Medigene Ag

Welcome, everyone, and thank you for joining us. With me today is Dr. Selvin Ho, CEO of MediGene AD. Today, we announce financial results for the half-year ended June 30th, 2023. 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.

Thank you, Pamela. Good morning, good afternoon, everyone, and thank you for joining MediGene's Half-Year 2023 Earnings Score. I'm happy for the opportunity to review the first six months of accomplishments and updates as we continue to execute our corporate strategy in 2023. At MediGene, we have a deep commitment and vision to serve patients. We aim to unlock the immune system's potential to achieve curative therapies for patients with solid tumors. And through this, we believe we will create significant value to all our stakeholders and shareholders. Looking at our first six months of this year, we are an immuno-oncology platform company focused on developing differentiated, best-in-class, T-cell receptor-engineered T-cell or TCRT therapies for multiple solid tumor indications in patients with high unmet medical needs. Our longstanding expertise in T-cell immunology and many years of development of a proprietary, innovative, end-to-end platform is at the center of our efforts. MediGene is leveraging this platform to systematically build 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 first six months of 2023, we have remained focused on executing our corporate strategy and creating shareholder value. We have made significant progress in many areas, from advancing the programs in our pipeline, expanding our partnering efforts, and expanding our platform capabilities and innovation, and finally, in managing our financial position. For our pipeline and our solid tumor programs, Our lead program is MDG1015, a third-generation TCRT therapy, which is currently undergoing investigational new drug, IND, and clinical trial application, CTA, enabling experiments, with the aim of having the IND CTA approved in the second half of 2024. NYESO1, LAGE1A, are well-characterized cancer testis antigens expressed in multiple tumor types. And it is estimated that approximately 190,000 patients in the top eight global markets express NYESO1 or LAGE1A and HLA-A02 across a number of solid tumor indications. In April, we announced that the first MDG1015 preclinical data was presented at the American Academy of Cancer Research. The data showed that T-cells carrying an NY-ESO-LAGE1A-specific T-cell receptor combined with Medigene's proprietary chimeric PD-141B-B-co-stimulatory switch receptor have significantly increased anti-tumor activity compared to T-cells expressing the T-cell receptor alone. This highlights the potential for significant benefits of MDG1015 in improving long-term anti-tumor effects by mitigating the immunosuppressive tumor microenvironment that currently limits solid tumor therapies with our co-stimulatory protein, or CSP for short. Moving on to our KRAS programs, in June, we announced our pipeline expansion into neoantigens, also known as oncogenic driving mutations, with KRAS as the first target of our T-cell receptors from our prior MDG10XX program. Importantly, T-cell receptors against KRAS mutations are being developed in combination with the option of either our PD1-41BB or our CD40 ligand CD28 co-stimulatory protein. The first KRAS antigens and target HLAs we have announced are KRAS G12V-A11 with a program named MDG2011, KRAS G12V-A03 named MDG 2012, and KRAS G12D A11, named MDG 2021. KRAS mutations are widely recognized as the most common oncogene mutations in difficult-to-treat solid tumors, existing in approximately 30% of solid tumors such as pancreatic, colorectal, endometrial, and non-small-cell lung cancer. Global incidence of solid tumors expressing KRAS mutations is estimated to be well in excess of 300,000 patients. We expect to announce the first lead candidate for MDG 2011 this quarter, with MDG 2012 to follow in the first half of 2024, and MDG 2021 following thereafter. Overall, this will allow us to build a library of potential TCRT therapies targeting multiple mutations, HLAs, and with multiple CFPs with the aim to make these accessible to the broadest possible patient population with one or more of these specific targeted therapies. As we accelerate MDG 1015 towards a phase one trial, MediGene has strengthened and complemented the executive leadership team with the addition of Dr. Kirstie Crane as head of clinical research and development. In terms of our partnering, these continue to provide clear scientific validation of MediGene's technology and assets. Along with our own programs, the partnered programs continue to brush forward, both scientifically and also towards clinical development, and will further provide clinical proof of concept. We will provide ongoing future updates from our partnerships in due course. In April of this year, MediGene entered into a cooperative research and development agreement, or CRADA, with the National Cancer Institute to evaluate the use of our proprietary T cell receptors in novel cell constructs. Through this collaboration, we expect to expand the range of tools and technologies in our end-to-end technology platform and expect this could lead to opportunities to use multiple immune cell types in addition to MediGene's current work with T-cells to form the basis of future TCR-based anti-tumor cell therapies. In January this year, the company announced the receipt of a $3 million payment from its partner, 270Bio. This milestone payment follows the strategic alliance between 270Bio and JW Therapeutics with the initial focus on the development of 270Bio's MAGE A4 program, which employs a highly potent TCR discovered in collaboration with Medigene's proprietary end-to-end technology platform. Our partnership with BioNTech, with work on a number of antigen targets, is also progressing well. For our MDG 1011 program in liquid genus, we continue to evaluate options for partners. Our end-to-end platform capabilities to develop differentiated TCRT therapies continues to expand as we bring in new innovation and technologies. In May, we announced the acquisition of the exclusive worldwide rights to a CD40 ligand CD28 co-stimulatory switch protein from our long-term partner, the Helmholtz Munich. The CD40 ligand CD28 CSP accelerates the expansion of Medigene's product enhancement technologies within our platform. It joins the existing PD141BB co-stimulatory switch receptor and is a technology that has the potential to aid penetration of the TCRT therapy into the tumor, further enhance the anti-tumor activity of metagenes TCRT cells, and improves their ability to overcome the immunosuppressive solid tumor microenvironment. In June, we participated at the Immuno-Oncology Summit Europe, and presented an overview of the elevated activity of multiple TCRT therapies when combining MediGene's PD-141BB co-stimulatory switch