Nykode Therapeutics AS (NYKD) Earnings Call Transcript

Greetings, and welcome to the Nykode Therapeutics Q3 2025 Financial Results Conference Call and webcast. [Operator Instructions] As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to CEO, Michael Engsig. Please go ahead, sir.

Thank you very much, Kevin. Also from my side, a very warm welcome to all participants at today's Q3 report. Just to remind everybody of our forward-looking statements. Assuming you're familiar with such statements, we will move ahead. As usual, it's my pleasure to have next to me here, Agnete Fredriksen, our Chief Scientific Officer and Head of Business Development as well as Co-Founder; and Harald Gurvin, our Chief Financial Officer. A quick recap on our company strategy, which we announced in Q3 this year, which really demonstrates our focus on our 3 core assets, abi-suva, formerly known as VB10.16, which is our lead asset, and we're taking into a randomized controlled trial in Phase II in first-line head and neck. Secondly, VB10.NEO, our individualized neoantigen therapy with the potential to basically be a future therapy towards all cancer types. We're positioning this as the most attractive unencumbered INT assets ready to leverage peer data. And thirdly, our tolerance in platform, which we are positioning as the best-in-class tolerance platform for treatment of autoimmune diseases, potentially allergy and other diseases in that category. We're also demonstrating a disciplined approach to capital allocation, strongly capitalized with a runway that lasts into 2028, '29. We're going to add some more words to that later, which is on the other side of significant inflection points for the company. It's been another busy quarter for us with progress on all our 3 programs. Obviously, taking a lot of our efforts these months is the Abili-T trial, our randomized controlled trial for abi-suva. And we're very happy to announce that we have submitted the protocol to the U.K. authorities in November, and we are expecting a submission to the EMA authorities imminently, which is, to be honest, a close to a record, if not a record time for us to bring it from a decision on running a trial to actually submitting a protocol to the authorities. We have also agreed together with our partners, MSD on supply of pembrolizumab from this trial, which also means that MST has been part of writing the protocol and approving it in its current design. Very happy and great thanks to the team for such a large effort, keeping this trial on progress. For our VB10.NEO program, where we have said earlier that we are focusing on also strengthening the proprietary position around our NeoSELECT platform, so the algorithm that selects targets that we incorporate into our vaccines on a patient-by-patient basis. We've also seen good progress here. We have been granted a U.S. patent for the NeoSelect platform, which is a very important part of protecting our exclusivity for this platform. And we have presented very exciting data across our 2 clinical trials that further demonstrates that NeoSelect is really picking up the best targets to be incorporated into our platform, and Agnete will tell you more about that later today. We have presented a series of data for our AI platform, also called the tolerance platform, where we've shown the ability to see long and durable effect of our constructs even when delivered late in the development of the disease, which means it has really a therapeutic potential. And we've recently also shown that we have the ability to modulate also the so-called funeral compartment, which means the autoantibodies, and we are thus one of a very, very selected group of companies that can modulate all the compartments of the immune response. Agnete will also tell you more about that in a couple of slides. Moving on to an update on abi-suva. And again, just to quickly remind everybody, abi-suva is our lead candidate. It's a therapeutic immunotherapy developed to -- against HPV16-driven cancers. We are moving this asset into a randomized controlled Phase II trial in first-line head and neck. And we're doing this on the basis of having seen very encouraging data across 3 different clinical trials, of which 2 have been reported and is ongoing and 2 are in combination with immune checkpoints and one is a monotherapy. We see consistent added benefits compared to what we would expect to see with checkpoint inhibitor monotherapy, both on ORR and overall survival. And we see also consistently a strong correlation between the effect and the immunogenicity specific immunicity raised by this vaccine, which we really do consider a pivotal thing for a cancer vaccine to show credible data. Next step for this is, as I said before, initiating the Abili-T trial, the randomized controlled trial, which will be enrolling up to 100 patients. We also expect to release the first interim data from the ongoing C-03 trial within the next 6 to 12 months. And we do also foresee that the Abili-T trial itself should be able to deliver the first meaningful interim data within the next 24 months. So this is not a trivial indication. And we do see in particular with the head and neck, the HPV16-driven number of patients are increasing over the coming years. Alone in the head and neck, we see we are looking at an incidence of more than 60,000 patients per year. And if you look at the current standard of treatment, 4 out of 5 patients don't really see any meaningful benefit for the current available treatment, which leaves significant room for improvements with future treatments. Most of the treatments that are in development in this space against head and neck are focused on the HPV negative populations, which again makes the key opinion leaders see more HPV positive focused therapeutic options for the future. And if we look at the forecasted market or estimated market for this segment, the HPV16-driven segment, we are looking at significant growth with an annual compound growth rate of 9.2% between now and the next 10 years in front of us. The Abili-T trial is going to be the first time we take abi-suva into a randomized controlled setting. It's technically a Phase II trial with us expect to enroll up to 100 patients, split into 2 groups, randomized 1:1. One group will receive abi-suva plus pembrolizumab and the other one will receive pembrolizumab, which is a standard of care. The primary endpoint will be ORR and PFS. This is the protocol as we expect it to look right now. As I said, we just submitted this to the authorities in U.K., I expect to submit to the EMA authorities imminently in December and then begin the interactions with the authorities on the protocol and the study design. Also, as I said before, agreed the supply of pembrolizumab with MSD. And here I would like to thank the colleagues at MSD for their very gracious help on getting this trial designed and expeditely approved on the MSD side. Without that, we would not be able to run this trial forward. So grateful. Before handing over the word to Agnete, I just want to remind you all here, Abili-T, our lead asset moving into a randomized controlled trial setting for the first time, but we are expecting to deliver the interim data from C-03 in the first half of 2026 at a conference that we still have to identify and announce. We feel we are very well positioned in the field of HPV16-driven cancers in particular, head and neck and we do see that we will be able to deliver the first meaningful interim readout of this trial within 24 months, which is within our cash runway. With those words, I'm going to hand over to Agnete to take us through VB10.NEO.

