Ultimovacs Asa

Good afternoon, everybody, and welcome to UltimoVAG's second quarter of 2024 business update and financial results. As usual, I have with me our chief medical officer, Jens Björheim, and our chief financial officer, Hans Vassgaard-Heidt. We will go through the main news from this quarter, and as usual, if you have any questions, please use the system to send it to us, and we'll try to answer as many as possible at the end of this presentation. If we can move to the next slide, I have to show you a disclaimer. And if we move to the next slide, I will give a brief introduction. Jens will cover then the clinical update on UV1. I will have a slide on our novel drug conjugation platform. Hans will cover the financial update, and then I will cover the news flow and the meeting before Q&A. Okay, so let's proceed and move to the next slide. Again, you know, this quarter was mainly impacted by the results of initial in focus. Of course, despite these disappointing results and that, you know, we are, sorry for patience, we are still committed as a company and as a team to bringing UV1 across the next important data point. That is the Duvac readout. These top line results, as you know, the focus, the more recent one now in August, showed that we didn't meet a primary endpoint of improved progression-free survival. And there was also no improvement in overall survival. As Jens will cover, you know, these results are still very important and will be submitted for publication in a peer-reviewed medical journal. NIPO, as you know, we had encouraging results showing a clinical benefit, you know, presented last year. Also, publication giving a little bit more details on the specific group of patients that responded better. You know, this was in the spring. But there will be an update by the investigators that post the presentation during ESMO now next month of September. DUVAC continues to have a good inclusion of patients. Top line readout expected first half of 2025. Of course, you know, this quarter is impacted because we look at mid-May to mid-August in terms of the number of inclusion of patients is impacted by the vacation period in the Nordics and all over Europe. But we expect this will pick up and there are several patients also in screening. You are all familiar that we implemented the cash preservation initiatives with a very important goal to expand the financial runway to the fourth quarter of 2025. And this is important because then takes us over the anticipated top line readouts for the Dufac trial. We also have an ongoing development of a novel drug conjugation technology platform. And I will cover that topic in more detail during the presentation. So if we move to the next slide. I give the world to Jens. Jens, please.

Thank you so much, Carlos. Good afternoon, everybody. I will go through the clinical program. On the next slide, just as a recap for us, the background for the phase two program we are running. So going back a few years, we had phase one trials that showed good and lasting immune responses after the UB1 vaccine. It appeared to be a good synergy between checkpoint inhibitors and the vaccine in different patient populations. And it was a good and beneficial safety profile for the UB1 vaccine. So the ambition with the phase two program was to combine the vaccine with different immune therapy and in different indications to find a good home for UV1 moving forward. Therefore, we had a few things that needed to be in place. The indications we are working in need to express telomerase, as that is what we are vaccinating towards. And also, immune therapy should be approved in that indication. On the next slide, you can see the phase two program that we initiated. First, our sponsored own indication, malignant melanoma with the initial trial, as Carlos reported. Then we are also participating in four other trials in mesothelioma that reported at ESMO last year, and we'll have an update at ESMO this year in September. It was also presented in a journal during the spring this year, this study. For the head and neck cancer study back in August, earlier in August, we presented top line data from this trial. Unfortunately, this trial proved to be a negative one. Still, there are two trials ongoing within recruitment in the DOLBAC trial. As of now, 120 patients are recruited in this trial. And in the LUNBAC trial, 31 patients are recruited. Moving on to the next slide, just a small background on the head and neck cancer group. So this is the seventh most common cancer globally. So it's a large indication. Telomerase is highly expressed in these patients. Pembrolizumab is considered a standard of care for first-line treatment of patients with PD-L1-positive head and neck cancer. Also, a few comments on the trial as such. On the next slide, it was a randomized trial. one arm, 50 patients with the vaccine on top of pembrolizumab and a control arm with 25 patients. The primary endpoint was progression-free survival at six months. All patients were followed up to 12 months in this trial before the database was closed and they had a readout of the results. On the next slide, you can see the results from this study. Adding the vaccine on top of pembrolizumab did not meet primary or secondary endpoints in patients with metastatic or recurrent head and neck cancer. UV-1 continues to show a positive safety profile in line with the other studies with similar events observed in the control arm and a good tolerability. So this was disappointing, but it's the top line results from the FOCUS trial. And the data from this trial will be published in a journal in the near future. Moving on to the next slide, we now look towards ovarian cancer. So ovarian cancer is also quite large indication. It's the 18th most common cancer overall. Standard treatment for these patients include surgery, chemotherapy, PARP inhibitors, and Bevacizumab. Several studies have shown that if you combine PARP inhibitor with a checkpoint inhibitor, you have better efficacy for patients. Also in this indication, telomerase is highly expressed, which is important for the UB1 vaccine. If you take a... Look at the trial as such on the next slide. This is a large trial. 184 patients will be included in this study. It is a maintenance trial, meaning that patients are treated with chemotherapy. If they respond to that chemotherapy with a partial or complete response, they can be included in this trial. There are three arms, one Olaparib arm, which is a standard of care for this patient population. Then there is an in-between arm, Olaparib, Durvalumab, which is there to get a numeric understanding of the efficacy from Durvalumab only. And then there is the third arm with the vaccine, UV-1, Olaparib and Durvalumab. The statistics in this study is between the triple combination arm and the Olaparib arm. Also in this trial, progression-free survival is the primary endpoint with the secondary endpoints for overall survival response rate and safety. The top line results for this trial is expected first half of next year. Moving on to the next slide. Just also to update on this, so the LANGMAG trial is a trial in patients with non-small cell lung cancer that don't have the mutations in EGFR and ALK and others. In this study, 138 patients are planned to be included. Two arms here, one with PD-1 semiplimob and one with UV-1 semiplimob. Primary endpoint in this trial is also progression-free survival and secondary endpoints, other efficacy endpoints and safety. The top line results are expected in first half of 2036 for this trial. And as we have done earlier, we will update on the top line results in the Q4 presentation later. Moving on to the next slide, I give the word back to Carlos to present the novel drug congregation platform.

