Kuaishou Technology B

Welcome to MENDES Q2 Report 2025 presentation. During the questions and answers session, participants are able to ask questions by dialing pound key 5 on their telephone keypad. Now I will hand the conference over to the speakers, CEO Eric Manting and CFO Lotta Firm. Please go ahead.

Thank you and welcome everybody to the Q2 webcast and business update of MENDES. As a summary of the key events in Q2, we have presented data at multiple conferences of the ongoing Advanced 2 Phase 2 trial in acute myeloid leukemia, showing that our immunotherapy VD-Den cell improves T-cell repertoire and also that it acts across broader mutation ranges of AML. We had shown this in the past already in our earlier studies, but now also in the ADVANCE-II trial, we specifically focused on a common mutation called NPM-1. The relevance of this is that we are showing and continue to show that we stimulate broad immunity against residual disease and also that our product acts across different subtypes of AML. And that makes it very different from targeted therapies that by definition are always dependent on specific mutations being present in the disease, and also with quite a high risk of what's called clonal escape. So if you put a lot of pressure on one specific mutation, patients will develop new clones of the disease that will be resistant to that specific drug targeting that mutation. And the fact that we see a very broad immune stimulation, and also in this set of data, but also earlier data sets, that there was no association between the effectiveness of the product and the actual cytogenetics or the makeup of the tumor that makes it a very suitable strategy broadly across AML subtypes. Then we are progressing with NorthX Biologics and our manufacturing alliance to deliver large-scale GMP batches that will support our late-stage clinical development and in the end commercialization of the product. And we have strengthened in the person of Tarek Mughal our late stage development capabilities to shape our late stage development strategy, particularly in hemato-oncology. We have started to recruit patients in the AML22 cadence trial in the beginning of the year. And we can say that that is ramping up very nicely. We will provide a more detailed update in our next strategy update, but it's clearly picking up momentum. And we're very happy with this trial, which we will talk in a bit more detail further down the slide deck. But recruitment is ongoing and is picking up as we hoped for. In the deeper pipeline, our earlier stage pipeline, we have a phase one trial in ovarian cancer. And for the first time, we presented data of that trial at a major conference called ESCO, showing that tumor-directed immune responses were elicited by the product, but also very importantly that they are associated with progression-free survival in this very high-risk tumor type. And finally, as one of the key events, after the closing date of June this year, in July, the United States Patent and Trademark Office granted us a key patent that covers the use of alfilidansel in ovarian cancer. Then handing it over to Lotta to summarize the financial overview. Lotta, I think you are on mute.

Yes, hi everyone. The cash burn for the period for the Q2 was 26.9 million and for the first half year it was 42.9 million. The difference in the H1 operating result and the cash flow is mainly related to prepaid expenses and that's also mainly related is the Norfex cost for the tech transfer. And if we compare the figures with last year, we can see that there was a lot of higher, because it was more working on the tech transfer, higher activity last year than it's this year. Now we are going into a more late stage production phase. The cash position is 58.9 million at the end of the second quarter. And we also have some shares in the balance sheet. We have 1.4 million shares. They were issued after a decision from the AGM to cover bonus payments for the employees and to cover the board fee for those who choose to use this opportunity. The vast majority of the employees and also the majority of the board members has used this opportunity. But we still have some shares in the balance sheet and it's to cover tax and social fee. And there is also an extra part because we didn't know the share price. We have got the mandate to sell these shares in the market, but all of them. But it doesn't mean that we will sell all of them and we will only sell shares if it's a good opportunity to sell shares. That's everything from me.

