Mendus AB (publ)

Thank you, everybody, for joining the 26Q1 webcast.

Hello, everyone.

So to start with the summary of Q1, we've had a very ambitious plan that we communicated end of last year that was based on the positive data that we have documented over time, including the long-term follow-up we presented end of last year of the ADVANCE2 trial that showed long-term survival in MRD-positive high-risk AML with now already nine patients beyond five years of survival. So that provided the basis for us to continue the development of the product. We are currently in a trial in a similar setting, but in combination with a drug called oral azacitidine. This is applied after high-intensity chemotherapy. The trial is called AML. 22 cadence trial or in short, the cadence trial for which we wish to recruit 20 patients in the first half of 2026. It's a bit of a bumpy recruitment in AML always. Also in this trial, we are now at 16 patients recruited and we're still aiming for 20 patients in the first half of this year, which will allow us to do a first readout of the trial. The preparations for the DIVA trial, which is in combination with less intensive first-line treatment of venetoclax and azacitidin, is on track. We will also explain in a bit more detail why this is relevant and how this positions us in the AML landscape. And for that trial, to support that trial, we have signed a contract with Helicia Newton-John Cancer Research Institute, which is the leading cancer research institute in Australia. As some of you may know, we are running multiple trials in Australia, and we've therefore also set up a daughter company called Mendes Australia, which is handling not only the practical parts and the trials in Australia, but also allows us to benefit from a very attractive tax incentive that the Australian government allows for companies like us that do their research in Australia. It's not the main reason. We do our trials in Australia. The main reason is we can work there with the best people. And in this case, particularly a professor called Andrew Wei, who has been paving the road for post-remission therapies and also for venetoclax in AML. But it's good to build out our presence in Australia to also allow for the very beneficial circumstances to run these trials. Then what we have. added as an indication to our myeloid blood cancer program is CML. CML is a very large field, roughly 10 times bigger than AML. It's in principle under control with drugs called TKIs or tyrosine kinase inhibitors, but the quality of life of patients can be heavily affected by the continued use of these TKIs. So we have set out the clinical development strategy to position VD-DenCell as an immunotherapy in CML and help more CML patients accomplish what you call treatment-free remission, where they can live a healthy life without being dependent on day-to-day TKIs. We are very happy that we obtained all the regulatory approvals for the phase one trial that we start with this program, the vital CML trial, marking therefore also the start of the Vita Densa clinical development in CML. And that trial is now ongoing and recruited the first patients already in Bergen in Norway. With that, I'd like to hand it over to Lotta for the financial summary.

Yes, and the financial summary for the quarter was that the costs in the quarter were approximately 20 million Swedish kronor, which is 10 million lower than the same period last year. And this is the effect of the reorganization and the cost savings we did in the second half of last year. And during the quarter, we have also executed on the first tranche for the Fenja loan, which added 30 million to the cash position. The cash position at the end of the quarter is 74 million compared to 64 million at the end of Q4 2025. That's everything for me.

