BioNTech SE

NASDAQ:BNTX

Earnings Call Transcript 2019-Q3

[Operator]

Thank you for joining us today for BioNTech's first quarterly conference call to provide a business update and discuss the financial results for the third quarter of 2019.

Before we start, we encourage you to view the slides for this webcast as well as the third quarter financial results press release issued this morning; both accessible on our website in the Investor Media section.

Also during the presentation, we will be making forward-looking statements regarding the development of BioNTech's platforms and technologies and the progress of its pipeline programs and our financial outlook.

Should actual results differ from the company's assumptions, ensuring actions may differ from those anticipated. You are, therefore, cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date of this conference call and webcast. Speaking and available for questions today will be Ugur Sahin, CEO; Sean Marett, CBO and CCO; Sierk Pötting, CFO and COO; and Özlem Tureci, our Chief Medical Officer.

I now hand over to Ugur Sahin, BioNTech's CEO.

[Ugur Sahin, executive]

Thank you, [ Ozenka ]. It's pleasure to welcome you all to our third quarter conference call. The first one as listed company.

The first slide, please. My colleagues and I will provide you an overview of the key achievements and financial results from the past quarter. We will also give an outlook of our anticipated clinical and corporate development milestones. Our goal is to keep our shareholders informed about our way forward and enable that program for your questions. Our vision is to individualize cancer medicine and beyond. The strategy which we use is to execute this goal, based on following 3 pillars: first, we want to rapidly advance our product candidates in oncology towards market approvals. We will focus on our lead programs, FixVac and in collaboration with Genentech on iNeST. Second, to expand our pipeline by leveraging our multiple drug classes and synergies between them. And third, we will build a fully integrated global biotech company by investing into technologies, manufacturing and infrastructure to support future production and delivery of our programs. Our focus is to develop and commercialize the next-generation of immunotherapies as we aspire to individualize cancer medicine itself.

BioNTech ambition is to significantly improve clinical outcomes for patients, alone and in combination with other leading biopharmaceutical partners.

Our unique approach includes following principles: first, we aim to harness the full potential of the immune system by exploiting multiple product classes and addressing multiple complementary immune classes. We are developing and engineering highly potent, precise and target-specific product -- candidates, either as off the shelf or as individualized, on-demand produced immunotherapies, to improve the treatment and success rate of patients.

We are focusing on cohesive approaches by addressing in-tech visibility and cancer heterogeneity. By using this together, we aim to broaden the universe of patients benefiting from cancer immunotherapy.

I will now ask my colleague, Sean, to provide an overview of our achievements in the third quarter.

[Sean Marett, executive]

Thank you, Ugur. BioNTech is developing a broad pipeline of drug candidates, all of which have been designed to enable the best treatment regimen for each individual patient in cancer.

To provide an overview of our accomplishments to date as well as near term objectives, I refer you now to our pipeline slide. At the start of the third quarter of 2019, we had 8 distinct product candidates in 9 ongoing clinical trials. 5 of the 8 product candidates used mRNA, the other 3 product candidates use antibodies. All of our ongoing clinical trials are on track.

During the past quarter, we have made progress with the whole pipeline, in particular, I would like to highlight the progress of 4 product candidates, highlighted in light green. First, and I would like to highlight our fully owned product candidate, BNT112, which is our cancer vaccine FixVac to treat prostate cancer. The clinical trial applications for our Phase I/II, first-in-man trial received approvals in several European countries during the quarter. We also initiated a second first-in-man clinical trial in our 50-50 collaboration with Genmab. This global Phase I/IIa trial with the biospecific antibody GEN1042, also known as BNT312, target CD40 and 4-1BB in patients with multiple types of solid tumors. The first patient in this trial was dosed in September 2019. Third, we achieved the transfer of the IND for the program BNT321, formerly known as MVT-5873 from MabVax to BioNTech.

And last, I would like to mention that we had just filed the IND for our toll-like receptor agonist, BNT411, on November 5.

I will now hand over to Özlem to present some recently published data with regard to BNT112, B1 -- BNT321 and BNT411.

[Özlem Tureci;Chief Medical Officer, executive]

Well, thank you, Sean. Please let me start with an update on BNT112, that's our FixVac to treat prostate cancer.

