Avacta Group Plc

Good morning and welcome to the Evactor Group PLC investor presentation. To wrap this recorded meeting, investors will be in listen-only mode. Questions can be submitted at any time via the Q&A tab situated on the right-hand corner of your screen. Simply type in your question and press send. Due to the number of attendees on today's meeting, the company may not be in a position to answer every question received during the meeting itself. However, the company can review all questions submitted today and will publish responses where appropriate to do so. Before we begin, we'd like to submit the following poll. I'd now like to hand you to Christina Coghlan, CEO. Good morning.

Good morning, Mark. Thank you for hosting and looking forward to the conversation. My name is Christina Coughlin, and I am the CEO of AVACTA. We are here today to present our interim results for the period ending 30th of June 2024, and we are here as well for the business updates. We're going to start with the interim financial results for the EVACTA group. Key messages in the financial results published this morning is that the performance of the group was in line with board expectations. We have increased revenue and gross profit of the diagnostics division as we signaled earlier this year. The diagnostics division has achieved an adjusted EBITDA of 0.1 million, increasing from a loss of 0.4 million in the first half of 2023. This change has been driven by first growth in revenue, as well as savings associated with the closure of the Weatherby laboratory facilities and a move of these R&D activities to the chorus laboratories. In the therapeutics division, Investment has been made in ABA 6000 on two fronts. The first is to accelerate the enrollment in the trial to complete the Phase 1A, as we reported at ESMO. And second, drug supply manufacturing costs, which are going to allow the company to move to Phase 2 development in 2025. Other research costs have been controlled. As the company has now moved to a focus, the research team is now focused on the next generation of precision medicines. In the cash flow analysis, the operating activities inflow from diagnostics of $1 million from the operating activities. The financing activities reflects the March fundraise and our outlook. Diagnostics is expected to continue second half in terms of being EBITDA positive, the operating cash outflow on therapeutics is expected to accelerate as the trial progresses. Let's turn now to our business update. In the Evactive Business Update, let me give you a summary of a few of the highlights that we're reporting. First, AV6000, our precision-enabled peptide drug conjugate to doxorubicin, continues to demonstrate a highly encouraging tolerability profile, robust preliminary efficacy signals that will take you through a few of the examples in both study arms of our Phase Ia trials. The ongoing expansion cohorts will further refine our understanding of the safety and the efficacy ahead of the Phase II trial. At this half-year stage, our preclinical studies and the data from the ongoing Phase Ia clinical study of ABA 6000 continue to support our growing confidence in the wider potential of the precision platform. The process to divest the group's diagnostics division has commenced. The company has started to receive indicative offers. They are, of course, subject to diligence. But this will allow the company to move to a pure play therapeutics biotech entity. Which brings me to our fourth highlight. As we communicated first at the AGM, the company is looking at a sustainable long-term funding strategy, which includes exploring opportunities for a dual listing on NASDAQ. and an update will be provided in due course on this strategy. Let's first look a bit at the precision platform. Over on the left-hand side of the slide, you can see a schematic here with the first precision molecule, AVA6000. This is a warhead. In this example, doxorubicin is attached to a fat cleavable or the precision peptide. This is a small molecule entity, a peptide drug conjugate. The addition of the peptide to the warhead inactivates the warhead, essentially making it inert. The advantages here is we have a short plasma half PK, short half-life, minutes to hours. We have high tumor concentration, as we reported first at AACR. There is no targeting moiety here other than the FAP-specific release. and it has small molecule manufacturing. We can then implement these peptide drug conjugates in a biologic drug conjugate, either an antibody or an afimer. The precision platform is used then as a overhead release mechanism with a drug conjugate, again, ADC or afimer. And we can now get multiple drug-to-antibody ratios. Look again at the peptide drug conjugate. It's a ratio of one-to-one, but we increase that ratio as we move to the biologic drug conjugates. Advantages here. We see in our preclinical models minimal plasma