Q3 2025 Evaxion Biotech A/S Earnings Call
Speaker #2: Hello and welcome to the Evaxion Biotech update and third Quarter 2020 financial results . At time , all participants are in a listen only mode .
Speaker #2: After the speaker's presentation , there will be a question and answer session . To ask a telephone question , please press star one one on your keypad to join the queue .
Speaker #2: To withdraw your question , press star one . One again . Please be advised that today's conference is being recorded . I would now like to hand over to Birgitta , interim CEO and CSO .
Speaker #2: Please go this ahead .
Speaker #3: Thank you . Good morning and good afternoon , and thank you all for joining our Q3 2025 Business Update and financial Results conference call .
Speaker #3: I'm the Chief Scientific Officer and interim CEO of eviction . I'm joined today by Thomas Schmidt Chief Financial Officer . And Miss Combo Vice President of Investor Relations and Communications .
Speaker #3: I'll begin by walking through the agenda for today's presentations , and I'll start with a brief introduction , followed by an R&D update .
Speaker #3: And then Thomas will present the Q3 financial results . And lastly , after a few conclusive remarks , I will we will open for questions .
Speaker #3: I'd like to remind everyone that today's presentation may contain forward looking statements . And these are subject to risks and uncertainties and actual results may differ materially .
Speaker #3: First and foremost , I am pleased to welcome Doctor Helen Taylor Mason as the new CEO of Eviction , effective November 24th . So , Doctor Martin brings extensive biotech leadership , fundraising and partnership experience .
Speaker #3: Helen co-founded Adaptimmune and has helped several senior executive roles in Adaptimmune . Helen holds a PhD in molecular Immunology and an MBA . And with more than 30 years of experience in early research through project approval , Helen is an ideal candidate to lead the next stages of eviction strategy .
Speaker #3: This also means that I will return to my previous role as CSO and with Helen's transition from director in the board to CEO Jens Bittner , he will join the board as an advisor and observer with the intention to seek election at the next AGM .
Speaker #3: Since the last business update , we have made several significant achievements and historic in-licensing of B3 . By MSD , providing significant cash and validation .
Speaker #3: The extension evaluation period or the evaluation period for Sb2 has been extended . We have several ongoing partnership discussions , though market uncertainty affects deal climate .
Speaker #3: We have presented two year clinical efficacy data for everyone at the Congress , and we have added EV zero for a novel therapeutic cancer vaccine for acute myeloid leukemia to our pipeline .
Speaker #3: Further , we have expanded our AI immunology platform with an automated vaccine design module , improving quality and reducing vaccine design time . Lastly , we have strengthened our financial position and we now have a cash runway extended to second half of 2027 .
Speaker #3: And this is based on a 7.5 million US dollar option . Exercise . Fee received from MSD and an additional cabin capital market funding sources .
Speaker #3: And Thomas will share detail around this . So , as mentioned , one of the main highlights of the quarter is the MSD transformative deal .
Speaker #3: So in September 25th , a was a historical moment for a vaccine with MSD or Merck exercising their option on B3 . So this was the first ever in-licensing of an AI discovered vaccine candidate by a major pharma company .
Speaker #3: And as mentioned , the $7.5 million exercise fee extends our cash runway significantly . The deal confirms our strategy of value creation through partnerships .
Speaker #3: Even with industry giants like MSD . It also validates our AI immunology and R&D pipeline and further ensures a development of EV three without cost eviction and not related to the Exp three deal .
Speaker #3: As such , the UV , B2 evaluation period has been extended . So 2025 is shaping up to be a for year for eviction .
Speaker #3: We've achieved several key milestones in the last business update . As mentioned , MSD exercised the option on Exp three . We presented two year clinical outcome data from our Eve one phase two study , and we have announced the addition of O4 to our pipeline .
Speaker #3: And so is the lead candidate for our precision cancer vaccine. Looking ahead, we are expecting to provide further R&D and business development updates.
Speaker #3: So let's shift focus to our recent R&D and AI immunology progress . PVCs is our novel AI designed cancer vaccine candidate targeting non-conventional antigens from the dark genome , so-called endogenous retroviruses or ervs .
