Avacta Group Plc

Good afternoon, ladies and gentlemen, and welcome to the Evactor Group PLC Final Results Investor Presentation. Throughout this recorded presentation, attendees online will be in listen-only mode. Before we begin, we'd like to submit the following poll, and if you give that your kind attention, I'm sure the company would be most grateful. I'd now like to hand over to the management team from Evactor PLC, Christina, Tony. Good afternoon. Good afternoon.

Thanks, Mark, and thanks to everyone who has dialed in to listen today. My name is Christina Coughlin and I am the new CEO of AVACTA. Let me take just a moment to introduce myself to all of you. I am an oncologist and an immunologist. I trained at the University of Pennsylvania now a number of years ago. The serendipity of my first year oncology career as a fellow was that Penn recruited a gentleman by the name of Carl June, who is the scientific pioneer behind the CAR T-cell. I spent a number of years working with Carl and training with him in science and practicing pediatric oncology before then leaving for an industry career. So I spent about 10 years in large pharmaceutical companies. Wyeth was acquired by Pfizer, Novartis, and then moved over to biotech. You can see there our chairman, Elliot Forster, was my first CEO at Immunocore when I first moved over to biotech as the chief medical officer there. I did a couple of rodeos as a chief medical officer, one as a CEO with an NK cell company. And I've been on the board of Avacta now for just over two years and really have fallen in love with the technologies here. I'm looking forward to telling you a little bit more about our technologies as we get to the business update. But first, let me also introduce Tommy. who is our CFO, who will be taking us through the preliminary results.

Hi, thanks everybody. Let me just take you through those numbers now and just to bring those up to date. So we're reporting on the year ended December 23 relative to the prior year. And as you can imagine, our income statement looks very different compared to a year ago. given the two acquisitions which have now embedded into the Diagnostics Division, with Launch being acquired back in October 2022 and Chorus back at the beginning of June last year. So revenue growth is up to £23 million and it's obviously got a knock-on impact through to our gross profit number for Research costs is probably one of the most important parts in the P&L in terms of the spend on the development programmes, and we'll talk through the plans on those later. From an SG&A perspective, we've obviously got increased costs there given the additional businesses, but on an underlying basis, excluding the two acquisitions, SG&A costs are down about 3.5% year on year. We have an operating loss of 28 million, which is slightly lower than last year's figure. And then we have the financing and tax costs where we have the R&D tax credits that we reclaim in cash every year. And there's a net non-cash charge of about a million pounds from the two components of the convertible bonds as we take them through the finances section. So we end up with a retained loss of 25 million. and that there's a loss per share of just over nine pence per share if i um just break the the income statement down a little bit further into our segments um therapeutics uh the the income coming through from here is the fxl milestone that we had during the year that takes our percentage ownership of that jv up from 19 through to 25 percent um obviously that's a non increases from that perspective, and the 13 million research costs compared to just under 9 million the previous year. SG&A costs and therapeutics are broadly flat year on year, so the adjusted EBITDA, and that's our non-cash, non-recurring items measurement that we use, so 13 million loss of therapeutics compared to the 6 million for the previous year, and that is purely the the drive on the research costs as we head through the clinical programmes. I'll move on to the diagnostics division. Obviously, we've grown massively from 4 million revenue to 21, and that gives us 9 million of gross profit to contribute towards the group. Our important bit is we're striving to make diagnostics gone from a loss of 5 million EBITDA to just over 1 million in that period. We believe that the division will be EBITDA positive in the second half of 2024 and it will be cash generous relative to 2025. So all the investment that goes into DRIVE is essentially the therapeutics part of the business with diagnostics covering itself and starting to contribute cash to the business as we move forwards. I'll move on to the cash flow statement. We started 2023 with 45 million, operating cash outflows of 15 million. The investing activities reflects the payment for our chorus business and there's some with just under 17 million of cash, but the fundraise in March contributed a net 29.4 million to cash. So at the end of March, we had circa 38 million cash. That cash based on our current runways takes us through probably to the start of 2026, which is what we've indicated previously. From a balance sheet perspective the non-current assets has increased year on year because of the chorus goodwill cash we've talked about previously. The other item to just mention there is the convertible bond has two elements to it and it's reduced from just under 58 million down to 34 million at the end of the year in terms of how the two components of it have been valued. The sixth monetisation happened on the 22nd of April this year, so the principal amount at the bottom is now reduced from £55 million down to £35.7 million as we sit here today. Thank you very much for that, and I will now hand over to Chris to pick up on the business update.