receptor with TCRs targeting different antigens. Irrespective of the canti antigen being targeted, TCRs combined with the PD-141BB switch receptor displayed superior T cell functionality in vitro and increased T-cell efficacy in vivo as compared to TCR-T cells without the switch receptor. This data validates our armoring and enhancement approach in developing differentiated TCR-T therapies. In the first half of this year, we also made progress with the expansion of our patent portfolio. In May, we announced that MediGene had been issued a patent by the Japan Patent Office protecting our PD141BB co-stimulatory switch receptor. This complements patent protection for the PD141BB technology already received in the United States and China in 2022 and reinforces the innovation inherent in key technologies of our end-to-end technology platform. In addition, we reported that we have been granted the patent protection of our TCR targeting PRAME in Europe and China. This patent grant in Europe and China complements patent protection for PRAME already received in Eurasia, Japan, and Korea. Finally, we continue to increase our visibility on the capital markets and expansion of our investor base through participation in conferences, while we continue to explore financing options to extend our cash reach into 2026 and beyond. Also in the first half of 2023, we've expanded our leadership team with Pamela Keck as Head of Investor Relations and Corporate Communications. The basis of MediGene's differentiation is our end-to-end platform of multiple, combinable, exclusive and proprietary technologies. Our product enhancement technologies potentially enhance our TCRT therapies from a safety and or efficacy perspective, such as with our co-stimulatory SWITCHPROS team, whilst our development optimization technologies improve the efficiencies of development processes across the stages of drug discovery and development to make these cheaper, faster, and better. Our platform is dynamic as we continue to innovate to address evolving scientific knowledge. With additional technologies already upgraded and added over the course of 2023, we look forward to further technological innovations being added in the future. Overall, this has led to this pipeline of MediGene's own programs of multiple TCRT therapies in development for solid tumors, consisting of optimal TCRs against both cancer testis antigens, such as NY-ESO1, LAGE1A, with MDG1015, as well as neoantigens, such as multiple KRAS mutations for G12V and G12D. As mentioned earlier, we are building a library of TCRT therapies targeting multiple cancer antigens, multiple HLAs, and wherever possible, combined with an armoring enhancement technology, such as PD141BB or CD40 ligand CD28B. MediGene has also extensive partnering of multiple TCRs against cancer test antigens for solid tumors with BioNTech, 270Bio, and Hongsheng Sciences. Our partners will determine the progress on these programs, and we and they hope to announce updates on this in due course. As you know, we have pivoted away from targeting hematological or liquid tumors and aim to partner these programs as well. I will now go through the financials for the first six months ended June 30th, 2023. MediGene's revenues decreased by 88% to 3.1 million euros in the first half of 2023, compared to 25.3 million euros in the first half of 2022. This decrease is due to the comparison with the comprehensive TCRT and technology partnership with BioNTech concluded in the first quarter of last year, as well as revenues from the partnerships with 270Bio and Hongsheng Sciences generated in the first half of 2022. Sales and general administrative expenses decreased by 30% to €4.3 million in the first half of 2023, compared to €6.2 million in the first half of 2022, due to certain costs related to the preparation of the BioNTech partnership being concluded in 2022. Research and development expenses increased by 42% to €5.2 million in the first half of 2023, compared to €3.7 million in the first six months of 2022. This increase is due to the refocus on the development of TCRT therapies for the treatment of solid tumors and preclinical development activities, resulting in the new and expanded product candidate pipeline described earlier. Looking at the balance sheet, As of June 30, 2023, cash and cash equivalents and time deposits amounted to €24.6 million, compared to €33.2 million as of December 31, 2022. In terms of guidance, performance in the first half of 2023 was in line with the Executive Management Board's expectations. The Executive Management Board therefore maintains its guidance for fiscal year 2023, as published in the annual report 2022 on March 29th of this year, in its entirety. Please note, these estimates do not include potential future milestone payments from existing or future partnerships or transactions, as the occurrence of such events or their timing and size depends to a large extent on external parties. and therefore cannot be reliably predicted by MediGene. Accordingly, the Executive Management Board expects revenue in 2023 to be between 5 and 7 million euros, and R&D costs ranging from 13 to 16 million euros. As of June the 30th, 2023, cash and crash equivalents and time deposits amounted to 24.6 million euros. Therefore, based on current planning, the company is financed until the fourth quarter of 2024. From a corporate perspective, in the second half of 2023, MediGene will continue to push forward on the development of its T-cell-based immunotherapies to fight solid cancers. This focus represents, in the company's opinion, the most promising commercial business opportunity for MediGene's differentiated technologies. As mentioned earlier, our scientific focus will be to advance early-stage projects, such as our first KRAS programs, NGC 2011, 2021, and 2012, and expand the end-to-end technology platform by innovating and expanding the tools and technologies within the platform. The company will continue to submit results of our work for presentation at upcoming scientific congresses. From a clinical development perspective, NGC 1015 will be advanced towards a first and human clinical trial through its IND CTA enabling work. Consistent with its focus on solid tumors, and despite the encouraging results of the phase one study with MDG 1011 in hematologic diseases, the company maintains that the phase two portion of the study will only be done with or by a partner. The company is currently evaluating the partnering of MDG 1011. MediGene also anticipates to successfully continue and expand our existing partnerships. We continue to evaluate potential additional partnership opportunities related to our assets and technologies from within our end-to-end platform in order to maximize the value of the company. Thank you all, and this marks the end of today's prepared remarks. At this time, I'd like to open up the call for questions.