Thank you, Michael. First, a little reminder of where we are at the moment with VB10Neo. We have performed 2 clinical trials with this fully individualized cancer neoadjuvant therapy. They have both been in heavily pretreated patients, which is different from where we see our peers currently moving into very early-stage adjuvant setting. In both of these trials in heavily pretreated patients, we have shown strong immune responses. We also, in this particular setting, when we make one vaccine per patient, the manufacturing process is extremely important. The current setup we have at the moment has a competitive robust 7-week turnaround time. in the clinical setting with potential for further improvements and cost advantage. So this is an important factor for VB10.NEO compared to our peers in the field. We do also have a need to select neoepitopes for each individual patient when we work with individualized cancer neoantigen therapies. And we have developed a proprietary AI algorithm in order to select the optimal neoepitopes per patient, and we have shown that these prioritizes superior immunogenic neoantigens from the 2 clinical trials as well as preclinical data. In the future, we see now a very interesting defining period for individualized neoantigen therapies. There are 10 ongoing randomized clinical trials from peers Phase II and Phase III trials. So this is really the highest investments in this field to date. And most -- many of these will read out within the next 15 months, which we know will be very important and if positive, will further validate the concept of individualized neoantigen therapies, which will bring Nykode in a very interesting position. In the meantime, our strategy is to further strengthen this position, building on the positive basis that we have at the moment and focus on being the most attractive unencumbered INT through selected activities to leverage when these key readouts come in the next few months. So these are some of the key success factors for an ideal INT candidate. We do believe it's important to already have clinical data, which we have antigen selection. We do have a proprietary algorithm, and this is where I'll focus today with some progress that we've seen in this particular box for the last quarter. And then we are currently also working even more on the supply chain and the cost of goods in order to continue the competitiveness -- increase the competitiveness. So here are data that we presented at the SITC conference earlier this month, which we believe is very validating for the neoepitope selection method that we've developed here in-house. NeoSELECT, when we select epitopes for patients, we select up to 20 neoepitopes. So that's the number you see also up to 20 on the x-axis of the graph here to the left. And we rank these epitopes and the 20 best epitopes will make it into the vaccine in the vaccine design and be able to be given to patients, and we can measure whether or not they were immunogenic. And you can see here across both N-01 and N-02, you can see that there is a trend with the strongest immunogenicity and also for the high-quality antigens to be amongst the highest ranked neoepitopes. So you can see there. Once we rank as #1 also tend to be the optimal neoepitopes. So that is extremely important in order to validate that NeoSELECT is actually identifying the optimal neoantigens for the patients. Importantly, Nykode has focused on not only incorporating features that are linked to immune responses against the neoantigens, but also technical and clinical parameters. So that's what we incorporate in what we call high-quality neoepitopes in the ones that make it into the vaccine design. And we see that these high-quality immunogenic high-quality neoantigens are the ones that are mostly associated also with favorable clinical outcome. Obviously, in patients with multiple different diseases, heterogenic patient population, so needs to be further validated in future trials with very important signs going in the right direction here. And then in order to solicit this, we have also very recently been granted another patent, another layer of protection for VB10.NEO, which actually then focuses on the neoepitope selection method that we have developed in-house. This is now in U.S. and that is a patent that expires in 2039. So long protection here. This is a U.S. patent. So we have already previously been granted patent for the method of selecting neappitopes in Australia, China, Israel and Japan and Russia, which is going to be important for the future of VB10.NEO. So just to summarize for this particular program, the key readouts in the next 15 months is what we're all waiting for. It can create a strong conviction for INTs. We do believe we are already in a good position, and we are continuing, as you also see here with the NeoSELECT data and the patent protection that we are continuing to strengthen our position in the field. Then I think I'll move into the tolerance program. And just as a background here, when we say tolerance, we are working with truly antigen-specific immune tolerance. And this is really a new way of thinking about autoimmune disease treatment. The problem of today's treatment is that they focus on symptom management and do not really address the underlying root cause of the disease, which impacts also side effects and also the duration of effect to the current treatments that are of for patients. So that impairs the quality of life of the patients. Unfortunately, autoimmune diseases affect a huge portion of our global population it's actually 1 in 10 that is affected by an autoimmune disease, which also means that there is a huge market for treatments addressing autoimmune diseases. So with antigen-specific immune tolerance, truly antigen-specific, we have a vision to offer a prospect of a cure, which you cannot mission with the current treatment. So that's what we are aiming for with this program. When it comes to the key factors for a successful platform in this field, we both want to see therapeutic efficacy across diseases. And today also show you additional new data from the last quarter, both within long durability in the EAE model as well as in the new model, Vitiligo. And then we need to see regulation of all major autoactive disease-causing cells. So different autoimmune diseases, the reason for seeing disease can be caused by multiple different immune parameters, including autoantibodies, effective T cells, CD8, CD4. And we need to see a broad effect in order to envision that we can treat multiple different autoimmune diseases. Another important factor here is to be able to incorporate multiple antigens, many different autoimmune diseases are caused by a range of different antigens and the ability to have a vaccine modality that can incorporate multiple antigens will make it more likely that we can treat multiple different diseases. And obviously, here also manufacturability and delivery, convenient delivery route is important here. So today, I'll show you new data basically in all of these boxes that are continuing to increase our conviction. So this data here were shown at a conference in August where we started to treat mice that have already developed quite severe EAE, which is a mouse model for multiple sclerosis that we are working on for multiple purposes. And we start to treat the mice after they have developed clinical symptoms. And still, we can see that we are able to provide a very strong therapeutic effect, but also importantly, very long-lasting therapeutic effect even without continuing to dose the mice, only 2 doses here at an early time point. And this is one of the things an antigen-specific therapy can offer compared to other treatments that are only focused on symptoms. Here is one of the data that we believe is very important and differentiating from what we've seen published from our peers. We have been able to reduce autoantibodies in mice models also when treating the mice in a therapeutic setting, which we have not seen from many of our peers as of to date. And this can be a very interesting competitive advantage of our technology, where you can see that the level of autoantibodies are decreased when we use our targeted vaccine compared also to a nontargeted vaccine. Then another sophisticated data here that we are pretty proud of is that we have -- and to the left, been able to look into the central nervous system or spinal cord actually and look at the infiltrating cells, both here to the left and in the EAE model, where we see a reduction of an impact on the level of immune cells, so a reduction of the disease-causing cells into the spinal cord, which is where we need these immune cells to -- in order to change the course of the disease. And to the right, we've done an experiment looking into the pancreatic islets in the NOD model, the type 1 diabetes model, where we also see an increase of regulatory T cells in the affected organs as such. So a lot of progress there on the disease models and also on the immune parameters. When it comes to the multi-antigens, we also made a lot of progress in the last quarter. We have incorporated all the competence that we have developed over the years also from our individualized cancer neoantigen epitope selection and our core competencies here in the team in-house. And we have now created constructs with multiple antigens from here a type 1 diabetes project, where we could identify multiple antigens and multiple opportunities to combine these antigens in one construct. And our model was able to take 2.7 billion possibilities down to 39 selected antigens, and we can see that a high percentage of this is actually very functional with long complicated set of antigens is still being able to be produced in -- with high quality and high yield. And this will now -- are now being tested in vivo trials. And this is also an important competitive factor where we don't see all our peers being able to incorporate multiple antigens in one construct. Then for translatability into the clinic, we know most competitors are focusing or actually using intravenous delivery, which is complicated in the clinic. And we have recently been able to compare when we inject our vaccines both intravenously and subcutaneously, which is a much more convenient method for the patients in a clinical setting, and we can see similar levels of efficacy when we give it subcutaneously, which will also be extremely important when we translate this into the clinic. And then as the last data slide here, we have, as I mentioned initially, now moved into a third disease model initially here looked at Vitiligo, where we can induce the disease with a human TRP-2 antigen. And this is driven by CD8 T cells, and we have -- very promising data already from the first initial experiments here, where we can see the targeted vaccine is able to reduce the number of the disease causing CD8 T cells. So another example here of today showing you both an effect on CD8 T cells and autoantibodies in addition to these more regulatory T cells that we see most of our peers are focusing on in their presentations. As a sum up, we feel more and more confident with the data we're generating and our path towards developing a best-in-class antigen-specific immune tolerance platform. seen a lot of progress from the last quarter here and the team working very hard and dedicated in order to get all these data. As a summary, we know that the current treatments are not optimal. They are focusing on symptom relief. Our competitive strength is also amongst the other players in the field of antigen-specific immune tolerance is both this long-lasting efficacy that we see now, but also the fact that we do observe an effect both on T regs, CD8 T cells and autoantibodies, and we also see this in affected organs like the CNS and the pancreatic islets. Interestingly, we see efficacy with recombinant protein delivered through convenient route of administration, subcu, as I shown here today, which makes this the hurdle less to move into the clinic and will be very important for a clinical setting. And then not to forget the progress we've seen on our AI/ML and the move into tolerance here so that we are able to incorporate multiple antigens in the design of our vaccines. So we'll continue this investment and further elucidate the mechanisms of actions and test different APC targeting units and which ones will be optimal for which diseases in the near future. Then I think I'll hand over to you, Hal.

