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spk02: Good morning and welcome to the Altamira's Therapeutics Business Update and Full Year 2023 Earnings Conference Call. On today's call are Thomas Meir, Altamira's Founder, Chairman and the Chief Executive Officer, and Kovadonga Panida, Altamira's Chief Operating Officer. Earlier today, Altamira issued a news release with the full year 2023 financial results as well as a comprehensive business update. The release is available on the company's website at www.altamiratherapeutics.com and has been filed with the SEC. During today's call, the company will be making forward-looking statements within the meaning of the Private Securities Litigation Act of 1995. These include statements that address future operating, financial or business performance or its strategies or expectations. Forward-looking statements are based on management's current expectations and beliefs and involve significant risk and uncertainties that could cause actual results, development and business decisions to differ materially from those contemplated by these statements. These risks and uncertainties include, but are not limited to, the timing and conduct of our clinical trials, the clinical utility of our product candidates, the timing or likelihood of regulatory filings and approvals, our intellectual property proposition and our financial position, as well as those described in the risk factors section in our annual report on Form 20F. and future filings with the Securities and Exchange Commission. In addition, any forward-looking statements represent the company's views only as of today and should not be replied upon as representing its views as of any subsequent date. While it may elect to update these forward-looking statements at some point in the future, it specifically disclaims any obligation to do so even if its views change. With that, I will now hand the call over to Altamira Therapeutics CEO, Thomas Meyer.
spk01: Please go ahead.
spk04: Thank you, Razia. Hello, everyone, and thank you for joining our business update and full year 2023 earnings call. I will kick off the call by providing an overview of recent corporate developments, as well as an update on our strategy. Our COO, Covadonga Panera, will then discuss the progress in our new core business of RNA delivery. Finally, I will discuss our financials and outlook for 2024 before opening the call for any questions. Reflecting on where Altamira stood one year ago and where we are today, I'm pleased to say that we made great progress. and emerged as a stronger and more focused company. We keep progressing with the RNA delivery business. More and more potential applications for our oligophore and semaphore nanoparticle technology are being identified, and we just recently concluded our second collaboration agreement with another exciting biotech company. Extrahepatic delivery of RNA and efficient intracellular release or hot topics in the industry. With the recent partial spinoff of our venture legacy business, we took a significant first step on our journey towards becoming a fully focused RNA delivery company. And we expect to complete the strategic repositioning of the company through partnering of our AM125 legacy asset in 2024. Those legacy assets have substantial intrinsic value, and we just started to unlock that potential. We managed to streamline our cost structure and reduce cash burn very significantly. At the same time, we cleaned up our balance sheet by paying off all financial debt earlier than planned and rebuilt shareholders' equity from a deficit to 6.5 million Swiss francs or more than 7.1 million US dollars. This puts us financially in a much stronger position. We are seeing great potential in the RNA space and are now much better positioned than one year ago to take advantage of these exciting opportunities. With this, I'm handing the call over to Covadonga Panera, our Chief Operating Officer who will provide you with an update on our RNA delivery business.