Speaker #3: And these herbs are specifically expressed in cancers but dormant in normal tissue , making them an attractive target for cancer vaccines . Either is a therapeutic cancer vaccine aiming to induce immune control in acute myeloid leukemia , where we know relapses remain a major challenge .
Speaker #3: The vaccine is based on our AI immunology platform , leveraging our discovery engine . Identify multiple and optimal tumor specific epitopes that matches the expression profile and also the immune characteristics in patients .
Speaker #3: And we have now designed the lead candidate and have conducted pre-clinical studies . Next steps include GMP manufacturing and additional R&D enabling studies to prepare for a first in human study .
Speaker #3: With the Eve one lead vaccine candidate selected , the program has been added to our pipeline . Further changes in include the removal of the Eve two program , as we do not have any exit development currently ongoing on this program .
Speaker #3: They two vaccine program served as proof of concept for DNA delivery of new antigen and has informed on the design of both Eve , O3 and O4 .
Speaker #3: Our lead program , Evo one , a personalized cancer vaccine that includes multiple patient specific targets , so-called Neoantigens that we identify with our AI immunology platform from patient tumor material .
Speaker #3: If one is administered in combination with pembrolizumab and immune checkpoint inhibitor to enhance the clinical efficacy . So in October , we presented two year clinical outcome data from our phase two trial in an oral session at the Congress .
Speaker #3: And the results are highly encouraging , encouraging and were received both by the scientific and medical community . So at the Congress , we reported a 75% objective overall response .
Speaker #3: We also saw that a 11 out of 12 patients that responded had a sustained response at two years back . We also saw a 34% conversion rate , meaning that patients with stable disease or partial response deepened their response upon exo1 treatment .
Speaker #3: So we find the clinical outcome data very encouraging . And further , we believe that they compare favorably to historical pimple monotherapy data , equally encouraging is the strong immunological activity of Eve one A , which is critical for long term efficacy .
Speaker #3: So in all patients , treated with Eve one , we saw a new antigen specific T cell response . Further , when assessing the individual new antigen immune responses with that , 81% of the vaccine , neo antigen administered across patients were immunogenic .
Speaker #3: So this high hit rate provides strong evidence of the predictive power of our AI immunology platform . We also showed that the immune responses were sustained throughout the two year trial period , even after dosing .
Speaker #3: After the dosing period ended . Cecil activity remained high , indicating lasting immune memory and doable . T-cell responses are essential for preventing relapses , and in achieving long term control of melanoma .
Speaker #3: So this reinforces the potential of Eve one as a personalized immunotherapy that not only drives a tumor shrinkage in combination with standard of care , but also builds on a robust immune defense .
Speaker #3: As mentioned , our AI platform has been enhanced with a new automated vaccine design module significantly reducing design time and also accelerating development .
Speaker #3: Timelines . It enabled us to optimize vaccine candidates with high precision , both for new and vaccines . So from data input to candidate generation , the process is now fully automated , ensuring optimal sequence and confirmation of vaccine targets .
Speaker #3: And as mentioned , the new module speaks up vaccine development while reducing costs compared to traditional methods . And further , it seamlessly connects the downs with downstream processes supporting a smooth transition from design to production .
Speaker #3: And the design module has already been applied in some of our key R&D projects . One first example is the use of the module to identify and select regions of an antigen .
Speaker #3: That can be expressed. So we noticed that the full length of a particular antigen could not be expressed due to solubility constraints. But when we applied the new module, we identified truncated variants of the antigens.
Speaker #3: That then could be expressed as an opening for preclinical evaluation of that antigen. Another example of the application is that we can, with the module, predict the most optimal sequences of vaccine targets based on a given antigen protein structure.
Speaker #3: And here we have also been able to rescue a hard to express protein that would require labor intensive and trial and error design approaches to find expressible constructs .
Speaker #3: So with this new design module , it positions us at the forefront of AI driven vaccine innovation and further enables us to move fast from target discovery to final product candidate .
Speaker #3: So in summary , we have seen significant progress across our R&D pipeline , and AI platform . And we are on track for the next milestones .
Speaker #3: And we look forward to updating you as our programs continue to advance . So with that , I would like to give the word to Thomas to present the financial results .
Speaker #3: Yes . Thank you . I am happy to present the financial results for the quarter . And maybe let me just start with an overview of the achievements that we have done throughout the year up until now .
