CureVac NV

NASDAQ:CVAC

Earnings Call Transcript 2024-Q3

[Operator]

Greetings, and welcome to the CureVac Financial Results and Business Update for the Third Quarter and First 9 Months of 2024 Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Sarah Fakih, Vice President of Corporate Communications and Investor Relations. Thank you. You may begin.

[Sarah Fakih, executive]

Thank you. Good morning, good afternoon, and welcome to our conference call. My name is Sarah Fakih and I'm the Vice President of Corporate Communications and Investor Relations at CureVac. Please let me introduce today's speakers.

On the call with me from CureVac are Alexander Zehnder, Chief Executive Officer of CureVac; Myriam Mendila, our Chief Scientific Officer and our Chief Financial Officer, Axel Malkomes. You may have seen the press release last week announcing his joining the CureVac division. Ulrike Vogt, Senior Vice President Finance, will be available for the Q&A session.

Please note that this call is being webcast live and will be archived on the Events and Presentations section under Investor Relations on our website.

Before we begin a few forward-looking statements. The discussion and responses to your questions on this call reflect management's view as of today, Tuesday, November 12, 2024. We will be making statements and providing responses to your questions that state our intentions, beliefs, expectations or predictions of the future. These constitute forward-looking statements for the purpose of the safe harbor provisions. These statements involve risks and uncertainties that could cause actual results to differ materially from those projected.

CureVac disclaims any intention or obligation to revise any forward-looking statements. For more information, please refer to our filings with the U.S. Securities and Exchange Commission.

I will now turn the call over to Alexander.

[Alexander Zehnder, executive]

Thank you, Sarah. Ladies and gentlemen, good morning, good afternoon to everyone on the webcast. The first 9 months and particularly the third quarter of 2024 marked a turning point for CureVac. We made significant progress on our 2024 priorities, taking decisive steps, rightsizing the company, streamlining our processes and improving our business operations.

We have successfully delivered on key milestones, including a new licensing agreement with GSK announced in July. This agreement valued at up to EUR 1.45 billion includes an upfront payment of EUR 400 million, which was fully booked in the third quarter. Additional potential milestones and royalty payments from this agreement are expected to provide significant capital going forward while strongly validating our mRNA technology. Alongside this, we launched a corporate redesign, including a roughly 30% reduction of our workforce, which will be completed by the end of this year. These efforts helped us to reduce costs while maintaining a strong focus on research and development.

Looking ahead, we set clear development priorities with a sharpened focus on high-value indications in oncology and infectious diseases. In oncology, our Phase I study in glioblastoma has yielded promising preliminary data showing the potential of our mRNA technology in this highly aggressive cancer. And today, we are disclosing a new cancer vaccine program targeting squamous non-small cell lung cancer, expanding our off-the-shelf cancer vaccine pipeline.

In infectious diseases, we launched a new program for urinary tract infections or UTIs, one of the world's most common infections. This program addresses a critical unmet medical need driven by recurring infections and the increase in prevalence of antibiotic resistance against uropathogenic E. coli, the bacteria that primarily causes these infections. Our UTI program exemplifies our focus on leveraging our technology for areas of high unmet need with significant commercial potential.

On Slide 5, you can see this achievement in the context of our transformation journey. After I started in April 2023, we conducted a thorough business analysis, identifying key areas to improve our financial discipline, reducing unneeded pandemic era infrastructure and focusing the organization on innovation and R&D. In 2024, we are executing on these insights. We have launched a corporate redesign, which is on track for a roughly 30% workforce reduction by the end of this year without compromising our R&D and manufacturing capabilities.

Operational expenses are expected to decrease by over 30% starting in 2025. The EUR 400 million upfront payment from our new licensing agreement with GSK was fully booked in the third quarter, providing us with a strong cash position of EUR 551 million at the end of September and resulting in a net profit for the first 9 months. As we approach the end of 2024, we are now leaner, more strategically aligned and financially stronger. And from this position of strength, we will double down on research and development activities with a focus on high-value opportunities in oncology and infectious diseases.

