Molecular Partners AG

NASDAQ:MOLN

Earnings Call Transcript 2018-Q3

[Operator]

Ladies and gentlemen, welcome to the Molecular Partners Q3 2018 Interim Management Statement Conference Call and Live Webcast. I'm Myra, the Chorus Call operator. [Operator Instructions] And the conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Patrick Amstutz, CEO of Molecular Partners. Please go ahead, sir.

[Patrick Amstutz, Co]

Hello, and a warm welcome from my end to this conference call. My name is Patrick Amstutz, I'm the CEO of Molecular Partners. And with me, I have Michael Stumpp, the COO. We are taking advantage of our earnings call, which is less an earnings call than an update on the newest data on abicipar, our ophthalmology drug. And this data was presented at AAO last week, where Michael was, and it's really about to put this data into perspective and open the floor for questions.This molecule was licensed to Allergan, so it's their molecule at this point in time, but still the data is of importance to us, so we thought it's a good idea to make this call about abicipar.Slide #3. So a short overview. I will start with the Q3 highlights, not to forget those, and then hand over to Michael for the deep dive on abicipar. I will then take over for a short outlook and do some PR for our R&D Day in New York, December 6. And then, open the floor for questions.So Q3 -- Slide #4 -- 5. Q3 was characterized through a continued progress on all programs. I'm highlighting here the oncology portfolio and not abicipar as this will then be discussed by Michael. MP0250 is ongoing in the combination with bortezomib and dexamethasone in multiple myeloma. We have now set the dose at 8 milligrams per kilogram. The 12 milligrams was not ideal, so we went to the 8 milligrams per kilogram every 3 weeks. We have durable responses also in patients directly progressing on proteasome inhibitor, also directly progressing on bortezomib, nicely showcasing that MP0250 brings the value to these patients. And this will be core discussion point for our R&D Day, so I will not go into details here, and we will also present a poster at ASH. The 250 trial in EGFR-mutated non-small cell lung cancer is progressing well. We're there in the 8 milligrams per kilogram cohort. This is the first patient cohort. And we will have initial safety data by year-end and likely present around JPMorgan. Also on the immuno-oncology side, we're making good progress with our DARPin I/O toolbox. We have nice presentations on MP0310 at the FAP x 4-1BB. So the local activating -- T-cell activating molecule, and the data will be presented at multiple scientific conferences. And we also have moved a candidate that's called FAP x CD40 forward to showcase the toolbox value. Initial data out of this candidate will be showcased at conferences.On the next slide, you have an overview of our pipeline. And here you see in blue, you see oncology immuno-oncology, that's what I touched upon and that's where we are -- have continued progress. While now, I will hand over to Michael for the deep dive on abicipar on the first red arrow abicipar in neovascular AMD.

[Michael Tobias Stumpp, Co]

