Bergenbio ASA

OSE:BGBIO

Earnings Call Transcript 2024-Q1

[Martin Olin, executive]

Good morning. My name is Martin Olin, and welcome to the quarterly report for the first quarter of 2024 for BerGenBio. I'll just remind the audience about the formalities.

So the highlights of the first quarter, I would characterize it as being continuing on the plan with our focused strategy within frontline non-small cell lung cancer for STK11-mutated patients. And we are very encouraged to have received the recommendation or the decision by the Data Safety Monitoring Board (sic) [ Drug Safety Monitoring Board ] from the Phase Ib study to continue in the expansion in the additional cohorts but also the opening of the Phase IIa part of the study, which is specifically for STK11-mutated non-small cell lung cancer patients in frontline therapy.

I'm also very pleased to follow up on the announcement we had yesterday, which is that given the fact that bemcentinib in our mind is one of the leading AXL -- selective AXL inhibitors in the clinic has been selected to be part of a study run by the University Hospital at San Antonio by Dr. Taverna in combination with pacritinib, a STAT3 inhibitor. And it's a fully funded study. So the contribution from BerGenBio will be bemcentinib itself.

The financial position at the end of the first quarter ended fully in line with our guidance, and we further strengthened our cash position by the warrant exercise, which was conducted in April and contributed with NOK 139 million. We continue to operate the company at a significant reduced burn rate compared to previous years. And we are now operating the company at around NOK 40 million a quarter, which means that we are funded with the warrant exercise proceeds until the third quarter in 2025.

Today's presentation is focusing on the frontline non-small cell lung cancer opportunity, which we believe is a very significant opportunity. Just to remind everyone that the unmet medical need in frontline therapy is primarily related to PD-L1 negative endo patients. So these are the patients that doesn't respond very well to the standard of care, immunotherapy plus chemotherapy, but also, there is a significant population of patients who harbor a mutation in the gene called STK11. It constitutes up to 20% of frontline non-small cell lung cancer patients. And today, there are no available good therapies for this patient population.

And the support for the unmet medical need continues to evolve. There's recently published meta data set from BMC, BioMed Cancer that includes 4,000 -- more than 4,000 patients, of which more than 600 patients had a mutation in STK11 patients. And the data basically replicates what has been published previously, but this is a meta analysis. So it's a pretty interesting evolution and additional evidence in the fact that most of the STK11 patients have a low PD-L1 expression, and that leads to a lower overall response rate to checkpoint inhibition. And certainly, their PFS and overall survival were worse than the wild-type population.

If we look at the market opportunity, we believe that it's around 30,000 patients in the U.S. and the big 5 EU, which constitute a potential of roughly USD 4 billion a year.

And I will now hand over to Cristina to take you through the case of bemcentinib in non-small cell lung cancer.

[Cristina Oliva, executive]

Thank you, Martin, and good morning, everyone. Over the next few slides, actually, I would like to walk you through the case of AXL inhibition with bemcentinib in first-line non-small cell lung cancer. I want to remind everyone some major characteristic of bemcentinib. Bemcentinib is a highly differentiated AXL inhibitor that actually is able to provide an improved inhibition with fewer side effects, is also able to concentrate significantly in lung tissues and able also to cross the blood-brain barrier, which are both very important characteristic for the patient population affected by lung cancer.

We have studied bemcentinib in over 600 patients. Hence, we have an extensive knowledge of the safety profile and extensive safety database. We have observed also activity with bemcentinib in monotherapy in a multitude of indications. And we have completed several studies specifically relevant for the lung cancer indication, 2 Phase II studies completed with the combination of bemcentinib and chemotherapy and also with the checkpoint inhibitors, actually providing us the rationale for moving into the first-line indication.

Bemcentinib has also been granted the Fast Track designation by the FDA in the first line in STK11-mutated non-small cell lung cancer and in second-line non-small cell lung cancer. It has also an extensive IP through 2042.

So several studies have already established what is the role of AXL on tumor and immune cells. And it appears evident that actually it's critical for the neoplastic survival and for the disease spread. AXL expression is associated with poor prognosis, worse clinical outcome and therapeutic resistance, is expressed in a multitude of tumors. And specifically on tumor cells, its signaling actually triggers some activities that you see depicted here on the left-hand side, like increased survival, proliferation, angiogenesis, therapeutic resistance but also immune evasion.

AXL is also expressed in a variety of host cells and specifically on a variety of immune cells that you see represented here on the left -- right panel, specifically dendritic cells, monocytes, macrophages and natural killer cells. The interactions between actually the neoplastic cells and the immune cells in the tumor micro environment can potentiate the AXL expression and lead to what we call a pro-tumorigenic environment. We, therefore, expect that the inhibition of AXL through the use of bemcentinib could play a role on this dual compartment, both in the tumor cells but also the very important tumor macro environment.