Thanks, Lotta. And just to reiterate, this is a cash runway that will allow us to reach the end of the year and also the main milestones of our clinical programs. The ongoing clinical programs, starting with AML, are the ADVANCE-II trial, which is a long-term follow-up. Again, the patients are doing well. We're very happy with that outcome, obviously. The AML22 cadence trial is the trial that I just described in combination with oral azacitidine is recruiting as we speak. And the DIVA trial, which is in the new first-line treatment setting of venetoclax plus azacitidine, is expected to start mid-this year. So we are in full preparation modus now also together with Uli-Philippe Newton-John Cancer Research Institute to have that trial start in a timely way. Combined the data from these trials and also, of course, keeping a close eye on how the first-line landscape in AML will evolve will allow us to set out a registration trial strategy to get this product to market. And very importantly, of course, right now we are positioning the product in the broadest possible way to address patients that have accomplished first complete remission in AML. The CML program started with the Vital CML trial. It's a trial that addresses patients with a suboptimal response to current standard of care, being tyrosine kinase inhibitors. But also importantly, we have already prepared or are in full preparation modus for a phase two trial that can start as soon as we have the initial safety data from the phase one trial, and actually in parallel. So we also wish to start this trial before the year end. And this trial will specifically address treatment-free remission, which means the final objective in CML and also what is seen as the most important treatment objective in CML to allow patients to safely stop their TKI usage. The Allison trial, the ovarian cancer trial, we reported on end of last year. We had presentations at ASCO. We had a two-year presentation. survival follow-up end of last year. It's delivered basically what it needs to deliver, which is safety and feasibility in this indication. However, ovarian cancer is a quite complex disease. So we think that specifically in relation to the tumor microenvironment, which is inherent to this disease, we will need to combine it with other therapeutic modalities. And also with respect to the focus of the company, we have decided to focus on the broader myeloid blood cancer space because it's allowing us to be very competitive there. And in ovarian cancer, the competitive landscape is different. And also from, let's say, the focus of the company's perspective, the myeloid blood cancers from now on will be the main focus. But nevertheless, ovarian cancer program has been successful and we are looking to partner it or to combine it with other therapeutic modalities. Now to start with the primary concern in AML and also later on explaining how that relates to CML. The only concern in AML is survival. It's such deadly disease that the first and most important thing is to get it under control. Most patients unfortunately relapse and pass away despite initial treatment. The survival rate of AML is still 25% or less with current standard of care. Today, the only curative approach is hematopoietic stem cell transplant and That's a dangerous procedure, which many patients cannot undergo. So the only objective in AML is to make sure patients are able to survive. And what we have done as part of our also giving patients a bigger platform on our websites, we have taken a few patient interviews. This patient called Jacob has taken part in our advanced two trial. And the long story short is the extra life that he experiences now from day to day has allowed him to also see the birth of his grandchild. So this is AML. With respect to the treatment landscape in AML, there has been for 30, 40 years, really no change. It's always been high intensity chemotherapy, which is available for roughly half of the patients, although half of the patients are considered not fit enough to undergo this intensive chemotherapy. So for the unfit patients, which are patients 75 years and older, or patients that have comorbidities and for which the high intensity chemotherapy is not available, there's now a new drug called venetoclax, which is combined with an injectable form of azacitidine. This first-line treatment landscape is shifting, and the reason is that the Venetoclax is so successful that it's now also being tested more and more in FIT patients as an alternative to high-intensity chemotherapy. And actually, also, the first randomized controlled data were presented end of last year at ASH. And what we have seen is that the... patients that were treated with venetoclax and azacitidine had a better performance specifically in the first year as compared to patients treated with high-intensity chemotherapy. So we expect a bigger shift towards venetoclax and azacitidine in the AML landscape, and we have adjusted our clinical trial strategy accordingly. In CML, the situation is very different. In CML, the overall survival is very similar to the general population. However, it requires day-to-day targeted treatment of the disease, which is in the form of tyrosine kinase inhibitors or TKIs. The TKIs suppress the disease. But what is very much overlooked is the effect of the TKIs on the quality of life of patients. And these are just two of the interviews that are on our website. The gentleman, Jora Scharf, is part of a patient organization who really encouraged us to continue and to be part of innovation in CML. And also the young lady called Solveig, who was also in our annual report, indicates how badly the TKIs are affecting her quality of life and how badly she would also like to have a chance of reaching treatment-free remission. So this is in a nutshell why we do it. The most important part of it is that the immune system in the end is also in CML considered to be the key to potential long-term survival without being dependent on tyrosine kinase inhibitors. There is renewed industry in the CML space since the discovery of a new class of TKIs. TKIs are already starting with Gleevec, 20 years old, in the treatment of CML. They have been developed into second generation TKIs, but more recently, third generation TKIs have been developed that have a slightly different mode of action that are more specific for the driver mutation of CML called BCR-ABL. And Novartis, who was also the first party to enter the CML space with their TKI called Gleevec, was now also the first to enter this space with a new class of TKIs called allosteric inhibitors. And they've shown two things. First of all, there is still significant innovation possible in CML. And also secondly, It's a very big market that also resulted in their case in a projected peak sales for this product called Asiminib of 4 billion US dollars. So not surprising, another compound developed by a company called Terns is now in the hands of another big pharma company called Merck. So Merck is now helping Terns develop their compound, which is also an allosteric inhibitor to, in the end, also challenge Chemlix in the market. So there was a lot of new attention for the CML field. The relevance for us is that these new TKIs that will have deeper and better responses in CML will allow more and more patients to achieve that optimal goal of treatment-free remission because you need to have a couple of years in a row, a very deep response on TKIs before you are allowed to stop your TKIs. And when you stop, that's when the disease comes back. And this is where we with 3D Densel will try to improve TFR success. So actually, we are dovetailing on the success of these new classes of TKIs and more and more patients reaching these deep molecular responses. So how do we take it on? To indicate, sorry, to expand the indication to CML, you have to start with the phase one trial and show, of course, safety tolerability. But also what we have already done is we focus on patients with suboptimal responses to TKI so that we have also embedded in the trial the possibility to see what happens on the disease level, which is what you call early molecular responses. So all those data will start accumulating since the start of the trial. And we will hope to have the first eight patients already treated to the point that we can have a readout in the second half of the year. If the safety is confirmed, we have so far not seen any safety related issues with our product in the clinical trials. But of course, we need to establish it now in CML. Then we can also start the phase two trial. The phase two trial will focus on patients with a second TFR attempt. It means that they have already failed an earlier TFR attempt, meaning that the disease levels were going up and they had to be reinstalled on either their existing or new TKI. But if they again reach these very deep remissions and they can do a second TFR attempt, the failure rate is even higher. In the first TFR attempt, it's typically 50% that patients fail within the first six to 12 months. In the second TFR attempt, it's typically 75%. So we'll have a good chance of also in that setting, picking up signals of efficacy relatively early. So this is how the CML trial is now set up. And of course, we're very happy that the vital CML trial is factually ongoing as we speak. So to wrap it up, we have an ambitious clinical development plan that we communicated at the end of last year. Very importantly, it aligns with the evolving first-line treatment landscape in AML, and it will allow us to position vddencel broadly as a first-line post-remission therapy in AML, meaning across all AML subtypes, we are with our immunotherapy approach, not dependent on individual mutations. Also, we will make it independent of the measurable residual disease status because also patients that have undetectable levels of disease have a high risk of relapse. So already in the cadence trial, we are capturing the full spectrum of patients, including patients with undetectable MRD levels. And also we will be after the DIVA trial in the position to combine VDN cell with both high intensity and low-intensive first-line treatment, being venetoclax and azacitidine. So we'll basically capture all of the AML patients that successfully accomplish a complete remission. That will inform our path to market, and we believe that that will be a much more optimal path to market as compared to only one subgroup of patients that we had originally planned for earlier last year. Then the indication and expansion to CML is now in effect. Trials are ongoing and the vital CML trial has already recruited the first patients, which positions us for an initial readout already in the second half of 2026, which will then also support the start of the phase two trial. So with that, I'm very excited to report back on the first quarter and happy to take any questions from the audience. Thank you.

