Q2 2023 Evaxion Biotech AS Earnings Call
Good day and thank you for standing by. Welcome to the Evaction Biotech Q2 results call. At this time all participants are in a listen-only mode. After the speaker's presentation there will be a question and answer session. To ask a question during the session you will need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question please press star 1 1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Per Nolen. Please go ahead. Thank you operator. Good morning and good afternoon everyone. I'm Per Nolen, Chief Executive Officer at Evaction and with me today is Jesper Miegold Nissen, Chief Operating Officer and Interim Chief Financial Officer at Evaction since August 1st. First before we start a note on forward-looking statements, let me remind you that the following discussion contains certain statements that are considered forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Because forward-looking statements involve risks and uncertainties, they are not guarantees of future performance and actual results may differ material from those expressed or implied by these forward-looking statements due to variety of factors including those risk factors.
for the second quarter of 2023 and then we will open up the line for questions.
We have a presentation which you can follow and this is slide 1 and we will start by taking a quick look at today's agenda which is on slide 2.
So, slide two, I would start with our recent communication on our Staphylococcus aureus vaccine, EVXB1, where we were pleased to present preclinical proof of concept data showing that the vaccine candidate can clear Staphylococcus infections.
We will also show the early stage clinical data reported on AACR 2023 and ASCO 2023, indicating that patients treated with our vaccines, EVX01 or EVX02, in combination with a checkpoint inhibitor experienced a treatment benefit and with good overall tolerability.
Further, I will provide an update on our next generation personalized cancer vaccine candidate EBX03, which is approaching the clinic.
as well as our novel AI technology OBSERVE that's been used to identify a new source of antigens for personalized cancer vaccines.
And that's planned for clinical validation through the EVX03 program.
And of course the financial update with second quarter financial results as presented by Jesper.
So let's start with EVX V1 on slide 3. So move to slide 3
In late July , we presented novel data on our vaccine candidate for prevention of Stetylococcus aureus disease, edex-P1, at the Gordon Research Conference in New Hampshire, USA.
The vaccine candidate has been generated using our AI technology and apart from the protective effect demonstrated in the sepsis disease model, which we have shown previously and that you can see for reference on the left hand side.
We have now assessed the ability of EVX-B2 to clear bacteria from internal organs.
And if you take a brief look at the graph on the right-hand side, the results are quite clear. No bacteria could be detected in any organs four weeks after a bacterial challenge. The program is currently in late pre-clinic development.
And we are in discussions with a potential partner on its future development and commercialization in accordance with our strategy.
So now let's switch to oncology and our clinical programs for personalized cancer vaccines.
That's slide 4.
So if you have the right slide in front of you, you should be able to read edex 01 on the top and it should show the readout of our clinical phase 1-2 clinical trial in metastatic melanoma.
EVX01 is a personalized peptide-based cancer vaccine where patient-specific tumor mutations, so-called neoantigens, are identified using our AI technology, Pioneer.
These neoantigens are ideal targets for cancer vaccine in that they derive from tumor mutations and therefore only exist in tumor cells.
which means that a treatment can become very specific for the tumor with less risk of negative effects on healthy tissue.
In the first human trial, six biweekly doses of EVX01 were given in combination with PD-1 therapy.
The treatment was well tolerated and of the 12 patients that completed the trial, 8 showed an objective response to the treatment.
If you look on the graph on the right-hand side, you should see a horizontal black line indicating the tumor size at the start of treatment.
You can see 12 bars which represent the best objective responses for each patient in the early fulfillment .
If the bar goes up, tumors increase in size and if the bar goes down, this means that tumors decrease in size. And through our excitement, most bars do actually go down. And for each of the patients, the outcome fulfills the criteria of a treatment response.
We obviously really enthusiastic about these results. It's better than you would expect from P2I alone.
And it speaks to the strength of our AI technology in selecting the right new antigens for persmized cancer vaccine.
This was EVX01, but we have also reported data from our DNA-based cancer vaccine EVX02.
That's on the next slide, slide five.
It should say say e the x02 at the top
This is a clinical trial of EVX02 in combination with nivolumab, a PD-1 blocker, as adjuvant therapy to prevent cancer relapse after complete surgical resection of malignant melanoma over 12 months.
It's a DNA-based therapy. The image shows a DNA plasmid carrying the genes for patient-specific neoantigens.
So the vaccine is administered as DNA and then translated to new antigens in the patient. And the results look very promising.
All 10 patients that completed the vaccination with EVXA2 were relapse free at the end of the trial.
The vaccine was well tolerated in all patients and induced a new antigen specific T cell immune response in all patients.
which can be seen as a proof of mechanism for our DNA vaccine technology.
But we do not plan to develop this vaccine candidate further for the time being. And why, you may ask? Well, it's because we have already developed a next generation vaccine based on EVXO2 and the new candidate is called EVXO3.
and which we intend to prioritize. Let's move to slide 6.
