Mendus AB (publ) (IMMU) Earnings Call Transcript

Welcome to Mendus Q2 Report 2025 presentation. [Operator Instructions] Now I will hand the conference over to the speakers CEO, Erik Manting; and CFO, Lotta Ferm. Please go ahead.

Thank you, and welcome, everybody to the Q2 webcast and business update of Mendus. As a summary of the key events in Q2, we have presented data at multiple conferences of the ongoing ADVANCE II Phase II trial in acute myeloid leukemia. showing that our immunotherapy with vididencel improves T cell repertoire and also that it acts across broader mutation ranges of AML. We had shown this in the past already in our earlier studies, but now also in the ADVANCE II trial, we specifically focused on a common mutation called NPM1. The relevance of this is that we are showing and continue to show that we stimulate broad immunity against residual disease and also that our product acts across different subtypes of AML. And that makes it very different from targeted therapies that by definition are always dependent on specific mutations being present in the disease and also with quite a high risk of what's called clonal escape. So we put a lot of pressure on one specific mutation. Patients will develop new clones of the disease that will be resistant to that specific drug targeting that mutation. And the fact that we see a very broad immune stimulation and also in this set of data, but also earlier data sets that there was no association between the effectiveness of the product and the actual cytogenetics or the makeup of the tumor that makes it a very suitable strategy broadly across AML subtypes. Then we are progressing with NorthX Biologics and our manufacturing alliance to deliver large-scale GMP batches that will support our latest clinical development and in the end, commercialization of the product. And we have strengthened in the person of Tariq Mughal our late-stage development capabilities to shape our late-stage development strategy, particularly in hemato-oncology. We have started to recruit patients in AMLM22-CADENCE trial in the beginning of the year. And we can say that, that is ramping up very nicely. We will provide a more detailed update in our next strategy update, but it's clearly picking up momentum. And we're very happy with this trial, in which we will talk in a bit more detail further down the slide deck. But recruitment is ongoing and is picking up as we hoped for. In the deeper pipeline, our earlier stage pipeline, we have a Phase I trial in ovarian cancer. And for the first time, we presented data of the trial at a major conference called ASCO showing that tumor directed immune responses were elicited by the product, but also very importantly that they are associated with progression-free survival in this very high-risk tumor type. And finally, as one of the key events after the closing date of June this year, in July, the United States Patent and Trademark Office granted us a key patent that covers the use of a vididencel in ovarian cancer. Then handing it over to Lotta to summarize the financial overview.

Yes. Hi everyone. The cash burn for the period for the Q2 was SEK 26.9 million. And for the first half year, it was SEK 42.9 million. The difference in the H1 operating result and the cash flow is mainly related to prepaid expenses, and that's also mainly is the NorthX cost for the tech transfer. And if we compare the figures with last year, we can see that, that was a lot higher because it was more working on the tech transfer of higher activity last year than it's this year. Now we are going into a more late-stage production phase. The cash position is SEK 58.9 million at the end of the second quarter, and we also have some shares in the balance sheet. We have 1.4 million shares, they were issued after a decision from the AGM to cover bonus payments for the employees and to cover the Board fees and for those who use this opportunity. And the vast majority of the employees and also the majority of the Board members has chosen this opportunity. But we still have some shares in the balance sheet and it's to cover tax and social fee, and there is also an extra part because we didn't know the share price. We have got the mandate to sell these shares in the market, but -- all of them, but it doesn't mean that we will sell all of them. And we will only sell shares if it's a good opportunity to sell. That's everything from me.