On Slide 6, we outlined the pipeline expansion in both oncology and infectious diseases. In oncology, shown on the left, our pipeline expansion spans both off-the-shelf and personalized cancer vaccines. For the off-the-shelf cancer vaccines, we are disclosing a new shared antigen cancer vaccine program in squamous non-small cell lung cancer, which will include novel cancer antigens derived from our proprietary antigen discovery. We are preparing for IND and CTA submissions in the first half of 2025 and expect to start Phase I trial shortly thereafter.

Discovery activities for additional shared antigen programs continue with a second clinical candidate expected in 2026. Preclinical development of a fully personalized cancer vaccine candidate is also progressing with the first candidate expected to enter the clinic in the second half of 2026.

In infectious diseases, we are also following a dual strategy, having licensed our most advanced program in respiratory diseases to GSK by focusing our proprietary programs, primarily on non-respiratory diseases with high unmet medical needs. Here, we have launched a new program for urinary tract infections, which are the world's most common infections. And Myriam will present the promising preclinical data for this program later in the presentation.

Before I go into the business update, I'm delighted to have our new Chief Financial Officer, Axel Malkomes, who joined CureVac just yesterday on the call with us. On behalf of the whole CureVac team, welcome. Axel brings over 30 years of experience across both the corporate and banking sides of our industry. His deep expertise will be crucial for the next chapter of CureVac as we advance our strategic initiatives and strengthen our financial foundation.

Axel, would you like to say a few words?

[Axel Malkomes, executive]

Thank you, Alex, and good morning, good afternoon to everyone on the webcast and conference call. I'm truly excited to join CureVac during this pivotal moment in the company's evolution. I believe CureVac is poised to make continued remarkable progress in development of innovative mRNA-based medicines. By applying my expertise in financial management and corporate growth, I'm convinced I can help drive CureVac's mission forward and contribute to its future success.

[Alexander Zehnder, executive]

Thank you, Axel. As we continue moving forward with our business and pipeline priorities, it's important to highlight what makes CureVac unique.

On Slide 8, you can see these key strategic and technological differentiators that set CureVac apart in the mRNA field. In terms of strategic differentiators, we have a dual strategy in oncology, working on both off-the-shelf and personalized cancer vaccines to cover a wide range of cancer types. We use a similar dual approach in infectious diseases, where we are focusing on proprietary programs for non-respiratory diseases like viral, bacterial or fungal infections, while we have out-licensed our respiratory disease programs to GSK.

Our scalable manufacturing capabilities including the RNA printer, gives us the flexibility to produce preclinical and clinical trial materials efficiently. And our strong intellectual property portfolio further supports our innovation by protecting our technology. In terms of technology differentiators, our precision mRNA backbone is built on 20 years of experience helping us design highly efficient mRNA constructs that improve protein expression and lower dose efficiency.

In oncology, we have a unique ability to discover new classes of antigens, which paves the way for innovative cancer treatments. And our work on advanced lipid nanoparticle delivery system tailored for specific indications aims to enhance the effectiveness and stability of our vaccines. Together, these differentiators give us a strong competitive position and drive our mission to develop transformative medicines for patients.

Slide 9 shows how our differentiators feed directly into the key focus area of oncology and infectious diseases. Our precise mRNA backbone and proprietary delivery systems are at the heart of our technology platform, which is continuously evolving with the aim to deliver best-in-class products. By focusing our development efforts on high potential areas in oncology and infectious diseases, we are positioning ourselves to deliver impactful health solutions.

And with that, I will hand over to Myriam to explain how we're turning these technologies into a strong focused clinical pipeline.

[Myriam Mendila, executive]

Thank you, Alex, and good morning, good afternoon to everyone. Moving on to Slide 10. Let me outline our most recent pipeline, which reflects our focused strategic approach to high-value development programs relevant to patients. Both our existing programs and the new programs disclosed today demonstrate our commitment to selecting indications where mRNA technology can make a substantial difference, addressing unmet clinical needs and attractive market opportunities.

