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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Ladies and gentlemen, thank you for standing by. Welcome, and thank you for joining the Medigene AG Half-Year 2023 Earnings Call. Throughout today's recorded presentation, all participants will be in listen-only mode. The presentation will be followed by a question-and-answer session. [Operator Instructions]
I would now like to turn the conference over to Pamela Keck, Head of IR. Please go ahead, madam.
Welcome, everyone, and thank you for joining us. With me today is Dr. Selwyn Ho, CEO of Medigene AG. Today, we announced financial results for the half-year ended June 30, 2023. You can access the press release on the Investor Relations page of our website at medigene.com.
Before we get started, let's quickly run through the forward-looking statements. Please note that as part of our discussion today, management will be making forward-looking statements. Also, we believe our expectations are based on reasonable assumptions. By their very nature, forward-looking statements involve risks and uncertainties and may be influenced by factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements. Any forward-looking statements made on the call reflect the knowledge and information available at the time of this call. The company undertakes no obligation to update forward-looking statements.
With that, I'll hand the call over to Selwyn.
Thank you, Pamela. Good morning, good afternoon, everyone, and thank you for joining Medigene's half-year 2023 earnings call.
I'm happy for the opportunity to review the first six months of accomplishments and updates as we continue to execute our corporate strategy in 2023. At Medigene, we have a deep commitment and vision to serve patients. We aim to unlock the immune system's potential to achieve curative therapies for patients with solid tumors, and through this, we believe we will create significant value to all our stakeholders and shareholders.
Looking at our first six months of this year. We are an immuno-oncology platform company focused on developing differentiated best-in-class, T cell receptor-engineered T cell or TCR-T therapies for multiple solid tumor indications in patients with high unmet medical needs. Our long-standing expertise in T cell immunology and many years of development of a proprietary, innovative, end-to-end platform is at the center of our efforts.
Medigene is leveraging this platform to systematically build differentiation of our TCR-T therapies at multiple sequential stages of the drug discovery and development process, whilst continuously innovating the technologies within the platform.
In the first six months of 2023, we have remained focused on executing our corporate strategy and creating shareholder value. We have made significant progress in many areas, from advancing the programs in our pipeline, expanding our partnering efforts and expanding our platform capabilities and innovation, and finally, in managing our financial position.
For our pipeline and our solid tumor programs, our lead program is MDG1015, a third-generation TCR-T therapy, which is currently undergoing Investigational New Drug, IND, and Clinical Trial Application, CTA, enabling experiments with the aim of having the IND/CTA approved in the second-half of 2024. NY-ESO-1/LAGE-1a are well-characterized cancer testis antigens expressed in multiple tumor types, and it is estimated that approximately 190,000 patients in the top eight global markets express NY-ESO-1 or LAGE1-a and HLA-A02 across a number of solid tumor indications.
In April, we announced that the first MDG1015 preclinical data was presented at the American Academy of Cancer Research. The data showed that T cells carrying an NY-ESO-1/LAGE-1a-specific T cell receptor, combined with Medigene's proprietary chimeric PD1-41BB costimulatory switch receptor, have significantly increased antitumor activity, compared to T cells expressing the T cell receptor alone. This highlights the potential for significant benefits of MDG1015 in improving long-term anti-tumor effects by mitigating the immunosuppressive tumor microenvironment that currently limits solid tumor therapies with our costimulatory protein, or CSP for short.
Moving on to our KRAS programs. In June, we announced our pipeline expansion into neoantigens, also known as oncogenic driving mutations, with KRAS as the first target of our T cell receptors from our prior MDG10xx program. Importantly, T cell receptors against KRAS mutations are being developed in combination with the option of either our PD1-41BB or our CD40 ligand CD28 costimulatory protein. The first KRAS antigens and target HLAs we have announced are KRAS G12V-A11 with a program named MDG2011, KRAS G12V-A03 named MDG2012 and KRAS G12D-A11 named MDG2021.