As I said previously, bemcentinib has demonstrated added benefit when combined with both chemotherapy and checkpoint inhibitors. Therefore, we believe that actually treating patients earlier on, so in first line, before they develop resistance might significantly delay the disease progression and also extend their overall survival.

So the STK11-mutated patients, which is the patient population that we have selected for our first-line indication, is actually characterized by a so-called cold tumor macro environment, which is characterized by being refractory to immunotherapy. And what happens in this immunosuppressive environment, as you see here at the bottom of this slide, so to the left-hand side, there is a striking infiltration of immunosuppressive cells. Just to name a few of the blue ones that you see here: the TAN, the tumor-associated neutrophils but also the Treg. At the same time, there is a significant exclusion of inflamed immune cells that are here represented at the bottom in red, like the CD8 and CD40 cells, for instance. And this, all in all, actually is -- represents a cold system, which is very poorly responsive to immunotherapy.

Another observation that is important is that actually in over 80% of these STK11-mutated patient population, AXL is expressed. And this is actually reflects, again, the role of AXL in what we call immune deserts. Therefore, the inhibition of AXL in this immunosuppressive environment can lead to a reversed, restored response to anti-PD-L1, at the same time, a reduction in the resistance to chemotherapy.

So where are we with our ongoing study? We have selected, as I said, a patient population which is currently underserved by the available therapy. And that's the first-line STK11-mutated non-small cell lung cancer. The study actually, I want to remind, is composed of 2 parts, Part Ib and Part IIa. The Part Ib is a classic dose-escalation study, where increased dose levels of bemcentinib will be combined with a standard chemotherapy and immunotherapy treatment regimen. The Phase IIa is going to be with a specific patient population, the STK11-mutated non-small cell lung cancer, and will be actually exposed -- the patients will be exposed to 2 dose levels as became feasible from the Ib.

I'm very happy to report that actually the study is on plan and is moving according to our time lines. The review of the safety data that has been conducted by the independent Data Safety Monitoring Board has allowed us to proceed through the planned dose cohort but also to initiate already the Phase IIa part. There will be an interim analysis expected late this year or early next year that will be based on the preliminary data on overall response rate and progression-free survival. And as I mentioned, we are very pleased to announce that the IIa part has been open to enrollment and has been initiated across a multitude of European and U.S. sites according to plan with a very active investigators' engagement.

Bemcentinib remains -- within the context of the STK11-mutated non-small cell lung cancer, remains actually the only one that targets only an STK11-mutated patients but also remains the only one with a very early entry to the clinic in the first-line setting.

So all in all, what's the case of bemcentinib for this first-line STK11 non-small cell lung cancer? In the medical community, there is a growing awareness of the need for new and better treatment in STK11-mutated non-small cell lung cancer. The AXL expression leads actually to resistance to checkpoint inhibitors and chemotherapy in this patient population. At the same time, STK11-mutated patients present a high expression of AXL on both, as I said, the immuno component but also the tumor cells.

We have reported efficacy of bemcentinib in 2 Phase II studies that have been completed: one in combination with chemotherapy and the other one in combination with checkpoint inhibitor, both in pretreated non-small cell lung cancer. Bemcentinib has demonstrated monotherapy activity in a multitude of difficult-to-treat oncology diseases. We, therefore, believe that actually using bemcentinib as an early intervention in first-line -- in the first-line setting could improve the clinical outcome of these underserved patient population by actually potentiating and delaying the resistance to the current treatment available.

The BGB016 (sic) [ BGBC016 ] Phase Ib/II study is progressing in accordance to the guidance and what we've been reported earlier on. And bemcentinib at the current stage remains the most advanced AXL inhibitor that is developed and in clinical studies in STK11 non-small cell lung cancer.

Let me now switch gear and report to you what Martin has just announced. We are very pleased to report actually this collaboration that focus on the new NIH-funded studies in pretreated non-small cell lung cancer. These clinical studies originate from a groundbreaking research conducted by Dr. Taverna and her team that actually has identified that AXL and STAT3 are upregulated in advanced lung cancer, and together, actually, they produce an increased environment that is pro-tumorgenic.

With the basis of this preclinical evidence, the NIH has granted an NIH fund that will cover over 5-year period that would enable Dr. Taverna and her team to develop a Phase Ib/II investigator-led study. This study will combine an AXL inhibitor, specifically bemcentinib, with a STAT3 or JAK2 inhibitor, pacritinib, in patients previously treated with at least one line of therapy, affected by advanced lung adenocarcinoma.

The study will be conducted at the University of Texas in collaboration with us and Sobi and will be complementary to the currently ongoing study. We also believe that this experience will provide us additional knowledge on the mechanism of AXL inhibition in patients with lung cancer.

And I would now hand it back to Martin for an update on key financial and news flow. Martin?