exposure with sustained tumor exposure. We have tumor targeting via a second mechanism through the antibody or the afimer binding, and these use standard ADC conjugation chemistry methods, So the manufacturing made simple by many others ahead of us in the ADC space having optimized these methods. Here is an intro to my new favorite slide in the deck to tell you about a new research program looking at both the expression and the biology of FAP since precision is uniquely poised to leverage the FAP enzymatic activity. In the tumor microenvironment, we are noting that the spatial organization supports the precision mechanism of action of bystander effect delivery. Let me tell you a little bit about what we mean here. The highest expression of fat in the calves, or the cancer-associated fibroblasts, is concentrated right at the tumor stroma interface. We've seen this in a number of tumors that have been stained with this new fibrous, method that we have immunofluorescence it allows us to look at in a given tumor biopsy multiple different antigens in different colors now at that tumor stroma interface we see that the fat positive caps are co-located with the blood vessels which again underpins or delineates this bystander effect delivery what do we mean by this let's look at the three steps The blood vessels, which are noted in red, deliver the conjugated molecule, AVA6000 being the first one, to the local FAP-positive calves in green. This is all in the stroma. The FAP on the cell surface of the calves now cleaves the conjugated molecule and creates that activated warhead. It releases it. Active warhead now is free to move into FAP-negative tumor cells in aqua or teal, or the FAP-positive cas. Critically important in this slide, it's important to note, this is a patient with triple-negative breast cancer. This is not a patient treated in the trial, but is an example. Many solid tumors will have FAP-negative tumor cells, but FAP-positive cas. This is the bystander effect. and it is the entire mechanism of action of the precision platform. Drug is delivered in the stroma, and that active release warhead, because it's extracellular, is now free to move to tumor cells or the calves alike. Let's look a bit at the evolution of the chemistry around precision and a little bit of a teaser as to what the pipeline will look like. All the way over on the left-hand side, you can see in the first generation of our precision medicines, we see AVA6000 here. This is the exact chemical structure of AVA6000. Doxorubicin is attached directly to the fat cleavable peptide that forms the precision platform, and a capping group is added here, an engineered amino acid. We have no PK extension in this. The half-life of the first-generation compounds at short minutes in the clinic, shown as well as animal models, with extension of released warhead half-life. Important to note here, we talk about the half-life of the conjugate versus the released warhead. There is no spacer to modulate the enzyme efficiency. We're using a true chemistry term here, Kcat over Km, which just refers to the efficiency of the enzyme in cleaving, which is baseline high efficiency. That's our first molecule, AVA6000. Let's look at the second generation here where we've optimized the chemistry in two important ways. The first is we can alternate multiple different capping groups with PEG links. These enhance plasma protein binding and can significantly extend the half-life of the precision molecule. Recall, this is the conjugated molecule, not the released warhead. Linkers, self-immolative linkers, so they fall apart once they've been cleaved. These linkers can allow many additional warheads to attach to the peptide. We've borrowed several of them from the ADC space and developed some of our own. What these allow us to do is modulate the efficiency of the enzymes. Both of these innovations, I'll tell you, with the chemistry of precision, are allowing us to extend the half-life pretty dramatically of the released warhead. And so this allows us now not only to fix the therapeutic index of warheads, but we can also significantly impact the PK of the released warheads. Let's look at the third generation together. Here is the precision biologic conjugate drug. First-gen and second-gen are both peptide drug conjugates versus the third generation, which is now a biologic drug conjugate. We're now using enabled MMAE as an example here with the peg-captamide cysteine conjugation against borrowed from those that have pioneered in the ADC space, works really well there. We've been implementing that chemistry directly here. We've engineered cysteines into our own proprietary atomers. We can also use the existing cysteines within antibodies, and we can create a link between our precision fat cleavable peptide, the biologic, and the warhead. The capping group that allows this it allows the melamine 15 conjugation to biologics. The