BNT112 is designed to elicit an immune response to 5 prostate cancer-specific antigens. Three of them are undisclosed tumor-associated antigens, and then we have PSA and PAP, which is the province target.

We have planned to initiate a Phase I/II trial in 2 patient populations. One is metastatic castration-resistant prostate cancer, symptomatic patients after 2 lines of chemotherapy, where patients will receive as of the BNT112 or -- alone or in combination with cemiplimab. The second are patients with newly diagnosed, high-risk localized prostate cancer, where the patients will be treated with BNT112 in combination with goserelin and cemiplimab, followed by surgery. Whereas, goserelin for the localized prostate cancer population, is a standard of care, as cemiplimab is not approved in prostate cancer. Cemiplimab, also known as Libtayo, is an anti-PD-1, which is developed by Regeneron and is approved in advanced cutaneous squamous cell carcinoma and in clinical testing in other cancers. Anti-PD-1 blockade is expected to potentiate the effect of our prostate cancer vaccine, and therefore, part of our development strategy is to implement the anti-PD-1 blockade mechanism early on into our clinical development plan.

We would like to report in this context that BioNTech and Regeneron have just agreed on a joint clinical development plan in prostate cancer with Generon's (sic) [ Regeneron's ] checkpoint inhibitors, cemiplimab, will be provided at no cost to BioNTech for this trial. BioNTech and Regeneron's will each retain full commercial rights to BNT112 and cemiplimab, respectively. We expect to initiate our Phase I/II trial combining both compounds in advanced prostate cancer end of this year.

In the first half of this year, we acquired several antibody assets from MabVax Therapeutics. Our lead candidate is BNT321, also known as MVT-5873. That's a fully human monoclonal cancer antibody, targeting sialyl Lewis A epitope and epitope present in a range of glycoproteins, collectively known as CA19-9. CA19-9 is specifically expressed in pancreatic cancer and also various other high medical need cancer indications.

On this slide, the specificity and high affinity of the antibody is shown, and this make BNT321 a promising drug candidate against pancreatic cancer and other CA19-9 positive tumors.

In the MabVax trial, 6 patients were evaluable, 4 of them met with criteria for partial response and 2 patients met the criteria for stable disease. The antibody was generally well-tolerated by all 6 patients. This trial is currently paused, we intend to resume the trial as a Phase I/II trial this year.

On this slide, now you can see the specific high-affinity binding of the radio-labeled version of BNT321 to CA19-9. The high-density areas here demonstrates the detected liver metastases. This data validates the target and indicates that BNT321 and its variants could also be used for detection by radio imaging of our radio -- not only for antibody treatment itself. We anticipate resuming the trial with BNT321 in the last quarter of this year. It's our first fully owned and sponsored trial in the U.S. BioNTech will continue to evaluate this antibody in CA19-9 positive tumors, including in advanced pancreatic cancer.

In addition, we would like to draw your attention to our small molecule immunomodulator, BNT411. This selective toll-like receptor 7 agonist has shown activity in numerous mouse tumor models such as tumor growth and tumor clearance. Based on such promising preclinical data, we have just filed for IND for BNT411. On November 5, we expect to initiate a Phase I clinical trial as a combination therapy in solid tumors in the first half of 2020 as

planned.

I will now hand over to Sierk to discuss our current financial results and guidance.

[Sierk Pötting, executive]

Thank you, Özlem. Financial results for the third quarter 2019 include our cash position with cash and cash equivalents as of September 30, 2019, of EUR 463 million compared to EUR 411 million as of December 31, 2018.

Total revenue, consisting primarily of revenue from our collaboration agreements, was EUR 29 million for the quarter ended September 30, 2019, compared to EUR 20 million for the quarter ended September 30, 2018. The increase was primarily due to the progress in our collaborations with Genentech

and Eli Lilly.

Research and development expenses were at EUR 50 million for the quarter ended September 30, 2019, compared to EUR 33 million for the quarter ended September 30, 2018. The increase was primarily due to an increase in headcount, the expense recognized from the granting of stock options and higher expenses for all collaboration projects.