KRAS mutations are widely recognized as the most common oncogene mutations in difficult-to-treat solid chambers, existing in approximately 30% of solid tumors such as pancreatic, colorectal, endometrial and non-small-cell lung cancer. Global incidents of solid tumors expressing KRAS mutations is estimated to be well in excess of 300,000 patients. We expect to announce the first lead candidate for MDG2011 this quarter, with MDG2012 to follow in the first-half of 2024 and MDG2021 following thereafter.
Overall, this will allow us to build a library of potential TCR-T therapies targeting multiple mutations, HLAs and with multiple CFPs, with the aim to make these accessible to the broadest possible patient population with one or more of these specific targeted therapies. As we accelerate MDG1015 towards a Phase 1 trial, Medigene has strengthened and complemented the executive leadership team with the addition of Dr. Kirsty Crame as Head of Clinical Research and Development.
In terms of our partnering, these continue to provide clear scientific validation of Medigene's technology and assets. Along with our own programs, the partner programs continue to press forward both scientifically and also towards clinical development, and will further provide clinical proof of concept. We will provide ongoing future updates from our partnerships in due course.
In April of this year, Medigene entered into a Cooperative Research And Development Agreement, or CRADA, with the National Cancer Institute to evaluate the use of our proprietary T cell receptors in novel cell constructs. Through this collaboration, we expect to expand the range of tools and technologies in our end-to-end technology platform and expect this could lead to opportunities to use multiple immune cell types in addition to Medigene's current work for T cells to form the basis of future TCR-based antitumor cell therapies.
In January this year, the company announced the receipt of a $3 million payment from its partner, 2seventy bio. This milestone payment follows the strategic alliance between 2seventy bio and JW Therapeutics, with the initial focus on the development of 2seventy bio's MAGE-A4 program, which employs a highly potent TCR discovered in collaboration with Medigene's proprietary end-to-end technology platform.
Our partnership with BioNTech with work on a number of antigen targets is also progressing well. For our MDG1011 program in liquid tumors, we continue to evaluate options for partner. Our end-to-end platform capabilities to develop differentiated TCR-T therapies continues to expand as we bring in new innovation and technologies.
In May, we announced the acquisition of the exclusive worldwide rights to a CD40 ligand CD28 costimulatory switch protein from our long-term partner, the Helmholtz Munich. The CD40 ligand CD28 CSP accelerates the expansion of Medigene's product enhancement technologies within our platform. It joins the existing PD1-41BB costimulatory switch receptor and is a technology that has the potential to aid penetration of the TCR-T therapeutic into the tumor, further enhance the antitumor activity of Medigene's TCR-T cells and improves their ability to overcome the immunosuppressive solid tumor microenvironment.
In June, we participated at the Immuno-Oncology Summit Europe and presented an overview of the elevated activity of multiple TCR-T therapies when combining Medigene's PD1-41BB costimulatory switch receptor with TCRs targeting different antigens. Irrespective of the can-te antigen being targeted, TCRs combined with a PD1-41BB switch receptor displayed superior T cell functionality in vitro and increased T cell efficacy in vivo as compared to TCR-T cells without the switch receptor. This data validates our armoring and enhancement approach in developing differentiated TCR-T therapy.
In the first-half of this year, we also made progress with the expansion of our patent portfolio. In May, we announced that Medigene had been issued a patent by the Japan Patent Office protecting our PD1-41BB costimulatory switch receptor. This complements patent protection for the PD1-41BB technology already received in the United States and China in 2022 and reinforces the innovation inherent in key technologies of our end-to-end technology platform. In addition, we reported that we have been granted a patent protection of our TCR targeting PRAME in Europe and China. This patent granted in Europe and China complements patent protection for PRAME already received in Eurasia, Japan and Korea.
Finally, we continue to increase our visibility on the capital markets and expansion of our investor base through participation in conferences, while we continue to explore financing options to extend our cash reach into 2026 and beyond. Also in the first-half of 2023, we've expanded our leadership team with Pamela Keck as Head of Investor Relations and Corporate Communications.
