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spk05: Welcome to the MediGene Full Year 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. Please note, this conference is being recorded. I would now like to hand over to your speaker today, Ms. Pamela Keck, Head of IR and Corporate Communications. Please go ahead.
spk01: Welcome everyone and thank you for joining us. With me today is Dr. Selvin Ho, CEO of MediGene. Today we announced financial results for the year ended December 31st, 2022. You can access the press release on the investor relations page of our website at MediGene.com. Before we get started, let's quickly run through the forward-looking statements. Please note that as part of our discussion today, management will be making forward-looking statements. Although we believe our expectations are based on reasonable assumptions, by their very nature, forward-looking statements involve risks and uncertainties and may be influenced by factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements. Any forward-looking statements made on the call reflect the knowledge and information available at the time of this call. The company undertakes no obligation to update forward-looking statements. With that, I'll hand the call over to Selvan.
spk02: Thank you, Pamela. Good morning, good afternoon, everyone, and thank you for joining MediGene's full-year 2022 earnings call. I'm excited to review the past year of accomplishments, as we continue the transition of MediGene and provide an outlook on all that we expect to achieve in 2023. Since joining the company as CEO in July 2022, I've been working diligently with the team to evaluate our corporate vision. And as a result of our work, we released our updated strategy in November of last year. I am proud to call MediGene a platform biotech company focused on developing differentiated T-cell receptor engineered T-cell, or TCRT for short, therapies for the treatment of multiple solid tumor indications in patients with high unmet medical needs. At the heart of our work is our extensive expertise in T-cell immunology and many years of development of a proprietary, innovative, end-to-end platform. MediGene's focus is to leverage this platform to build incremental differentiation of our TCRT therapies at multiple sequential stages of the drug discovery and development process, whilst continuously innovating the technologies within the platform. In the management of cancer, personalized medicines are and will continue to play an increasing role. Immuno-oncology cell therapies, such as TCRT therapies, are emerging as a novel class of treatment with clinical benefits being consistently demonstrated in treating solid tumors. Despite these advances, unmet needs clearly remain for further improvements, particularly in sustaining efficacy and with a lower risk of adverse side effects. Our end-to-end technology platform, built on these multiple, combinable product enhancements and development optimization technologies, allows us to identify and develop TCRT therapies for multiple solid tumor indications that we believe will be optimized for both safety and efficacy. We further believe this platform may allow us to create best-in-class TCRT therapies, ensuring that MediGene has a unique opportunity to make a real impact on the lives of cancer patients. To date, the robustness of our work has been scientifically validated through multiple partnerships. in which both potentially highly differentiated T cell receptors and novel individual platform technologies have been outlicensed from MediGene to our partners. Clinical validation of our platform also comes from the results of our phase one trial with MDG 1011 in patients with certain blood cancers.
spk04: Moving to our platform.
spk02: As I've mentioned, the basis of our differentiation is our end-to-end platform of multiple, combinable, exclusive, and proprietary technologies. These technologies enable both the potential enhancement of our TCLT drug products from a safety and or efficacy perspective, such as with our PD-1, 4-1BB switch receptor, as well as the optimization of our development processes across the stages of drug discovery and development. 2022 was clearly a transformational year for MediGene. We announced the strategic update that involved the shift of our pipeline focus from liquid to solid tumors, expanding our in-house pipeline, and accelerating the development of our lead candidates. We were thrilled to welcome Biontech as our new global strategic partner. and received a milestone payment from one of our existing partners, 270Bio, related to the MAGE A4 target licensed to 270Bio. In addition, we continue to expand our patent portfolio, which now consists of 57 issued and 94 pending patents across both our assets and technologies within our end-to-end platform. Throughout 2022 and into the start of 2023, we continue to strengthen the executive leadership team with the addition of James Cornicelli, Pamela Keck, and Kirsty Crane to the company. James, as our head of corporate development and strategy, brings over 20 years of experience in business development and strategy advisory. His knowledge and insights will be invaluable as we navigate critical decisions around partnerships and pursue an ambitious growth strategy. Pamela is a highly experienced investor relations and corporate communications professional who brings over 15 years of expertise to her role as head of investor relations and corporate communications. She is responsible for developing and executing an effective investor relations program to attract and diversify our shareholder base, as well as enhancing our communications with existing shareholders. Kirstie, our newly appointed head of clinical research and development, now completes the team and leads our clinical development activities. She brings more than 10 years of experience in drug development and clinical operations, focusing primarily in immuno-oncology and in cell therapy development. Moving to our pipeline, MDG 1015 is our lead