Thanks a lot, Patrick, and also warm welcome from my side. So I guess, you have seen some of the data, but it's a pleasure for me to go through together with you and, of course, be ready to answer your questions. Last week, and it was ongoing until Tuesday, in Chicago, there was the biggest annual event for the American ophthalmologist, probably also globally so-called American Academy of Ophthalmology. And Friday and Saturday, they held so-called subspeciality days, and I, myself, and a colleague of mine, attended the Retina Subspecialty Day, that's a place where about 2,000 specialists meet, probably the majority from the U.S., so capturing certainly more than 50% of all the U.S. retina specialists.On Slide 8, you see the top line data. You may have seen this already in July when Allergan had the first presentation. This is the primary endpoint, stable vision. And as you can see, abicipar q8 and q12 week after loading doses were both noninferior to ranibizumab given every 4 weeks, which is nice because you can essentially achieve the same with 6 injections at the q12 week regimen what is achieved with Lucentis in a 13-injection scheme in the first year.Moving on to Slide 9. What is shown here, and I think this is very important to remember, the field started with MARINA and ANCHOR. Those were the pivotal studies of ranibizumab in neovascular AMD. Twelve injections were given in the first year, gaining about 7.2 letters. A little later, they ran a similar study, like abicipar and Allergan has done right now: They tried to space the injections in the second part of the study, following 3 loading doses to once every 12 weeks. However, the results were quite disappointing. All the initial gains in visual acuity were lost throughout the latter 9 months. So you can see here the PIER study, second bar from the left, resulted in plus/minus no vision gain. Eylea was then following, that's the green bar, treat-and-extend was adopted. Another really important point is during everyday life, everyday practice, a lot of optimization has been done, but the results are not as good as the clinical studies. So an average of, say, 5 injections per year is given in these various trials shown here to the right, however, the visual gains are also rather modest. And that's exactly where Allergan and abicipar are trying to get into: how much letter gain can we achieve with only 6 injections per year? And this will set abicipar apart because it's the only fixed every 12-week dose anti-VEGF AMD. Next slide, please. So those are the vision gains. You can see both studies, SEQUOIA and CEDAR, both are identical Phase III studies in naïve wet AMD patients. You'd see here over the first 52 weeks the visual gains plotted, reaching at the primary endpoint around 8.3, 8.3 and 7.3 letters gained in the SEQUOIA study and 8.5, 6.7 and 5.6 letters gained in the CEDAR study. I think it's very important to note how after we fixed in, the curves developed, and all studies either maintained or further increased the vision gains, which is very nice because it clearly shows that abicipar, given every 8 or 12 weeks, is fit to maintain the initial gains.On the next slide, we can see how our, say, best biomarker in ophthalmology, we use an equipment called OCT. You can measure the thickness of the center of the eye, here expressed in central retinal thickness. That's exactly where foamy eye is, that's the place of the eye, where you have the best accurate vision. And again, you can see from baseline, which is 0, all the curves dropped basically in parallel and the gains obtained at week 16 from minus 115 to minus 133 in the upper study, minus 112 to minus 141 micrometers were fully maintained and actually exceeded by week 52, which demonstrates that all treatments are equivalent.Next slide, please. If you're wondering now whether a in-between study of variation of about 1 to 2 letters is significant, maybe let's quickly look at what Eylea has shown in their registration study, they are called VIEW 1 and VIEW 2. They are published by Jeff Heier and colleagues in 2012. And as you can see here, the aflibercept given every 4 weeks in the 2-milligram dose that's framed here in the orange box was 10.9 letters in VIEW 1 and 7.6 letters in the VIEW 2 study, that's within the margin that we commonly use for letters as a, noninferiority, and it's probably a baseline imbalance that leads to this relatively different result with the 0.5 milligram dose of Eylea, it was 9.7 in Q2 and 6.9 in the upper. So by no means I've seen the difference between CEDAR and SEQUOIA has anything to do with the drug.If you were wondering on the OCT about fluctuations between MINIMA and MAXIMA, you see here a nice saw tooth profile of the Eylea given every 8 weeks. That's the gray dotted line, the one that moves up and down. Lucentis is, I think, the second from the top, the black line, yes, there it is with the diamond. And you can see that Eylea, no matter whether it was given every 4 or every 8 weeks or as a 0.5 or a 2 milligram dose, they all nicely go down and then stay in this corridor of about 25-micrometers from the beginning to the end, and they were also comparable on noninferior at week 52.Moving on to safety, Slide 14. Allergan showed a number of tables. We have just moved now here, maybe the key readout. For us, it's very important to know whether the intraocular inflammation is moving further and further down. You'll remember we had this in Phase I. There, it was around 50%, depending on which dose you're looking at, was improved in the second phase to around 10%. And now here, in a really big study running for 1 year, the clock stopped at 15.4% and 15.3%, both the 2q8 and the 2q12 are virtually indistinguishable. Note that both studies are pooled here, so it's across more than 625 patients in the mild, moderate and severe percentages and incidences given. Most patients in the abicipar were treated with topical corticosteroids. Some were not even treated at all because the inflammation was simply mild.With that, I think we can quickly come to a sort of historic comparison. On the left side, you see a figure that Allergan shows from the focus study. The year 1 result also published by Jeff Heier and colleagues, presented in combination with PTD, lead to about 38% inflammation in a 105-person study; clearly, above what we see today. And then later, Genentech did a great job in improving the material, maybe the formulation. And the AMD studies, you see here circled in red, had 13%, respective 18%. The next study was the DME study. It went further down. And the RVO study in the end was very close to 0%, which is an extremely nice testimony to their capability of making better and better batches that go into clinical studies. And with that, I think we come to the overall summary. We have probably also seen this before. So the conclusion, abicipar is the potential to be the first fixed 12-week anti-VEGF. I think this is important. We give the retinal specialist a possibility to make a much easier scheduling of all the patients he or she sees, and you can probably look through the full text. Just remember again, SEQUOIA and CEDAR were the first successful demonstration of maintaining vision of 2 milligrams given every 12 weeks as a fixed treatment regimen compared to monthly ranibizumab. Secondary endpoints from both studies support the primary endpoint results. And the overall incidence of treatment immersion adverse events was comparable with a higher rate of intraocular inflammation. So Allergan concluded that they plan to file abicipar with the FDA in the first half 2019, and Allergan continues to expect results from the MAPLE study using its further optimized formulation. And we will hopefully hear that first half of 2019.I think with that, I hand back over to Patrick.