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 Richard Romanious from Red Eye. Please go ahead.

Hello, good afternoon. I'll start with just a very quick question. In what quarter do you expect to present the first data from Cadence?

Hi, Richard, and thanks for joining. Well, the cadence trial is a combination of safety, of course, in combination with oral azacitidine, which we formally have to confirm, which is important because oral azacitidine, as you know, has been approved now in the post-chemotherapy setting. So we actually have to show after the single agent advanced two trial that we can safely combine with oral azacitabine. So that's the primary objective also of the first phase of the cadence trial. The second phase will be an expansion phase up to 100 patients. But the first phase is set up to establish safety. But of course, we will also look for initial signs of efficacy. And then we can do that also in AML on the molecular disease level. So we are doing MRD measurements and we can look into how these MRD events evolve before and after treatment. Of course, it's slightly different as compared to the advanced two trial, because the advanced two trial focused only on MRD positive patients, whereas the cadence trial allow any patient to come in independent of MRD status. So it will be a little bit more granular as compared to the advanced two trial where we immediately already started to see some patients converting from an MRD positive to an MRD negative status. This will be a little bit more granular with respect on how MRD evolves over time. But nevertheless, it will give us a good indication about what is happening under the surface. And similarly, and also very similar to what we did in the advanced two trial, we will, of course, look for the response of the immune system, both at baseline and also in correlation with the outcome. with respect to the health of the patients, so whether the patients relapse or not, but also over time follow the immune responses that we trigger with VD-DenCell to make sure that we confirm basically what we have also seen in the ADVANCE-II trial record. And that we can do after we have incorporated the first 20 patients. It's not black and white, but we have just decided that 20 patients is halfway to the first phase, so it will be a relevant moment to see what is happening as an interim analysis.

Okay, so mid-year when you reach 20 patients, that's when you will present it?

Exactly. Well, that's when we need to do the analysis. So around that time, you know, it will not take too long, but one way or the other, of course, we have to first reach the 20 patients, then open the samples, et cetera, and do the analysis. So most important is first that we get to the 20 patients, and then we do the analysis, and we will report shortly afterwards.

Okay. I was wondering in my next question about the recruitment speed, across the different trials, how do you compare them from Cadence to DIVA to the CML trial?