biologic conjugation we have seen in our preclinical models significantly extends the half-life to days to weeks. The warhead now is delivered intratumorally in a highly sustained release mechanism. It allows also through that biologic conjugate, another mechanism of targeting to either the tumor microenvironment, the stroma, or the tumor cells themselves. Let's dive in now to the clinical data. We're looking at our Gen 1 precision molecule. This is FAP-enabled doxorubicin, ADA6000. ABA6000 delivers high concentrations of doxorubicin to the tumor microenvironment relative to plasma, resulting in durable tumor shrinkage in patients whose tumors have overexpression of fat and sensitivity to the anthracycline mechanism. Exposure response modeling suggests that released doxorubicin is generated primarily by cleavage in the TME as opposed to in the bloodstream, and this is leading to a distinctly favorable safety profile. Precision-enabled or peptide drug-conjugated doxorubicin in ABA6000 results in a robust widening of the therapeutic index and some key fundamental changes in the kinetics of the released doxorubicin. All three of these conclusions will show you the data coming up. As you know, we've published these first this year, earlier this year, at AACR with Professor Banerjee, and most recently, just a couple weeks ago, at ESMO with Professor Twelves. First, let's look again and recall the design of the AD6000 Phase I trial, as well as the patient population. We began the trial in Arm 1 with an every three weeks dosing regimen. That is very consistent with the way that doxorubicin, standard or conventional doxorubicin, is dosed in the clinic. We started with two dose levels there that you can see in faint pink. one lower than conventional doxorubicin, and one pretty much at the same dose level. So the 80 and 120, in the brackets there, you can see the molar equivalent dose of doxorubicin at 54 and 81. We then escalated through another five cohorts from a 1.3 to an almost four times the dose level of standard dose doxorubicin in the clinic. Based on a favorable safety profile that was first reported at ACR earlier this year, we then moved to Arm 2 in Phase 1, which is an every-two-weeks dosing regimen, and you can see the three dose levels enrolled there. The population is patients with a diagnosis of known fat-positive cancers with acceptable performance status, adequate organ function, and recovery from prior therapy. Based on the cumulative cardiac toxicity, the prior therapy with any anthracycline was limited to a total cumulative dose of 350, and the trial has been analyzed for our safety and our efficacy endpoints. Let's take a look first at three safety findings in the trial. First, conventional cytotoxics, including doxorubicin, are limited in the clinic by severe hematologic toxicities that are observed pretty much across the board with these drugs. What we are looking at here in this graph are three Five severe hematologic toxicities can CTCAE grade 3-4 toxicities that are experienced either with a published data set with conventional doxorubicin. You'll see the reference there. It is a recent trial published in 2020 by one of our investigators as the lead author, Dr. William Tapp. These patients were treated with soft tissue sarcoma in the first or second line setting, so it is a particularly relevant trial for us to compare to. Let's just look at the top there, neutropenia, which is the key toxicity that limits dosing in the clinic. Nearly 50% of patients, 49%, experience severe hematologic toxicity there, neutropenia, and that is reduced to 14% patients treated with AVA6000. Recall, again, only a few patients in the trial were treated with that dose of conventional docs or below. Most of the patients received 1.3 to almost four times the molar equivalent dose of doxorubicin, and yet we see this pretty dramatic reduction in all of the severe hematologic toxicities. Importantly, and for the first time at ESMO, we were happy to report that we see a lack of severe cardiac toxicity associated with conventional doxorubicin when patients are dosed with ADA 6000. Let's look at this in a couple different ways. I'm going to start in the middle box here with severe cardiac toxicity. In these graphs, we're comparing again to the same doxorubicin arm in the trial that was published by Dr. Tapp, but also updated for the cardiac data by Robin Jones. What you can see here is with regards to severe cardiac toxicity, which is grade three for cardiomyopathy or cardiac dysfunction. no patients with AVA6000 experienced severe toxicity versus 3% treated in this particular trial. With regards to mild cardiac toxicity, we use a measure of the heart function called left ventricular ejection fraction dysfunction. And what we are looking at here is in patients where that reaches a level that is just below that of a normal patient. Patients treated with doxorubicin, 12% of