Thank you, Agnete. Looking at the key financials for the third quarter, total revenue and other income came in at $118,000 compared to $665,000 in the third quarter of 2024, driven by less revenue from Genentech and Regeneron. Total operating expenses reduced from $15.6 million in the third quarter of 2024 to $6.4 million in the third quarter of 2025, reflecting the reduced organization following the organizational streamlining finalized in the first quarter of 2025 and also reduced clinical activities. Finance income and costs were net $1.3 million positive in the third quarter, which mainly relates to interest income and unrealized currency movement on Norwegian kroner exposure. So overall, we recorded a net loss of $3.7 million for the third quarter compared to a net loss of $9.7 million for the same period in 2024. Moving on to the balance sheet. We are still well capitalized with a cash position of $64 million at the end of the third quarter. With disciplined execution and strong financial focus, we will reach key inflection points within the estimated cash runway into 2028. This does not include the pending tax case where we have booked a long-term receivable amounting to $32.5 million at the end of the third quarter as further described in the quarterly report. Nykode is confident that we will receive a positive ruling in the tax case also based on advice from third-party tax experts. As communicated in the first quarter, we have received a letter from the tax authorities that we can expect draft of recommendation from the secret in the first quarter of 2026. A positive outcome will push the cash runway into 2029. Moving on to equity and liabilities. We had total equity of $99 million, which represents a strong equity ratio of 94%. And with that, I will give the word back to Michael.

