Modus Therapeutics Holding AB (publ)

Welcome to today's live report from Modus Therapeutics, where we have invited CEO John Oed to go through the development during the second quarter of 2024. Those of you who are here live can ask questions directly in the chat to John, and I will pick up where after. I think that's appropriate. Jag ska också säga att den länk som fanns med i dagens pressmeddelande i anslutning till rapporten inte fungerade som den skulle så förhoppningsvis hittar ni hit ändå. Och så får vi vara duktiga på att sprida den här intervjun vidare i efterhand helt enkelt. Välkommen John till att börja med.

Tack Jonathan. And before we start talking, I would just like to say that I have had a problem with hoarseness and coughing the last few weeks, so if there is any problem with hearing what I say at any time, I apologize for that.

Shall we start with the result for the period? Is there anything to comment on there? It is a result of minus 4.8 million, somewhat lower than the corresponding period last year. Is this due to increased research and development costs or what lies behind the figure?

You mean decreased? Last year we had a decrease of minus 7.8. Here we see a decrease of minus 10.7. This is about where we are, partly in the research work, and where the activities lie. When you prepare and submit and send in a study for where we are now, where it is with the authorities, that work is very much done as office work and does not include practical costs on clinics and research sites. And that means that we haven't really gotten there yet. First, the study must be approved. So that's why you can say that until now, the phase 2 study is at about 800,000 SEK. It is not in that phase of practical research where we were last year with another study. So it is completely in order. Then we can see that we have also made a lot of efficiencies, especially on the IR side, that we have become more effective in how we use that budget and have been able to see savings overall in the admin, thanks to that.

From your perspective, what is the most important event during the quarter?

That is what we are trying to communicate most clearly in the Q2 report. The study is now ready for assessment by the authority. It is a milestone, even if it is not a milestone which can be updated in the same way. You don't usually talk about the study being sent in, but everything that leads to it means that the entire network, the entire design is ready, all the documentation is ready, and it is of course a very large internal service that is completed, a large load of internal service that is ready. and a prerequisite for the practical part of the research to be able to start. So I think it's important to keep that in mind.

And of course, there has been a lot of focus on the start of the study for anemia by lung disease. Is that the only one you should pay attention to as an investor, or how do you see the whole thing?

I think it's important to remember that we have, so to speak, developed a portfolio that is balanced and at the same time that we work with it as a smaller biotech companies that we are sequentially based on prioritization and balance in the portfolio. At the same time, one should remember that we have a malaria project that is financed by an external financial welcome together with and that is driven by resources at Imperial College in Kenya. And as long as we maintain our share of av avtalet att tillhandahålla drog till studien så är det här ett projekt som innebär stora fördelar för oss och som liksom rullar på utan vidare investeringar från oss, men med stora möjliga fördelar i andra vågskålen. And if we look at sepsis, we can say that the reason why we prioritize animal disease and anemia is that we see this balance in the portfolio We have a very good starting point in sepsis. Our LPS study points out that we will be able to move forward due to the fact that we see the possibilities for effects in such conditions. But at the same time, if you break new ground scientifically, it is an area that is quite immature, so to speak, scientifically. The conceptual risk when you move forward and breaking new ground is good at balancing against the more mature animal disease and anemia, which are two large, mature scientific therapy areas that are united in this project. So it helps the balance of the project in the project portfolio. Therefore, you should absolutely not forget about the other projects, even if we sequentially run hard with the animal disease and anemia study now.

We are waiting for an approval from the government. You indicated that a new system called CTIS might be an explanation for the delay. Can you explain what this system is?

Looking at how we have communicated around this, in the previous quarter, we flagged that we saw that we could communicate about the start of the study during Q2 and Q3. And that was to signal that there is uncertainty. And it has nothing to do with CETIS. Regulatory input is always surrounded by uncertainty, because it is a process that is out of our control. First, a lot of detailed documentation is prepared. which will be handled by the ethics side of the authority and also by the pharmaceutical industry. Of course, there is a lot of work to be done here, but once it has been sent in, it will be assessed by the authorities. There is a lot of work to be done both before CETIS and now that CETIS has been introduced. It contains uncertainties outside of our control. And it has always been that way. So far, we are on track. If things were to change in the future, we would be able to handle it. But so far, we are on track.

You also mentioned some of the advantages of CETIS in your words, and maybe you should highlight that there are actually positive aspects of the system for a company like Modus.

Absolutely. This is something that we are very positive about. And of course, all such new systems, when you start them up, have a lot of childhood diseases, but with that phase, I think a lot is over now. Excuse me. The advantages are that a lot is automated. The feedback from the authorities is more precise, because they have a much better overview of all the documentation that has been sent in. Then it's still there, so if you want to complete and change parts of such documentation, for example, if you want to make what we call an amendment, a change in the design, then it's much easier. If, for example, we want to introduce another country in the EU, that is also an improvement with this system. It is also transparent that the goal with the system is that it should also be publicly accessible in the CT database. So there you can, so to speak, now it is still early, but there you can then add the studies that are registered there in a new way.