the patients will see an LVEF level that is below normal. There was only one patient in the ABA 6000 trial that saw their LVEF reduced below normal, so 1.8%. Just to give you a little bit more context in the box there, Severe cardiac toxicity cardiomyopathy is not observed with ABA6000, but it is reported in the doxorubicin label with 6% to 20% of patients treated at the higher dose level of 500 milligrams per meter squared. In the ABA6000 trial, we have liberalized in an amendment to ABA6000 Dose patients up to 550 milligrams per meter squared. That amendment has been in force for some time now. And that is underpinning this observation of a lack of severe cardiac toxicity. Turning now to the quality of life for the patients. We have multiple toxicities that impact quality of life. We have selected here five from the GI toxicities. These are any grade, not just looking at severe toxicities. And we're looking here and breaking down by also the every two weeks versus the every three weeks to give you an illustration of the similar toxicity profile that we're seeing between the two arms. We're comparing, again, to the same conventional doxorubicin data set at 75 milligrams per meter squared. And what you can see, let's just look at a couple that I know from my clinical practice were critically important to the many teenagers that I gave doxorubicin to with soft tissue sarcomas. Let's start at the top. Nausea dropped in half. Really impacts the ability of just the activities of daily living. One of the things that my teenagers in the clinic used to complain about all the time are the mouth sores that they get from this. I'm happy to report that, again, we see this, as we reported initially at AECR, a dramatic drop in the mouth sores, 40.6% of patients treated with conventional doxorubicin, down to less than 10% in both arms with the patients here. Also see reductions in the other toxicities noted there. Now, a favorable safety profile was very important as we moved into the clinic with ADA 6000. It doesn't matter though if we aren't shrinking tumors and impacting the time that patients have in terms of progression-free survival and their duration of response. Let's look now at the efficacy together. This is a waterfall plot updated from AACR at ESMO now with the patients with FAP high indications. You'll see here we have multiple patients with high-grade soft tissue sarcomas, undifferentiated pleomorphic sarcoma, liposarcoma, as well as patients with a subset of head and neck cancers, salivary gland cancers. Of note, patients who are ongoing at the time of the data cutoff are noted with an asterisk, and we reported two patients with histology. Recall back the immunofluorescence. This is a truly important tool that we're going to show you the results of here. Let me help us to sort of hone in on and really focus on patient populations as we try to read the tea leaves of the Phase I trial. Let's recolor this and focus in on the patients with head and neck cancers or salivary gland cancers. Here we reported and we see that patients with salivary gland cancer have evidence of activity, one partial response and one minor response. You can see here multiple patients with the teal bars are ongoing at the time of the data cutoff. I like to note that I have some favorite slides in the deck. This is one of them. It impacts the entire platform. Let me explain why. This is a case study of a 79-year-old gentleman who was treated with salivary gland cancer ductal histology in the trial. His prior therapy was androgen deprivation therapy standard in this tumor type, and that was followed by disease progression. He enrolled in the 86,000 trial in October of 2023, and he was enrolled in the highest dose cohort, 385 milligrams per meter squared. Important to note this gentleman's age. He is 79 years old, and it is possible that he wouldn't have been offered standard dose doxorubicin because of the toxicity, and yet he's being treated at almost four times the dose of conventional doxorubicin. He was noted in the biopsy 24 hours post to have the highest level of intratumoral doxorubicin in any biopsy taken in the trial. He began with a minor response at the first scan, which was a confirmed partial response at 12 weeks, and now I'm happy to report he has a duration of response that is greater than 18 weeks. Because he has reached the lifetime maximum of doxorubicin exposure by AUC, he has stopped receiving AVA6000, although his partial response is continuing in follow-up at the time of the data cutoff. You can see his CAT scans there on the left. And we're demonstrating here two liver lesions that have shrunk pretty dramatically over the course of his therapy. In the middle of the slide is my favorite figure, well, new favorite figure I'll call it, in the deck. We're using this same technology, so immunofluorescence. It's allowing us to look at three different types of tissue