Great, thanks Tony. So first I'd like to introduce you to the research and development leadership team at AVACTA. You'll see there our chief business officer who has been with us for several months and is quite busy, Simon Bennett, our chief operating officer, Karen Harrison, and then two of our key scientists who are making, I'll call it the magic happen with the pipeline that I'm going to tell you about in the next slide. who are David Jones, our head of biology, and Frances Wilson, who is our head of chemistry. So if we move to the next slide. As you know, we recently published our first clinical data with ABA 6000 at ADCR. This, as you know, is our first peptide-derm conjugate in the pipeline. What I want to show you here in this slide is how we've leveraged these clinical data and how we're going to shape the pipeline going forward. This is a complex slide, but it's my favorite one in the deck. It's designed to take you through what is the next chapter for AVACTA and where the pipeline is heading. I'd like to first start with a couple of key terms here to make sure everyone's on the same page. The tumor microenvironment and the protease, FAPT, Let's look at both their meaning and their importance. First, the tumor microenvironment. We often talk about tumor cells as if they are the tumor, but that just isn't true. The analogy that I like to use here is that of a brick wall. A brick wall isn't just constructed with bricks alone. Any toddler could knock that over. It needs the mortar that holds the bricks together. The same is true of a tumor. Think of the tumor cells of the bricks and the fibroblasts and the immune cells, the stroma, as the mortar. They're holding the tumor together. Protein or the protease that precision technology leverages, also known as fat, is expressed on the surface of those cells that are in the mortar, the fibroblasts. And so all of these cell types together form the tumor microenvironment, and we will keep using that term. meaning both the stroma and the tumor cells. So over there on the left, the first modality in the pipeline is precision alone, and that is a peptide that is linked to a toxic warhead. In the first instance, the toxic warhead is doxorubicin, and that is known as ABA6000. This is the original precision drug, and there are others in the pipeline. As we saw in the ACR data, the pharmacokinetics are somewhat changed between traditional docs and ABA6000. It's probably the right profile for a cytotoxic warhead, but perhaps not for the other types of warheads that we're interested in precision enabling, essentially. As we publish, the half-life of ABA6000 is somewhat short, but again, that's the profile that we want for that truly cytotoxic warhead. If we consider the other types of warheads, let me give you two examples, perhaps an immune signaling warhead or a pathway targeted warhead. Each of these is going to have sort of a different desired PK profile. And so to achieve this, we've been working on two alternative delivery methods or modalities that are both based on the precision technology. So in the middle there, what you can see is we have a non-targeted biologic. This is the FC portion. of an antibody that is used essentially as a delivery vehicle, but really modulates, changes the PK. And you can see here we describe the extension of the PK. The warheads, though, are released in the exact same way as ABA6000, meaning they are cleaved in the tumor microenvironment by the fat that is expressed on those fibroblasts or that part of the mortar. This extension of the half-life here is going to be important for some of the warheads in the pipeline. And then third, as you can see all the way over there on the right, we have sort of a truly unique back-to-offering in the pipeline, which is an antibody or an apomer drug conjugate, whereby we take our precision-enabled warhead and link it up with a tumor targeting either an apomer or an antibody. And so this becomes a truly tumor-specific mechanism of action with two targeting options, both the target of the apomor or the animal, and then as well the FAP or the precision release mechanism. And so this is going to allow us then to implement in the clinic really much more potent warheads than our first one in the clinic, which is doxorubicin. And so we haven't disclosed this entire pipeline, but here you can get a flavor of the research that is ongoing with that team that I introduced previously. We're leveraging the data in the clinic. We have a deep understanding of just how precision technology is working in patients who are receiving ABA6000. And we're looking forward to an update to the pipeline in the second half of this year, along with an update to the ABA6000 data. In the next slide, I'd like to take a look at what are the key advantages of these approaches. So what you can see here on the left are essentially five parameters that we think about, and we're comparing our two modalities, the peptide drug conjugate and anaphymer drug conjugate, with a traditional antibody drug conjugate, just trying to categorize What essentially are those advantages that we would see in the clinic? Now, truth be told, the antibody drug conjugate class is a very good drug conjugate class. These have been quite successful in the clinic. We think, though, that with the precision technology, we have the ability to build on that success and create, we think, even better options. If we first take there in red the peptide drug conjugate and the apomer drug conjugate, which are somewhat similar to each other, they have a different mechanism of action than the traditional ADC. And so we see extracellular warhead release with very limited systemic exposure. And so that is going to limit some of those toxicities that are the release of the warhead from an ADC in some places, such as the lung. We will see rapid internalization of our warhead in both FAT positive and FAT negative cells. Now, the reason that that is important is if we go to the second parameter, which is that location of warhead activation. Our warhead is released extracellularly, and so it optimizes something called the bystander effect. The bystander effect is a key parameter in ADCs in that this is the way that a tumor antigen negative cell can be killed. That warhead being released in the extracellular space now is free to move into either a fat positive or a fat negative cell. That's going to be critical moving forward, especially as we show you some of our expression data a bit later. The third parameter there, the linker, recall precision is a tumor-specific warhead release. And so we implement that as just the peptide in the peptide drug conjugate, but it's the linker between the afimer or the antibody and the drug conjugate as we implement both the afimer drug conjugate and a precision antibody drug conjugate. This is important because it is nonspecific release by traditional antibody drug conjugates that produce these toxicities that are essentially off tumor. So the lung toxicity is probably the best example there. I'm going to consider parameter five and six together, the drug to antibody ratio, as well as manufacturing, because they sort of work together in thinking about the advantages. Under a peptide drug conjugate, we have a one-to-one ratio. This is essentially a small molecule manufacturing campaign. We now know how to manufacture at GMP level for the peptide drug conjugates and have managed the cost of manufacturing. So small molecule costs much lower than what we would see with conjugate drugs, such as the afimer drug conjugate or the antibody drug conjugate. Here, though, even the apomer drug conjugates are going to have some advantages. They are very thermally stable. We manufacture them in low molecular weight apomer molecule. It's much simpler