Thanks Lotta. And just to be clear, the instrument of share-based compensation on the one hand, is an extra incentive for management and Board and employees related to the share price. But of course, it's also a significant cash saving mechanism. Let me continue with the operational update. For most of you, this must be clear from our earlier presentations, but just to emphasize 2 important points of our positioning in acute myeloid leukemia. Acute myeloid leukemia is a blood-borne tumor that's very aggressive and basically needs to be treated immediately with high-dose chemotherapy, but then most patients relapse and die from the disease. Survival, 5-year survival has been quite constantly in the last decades below 30% and that is mostly related to hematopoietic stem cell transplant. So the only curative -- potentially curative approach at this point in time for AML is a hematopoietic or bone marrow cell -- bone marrow transplant, and it comes with serious side effects, including transplant-related mortality, chronic graft versus host disease, where the transplant actually affects the patient's body and it leads to very serious side effects. So actually, the transplant option for the majority of patients is not available. That is where we play with vididencel because it does deliver potential long-term disease-free and overall survival and it has a very good safety profile. So it will allow a much larger patient population to benefit from immunotherapy. Very crucial is this pattern that we have discussed before. This is data we presented end of last year. This trial is still ongoing. So the long-term survival data are still being collected, but very importantly, you see a striking picture, which is that after an initial quick relapse and also death actually of patients in the first 6 to 12 months, you start to see a plateau. That plateau means patients are really in a stable situation. And some of the patients have already passed 5-year survival after being treated with vididencel. So at a median follow-up of around 42 months, we still haven't reached median relapse-free and overall survival because the majority of patients remains alive now. That is what we are after. At this point in time, we have an estimated 5-year survival of 58%, whereas current standard of care. And like I said, also, it's been a number already the same for a very long period of time, long-term survival in AML is typically not above 30%. So in the total AML landscape, we are currently focused on those patients that are eligible for high-intensity chemotherapy. That's roughly half of the patients. And to date, there's only one drug approved next to post-remission transplants or bone marrow or hematopoietic stem cell transplant. And that drug is called oral azacitidine. We will show a little bit more about that drug, but that drug is, in principle, not curative, but it is delaying disease and it has been approved as the first drug for this post-remission treatment of AML. Then you have the other half of patients which are deemed chemo unfit. So these patients are not eligible for high-intensity chemotherapy. Remission rates have been extremely low, but that is where our new drug called Venetoclax is dramatically changing the picture. It means that more patients achieve complete remissions but those patients in principle are not eligible for transplant. So aza plus Venetoclax is then used over longer periods of time and comes with very serious side effects. So the need for post-remission therapy is much broader in the total AML field, and it's also growing because of the success of getting more patients in complete remission with Venetoclax. So as a first step, we decided to combine vididencel with oral azacitidine. As you can see on the right, oral azacitidine has a temporary effect. So this is MRD-positive patients, patients with residual disease that were treated with azacitidine or a placebo, which is the blue line. And you can see that there's a very quick drop-off and also that there is not a plateau. In the end, all patients relapse and also all patients pass away. But there is a separation of the curves and the relapse-free survival median shifts from 2.7 months to 7 months. So that's a very different picture from what we saw with vididencel, which is immunotherapy, which in principle leads to a lot more durable chemical remission. But to combine these 2 drugs could be potentially synergistic and that is why our first next trial after the trial I just showed, which was a single agent trial is a combination trial with oral azacitidine. The 5-year survival of the registration trial of oral azacitidine has been published underway as we collaborate as a first output. But what it shows is that the 5-year survival is in line with what has been the situation for a long period of time. So below 30% 5-year survival with this drug. We are currently recruiting patients in the CADENCE trial or from the AMLM22-CADENCE trial. It's a collaboration with Andrew Wiese, principal investigator but also with the Australian Leukemia and Lymphoma Group, this is saving us a lot of money. So it's an investigator-sponsored trial supported by ALLG. And that trial is sizable. So we would first treat up to 40 patients in Stage 1, which is currently ongoing. And then the trial has the option to include another 100 patients for a proof-of-concept phase. We are in parallel preparing for a go-to-market strategy and the registration trial and that not only comprises the trial design and the alignment with the regulatory agencies, but it also comprises the upscaling of our manufacturing because we don't want to change the manufacturing process after we have engaged in a registration trial. So the current process we are implementing at NorthX is also the process that we wish to use for market launch and commercialization once the product reaches market. And that is ongoing, and we anticipate to release the first GMP batches before the year-end, which is an important milestone on the path to registration trial readiness. Then as I mentioned, there is a broader patient population in AML that we should consider, and we have prepared the outline of several trials, including a trial with the aza Venetoclax combination that I described and a trial in the post-transplant setting. But also we have looked and we've discussed that in earlier calls, we've done a very extensive market analysis on potential indications in blood-borne cancers beyond AML, and we have decided that chronic myeloid leukemia or CML, is a prioritized indication. The reason is that it's a very large market. It's actually larger than AML because it is with patients that stay alive, so this is what you call prevalent patient population. whereas AML is incident patient population. It's new patients that are encountering the disease, whereas in chronic myeloid leukemia, patients are a lot more stable because they have an effective treatment, which is tyrosine kinase inhibitor, a small molecule way of suppressing the disease. But however, these patients in the end want to avoid lifelong treatment with these TKIs. And that's where immunotherapy and vididencel specifically, could help patients achieve more and more successful treatment-free remission rates. Then in June at ASCO, we presented our data from the ovarian cancer trial. We don't emphasize this trial a lot because it's still in a relatively early stage. It's a Phase I trial, safety feasibility trial. But this was the first time we presented this data at a large clinical conference. And the reason is that the data are becoming more mature and that we start to see a picture arise that may show that there's an association between the product and durable survival and is very hard to treat tumor types. So this is a high-grade serous ovarian cancer. It's a disease that is treated by a combination of surgery and chemotherapy. The reason it is one of the most deadly diseases in the gynecological field is that the recurrence rate of the tumors is very high and the recurrent tumors are not very poorly responding to the original chemotherapy. They're also very poorly responding to other drugs available in other solid tumors like targeted therapies or checkpoint inhibitors. So this is a very difficult to treat disease. The interesting pattern we're seeing, and this is the swimmer spot, we also presented at ASCO that if you focus on the green arrows, they are the patients that are still in a progression-free follow-up. Those are the patients that could have a chance of long-term survival, and 6 out of the 7 patients were patients that also showed very strong immune responses after having been treated with vididencel. So it means that there is an association between the vididencel treatment and the tumor-directed immune responses that we have observed and the progression-free survival. Now why are we still careful in expressing our expectations around this trial? First of all, we want to better understand why certain patients are responding and other patients are not. So we are continuing to do a lot of underlying analysis to see what makes a difference, for example, in the immune system of patients that do not respond and progress the disease, and the patients that have a good response and do not progress to the disease to date. But secondly, also, the immunotherapy effect is most clearly visible in long-term survival. So the immediate effect of immunotherapy is not there. That's mostly with chemotherapy or with targeted drugs that you start to see immediately slowing down of cancer cells. What you see with immunotherapy is that the long-term survival improves. You get to see a plateau, which we now clearly have established in AML. But in the ovarian cancer trial, is still a little bit early to say that we actually start to see the survival benefit. So what we will do in the coming months is to, on the one hand, continue to follow up these patients, and we expect to report the 2-year survival of the patients still alive in the fourth quarter. And in the meantime, we will also look deeper into the underlying data to understand why certain patients are responding very well to the therapy and also have a clearly improved progression-free survival based on the data we have today. And this is the reason we were excited to present our data at ASCO. And again, we will follow up with the long-term survival follow-up of these patients. With an outlook, the Phase II proof-of-concept data have only been further strengthened in the second quarter by the data we presented at CIMT and at EHA showing that the drug can be positioned broadly in AML as an active immunotherapy against residual disease. The current AML-CADENCE trial is picking up momentum and recruitment is ongoing. So that will also be a trial in which we, for the first time deliver randomized controlled data in combination with current standard of care. The global registration trial preparations in AML are underway and that's, of course, strengthened by the appointment of Tariq Mughal. And we are, as a basis for late-stage development setting up the large-scale manufacturing, which is on track to deliver GMP material in the second half of this year, so before the year-end. We have multiple trial opportunities identified to expand the addressable patient population in AML and with CML as an identified prioritized indication. So as very near-term milestones, we will have continuous follow-up on the ADVANCE-II trial, the continued progress of the CADENCE trial that will deliver the first randomized controlled data in combination with oral azacitidine. We are preparing for a registration trial readiness, including a large-scale manufacturing, and we will initiate exploratory trials to broaden the addressable patient population in AML but also to open up the CML indication. And finally, in the fourth quarter, we expect to report 2-year survival data of the ALISON trial in ovarian cancer. Now as a last remark, it's, of course, very important when you enter into late-stage development phase that you keep very close finger on the pulse with both the KOL landscape or the landscape of clinical experts that can not only give advice, but that can also support your clinical trials. But also that you stay close to the pharmaceutical industry. And this is what we have been doing continuously in the background to make sure that the next steps in the clinical development of vididencel matches not only the medical need, but also the industry expectations. That combined will lead to a more detailed clinical development strategy, and we will plan for a clinical development strategy update in the early fall of this year. With that, I'd like to conclude the Q2 update and open the session for questions.