Speaker #3: Based on strong execution of our financial strategy , as we can .
Speaker #4: See here on the slide , also throughout the year we have made a number of activities with a capital market , activities with of course , also the agreement that we did with the European Investment Bank of Deep Conversion plus also MSD Outlicensing of the IB , B3 .
Speaker #4: So throughout the year and up until end of October , we have activities in the to the sound of 31.8 million US dollar .
Speaker #4: All which basically helps strengthening our equity and certainly also our runway , which is now extended into the second half of 2027 . So really , good and strong achievement .
Speaker #4: And following the financial strategy that we have laid out , if we zoom in on the third quarter and the highlights from the third quarter , we certainly have had a strong financial quarterly performance .
Speaker #4: As mentioned , the cash runway now has been extended into the second half of 2027 . And we've also seen in the quarter the option exercise by Merck or MSD , which not only provides a cash income now , but also has a future revenue income of potentially up to $592 million .
Speaker #4: We are well on track . Also in the third quarter , on delivering on our financial targets for the full year and throughout the quarter , we have also really solidified our equity through the European Investment Bank debt conversion and also through the MSD income .
Speaker #4: So really a good and strong quarter , if we look a little bit closer on the profit and loss elements of it , clearly the revenue from NSD drives the first drives , the quarterly operational gain , the first of its kind for election , but also importantly , our operating expenses , not only do we manage those well , but we actually also are slightly below .
Speaker #4: Last year and more or less at the same level as previous quarter . So also from earlier communications , we expect from a cash flow perspective to still hit around about the 14 million operating cash flow level .
Speaker #4: Net financials in the quarter is to the sound of 1.3 million , driven by the debt conversion that we did in July . The debt conversion in July with the EIB happened at a 89% share price premium at the market close of July 10th .
Speaker #4: That premium has been recorded on the financial income for the quarter , and that then brings the income for the quarter to the 4.6 million US dollar .
Speaker #4: Turning to the balance sheet , we certainly , as mentioned , already have continued the strong execution that also has improved our equity .
Speaker #4: The equity now stands at the end of the quarter at 16.6 million USD . Included in the equity is a derivative liability with the net impact of $1.5 million .
Speaker #4: The the derivative stems from our public offering in January and the investor warrants that we had from from that date . However , in October , we have seen we have seen , as mentioned already , warrant exercises of 2.7 million , which means that this net impact of the derivative will be at a minimal value at the end of the year .
Speaker #4: So also a good , good outcome . It's also reduced our outstanding warrants by 1,000,080 . And we now have a remaining outstanding warrants of 2.8 million .
Speaker #4: Also important to note is that our cash balance end of June is at a sound and solid €10.6 million dollar and we'll see further cash income as we or a cash flow in as we received in October .
Speaker #4: The revenue income from MSD and also the cash from the sales of shares due to the investor warrant exercise . And last but not least , the debt conversion to adapt to equity conversion with the European Investment Bank really has strengthened our balance sheet , has improved our cash flow as we move forward and as certainly also lowered our leverage .
Speaker #4: So really a great outcome from that event . Also . So a good solid quarter following along our financial strategy . And with that , I then hand it back to beginning .
Speaker #3: Thank you Thomas . So lastly , as a conclusive remarks , I would like to highlight that we do have a strong operational momentum .
Speaker #3: We have achieved the majority of our 2025 milestones and are tracking towards several potential value catalysts . Business development remains a key priority and multiple parallel partnership discussions are currently ongoing .
Speaker #3: Catherine Ray is extended to second half of 2027 , and with that , I would like to thank you for your time and attention and we'll be happy to answer any questions .
Speaker #3: Please follow the other readers instructions . Thank you .
Speaker #2: Thank you . As a reminder , if you wish to ask a question , please press star one one on your telephone and wait for your name to be announced .
Speaker #2: To withdraw your question , press star one . One . Again , please stand by while we prepare the first question . First question comes from Sumit Roy at Jones Trading .
Speaker #2: Your line is open . Please go ahead .
Speaker #5: Good morning everyone , and congratulations on all the progress this quarter . A quick question on the yeah . Oh one . What are if you can give us any color on the potential partnership deal like what seems what is the key .
Speaker #5: Question that you're getting from a partner . They want to wait for a much longer term data or any other key achievements . You have to present for .