manufacturing using different species and a much simpler conjugation step. And that allows us both shorter timelines and lower costs compared to the traditional complex conjugation methods. that are needed for the traditional antibody drug conjugates. So we're excited about both of these modalities moving forward, and we are going to move next into some of the clinical data around our first peptide drug conjugate, which is ABA6000. So let's take a look at some of the key pieces of data that were presented at the ADCR. So first, the mechanism of action. Let's just go through this one more time. AD6000 is a conjugate of both a peptide that is specifically cleaved by fat in the tumor microenvironment, That peptide drug conjugate is important. It can't enter cells, whether it's a tumor cell, a normal cell. That's the key benefit of that peptide. Now, in the tumor microenvironment, you can see there, FAP is expressed in the extracellular membrane cell surface. It cleaves off the peptide and then frees doxorubicin, which can then traverse the membrane into either a FAP-positive or a FAP-negative cell. So if we move to the next slide, here's the clinical trial design that we're taking a look at. Oh, the first, the key findings in phase one. So three things that I'd like you to focus on as we go through the data. The first is ADA6000 is going to deliver a very high concentration of doxorubicin to the tumor microenvironment compared to the plasma. This is going to result in anti-tumor activity in patients whose tumors have overexpression of FAP. Our pharmacokinetic pharmacodynamic modeling, or PKPE, would suggest that this released doxorubicin is generated in the tumor microenvironment by cleavage. And that's versus soluble FAP in the bloodstream. And that leads to this distinctly favorable safety profile and is key to the mechanism of the precision platform. And then finally, also speaking to the platform, precision-enabled doxorubicin, ABA6000, results in a robust widening of the therapeutic index. Simply put, the therapeutic index is essentially the concentrations where we see toxicity and where we see activity. And while those are almost the same for doxorubicin, they're actually completely separated in ABA6000. Okay, let's dive in. So first is the clinical trial design. What you can see here are the various dose levels at the top in arm one, which is the every three weeks dosing regimen that was done first in the phase one. You can see the green check marks there. These are all of the cohorts that form the basis of the data. In parallel, we are also enrolling now Arm 2, which is in every two weeks. This was enabled by the very favorable safety profile that we see in the every three weeks, allowing us to move back to the dose of 160 and escalate from there. You can see the inclusion criteria there, or the patients that were enrolled with fat-positive cancers. acceptable performance status, acceptable organ function, and they have to have recovered from the side effects from their prior therapy. And we also limited the prior anthracycline in these patients. And truly, only one patient enrolled in the trial had had prior doxorubicin. But as you'll recall from AACR, many of the patients had had multiple prior lines of therapy. So let's dive into some of the data together. There were a number of safety tables in the presentation. I'd like to summarize here two key findings. The first observation is that we see a significant reduction in the severe toxicities, such as neutropenia, which can limit the dosing of doxorubicin. And so this is important because it's possible for us now to consider higher and more frequent dosing. than we had seen in either with standard dose doxorubicin. And so we're optimizing the dosing schedule. We're also not withholding active drug, which is what happens with doxorubicin when patients experience these toxicities. We have to pause or in some cases even stop the dosing of patients. Now, the second observation I will tell you is pretty near and dear to my heart. As a treating oncologist, I took care of many teenagers with soft tissue sarcomas and so gave quite a bit of doxorubicin in my career. And sometimes the mild to moderate toxicities that you can see there, these are the ones that really impact the quality of life for the patient. And so The short list there, nausea, loss of appetite, constipation, mouth sores, muscular, these are the toxicities that really impact patients. I'll tell you just a quip from the investigator that I heard Dr. Banerjee when he was presenting. One of his patients, in fact, the patient with the deep partial response that we'll talk about in the next slide, His adverse event as he moved through the trial was that he was tired of coming to the clinic every week. He was trying to get back to his work life. So it's these stories that we hear from the investigator that really underlie that observation too there, this reduction in the toxicities that impact the quality of life. And so with that safety data in hand, Let's move to the next slide and we can start to take a look at some of the key observations that were made in terms of the efficacy of the drug. And so here we're showing you that first ABA 6000 responder that we referred to in December. And so this patient is demonstrating an ongoing, pretty dramatic tumor reduction. Dr. Banerjee wrote that highlight himself. a near complete resolution of the multiple pleural or lung metastases. What you're looking at here is a CAT scan of this patient's lungs at a few different levels. Let me give you the primer on the CAT scan here. So air, which you can see in the lungs, is black. And the highest density tissue, a CAT scan is just measuring density, are the bones. And the bones are there in whites. And you can see both the backbone or the wide vertebrae, but you can also see the ribs there in white as well. In some of the pictures, you see a large gray mass in the middle. That's not a tumor. That's actually the patient's heart. Circled in orange, then, are the gray metastatic deposits of the tumor that aren't supposed to be there. And we're comparing the baseline scan, which was performed just prior to the patient coming on study. That was performed in February of 2023. And at the time of the data release, the most recent scan was performed in January of 2024. So just about 11 months on study for this patient. And at the upper left, you can see one of the metastases pulling out. This is a metastatic tumor, and it has dramatically shrunk between February to January. In the upper right-hand corner, you can see on the left, again in February, two tumors that are circled. And then those tumors are essentially gone by the time we get to January of 24. Similarly, in the bottom left, another tumor that by January of 24 is gone. And yet again, another tumor in February of 23 in the bottom right-hand corner that is essentially gone in 2024. What's important about this patient is that he was treated with standard of care, surgery, radiation before the tumor metastasized. After he had developed metastatic disease, he was enrolled in a clinical trial. During that clinical trial, he developed progressive disease and then came on to the ABA 6000 trial. And this is where we see this. So this patient remained on study at the time of the data release. What the radiologists do for us to generate figure in the next slide is they measure each of these lesions that is circled in orange, the radiologist will use the computer to measure the diameter. So let's take a look at the next slide. This is a way for us to convey the data that was on the previous slide for a number of different patients and essentially give a summary for each of the patients. We call this a waterfall plot. And so each of the bars that you can see here is the