spk03: Thanks, Thomas, and good morning, everyone. Indeed, these are exciting times to work in the RNA space. Tremendous progress has been made over the past decades in science, research, and development, with the pace of discoveries and innovation increasing even more. Delivering RNA to target cells beyond the liver and releasing the RNA efficiently inside cells, however, have remained major challenges to date. This is where we come in with our peptide-based oligophore and semaphore nanoparticle platforms. The technology allows for extrapatic RNA delivery as the nanoparticles distribute within the body to diseased tissues. in particular to inflamed tissues in cancer and inflammatory or autoimmune diseases. Once inside target cells, the nanoparticles disassemble and release their RNA payload at substantially higher rates than lipid nanoparticles, the current industry standard. Oligophore and semaphore have been validated across more than 15 distinct animal disease models utilizing both siRNA and mRNA by various research groups worldwide. And we're excited to see the evidence continue to grow. In 2023, two in vivo studies performed by independent research groups using the Semaphore platform show promising results for mRNA treatment in cancer and osteoarthritis. Upregulation of C to B TB46 expression resulted in an immunostimulatory tumor microenvironment and restricted tumor growth. The effect was significantly potentiated when combined with anti-PD-1 immune checkpoint inhibition. On the other hand, increase of DNMT3B expression resulted in reduced bone sclerosis, cartilage degeneration, synovitis, and pain sensitivity, following meniscal injury. Another independent research group recently showed that insertion of our peptide into adeno-associated virus vectors significantly enhance cell transduction. The combinant adeno-associated virus vectors are commonly used as carriers to introduce nucleic acid into cells for gene therapy. We are pursuing with the RNA delivery business a pick and shovel strategy based on the licensing of our platform technology to partners in the biotech and pharma industry for use in their own RNA drug product development programs. The first of such collaborations have been set up. Hackett Therapeutics, a spin-off from King's College London, will test nanoparticles based on Altamira's Oligo4 platform and comprising certain non-coding RNAs in the regeneration of damaged heart tissue following myocardial infarction in animal models. Universal's group will evaluate the use of the Semaphore platform for the delivery of mRNA vaccines, increasing the effective amount of mRNA delivered to target cells with Alzheimer's technology may allow for using lower mRNA doses. and thus result in potentially more effective and efficient vaccines. We expect to enlarge, to engage in additional collaborations as we further develop the platform, generate additional data, and advance through IND enabling studies. While working on our platforms, we are also pursuing two proprietary drug developmental programs. They are our flagship programs, which shall demonstrate the potential of the technology. At the same time, we believe that they represent attractive growth opportunities. We are developing AM401 for the treatment of KRAS-driven cancers and AM411 for the treatment of rheumatoid arthritis. We aim to advance both programs into an investigational new drug filing with the FDA in 2025 and to out-license them either following the IND or after a Phase I clinical trial at the latest. The current focus is on the optimization of the formulation and process development for scaling up nanoparticle production. For the AM401 program, Altamira filed a patent application with the United States Patent and Trade Office to provide broad coverage of different KRAS mutations in cancer treatment with nanoparticles comprising the oligophore platform and a single siRNA sequence that we call polyK res mute. In vitro data confirmed the ability of polyK res mute siRNA to knock down G12C, G12V, G12D, G12R, G12A, and A46T, which account for the majority of KRAS mutations in pancreatic, colorectal, and non-small cell lung cancer. I will now turn the call back to Thomas.
spk04: Thanks, Koba. Let me discuss now our two main legacy assets, the Benchio drug-free nasal spray for allergy and our AM125 beta histine nasal spray for vertigo and other disorders of the central nervous system. In November of last year, we announced the partial spinoff of our Benchio business as an important first step in our strategic pivot towards RNA delivery. As a reminder, we sold a 51% stake in our subsidiary Altamira Medica AG to a Swiss private equity investor for a cash consideration of 2.04 million Swiss francs or approximately 2.3 million US dollars. Apart from the raise of non-dilutive cash, the transaction generated a financial gain of 5.2 million Swiss francs or close to 6 million US dollars. and will result in a lowering of operating expenses. Altamira will be entitled to receive 25% of any future licensing income of Medica and also of Medica's value appreciation in case of a sale, which captures an additional share of the business upside potential. We consider this upside potential to be substantial. In clinical trials, Venture showed great efficacy in alleviating the main symptoms of allergic rhinitis, hay fever, and improving health-related quality of life. All of this without containing any active pharmaceutical ingredient. This allows for a unique positioning of the product as an