Evaxion Biotech A/S

Greetings and welcome to a Vaccine Biotech third quarter 2021 earnings conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during today's conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn this conference over to your host, Mr. Corey Davis from LifeSci Advisors. Thank you, sir. You may begin.

Thanks, Laura, and hello, everyone. Thanks for joining us. Let me quickly remind you that the following discussion contains certain statements that are considered forward-looking statements, as defined in the Private Securities Litigation Reform Act of 95. Because forward-looking statements involve risks and uncertainties, they are not guarantees of future performance, and actual results may differ materially from those expressed or implied by these forward-looking statements due to a variety of factors, including those risk factors discussed in the company's annual report on Form 20F for the fiscal year ended December 31st, 2020, as filed with the SEC on April 7th, 21. And then the company subsequently filed SEC reports. At this time, I'd like to turn the conference call over to Lars Wegner, the company's president and CEO. Please go ahead, Lars.

Thank you, Corey. Good morning, everyone. Thank you for joining us for this event on biotech. Q3 earnings call. I'm Lars Wigner, Chief Executive Officer of Evaction, and with me today is Evaction's co-founder and Chief Business Officer, Niels Møller, who is currently Interim Chief Financial Officer. We'll give you a short presentation on our business and results, and then open up the call for your questions. Let me begin by saying Evaction has continued to make a very encouraging clinical progress in the third quarter of 2021 towards our goal of becoming a world leader in AI-driven immune therapies. As many of you know, Evaction specializes in decoding the human immune system and using the data to rapidly discover and develop potential effective drug candidates to improve the life of patients with cancer and infectious disease. We believe that our AI models allow us to identify unique drug targets which may translate into a higher likelihood of clinical success. In July of this year, 21, we reported the data which supported advancing two of our lead cancer vaccine programs into Phase IIb clinical trials. The phase 1-2a result of our EVX-01 program showed that 67% of the patient benefited from EVX-01 in combination with anti-PD-1 for the treatment of metastatic melanoma, compared to a historical data of only 40% benefiting for the checkpoint inhibitor load. We also observed a complete response rate of 22%. compared to the historical data of only 7% benefiting from checkpoint inhibitor alone. A phase 2B clinical trial of EDXO1 in melanoma is planned to start at the end of 2021. Last month, we announced a clinical trial and supply agreement with subsidiaries of Merck, one of the world's leading immune oncology companies, to supply its anti-PD-1 therapy, Contruda, in this trial as well as collaborating on the trial design. In addition, EVXO2 showed T cell activation in adjuvant melanoma and appear to be well tolerated. We intend to submit a regulatory filing for phase 2B clinical trial of EVXO2 in combination with EVXO3, our novel patient-specific therapy for multiple cancer indications. as a combination therapy with anti-PD-1 and adjuvant melanoma in the first half of 2022. The EVH-01, 02, and 03 products all come from our pioneer AI platform, which generates patient-specific cancer immune therapy. In other clinical developments, we remain on track for regulatory filing for a clinical trial in the second half of 2022 for the lead candidate on our EVEN platform, which generates vaccines against bacterial diseases. This program, EVXB1, is a vaccine for the prevention of staph aureus in skin and soft tissue infections. We also expect to select the first viral candidate from our RAIM platform in the second half of 2022. Outside of the clinic, Evaction received this year Enabling Technology Leadership Award in the Artificial Intelligence Enabled Drug Discovery Industry by leading global research and consulting firm, Foster & Sullivan. We are honored to receive the award and I'm very proud of the hard work and commitment of the whole Evaction team in advancing our vision for better global health. Evaction also gave a presentation at the UNO UK Conference which was held in London last month. One of our senior scientists, Dr. Emma Christina Japper, introduced Evaction's AI immunological core technology and detailed how the company is using AI to decode the human immune system. She focused on pioneering and demonstrated how Evaction is continuously working to improve the platform through immunological data generation and the development of optimized AI models. This concludes our business and operational update for Q3 2021. I will now turn the call over to Niels for news of our follow-on public offering and the Q3 financial review.