summary data for an individual patient. The bars that are falling below the x-axis are tumor shrinkage, and the bars that are rising above are patients who have seen tumor growth. Now, what's important about this figure, just looking at the summary, is that many of the patients, and these are the patients with the FAP high indications, many of these patients have evidence of tumor reduction, including, you can see there, the five responders. There are two partial responders that are defined by RESA's criteria, and then three minor responses next to them that are a minus 10% to a minus 29%. What's important to note is that four of these five responders are still on study at the time of the data cutoff. The reason that that is important is because this is the best response These patients could drop even further in terms of their tumor shrinkage. What you can see then in the middle are a few patients with a small degree of tumor reduction. Two of those patients with the asterisks as well are still on study. So the key message here, we are seeing a number of patients with reduction in the tumor volume. Six of these patients are still on study at the time, and so this figure has the potential to get better as we continue to observe these patients on the ongoing study. Let's move to the next slide, which I'll tell you is my second favorite slide. I told you my first favorite slide is the one that lined up the pipeline going forward, but this is my second favorite, and the reason is is that Here's the data that really underscore our excitement about the precision platform going forward. Let me explain to you how we generated these data. Some of the patients on the study were able and willing to undergo a tumor biopsy, which is a challenge for patients, and it was about 24 hours after they had received a dose of ABA6000. At the same time as they had the biopsy, we also took a blood sample so that we were able to measure the concentration of doxorubicin, or the released warhead, in both the tumor tissue as well as at the same time in the plasma. Our hypothesis walking into this trial was that ABA 6000 was going to lead to a concentration of the released warhead, the doxorubicin, in the tumor, when compared to the plasma. What we were very happy to see across all of these patients is a nearly two log difference between the tumor and the plasma. Recall there on the y-axis, this is a log scale. So this is a large increase in the concentration of the ectoxyribicin in the tumor versus the plasma. So that's the first observation here. The second observation, which is Almost more important for the platform is that patients with FAP high disease and patients with FAP mid disease, so the red and the black designations, are mixed up there. The reason that that is important is that we see high concentration of doxorubicin in both of these disease settings. So in FAP medium expression, essentially, and FAP high. and really without distinction there. What this underscores is that the data that we showed you in the previous slide where the responses were pretty much concentrated in the fat pie, the thing that is probably critically important is the choice of the warhead as opposed to the ability of the precision technology to work its magic and dump the warhead into the tumor microenvironment. The patients with the FAP-high diseases, you could see there, they were soft tissue sarcoma and salivary gland cancer. Those are two diseases where we would expect, based on the clinical data in the literature, that we would see responses to doxorubicin, whereas the GI cancers, so pancreatic cancer, colorectal cancer, which formed many of the patients in the FAP-mid category, may not have seen such a dramatic activity. What matters on this slide is, number one, we are concentrating that warhead, whether it's FAP mid or FAP high. And the second, the warhead choice really matters for the patient population. So let's move then to the next slide. So based on our ACR data, we have four key messages here. The first is that the data that we've shown really shows that the precision platform works as it was designed. It was designed to deliver high concentration of warhead directly to the tumor relative to the plasma. And that has led to significant anti-tumor activity in a number of patients. whose tumors have overexpression of FAP. That leads us then to the safety profile. And so we have seen a big change in the safety and tolerability of doxorubicin when we compare patients who are dosed with 886,000 versus historical patients who have been dosed with standard dose doxorubicin. Third, we see preliminary exciting signs of ABA6000 clinical activity. These are quite encouraging to us. This is really leading to a validation of the precision mechanism of action and proof of concept of ABA6000 in the clinic. And then finally, we are optimizing the dose and schedule. Because of the favorable safety profile, we are able to dose now on an every-two-week basis. And from there, a bit later this year, we will be selecting the dose and moving to the expansion cohorts. More about that in just one minute. Let's next move on to our diagnostics update for you here. What you can see here, as we have discussed previously, is that two acquisitions have been made to develop the diagnostics pipeline. Launch on the left. and Chorus on the right. Both businesses, to give you the high level, are performing as planned. We are seeing a 10% underlying growth year on year, and you can see here the planned growth initiatives for both Launch and Chorus as we are continuing the integration into a joint diagnostics We expect this to be overall EBITDA positive in the second half of this year and cash generative in 2025. Let's move on. Now we have four key messages to... bring this all together. The first is Avactus Precision Platform. It's highly tumor-specific in its release mechanism for the warheads. It is capable now, and we've shown this in patients, of concentrating these warheads or anti-cancer drugs in the tumor microenvironment compared to the plasma. And we can leverage that, as we talked about at the beginning, in different formats to optimize based on the different warheads. The clinical data that we released at AACR provide clinical proof of concept for ABA6000 with multiple patients responding and proof of mechanism that the precision platform is working exactly as we designed it. Our pharmacokinetic and pharmacodynamic modeling, of which we showed just a small snippet at AACR, but this modeling supports the ongoing exploration of that every two-week dosing schedule. That's going to assist us in defining the recommended phase two dose, and we are on track to begin the expansion cohorts in the second half of 2024. And then finally, we have ongoing work in our diagnostics division to integrate and plan for the future. Here, we're looking to maximize the value for both our shareholders, patients, and customers alike. And then finally, we have three upcoming milestones catalysts in the second half of 2024. I alluded to a few of these, but we're looking forward to discussing these with you. The first is the initiation of the expansion cohorts. Again, we are on track. These will begin in the second half of 2024. Around about the same time, we will be updating the APA 6000 clinical data. We are looking to use that data. It's essentially going to support the next stage of development. And then finally, back to my favorite slide, we will be releasing the updated pipeline of Avacta Therapeutics assets with both their stage and their timing to the clinic in the second half of 2024. So looking forward to that. You know, some really exciting news coming in the second half of this year. So that will conclude our formal presentation. And, Mark, we're happy to take some questions.