Thank you very much, Harald and Agnete. And just recapping here before we open up for questions. With the initiatives that we have taken on the cost base and restructuring as well as the progress we are seeing on the programs, we feel the company is very well positioned to execute on our strategy and meeting our inflection points. Our cash runway has been extended, thanks to a diligent approach to cost allocation or capital allocation. And you see the results on our quarterly costs this quarter compared to last year, which means our cash runway is still lasting into '28/29 on those presumptions Harald just mentioned, which again means that it exceeds the meaningful inflection points we see in front of us. Within the next 6 to 12 months, our focus is on getting the interim efficacy data from the C-03 trial, which we expect to be able to announce somewhere in the first half of 2026. We may also be looking at key peer readouts from the individualized neoantigen therapy field, which could, of course, also drive interest in the field as general, and that is what we are paying ourselves against. So we are working hard on strengthening positioning VB10.NEO as the most attractive unencumbered INT field. And we, of course, will continue to see progress on our platform, positioning that as the best-in-class platform. If we look a little bit further out into the future, we should be looking at the first interim data from our Abili-T trial, the randomized controlled trial in abi-suva in 2027. And there, we also see a potential continued readout from peers in the individualized neoantigen therapy field. In particular here, we'll be looking at some of the first randomized controlled Phase III trials reading out. So exciting times in front of Nykode. And with those words, we'll be opening up for questions. So Kevin, will you take us through those?