Thank you, Lars. I'll begin with the news that later today we expect to close our follow-on public offering, which was multiple times oversubscribed. and which included the full exercise of the underwriter's over-allotment option for which we announced the pricing on November 4th, 2021, and which we expect will raise gross proceeds of approximately 27.6 million US dollars before underwriting discounts and commissions and other offering expenses. This follows on from our IPO in February 2021, which raised net proceeds of 27.9 million US dollars after underwriting discounts and commissions, but before offering expenses. As of September 30th, 2021, cash and cash equivalents were 11.9 million US dollars compared to 5.8 million US dollars as of December 31st, 2020. We expect the net proceeds from our FPO and our IPO, along with our existing cash reserve, will be sufficient to fund our operating expenses and capital expenditure requirements through at least 12 months from September 30th, 2021. Research and development expenses were 4.4 million US dollars before for the quarter and ended September 30th, 2021. compared to 3 million U.S. dollars for the same period in 2020. The increase of 1.4 million U.S. dollars was primarily related to increased spending net of grant income for ongoing development utilizing our AI platforms, preclinical product candidates, and clinical trials. In addition, employee-related costs increased due to the higher headcount. General and administrative expenses were 1.5 million U.S. dollars for the quarter ended September 30, 2021, compared to 1.7 million U.S. dollars for the same period in 2020. The decrease of 0.2 million U.S. dollars was primarily related to the higher share-based compensation in the period ended September 30, 2020, due to accelerated vesting period and sign-on warrants associated with the IPO. Net loss was US$5.3 million for the quarter ended September 30, 2021, or US$0.27 loss per basic and diluted share compared to US$4 million or US$0.26 dollars lost per basic and diluted share for the same period in 2020.

Thank you, Nils. That concludes our presentation today. So now it's time to open up the call for any questions.

At this time, we'll be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation film will indicate your line is in the question queue. You may press star 2 to remove your question from the queue. For participants using speaker equipment, it may be necessary for you to pick up your handset before pressing the star keys one moment while we poll for questions. Our first question comes from the line of Kevin Segeder with Oppenheimer. You may proceed with your question.

Hey, guys, thanks for taking my questions. Maybe two or three from us. First, with regard to the Phase 2b study of EVX01, can you just comment on general study design and specifically how you're thinking about any interim analysis and recognizing, you know, so feel very early days, but a potential timeline to an interim analysis on the 2b study? Thanks.

Thank you, Kevin. I think it's a really relevant question. So we expect our study to have its regulatory filing this year and then first patient in next year. We are recruiting 100 patients, and we expect we'll be able to do that pretty rapidly. We're going to open up centers in the U.S., Europe, and Australia. And this allows us already to have the first interim in 2023. and then a full year readout on all patients already in 24.

And then with regard to... It does. That was super helpful. And then with regard to patients that were previously enrolled on UVX01 or UVX02 in the Phase II, I believe, A studies, are any of those patients still on therapy or in active follow-up? And I guess sort of as we're waiting for this TB data on EVXL1 to mature, what additional clinical updates can we hope to get from previously enrolled patients?

Yeah, on EVXL1, we still have patients in this study, and we expect to look at the data again in the second half of next year. so we'll be able to have more data out of our Phase 1, 2A, and EVX-01, of course. EVX-02 is still ongoing, and we expect to have the readout by 23, probably first half of 23. We also expect that EVX-02 will finalize recruitment already this year, and that's in algebra and melanoma.

Great. And then just lastly, maybe more of a general question, you know, the CITSE meeting will be ongoing, you know, later in the week. I think many of those, you know, abstracts are now available. And I guess sort of on a more general level, how do you see the competitive landscape currently specifically in melanoma? And perhaps you can, you know, position the two-way data on EVX01 in the context of what's a continually evolving competitive landscape? Thank you for taking our questions.

Yeah, good question. So we're extremely happy with the data coming out of our EVX-01 and 02 trial. We saw a more than 50% increase in the objective response rate, something we expect that we'll be able to mirror in our Phase IIb study. That's a very competitive product compared to other, combination studies that are ongoing. Of course, we are looking also forward to seeing some of the new checkpoint inhibitor combination trials, such as with LAG3, and see the details of those data. But so far, we have not seen all those details, so we can compare. We do believe we have a large competitive edge towards all these combination therapies combining two monoclonals, as the safety profile of EVX01 appears to be extremely favorable compared to checkpoint inhibitors. And one of the main reasons for people not receiving combo is that the safety profile of these combined therapy are not favorable.

Thanks for taking our questions. You're welcome.

Our next question comes from the line of Thomas Blanton with Lake Street Capital Markets. You may proceed with your question.

Great. Thank you. Good morning, guys, and thanks for taking the questions. Lars, mechanically on the regulatory filings we'll see, will you do all three regions this quarter, or is there going to be some staggering effect where you might see, let's say, the EU filed this year, then an IND next year? Can you just walk us through some details on that?

Yeah, it's a very relevant question. We expect to start out in Denmark, EU, Australia as the first step. Depends on if it's EVX 01 or 02. But EVX 01, we expect to file in a staggered approach. So it will be EU to start with, then Australia and US following right after. And for EVX02, it will start in, when we start the combination trial, it will start in Australia. And then right after, we're going to file in Europe and U.S., probably at the same time. And shortly thereafter, within months.