The basis of Medigene's differentiation is our end-to-end platform of multiple, combinable, exclusive and proprietary technologies. Our product enhancement technologies potentially enhance our TCR-T therapy from a safety and/or efficacy perspective, such as with our costimulatory switch protein, whilst our development optimization technologies improve the efficiencies of development processes across the stages of drug discovery and development to make these cheaper, faster and better.
Our platform is dynamic as we continue to innovate to address evolving scientific knowledge. With additional technologies already upgraded and added over the course of 2023, we look forward to further technological innovations to be added in the future. Overall, this has led to this pipeline of Medigene's own programs of multiple TCR-T therapies in development for solid tumors, consisting of optimal TCRs against both cancer testis antigens such as NY-ESO-1/LAGE-1a with MDG1015, as well as neoantigens, such as multiple KRAS mutations for G12V and G12D.
As mentioned earlier, we are building a library of TCR-T therapies targeting multiple cancer antigens, multiple HLAs, and wherever possible, combined with an armoring enhancement technology such as PD1-41BB or CD40 ligand CD8. Medigene has also extensive partnering of multiple TCRs against cancer testis antigens for solid tumors with BioNTech, 2seventy bio and Hongsheng Sciences. Our partners will determine the progress on these programs, and we and they hope to announce updates on this in due course. As you know, we have pivoted away from targeting hematological or liquid tumors and aim to partner these programs as well.
I will now go through the financials for the first six months ended June 30, 2023. Medigene's revenues decreased by 88% to EUR3.1 million in the first-half of 2023, compared to EUR25.3 million in the first-half of 2022. This decrease is due to the comparison with the comprehensive TCR-T and technology partnership with BioNTech concluded in the first quarter of last year, as well as revenues from the partnerships with 2seventy bio and Hongsheng Sciences generated in the first-half of 2022.
Sales and general and administrative expenses decreased by 30% to EUR4.3 million in the first-half of 2023, compared to EUR6.2 million in the first-half of 2022 due to certain costs related to the preparation of the BioNTech partnership being concluded in 2022.
Research and development expenses increased by 42% to EUR5.2 million in the first-half of 2023, compared to EUR3.7 million in the first 6 months of 2022. This increase is due to the refocus on the development of TCR-T therapies for the treatment of solid tumors and preclinical development activities resulting in a new and expanded product candidate pipeline described earlier.
Looking at the balance sheet. As of June 30, 2023, cash and cash equivalents and time deposits amounted to EUR24.6 million, compared to EUR33.2 million as of December 31, 2022.
In terms of guidance, performance in the first-half of 2023 was in line with the Executive Management Board's expectations. The Executive Management Board therefore maintains its guidance for fiscal year 2023 as published in the Annual Report 2022 on March 29 of this year in its entirety.
Please note, these estimates do not include potential future milestone payments from existing or future partnerships or transactions as the occurrence of such events or their timing and size depends to a large extent on external parties, and therefore cannot be reliably predicted by Medigene.
Accordingly, the Executive Management Board expects revenue in 2023 to be between EUR5 million and EUR7 million, and R&D costs ranging from EUR13 million to EUR16 million. As of June 30, 2023, cash and cash equivalents and time deposits amounted to EUR24.6 million. Therefore, based on current planning, the company is financed until the fourth quarter of 2024.
From a corporate perspective, in the second half of 2023, Medigene will continue to push forward on the development of T cell-based immunotherapies to fight solid cancers. This focus represents, in the company's opinion, most promising commercial business opportunity for Medigene's differentiated technologies. As mentioned earlier, our scientific focus will be to advance early-stage projects such as our first KRAS programs, MDG2011, 2021 and 2012, and expand the end-to-end technology platform by innovating and expanding the tools and technologies within the platform. The company will continue to submit results of our work for presentation at upcoming scientific congresses.