Thank you. So if we move to the next slide, why are we talking about a novel drug conjugation platform? As you know, we have been spending a lot of time in the team in developing a new technology for cancer vaccines, with one example being the TET vaccine that we tested clinically in prostate cancer. In order to optimize that formulation of that vaccine, we had to develop a novel conjugation technology that, as I mentioned, was initially formed to optimize the expansion of our vaccine pipeline. So this novel conjugation technology is really the result of several years of work by our research and CMC teams. The key benefits is that this is a very flexible conjugation technology. and has the potential to be broadly applicable to a variety of therapeutic modalities, particularly in the creation of innovative drug conjugates with favorable pharmacological properties. This means that, you know, in addition to the space of oncology, this can be used potentially in other therapeutic areas. What is, of course, very exciting. We are currently conducting preclinical proof of concept research And we'll seek external validation of this novel drug conjugation platform by talking, discussing with experts in this area. We see a significant value proposition within this technology, representing a major opportunity for UltimaVox for future pipeline growth and expansion of potential collaborations. We are currently going through several of these projects tests and we will provide expect to provide an update to the market before the end of 2024. OK, so if we move to the next slide, we move into the financial area and I give the word to Hans.

Thank you Carlos. If you move on to the next slide. On the key financials. By the end of the second quarter, Ultramarx had a cash position of 170 million NOK, roughly 16 million US dollars. During the second quarter, we implemented a cash preservation program to sustain the financial runway, as Carlos mentioned. This includes a workforce reduction of approximately 40%. The cash preservation initiative secures that The expected financial runway will last until the fourth quarter of 2025, beyond the expected readout of the DOAC trial. When looking at the cost during this runway period, most of the costs are committed costs, so there is limited free cash available for alternative use. Based on the current plans and forecasts, the cash burn rate to the end of this period, meaning towards the end of 2025, is estimated to be roughly 15 million NOK per quarter. Looking at the key financials, the EBIT or the operating profit was minus 45 million for the second quarter. Year-to-date for the first half was minus 74 million NOK. And the profit before tax was minus 45 million NOK for the quarter and minus 68 million NOK year-to-date for the first half. Looking at the operating expenses, the main component here being R&D and IPR expenses. These costs were approximately at the same level in the second quarter this year as the previous quarters. Going forward, the operating expense level should be expected to be reduced, partly as clinical trials are finalized and partly as operational adjustments, including the mentioned workforce reductions, will start to have effect in the second half of 2024. If we move on to the next slide, I would like to mention that there was a Small typo in the material that was distributed this morning. Below the table we see a sentence specifying the cash holding by the end of the second quarter. The correct version is what we show here, 170 million NOC, which we also referred to on the previous slide. The version sent out this morning showed 270, so we apologize for that typo. If you look at the key cost components, payroll expenses, we have significant variations in the component called share option costs. The share option costs varies significantly between quarters, depending on the development in the share price. So in the first quarter this year and the second quarter last year, 2023, There were high volatility and significant drops in the share price, giving negative or reversals of the accruals for social security tax related to the option program, giving negative cost elements. So it's hard to compare between periods. What is, from a cash flow perspective, most important is the regular payroll expenses. And looking at those, you will see that these are very stable this year compared to previous year, 10 million for the second quarter and 26 million year to date. Moving on to the external R&D and IPR expenses, we see that the cost level this year, 27 million, was significantly lower than the same period last year. It's important here to mention that