That's great, Christina. Tony, thank you very much indeed for updating investors. Firstly, thank you to everybody for your engagement both ahead of today's presentation. We received nearly 200 questions, and you also received a number of questions throughout today's presentation. In the best interest of time, we'll go through the categories that you've kindly provided to us, Christina and Tony. And as I said, if I don't read out your question exactly, I do hope that we're able to cover your theme of that question in some of the following. So let's start off, if I may, with the first question. You know, there were multiple questions, I guess, around the placing, the bond, and the plan for diagnostics. So I guess I know you've touched on it, but perhaps you could give us a little bit more color around that.

Sure. Thanks, Mark. Let me start with, we are at a pivotal time in the history of EVACTA, and we hear your concerns. We have achieved proof of concept with our first clinical program, ABA 6000, and these data really demonstrate for us proof of mechanism of this precision platform. This is critical. It's really one of the key reasons that we say that EVACTA is at this pivotal point in its history. As you know, I've been on the board for two years and working with the team here as the head of R&D for a few months, but honestly, this is my first day in this new role as CEO. I'm going to take a bit of time with our board to assess what is best for both shareholders and patients alike. I can't address all of these questions specifically today, but what I can tell you is that everything is on the table. I'm working directly with the board, and together we have identified our four key strategic priorities for the short term. Let me tell you a little bit about each of these four. First and foremost is our therapeutics pipeline. We are moving APA 6000 quickly in the clinic, and we are working towards those expansion cohorts, which will provide us with disease-specific data, which is important, for us to move the program essentially to the next chapter. In addition to that, we're working on multiple fronts in the pipeline of assets, as we talked about in that early slide. What's really exciting about precision is just the sheer number of ways that we can implement this in the next program. And the team here at Avacta are working hard on those various options. This also brings me to introducing the team. We have hired our chief business officer, Simon Bennett, and let me tell you, he is quite busy. The commercial deals that we've spoken about, these are really unlocked by these clinical data. And so there are multiple conversations ongoing. Progress is being made on multiple fronts in the pipeline. This is key for myself and the board to keep this moving. The second of the four priorities is financing. There is a number of questions here to address, and we will address them. For now, the Board is working towards the plans to fund all of that innovation that I mentioned earlier. This is a key priority for myself and the Board in the short term, and I will reiterate to you, everything is on the table, and we are working together with just a short bit of time here to come back to you on some answers to these questions. The third priority is the planning around our diagnostics division and how this plays out. Here, myself and the board, we are looking to maximize value for shareholders, customers, and our staff alike. And we are working on a plan in this direction and look forward to communicating that to you in the not-too-distant future. And fourth, which I haven't touched on, but you saw in the R&S this morning, is the evolution of the board. There are some critical competencies here that we know are needed, and this is ongoing, has been ongoing in parallel with the CEO search. We know that there's board evolution needed to take AVACTA into this next chapter that I told you a little bit about today. Let's turn to the next question.