General and administrative expenses were EUR 11 million for the quarter ended September 30, 2019, compared to EUR 7 million for the quarter ended September 30, 2018. This increase was primarily due to increase in headcount and the expense recognized from the granting of stock options.

Net loss was EUR 30 million for the quarter ended September 30, 2019, compared to a net loss of EUR 23 million for the quarter ended September 30, 2018.

Shares outstanding as of September 30, 2019, were 260,262,336.

As another important financial milestone, we are pleased to announce the execution of the over-allotment agreement as part of our recent IPO, which added $7 million to increase the overall capital raised in the offering to $140 million or approximately EUR 135 million.

With that, I will now hand back to Özlem to provide you with an update on our upcoming milestones for our clinical programs.

[Özlem Tureci;Chief Medical Officer, executive]

Thank you, Sierk. We maintain current guidance on the following upcoming milestones for our clinical programs. In the remaining quarter of 2019, we plan to initiate 2 trials: one is a Phase I trial for BNT112, our prostate cancer FixVac; and the second is that we intend to resume the Phase I trial with BNT321, which is the former MabVax product.

There are 3 trial initiations planned in 2020. One is a Phase I trial in multiple solid tumors for BNT151, which is our first RiboCytokine to go into clinical evaluation. 151 is interleukin-2 molecule, which is modified for optimized activation of effector T cells, whereas, activation of regulatory T cells is diminished.

The second program, which will go into clinical testing, is BNT211, which is our first CAR-T cell program in multiple solid tumor indications in the first half of 2020.

And the third program is our toll-like receptor binding molecule, BNT411. In the same time frame, we will report data on 2 programs. Our [ third ] Phase I program in triple-negative breast cancer with BNT114, our TNBC, a FixVac product, and our BNT111 in advanced melanoma patients, also a FixVac program where we will report Phase I data and initiate a Phase II trial.

Based on our achievements to date and the planned accelerated progress from the pipeline enabled by the fundraising efforts in 2019, we believe we will continue to provide multiple value-baiting events in the near term.

I will now return the microphone to Ugur for our final statements in advance of Q&A session.

[Ugur Sahin, executive]

Thank you, Özlem. Our recent IPO and the support from new and current investors, adds to the momentum we have established over the last year. I look forward to the upcoming developments, and thank our shareholders for their trust and support.

We will now take questions.

[Operator]

[Operator Instructions] And your first question comes from the line of Akash Tewari.

[Amy Li, analyst]

This is Amy Li on for Akash. So I have 2 questions around your PCV asset. In your 2017 Phase I PCV trial with BNT121 that was published in Nature, the final selection of neo-antigens required the decision of a target selection board. Do trials with BNT122 also require this step? And in general, can you go over your antigen selection process and how it's evolved over the past 5 years? And then finally, in the same trial, it looks like patients with NY-ESO-1 and/or tyrosinase positive melanoma will be -- received a FixVac formulation with these antigens until their PCV was ready. Does this FixVac bridge impact clinical response? And could a similar bridging regimen be implemented in the clinical setting?

[Ugur Sahin, executive]

Yes. Thank you for the questions. First of all, I can't comment on the details of the Target Selection Committee. Yes, we had, indeed, in the Nature study, a final target selection approach based on regulatory authority advice. We can't comment how we do it now, but it is according to the request of FDA and other authorities.

With regard to the improvements of the pipeline, as you probably know it and that the selection process is based on various aspects. The first aspect is the identification of the mutation, and this must be sensitive and specific. We have improved our mutation calling pipeline, providing us even more sensitive and more specific detection of mutations, including tumors, with low tumor content. And we have -- we are continuously improving our new epitope prediction process for Class I as well as Class II epitopes. The improvement of predictions are based on machine learning approaches as well as generating more datasets, which are feeded into the learning algorithms.

The third question was -- oh, yes, yes. The collaboration that we have this Genentech is a pure new antigen-based collaboration. And therefore, the vaccine approaches that using currently based on vaccination of patients with mutation -- mutated epitopes only. One additional reason why we can do that is that in 2000 -- the study that we published in 2017 was based on a manufacturing process, which required about 3 months until the vaccine could deliver -- delivered. And they had to provide the patients an intermediate-type of approach. Since then, we have significantly reduced the delivery time, so that this is not anymore needed.