Got it. And then I was curious, it looks like there's a bit of a delay in the selection of the first candidate from Raven. I was wondering if you could comment on that.

We like to be guided by data, and we are generating data in the pre-clinic right now. We are developing the Raven technology to be broadly applicable across all viruses, but right now we of course were not COVID-19 due to the non-diluted funding we have received. Based on that data, but also on data and evaluation of other viral candidates, we want some data before we make that decision. And that will be first ready in around Q2 of next year. And then we'll make the decision of which one is going to be wrapped up and put into the clinic.

And then finally, you mentioned there was going to be some collaboration with Merck on the clinical study design. I don't know if you can comment on that, but I'm curious to hear what kind of input you've received from them with respect to the design you laid out back in July. Okay.

Yeah, I'm not going to share Merck and what they share with us, unfortunately, on this call. But of course, we are working with their team. They have an excellent team of clinicians. They also understand this first line metastatic setting, I think, better than most. They are one of the market leaders in that indication. And they have access to a lot of interesting data that basically guides phase 2b designs they also recently actually published this data in a very very nice publication on the two pivotal trial in metastatic melanoma keynote 001 and 006 and that data I think was a bit surprising to many and many clinicians when they looked at it because there was still a high medical need but there was also some clear documentation on how you design a good phase 2B. And that's what we've been working on and have finalized here a few weeks ago.

Excellent. I appreciate you taking the questions. Thank you.

Thank you.

Our next question comes from a line of Ahu Demir with Lattenberg Thalmann. You may proceed with your question.

Hello, everyone. Thanks for taking my question, Lars Neil. Congrats on the recent developments. It has been a dynamic couple of weeks for the company. My first question is on take-to-be trial of EBX02 and 03. Could you maybe comment on the clinical trial design? When do we expect to see interim results? And lastly on that question is, do we expect a clinical collaboration with Merck? Are there any discussions around that?

Thank you. Good question. So the design, we are combining our two DNA technology into a three-arm study in adjuvant melanoma, people with high risk of recurrence. And that's because then you can get a fast readout after already a year. And that means it's going to have three arms with 75 patients in each, one arm getting checkpoint inhibitor, one arm getting checkpoint inhibitor plus EVXO2. and one arm getting checkpoint inhibitor plus EVX03. And we're looking very much forward to starting this trial because there is a high unmet need in this group. More than 30% of the patients, even on checkpoint inhibitor, relapse within one year after their operation. So we're looking very much forward to that study. Of course, we are discussing with all the relevant parties that have checkpoint inhibitors in this indication, if it makes sense to collaborate on a study like this. There are two products approved on that indication, and that is Merck's product, Ketruda, and Opdivo from BMS. And our plan in this setting will be only to include our product with the market leaders that are approved in that indication. So that gives us basically two groups to discuss with, which we are, of course, always discussing with on an ongoing basis. I hope that answered the question, Ahua.

Yes, yes, definitely. My second question is on EVX B1. Can you maybe comment on what stage of CIND work you are at? What are we expecting to see maybe prior to the IND filing?

So we have, of course, now prepared the product for TOPS. So it's really in the preclinic. We will be sharing the data update on the very comprehensive preclinical data package on our staff program. in the upcoming three quarters. The final time has not been decided, but we'll be looking forward to sharing that data on that program as the preclinical package is very impressive, if you ask us. So it will be basically doing the talks and setting up the manufacturing that is currently driving it and then an ID filing by the end of next year.

That sounds great. And my last question will be on the capital raise, probably to Neil. How long did you extend your cash runway with this capital raise?

Yeah, right. So what we have communicated is that the expected net proceeds from our IPO and obviously also our FPO combined with our Existing cash reserves will be sufficient to fund our operating expenses and also the capital expenditure requirements through at least 12 months from September 30th this year, 2021.

Thank you so much for taking my question. Thank you.

You're welcome.

Ladies and gentlemen, we have reached the end of today's question and answer session. I would like to turn this call back over to Mr. Lars Wigner for closing remarks.

Thank you, Laura, and thank you all for your questions and your interest in the action. In summary, we believe that we have made some exciting clinical progress in the third quarter of 21 with data supporting the advancements of both our lead cancer programs into Phase IIb clinical trials. Our cash reserves of $11.9 million as of the end of third quarter, combined with the follow-on financing, provide a solid financial foundation and will facilitate the continual development of our lead programs. This concludes this call of our Q321 results, and we look forward to speaking to you all next time. Thank you.

Thank you for joining us today. This concludes today's conference. You may disconnect your lines at this time.