So, EVX03. EVX03 is the first ever personalized herb cancer vaccine.
It builds on eBex2, meaning that it's a DNA-based personalized cancer vaccine, but it has two major upgrades.
One upgrade is the addition of a genetic immune adjuvant, which aims to boost the immune response to the vaccine.
The other upgrade is the addition of a novel vaccine target, so-called herbs, which I will come back to in a minute.
Let's start with the genetic immune adjuvant.
This is a chemoattractant molecule which is incorporated into the DNA plasmid as shown for EBX3 to the right of the picture.
EVX02 is a plasmid on the left hand side, incorporated in DNA, coding for new antigens.
Whereas EVX03 on the right hand side in addition incorporates the DNA sequence for the genetic immune adjuvant which is shown in green.
The DNA plasmid is administered to the patient and the adjuvant, a chemoattractant molecule called CCL19, is produced inside the cells of the patient at the injection site.
And the consequence of this is that the genetic adjuvant attracts immune cells to the vaccination site.
which is thought to make the vaccine much more effective.
Preclinical data supporting these claims were presented in detail at our R&D day in May, and you're welcome to visit those presentations at our homepage.
The second upgrade.
of EBX3 is on the antigen side. Personalized cancer vaccines are usually dependent on new antigens, which are created by mutations in the tumor.
This is how the immune system can identify and attack tumors.
But it's not the only way for the immune system to identify a tumor. Using artificial intelligence and specifically our novel AI technology, Observe, we have identified a novel source of tumor-selective antigens that can be used for personalized cancer vaccines, so-called ERBs.
which stands for endogenous retroviruses and which are also included in e-dexa3 as shown to the right.
Let's switch to slide 7, an unknowable AI platform or absurd.
So, slide seven.
OBSERVE is our AI technology for identification of herbs. And herbs constitute a novel source of cancer vaccine antigens that may allow effective treatment also patients who are unresponsive to today's cancer immunotherapies.
But what are herbs? Well, herbs are viral DNA leftovers from historical infections throughout human history. And we all have it. In fact, about 8% of our DNA has viral origin.
But no need to worry, this DNA is resting and does no harm to us, at least not under normal conditions where herbs are under tight control by our genetic machinery.
But in cancer cells these control mechanisms often break down leading to selective expression verbs on human cancer cells.
And these are of course ideal targets for the immune system. The cancer cell basically waits with a red flag saying, I don't belong here, I'm infected by a virus, and potentially leading to an immune attack.
And that seems to happen quite regularly. We have recently shown that patients that produce herbs in their tumours may survive longer.
If you take a look on the left hand side in this slide, you can see two survival curves in patients with low tumor mutational burden or TMD, which means that there are few tumor mutations.
The red line shows the survival in patients with few herbs.
Whereas the blue line shows the longer survival in patients with a lot of herbs.
presumably because such tumours with a lot of verbs...
are more likely to be attacked by the immune system and hence the better survival.
And in preclinical models, we have shown that this can be used to make a personalized cancer vaccine that effectively combats tumors. So we believe that EDX03 may be more effective than current vaccines.
And in preclinical models, we have shown that this can be used to make a personalized cancer vaccine that effectively combats tumors. So we believe that eVX03 may be more effective than current vaccines that are based only on new antigens. Dr. undermining scale, Define your age, webcam, and George LiftonJoe at
notably that it can be broaden we can broaden the target population quite significantly.
So why is that? Why do we think we can broaden the target population?
It's because today's immunotherapies are more or less restricted to patients with hot tumours, which are tumours where there are many tumour mutations called the tumours with high tumour mutation burden or high TMD.
But herbs seem to be equally highly expressed in tumors with few mutations or
also called cone tumors.
And these actually make up the majority of all patients' tumors. So potentially, a much larger target population, and we should remember that EBX3 will contain both neoantidians and ERVs.
and also our novel genetic adjuvant technology. And that's why we refer to eVexo3 as a next generation personalized cancer vaccine with potential for superior effects.
So we plan to submit an application for start of phase one clinical trial for EVX03 in Q4 this year and expect to be first in the world with the PROSMOS-ERV vaccine in patients.
In addition to the operational progress, we have recently signed an agreement with the Global Growth Holding Limited, including financial commitments totaling up to 20 million US dollars.
Available in tranches over the next three years. Subject to SEC approval.
The financing is intended to cover the company's working capital needs, including the advancement of EVX03 to Phase 1 Readiness.
while the actual initiation of clinical activities for EDX03 are subject to additional funding.
This was the updates from the operations and now I would like to turn the call over to Jesper.
Thank you, Pierre. I will focus my comments on our financial results.
for Q2 23 compared to Q2 22. All of the numbers that I will review in this discussion will be approximate for easy sharing and viewing the goal.
