Bergenbio ASA

OSE:BGBIO

Earnings Call Transcript 2022-Q1

[Operator]

Ladies and gentlemen, welcome to the BerGenBio Q1 2022 Conference Call. [Operator Instructions] This conference is being recorded.

I will now hand it over to the speakers. Please begin.

[Martin Olin, executive]

Thank you very much for the introduction. Good morning. I'm Martin Olin, the CEO of BerGenBio. I'm very pleased to present to you with our Q1 highlights and financials for the first quarter. I'll just remind everyone about the forward-looking statements.

So this is a snapshot of BerGenBio. BerGenBio is a world leader in exploring [indiscernible] transformative treatment modality for severe diseases. The development focus going forward will be focused on bemcentinib, our lead program, which has been dosed in more than 600 patients as of today, approximately 400 in oncology and 200 in COVID. And we are moving bemcentinib forward in 2 significant indications: One, a biomarker-driven population in first-line non-small cell lung cancer, which is carrying or harboring a mutation in the STK11 gene.

The second opportunity we're pursuing or prioritizing is hospitalized COVID-19 patients. In pursuing these indications, we are applying a laser-focused approach to unlock clear value drivers within the next 18 to 24 months. We retain all rights to our candidates, which we believe provides flexibility to generate maximum value for our shareholders.

So bemcentinib, our lead compound, is a small molecule, all the available and highly-selective AXL. It works through blocking the activation of AXL, which is known to play a key critical role in respiratory diseases and cancer.

In respiratory diseases, AXL activation is seen in voluntary co-effects of immune suppression, migration, proliferation and cytokine signaling. In cancer, AXL activation is related to invasion, resistance, proliferation, survival and immune depression. We have extensively explored bemcentinib in several diseases and have seen indications of clinical efficacy pointing to the broad potential of bemcentinib. This large exploration has also provided us with a deep understanding of the characteristics of bemcentinib.

We see relevant accumulation in lung and brain tissue without particular relevant for the 2 prioritized diseases. We understand the pharmacodynamics and pharmacokinetics profile. We believe we have identified dosing regimes that should translate into clinical efficacy and also provide regulatory acceptance. And based on the scientific rationale, the acquired extensive knowledge on the unmet medical needs in these 2 indications.

We have defined them as our key priorities. One, a biomarker driven population in non-small cell lung cancer patients, patients who are harboring a specific mutation in the STK11 genes in lung cancer. I would like to remind the audience that lung cancer, of which non-small cell lung cancer represents 85%, is by far the largest cancer killer with more than 200,000 people being diagnosed and 150,000 deaths reported annually.

Although immunotherapy with the introduction of immune checkpoint inhibitors have significantly improved the outcome for patients, the majority of patients does unfortunately not respond very well to immunotherapy due to either resistant or molecular drivers and patients harboring limitation in the STK11 gene represents a large population of about 30,000 patients who respond purely to immune checkpoint inhibition. And to that end, we have shown that bemcentinib potentially restores the activity of immune checkpoint inhibitors. And therefore may increase the response and the efficacy of immune checkpoint inhibitors when combined with bemcentinib.

Bemcentinib is the only highly-selective AXL inhibitor and development for this significant population. And we have secured a strong proprietary position by securing relevant IP for this indication. The FDA has acknowledged the medical needs and has granted us a Fast Track designation. And we do believe that there is a potential for an accelerated pathway should we be able to replicate the preclinical data in the clinic.

Today's treatment of non-small cell lung cancer is determined by whether the patient has a molecular driver, determined often by next-generation sequencing. In case of no molecular driver, standard of care today is immune checkpoint inhibition combined with chemotherapy, while molecular driven situations or diseases are treated with targeted therapies such as EGFR, ALK and BRAF inhibitors.

Mutations in the STK11 gene represent a molecular-driven disease in our opinion and it is present in up to 20% of all non-small cell lung cancer patients. There are currently no targeted therapies for patients harboring the STK11 mutation and we believe that given the mode of action of bemcentinib, it creates a unique opportunity to address the significant unmet medical need for this population.

There are multiple sources that confirms that STK11 mutations are associated with low response rate and shown survival with standard of care immune checkpoint inhibition combined with chemotherapy. The reported response rate from several sources are generally below 5% and the median of all survival is less than 12 months compared to more than 26 months for Y type, i.e., no mutation in the STK11 gene pointing to the significant unmet medical need for this population.

The new checkpoint inhibition generally requires activation of tumor-specific CD8+ cells and the presence of STK11 mutation causes lack of antigen presentation on dendritic cells, which reduces the CD8+ T cells and thus conferring to a lack of response to immune checkpoint inhibition.

Bemcentinib has a novel mechanism of action that increases the type 1 interference, secretion from the dendritic cells, driving of the generation of new tumor-specific CD8+ cells to restore the sensitivity of checkpoint inhibition. And we believe that the mechanism of action of bemcentinib therefore potentially or potentiates a targeted therapy approach in this specific population of STK11 mutations.

