Mendus AB (publ) (IMMU) Earnings Call Transcript

Welcome to Mendus's Q3 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.

Good afternoon, everybody. Good morning for those of you from the U.S. joining, and welcome to the Q3 financial business update for Mendus public company. We have to show our disclaimer. It's also available on our website. The Q3 of 2025 has mainly been focusing on the progress in myeloid blood cancers. It means we have followed up our ADVANCE-2 Phase IIa trial and have indicated a positive outcome now at 48 months median follow-up. But also those data give us a lot of confidence about the potential of the product in the broader AML setting. We have started and the trial is ongoing and recruiting the AMLM22-CADENCE trial together with the Australasian Leukemia and Lymphoma Group, in short CADENCE trial, and this is a Phase IIb combination trial with a drug approved for AML patients that have been treated with high-intensity chemotherapy called oral azacitidine. The trial is gaining momentum, and we have set a goal to enroll 20 patients by the first quarter of 2026, after which we will also prepare an initial readout. Another important step is that the AML first-line treatment landscape is evolving, and we have to adapt to that. The next to high-intensity chemotherapy, there's now a very successful regime of 2 drugs called venetoclax and azacitidine used as a means to get chemo-ineligible AML patients into complete remission, and that is a growing patient population, which is also in a very high need of post-remission immunotherapy. And we want to be able to be part of that transformation of the AML landscape. So we are now preparing with Andrew Wei, the same professor who is also heading the AMLM22-CADENCE trial, a trial called DIVA, which is a Phase I trial to, for the first time, study vididencel in combination with azacitidine and venetoclax. Also importantly, and as a very attractive market segment in myeloid blood cancers, we have decided to position vididencel in chronic myeloid leukemia. We will share a few details about the background of that new indication in the upcoming slides. But also importantly, we have already prepared in detail the trials to enter into this field with the Phase I and the Phase IIa trial scheduled to start in 2026. To compensate for the additional trial costs that we anticipate in 2026, we have decided to reduce our staff, including also some of the management team members to compensate for those additional trial costs in 2026. Mid this year, we announced that the U.S. Patent and Trademark Office, USPTO granted us a patent covering the use of vididencel in ovarian cancer. That's part of an ongoing trial, the ALISON trial in Phase I, but this also validates the use of the product in ovarian cancer, and it gives us a nice optionality to see how the ALISON trial plays out and is, of course, in a good way, protecting our product specifically for use in that indication. And then we have a platform that we have been developing a lot of research, preclinical research has been going on in our labs, but we have made the preclinical research subject to partnering. And we actually also announced in the third quarter that we have closed an initial partnership with an international biopharmaceutical company in a research collaboration with our lab. Then going to the financial information, Lotta, can I hand it over to you.

Yes, please. Hi, everyone. Yes, there is not much to say about the financial as usual. We have an operating result of SEK 20.4 million. The cash flow -- the negative cash flow is SEK 21.4 million. So it's more or less in line with the result. And it depends -- and it's because we now have went into a more late-stage phase with NorthX. So then we don't have costs every month because the cost for the batches will come when they will be delivered to us. The cash position end of Q3 is SEK 37.6 million, and we expect that to finish -- to have a cash runway into the beginning of 2026.