That's great. Thank you, Christina. We've seen the communications and reports around the AVA 6000, the AACR presentation. Could you just give a bit more color, perhaps, around how that presentation was received and really what the audience was made up of?

Sure. So the AACR presentation, Professor Banerjee from the Royal Marsden was our presenting author. He has enrolled actually the most patients onto the trial, has been working with us since day one. I can tell you, you know, we did put a few pictures out, photos out on Twitter, but Dr. Banerjee did not stop speaking to the various people that came to the poster for the full timing of the session, which was over three hours. And at many times during the poster session, the audience was more than five people deep. There was a QR code in the corner where people could download the poster. And many people just gave up trying to get close enough to actually download it. You asked about the audience, which is a There were essentially three stakeholder groups that attended, and the conversations with each of them were quite important. The first, the scientists and the oncologists. So these are the mainstay of the attendees at AACR. They were quite excited about the data, asking about, you know, the next steps for ABA 6000, and several oncologists who came just with ideas for warheads. You know, we've got this toxic drug. and Asian populations that we could use them for. There was a lot of interest around FAP high versus FAP mid, and that choice of warhead and how important it is. The second stakeholder group that I'll mention were representatives from other pharma and biotech companies. We had made some invitations to those that had been ongoing, and I can tell you, if Simon was here, he would tell you that Most of the major players in this space actually stopped by to see the data. And so, you know, there were some ongoing conversations and some new conversations there. Like I mentioned earlier, these kinds of commercial deals are really unlocked by this clinical proof of concept and the proof of mechanism data that we have here. The third group, which were near and dear to my heart, if any of you follow me on Twitter, you know that many of my followers are in this group. They are patient advocates. There were many patient advocates who I know who actually dropped by, and they're asking about, you know, next steps for ABA 6000. One advocate was from the Metastatic Breast Cancer Coalition, and just asking about, both APA 6000, what's in the future, and then what also might we be doing, what other drugs might we be able to precision enable. So you're hearing here some of the themes. It was a very exciting day for us for AVACTA. It was really one of the first times that we were able to talk about some of these data with these, I'll call them three key stakeholder groups.

Thank you very much indeed, Christina. Let's turn to the next question. You've called AVA6000 the pathfinder for the platform. Are you completely confident that it has succeeded in this, i.e. specifically proven precision is capable of A, targeting a range of tumour types, and B, proven it's suitable for the safe and effective delivery of other more toxic warheads?