The compelling activity of bemcentinib has been reported in self-reports medicine in 2022, showing that the combination of bemcentinib with pembrolizumab or Keytruda significantly increases the CD8+ cells compared to a control and pembrolizumab alone in cell lines that harbors these STK11 mutations. And that this leads to a significant reduction in the tumor volume.

Also in our second-line non-small cell lung cancer study, the 008 study, we saw antitumor activity in patients harboring the STK11 mutation pointing to that sentence, may restore sensitivity to PD-1 therapy.

With a significant unmet medical need and a compelling activity of bemcentinib, the path forward has been defined as advancing the understanding and possible implementation of bemcentinib as the treatment for STK11 mutated patients, conducting a Phase Ib/IIa trial in STK11 non-small cell lung cancer patients, which will be carried out both in the United States and Europe, expanding the understanding of bemcentinib's mechanism of action and efficiency in co-mutational situations to further specify the clinical profile, but also the opportunity for bemcentinib in this significant indication.

Now I'd like to shift over to COVID-19. The pandemic is still around with regional differences and variance causing hospitalizations due to COVID-19 to remain an issue. And despite recent approvals, the medical need for hospitalized patients, in our opinion, remains. We have shown that in pre-clinical setting, bemcentinib provides a broad variant of COVID. We have seen a profound efficacy signal in the ACCORD2 study of hospitalized COVID-19 patients.

We are very pleased that bemcentinib has been accepted into the EU-SolidAct platform study, which is expected to enroll 500 patients that are hospitalized COVID-19 patients and the study is scheduled to commence shortly or early in the second half of 2022. We also believe that regulatory agencies are expected to continue to grant accelerated and/or emergency authorizations for promising drugs, which we believe bemcentinib potentially belongs to. So although the pandemic varies over time, it's also a fact that we will continue to see new variants.

We've also -- we've already seen a couple of them, the Alpha, the Beta and the Omicron. There are potentially new variants occurring, which may impact the pandemic and the lengths of the pandemic and the waves in it. And to that end, we have shown that bemcentinib provides a broad variant inhibition and therefore should be insensitive to future variance of COVID-19.

This is a snapshot or a cartoon to show the clinical benefits we saw on the ACCORD2 study work where bemcentinib met its primary and key secondary endpoints with strong statistical significance. So on the left-hand side shows the benefit of added bemcentinib over standard of care. And we saw a significant reduction in the number of death events.

We saw a significant reduction in patients who were progressing to intubation or requiring intubation. We also saw a significant reduction in the patients who would still require oxygen and patients who were treated with bemcentinib plus standard of care or discharged from the hospital much sooner than the control arm, which is the standard of care.

So just briefly touching on the EU-SolidAct platform study. It is a consortium that consists of a large number of sites. It has already established capability to recruit and to hospitalize COVID-19 patients. There has been one drug already approved under this platform. So we believe that the platform has demonstrated its ability to be a relevant mean of recruiting COVID patients.

The treatment will be with bemcentinib or [indiscernible] placebo in addition to current standard of care based on approved agents and therefore we believe the study design reflects the evolving nature of diseased behavior due to the effect of vaccines and variants and importantly the primary endpoint selected has been done in consultation with the authorities and informed by the data generated from the 2 previous COVID-19 studies conducted by BerGenBio.

So the path forward in COVID-19, which is a respiratory infection is that we have demonstrated efficacy of patients on top of current standard of care, including remdesivir and corticosteroids, the EU SolidAct platform provides an opportunity to generate data in large multisite study in a highly cost-effective manner. We also believe that the COVID-19 data could lay the foundation to explore bemcentinib in other severe infections and thus further expanding the market opportunity.

We also believe that if we are able to replicate the data that we saw in the ACCORD2 study that the authorities will look very positively and potentially providing an accelerated approval path for bemcentinib in this indication.

I'll now go through the Q1 financial highlights. So this is a snapshot of our key financial data for the first quarter. The operating cost decreased to an average level after the patient improvement peaked and the COVID-19 started last year in '21. Our cost is still well managed with about 80% of the cost being associated with research and development activities.

Our cash burn in the first quarter was NOK 74 million or $8.4 million compared to an average cost of $728.3 million. So indeed an average quarter looking at the history of the company. We ended the first quarter with 368 million or $42 million in cash.

So just to remind us about the BerGenBio equity story. We are a wealth leader in exploring excellent transformative treatment modality for severe diseases. We have decided that the strategic focus going forward should be around bemcentinib in 2 particular indications: one, a biomarker-driven population in non-small cell lung cancer, the STK11 mutation population and hospitalized COVID-19 patients. We are applying a laser-focused approach to unlock clear value drivers associated with each of these 2 indications in the next 18 to 24 months. And we continue to retain all the rights to our candidates, providing maximum flexibility for value generation going forward.

And with that, I would like to thank the audience for listening. And I will hand over for questions.

[Operator]

[Operator Instructions] As there are no questions at this moment in this call, I will now hand it back to the speakers.

[Martin Olin, executive]

Thank you. We have a question and I'll read the question related to strategy. With current cash flow, BerGenBio announced cash in approximately 1 year from now without any partnering agreements with upfront payments or ACI issue. Can you elaborate a bit around this and which timeframe do you hope BerGenBio will be able to unlock value for its shareholders?

