Medivir AB (publ) (MVIR) Earnings Call Transcript

Thank you. Welcome, everyone, to our Q2 report here at Medivir, and we look forward to walking through progress we've seen in Q2 and to address key questions as we continue our preparations for the Phase IIb study with fostrox and Lenvima. If we look back at Q2 or if we look even further than that, so to start, we presented final data from the now closed Phase Ib/IIa study with fostrox plus Lenvima in Q1. And interestingly, sort of basically as of today or one of these days, the patient who has been longest on treatment has now been treated with continued benefit for 3 years, which is a very, very long time for second-line liver cancer patient. What we also do, we continue to follow what's happening competitively in the second-line liver cancer space, especially when there are new data presentations at major congresses. And Q2 saw 2 of those congresses take place in ASCO in the U.S. and ESMO-GI here in Europe. And we can conclude, as we have concluded many times before, that the combination of fostrox plus Lenvima in second line does maintain a frontrunner position in second line. And we will touch on this, and Pia will come back to this in a bit more detail. Importantly, patent protection is critical when we develop drugs. And in Q2, we saw another major patent authority, in this case, Japan, approved the very important fostrox plus Lenvima patent, providing protection until 2041. This particular combination patent sort of is a key element in the fostrox patent strategy. And with Japan following on from EU and also Australia is a very good sign and signal and makes us look forward to additional sort of patent approvals in other key regions. Thirdly, the -- in Q2, we have or had a partner in IGM Biosciences. They were acquired by Concentra in Q2. And sort of one of the reasons why they were acquired is that they had some setbacks in their own portfolio, one of them being the lack of activity seen with their own DR5 agonist. And this molecule is the molecule they use to combine with birinapant and they also combine with other molecules. So as sort of -- as a result, that means that we have -- they have then sort of -- when they were acquired, they have returned birinapant to us. And moving forward, we will, of course, evaluate the best option forward for the molecule. Finally, I mean, in our -- sort of goes without saying, in our current clinical -- current financial situation, key focus at the moment is to land the best possible solution to finance the next step. And we will come back on this and touch on this at the end as we go through our financial situation. But with that, and as I said sort of in the room, apart from myself and Magnus, then Pia will go through some of the data from the recent congresses, and we are joined by our CSO, Fredrik, who is here for the Q&A session as well. So with that and start from the top, I will hand over to Pia to take us through the recent events in the liver cancer field and what it means for the fostrox plus Lenvima combination.

Thank you, Jens. And as Jens said, ASCO and ESMO-GI has taken place this spring and summer. And in second line, where we are developing fostrox and lenvatinib, the data has been scarce and in line with as been shown previously. And it confirms sort of fostrox plus lenvatinib as a promising second-line treatment in advanced HCC. And there is this huge gap in clinical data in second-line advanced HCC. And that is really the reason why there is no consensus of what treatment to use. And the recommendation, as you can see from this ESMO-GI presentation is still to include these patients in a clinical study. Not all patients will have a clinical study available and then you use more or less what is available or what has data in first line or has been used after sorafenib. And also what is again confirmed is that immune therapy is established in first line and will remain in this setting with Tecentriq/Avastin or as it will say in all these slides, atezolizumab plus bevacizumab, particularly in first line, which is used in around 90% of the patients in first line. We can go to next slide. So this sounds a little bit crazy actually at a conference that is focusing on liver cancer. But at ESMO-GI, there was only one presentation with prospective clinical data in the second-line HCC setting. And this presentation used cabozantinib in second line, and it's not only after eye, you can see to the left here, but it was mainly Tecentriq/Avastin, atezo/bev that was used in the first-line setting. And in this study, there was a median progression-free survival of 3 months and an overall response rate of -- it was only one patient that responded of 4.5%. And this is really in line with what we have seen previously. I can show you some more data if we go to the next slide, and that was from a prospective registry from Europe, Leviathan Study that looked into 230 patients that had received either sorafenib or lenvatinib in the second-line setting, trying to understand sort of, okay, what is the outcome in the second-line setting. And this study really also confirmed what we have seen before with the median progression-free survival for lenvatinib of 5.5 months and a disease control rate of 60% with lenvatinib. We didn't have any data of overall response rate from this study since it was a prospective registry. So this is more or less what was presented at ESMO-GI when it comes to the setting where we are developing fostrox plus lenvatinib. If you can go to the next slide, there has also been a recent review published in Annals of Hepatology in February this year, where they looked into the data for -- in the second-line setting. And it is both prospective and retrospective studies here. But all in all, you can say that all of this data confirms what we have seen previously with an overall response rate of less than 10%, disease control rate of around 65% and median progression-free survival or time to progression of around 4 months. And this can be -- if we go to the next slide. And this can -- data can be compared to what we have shown in the Phase Ib/IIa study with fostrox plus lenvatinib where we saw an overall response rate of 24%, a disease control rate of 81% and a time to progression of 10.9 months, which is substantially better than what has been seen with lenvatinib with other TKIs or with immunotherapy combinations in the same setting in second-line advanced HCC. And with this limited clinical data in second line and the development in HCC is really focused in first-line liver cancer. There is, however, a continued support of immune therapy in the first-line setting. It's solid. And it's further supported by quality of life, an endpoint that has not been so much in focus in oncology development. But recently, ESMO and also at ESMO-GI, where there was a session that only was talking about quality of life. ESMO recognized now health-related quality of life as a key parameter in determining the clinical value of anticancer treatments. And it could also upgrade the overall assessment of therapeutic efficacy. And why am I saying this here now it's because to understand sort of what treatment algorithm is currently the one that we are working in. And if you go to the next slide. We can see also a recent publication in support of immunotherapy in first line, where they integrated health-related quality of life in addition to overall survival, the most important endpoint in liver cancer and show that Tecentriq/Avastin or atezo/bev outperformed all other treatments and provided the best balance between quality of life preservation, that quality of life didn't deteriorate together with overall survival in advanced HCC. So our firm assumption is that Tecentriq/Avastin will continue to be the preferred first-line treatment option also in the future. And our planned Phase IIb study post immunotherapy will reflect the future treatment algorithm and the results from our study will be relevant for the high unmet need in the second-line setting. And with that, I will leave it back to Jens.

