PCI Biotech Holding ASA

Good morning and welcome to PCI Biotech fourth quarter and preliminary full year 2021 presentation. My name is Per Valde, I'm the CEO of PCI Biotech and I have with me also Ronny Skuggedal who is the CFO of PCI Biotech. Note that on this slide we have details surrounding a Q&A session that will come live after the presentation. So please use these details if you want to call in and ask questions. This is a live presentation but also a webcast presentation. But to ask questions you can either put them through the webcast or call in and ask them directly. Please also pay attention to this important notice and disclaimer. And with that, I will start the presentation. What we'll go through today is the highlights of 2021 and then an operational review where we'll go through all the different programs. Then we will look at key financials and an outlook of the future before moving over to the question and answer session. So let's start then with the highlights of 2021. And I need unfortunately to start with the FIMAKEM program that we had to close the recruitment into earlier in 2021. It was due to a competitor product that reported positive results and these results are expected to quickly change the standard of care for this patient population that we are including in our release study. And we therefore think that this is going to be very challenging to complete and potentially inadequate for approval. Approximately 30% of the 41 enrolled patients into this will continue to receive study treatments for up to six months. This is because we had quite good recruitment towards the end of this study and we will not treat them more than during this treatment period and therefore it enables a swift wind down of the study and this trial. And then what we are going to do is to collect the efficacy results, and safety of course also, and see whether this data can be utilized for anything of value going forward. So that's also an important part of closing down the study. Our lead program now is the vaccination technology, FEMAVAC. This program is progressing towards an initiation of a phase two clinical proof of concept study, and we have product definition and overall study design clarified after comprehensive consultation with external experts. We are aiming to complete this during the spring, and we'll come with more details about this at a later stage. Importantly also, in last year, we had a U.S. patent granted for the FEMAVAC in combination with immune checkpoint inhibitors, which is where we plan to use our FEMAVAC technology. So this is an important patent for this program going forward. The second program that we are continue to develop is FIWA NAC. And this has now gone into a more focused internal development. So we have a plan that we initiated based on strategic research and the collaborations that we've done. And we are targeting applications that are specifically suited for the PCI technology to develop those further for potential collaborations with partners. We had some very encouraging data from collaborations that we for the first time presented at the UK-based 12th annual RNA Therapeutics virtual conference in January 2021. This data has also later been presented at other places, most recently now in the fourth quarter at the conference in Berlin. We have also used this data to establish further collaborations within the FIMANAC. And there are two new collaborations that have been established, one with Olix Pharmaceuticals, which is a South Korean company working on RNRI, this interference RNA therapeutics. which is one of the technologies or products that our technology can efficiently deliver to the intracellular compartment where it's needed to be delivered for this application. And also, early this year, we entered into a preclinical research collaboration with another South Korean company called MD Immune, who are also developing an innovative drug delivery technology for modifying cellular and disease processes. And we will look at synergies between these two technologies. On the corporate side, in last year, we significantly strengthened the organization. We hired three highly skilled individuals, an experienced clinical operational leader, and two key employees within clinical science and business development, which are focusing on our FIMAvac and FIMANac program. So these were the highlights for 2021. Now I will go through the different programs. Just have a look at the pipeline first. We have now two different programs, one in clinical development, which is the FIMAvac program that we are developing further. It is approaching phase two after a successful phase one. And now the FIMAvac program, where we have several collaborations also established with other companies, which is developed in nucleic acid therapeutics delivery. And this is a pre-clinical program. So with this, I will go into the more program-based operational review, and I will start with the Femachem program. So we had a pivotal study, or we still have a pivotal study, but recruitment has closed to this, which was called Release. We closed this because of data that came out at the conference, ASCO GI conference, in the US in January. It was presented on the 21st of January. late in the evening, and this data demonstrated that a combination of a specific checkpoint inhibitor with gemcitabine and cisplatin, which is the standard of care today, a combination of these two drugs with checkpoint inhibitor provide a significant survival benefit in this patient population. This is really good news for the patients because there is nothing new that has been developed for these patients for the last 10 to 12 years. But unfortunately for us, this means that the standard of care is expected to rapidly change. And when that changes, it makes a release study not feasible to perform. And since we had recruitment for maybe one and a half year going forward, and the standard of care is expected to change rapidly, it makes it unfeasible to continue to perform the release study, to complete the release study. What we saw in this presentation is that the specific subgroup that we are targeting with our technology have quite good results in this to pass one study that was presented. So it is expected to rapidly change for that specific population. I would like to stress, and we informed about this I think on the 24th of January, and I would like to stress again that there is nothing of signals from within the study that has made us make this