[Patrick Amstutz, Co]

Thanks, Michael, for this nice summary of the data. And before I open the call for questions, let me quickly summarize the key messages and then give you a short outlook what's to come. So I think on the key messages, it's really just continued transition from DARPin platform to a clinical oncology company. And we have the nice progress in oncology that will be highlighted more on the R&D Day. On abicipar, I think that's what we want to stress here today, that's really on the way to become the first fixed-dose 12-week anti-VEGF in the retina space. And that's a real achievement to our and Allergan's team to have developed a differentiated DARPin. I think this is also great validation to the platform that we can create differentiated molecules and develop them in Phase III towards the market. As we also know, Allergan has not stopped improving the manufacturing process. They have now a further improved process at hand, and they're testing that material in the so-called MAPLE trial. We're very much looking forward to that data set that will reach us H1 '19.It is an earnings call, so we still have more than $110 million on the banks with -- so we're financed well into 2020, and we can capture key value inflection points going forward. And all of that leads us to the final conclusion that we are on track forward integrating to become a late-stage oncology company with the ambition to, at one point, sell our own products.On the next slide, you see a bit of an outlook and also a bit of what we have been achieving. So first, we have the abicipar data in '18. So we have achieved that data as we just showed for that trial, underlined this quarterly dosing. And now we have also an additional value inflection point ahead, which is MAPLE and then also the FDA filing plus the DME start in Phase III in the next year, with the outlook to see this product launched in 2020. MP0250. So we have initial efficacy data, and we will show more details on that at ASH and then more efficacy data going forward 2019 and '20. And also at ASH, we will dive into more of the strategy how we want to develop this drug in multiple myeloma. Non-small cell lung cancer. We're on track to capture the initial safety with the first cohort and have initial efficacy next year. We will keep you updated on that progress. MP0274. You will be aware that we had to add additional patients at low dose. So this trial is ongoing, running and it's overall delayed as we have now more patients at lower doses due to potential safety findings we had. The trial is running now well, and we will definitely update on how that is moving and have initial efficacy data next year. On MP0310, we have published and are publishing more and more preclinical data, research data, and we're on track to first-in-human in 2019. And again, all of that is well within our funding reach today. I will close this part by highlighting a Save the Date and doing some advertisement to our R&D Day coming here. So the theme is Building Tomorrow's Breakthroughs. It's in New York at The Yale Club. It will be from noon to 2:30 p.m. And we will be highlighting MP0250 multiple myeloma with a guest speaker and expert in the MM landscape. We will talk about the advancements in our immuno-oncology pipeline and also have Pamela Trail, our CSO, highlighting her research strategy; the first time she's joining one of our R&D days. And we can also confirm a speaker from Allergan who will talk more about the abicipar data we just looked at now. With this, I will thank you all for your attention and open the floor for questions.