[Operator Instructions] The next question comes from Chien Lee from Pareto.

Just one quick question from me. So regarding the pivotal revenue, how can we break it down into like the steps that you need to clear in order to start the registrational trial? Can we assume that the tech transfer with NorthX is completed? And what are the remaining steps?

Thanks so much for joining Chien and perfect question. So as you can imagine, there's different assessments that we have to make in order to be able to engage in the Phase III trial. One is the clinical material to support the trial. Again, ideally, that is the same material that you will also use for market registration and commercial launch. So that's why the collaboration with NorthX and the large-scale GMP manufacturing is such an important milestone on the path to clinical stage readiness. But as you can imagine, there's also constant alignment with the regulatory agencies because you want to make sure that if you engage in a trial and you complete the trial that your product will also be registered and be according -- that the trial will be according to expectations. But also very importantly, and that is, as you can imagine, something we have been working on very actively in the background. If you enter a registration trial, you have to already prepare for on the end, the market. and also the budget associated and the cloud that you need to motivate a broader international group of clinical sites to engage in your trial, et cetera, is, of course, benefiting from a partnership with pharma. So what we are and have been doing since the last 12 to 18 months as soon as we knew that the Phase II data could provide a good basis for a registration trial as we've been listening very careful to the KOLs that are part of the international landscape and that could support our Phase III trial, but also the feedback from pharma. Now that combined with the appointment of Tariq is the total mix we are currently putting together to make sure that the path we will follow to market registration is an optimal path that we can also realistically take. And secondly, that in the options we have created, to broaden the addressable patient population, we make the right choices. Now Tariq started in May, as you can imagine, that has accelerated tremendously all of these efforts but we need a bit more time to condense all of that into a final strategy that we will explain in more detail somewhat later down the line this year.

That's clear. And another question. So do you expect to release follow-up data for the advanced survival update later this year?