these R&D expenses were particularly high in the second quarter of 2023 when you make this comparison, primarily due to higher costs from the initial trial in that period and also CMC costs. These are further specified on slide 20 further out in the presentation. For other operating expenses, there are no major changes from previous year. On the next slide, we see the quarterly operating cash flow. The operating cash flow in the second quarter of this year was approximately minus 50 million, which is somewhat higher than the EBIT of minus 45 million NOC. As mentioned, we expect continued quarterly variations in cash flow and costs, but we do expect a significant decrease over the next quarters compared to the previous quarters due to the implementation of the cash preservation initiative and completion of key activities. On the next slide, we share the quarterly breakdown on the profit and loss statement for information purposes. So with that, we move on to the next slide and I give the word back to Carlos.

Thank you, Hans. So if we move to the next slide, I think, you know, we continue to deliver on the promised results. Unfortunately, not as positive as we would expect it, but that's the reality of biotech. Fortunately, as a company, we had different studies. and now we can look forward to receive the DUVAC ones next year. As I mentioned, in terms of news from our side as a company, it will be the presentation of the technology and business opportunity for the novel conjugation platform technology towards the end of the year. And then next year, you know, the first results to be expected are the DUVAC results. So if we move to the next slide and just to, As a summary, we continue to be committed to bringing UV1 across the next value inflection point, but also continue to develop our novel drug conjugation platform. We are now, of course, a smaller team and really focusing on the obligations that we have as a company, as a listed company, as a company that has patients being enrolled. and also a team putting a lot of effort in developing the novel drug conjugation platform that, as I mentioned, we expect to update you before the end of the year. The cash preservation initiatives, that was a very extensive work done by the team and that unfortunately also resulted in we had to have some downsizing, but now this cash runway is anticipated to be to the fourth quarter of 2025. And as mentioned several times, you know, this is important because it expects us to take us beyond the results from the DUVAC trial. So with this, I want to thank everybody for the time to listen to us and we can move to the Q&A.

Thank you, Carlos. The first question is related to the drug congregation platform. Have external parties such as AstraZeneca expressed interest in the drug congregation platform, particularly considering financial support?

Yes, yeah, I will answer that. We haven't shared yet with external parties the technology, so we are currently finalizing some of the tests. And all of that is an objective. This is pure Ultimavax novel technology and has not been shared with anyone outside.

Thank you, Carlos. Then a financial question. How do you plan to stay and go in concern towards Q4 2025 and Endocash? I'm happy to answer that, Carlos, unless you would like to do it. No, no, please go ahead. It's clear that going forward, the funding situation of Ultramarx will be a key element which the management team and the board will focus on. It's clear that when you move towards the end of a financial cash runway period, funding and financing is a key element that we need to resolve. We don't have any specific answer or able to give any details on this, but we can assure that this will be a key priority going forward based on the pipeline we have. Another question related to the new technology platform, Carlos, can you add some more color to how the tech platform can be used and market size?

No, I cannot do it at this moment. And, you know, we will provide that update before the end of the year. But it's important to refer this as, you know, there is no market size because this is not a single application. So this technology can be used across multiple different therapeutic areas, not just oncology. So that will have to be the reflection of when in which compounds and conjugations this technology will be used. to provide that, but it's more the potential to be really used broadly, not just in oncology and not just in vaccines.

Thank you, Carlos. That was, in fact, all the questions we have received. So I'll give them to you, Carlos.

Okay, thanks. So I want to thank Hans and Jens for, again, supporting me in the