internal solid tumor program, and it's being advanced towards a phase one clinical trial and is currently undergoing investigational new drug or IND and clinical trial application or CTA enabling experiments with the aim of having the IND CTA approved in the second half of 2024. As a reminder, MDG1015 is a third generation TCRT therapy that combines a novel optimal affinity TCR in terms of sensitivity, specificity and safety targeted against NY-ESO1, a well-characterized and validated cancer antigen expressed in multiple tumor types that is further combined with a key product enhancement technology, our PD141BB switch receptor, which has the potential to significantly improve the ability of our TCRT cells to kill cancer cells on a sustained basis. This program is unique. and that is the only NY-ESO-1 directed TCRT therapy with this PD-141B enhancement technology, and has the potential for a more targeted, safer, and potent immune response while overcoming the highly immunosuppressive tumor microenvironment in comparison to other NY-ESO-1 programs that are being deprioritized by competitors. Our second recently announced TCRT therapy program in solid tumors MDG10XX, is being developed against several as yet undisclosed targets and involving multiple HLAs, again in combination with the PD141BB switch receptor technology. We plan to announce the first lead within this program in the second half of this year. As previously announced, we have successfully completed our Phase I MDG1011 program in patients with blood cancers. such as acute myeloid leukemia, myelodysplastic syndrome, and multiple myeloma. The MDG 1011 trial provides clear clinical validation of our ability to generate and manufacture TCRT therapies. Data on these manufacturing capabilities were presented at the CAR TCR Summit in London in February of this year. Despite the positive data generated for MDG 1011, We have made the strategic decision to focus any further research and development efforts towards solid tumors and are exploring the potential to partner out MDG 1011.
spk04: Moving specifically now onto partnerships.
spk02: To date, we have partnered a number of assets with Biontech, 270Bio, formerly known as BluebirdBio, and Hongsheng Sciences, formerly known as Roivant Cytobank. And the table presented here summarizes those partnerships with potential value of the triple-digit millions from milestone, option, and royalty payments. In February of 2022, we signed a global strategic partnership with BioNTech to advance TCR-based immunotherapies for cancer. Under the terms of the agreement, MediG received an upfront payment of 26 million euros and will be reimbursed for the research and development costs incurred for the period of the collaboration. MediGene contributes its proprietary TCR discovery platform for the development of TCRs against multiple solid tumor targets nominated by BioNTech and will also be responsible for global development and hold exclusive worldwide commercialization rights on all TCR T therapies resulting from this research collaboration. BioNTech acquired MediGene's TCR4 of the original MDG10XX program, targeting the cancer antigen brain. BioNTech also obtained the exclusive option to acquire additional existing TCRs in MediGene's discovery pipeline and received licenses to MediGene's PD141BB switch receptor and precision pairing library technologies. Both of these have the potential to augment TCR cell therapy efficacy and be applied to all of BioNTech's self-therapy programs. Upon achievement of contractually defined targets, MediG will be eligible to receive development, regulatory, and commercial milestone payments up to a triple-digit million euro amount per program. In addition, the company will receive tiered deferred option payments on global net sales for products based on TCRs arising from the collaboration and royalties on products utilizing at least one of the licensed technologies. Our partnership with 270Bio concluded in June of 2022 in accordance with the contract. Upon achievement of contractually defined targets, MediGene remains eligible for milestone payments and royalties from 270Bio as per the existing agreement. In December of 2022, a strategic partnership between 270Bio and JW Therapeutics was announced. that included plans for the advancement of the MAI-J4 TCR license from MediGene into a Phase I clinical trial in China. This triggered a US$3 million payment from 275, which we received in January of this year. As previously announced, Hongsheng Sciences has temporarily suspended its development activities within the MediGene partnership until new funding is available to them. We are currently monitoring events closely and will announce any updates in due course. We remain committed to exploring new partnership opportunities to maximize the value of our current and future assets and technologies and ultimately deliver novel and differentiated TCRT therapies to patients and hope to provide further updates during the course of 2023. I will now go through the financials for the full year 2022. Our 2022 revenue consisted of revenue from the existing partnerships with 270Bio, Hongsheng Sciences, and the new partnership with BioNTech. Revenue for the year ended December 31st, 2022, approximately tripled, 31.3 million euros compared to 10.5 million euros in the previous year. The increase was as a result of the comprehensive TCRT and technology partnership previously described with BioNTech. as well as a milestone payment received from 270 buyer. Revenue recognized includes all income from service contracts with development partners, pro rata revenue recognition from upfront payments received in the past, as well as the 270 buyer milestone payment. General and administrative expenses were approximately 7.7 million euros in the 2022 financial year, compared to 6.2 million euros in the prior year. This 25% increase was mainly due to higher personal expenses and consulting costs. In addition, some of the expenses for executive board compensation were reported under