decision. This decision is based on the data that came with this comparator in January at the ASCO conference. We had an IDMC review of safety of actually safety of doing two FEMA chem treatments with our technology in December. And there were no additional safety signals and a recommendation from our independent data monitoring committee was that we could just continue with two treatments. So there are nothing other than the specific results that makes it very difficult, very challenging to complete this study. As I said, such a change in the standard of care will render this trial very challenging to complete and also potentially inadequate for approval. And it will also significantly diminish the market opportunity that we had for our treatment approach in this patient population. So what we now will focus on is a swift and cost-efficient closing process of this trial and this is work in process with the CRO. All the details have not yet been elucidated in this process and there are a number of different decisions that needs to be taken so we don't have currently a precise timeline or a precise budget for how much it will cost to close this study. We have an ethical responsibility for the patients that have signed informed consent and gone into the study. So we will give them the treatment that they were promised when they entered into the study. We'll follow them until treatment is completed, but then close the study as swiftly as possible and as cost efficient as possible. To this aim, we are able to close almost 60% of the sites immediately. And we will then follow the other sites with patients in them to monitor efficacy and collect this and ensure that we can close them as quickly as possible. We will take these results afterwards and they will be available later this year. We had quite a lot of recruitment towards the end of the year. So we are still waiting a lot of the efficacy results to come in. So we don't have anything to report right now. But when we have these data, we will come back to the market and talk about what these data are and if there is any potential value that we can take out of these data. So that is the Femachem program, which is then being winded down and not continued to be developed in the way that it was. And now Femavac is our lead program. And this is where we're leveraging the PCI platform within immunotherapy. And it is immunotherapy that made us or forced us to close down the release study. And immunotherapy is really now the new standard and the new way of treating cancer patients. So this rather works together with immunotherapy, this Femavac technology. And we have some really compelling preclinical results with unique mode of action for this technology. We have particularly strong CD8 T-cell immune responses. And for vaccination, what you need is cytotoxic T-cells if you want to kill cells in the body. Because these are the cytotoxic, which means that they are able to kill cells that can recognize cells that are infected or that are deceased and take them out with specific T cells. This data that we have from preclinical has also been successfully translated into humans. We have done a phase one study in Healthy Volunteers and the results from that study was published. So we have a publication with full insight to all the data in that study. Some very nice data on the increase of responders that we see with our technology compared to state-of-the-art adjuvant technology. It is also a versatile vaccination platform that can potentially be used with several different modalities. What we have done pre-clinically and translated into humans is with protein and peptide-based vaccines. And as I mentioned, last year we had a patent granted in the US for combination with immune checkpoint inhibitors. And this is very important for this technology, which means that we have protection for this combination, which is where we want to take the technology for a long period forward in time. It covers the important foreseen development combinations that we have for this technology. So since this now is our main program, I will go a bit more into detail and just sort of rewind a bit and talk a bit about the preclinical results and the clinical translation. And then as much as I can say today about our plans going forward, which are still being developed together with a group of expert clinicians. So as mentioned, we have some really compelling preclinical results. We have seen that intradermal vaccination with our FEMAVAC technology induces strong anti-tumor response. These are TC1 tumors that have been inoculated in animals. If you don't, on the left hand untreated, this is how these tumors grow. What you can see is growth of the tumor in size if they're not treated. And these are aggressively growing tumors and none of these animals survived beyond day 30. Now, if we do the same inoculation of tumors to these animals, but then do an intradermal into the skin vaccination with Femavac and antigens that are relevant for these TC1 tumors that can make the immune system potentially recognize the cells and start combating these cancer cells. You can see that had a dramatic effect. It started to grow. The vaccination just wiped out the tumors and the mice became tumor free. And they were immune to a new challenge because after this, we then tried to put in a new tumor of the same type. into the animals and they are not being established when you do that afterwards. Which means that now the immune system of these mice recognizes these tumors and are not allowing them to grow in the body. This is exactly what you want to achieve with therapeutic vaccination and with immune checkpoint inhibitors, with immunotherapy in cancer. It is a versatile vaccination platform. And earlier this year, in January, we also published some positive results from preclinical studies on BCG vaccination towards tuberculosis. It was performed in collaboration with the University of Zurich and ETH Zurich and were accepted for publication in Frontiers in Immunology, which is a high-impact immunology journal. What we show in this article is that when you do vaccination with BCG, you get an enhanced inflammation and cross-presentation of these proteins, which then stimulate strong CD4 and CD8 T cell responses in mice. And you can see that on the figure on the right-hand side up here. how both CD4 and the cytotoxic, not least those CD8 cells, increased dramatically in these mice. These are very important responses because you need to attack cells