Speaker #5: For a successful deal .
Speaker #3: Yeah . Thank you for that question . So we just presented , as mentioned , the two year clinical outcome data . And I would say that we have moved from a questions around a quality of data .
Speaker #3: How does your platform work to more . How can we apply your technology within perhaps other types of cancer . And cancer indications .
Speaker #3: So the data was received well and we have been discussing it with key opinion leaders . We have also been discussing it with potential partners and the strategy is that we will outlicense it at the current development stage .
Speaker #3: And then the partner can of course , decide on potential next step . If we continue on the track , we are currently with advanced melanoma .
Speaker #3: The next most likely step would be to conduct a larger randomized control study comparing the combination of Xo1 plus standard of care to standard of care alone .
Speaker #3: So that's that's at least one option . But we also do see the potential of of taking our technology and applying it in other disease or cancer indications where there is a a high mutational burden , meaning that we can select a high quality new antigens and formulate a vaccine that would benefit the patient .
Speaker #3: So multiple different discussions are ongoing . And also different questions are coming our way . But generally the questions are not about the quality of the data or the impact of the data , but more how can we move this forward together and find solutions for manufacturing and also for for other indications ?
Speaker #5: Got it . Thank you . Thank you for that . One last question . Congrats on unveiling the EV oh four in the AML .
Speaker #5: The AML program , if you can give us a slight understanding on on the target or how is it , is it expressed on AML stem cells like , you know , Cd33 Cd123 have been tried and trying to understand where is the differentiation from this target ?
Speaker #6: Yeah . No , this is a very .
Speaker #3: Good question . So the way that we have applied our AI immunology platform is that we look at genomic and transcriptomic data . And for this particular type of antigens , we mainly look at transcriptomic data .
Speaker #3: So the sequences that are being expressed as messenger RNA, or RNA in general, in the tumors. And then we have looked... We started out by actually analyzing several different types of novel classes of antigens.
Speaker #3: And we realized that in certain indications . And AML is one of them . There's a very high expression level of these endogenous retroviral sequences from the dark genome , meaning that we can across patient find , share a sequences and put them into a vaccine , and thereby being able to support several patients with one single vaccine .
Speaker #3: So this is an off the shelf approach where we will be able to use the same vaccine across the different tumor profiles , and also the across the different immune characteristics of the patients .
Speaker #3: But we still using AI immunology and our core technology to identify the most optimal antigens . Now it's just coming from the the dark genome .
Speaker #5: Okay, thank you so much. And congratulations again on the progress.
Speaker #6: Thank you .
Speaker #4: Thank you .
Speaker #2: Please stand by for your next question . The next question comes from Nelson Cox at Lake Street Capital . Your line is open .
Speaker #2: Please go ahead .
Speaker #7: Hey , Nelson . I'm for Thomas . Congrats on all the progress here this quarter . I'll maybe ask my two up front and apologies if I've kind of missed some of this .
Speaker #7: I've had some technical issues , but a lot of updates here as of late , maybe at a high level . Can you please comment on just the overall breadth of partnering conversations you're having across your pipeline , and how those have kind of evolved over the last year ?
Speaker #7: And then when you look at the proportion of your business development conversations you're having today , can you kind of talk about how many are focused on target discovery versus the programs kind of already in your pipeline ?
Speaker #7: Thanks .
Speaker #6: Yeah . Hi , Thomas .
Speaker #3: Thank you for that question . So we do have multiple dialogues ongoing , and I would say that they are across the interest is across our R&D pipeline , but also centered around our capabilities for identifying novel targets .
Speaker #3: So classical target discovery programs , there's interest in our oncology programs . And there's also interest in our infectious disease program . So it's a little bit mixed I would say .
Speaker #3: And some companies do have a preferences . A in infectious disease . Some do have interest in both a vaccine candidates that we have developed and in in target discovery collaborations .
Speaker #3: So a little bit of mix and that a confirms I would say our strategy is to monetize on both our own in-house developed vaccine candidates , but also to enter into infectious or target discovery collaborations .
Speaker #3: I cannot comment so much on exactly where we are as it's really difficult to speculate exactly on the timing of of when these different dialogues would move into into a real deal .