Thanks, Lotta. And just to be clear, the instrument of share-based compensation on the one hand is an extra incentive for management and board and employees related to the share price. But of course, it's also a significant cash saving mechanism. Let me continue with the operational update. For most of you, this must be clear from our earlier presentations, but just to emphasize two important points of our positioning in acute myeloid leukemia. Acute myeloid leukemia is a blood-borne tumor that is very aggressive and basically needs to be treated immediately with high-dose chemotherapy, but then most patients relapse and die from the disease. Survival, five-year survival has been quite constantly in the last decades below 30%. And that is mostly related to hematopoietic stem cell transplant. So the only curative, potentially curative approach at this point in time for AML is a hematopoietic or bone marrow transplant, and it comes with serious side effects, including transplant-related mortality, chronic graft versus host disease, where the transplant actually attacks the patient's body and it leads to very serious side effects. So actually, the transplant option for the majority of patients is not available. That is where we play with 3D Densel because it does deliver potential long-term disease-free and overall survival. And it has a very good safety profile. So it will allow a much larger patient population to benefit from immunotherapy. Very crucial is this pattern that we have discussed before. This is data we presented end of last year. This trial is still ongoing. So the long-term survival data are still being collected. But very importantly, you see a striking picture, which is that after an initial quick relapse and also death actually of patients in the first six to 12 months, you start to see a plateau. The plateau means patients are really in a stable situation. And some of the patients have already passed five years survival after being treated with Fididenzo. So at a median follow-up of around 42 months, we still haven't reached median relapse-free and overall survival because the majority of patients remains alive now. That is what we are after. At this point in time, we have an estimated five years survival of 58%. Whereas current standard of care, and like I said also, it's been a number already the same for a very long period of time. Long-term survival on AML is typically not above 30%. So in the total AML landscape, we are currently focused on those patients that are eligible for high-intensity chemotherapy. That's roughly half of the patients. And to date, there's only one drug approved next to post-remission transplant, so bone marrow or hematopoietic stem cell transplant. And that drug is called oral azacitidine. We will show a little bit more about that drug, but that drug is in principle not curative, but it is delaying disease and it has been approved as the first drug for this post-remission treatment of AML. Then you have the other half of patients which are deemed chemo unfit. So these patients are not eligible for high intensity chemotherapy. Remission rates have been extremely low, but that is where now a new drug called venetoclax is dramatically changing the picture. It means that more patients achieve complete remissions, but those patients in principle are not eligible for transplant. So AZA plus venetoclax is then used over longer periods of time and comes with very serious side effects. So the need, for post-remission therapy is much broader in the total AML field. And it's also growing because of the success of getting more patients in a complete remission with venetoclax. So as a first step, we decided to combine VitaDen cell with oral azacytidine. As you can see on the right, oral azacytidine has a temporary effect. So this is MRD positive patients, patients with residual disease that were treated with azacytidine or a placebo, which is the blue line. And you can see that there's a very quick drop off and also that there is not a plateau. In the end, all patients relapse and also all patients pass away. But there is a separation of the curves and the relapse free survival median shifts from 2.7 months to seven months. So that's a very different picture from what we saw with VD Denzel, which is immunotherapy, which in principle leads to a lot more durable clinical remission. But to combine these two drugs could be potentially synergistic. And that is why our first next trial after the trial I just showed, which was a single agent trial, is a combination trial with oral azacitidine. The five-year survival of the registration trial of oral azacitidine has been published with Andrew Wei, with whom we collaborate as a first author. But what it shows is that the five-year survival is significant. in line with what has been the situation for a long period of time, so below 30% five-year survival with this drug. We are currently recruiting patients in the CADENS trial, or formerly the AMLM22 CADENS trial. It's a collaboration with Andrew Weiss, principal investigator, but also with the Australian Leukemia and Lymphoma Group. This is saving us a lot of money, so it's an investigator-sponsored trial supported by ALLG. And the trial is sizable. So we would first treat up to 40 patients in stage one, which is currently ongoing. And then the trial has the option to include another 100 patients for proof of concept phase. We are in parallel preparing for a go-to-market strategy and the registration trial, and that not only comprises the trial design and the alignment with the regulatory agencies, but it also comprises the upscaling of our manufacturing because we don't want to change the manufacturing process after we have engaged in a registration trial. So the current process we are implementing at Northex is also the process that we wish to use for market launch and commercialization once the product reaches the market. And that is ongoing and we anticipate to release the first GMP batches before the year end, which is an important milestone on the path to registration trial readiness. Then, as I mentioned, there's a broader patient population in AML that we should consider, and we have prepared the outline of several trials, including a trial with the ACEF and NETOCLEX combination that I described, and a trial in the post-transplant setting. But also we have looked, and we've discussed it in earlier