because bacteria are hiding inside cells in this disease, in tuberculosis. And generally, the results support our understanding and the mechanism of action and the potential that we see for this technology. Although infection is not our focus area, we're looking for therapeutic vaccination, this data validates the technology. Now, we took this from the preclinical setting and into the clinical setting by doing a phase one study in healthy volunteers. In healthy volunteers, we then used specific antigens against HPV. And HPV is a virus that often induces cancer in patients. And then we measured in those healthy volunteers the amount of T cells, how many of them developed T cells against these specific proteins or peptides and antigens that we were vaccinating with. And what you can see on the right hand side here is a panel with, at the top, the number of responders we saw in the different dose groups. And there was one control group with a state of the art adjuvant that was used together with this peptide, with this vaccine. And then we added Fimavac in different doses on top of that. And you can see that we had an increase, eight times increase in the number of responders, those who developed significant T cell response. We also saw T cell responses that were much more robust, and that is what you see on the lower panel here on the right-hand side. In the control, we didn't see much at all, while they were quite much more robust in two different dose levels where we tested this. So, in summary, we see a substantial increase in the number of responders with T cells, which are the response you really need for the HPV E7 peptides. We also saw enhanced responses, not just more responders, but also enhanced responses, and more robust CD8 T cell responses, which are important. And looking at those CD8 T cells, we also looked at the functionality. And so there was also better functionality, more markers that these reacted on, as you can see on the two right-hand side bars here. So these are quite good results from a healthy volunteer study. And it validates what we've seen in the preclinical setting and our mode of action, understanding of our mode of action. So what we want to do now is to take these, harness this, what we can achieve with this technology in patients. So we are now progressing towards initiation of a phase two clinical proof of concept study in patients. We will start small and build upon the results. The study here is done in cancer patients, and the goal is, of course, to demonstrate that we can see anti-tumor activity. And the patient population we will aim this for is recurrent and metastatic head and neck cancer patient, which we have a perceived high likelihood of response. And there's clearly a high unmet medical need in this patient population. What we do here is we combine different therapeutic approaches, and that we do to achieve maximal immune response, maximal immunotherapy effect. So what we want to do is to convert what is called cold tumors, tumors that the immune system cannot see, to become hot tumors, tumors that the immune system starts to recognize and can start to combat. And we are working closely, as I said, with international experts in the fields of this specific disease and specifically immunotherapy. So as I said, we want to harness the power of our technology to address unmet medical needs. The entry indication for this is HPV negative metastatic and recurrent head and neck squamous cell carcinoma. And this is a population that today are treated by immune checkpoint inhibitors. But a majority of these progress quite quickly on these immune checkpoint inhibitors or are not sensitive to these immune checkpoint inhibitors. Even though we go straight into this population, if we can show benefit here, that we can convert cold to hot, there is ample opportunity to expand this to other indications as well. As I said, a high unmet medical need. A majority of these patients do not respond to immune checkpoint inhibitor therapy. Those who respond have a great benefit of it. So if you can convert non-responders to responders, that is very important. So there is really a high morbidity with these patients. And normally they survive less than one year. So it's really a high unmet medical need for those who are non-responders. Now, the ICI treatments, they are designed to target the immune system, to sort of put off some checkpoints to make it possible for the immune system to attack tumors. But the immune system needs to be awake. It needs to be able to recognize the tumor. It needs to be able to have the soldiers that can invade and start to combat this tumor. And one of the mechanisms that this doesn't work is because you don't have that immune system that are awake and T cells that are produced against the tumor. And this is what we can do with the Femavac. These tumors then are referred as cold tumors. And what we want to do is to convert them to hot by activating the immune system so that the checkpoint inhibition actually has a reason. The checkpoint inhibition opens the gates, so to speak, to the tumor. And with Femavac, we think we can provide the soldiers that can enter through these gates and infiltrate the tumor and start combating it. We have, as I've shown you, some really compelling preclinical and clinical data that shows enhanced T cell induction. And that is what we need for this to work. And we've seen strong, as you've seen, strong antitumor responses in animals when we use this FEMAVAC technology and use intradermal and intratumoral, which we'll also look into whether we can do in this setting vaccination with local illumination. And... What we want to do is enhance the T cell immune activation. And if we can achieve that, we can trigger a response to immune checkpoint inhibitors in those patients who don't do it. And that opens up vast and ample opportunity to look into other indications. So we've chosen what we think is the best entry indication for this, but there is ample opportunity to expand afterwards. So the status for this is that the ongoing activities are focusing on preparation of the study protocol, CMC. Which is, CMC is to really produce the product and the components that are needed. And this is a peptide-based vaccine. So it constitutes several peptides that are the most promising as tumor-associated peptides to target this tumor with and validate it in other clinical studies as well. And then also operational activities that needs to be done in order to start a study. As