at the same time using three colors in the tumor biopsy prior to this gentleman being treated on the trial. In teal or aqua, we're looking at the tumor cells. In bright green, we're looking at the fat-positive calves. And in bright red, we're looking at the blood vessels. Bystander effect is very important. Important to note here, the tumor cells are negative for FAP. But because FAP is expressed in the extracellular portion of the calves, The drug is delivered through those bright red vessels. It immediately interacts with the fat-positive calves. It is cleaved, and the warhead, because it is extracellular, is now able to move right into the fat-negative tumor cells or, truly, the fat-positive calves. Seeing responses in patients with fat-negative tumor cells is critically important for the pipeline, as this will be most of the solid tumors that we will treat. Let's recolor that waterfall plot again with reds. These are depicting the patients with high-grade sarcomas. What you can see here are five bars, five patients that were treated with the high-grade sarcomas. Two partial responses were noted in this patient population. And importantly, we see two other patients with tumor shrinkage, one of the patients reaching that minus 10% of a minor response. So multiple patients with activity here. Let's take a look at a quick update of the first partial response in a patient that was treated. This is a figure that we're reprising, essentially, from our AACR annual meeting in April of 2024. This patient, as we will note, all the way on the right-hand side of the waterfall plot with the asterisk, remains on study at the time of the data cutoff on the 19th of August. This gentleman, as you'll recall, a 60-year-old gentleman, one prior line of therapy, developed a minor response and then developed a confirmed partial response. He had near-complete resolution of the multiple pleural metastases, Happy to report that his duration as of the data cutoff of 19th of August, the duration of response is now more than 55 weeks. Next favorite. Next favorite slide in the deck. We're reprising again an important figure here from our AECR presentation where we're taking a look at the biopsies that were taken 24 hours after the dose was administered. We're looking in red at patients with FAP high and in black in patients with FAP mid. As you'll recall, these dots are all mixed up, but essentially most of the patients, the vast majority of the patients, are seeing this two-log difference between the tumor and the plasma concentration. Critical to note, this was underrepresented in the animal models, and so the patient's where we see this were better than what our animal models would have predicted. Now, looking over to the right-hand side, we're updating the figure using a log scale representation of FAP activity versus doxorubicin concentration. It is important to note here that even at these lower levels, 10 to the 2, of FAP activity that we would see in patients with FAP mid, we are getting these high levels of intratumoral doxorubicin. This underpins the entire mechanism of the precision platform. Even at these lower levels of FAP activity, the release of the warhead is particularly efficient with ADA-6000. Why is that important? Let's move to the next figure. This now allows us to dramatically widen the patient populations that are addressable by the precision technology. You've heard me mention before that there are three diseases where we see doxorubicin activity in the clinic, and these are particularly interesting to us with AD6000. Subset of head and neck cancer, salivary gland cancer, subsets of soft tissue sarcoma, as well as breast cancer. But this observation in the fat mid and the lower fat activity that we see in the biopsies really now allows us to go after multiple diseases, pancreatic, non-small cell lung, HER2 breast cancer, gastric cancer, multiple other diseases where other warheads in the pipeline might be critically important and we might see differential sensitivity. It's important as the pipeline reveal is coming. And optimizing more potent warheads for these particular diseases, truly in the cards for us. Summary and conclusions. AVA6000 is safe and well-tolerated in both arms. We have a lack of severe cardiac toxicity and early limited cardiac safety signal in the non-severe. There was no NTD, despite dosing up to almost four times conventional dose toxorubicin. Phase 1A enrollment has completed, and the recommended dose for expansion cohort begun enrollment. Multiple responses in patients with high-grade sarcomas and salivary gland cancers. Our biopsy data importantly indicate that tumor cell expression of fat is not required for the release of doxorubicin and not required for responses in the clinic. The precision-enabled doxorubicin AVA6000, there are multiple fundamental changes in the PK. These are important as we look at the pipeline going forward