I thought you could give your comment on the choice of CRO, Clinical Research Organization, for this study. You have chosen Italian Lattice. What is the background there?

Primarily, our idea is to run this study close to the scientific work that we have done to be able to build the good rationale for this study. And we can see that we have worked with the University of Brescia, experts from the University Clinic in Verona. LATiS has a strong anchorage in Italy and has a long-standing relationship network on these sites and is familiar with the entire scientific and clinical ecosystem. If we can work closely with our experts, we will see the benefits of this. We don't think it's too hard to develop outside of Italy. We don't know that yet, but as we see it now, we will manage to run this as an Italian studio. That's why we started there, and that's why Latis That is a good choice. The other way is that we see that they have a size that works for our organization to work with. Again, we come down to the fact that we are a high-qualified but small biotech company and need to do a lot of work on a personal basis in a smaller organization. There they can match us with that and we get an immediacy and a speed. Thanks to that, it is important for us. And also, when we have looked at it, we think that their scientific commitments correspond and complement ours.

We also like to highlight that publishing articles in scientific journals is an important aspect of what you do. How fast is the work going?

The work is going very well. Just like with authorities outside of our control, when and where such publications take place. But the work has progressed according to plan and as soon as we have an update, we will make sure to get it out. And we are really looking forward to that, because we think that the work we do in our collaboration is very engaging and very important for MODUS and for the final clinical studies that we do.

It is also mentioned in the report that there is a great media interest in sepsis and obesity, among other things. How does this affect the interest in your research in general? Can you say something in general about that?

I often emphasize that the awareness of the medical problems, the general awareness of the medical problems that pharmaceutical companies address, is incredibly important for the company. I think there is a direct connection to awareness about the importance of medical areas, treatment areas and education, and understanding and willingness to invest. Because it reflects how relevant our portfolio is. Since we have started to develop our research portfolio, I think we have seen a positive trend den här allmänna medvetenheten om de aktiviteter vi gör, alltså de områden där vi är aktiva.

Yes, and the malaria area is also constantly in focus as there are new outbreaks. What do you think about malaria in this context? Is there a willingness to invest in malaria or is it just that you see things happen, but the willingness to invest is quite low in general?

I think that what we see, unlike the last 15 years, in my interpretation is that we are now seeing a development from having had a difficult 15-20 years ago, to see what type of business model would work in malaria, with regard to malaria prevention and so on, in line with the quite systematic work that has been done to address malaria, for example, the Gates Foundation, Wellcome and so on. Models have been developed. For example, the Malaria Vaccine Project is currently in progress, where central purchases are made from manufacturers such as GSK and in the future, the so-called Oxford vaccine. Here is a business model where as we have started, that is to say that you share the costs for the development and then have a way forward to be able to distribute and sell a medicine that may be approved. So there we have seen a very positive development and it is clearer for us now how to be able to operate a business-wise healthy business in the malaria area. At the same time, I would like to say that at least as big a driving force, purely medically for me, and I think also for the general public, I hope, is that this is still such a big problem. So in many ways, it is a privilege to be able to try to contribute to seeing a change and to be able to address this problem, to be a part of it. I believe that malaria is a part of the diseases that are changing, and expansion is changing, in line with things like environmental changes today. And that is one of the reasons why we see so many reports of new outbreaks. Floods are a very important part, for example, Temperature changes and so on. So it has not become less favorable, if anything, it has become more favorable.

If we can draw the timeline for the rest of the year, the second half of the year, what will happen to MODUS from your perspective?

Then we will continue with the study. As we always say, we have a plan and that is to be able to roll out the first part of the study in Q1 next year. And from there, we have been clear that both other projects, the other projects, or especially Sepsis in our portfolio, part two of this study will be dependent on funding. But at the same time, as we usually do, we have our three legs that we always evaluate and look at. As a company like Modus, you have to evaluate business The possibilities on the business development side, partnerships and that type of activities. We have a strong, good and loyal owner who goes into the business for us and who has been able to improve the opportunities to get a good cadence in our financing cycle. And then we are also a noted company. I am also careful about what we will need to finance when we get to Q1.

Are there any partnering events or similar that you will be involved in in the second half of the year?

Yes, it will pop up. We are currently planning Nordic Life Science Days, followed by LSX Copenhagen. Those are the closest events. ByEurope, which is a major and important conference in our area, will be in Stockholm this year as well.

Exciting. Thank you for today. Follow the development during the second half of the year and next quarter. We will see what happens and will return with a question after the next quarter. Thank you for watching.

I look forward to it, Jonathan. Thank you to you and to those who listened in afterwards.