mentioned several times, we have a forum of clinical investigators that have been established, and they are supporting the preparations and will be supporting and take part in the conduct of the study. And we will come back with more information when all the key aspects of this study have been discussed and endorsed by the clinical expert group. So we want to make sure that we have all the clinical experts on the same page before we go out and inform you about what it is exactly in a more detailed level that we are going to do and talk more about how long time it will take and the budget for such a study. Then I'm going to talk a bit about the FIMANAC program, which is a preclinical program. And this program is really working on helping nucleic acid therapeutics get into cells. Nucleic acid therapeutics is a really large emerging area of treatment, a treatment class, or actually several different classes of nucleic acid therapeutics with different mode of actions. But they are a class of products, so to speak. And they have in common that they are quite large molecules. They need to get into cells to work. And they are often charged. And they have a problem in getting into cells. And what we have with our technology is an intracellular delivery technology. So this is where we're focusing this on nucleic acid therapeutics to develop applications that can deliver the nucleic acids into cells. We have some compelling preclinical results, really strong data for a range of nucleic acid therapeutics. It addresses the major hurdle for this class of drugs. There are applications where this works quite nicely today, and we have the COVID-19 vaccines, for example, which have shown some of the power of this technology, especially for specific prophylactic vaccination. But in many applications, intracellular delivery remains a major obstacle. As we have seen with the collaborations we have with companies who have these kind of drugs, who are interested to look into other ways and better ways of delivering their drugs into cells. So what we've done so far with this technology until last year was more of an opportunistic collaborative approach. We had this technology and anyone who thought they could use it could go into a collaboration with us. What we are now doing after a strategic review of this and what is needed to be successful on the business development front is to develop more targeted applications that are suited specifically for the strength of our platform. So more towards a turnkey solution that can be used in specific applications where there is a need. And the initial focus on this will be on, of course, easy, illuminal clinical conditions, where we also have supporting preclinical results. And one obvious area for this is a large area with a number of different diseases, skin applications. the biggest organ of the body, the skin. We've shown that in preclinic experiments that we can substantially enhance the delivery and transfection. And we also have the advantage with our technology of an excellent spatial specificity. It means you don't get leakage. If you give this locally, it leaks to a much less extent than many other technologies to other parts of the body, and therefore reduces the risk of side effects induced by that you have effects of these nucleic acid therapeutics where you don't want to have them. So you can really spatially focus it on where you want the effect to happen. And you can see on the right-hand side here the example of when we have delivered this mRNA without FIMA-NAC and mRNA with FIMA-NAC. We can see that that really increases the enzymatic luciferase activity, which is the enzyme that the mRNA we've used here produces. So the mRNA comes into the cell and produces the protein, and then we measure how much of that protein is in and how active is that protein in the cells. Excuse me. As mentioned, we have encouraging collaborative data on enhanced delivery of mRNA for various medical applications that were presented first at the UK-based 12th Annual RNA Therapeutics Virtual Conference and later complemented with more data and presented at other conferences and now most recently in fourth quarter in Berlin. And this data really suggests that it provides an appealing intracellular delivery solution for certain applications within this emerging class. It's not a one-size-fits-all application, but we are developing now further targeted applications which we think are most suited for our technology. And these results have really helped boost interest in the technology. And we have, as I mentioned, two collaborations that recently have been initiated with both of them actually with South Korean companies. South Korea is quite an active area in biotech and in emerging technologies. And just to summarize the research collaborations, we have several of these, six for the time being. Generally, they offer valuable scientific know-how, encouraging results and intellectual property, as you can have seen from data that we have presented before, and also from new patents that have come out of this. As I said, currently six collaborations, they span across different classes of drugs and therapeutic applications. Some of them are within the FIMAVAC program, some of them are within the FIMANAC program. The most recently established collaboration is with MD Immune, which is a South Korean company, as I mentioned, that are developing innovative drug delivery technologies, and we are looking at how we can combine our technologies to really make a bigger difference, a strong synergy for targeting and delivering drugs into cells. And we continue to pursue new and value-adding collaborative opportunities within this program. But as I said, now focusing on specific applications. So we will be seeking more towards business development opportunities in specific applications that we are also internally developing further. So that was the end of the operational review. Now we are moving over to a section where we'll go through the key financials, the outlook, and then we will have a Q&A session afterwards. And I remind you that you can send in through the webcast console questions We will also take questions from the audience here if there is any questions are any questions and there is also this Phone facility that we will open to see whether there are any callers with questions now with this I want to Leave the stage here for a few moments and let Ronnie Skogedal, the CFO, talk a little bit about the finance, the key financials.

