Okay. Will Phase I TENDU include patients or healthy individuals?

[Carlos de Sousa, Chief Executive Officer]

I think I can answer that. Of course, as Hans mentioned, these are in patients with prostate cancer. So the Phase I is in cancer patients, but of course, that are going to be treated. But the main objective for our study is to assess the safety of the TET-platform technology.

[Unknown Executive]

Okay. Is it possible that you will continue a development plan with the same antigens?

[Carlos de Sousa, Chief Executive Officer]

Very interesting question. But too early to answer that. So I will address this question in a different way. The TET-platform has a very big potential. It can be used in different types of -- supporting different types of cancer vaccines and even outside of cancer vaccines. So there will be the potential to -- for multiple products to come out of the use of the TET technology. We are not going to be able to give you yet too much details because we are very actively filing and pursuing new patents for this technology. So it's important that we keep these details for the time being, not disclosed, so we don't damage our IP chances. But what I can tell you is that the TET-platform technology has a huge potential to be used in different products using different peptides.

[Unknown Executive]

Last question. In this presentation, you call TET/UV2 a first-in-class cancer vaccine. Is this referring to the adjuvant only? Or will the mechanism of action of the peptides, antigens be different from UV1 as well?

[Carlos de Sousa, Chief Executive Officer]

It's first-in-class because, of course, it's a new technology using the tetanus. And this will also be -- we cannot say that we'll be first-in-class in the different combinations, but we'll be first-in-class using the TET-platform. That is very important benefit by the use of the adjuvant. And again, in some cases, any TET-platform will be always first-in-class because it uses the TET technology. But again, a very big potential. We will be extracting different products from using the core of the TET-platform as the core of different products and then combining with different peptides. And again, I would -- I have to stay there with the information, as I said, to protect our chances of IP filings. Okay. So these are in terms of questions. As usual, please, if you can reach to us if you have any specific questions that, of course, as you can imagine, we will be answering within the limitations and within the regulations. So thank you, everybody. We look forward to continue having your support, and we'll be in touch during this period of time, if not at the next quarterly report presentation.Have a good day and a good weekend.