Well, it's always difficult to make hard predictions, but I can give you a bit of a sense of the dynamics, Rikard. So the first-time treatment in AML has always been high-intensity chemotherapy for roughly half of the patients. Oral azacytin is now approved, but there's also, of course, patients getting other drugs in that particular setting where we are also combining with oral azacytin and with our product, VD-DenCell. There's also patients going to transplant. There's new trials going on with, for example, a new class of drugs called menin inhibitors. So there's always competitive pressure in the landscape of AML and particularly in the chemo setting where now a lot of people, of course, are shifting to venetoclax. Certainly in the venetoclax, to be clear, has not been approved yet for the chemo fit patients. But you have to think about recruitment in terms of what is going on in the actual clinical development landscape. And there, of course, a lot of the attention has shifted to venetoclax because it's such a promising drug. So a lot of the combination trials, for example, are also in venetoclax instead of the high-intensity chemotherapy setting. So this is simply a summary of how the dynamics are with respect to where patients end up with respect to ongoing clinical trials. And that is, of course, also why you always need to be on top of your trials and make sure that patients end up in your trial But in AML, it will never be easy because it's such a tough disease. It's always incident patients, right? So they are diagnosed with AML. They need immediate treatment and they need to be allocated to your trial or somebody else's trial. So the landscape in AML is always quite competitive. And I think this is also why the recruitment of the cadence trial is a bit bumpy. We will nevertheless continue, obviously, to make sure that this whole setting and specifically also the safety data in combination with oral laser sighted in has been accomplished successfully. The Venetoclax setting is different because there's so much experimenting going on in Venetoclax. We also expect a faster recruitment of the DIVA trial. We have a very ambitious plan to recruit 24 patients in 12 months once the trial has started. So that also gives you a feeling on how the clinical development landscape and the way patients are allocated to trials is currently proceeding. And of course, Andrew Wei, is a global KOL, but he's also involved in both of these trials. So I think we're making a realistic assessment together with him that the venetobclex trial will be recruiting quicker and smoother as compared to the post-chemo trial. With CML, it's different. CML, you have instead of incident patients, meaning patients that are newly diagnosed, you have prevalent patients. So these patients are diagnosed, they're under control on their TKIs. So actually it's easier to screen for patients that fit your trial criteria, inclusion criteria. So that's also why, of course, we have now also shown that immediately after approval, we started recruiting patients. So there, I think the recruitment will be more predictable. And that's also why we have a high confidence level. We will be able to report back already on the first eight patients in the second half of this year.

Okay, great. Just one last question. Have you noticed any change in sentiment among business development after the terms acquisition?

Well, it always helps if there is increased awareness of the possibilities for innovation in the field. And I think for a long time, people have basically, for the wrong reasons, ignored CML because it looks on paper and with respect to the suppression of the disease to be under control. And now two things have happened. First of all, the launch of Scamlix by Novartis has shown that innovation is still possible in the TKI landscape. and that it will have an impact on quality of life for patients. So that was already a major shakeup for the TKI field. And of course, then you get a lot of other companies also trying to get into that game and turns is only one of them. But it was the one that closely resembles the mode of action of Scamblic. So I think the main thing that has happened, Rickert, is that the awareness of, let's say, the pharma companies, but also the investors, actually, in the international investor landscape, for CML has grown tremendously, and we think for the right reasons. The main next hurdle, and that's also something that, you know, hematologists will tell you if you ask them what is the main objective in the treatment of CML, is actually treatment-free remission. And that is where we are now, of course, also part of that bigger picture and following the path of the TKIs that will lead to more patients becoming TFR-eligible.

Okay, great. Thanks for taking my questions.

Thanks, Richard.

The next question comes from Qian Li from Pareto. Please go ahead.

Hi. Hi. Thanks for the update. Just two questions from me regarding the CML study. So for the patient population being enrolled, could you maybe elaborate a bit more on the characteristics and how the optimal response is defined. And the second question is that, so what kind of molecular response improvement would you consider that is clinically meaningful? Thank you.