G&A, general administrative expenses, whereas in previous years they were reported under R&D expenses. Moving to R&D expenses, this increased from €12.8 million in 2021 to €28.5 million in 2022. The significant increase is mainly due to depreciation related to the full impairment of the drug candidate Rudex, which was outlicensed to Dr. Falk Farmer in the amount of €20.4 million. This is attributable to the results of a clinical trial for primary biliary cirrhosis, or PPC, as the efficacy of the drug candidate Rudex was not able to be demonstrated. In the previous year, the impairment loss of Rudex amounted to €1.5 million. Cash-in-cash equivalents amounted to €22.2 million at the end of 2022, compared to €22.4 million at the end of 2021. Based on current planning, which includes the upfront payment of €26 million received under the partnership with BioNTech, as well as the €3 million milestone payment from 275, MediGene is financed into the fourth quarter of 2024. The 2023 financial guidance reflects the company's focus and progress in its core immunotherapy business. Not included in these projections are potential future milestone payments from existing or future partnerships or transactions, as the occurrence of such payments or their timing of size largely depend on external stakeholders. As such, MediGene is not able to reliably forecast such events. MediGene expects revenue in 2023 to be between 5 and 7 million euros. The company expects R&D costs to range from 13 to 16 million euros. Please note that EBITDA, as a result of the aforementioned key performance indicators revenue and R&D costs, will not be pursued as a performance indicator in the future. Instead, cash balance liquidity of MediGene will be used as a key performance and management indicator starting in the fiscal year 2023. This is described as cash equivalents and fixed-term deposits and expressed as the cash reached in the planning period. Again, based on current planning, the company is funded until the fourth quarter of 2024. Looking ahead to 2023, we are focused on executing in four key areas. Firstly, we will advance our MediGene-owned proprietary pipeline into clinical trial stage by accelerating and prioritizing our research activities for MDG 1015, with the next milestone expected to be CTA-IND approval in the second half of 2024, and for MDG 10XX, with the first target lead selection expected in the second half of 2023. We have already made significant progress on both programs, and we recently announced that the very first presentation of MDG 1015 preclinical data will be shared at the American Academy of Cancer Research, or AACR, in April 2023. For future Discovery Stage programs, our teams are also investigating additional novel antigen targets. Currently, all our programs are autologous in nature, but we will continue to explore the potential for allogeneic therapy. Secondly, we will continue to extend our collaborative approach to R&D, maximizing our existing partnerships, and evaluating new partnerships for our technology and assets. Our collaboration with BioNTech, signed in February of last year, has made good progress to date. As mentioned earlier, BioNTech licensed both existing TCR assets and key technologies such as the Precision Pairing Tool and the PD141BB switch receptor. and has additional purchase options on several future characterized TCRs, which we continue to work on with BioNTech. These partnerships have provided important scientific validation of our technology and assets. As these programs move into clinical development, they will also provide further clinical proof of concept alongside MediGene-owned programs. Thirdly, whether through partnerships, license agreements, or internal development, we will continue to innovate and expand our end-to-end platform to generate additional value from new development optimization and new product enhancement technologies. Again, we have made significant progress here and hope to be able to announce updates to our proprietary technologies in 2023. Finally, with respect to our financial position, and as mentioned before, I'm pleased to confirm that we have a strong cash runway until the fourth quarter of 2024. We are confident that our partnerships will continue to progress, thus generating additional milestone payments and revenues, which will support continued investment in an R&D strategy. Despite this strong position, biotechnology is a capital intensive industry, and we wish to be fully prepared to raise additional capital to extend our cash rate into 2025 and beyond. As such, we continue to manage expenses prudently while exploring financing opportunities. We aim to be ready to execute a capital raise, allowing us to have sufficient capital to fully achieve our medium to long-term corporate objectives. In summary, the fiscal year 2022 has certainly been transformational for MediGene. We remain fully on track in the first few months of 2023 on the successful execution of our updated strategy and the delivery against our vision to develop Differentiated Best-in-Class TCRT Therapies for Patients with Soil Achievement. Thank you, everyone, and this marks the end of today's prepared remarks. At this time, I'd like to open up the call for questions.
spk05: Thank you. We will now 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 tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Once again, if you would like to ask a question, press star 1 on your telephone keypad.
spk03: One moment please while we poll for questions. A final reminder, if you would like to ask a question, press star 1 on your telephone keypad. Thank you. It appears we have no questions at this time. I would like to turn the floor back over to management. Thank you, Kathryn.
spk00: Thank you, everyone, for your time and for joining us for today's call. And this marks the end of this call. Thank you very much. Until next time.
spk05: Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation and have a wonderful day.
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