[Operator]

Your next question comes from the line of Daina Graybosch from SCVB Leerink (sic) [ SVB Leerink ].

[Daina Graybosch, analyst]

First, the process one and then a science one. The process one is, I didn't notice the FixVac TNBC on the upcoming milestone slide. I think the last time you gave an update before the IPO, there was a potential data readout in first half 2020. Can you talk about the program? And when we might see some data from it?

[Özlem Tureci;Chief Medical Officer, executive]

The TNBC trial, we indeed have a data update on the TNBC trial in the first half of 2020. I'm just checking whether we forgot it on the slide. It should be there. The TNBC program, yes, it is on the slide, right?

The TNBC program is an explorer [ power ] trial. We are testing several novel antigens in this trial, not as a FixVac, but what we basically do is that we test the patients for each of these antigens and then compile a stack, which is sort of semi-personalized to the patient. And the purpose is really to get an understanding of immunogenicity of these novel targets, and the data readout will be primarily an immunogenicity readout, these are neo-adjuvant and adjuvant patients. And that will be, indeed, in the part -- first half of 2020.

[Ugur Sahin, executive]

Yes, Daina, we have just realized that somehow the formatting of the document just killed the information of BNT114. Thank you for noting that.

[Daina Graybosch, analyst]

Of course. My second question was that the last SITC, last weekend, there was an interesting academic presentation of a neoantigen vaccine from MD Anderson in a hospital in China, where they saw some single-agent responses as well as responses combined with EGFR inhibitor. But they went after shared neoantigens, a panel only looking at shared, and they found, I think, multiple shared new antigens in the EGFR inhibitor. 2-part question. I wonder, if there's any implications for iNeST in your program? And if you can, can you talk about sort of your overall approach for shared neoantigens, personalized or not versus the non-shared neoantigen?

[Ugur Sahin, executive]

Yes. Daina, thank you for returning to that. As you know, we have also observed objective responses with our personalized cancer vaccine, published in 2017. And -- so we strongly believe that our [ neo ] vaccines and [ neo ] vaccines are -- have a clinical -- proven clinical activity.

With regard to the share tumor antigens. The number of shared tumor antigens are still relatively small as compare to the spectrum of private new antigens.

So what we do is we are doing our sequencing and patient analysis process, we enable the shared antigens and collect information about them and evaluate their immunogenicity in a special and which way. One can go into clinical trials with shared antigens only, but for doing that, it is required that patients have been engaged for tumors, which carries shared tumor antigens, that's one aspect. So one might do that, for example, for colorectal cancer or for pancreatic cancer with [indiscernible] antigen. But one has also to regard that not every patient who had some mutation is eligible, yes, for our shared antigen vaccine. Because [NSE] heterotype of the patients could be not optimal in this patients for applying that. And therefore, we have, at the moment, no plans to apply clinical studies with shared mutated antigens.

[Operator]

Your next question comes from the line of Cory Kasimov from JP Morgan.

[Unknown Analyst]

This is Nina on for Cory. So the IMS programs, can you talk a little bit about when we should be thinking about the readout for the Phase I basket trial? And is that really a gating factor for other programs and other tumor types coming online, aside from melanoma, kind of a Phase II studies?

[Ugur Sahin, executive]

So we will update about the Phase Ia, Phase Ib basket trial in the second half of 2020. The update will include the patients that have been treated, and which were eligible for immune response analysis and for objective response analysis. We will document the safety, we will document those findings. We will document immunogenicity and, we will document objective responses related with the combination and single vaccine alone.

[Unknown Analyst]

Okay. Great. And could you also talk a little bit about, just more broadly, how you're thinking about the read through -- the kind of early read through, either within or between kind of your therapeutic verticals?

[Özlem Tureci;Chief Medical Officer, executive]

Can you repeat? We didn't got -- get the question here?

[Unknown Analyst]

Sure. So can you just talk a little bit about how we should think about the read through between kind of your various therapeutic protocols, kind of between each other. So if you think specifically about the FixVac programs, how similar are the targets between the different indications? And is there anything that we can kind of read through from one indication to another?

[Özlem Tureci;Chief Medical Officer, executive]

So the -- your question is whether what we see in one indication such as melanoma, with fix - was it FixVac or iNeST?