In oncology, our existing pipeline for off-the-shelf cancer vaccines is led by our Phase I study in patients with resected glioblastoma, which has recently provided promising data for the completed dose escalation Part A of the study. The study started enrollment for the dose confirmation Part B in August 2024, testing the recommended dose of 100 micrograms and enrollment is progressing well.

We also announced a new program with an off-the-shelf cancer vaccine to treat patients with squamous non-small cell lung cancer. The vaccine candidate to be tested and codes for new antigens discovered with our proprietary antigen discovery platform.

In the infectious disease area, our most advanced programs cover respiratory indications fully licensed to GSK. Programs for seasonal influenza, avian influenza and COVID-19 are based on CureVac's proprietary second-generation mRNA backbone and are currently in Phase II development.

GSK recently announced positive Phase II headline data for seasonal influenza, confirming strong antibody targets against influenza A, strain and most importantly, also against the notoriously challenging influenza B strain compared to the [ NCI-Match ] standard of care in younger and older adults. The study met all 3 defined success criteria. And GSK reported that the program is progressing to Phase III next year.

Based on the validation of our platform in infectious diseases, we launched a new proprietary program to develop a prophylactic vaccine against uropathogenic E. coli, the primary cause of urinary tract infections, which rank amongst the most common infections worldwide. I will go into more detail later in the presentation.

In the third therapeutic area, Molecular Therapies, while the collaboration with the Schepens Eye Research Institute in ocular diseases was recently terminated, we continue to develop and optimize mRNA therapeutics in different areas. We are committed to focus our pipeline on selecting indications where mRNA technology can outperform conventional approaches, guided by our mission to advance innovation in preventive and therapeutic health solutions.

On Slide 11, we delve deeper into our oncology strategy, where we see tremendous opportunity for mRNA cancer vaccines to bring precision immunotherapy to large patient populations. We have made significant progress in advancing our two-pronged strategy for both off-the-shelf and personalized cancer vaccine development. As a brief reminder, the off-the-shelf assets in our oncology pipeline target tumor antigens that are shared across different patient populations and/or tumor types to induce de novo or amplify pre-existing immune responses in different cancer settings, including advanced stages of cancer.

CVGBM, our lead oncology clinical candidate is currently being evaluated in a Phase I study in patients with resected glioblastoma and encoding known antigens relevant to this highly aggressive brain cancer. All our next-generation shared antigen cancer vaccines, including the one in squamous non-small cell lung cancer, feature novel antigens discovered through our proprietary antigen discovery platform and will expand our pipeline with new clinical candidates in 2025 and 2026. By identifying novel shared antigen targets, also within our global collaboration with MD Anderson, we aim to make our vaccines even more effective in reducing the risk of tumor recurrence and enhancing outcomes for patients in different cancer settings.

For the other part of our oncology strategy, applying [ 12-plus ] cancer vaccines, whole genome sequencing of individual patients' tumor samples, combined with advanced bioinformatics is utilized to identify neo-antigens and/or novel tumor-associated antigens unique to a patient's individual genomic tumor profile. This precision medicine approach increases the likelihood of targeting antigens susceptible to immunotherapy and aims to provide a curative approach, especially in early-stage cancers with lower tumor burden.

Our first-line cancer strategy is complemented by the RNA printer, our solution for fast and highly automated manufacturing. We made significant progress with our oncology pipeline and recently presented data from our clinical lead program with the off-the-shelf vaccine candidate, CVGBM, which was tested in a Phase I study in patients with resected glioblastoma.

You might recall that CVGBM features a uniquely designed single unmodified mRNA construct encoding 8 segments derived from 4 tumor-associated antigens with demonstrated immunogenicity in glioblastoma. It was administered as a monotherapy after surgical resection and completion of radiotherapy with or without chemotherapy. Patients received 7 intramuscular vaccinations within 10 weeks and optional maintenance vaccinations in case of non-progression for potential benefit.