For additional information regarding our second quarter results and prior period comparisons, please refer to the business update and second quarter 2023 financial.
Results press release and our Form 6K both filed last week.
Starting with our expenses, research and development expenses for Q2 2023, amounting to US$2.9 million and general and administrative expenses to US$2.7 million for the period.
Research and development decreased by US dollar 1.2 million or about 29% compared to the same period last year.
The decrease was primarily driven by decrease in external development cost of USD 0.7 million related to clinical trial activities.
Further, a decrease was seen in employee-related costs of $0.5 million due to reduced headcount in personal.
General and administrative expenses increased by US$0.6 million or 28% compared to the same period last year.
The increase was primarily due to an increase of 0.3 million in external costs related to professional fees and the lower head.
and an increase in employee-related cost of $0.2 million.
These increases are due to the timing of funding projects and business initiatives compared to 2022 and the expansion of the organisation throughout 2022 to meet the requirements as a listed company.
The net loss for Q2 2023 amounted to a loss of USD 5.7 million compared to a loss of USD 4.8 million for the same period last year.
As of June 30, 2023, we have...
US dollar 7.1 million in cash and cash equivalence. We expect our cash balance to be sufficient to fund operations into December 2023.
Now I would like to turn the call back to you again for a few closing remarks before Q&A.
Thank you, Jesper. And now a brief look into the future. So looking into the rest of 2023, we expect to deliver on two important and near-term milestones. We plan to report interim results from the ongoing EVX01 phase 2 trial in patients with metastatic melanoma in Q4 this year.
And also, in Q4, to submit a clinical trial application to start a Phase I study for EDX03. But as mentioned before, this is subject to additional funding in the range of $5-10 million secured before initiation.
So, in conclusion, I'm very happy about the progress and believe we have potential to develop vaccines that may truly improve the treatment of cancer as well as the prevention of infectious disease around the world.
On behalf of everyone that have action, I invite you to continue to stay in touch with the company and follow our progress in 2023 and beyond. So operator over to you for Q&A.
Thank you. As a reminder, to ask a question, please press star 1 1 on your telephone and wait for your name to be announced.
To answer your question, please press star 1 and 1 again.
We will now take the first question.
From the line of Thomas Flatten please state your company name and ask your question.
Hey, guys, this Thomas from Lake Street. Couple of quick questions. You mentioned in your prepared remarks that you were discussing the staff program with a partner has a deal been struck there. Is this part of a partnership discussion for a deal yet to be announced?
So say that again, what was the question if we already have announced the partner or?
Well, you mentioned that you were discussing with a partner of the future for the Staph aureus program. I was curious if there was a partnership that had already been struck or is this with a potential partner? Yes, thank you for that question, Thomas. Yes, so sorry if that was confusing. Yes, I would refer to our strategy for these Infectious disease programs which is to find part of the
done in due time when a partnership is in place. But we have not signed a partnership yet.
Got it. And then for the EVX01 readout in the fourth quarter, I believe last time, last quarter, you thought that you might have up to 20 patients in that readout. Do you have any updates for us on how many patients you expect to have and what format that release will come in press release versus scientific meeting?
Yes, we intend to present the interim data at the end of this year at one of the important conferences and CTC could be one such conference but it's yet to be finally determined.
And we expect to present data from the first, say, handful of patients. But as you say, we have recruited the patients, but we have also reduced the size of the trial. So currently, it looks to be slightly less than 20 patients, the exact number of patients to be determined. But the—
depend on additional use of the ATM or the Lincoln Park facility or can you get into December using the 7.1 that you had at the end of June ? Yeah that's correct. So the runway is currently communicating without the assumption that we get additional funding.
Excellent. I appreciate you taking the question. Thank you. Thanks so much. Thank you.
We will now take the next question.
From the line of Ahutamir, please state your company name and ask your question.
Good morning and good afternoon. I am Ahouda Mir calling from Brandenburg-Tollman.
Two questions from us. One follow-up to Thomas' question about EVXO1 phase 2 studies. How many of the patients are in the priming stage? Are all patients in the priming stage versus boosting stage? And do you plan to follow up these patients?
Continue with the boosting stage as well. Yeah, so To the trial and as you referred to thank you Ahoo for the question we have this is trial where we combine with PD-1 and we which is Given to the patients the first three months
and then they continue and then we give the vaccine in combination. So we have initiated the vaccine treatments with EVX01 in a bit more than a dozen patients and we are expecting to administer the vaccine to the last few patients quite soon.
So it's all more or less closing in on the number of patients we have in the trial.
it's all more or less closing in on the number of patients we will have in the trial. So did that answer your question?