Ladies and gentlemen, at this time we will begin the question and answer session. Anyone who wishes to ask a question may press star followed by 1 on the touch-tone telephone. If you wish to remove yourself from the question queue, you may press star followed by 2. If you are using a speaker equipment today, please lift the handset before making your selections. Anyone with a question may press star and 1 at this time. Our first question comes from Joe Pantagnis from HC Wainwright. Please go ahead.

Hi, Selwyn and Pamela. Good morning and good afternoon, and thank you for taking the questions. So, Selwyn, I wanted to focus my questions on your technology, but from a corporate and investor-facing perspective. So you mentioned during your prepared remarks first that you'd be looking to present at upcoming scientific conferences. I guess, how do you balance your proprietary technologies that you're developing continuously versus what you can portray to partners and investors publicly as part of your differentiation? And what can we expect on that front?

Sure. And thanks for the question. So it's always a balancing act in having our data available in the public domain to investors as well as pushing this into scientific congresses, et cetera. I think in many ways for the immuno-oncology field and for cell therapies, we're fortunate that there are a number of opportunities to highlight the progress that we're making on our data. So we know in the second half of this year, there'll be a number of meetings such as ESMO, such as the CITSE meetings, where we will have opportunities to present that data. Our view as a company is that we're a very strong science and R&D focus at the point that where we are able to highlight that data in these scientific congresses will also be the point that we will be making those first announcements of any upcoming or new data that we've yet to release on any of our programs, whether that be MGC 1015 or 2011. So hopefully that kind of resonates, but it's also, I think, very consistent with how other companies see that as well.

No, it does. Thanks for that color. And then I guess maybe diving a little further into the underlying tech, focusing on antigen identification. Obviously, you know, part of your business is having a broad library in antigen identification. How much of a balance, to use the word again, do you envision in the future with regard to potential partners coming to you with their antigens or specific antigens to develop without necessarily touching upon your library?

Sure, again, great question. I think if you look at our end-to-end platform now, I think we are very clearly building up expertise in very specific parts of our platform that I think are truly world-class. I think there are other parts of the platform where we know that we are as good as others. And there are other parts of the platform where I think other companies may have more focus. So if you look at specifically on target identification and new targets, we believe it's a very hard job to find brand new cancer antigens, whether it be cancer testis antigens or whether it be neoantigens. So if you look at how we approach it, we really have taken the view that once identification of antigens have been done, potentially by ourselves or others or in the literature, we will then go through our screening process and then really hit where we believe we're truly world class, which is the focus then on T cell receptor generation. I think you see that from what we have done with our partnerships. In the future, which is, I think, your question, will we expect companies to approach us with targets? That's very possible. To date, we've had some discussions with some companies around that who have clearly seen the value of what we can generate in terms of the quality of our T cell receptors. But nothing concrete has been established so far. But I think that is another opportunity for us to highlight our capabilities and our expertise for generating not just these TCRs, which clearly is the basis of really any form of T cell engagement, but then further armoring and enhancing these T cell receptor T cells to make them really capable of addressing the solid tumor and their needs.

Great. Thank you, Selwyn.

As a reminder, if you wish to register for a question, please press star followed by one. There are no further questions at this time. I hand back to Selvin Ho for closing comments.

Thank you, Operator. Thank you to all who've joined the conference call today. We look forward to updating you with future progress on future calls. Thank you very much.