Preliminary safety and immunogenicity data from the dose escalation Part A of the study were recently presented at ESMO, SITC and SNO congresses. In this highly challenging and aggressive cancer type, the data confirmed a favorable safety and tolerability profile with no dose-limiting toxicities observed in this part of the trial. Successful induction of antigen-specific T-cell responses was demonstrated in the vast majority of evaluable patients with 77% of patients showing CD8 and/or 31% CD4 T-cell response to at least one of the encoded antigens on the vaccine.

Most importantly, within the group of evaluable patients, 84% of immune responses were induced de novo, meaning T-cell responses are successfully induced in patients who had no pre-existing T-cell activity against encoded antigens prior to vaccination with CVGBM.

Additionally, 67% of responding patients had T-cell responses against multiple encoded cancer antigens, supporting our antigen selection and successful mRNA design. At the highest tested dose of 100 micrograms, ongoing monitoring of T-cell durability showed that responses were sustained over a period of 99 days. The 100-microgram dose was also selected for the dose confirmation Part B of the study, which began enrollment in August this year. The first data readout of Part C is expected in the second half of 2025. We continue to advance our oncology pipeline.

And on Slide 13, we have summarized our upcoming oncology catalyst, which provides a strong development path over the next 24 months. That is our most advanced Phase I off-the-shelf program in resected glioblastoma as already mentioned. And enrollment of the dose confirmation Part B of the study is progressing well. We expect enrollment to be completed the latest in the first half of 2025, allowing for Part B data readout in the second half of 2025.

Data from an additional up to 20 patients dosed at 100 micrograms will provide the basis for potentially continuing to a Phase II study, which could start in the second half of '26. The newly announced off-the-shelf program in squamous non-small cell lung cancer is expected to enter Phase I clinical development in the second half of 2025. With our proprietary antigen discovery work continuing, we intend to disclose additional off-the-shelf programs with new clinical candidates in different indications in 2026.

Lastly, the first clinical Phase I study with a personalized cancer vaccine candidate is expected to start in the second half of 2026. These strong catalysts highlight our strategic focus on opportunities in oncology, leveraging our mRNA technology designed to ensure continued progress and innovation in our oncology pipeline.

Let me now shift gears and turn to our infectious disease area. In infectious diseases, we are directing our current proprietary research and development efforts towards new non-respiratory indications while benefiting from the ongoing clinical development of respiratory indications with current programs licensed to GSK. Targeting non-respiratory infections caused by bacteria, viruses and fungi, we aim to deliver safe and cost-effective vaccines for high unmet medical need areas with compelling market potential where our mRNA technology offers an advantage over conventional vaccine technologies.

In this area, we are excited to introduce a new fully owned infectious disease program targeting uropathogenic E. coli bacteria in short UPEC. UPEC is the primary cause of urinary tract infections, which rank amongst the most common infections worldwide. The statistics presented on Slide 15 highlights the significant incidence and disease burden associated with UPEC in the U.S. The high prevalence of UTIs with more than 50% of patients requiring antibiotic therapy, leading to increased antibiotic resistance and high rates of recurrence presents a substantial challenge in current medical practice. This results in direct medical costs reaching billions of dollars annually in the U.S. alone.

Currently, there are very limited treatment options to prevent recurrent UTIs. Our mRNA technology has a potential to deliver a best-in-class solution, including function inducing functional antibodies as well as T-cell responses against UPEC. To tackle this infection, we developed mRNA vaccine candidate encode FIH, a bacterial protein considered crucial for adhesion of the bacteria to bladder tissue and bias the formation. FIH is highly observed in UPEC's strain and therefore, represents an excellent vaccine target for the vast majority of patients.

For our vaccine candidates tested in preclinical studies, we have applied rational antigen designs to optimize immunogenicity. In addition, we have applied a unique technology to design candidates that lead to the in vivo cell assembly of a SIH nanoparticle. This innovative design is expected to lead to even higher immunogenicity.

Let me show you the very promising preclinical data we created with 2 of our candidates. On Slide 16, you can see the first preclinical data, which are currently being presented at the 12th mRNA Health Conference taking place this week in Boston. We tested our vaccine candidates in 2 preclinical models with direct and mice in comparison to non-licensed recombinant protein vaccines. Trying of binding and functional antibodies, meaning antibodies inhibiting halogenation and/or bacterial adhesion were measured in both models in serum and urine candidates.