Speaker #3: But a lot of activities and we can see that the interest is increasing when we have a major data readouts , as we have had in in this last quarter with the one phase two data coming out .
Speaker #7: Great . Thanks for taking the questions .
Speaker #2: Stand by for your next question . As a reminder , if you do have a question , please press star one one on your telephone .
Speaker #2: The next question comes from Swayam Pakula Ramakanth at H.C. Wainwright . Your line is open . Please go ahead .
Speaker #8: Thank you . Thank you . This is from H.C. Wainwright . Good afternoon , team . So certainly , you know , there are very interesting developments going on .
Speaker #8: The company . So can we focus for a second on your automated design module , you know , which is yet another interesting AI design drug design module that have .
Speaker #8: So how should we think about this ? You know , is this something that can help your , your your internal designing ? I mean , designing of your internal molecules only , or is this up for .
Speaker #8: Entering into partnerships or can you utilize this as a separate licensing situation where any of your partners could take that into their own computing systems and run on their own proprietary molecules ?
Speaker #8: How you know , it looks like there's a lot of places where this thing could go . And what are your your thoughts on that ?
Speaker #6: Yes , sure .
Speaker #3: Absolutely right . It can go in multiple directions . So in the past we have used AI immunology to identify novel vaccine targets .
Speaker #3: And then these targets have then been undergoing manual processing , ensuring that we could also express them . And manufacture them . And this process has been a labor intensive .
Speaker #3: So the the ambition was to to set up a , a automated process for this . And we have now been able to launch a new module where several different AI tools are being integrated , enabling us to go from target discovery to a product candidate selection .
Speaker #3: Very fast . So that can of course , be applied to our own programs . But we also do see an option of using this capability to support other companies in ensuring that what they select as their key antigens or in general , key targets that these antigens or targets can also be produced in a cost effective way .
Speaker #3: So I do see multiple options for monetizing on on this new module .
Speaker #8: Okay . So and then coming into the real world . Talk about a one for one more for for another minute at you know you're planning to present some some additional data from from the from the ongoing trial .
Speaker #8: You know , what sort of data would come out from there . And how would it strengthen your narrative on X01 , not only for yourselves , but also for a potential partner , whether it is just on the drug or on the platform , just as you were talking about , you know , with when you're answering some .
Speaker #8: Yeah .
Speaker #3: So at Esma , we presented the clinical outcome data and we are still in the process of patient samples . So we have collected samples , blood samples before therapy during vaccination .
Speaker #3: And then also as follow up samples . And all of these samples from from the patients are currently being assessed in our own labs .
Speaker #3: So we do of course , monitoring of the effects of one induced T-cell responses . But we also do deeper phenotypic analysis . So some of this will go out at CDC .
Speaker #3: We have a poster presentation . But also at future conferences because we have not analyzed all the many samples that that have been collected from the patients .
Speaker #3: So more to come , more deep dives into the the immune profiles of of the cells collected from the patients . And then we also have the extension phase of the one trial where six patients are now receiving either one as a monotherapy .
Speaker #3: So more data will come from from this subset of of patients .
Speaker #8: Perfect . Thank you for that . And then the last question is on the MSD relationship . And then it's great . It's great to have the $7.5 million .
Speaker #8: But you know how much more you know , do you still need to give any additional data for the second molecule , or is it the Merck still has to complete their due diligence on on that on on the data that you've given them , you know , in terms of running confirmatory studies or data analysis for them to decide whether they want to spend another $2.5 million .
Speaker #6: Yeah .
Speaker #3: So for the P2 , MSD is currently evaluating the data that we have provided . And further , they are in the process of generating some confirmatory analysis .
Speaker #3: And that was also why the evaluation to him was extended . So we expect that they will come back with an answer in in the second or in the first half of , of next year .
Speaker #8: Perfect .
Speaker #6: But .
Speaker #3: Is ongoing and and it's of course very exciting . And we would love to to Outlicense P2 to MSD .
Speaker #8: Yeah . Okay . Great . Thank you . Thank you very much for taking all my questions .
Speaker #3: Thank you .
Speaker #4: Thank you .
Speaker #2: There are no further questions . So I shall hand back to you for final remarks .
Speaker #3: Yes . And thank you for joining us today . And please do not hesitate to reach out should you have any additional questions .
Speaker #3: Thank you .