Yeah, I love that term, Pathfinder. It is true. This one went into the clinic initially really to show proof of mechanism of the platform. But let me tell you a little bit about this and why we feel so confident in this. There's two key data figures that we published in the AACR data that speak directly to this question. In the biopsy data, which I showed today, and that's comparing the doxorubicin concentration in the tumor versus the plasma, there's two observations that I'm going to highlight again. First, all of the patients, regardless of that FAP category, have approximately a two-log difference in the doxorubicin concentration. And so we set out in this trial to show just that. that the precision technology is able to take a toxic orchid and concentrate it in the tumor microenvironment. The second key observation is almost more important, and that is that FAP-high and FAP-mid didn't seem to make much of a difference in that figure. And so that speaks to, you know, the first question there, targeting a range of tumor types. There's a number of patients that can be found using such as a fat immunohistochemistry or a companion diagnostic, there's a number of fat-positive patients that can be found in a number of different diseases. And so seeing that the precision technology works, regardless of that distinction of fat high or fat mid, was very important for us. The second figure that speaks to this, that I didn't actually put in the deck today, It was the figure that actually shows the logistic regression analysis, so the widening of the therapeutic index. We see a separation between our observation of severe neutropenia and doxorubicin exposure. The key point in that analysis, the widening of the therapeutics index, which simply we're seeing responses to ABA6000. at exposures that are significantly lower than those with standard-dose doxorubicin, and we're seeing a distinct lack of toxicity at those exposures. So two important observations for the pipeline. The steep reduction in the systemic exposure suggests, A, that we're really concentrating the drug in the tumor microenvironment. It's being released in the TME. and also that we may be able to put even more potent warheads in. We're going to want, as we discussed early on, we're going to want to be able to modulate and really design the PK of each of these. And, Mark, I'll give everyone a teaser. In our third R&D Spotlight series, which has already been filmed, you're going to see the expert, so our clinical pharmacologist, who is going to walk through these two figures and give an even deeper explanation. Okay. We can move on to the next one.

That's great. Thanks. A number of questions around timelines, timeframes, that kind of stuff. Can you comment on the next steps for AVA6000 in the clinic, and is the program still on track?

Yes. So let me reiterate. AVA6000 is slated to both complete the phase one dose escalation in that every two weeks regimen, and also to start the expansion cohorts in the second half of this year. Those are one of those key catalysts that I mentioned. Along with that, we will be also updating the ADA 6000 clinical data in the second half of this year. And as well, going back to my favorite slide in the deck, we're going to be updating on the pipeline and giving all of our audience here a little bit of information deeper dives into what we've been working on in the labs and some of the exciting things to come.

That's great. Thank you. Slightly longer question, so forgive me. Given the initial pharmacokinetic data from the AVA6000 trial, which shows a significant reduction in the maximum concentration and exposure to doxorubicin compared to standard doses, What additional PK parameters should be studied to better understand the sepratic window and to optimize dosing for enhanced effectiveness without increasing toxicity?

So the PK profile of the released doxorubicin from ABA6000, this is an area of intense study right now. As you saw, we did put a little bit of data out at AACR this year. We're comparing the profiles, even as I speak, of the every three weeks and the every two weeks of dosing, in addition to some other key parameters. We talked about, you know, the C-max and the AUC, the half-life, some of the key parameters at AECR. But also just as important is going to be the tissue distribution. This is going to be speaking directly to that reduction in toxicity, but also the elimination kinetics. I can tell you that we are seeing some very interesting differences, I would say, between standard dose doxorubicin and then what we see in the various PK parameters. We are very much looking forward to updating in the second half of 2024 regarding these further analyses. These will be part of the clinical update. And we're looking forward to showing essentially some of the modeling and that has gone into and will go into and factor into the choice of both the dose and the regimen. This is important. It's a critically important question because our deep understanding of how AVA6000 is working in the clinic really is feeding right back into the labs at AVACTA and really feeds into that initial slide describing the evolution of the pipeline. And so we now know that we have ways in the labs now to modulate the PK. We have ways of essentially modulating both the tumor PK as well as the serum PK. You know, this will all be part of the pipeline update when we'll be able to show you some of the work that's been ongoing, and that's in the Precision Plus modality as well as the Precision ADC or AFIMR-DC. These are underscored, really highlighting, using clinical data that we have to feed right back into the pipelines.

Thanks. Sticking with the ABA6000, what are the potential mechanisms of resistance to ABA6000 in the FAP-positive tumors? And what studies would be crucial to understand and overcome these resistance mechanisms?