Additionally, CD8 and CD4 T-cell responses were determined in mice. Both mRNA vaccine candidates induced high levels of binding antibody titers in blood and urine in both models that also correlated with highly functional antibody titers in serum. Importantly, functional serum antibodies were higher with both mRNA vaccine candidates compared to the protein-based comparator vaccines.

Our nanoparticle candidate demonstrated the highest overall levels of FIMH specific binding and functional antibody responses in serum enduring of the animals, outperforming all other tested candidates. Additionally, both mRNA vaccine candidates induced higher T-cell responses than the comparator protein-based vaccines with a nanoparticle candidate again strongly outperforming all other candidates.

Overall, our infectious disease programs show promising progress with both non-respiratory and respiratory areas advancing based on solid development catalysts outlined on Slide 17. For our newly launched UPEC program, we expect to select a clinical candidate in the first half of 2025, enabling us to file for IND submission in the second half of 2025. This is anticipated to allow Phase I clinical development to start in the first half of 2026. Additional discovery work in other non-respiratory diseases is also progressing. And we anticipate strengthening our pipeline in this area with additional programs in 2025 for which clinical candidates could be selected in the second half of 2026.

For the respiratory program licensed to GSK, please note that the disclosure of the time lines remains at the discretion of GSK. As recently confirmed by GSK, the seasonal influenza program is expected to progress to Phase III in 2025. Further available time lines for the license program include anticipated data readout for the avian influenza study in the first half of 2025. GSK is also about to initiate a new combined Phase I study for an influenza COVID-19 combination vaccine. Corresponding information can be found on clinicaltrials.gov. Data is expected in the first half of 2025.

With this, I would like to conclude the portfolio update and hand over to Axel for a review of the financial data.

[Axel Malkomes, executive]

Thank you, Myriam. Looking at the significant progress we've made in streamlining our operations and focusing on strategic priorities. I would like to provide context to key financial metrics on Slide 18, demonstrating our financial health and enabling us to reinvest in key areas of growth and innovation.

Today, we report a strong cash position of EUR 550.9 million at the end of the third quarter 2025 and reaffirm our cash runway into 2028. Our quarterly results are driven by the new licensing agreement with GSK, which positively impacted our cash position as well as revenues. The EUR 400 million upfront from the agreement was received as a non-refundable payment for granting licenses to GSK and the right to use CureVac's intellectual property with no further R&D work obligation on our side.

As such, it was fully recognized as revenue in the third quarter of 2024. Given that under the terms of the new licensing agreement, all obligations from prior collaborations relating to R&D services had expired, remaining contract liabilities amounting to EUR 18.4 million were also recognized as revenue in the third quarter of 2024.

Setting the course for increased future financial stability, our strategic redesign is a key to enhancing our operational efficiency to further reduce costs. The efficient execution of the 30% workforce reduction on track to be complete by the end of 2024 incurred costs approximately 40% below the allocated budget.

From 2024 onwards, we anticipate a substantial increase in operating expenses by over 30%, including a notable EUR 25 million reduction in personnel costs. Our licensing agreement with GSK and renewed focus on innovation and R&D activities had also eliminated the need for commercial build-up and large-scale manufacturing activities. Streamlining of our in-house manufacturing capacity to provide a new manufacturing footprint better suited to our needs was accompanied by a partial impairment of a large-scale GP4 production facility.

Lastly, we have successfully terminated all remaining raw material commitments and closed all contract manufacturing organization, or CMO, related arbitrations for our first-generation COVID-19 vaccine in the third quarter, ensuring no further related payments.

Moving on to our condensed financial statement on Slide 19. You can see that our cash position of EUR 550.9 million increased from EUR 402.5 million at the end of '23 based on the EUR 400 million, upfront payment from GSK in August 2024. The increase is partially offset by our ongoing R&D activities as well as lapse payments related to our first-generation COVID-19 vaccine.