[Operator Instructions] Our first question today is coming from Geir Holom. We do have a few questions from Geir from DNB Carnegie. The first one is, you expect to report the first interim efficacy analysis in 2027. To deliver on that, when might you start dosing your first patients?

Yes. So thanks, Geir, for your questions. And it's always filled with caveats to come with this kind of projections for clinical trials like that. And as you know, very well, a lot of uncertainties. Our planning right now assumes a little bit more than a year from first dosing to the interim readout. So correspondingly, if we want to be able to read out around the late summer of 2027, for example, we would need to be able to see the first patient coming in and be dosed around summer time 2026. That's just for modeling purposes, we are not guiding on exactly when we will do that, but that's just for your modeling purpose.

Okay. A follow-up from Geir is how many clinical sites do you plan to open? And will all sites be in Europe?

Yes. So here, we are actually going in on the slightly aggressive or conservative, if you want, and better open up too many sites to begin with. So our current planning is to open up 40 sites in the Abili-T trial. Our modeling tells us that should be enough. We will, of course, be monitoring this closely and react if we see we need to open up more sites. But 40 is the number of sites we currently estimate to open up. The majority of these will be across the U.K. and EMEA region in Europe, but we are looking at regions outside Europe also. One of the countries that I myself feel very compelled to also explore is, of course, Canada. But we will be providing more updates on that as we continue the planning. So for the first wave, as we have indicated, we are focusing on U.K. and EMEA and then we will be considering further countries as a second wave in the beginning of the new year. I think we can take the next question, Kevin.