From a clinical development perspective, MDG1015 we advanced towards a first in human clinical trial through its IND/CTA enabling work. Consistent with its focus on solid tumors and despite the encouraging results of the Phase I study with MDG1011 in hematologic diseases, the company maintains that the Phase II portion of the study will only be done with or by a partner. The company is currently evaluating the partnering of MDG1011.
Medigene also anticipates to successfully continue and expand our existing partnerships. We continue to evaluate potential additional partnership opportunities related to our assets and technologies from within our end-to-end platform in order to maximize the value of the company.
Thank you all, and this marks the end of today's prepared remarks. At this time, I'd like to open up the call for questions.
Ladies and gentlemen, at this time, we will begin the question-and-answer session. [Operator Instructions] Our first question comes from Joe Pantginis from H.C. Wainwright. Please go ahead.
Hi, Selwyn and Pamela, good morning and good afternoon and thank you for taking the questions. So Selwyn, I wanted to focus my questions on your technology, but from a corporate and investor-facing perspective. So you mentioned during your prepared remarks first that you'd be looking to present at upcoming scientific conferences. I guess, how do you balance your proprietary technologies that you're developing continuously versus what you can portray to partners and investors publicly as part of your differentiation? And what can we expect on that front?
Sure, Joe. Thanks for the question. So it's always a balancing act in having our data available in the public domain to investors, as well as pushing this into scientific congresses, et cetera. I think in many ways, for the immuno-oncology field and for cell therapies, we're fortunate that there are a number of opportunities to highlight the progress that we're making on our data. So we know in the second-half of this year, there will be a number of meetings such as ESMO, such as the [Indiscernible] meetings where we will have opportunities to present that data.
Our view as a company is that we're a very strong science and R&D focus at the point that where we are able to highlight that data in the scientific congresses will also be the point that we will be making those first announcements of any upcoming or new data that we have yet to release on any of our programs, whether that be MDG1015 or 2011. So hopefully that kind of resonates, but it's also, I think, very consistent with how other companies see that as well.
No, it does. Thanks for that color. And then I guess maybe diving a little further into the underlying tech, focusing on antigen identification, obviously, part of your business is having a broad library in antigen identification. How much of a balance, to use the word again, do you envision in the future with regard to potential partners coming to you with their antigens or specific antigens to develop without necessarily touching upon your library?
Sure. Again, great question. I think if you look at our end-to-end platform now, I think we are very clearly building up expertise in very specific parts of our platform that I think are truly world class. I think there are other parts of the platform where we know that we are as good as others, and there are parts of the platform where I think other companies may have more focus.
So if you look at specifically on target identification and new targets, we believe it's a very hard job to find brand-new cancer antigens, whether it be cancer testis antigens or whether it be neoantigens. So if you look at how we approach it, we really have taken the view that once identification of antigens have been done, potentially by ourselves or others or in the literature, we will then go through our screening process and then really hit where we believe we're truly world class, which is to focus then on T cell receptor generation. I think you see that from what we have done with our partnerships.
In the future, which is I think your question, will we expect companies to approach us with targets. That's very possible. To date, we've had some discussions with some companies around that who have clearly seen the value of what we can generate in terms of the quality of our T cell receptors, but nothing concrete has been established so far.
But I think that is another opportunity for us to highlight our capabilities and our expertise for generating not just these TCRs, which clearly is the basis of, really, any form of T cell engagement, but then further armoring and enhancing these T cell receptor T cells to make them really capable of addressing the solid tumor unmet needs.
Great. Thank you, Selwyn.
[Operator Instructions] There are no further questions at this time. I hand back to Selwyn Ho for closing comments.
Thank you, operator. Thank you to all who joined the conference call today. We look forward to updating you with future progress on future calls. Thank you very much.
Ladies and gentlemen, the conference has now concluded, and you may disconnect your telephone. Thank you for joining, and have a pleasant day. Good-bye.