And so let me talk about, we think that there may be, or we can imagine that there may be two categories of resistance mechanisms. The first is resistance really something that we've been trying to understand as a field of oncology, not of ACTA, but oncologists in general, is resistance mechanisms to cytotoxic therapies. And so, you know, precision alone isn't going to be able to change those resistance mechanisms. It's one of the reasons, as an oncologist, that when a patient has developed progressive disease with a given cytotoxic, we generally tend, in most cases, to move on to a different drug because there isn't cross-resistance there. So understanding in the clinical trial is if our patients are developing some of those standard mechanisms of resistance. The second one that we can imagine is perhaps a loss of fat. We don't think that that is going to happen, however, for a couple of different reasons. Number one is just some data that we've generated in animal models and looking at this. The second is fat, which we've only really touched on some of the deep understanding that a bacta has in terms of this protein, fat. FAP has been noted in a number of different publications to be a negative prognostic marker. And along with that, what we see is that FAP is almost gained in the setting of tumor resistance to cytotoxics and whatnot. It appears to be higher in those settings of unmet need, which is what essentially underscores that concept of you know, a negative prognostic indicator. It is something that we are looking to possibly study in the clinical trial going forward. With now, you know, our initial biopsy data, the investigators are interested in perhaps even obtaining serial biopsies, gold in terms of someone like me who loves this concept of translational medicine. It's how I started my career. are these biopsies that can be obtained even in perhaps the setting of resistance to try and understand some of these mechanisms.

Thank you very much indeed. A couple of questions here. Amongst the 15 FAP high patients, was there a correlation between the response and exposure or lack thereof to previous therapies that may have triggered tumor resistance?

So we haven't disclosed the breakdown in the prior therapies among the groups, but what I can tell you is that the median number of prior therapies is three, and that ranges from zero to seven. There are only a couple patients there that have zero, which, you know, indicates that they did not have prior therapy. The vast majority of the patients that have been enrolled in the trial would be considered to be resistant to at least one, and in many instances multiple, prior lines of therapy. And as you can see from the AACR data, there was only one patient who had received prior doxorubicin. And we think that the susceptibility to the warhead is a critical piece to consider here. If we compare, again, the 15 patients with the FAP-high disease indications versus the patients with the FAP-mid, we also see a big difference in terms of just their predicted sensitivity to that warhead, to doxorubicin, where soft tissue sarcoma and salivary gland cancer would be two indications that would be predicted, and this is based on the literature, not a BACTA, but would be predicted to have sensitivity, whereas One might think in the GI cancers, such as colorectal cancer, pancreatic cancer, that we might not expect dramatic responses to the anthracycline mechanism of action. All of these will feed in, and we will be looking forward to updating these data as we get deeper into the second half of this year.

Great. Thank you. And I guess a lot of questions around pipeline and a factor recently spoke about bringing more toxic warheads to the pipeline and the internal work which has been undertaken to expand the pipeline. Is the choice between progressing with this more toxic warhead or AVA 3996? If so, when would this decision be communicated in the rationale explained?

So this is correct. Back to my favorite slide. Based on the data that we've seen in the clinic, and that includes both the PK, the efficacy, the safety, we have been working on the pipeline very hard internally here. We described there are multiple formats that we can leverage the precision technology, not just the precision drug conjugates, but also Precision Plus, which is going to allow us to take, you know, we mentioned sort of immune-mediated or targeted therapies as warheads, so not just a cytotoxic. We also have the Precision ADC format, the opimer drug conjugate format. And so we are quite excited about how the pipeline is coming together. And We haven't disclosed the details yet, but what I do commit to you is that in the second half of 2024, we will be disclosing the pipeline. We think it's pretty exciting with a couple of really novel programs coming forward. And with that disclosure, we will also be describing time to the clinic. and where we are with each of those programs. So good question, and we very much look forward to that particular update in the second half of 2024.

Well, Christina, that's the final question. So firstly, thank you to everybody for your questions that you submitted. And as I said at the outset, while we may have not read out your exact question, we hope that we've covered a number of those themes that seem to be recurring throughout the Q&A. Christina, Tony, I'm shortly going to redirect investors on today's call to give you their feedback, which I know will be particularly important to you both. But before doing so, I wondered if I could just ask you for a couple of closing comments, and then I'll send investors for their feedback.

Sure. I would like to first thank everyone for taking the time out of your day to come today and to listen. I hope we've conveyed, although it's day one on the job, I am very excited. We, our entire team here at the FACTA, are very excited about our next chapter. The data that we presented at AACR we believe are truly groundbreaking and have the potential to change the way that we treat cancer. We're very much looking forward to those three updates that we will be giving in the second half of 2024. We remain on track in the clinic and we remain on track with our pipeline updates. And so we look forward to communicating very shortly.

Christina, Tony, thank you once again for updating investors. Could I please ask investors not to close this session as we're now automatically redirecting you for the opportunity to provide your feedback in order that the management team can really better understand your views and expectations. This will only take a few moments to complete, but I'm sure will be greatly valued by the company. On behalf of the management team of VACTA Group PLC, we'd like to thank you for attending today's presentation and wish you all a very pleasant afternoon.