Thanks, Lotta. Then as a high-level summary of why we are in AML. AML is a very aggressive blood-borne tumor with basically immunotherapy being the only chance of cure. The only approved immunotherapy currently in AML is bone marrow transplant or hematopoietic stem cell transplant, also in short HSCT. This is a very high-risk procedure, which is inaccessible to most AML patients. Without transplant, AML patients face imminent relapse due to residual disease. And actually, the 5-year survival of AML has been dramatic low, well below 30%. Why are we relevant? We offer a safe immunotherapy to reduce relapse by providing immune control over the residual disease. We have shown that this leads to durable clinical remissions, but also very importantly, our product is safe. So we preserve health and quality of life for the patients treated. This is the 48-month data that I alluded to. What you see is a nice plateau. It means that after the initial patients that failed to respond to the therapy have suffered from relapse, you see a relatively large population responding with long-term survival. And that is the plateau, so the flattening of the curve that you see when you go to the right-hand side. Also, you can see that a number of patients have already passed 5-year survival. So this is a very striking result. As you know, from our previous presentations, we have also looked in a lot of detail into the immune system of the patients, and we could show that actually all the patients that had a reasonable immune system at start of treatment were able to build up immune responses against leukemic antigens after treatment with vididencel and also all of them became long-term survivors. So the majority of patients is still alive at 48 months median follow-up. And that is a great outcome. So that gives us the confidence that we can push vididencel in the broader setting in AML. And this is an overview of the AML treatment landscape. Again, HSCT is still the only curative approach, but for the many patients not able to undergo HSCT, there's actually 2 solutions, which is one, oral aza, but oral aza or oral azacitidine is not very effective. It does give some progression-free survival benefit. But when you look at long-term overall survival, it has very limited effect, and it's still below 30%. So that patient population is the patient population we are currently treating in the CADENCE trial. And then on the bottom, you see the patient population, which is currently classified as chemo unfit. So these patients do not get the classical high-intensity chemotherapy but the combination of azacitidine and venetoclax. But there, there is no transplant option. So the need for immunotherapy to make sure that these patients don't relapse is actually even larger than in the chemo-eligible patient population. So this is the reason, plus the fact that the treatment is so effective that it's being used more and more as a first-line treatment, even for patients that are classically classified as chemo fit means that is a very fast-growing patient population in need of post-remission immunotherapy. And this is why we want to expand the position of vididencel with the DIVA trial, which is a Phase I trial addressing azacitidine and venetoclax in AML patients. Overall, the time to market has not changed significantly to our earlier plans, which were to execute on a more narrowly defined trial with oral azacitidine in only MRD-positive patients. Now there's 2 reasons why we have adjusted the strategy. First of all, the developments in the AML landscape and the growing opportunity for post-remission immunotherapy. So we want to make sure that we adjust to that evolving landscape and are optimally positioned for vididencel in terms of reaching the market and also the overall market potential. So we have to adapt the execution of a clinical trial to what's happening in the field. But also the use of MRD has changed. So where MRD was not part of our Phase I trial because it was not commonly used in clinical practice. In our Phase II trial, the ADVANCE-2 trial, we just looked at we could use it to stratify patients into an MRD positive being a high-risk patient population. Nowadays, MRD is used a lot more continuous to monitor disease, and there's also a variation in MRD levels depending on how the disease is also monitored. There's different techniques to do it. So in a nutshell, MRD is a very important parameter and part of AML treatment, but the use of it has become a lot more diverse and a lot more continuous rather than just a black and white classification of MRD-positive and MRD-negative patients. So all in all, we want to first move to beyond MRD-positive patients. That is what's currently going on in the CADENCE trial because we treat both MRD-positive and MRD-negative patients. And then as I said, the aza-venetoclax patient population, a very fast-growing patient population in need of post-remission immunotherapy, in principle, also not eligible for transplant, so an even higher unmet medical need. And we really want to make sure that we capture the broader AML opportunity and also that our plans to go to market with this product have the best chances of reaching the market and also having the recruitment to support the Phase III trial in the best possible way. So the overall time lines to get to market, we estimate are not so different from the original planned time to market. We just optimize the chances of getting there. Then, of course, we've had an end of Phase II meeting with the FDA. We are also preparing for large-scale GMP production. We have a manufacturing alliance with a company called NorthX Biologics. We have entered into the production phase of that alliance. So we are currently evaluating the batches that we have manufactured. And of course, as soon as we can state that we have successfully been able to manufacture and release those batches, we will also notify the market, but the alliance is on track and a very important part of supporting the late-stage development of vididencel in AML. Then I will spend a little bit more time on the CML field. And the reason is it's a new field that we aim to enter, acute myeloid leukemia and chronic myeloid leukemia do share antigens that is well documented. But also we have done some preclinical work ourselves that we presented last year at the ASH conference, showing that vididencel actually stimulates immune cells to build up immunity against CML, which is, of course, a starting point for an active immunotherapy that we try to accomplish immune control over the residual disease. But why is it so relevant in CML? CML is a disease that is driven by a specific oncogene called BCR-ABL. And because this oncogene is so specific, it can also be effectively controlled with inhibitors, AB-L1, tyrosine kinase inhibitors or TKIs. It means that the disease is in principle under control and the treatment focus has shifted from short-term disease control to quality of life and cost reduction. The quality of life is heavily affected by lifelong TKI usage. So patients really want to try and stop their TKIs, and that is called a treatment-free remission, which has become a key therapy goal in CML. However, if you need to put pressure on the disease with TKIs and you take off the TKIs, you stop with the TKIs, it in a lot of patients quite quickly within the first 6 to 12 months leads to rising levels of disease. In that situation, patients have to be put back on the original or a new generation of TKIs. And the limited success of TFR is basically still an unresolved question. So going back to immune control, CML before the invention of TKIs was treated with hematopoietic stem cell transplants or with bone marrow transplant because it's such a dangerous procedure, it's hardly used anymore. The other immune drug that has been tried in CML is interferon alpha, but also that is a very difficult to use drug with toxicity, with a difficult therapeutic window. So people are really looking for new immune therapies to improve TFR success to make sure that the immune system is able to control residual disease and you don't need to take your TKIs for the rest of your life. Now that is a big unmet medical need. Also, when you look into the patient numbers on the right-hand side, you will appreciate that CML is a much larger field than AML. And the main reason is that CML patients stay alive. So it's a growing patient population. The estimated numbers now are roughly 150,000 patients in Europe and 150,000 in the U.S., so adding up to roughly 300,000 patients in Europe and the U.S. alone. And almost all these patients have one single goal, which is to live a healthy life without being convicted to lifelong drug usage. So what we'll try to accomplish in 2026 is, first of all, safety and early signs of efficacy based on the molecular levels of disease that we can monitor, but then also quite quickly step up and start a Phase IIa trial after the initial Phase I safety readout, and we will focus in that Phase IIa trial on patients who have previously failed TFR attempt. The reason to do that is that the failure rate in the first year at the first TFR attempt, and this is patients that have had very stable, very low levels of disease so that they can finally stop their TKIs is 50%. If it then fails and patients try after a couple of years of, again, stable disease suppression, a second TFR attempt, that failure rate is even higher, roughly 75%. So this is a good patient population to start and try and pick up the signal that an immunotherapy like vididencel allows patients to have a better outcome of their TFR attempt. The start of both of these trials is planned for 2026. Then moving to the summary and the outlook. So the positive ADVANCE Phase IIa data that we have presented with 48 months follow-up -- median follow-up data showing really that these patients have a chance of durable clinical remissions without having to pay a price of toxicity. So with a very safe treatment really boosts our confidence to position vididencel more broadly in the AML landscape. And this we are currently doing in the randomized controlled CADENCE trial with oral azacitidine, but we will also expand to the chemo unfit patient population in the DIVA trial in combination with azacitidine and venetoclax. The clinical data we expect from both trials in 2026, plus the anticipated first-line treatment landscape in AML will guide our optimal go-to-market strategy in AML. The indication expansion to CML with a clear rationale based on a very large and growing patient population with unmet medical need will open up large additional market potential for vididencel in myeloid blood cancers, and we have already drawn out in detail the clinical trial strategy to open up that indication. Then I should also mention in ovarian cancer, we have published positive data in the middle of this year at ASCO, and we will continue to follow up these patients. We expect the next readout of the ovarian cancer trial before the year-end. So as near-term clinical milestones, we have the long-term -- continued long-term follow-up of the ADVANCE-2 trial, including an update before the year-end. We have the long-term follow-up data from the ALISON trial in ovarian cancer. And then in the expansion of the positioning of vididencel to the myeloid blood cancer space, we have a number of key readouts already in 2026, being the CADENCE trial readout based on the first 20 patients in the trial, the DIVA trial readout based on initial safety and efficacy data and the initial safety and feasibility data in CML, which, of course, is the first big step into the remainder of the Phase I trial, but also the start of the Phase IIa trial. So with that, I would like to hand it over to the Q&A session, and welcome to answer any questions.