calls, we've done a very extensive market analysis on potential indications in blood-borne cancers beyond AML. And we have decided that chronic myeloid leukemia, or CML, is the prioritized indication. The reason is that it's a very large market. It's actually larger than AML because it is with patients that stay alive. So this is what you call prevalent patient population, whereas AML is incident patient population. It's new patients that are encountering a disease, whereas In chronic myeloid leukemia, patients are a lot more stable because they have an effective treatment, which is tyrosine kinase inhibitors, a small molecule way of suppressing the disease. But however, these patients in the end want to avoid lifelong treatment with these TKIs. And that's where immunotherapy and sputum cell specifically could help patients achieve more and more successful treatment-free remission rates. Then in June at ESCO, we presented our data from the ovarian cancer trial. We don't emphasize this trial a lot because it's still in a relatively early stage. It's a phase one trial, safety feasibility trial, but this was the first time we presented this data at a large clinical conference. And the reason is that the data are becoming more mature and that we start to see a picture arise that may show that there is an association between the products and durable survival in this very hard to treat tumor type. So this is high-grade serious ovarian cancer. It's a disease that is treated by a combination of surgery and chemotherapy. The reason it is one of the most deadly diseases in the gynecological field is that the recurrence rate of the tumors is very high, and the recurrent tumors are not very poorly responding to the original chemotherapy. They're also very poorly responding to other drugs available and other solid tumors like targeted therapies or checkpoint inhibitors, so this is very difficult to treat disease. The interesting pattern we're seeing, and this is the swimmers' plot we also presented at ESCO, is that if you focus on the green arrows, they are the patients that are still in a progression-free follow-up. Those are the patients that could have a chance of long-term survival. And six out of the seven patients were patients that also showed very strong immune responses after having been treated with VDDen cell. So it means that there is an association between the VDDen cell treatment and the tumor-directed immune responses that we have observed. and the progression-free survival. Now, why are we still careful in expressing our expectations around this trial? First of all, we want to better understand why certain patients are responding and other patients are not. So we are continuing to do a lot of underlying analysis to see what makes a difference, for example, in the immune system of patients that do not respond and progress to disease and the patients that have a good response and do not progress to the disease to date. But secondly, also the immunotherapy effect is most clearly visible in long-term survival. So the immediate effect of immunotherapy is not there. That's mostly with chemotherapy or with targeted drugs that you start to see an immediately slowing down of cancer cells. What you see with immunotherapy is that the long-term survival improves. You get to see a plateau, which we now clearly have established in AML, but then the ovarian cancer trial is still a little bit early to say that we actually start to see the survival benefits. So what we will do in the coming months is to, on the one hand, continue to follow up these patients, and we expect to report the two-year survival of the patients still alive in the fourth quarter. And in the meantime, we will also look deeper into the underlying data to understand why certain patients are responding very well to the therapy and also have clearly improved progression-free survival based on the data we have today. And this is the reason we were excited to present our data at ESCO. And again, we will follow up with the long-term survival follow-up of these patients. So as an outlook, the phase two proof of concept data have only been further strengthened in the second quarter by the data we presented at CIMT and at EHA showing that the drug can be positioned broadly in AML as an active immunotherapy against residual disease. The current AML cadence trial is picking up momentum and recruitment is ongoing. So that will also be a trial in which we for the first time deliver randomized control data in combination with current standard of care. The global registration trial preparations in AML are underway, and that's, of course, strengthened by the appointment of Tarek Mughal. And we are, as a basis for late-stage development, setting up the large-scale manufacturing, which is on track to deliver GMP material in the second half of this year, so before the year end. We have multiple trial opportunities identified to expand the addressable patient population in AML and with CML as an identified prioritized indication. So as very near-term milestones, we will have continued follow-up of the ADVANCE-II trial, the continued progress of the CADENCE trial that will deliver the first randomized control data in combination with oral azacitidine. We are preparing for registration trial readiness, including the large-scale manufacturing. And we will initiate exploratory trials to broaden the addressable patient population in AML, but also to open up the CML indication. And finally, in the fourth quarter, we expect to report two-year survival data of the Allison trial in ovarian cancer. And as a last remark, it's of course very important when you enter into a late stage development phase that you keep very close finger on the pulse with both the KOL landscape, so the landscape of clinical experts that can not only give advice, but that can also support your clinical trials, but also that you stay close to the pharmaceutical industry. And this is what we have been doing continuously in the background to make sure that the next steps in the clinical development of ididencel matches not only the medical need, but also the industry expectations. That combined will lead to a more detailed clinical development strategy, and we will plan for a clinical development strategy update in the early fall of this year. With that, I'd like to conclude the queue to update and open the session for questions.