It is, of course, a relevant question for a company that does not have a top line yet. And to that end, we believe that the company has a history of being able to attract funding for its strategy. We also believe that this will be the case going forward. We are not exclusively focusing on a share issue, but are also considering other means of attracting funding including partnering opportunities, which can provide not only funding, but also strategic relevant capabilities in advancing bemcentinib towards the market and which relates through the ability or timing to unlock for its shareholders.

We believe that both the readout from the EU SolidAct study, which should come around in the first half of '23 and the Phase Ib and Phase IIa data from the STK11 study will provide very meaningful value drivers in terms of attracting potential partners and/or laying the foundation of further development and thus attracting additional funding.

We have another question, which refer to rightsizing the organization. The question is done on purpose. I think we can say done.

And there is another question, which is related to partnering. BerGenBio has been talking about this for several quarters now, no progress or ongoing positive discussions.

We can, of course, not comment on specific discussions and we will communicate to the market when and if we have relevant news on this front, but it remains a strategic priority for the company to explore strategic partnering opportunities.

There is a comment that I believe refers to the Q1 report, and it states the report says in the strategic priorities section, a go-to-market strategy may also be considered in selected indications or discrete territories. Can you elaborate?

Yes, I can. I think it is, without reasonable doubt that BerGenBio as a small biotech company will not be able to pursue a first line non-small cell lung cancer opportunity of this magnitude and therefore would be seeking partners to co-develop and commercialize bemcentinib in this indication. This does not exclude that BerGenBio may retain relevant co-marketing or commercial rights for specific trial terms and the same goes for the COVID-19 program.

I think we have another question here that says how many patients are you aiming to enroll in the Phase Ib/IIa STK11 mutated non-small cell lung cancer study?

So this is a traditional 3+3 approach in, as a dose escalation study, which depending on the outcome of that 3+3 will then be expanded into a Phase IIa study. We have not yet determined the size of the expansion study, and this will be dependent on the safety and efficacy data that will be coming out of the Phase Ib study.

There is another question. Will the increased focus of the company on STK11 mutated non-small cell lung cancer and COVID-19 have a positive impact on cash burn going forward?

Well, we certainly believe that the focus itself will enable us to better pursue the potential of bemcentinib. This is specifically why we're doing it. And to say that it has a positive impact, I guess, that the person who have raised the question refers to the history and I would say that the existing burn of the company may not be predictive for its future. But we certainly believe that the focus on STK11 and COVID-19 is the right thing to do for the company, not only for financial reasons, but more so for strategic reasons.

There's another question here is how is the competitive landscape in first-line STK11 mutated patients, both on the market and competitive companies pipeline?

This is a very good question and we do believe that, as I said previously in the presentation, that we are in a favorable position as we have the only highly selective all the available AXL inhibitor for this specific population. We also have secured relevant IP and we have not seen any other competitors specifically addressing this population in the same manner and approach as BerGenBio is doing. This is not to say that there are no competitors. We believe that STK11 mutation and the unmet medical need itself is indeed attracting or getting a lot of attention in the industry as, I guess, we will also see in the upcoming ASCO in June.

Question on STK11 mutation. Does the patient have to be AXL positive as well as having the mutation? From the look of it, all the STK11 patients you show from the 008 study seem to have AZL plus status. Is that always the case or can a patient be STK11 mutated and be AXL negative and will bemcentinib work in such a case?

I will hand that question over to Nigel McCracken, who is also on the call and is our Chief Scientific Officer.

[Nigel McCracken, executive]

Thank you, Martin. Basically we do not require another stratification. So I think if people are STK11 mutated, we're not necessarily looking for another stratification with the AXL positivity. What we have seen and Martin has mentioned, the patient seems to be positive and STK11 mutated. But, again, there's no further stratification. So when we go into the study, we are purely looking for STK11 mutated patients.

[Martin Olin, executive]

We have another question. Can you elaborate on how the communication with FDA now develop ahead of the Phase Ib/IIa study in STK11 non-small cell lung cancer patient?

May I hand this over to Nigel?

[Nigel McCracken, executive]

Yes, of course, Martin. So as you've heard from Martin, the FDA is aware of BerGenBio's interest in pursuing STK11 in non-small cell lung cancer because, as Martin mentioned, we actually have had this Fast Track designation. Now we're using a standard approach with respect to the Phase Ib/IIa study that we're planning to conduct and that the study has been designed to take into consideration the FDA's project optimist and has been designed and optimized with the help of ex-FDA assessors.

Now, again, I've mentioned to you, we're going to take a standard approach where we're going to submit that protocol, and we will have 30 days, if we will either receive some comments from the FDA or that the study will go ahead naturally. It is a very standard study in that we are embarking with a Phase Ib, which is a safety lead-in initially and then we'll be taking 2 of those doses forward into STK11 patients.

[Martin Olin, executive]

Thank you, Nigel. I think it looks like we do not have additional questions at this point. So with that, I think we have concluded the Q&A session.

And I believe we can end the call with this. Thank you very much for everyone who participated in the call.