Yes, thank you, Per. Key financials and the key financial figure here is cash. And we have 116 million of cash in the bank at year end. this cash position is estimated to give the company a financial runway well into 2023 and regarding the release wind down costs the close process is under review as a pair reviewed under the operational review earlier And the current cost base of release will be reduced over time. But as Per said earlier today, the Q4 was the best quarter recruitment-wise. And these patients need to be followed up with treatments for up to six months. So the costs will be reduced over time. But of course, there is also benefits on the cost saving area by our ability to close down 60% of the sites immediately. But we need to come back to the exact figures because there are still just weeks since the decision was made. So this is currently under review. regarding potential capital need for the next clinical phase of Fimavac. And again, as Per said earlier under the operational review, this is under evaluation and needs to be finally discussed with this international expert group. Other financial figures to note here is maybe the other income public grants. For 2022, we have this standard Skattefunn tax scheme with an estimated value for the full year of up to 4.8 million NOK. And the net financial results are fluctuating both between quarters and between years. And this is mainly a result of exchange rate effects on cash deposits in euros and from a pure accounting perspective the decision to close release is a non-adjusting after reporting date event meaning that no items in the balance sheet are impacted by this decision. But in Q1 2022, the carrying amount of laser devices that have been acquired for the release study and were tailored for the release study of carrying amount of 5.8 million NOC will be fully depreciated in Q1. But this has no cash flow effect. It's pure accounting depreciation. Then I think I'll leave the outlook for you.

Thank you, Ronny. So with regard to the outlook, Our lead program now is FIMAvac. This is progressing towards initiation of a phase two clinical proof of concept study. Our aim here is to improve the response to immune checkpoint inhibitors, the new promising class of treatment that is really taking the front stage, has really taken the front stage in cancer treatment. but still has a lot of patients who are not responding due to different reasons. And one of those reasons being not have sufficient T-cell responses in the body. And we want to combine this then with our FIMOVAC technology in recurrent metastatic head and neck cancer patients. We have established a very good clinical expert group that supports this clinical development. We will discuss this in a forum with them in the near future. And this will be when we sort of can hone in on all the details and have a full understanding of what this program looks like. This is really a versatile technology that can be used both with protein and peptides and also potentially with nucleic acid therapeutics for vaccination. And it is available for partnering and licensing as a technology today. And we have some collaborations in this area. What we're doing here is to refine the technology internally. So we are putting some effort in making this to a more of a targeted technology that we develop applications that are most suited for our the FIMANAC technology. So what we're doing is we are taking some more internal development into this to home in and focus on specific applications where we think we have the best chance of success. And with this, pursuing collaborations and out-licensing opportunities. And then FIMA Chem, unfortunately we had to close recruitment into the release study. And I would like to thank all contributors to that, external contributors, our investigators, the investors and everyone, the patients not least, that have been treated in this study and contributed to the progress of the study. We are focusing on a swift and cost-effective closing of this study now, and we'll come back to what this means, and also revert back when we have compiled and analyzed the results for evaluation of potential value in this small randomized study. So with this, I think we are done with the presentation. And I think we should start by asking whether there are any questions in the audience here first. And it doesn't seem to be any questions in the audience. And then what I'm hearing here is that we're going to take some questions from the webcast first, from the webcast console, before we go into the calling. So Ronny.