Thank you, Pia. Yes. I mean the question is always sort of why do we hone in on sort of the first-line treatment. But that is -- I mean, when we plan for the next phase, I mean, it's important that we also plan for a phase that will survive over time. And this is why it's encouraging and important that sort of the design of the study that we have, the Phase IIb study, with an immunotherapy, with Tecentriq/Avastin sort of in first line and then progression, that treatment algorithm is the right one today, and that treatment algorithm will stay the same over time. So encouraging from that data set to see that Tecentriq/Avastin first line will remain cemented. And the other part, again, if we look at this slide, and this is just the treatment algorithm on the bottom here, i.e., the second line where there are no approved options, this is where we are targeting. So again, we are focused on where the biggest unmet medical need is. There hasn't been anything new come into play. And as Pia alluded to or showed, the data that we've seen as of late confirms that sort of the frontrunner position we have with the combination remains intact. And just to kind of reiterate what we talked about before, a couple of things. One, we know that sort of the second-line HCC space is a very large and growing commercial opportunity. When we get to sort of 2030, we're looking at almost like a $3 billion market. And if anything, that is likely to be bigger, again, looking at sort of what we see in terms of evolution perspective, we've talked about this before as well. But just to kind of emphasize that, liver cancer is likely to grow faster than previously anticipated, driven by the alarming increase in fatty liver disease and the risk of fatty liver disease patients being diagnosed with liver cancer. So with that, considering the market, the size of the market, the market is only going to grow and our opportunity and our belief that we can be the first approved treatment option in second line, then it becomes critical to work and strengthen our IP patent strategy and strengthen the patent family. And that's why the combination patent and approval now in Japan is such a key. And it's especially sort of just kind of stop on this. It's especially important for a product like fostrox, which is focused on a particular tumor type. So here is -- the patent is for the combination with Lenvima, which is then sort of the combination we are developing, and it's for use in liver cancer. So it means that, that is the -- and will be then the approved use, meaning that it would be difficult for a generic to come in and challenge the patent and say that -- and argue that fostrox is being used in a different tumor type since it will only be approved in liver cancer. Hence, this type of used patent becomes extra strong for a drug with that type of tumor type focus. So very happy that Japan approved and looking forward to approval from the other -- from other regions as well. So with that, we move into the financials.

Thank you, Jens. Next slide, please, where you can see the financial summary for the second quarter and year-to-date performance to June. The result and cash flow was in line with our forecast. Turnover slightly higher in Q2, primarily driven by royalty income from Xerclear. I'll give you some comments regarding the external expenses. As you can see, they're significantly lower than last year, mainly due to reduced clinical costs following the completion of the study in November last year, although we have some clinicals in the quarter, and we will have some additional wrap-up costs expected in Q3 as well. We have made some CMC investment in the quarter for the planned Phase IIb study. And we estimate a lower cash outflow in the coming month, and we continue to work to reduce the cost base that we have today. And some final comments regarding the cash position. We have a strong support from Linc, our largest shareholder, and we have utilized a loan facility of SEK 30 million during the quarter. And with that, we have a cash balance end of June amounts to SEK 38 million, and the estimated cash runway is now end of quarter 4 under the current plan and the current assumptions that we have today. And then I will hand back to Jens for some final comments.

Thank you, Magnus. Just to touch on this. I mean, in our current situation, our #1 focus is, of course, to conclude on the best way forward financially for fostrox. And as soon as we have final clarity on that, we will, of course, communicate. What I can say is that we are in active discussions with different parties to land on the best way forward. And before having concluded those discussions, we are very much grateful for the support and belief shown by our main owner, Linc, in providing the loan facility as that enables us to follow through on those discussions. It is difficult to say more at this stage than to reiterate that this is our key priority at the moment. And we will, of course, communicate as soon as we have concluded on those discussions. So with that, we'll stop there and then open up the line for questions.

[Operator Instructions] The next question comes from Joe Pantginis from H.C. Wainwright. The next question comes from Richard Ramanius from Redeye.

This is Josh on for Joe. I've had a question about birinapant. So now that you've regained all the rights to it, is there any additional color you can provide on how you think about moving it forward?

Well, I mean, birinapant is an interesting molecule. It has a great safety profile. It does what it's supposed to do mechanistically in cancer cells. And we're currently evaluating several...

I think -- did you answer the previous question?

Yes. That's correct. [ Uli ] I think there is some time delay issue here.

Not sure if we have technical challenges here. We've -- so far, we've heard one question from Josh at H.C. Wainwright regarding birinapant.

And we can just conclude that with the observation that we're currently working to find a path forward for birinapant. And we think it's still a very interesting opportunity, both in terms of -- there are many different combinations out there that are potentially useful and also various indications. So that's where we are currently.

Again, from a technical viewpoint, not sure if we are being heard or not.

Yes, you are.

Okay. Good, good. So hopefully, that answers the birinapant question. And it sounded like the next person in line was Richard from Redeye.

Please go ahead, Richard. You seem to have a problem with Richard's line.

We did hear Richard sort of a couple of times before.

Can you hear me?

We can hear you now, Richard, yes.

Can you hear me?

Yes.