So, all the patients will actually have the boosting, basically. So, it will be, as I understand, between Week 12 to 24, you have the priming section. So, these are the patients. You have a much longer follow-up. Ah, yes. Sorry. Now I understand. So, yes, we do not know that yet, of course. So it's a... Yes.
Quite a lot of patients have been entering the trial during the spring. So we're not yet there where we will know if they will go into the next phase of boosting. But that is the plan for patients if they stay on the trial and if they're not progressing that they will be offered boosting.
I see. So all the patients will see end of this year will be at the timing stage, basically. Yeah. That will be the date that we present at the end of this year, yes. Okay. Helpful to know. And my second question is on the O's. This is something that I'm
relatively new compared to new antigen approach. So I am curious, how do you select your IRF? How specific are they among patients or DNA indication? Just curious if you could elaborate on the IRF site. Yes, I can give some more background. So there's a lot of IRF DNA in the...
humans and as I said before they these are more or less randomly expressed in some cancers when the machine control machinery breaks down. They're seen to be around say 10 or 20 thousand different jurors that can be expressed so finding they are
very different from patient to patient. And that said, there are sometimes in some patients that could be overlapping herbs, but we are in this trial looking for producing a fully personalized vaccine towards herbs, and that's really why we are unique. So.
And these herbs they are selected based on likelihood to induce a strong immune response given that there are relatively long foreign peptides that can be actually quite large number of Epitopes on each herb so we can find very
So say high quality antigens whenever we find the strong expression of these herbs in patients.
And it's based more or less in the same way when you select a new antigens that you look for how well they match the immune system of that patient. So you need to predict the shape of the patient's immune receptors and also the shape of the epitopes on the herb.
and then how likely they are to adhere to one another. That is one of the key factors we look at, but there are many more aspects to it.
Thank you very much for taking my time. Thanks so much.
Thank you.
We will now take the next question.
It comes from the line of Swayam Bakula, Ramakant. Please state your company name and ask your question.
Thank you. This is RK from Hetzer & Vangred. Good afternoon, Per. So a quick question on EVX01. I think
So on the Phase 1 portion of that study, we have presented some interim data on the nine patients. Is there going to be additional data in the next update that you're going to be presenting at the end of this year? Or is it mostly going to be initial data from the Phase 2 portion of the study?
Yeah, thank you, RK, for that question. So at ASCO this year, we presented the full data set. So as you mentioned, we previously have shown interim data from nine patients. But at ASCO in June , we presented, and the slide that's in the presentation today is actually from 12 patients, which is a full patient set.
where we do have eight responders. So there we have already presented the data. We will likely publish more scientific details later on, but we don't intend to present additional clinical outcome data on these programs. So that's already final.
At the end of this year we will focus on the interim data of the phase 2 trial, which is a slightly different design and it's then sites in Australia and in Europe , so it's a multi-centre trial.
Very good. And then on the IRFs, I'm just trying to understand a little bit more on the IRF. Are the IRFs expressed?...
uniquely based on the patient, or are they expressed uniquely based on the indication?
Yeah, that question I would say is uniquely based on the patient. We think there could be some overlaps sometimes depending on the cancer and maybe if you reason around how they're expressed it's sort of
If there is a signal to express a certain part of the genes in a patient, then if that signal is common between patients, there may be an overlap between those herbs, but usually the expression of those is completely independent.
So to answer your question a bit more simply we think it's highly patient specific but with the potential to find some overlap. We are not looking for overlap in the first trial, so there is fully personalized but it's possible that you can find a subpopulation where there is some overlap and you can produce a common drug for several patients.
So, one last question on the IRV again. Do you need...is there a certain threshold in terms of expression of the IRV for you to make a personalized vaccine against it? Yeah, that's a very good question, I think. I think there is a certain threshold in terms of expression of the IRV for you to make a
a vaccine and that's really why personalized cancer vaccines today are restricted to, say melanoma, a few more indications, lung cancer and so on. And in other indications, where there are a few medications, maybe it's just a few percent of the patients where you can actually make your personalized neventicine vaccine. With herbs, we find a slightly different profile. It's not the same.
for making a cancer vaccine for patients with a completed cold tumor without any near antigens.
But in the EDXO3 we actually plan to do both. We will sequence the tumor and if they have good neoantigens, this will be included in the vaccine. And then it will be complemented by strong herbs at the same time. So we try to pick the best from both worlds. And hopefully we can also expand the target group quite significantly.
Thank you, thanks for taking all my questions. Thank you so much, okay. Thank you. Once again, as a reminder, if you wish to ask a question, please press star one and one on your telephone keypad. That's star one and one if you wish to ask a question.
There are no further questions at this time. I would like to hand back over to Per for final remarks.
Okay, thank you everyone for joining and thank you for all the questions and we look forward to stay in touch. Thank you both. Bye. That does conclude our conference for today. Thank you for participating. You may now disconnect.