in optimizing the PK and the released warhead. It includes an extended half-life of the released warhead and a reduction in the Cmax, or the maximal concentration, and the volume of distribution, essentially showing in the clinic that we can shield normal tissues from the effects of this warhead. Reprising again from the AGM is our AVA clinical development strategy and showing you exactly where we are. We've now completed the blue diamond, the phase one dose escalation data release at ESMO. We have now moved to our RDE cohort The expansions will begin in the second half of 2024. The RDE cohort, importantly, is already ongoing. These expansion cohorts together, and we are still planning three of them, as we noted at the AGM, these will lead us directly into the Phase 2 trial. One of the questions that we get asked a lot, What are the advantages of the peptide drug conjugate platform of Avakta over the traditional ADC approaches? Importantly, we see four. I hope you're seeing how much work is being put into understanding this bystander effect, understanding the biology of fat. We intend to be the company and the scientists that understand fat better than anyone. This bystander effect is critically important. Extracellular warhead release in the tumor microenvironment allows that warhead to now move into a fat-negative tumor cell as well as the fat-positive stromal cells. critically important as most of the tumors and the indications that we're looking at are going to be FAP negative and we already see responses in the phase one. The traditional ADC approach is that the warhead attached to the antibody is internalized into an antigen positive cell. The bystander effect is really only active once that warhead is essentially kicked out. And so an antigen negative tumor cell can only be killed by the warhead being kicked out. The linker is important, and there is a big difference between the Avacta linker and the traditional ADC. Our tumor-specific warhead release by the FAP cleavable linker is in contrast to nonspecific protease cleavable linkers used in most ADCs. This is where we see the lung toxicity. We see zero lung toxicity, and we have looked and needed to report to the health department. We see zero lung toxicity, zero liver toxicity with our PDCs versus the ADCs. And then our manufacturing as well as the DAR. The ABA peptide drug conjugates are simple with a one-to-one ratio versus a four-to-eight that is needed for the traditional ADC. We have small molecule timelines and costs of manufacturing. The manufacturing of ADCs is somewhat complex with three different processes and quite costly compared to our ADCs. Our milestones. Let's revise this slide from the AGM and take a look at where we are. Initiate the expansion cohorts. We've completed that. Phase 1 enrollment is complete. The RDE expansion is ongoing. Update the AVA 6000 clinical data. We've completed this. The ESMO presentation went very well at the Congress just a couple weeks ago in September. We've also committed in the second half of 2024 to release pipeline updates, as well as to host a live R&D spotlight to take a look at the innovative science, and the Evacta pipeline. Let's look at both of these. They're in progress. Updates on the pipeline will be ongoing throughout the month of October. And our live R&D spotlight has been scheduled in London on October 30th. We look forward to updating you on the pipeline and the next generation of precision molecules. Also important that we bring to our investors today setting goals for the pipeline into 2025. The ADA 6000 initial look at expansion cohort data and update of the phase one data will be in the second quarter of 2025. The ADA 6000 phase two trial is slated to begin in the second half of 2025. And as we move toward that goal, we will give further guidance. Also happy to report that the next-gen precision candidate selection for the next molecule to enter the clinic will be in the second half of 2024, and we will give further guidance as to the timing of the IND as we move forward. Thank you for joining us today. We are now looking forward to answering some of your questions.

Mark. Fantastic. Thank you, Christina. Thank you for the presentation. I'll just pop your camera up if you don't mind. I'd like to remind you that recording the presentation along with a copy of the slides and the published Q&A can be accessed via your investor dashboard. Christina, we have received a number of questions, both pre-submitted and throughout today's meeting. And these fall into a bunch of themes, really. And perhaps we can start off with the first one, which is around licensing. The first question we've got here is, I've actually told shareholders we've been in deal value discussion since June 2023. The data has improved at every juncture. When will the company find and deliver on the multiple promises made over the past year and announce a licensing deal?