[Operator]

[Operator Instructions] The first question is from Bill Maughan from Cowen.

[William Patrick Maughan, Equity Research Associate in Specialty Pharma]

So I've just got two for you. First of all, has there been identified an imbalance, say, from the baseline in the CEDAR trial that may explain the delta between abicipar and Lucentis? And then second, you gave percentages on the number of patients with inflammation that were treated with corticosteroids. Did these patients generally continue on the trial or did they mostly discontinue?

[Michael Tobias Stumpp, Co]

Bill, thanks. It's Michael. If you were in the presentation at AAO, you have probably seen the slide that Allergan also presented on the -- more than 15-letter gainers. And indeed, you are right. So in CEDAR, the ranibizumab arm had a slightly higher percentage of patients who gained more or equal to 15 letters. For me, that's probably the main reason to explain the different BCVA charts. But I'm sure Allergan is looking into this and will keep analyzing to find out whether there is anything else. On your second question, Allergan has the data. We don't. So patients are treated with corticosteroids, some continue, but not everyone will continue. So that depends on the physician and patient dialogue. We don't have any details there.

[Operator]

The next question is from Richard Vosser from JP Morgan.

[Richard Vosser, Senior Analyst]

Just a question on MP0250. Clearly, you talked about several patients having a response where they have been pretreated with the proteasome inhibitor in your trial. Perhaps you could give us a bit more color here. Were those responses at the 8-milligram dose that you settled on or other doses? What proportion of the pretreated patients are you seeing responses and maybe any other color in terms of responses across the people recruited so far? It would be very useful.

[Patrick Amstutz, Co]

So you are absolutely right. So these responses I was referring to were on the 8-milligram dose cohort. So that's the dose we have to look at. So it's also very fair to look at that dose. And yes, they had progressed on proteasome inhibitor. Some actually on bortezomib, Velcade. And then could be, let's say, reactivated in the combination setting to profit from bortezomib 250 combination. And we are at the moment looking into this in more detail. Obviously, we're preparing the data for ASH and that's really mostly about this 8-milligram cohort. We're talking about the number in the public domain. In the first part, we have 8 patients, of which 5 have had a response; one additional at the state of the disease and 2 nonresponders. We can give much more data on the patient characteristics of these and also of the numbers which directly came from a proteasome inhibitor. And for us, the interesting thing will be how this data guides the future strategy. And I will not want to go into too much detail here, as this is really a chapter for the R&D day. But I can go as far as to say that this was very helpful. Even though the patient numbers are small, we can clearly see a path forward how we want to develop MP0250 multiple myeloma.

[Operator]

[Operator Instructions] The next question is from Anastasia Karpova from Kempen.

[Anastasia Karpova, Research Analyst]

I just saw the ASH abstract, and in a second cohort, we don't see your responses in 3 patients that are enrolled there. Would you plan -- do you plan to present a different data cutoff at ASH specifically? And can you provide any background information on those 3 patients? Again, I understand that it's a small sample.

[Michael Tobias Stumpp, Co]

This is Michael. I'm happy to take this question. It's a bit operational. So the deadline for abstract was August 1st, and of course, we pooled together whatever data we had in July so that we submitted for the poster, which will be shown on December 1. We have decided on the patient data cutoff and we're pooling this data so there will be more data presented than is in the abstract; especially, as Patrick explained, trying to understand and tease out which patients responded and why. You are right, there are 3 patients on the higher-dose cohort, but we're focusing now on the 8-milligram per kilogram given every 3 weeks and this is the majority of the data set in the poster.

[Operator]

[Operator Instructions] There are no questions at this time.

[Patrick Amstutz, Co]

So thank you, everyone, for listening in and all the questions. And we're looking forward to hopefully see you at the R&D or that you dial in for the update there. Thanks from my end. All the best.

[Operator]

Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.