[Ugur Sahin, executive]

The FixVac.

[Özlem Tureci;Chief Medical Officer, executive]

The FixVac, whether we can learn anything for other indications. Was this question?

[Ugur Sahin, executive]

Yes.

[Özlem Tureci;Chief Medical Officer, executive]

So what we can -- in FixVac, our -- the antigens -- the vaccine antigens are indication-specific, which means that the specific antigens we choose for one indication with high likelihood not be used in another one because we really optimize per indication. What we, however, can learn is an understanding -- learn cross indications, so to say, is an understanding of how immunogenic our vaccine as such is, and which types of immune responses, for example, with regards of the phenotype or T-cell type, CD4, CD8, PD-1 positive and so on, we induce. Because these are features which are primarily triggered and mediated by class-intrinsic properties of RNA lipo plexus as vaccine format as such. And we expect that the magnitude of immune responses and the breadth of immune responses is also correlated with the probability of triggering clinical activity, and therefore, there are a couple of things we can learn from one indication and expect data in that indication for the other indications.

[Operator]

Your next question comes from the line of Shanshan Xu from Berenberg.

[Shanshan Xu, analyst]

Congratulations on the recent IPO. So maybe one question for Dr. Tureci. For your Phase I data report for BNT111 in the first half 2020, how many patients will be included in that data release? How many metastatic and how many in adjuvant setting beyond -- or are you also going to report survival data such as [ PFS ] and [ OPX ]? And I have 2 follow-ups.

[Özlem Tureci;Chief Medical Officer, executive]

So thank you for the question, Shanshan. In that report, we will focus on the metastatic patient population. We have already presented data within July cut-off of this patient population. The cut-off will use might be a bit later, so a couple of more patients may be added. We have 40-plus patients reported so far. And the data we will report will be safety, immunogenicity, immune modulation as per cytokine levels and objective response rates.

[Shanshan Xu, analyst]

Great. And -- so also on BNT111, what kind of clinical data do you expect to collect for your single-arm Phase II study? And for a randomized pivotal trial, what kind of patient population, treatment background, especially with the comparator arm, I was thinking about?

[Özlem Tureci;Chief Medical Officer, executive]

Yes. Those 2 trials are still in the planning phase, and we are in dialogue with regulatory authorities. What a couple of study design aspects have been already decided upon. For example, that we -- these trials will be conducted in patients with -- who are checkpoints -- checkpoint experience -- experienced and adhered.

And with regard to the endpoints, this is still subject to discussion and with the regulators, and will, at the end, determine what exactly we will report at the end of those trials.

[Shanshan Xu, analyst]

Great. So last one for me. BNT321, so the question is that previously, only 2 doses, one is at 0.125 milligram per kilogram, and the other dose was 1 milligram per kilogram were tested by MabVax for frontline pancreatic cancer patients. So my question is that do you expect to reescalate the dose? If not, what kind of dosage do you expect to bring forward into your Phase II study? And also, as a monotherapy or as a combination therapy?

[Özlem Tureci;Chief Medical Officer, executive]

Yes. Shanshan, we plan to reescalate the dose of the dose escalation part was holded because of financial issues of the company. So the doses were not fully and properly explored, and there is an opportunity to further explore and escalate the doses. And this is what we will do once we start for clinical trial because we expect that we can dose higher than reported.

[Operator]

[Operator Instructions] Your next question comes from the line of Ingrid Gafanhão from Kempen.

[Ingrid Gafanhao, analyst]

This is Ingrid from Kempen. We came across a couple of posters that you presented at SITC, more specifically, some information on the RiboCytokines. I was just wondering, is there anything that you would like to add to what has been shared before with us? And when can -- do you expect to present some more data and updates on that -- on those programs.

[Ugur Sahin, executive]

Yes. Thank you for the question. Indeed, this is -- the RiboCytokines, an exciting development, and we will continue to publish data about the mode of action and activity, particularly also in combination with other compounds.

[Operator]

We have no further questions. If you wish to continue?

[Ugur Sahin, executive]

Yes. Thank you, again, for joining us today for this call. We look forward to providing updates on our progress in the new year.