As already discussed, revenues strongly increased by EUR 477.4 million to EUR 493.9 million for the third quarter and by EUR 489.5 million to EUR 520.7 million for the 9 months end of 2024 compared to the same period in 2023. As the year-on-year increase was primarily driven by the license agreement with GSK, this must be seen as a positive onetime event.

Operating profit was EUR 368.4 million for the third quarter of 2024 compared to an operating loss of EUR 54 million for the same quarter in 2023. For the first 9 months of 2024, operating profit was EUR 221.4 million compared to an operating loss of EUR 186.2 million for the same period in 2023.

The operating result was affected by several key drivers. First, cost of sales increased year-on-year, mainly due to higher arbitration costs for CMO activities related to the first-generation COVID-19 vaccine as well as due to higher personnel expenses related to the redesign of the organization.

Second, R&D expenses increased with higher investments in oncology development programs as well as increased expenses related to the litigation to enforce intellectual property rights. Third, general and administrative expenses decreased compared to the prior year period, mainly driven by lower personnel expenses.

Lastly, other operating expenses increased due to the discussed partial impairment of CureVac's GP4 production facility. Financial results decreased by EUR 3.1 million to EUR 2.2 million in the third quarter of 2024 and decreased by EUR 4.7 million to EUR 8 million for the first 9 months of 2024 compared to the same periods in 2023. The decrease was mainly driven by lower interest income on cash investments.

Pretax profit was EUR 370.6 million for the third quarter and EUR 229.4 million for the first 9 months of 2024 compared to a pretax loss in the same period of 2023.

And with this, I'd like to hand back the call over to Alexander for today's key messages.

[Alexander Zehnder, executive]

Thank you, Axel. Now let's summarize the key highlights for Q3 2024. We closed the third quarter of 2024 with a cash balance of EUR 550.9 million, providing us with a solid financial runway into 2028. This strengthens our ability to continue driving innovation and growth. In addition, we are making significant progress on our strategic transformation, including a 30% reduction by the end of 2024. This will contribute to substantial cost savings starting in 2025 and enhancing our operational efficiencies.

In oncology, we are advancing our off-the-shelf and personalized cancer vaccines. Our glioblastoma trial has shown promising early results. And we are planning new trials in 2025 and 2026. And in infectious diseases, we are moving forward with the UPEC vaccine for UTIs. Additionally, our partner, GSK, is advancing a seasonal influenza vaccine into Phase III next year and is about to initiate a combined Phase I/2 study for COVID influenza combination vaccine, both leveraging our platform.

And as we enter 2025, we are well positioned, well financed, focused on high-value opportunities and supported by strategic partnerships and a robust IP portfolio. These elements position us well for ongoing growth and success in tackling major health challenges.

And with that, I would like to conclude our presentation and open the floor for your questions.

[Operator]

[Operator Instructions] First question here is from Chen Yang from Bank of America.

[Chen Yang, analyst]

I have 2, please. I think one; can you discuss perhaps kind of your thoughts about business opportunity, licensing opportunity outside of the mRNA kind of your core expertise. Whether that is an area of kind of potential interest just given your cash position? And then second of all, can you discuss about the kind of the litigation update and kind of what should we expect on that front?

[Alexander Zehnder, executive]

Okay. Thank you. So on your first question on business opportunities. At the moment, we stay very focused on the 2 areas that we described during the presentation, which is oncology on one hand and infectious diseases on the other hand. And within these 2 areas, we already do have collaboration with GSK on one hand and the MD Anderson on the other hand. But of course, we are always open to look at new opportunities within these 2 areas that will help us to strengthen our portfolio and especially accelerate our path to the clinic.

With regards to litigation, so these are ongoing. I think the next time point for you to keep in mind is the U.S. court case, which has been scheduled for March '25, so March next year. So work is ongoing for us to prepare as best as we can for these events. So other than that, we don't have much to update you on just now.

[Operator]

Our next question is from Mani Foroohar from Leerink Partners.