If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Qian Li from Pareto. Please go ahead.

Hi, good afternoon, and thanks for the update. Just one quick question from me. So, regarding the people who already know, how can we break it down into, like, the steps that you need to clear in order to start the registration or trial? Can we assume that the tech transfer with the North X is completed and what are the remaining steps?

Yeah. Thank you. Thanks so much for joining, Jan, and perfect question. So as you can imagine, there's different assessments that we have to make in order to be able to engage in the phase three trial. one is the clinical material to support the trial again ideally that is the same material that you will also use for market registration and commercial launch so that's why the collaboration with northex and the large-scale gp manufacturing is such an important milestone on the path to clinical stage readiness but as you can imagine there's also constant alignment with the regulatory agencies because you want to make sure that if you engage in a trial and you complete the trial that your product will also be registered and be according that the trial will be according to expectations but also very importantly and that is as you can imagine something we have been working on very actively in the background if you enter a registration trial you have to already prepare for on the end the market and also the budget associated and the cloud that you need to motivate a broader international group of clinical sites to engage in your trial, et cetera, is of course benefiting from a partnership with pharma. So what we are and have been doing since the last 12 to 18 months, as soon as we knew that the phase two data could provide a good basis for registration trial, as we've been listening very careful to the KOLs that are part of the international landscape and that could support our phase three trial, but also the feedback from pharma. Now that combined with the appointment of PARIC is the total mix we are currently putting together to make sure that the path we will follow to market registration is an optimal path that we can also realistically take And secondly, that in the options we have created to broaden the addressable patient population, we make the right choices. Now, TARIC started in May, as you can imagine, that has accelerated tremendously all of these efforts. But we need a bit more time to condense all of that into a final strategy that we will explain in more detail somewhat later down the line this year.

Thank you, Eric. That's clear. Another question, so do you expect to release follow-up data for the Advanced Survival Update later this year?

The short answer is yes.

Okay, thank you. Thanks for taking my question.

Thanks, John.

The next question comes from Aaron Otkar from Edison Group. Please go ahead.

Hi there. Thanks very much for the presentation and for taking my questions. I just wanted to understand, first of all, I think you might have touched upon it, but can we expect any more expenses related to the tech transfer in the second half of this year? I know it's been closer to zero in the prior two quarters, but we understand that there's still some prepaid expenses on the balance sheet.

Yeah, so in principle, Aaron, we will complete the project, the current project with Northex. And then of course, we have to see how we continue for a longer term global supply contract with Northex and potentially also expanding the network of manufacturers in the end to make sure we have a stable global supply of the product. And with the initial part, which is, first of all, the tech transfer, so the transfer of the process to their facilities, and then the manufacturing of GMP material that is in principle being paid from the prepaid amount of 90 million SEC that we already have invested into the Alliance in 2023.

Okay, perfect. Thanks very much. And then just one more question. At the registration trial, we see that there's quite a high number of sites relative to the number of patients. Could you just help us understand the reason behind this? There's 100 to 120 sites suggested for 150 to 200 participants.

Yes, and there's two parameters, I think, that determine recruitment rate, Aaron, and one is the incidence of the disease. So AML, despite the fact that it's a rather sizable market with good pricing opportunity for new drugs, it's still a limited number of new patients per year. And the numbers I showed earlier on, so roughly 45,000 patients in Europe and the US. But secondly, and that is just as important, you have to work in a competitive clinical development landscape. And there is a lot of trial activity in AML. So far, not with real breakthrough success, except for venetoclax, which made a major difference for patients in the chemo unfit population. there is going to be more clinical activity, particularly in a new class of drug called menin inhibitors. Some companies have announced large clinical trials in that setting. So you have to basically make sure that you have enough sites open to capture those patients that are diagnosed with AML that are eligible for treatment with your product. But also, and that's of course also why we have this active dialogue, not only with industry, but also with KOLs that are influencing larger networks of clinical centers. make sure that people appreciate the value and potential benefit of your product to patients because in the end it is a competitive landscape not only on the market but also in the clinical development landscape so that's why we are conservative and we just anticipate that we have to open up a lot of centers to to run the trial to this patient number okay that's very helpful thanks very much no more questions from me thanks

As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. There are no more phone questions at this time, so I hand the conference back to the speakers for any written questions or closing comments.

Well, if there's no more questions, then thank you so much, everybody, for joining. And we look forward to our strategy update, which is almost around the corner. I would say early fall means end of September, early October that we will be aiming for. We will share details shortly. And we very much look forward to keeping everybody up to date with our progress. Thanks so much.