Yeah, Jen, first of all, thanks for joining and very elegant questions. So I think you need to think about TFR in two ways. First of all, you need to have perfect response to your TKIs. And it's a scale of scoring. And you need to have at least a four log 10 reduction of your disease over many years, depending a bit on the US and Europe, two to three years before you can do a TFR attempt. So if you are a suboptimal responder and you don't reach these very deep levels, you are not even eligible for TFR success. So that means that any patient in our trial that we can, let's say, convert from a suboptimal responder to a more optimal responder is already very big progress. Then of course you need to establish that that response is sustainable over many years for that patient to actually do a TFR attempt. But it's black and white. If you don't have an optimal response, you will never be eligible for TFR. So that's why we are so keen to combine the safety and tolerability data with also the early molecular responses that we may be able to detect in some of these patients, which will lead to a deeper response as compared to their earlier lines of treatments with TKIs. In the end, for the patients, the most relevant phase is obviously to have a real TFR attempt and to have the attempt be successful. Now, if you look into the, let's say, subpopulations of patients, the suboptimal responders represent roughly 20% to 30% of the people in the chronic phase of CML treatment. The other, let's say, more optimal responders, they could in principle all be eligible for TFR attempt. So that is, I think, also a portion of patients that will grow with the new classes of TKI. So that is the majority of the market. It's just that because of the TFR failure rates are so high, it takes, first of all, a long time to become TFR eligible. And then if you stop and you fail to clear out the disease, and that's visible already in the first six to 12 months, then of course, you have to wait for another couple of years before you can do a second TFR attempt. And that is really holding down the TFR success rate. So if you look at over a period of 10 years since diagnosis, only 25% of patients achieve a TFR successfully. And that is the bigger pool of patients, obviously, that we zoom in on.

Okay, thank you so much. That's all from me. Thanks, Jen.

As a reminder, if you wish to ask a question, please dial pound key 5 on your telephone keypad. The next question comes from Aaron Otkar from Edison Group. Please go ahead.

Good afternoon, and thanks for the update, and thanks for taking my question. first of all wanted to ask about the operating income relating to the research collaboration with the biopharma partner i'm just curious to know if you're able to share any details there and i appreciate if not then maybe when we might expect an update and then similarly can we expect a similar run rate for this other operating income throughout the year yeah so let me start with your first question aaron um about the collaboration it is ongoing uh um

the partner who we work with have moved their part of the program into the clinic now. I expect we may be able to speak in more detail about this program in the second half of this year. We are still in an early stage. We want to make sure that the collaboration continues and also moves into the next phase of the collaboration. So we hope to be able to say a bit more with permission of our partner in the second half of this year. And what was your question with respect to the operating cash flow?

And so the other operating income this year relating to that part, can we expect a similar run rate throughout the throughout the year for the subsequent quarters?

You mean related to the collaboration? Well, I mean, right now, the only thing that is, let's say, related to income is the fact that they pay for the program. It is a clinical program. It may shift, of course, to a bigger collaboration if successful. But that's also why we have been quite modest. And also the partner was not really keen on sharing the details of that program. But since it's now in the clinic, we are talking with them that we can maybe say a bit more about it in the second half of the year.

OK, thank you. And then my next question relates to manufacturing. We've seen that that's sort of been a key differentiator over the years. And then large scale GMP production is now set up with Norfex Biologics. So it's good to know if there's any other additional manufacturing milestones or similar that we can sort of be watching out for in the years to come.

Well, the most important thing is that we have established it, Aaron. And that's not only, let's say, the physical part of the process, which is that you do what's called a technology transfer from your non-GMP settings. which is in our case, our labs in Leiden to a GMP setting, which is the facilities of Northex in Madfors, Sweden, but also that you document it all properly and that you have continued contact with the regulators, that the way you have scaled up your process is in line with their expectations and also a basis continue clinical development and in the end market registration without hiccups about let's say the product changing or the nature of the manufacturing of the project changing so that is what we are constantly working on so it's not only the let's say making of the batches because actually we have made enough material to support our current planned trials so for future trials we will continue to manufacture more and it's also good for the collaboration and keeping the teams trained from both sides that the manufacturing continues, but it's not factually necessary right now to continue to manufacture more because we have established actually the process and also, like I said, enough material for the currently planned and ongoing trials. But it is, of course, a collaboration that we want to keep active.

Okay, that's helpful. Thank you. I did have one more question about recruitment relating to cadence, but I think you addressed that above, actually, so nothing else from me. Thank you.

Thanks for participating, Owen.

There are no more questions at this time, so I hand the conference back to the speakers for any written questions and closing comments.

Yes, I looked into the activity feed and there was one message from somebody participating, asking what the main purpose is of ED-Denso for CML, improving the TFR rate. So I hope I addressed that. It's indeed improving the TFR rate and in two ways. First of all, making more patients eligible for a TFR attempt by deepening their response that was suboptimal to TKIs. And secondly, and most importantly, of course, to sustain those TFRs. And that's particularly relevant for the patients that have accomplished TFR eligibility before. and just need a much better outcome of their TFR attempt. What can we expect in this trial? I think I've alluded to that. And then there was also one written email we received prior to the presentation starting via our email address. And that was about the partnering and the way the CML landscape is shaping up. I think I have addressed those questions in the answers to the people that were on the call. So with that, I would like to conclude this Q&A and also thank everybody for their participation.