alternative to medicated nasal sprays or in combination with oral treatments such as antihistamines. We expect sales to grow significantly from 2024 onwards, primarily driven by the launch of Bentrio through distributors in additional countries. For China, one of the largest markets worldwide, we already have a collaboration. It is with Nuance Pharma, which began in 2022. Nuance is currently distributing the product successfully in Hong Kong. and is aiming for market approval in mainland China and South Korea later this year. Altamira Medica will initially supply Benchero to Nuance and may receive development and commercial milestones of up to US$3 million and up to US$19.5 million, respectively. Once Nuance assumes local production of Benchero, it will pay to Altamira a staggered royalty on net sales at a high single to low double-digit percentage. In Scandinavia, our partner Pharma Nordic just launched the product in Q1 2024, and we look forward to successful development there as well. For other key markets, notably the US, the world's largest OTC consumer health market in Europe and elsewhere, Discussions and negotiations with interested parties are ongoing. Venture was cleared by the FDA for marketing. However, it's not being marketed in the U.S. yet, ending the partnering of the product. We do expect major news flow here in 2024. Overall, we're confident to see our stake in Altamira Medica generate a growing revenue stream and result in significant value appreciations. Following this first step in the strategic repositioning of our company, we expect to take the next one in 2024 by partnering our inner ear assets. Partnering discussions are most advanced regarding AM125, a patented nasal spray for the treatment of acute vestibular syndrome, or briefly, AVS, a very frequent type of dizziness. This product has been developed to help acutely dizzy patients to get back on their feet more quickly. The drug product is a reformulation of betahistine, a histamine analog, which in the traditional oral formulation is standard of care treatment for vertigo in many countries around the world. A phase two trial in Europe demonstrated that a four-week treatment course with AM125 in ADS patients was well tolerated and helped to accelerate vestibular compensation enabling patients to regain balance and recover faster. In the U.S., where oral betastine exceptionally has not been marketed for decades and no comparable product exists, Altamira received in summer 2023 IND clearance from the FDA. To date, we have invested about 18 million U.S. dollars in the program. There is one important aspect to AM125. Since beta-histine is a histamine analog, AM125 may have clinical utility in other central nervous system disorders known for the involvement of histamine. It is known that histamine plays an important role in the regulation of a wide range of behavioral and physiological functions, such as appetite, drinking, sleep, wakefulness, learning, attention, and memory. Studies by independent research groups have shown clinical benefits of beta-histine in the treatment of ADHD, cognitive function in dementia, memory loss, and antipsychotic-induced weight gain, among others. And histamine is a target in narcolepsy, probability syndrome, for which we have an orphan drug designation or Tourette syndrome. Therefore, we believe that our AM125 offers quite some potential in partnering for Vertigo, but also beyond and especially in the US market where there is no oral betastine available. It is important to note that despite its significant potential, the AM125 asset currently carries zero value on our balance sheet. Any proceeds derived from partnering will therefore have a direct and positive impact on our bottom line. Now turning to our financials. Before reviewing our financials for the full year 2023, I would like to note that the financial statements are presented in Swiss francs. To help you with interpreting the financials, Please note that one Swiss franc is worth approximately 1.1 US dollars. Further, I need to highlight that the 2022 income statement has been revised retrospectively due to the partial divestiture of the venture business. The venture activities are reported now as so-called discontinued operations. Continuing operations therefore comprise the RNA delivery development programs as well as those related to AM125. In 2023, we made great progress in aligning our cost structure with the strategic pivot to the RNA delivery business. Total operating loss from continuing operations decreased from 18 million Swiss francs in 2022 5.9 million Swiss francs in 2023. Research and development expenses were 3 million Swiss francs in 2023 versus 14.6 million in 2022. Excluding a one-time non-cash write-off impairment of capitalized development expenditures for the AM125 project based on impairment testing under IFRS, as just mentioned, This program has zero value currently on the balance sheet. Research and development expenses rose about 33% from 2022. General and administrative expenses decreased from 3.4 million Swiss francs to 3.1 million Swiss francs.
spk01: Ladies and gentlemen, please continue to stand by. The conference will resume shortly. Thank you. Once again, ladies and gentlemen, please continue to stand by. Your conference will resume shortly. Thank you for your patience. Once again, ladies and gentlemen, please continue to hold your conference. We'll resume shortly. Thank you very much for your patience.
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