[Unknown Analyst]

This is CJ on for Mani. Following your encouraging flu data, I was wondering if you could share any commentary on plans for developing a combo vaccine for flu COVID.

[Alexander Zehnder, executive]

Question on flu COVID combo, Myriam?

[Myriam Mendila, executive]

Yes. I mean this question should ideally be addressed by GSK. But of course, we all believe that given the epidemiology and the occurrence of infections, that combination for patients of the flu vaccine and COVID vaccine would be the most convenient approach, right, and most promising. That's why all of the development efforts in the past when we were still in collaboration. We are focused on this.

The Phase I study starts now as we also shared. And we expect the data readout next year for decision-making for progress to Phase II. I'm not sure I addressed your question. But I think the program is progressing, especially because of the very positive Phase II data in influenza. And we are optimistic that this is going to be a continued and successful program.

[Operator]

The next question is from Chira Mantoori from Volteman.

[Unknown Analyst]

Congrats with the update. This is Chira from – and I'm on behalf of Suzanne. So I was wondering any color or reasoning you can provide on selecting lung cancer as the new indication? And then following up the previous question, can you say something regarding patent litigation on the EU front, on the Europe front.

[Unknown Analyst]

Okay. I think, Myriam, maybe one question for you. I think it was a question, if I understood correctly on indication selection or vice claimants.

[Myriam Mendila, executive]

That's what I understand. I'm sorry, we got the acoustics great. Yes. So we have to, of course, when we select the candidate, we have to follow the science, right? And basically, in our approach, just covered antigens, shared antigens that are shared from different cancer indications. And one also wanted to include novel classes of antigens. And so in our research, again, we found appropriate coverage of novel antigens in squamous non-small cell lung cancer. So following the sign that the indication we selected for our -- what we think very innovative next antigen cancer vaccine to address the high unmet need in this population.

So the indication is basically based on the science of the data and the readout of our antigen discovery work. Does that address your question, again, because it wasn't super easy to understand it?

[Unknown Analyst]

Yes, perfectly. I hope my sound is now better, but it was perfectly on. And regarding the recent litigation on the European front?

[Alexander Zehnder, executive]

Yes. So in Europe, it's a bit more complex, whereas in the U.S., all the different cases are bundled in one case. And we have one court case on validity infringement and damages. In Europe, it's really on a case-by-case basis, right? So this is something that will continue throughout the next years.

We do expect further rulings from the European patent office on our patents in the second quarter of next year as well as from the regional court in Dusseldorf more in the second or third quarter. But in Europe, it's going to be an ongoing process throughout '25 and maybe leading into '26 on a patent per patent basis, right? But I think the key visibility, the key event from -- at least for the first half will be the U.S. case in March.

[Operator]

Our next question is from [indiscernible].

[Unknown Analyst]

Just a couple of FimH questions. I think there was a prior protein-based program that didn't move forward. Can you just maybe comment on if your engineering approaches address maybe why that program didn't move forward? And then any thoughts on how you -- I think there's a glyco conjugate program in Phase III. Any thoughts on how your approach could be better than that?

[Myriam Mendila, executive]

So again, I'm sorry, the audio is a little bit difficult. So I heard the first question why FimH, right, if I understand correctly. And FimH is easy to address. It's a highly conserved antigen in UPEC bacteria. And by seating and targeting this antigen, we basically are able to cover about 95% of the population affected by UPEC. That's the first one.

The second one is this basically antigen target has been kind of validated in preclinical trials. And even if you want to go there in a Phase I/II study by another sort of company who is testing a peptide-based vaccine. So FimH is validated. I think, as a target to address UPEC bacteria and this is a promising antigen.

If your second part of the question is about the antigen design, again, we applied something very innovative, right, in the way how we selected to target FimH. And I don't want to get too much into the detail, but in a pre-binding confirmation so that we really can get the bacteria before it has attached to the endothelial cells in the bladder.

And then we have, for the first time, applied a design where, again, the encoded protein forms a nanoparticle with fin in the core and then basically a lot of FimH proteins expressed on the surface to really induce a stronger immune response. And that is design, again, in our preclinical studies translated to a really beautiful immunogenicity, showing very high titers of binding and what is even more important functional antibodies.