[Operator Instructions] The next question comes from Christian Binder from Redeye.

I was wondering about potential late-stage development in AML. Previously, you've remarked that you could get to market with relatively small Phase III trial. Is that still the case? Or would it potentially to be expanded given the broader positioning?

Christian, thanks for your question. Yes, I think the short answer to your question is we will expect a somewhat larger patient population if we, let's say, broaden the addressable patient population post chemo, so to include also the MRD-negative patients, which tend to have a somewhat longer period before potential relapse. But the recruitment and in the end, also the probability of success in running that trial will also significantly improve because you, first of all, have a much broader patient population, but also you overcome the complexity of first having to assess according to standardized methods that the patient is considered to be MRD positive. So we anticipate a trial to be bigger. Initially, we said 150 to 200 patients. We now think that the registration trial in that setting will require around 250 patients. But the lack of complexity and a much broader patient population to be included will certainly facilitate the recruitment of that trial.

The next question comes from Arron Aatkar from Edison Group.

The first one I've got is, could you provide some more detail on the trial design, size and endpoints that might be used for this Phase Ib DIVA trial?

Yes, absolutely. It's going to be a typical Phase I trial, Arron, and we anticipate to enroll 24 patients in 12 months' time. This is a much more prevalent patient population. And yes, we think, therefore, that we can run a relatively quick trial with the initial safety and feasibility signal already established in 2026, with the trial, of course, extending into 2027.

Okay. So if I'm understanding correctly then, so there'll be 24 patients in 12 months, but then the initial readout would be in sort of mid-2026. So will that interim sort of readout be -- well, an interim readout, not corresponding to the full results. Is that right?