And when we compare it to a protein-based design targeting FimH, it shows basically superior immunogenicity, both for humoral antibody responses and T-cell responses. I know you had a part of the question about another program, but I didn't hear that very clearly.

[Unknown Analyst]

I think it was more a question around differentiation with our more advanced program. Why do we believe an approach with an mRNA or our vaccine could be differentiated or different?

[Myriam Mendila, executive]

Well, I think especially in this setting, again, mRNA per se is differentiated in that we can show clearly induction of humour and cellular immune responses as shared in our preclinical data, because we believe you have to address through, again, targeting targeted antibodies as well as cellular responses because the bacteria rest on the cells in the bladder. So that's the first part why it is differentiated.

And then the other part is, of course, because of the way how we designed our vaccine and the target that we have selected.

[Unknown Analyst]

And the design was all in-house? Or did you in-license any technology?

[Myriam Mendila, executive]

This is a proprietary technology that is all owned by TV.

[Operator]

Next question is from Jon Miller from Evercore.

[Unknown Analyst]

It's [indiscernible] on for Jon. I guess on the GBM program, apparently, very good response from T-cells. But how should we think about the translation towards tumor response based off the data? And also for the overall off-the-shelf program, what are the indications that of most interest?

[Myriam Mendila, executive]

Yes. So maybe for GBM, this is a super important question, right, that nobody can answer at this point. How does the immunologic response translate into clinical benefit? And there, again, we need to wait for more data coming from our expansion cohort.

We have presented at ESMO very early preliminary clinical readouts from our Phase I dose escalation cohort. In those data, we shared that we had one partial response in a patient who entered the trial with only a partial tumor reduction. And again, under monotherapy with our vaccine, that patient developed a partial response. Unfortunately, the immunogenicity readout did fail in this patient, because they couldn't collect enough cell samples. But at least one partial response was observed in our Phase I dose escalation part.

And then the other parameters you could look at, again, all under the caveat with early data at 16 patients. But we also looked at the PFS at 6 months in this bad prognosis population where we saw in our trial a PFS at 6 months of about 34%. And then you compare this to data shared at ASCO this year from basically a trial conducted by similar investigators that participated in our trial, but now that's fin. And they shared that patients with un-methylated GBMs treated just with radiotherapy plus/minus -- had a PFS at 6 months of only 18%. So again, I have to caveat this is early data. It's a handful of patients.

But we do see some promising even clinical signals. Now what we are doing in the dose expansion part, again, we collect more information on more patients. We collect more and also deeper immunogenicity data. And we will collect, of course, the clinical data. So that at the end, we can hopefully correlate the 2 and then make a robust decision whether we go into Phase II or not.

[Alexander Zehnder, executive]

I guess the second question was around indication selection for the rest of the off-the-shelf vaccine. So I think we already communicated candidate squamous non-small cell lung cancer, right? And I think work on the indication selection for the next CRAC program potentially out of the MD Anderson collaboration is still ongoing.

[Myriam Mendila, executive]

And maybe just to build on this, we have conducted end of last year, beginning of this year, an extensive oncology strategy exercise where we looked at all different kinds of indications which could be targeted by a cancer vaccine. And we considered criteria such as likelihood of scientific success, unmet medical need, competitive environment, commercial opportunities and have prioritized a few cancer indications that where we will go deeper into the discovery for cancer antigens.

So it's selection of next indications is really following a strategic approach that has been also translated into our collaboration with MD Anderson, where we focused together on, again, promising scientifically but also commercially promising areas in oncology.

[Operator]

[Operator Instructions] There are no further questions. I'd like to turn the floor back to management for any closing comments.

[Sarah Fakih, executive]

With this, we would like to conclude our conference call. Thank you very much for your participation. Stay safe and please don't hesitate to contact us should you have any further questions. Thank you, and goodbye.

[Sarah Fakih, executive]

This concludes today's teleconference. You may disconnect your lines at this time. Thank you again for your participation.