[Martin Olin, executive]

Thank you, Cristina. So Cristina's update, with that, I would move into the key financials and news flow. So as we -- as I previously said, we are really tracking on our guidelines that we have previously announced. So we are spending roughly NOK 40 million on a quarterly basis. We have significantly reduced almost by 50%, compared to historical numbers, the burn rate of the company. And we expect the burn of around NOK 40 million a quarter to continue in the foreseeable future.

We are very pleased with the capital raise we secured in the warrant exercise window in April. This provides a cash position at the end of this quarter, the coming quarter of roughly NOK 200 million. So we are well funded, and we will be able to complete the enrollment of the patients in the IIa study that Cristina spoke about. We also believe that this cash position will take us into the second half of 2025.

And important information to the shareholders in connection with the AGM on the 23rd of May this month, it was decided to do a so-called reverse share split. And what does that mean? It means that for each 100 shares that you own today, you will own 1 share after the reverse share split. This will reduce the number of shares from a roughly 3.9 billion to 39 million. It will not affect the corporate value. So at least from a theoretical point of view, this will not be dilutive to the existing shareholders from a valuation point of view.

It's important to keep in mind that this share split, 100:1, will have the consequence that fractional shares will not be issued. So if you own a number of shares that cannot be divided by 100, this will be fractional shares, that component that can be not divided by 100. And shareholders who have that position will not be compensated for the rounding down. You may remedy the situation and make sure that you have a number of shares that can be divided by 100, but of course, that's up to each and every single shareholder. But this is the last day to remedy that situation. And we expect that the consolidation will be completed on May 31 this month.

Also important to note that there will be a new ISIN number, which will change as of tomorrow.

If we look at the news flow, this we have guided on previously. And I'm very pleased to say that we have actually been able to deliver on the guidance. We have initiated the IIa, a very important milestone in the company's progression and pursue of the strategy. Now we have a global study, which will encompass 33 sites when all the sites are active, which is -- we're getting there, very close.

We are also very actively in discussion with the establishment of a synthetic control arm. So remind the audience that the Phase IIa is a nonrandomized study, but the synthetic control arm will, in our mind, in a very innovative way, provide a contextual data set that could strengthen the relevance of the data that we will generate from the Phase IIa study.

Later this year, we expect to provide an overview of the safety from the Ib, the totality of the 3 cohorts, and hopefully, we'll also be able to announce some interim analysis on a limited number of patients from the Phase IIa study. The more comprehensive interim analysis for the IIa will, of course, be announced in 2025 when we have all the patients enrolled and have the -- and they have been in the study long enough for them to be relevant in the interim analysis.

Other news flow, I've already spoken about the warrant exercise period, which we are very pleased and thankful to the shareholders for their contribution. We have announced previously also the SRI data, which continues to suggest that bemcentinib actually could play an important role in severe respiratory infections. As we have said previously, we are not advancing bemcentinib in severe respiratory indications from a clinical point of view, but we continue to do it from a preclinical point of view, simply because we believe the hypothesis is very strong for bemcentinib in that indication. And as we have announced yesterday, we now have a clinical study funded by the NIH, which we believe will allow us to provide additional information about the role of bemcentinib in lung cancer.

In the second half of this year, we expect to provide an update on the tilvestamab out-licensing process. We will continue to publish manuscripts from studies that has been completed. And we also expect an update from our partner, ADCT, on the program, ADCT-601, in 2 indications. So that's the news flow.

And in summary, BerGenBio continues to focus on the advancement of bemcentinib in front-line therapy for STK11-mutated patients in non-small cell lung cancer. The Data Safety Monitoring review when it's over, it's really relieving, but it's also a very comforting to know that as we had projected, we have not seen any new safety issues in the combination -- the triplet combination of bemcentinib, the checkpoint inhibition and chemotherapy. And we now have a global Phase IIa study up and running. And most of the sites are actually open for enrollment. The interim analysis in our mind for the specific STK11-mutated patients will potentially unlock significant value and define the development going forward for bemcentinib in this significant unmet medical need.

The cash position with the addition of the warrant exercise in April is fund -- will fund the company and our operations into the second half of '25, and we believe we are progressing very well towards the goal of hopefully showing that bemcentinib can make a clinical difference to patients that otherwise don't have many good options for treatment.

Thank you very much for listening. And I think we will now move to the Q&A session.

[Unknown Executive]

Yes, we have a few questions. So the first one is, what are the key milestone and challenges you foresee in the development and commercialization of bemcentinib in non-small cell lung cancer patients with STK11 mutations? And how do you plan to address these challenges to ensure a successful outcome?

[Martin Olin, executive]

Very good question. So first of all and foremost, it is to have the readout from the ongoing Phase IIa study, which will, in our mind, define the next development states in front-line therapy for STK11-mutated patients population. The signal that we are going to identify will also define the size and, therefore, the time line and the cost for a development in the next most likely Phase IIb, potentially a Phase III study or a registration study. It all depends on the strength of the signal. So let's have the data, and then I think we can define what the development plan will look like.

From a commercial point of view, I think we've been very adamant that we will be looking for a partner to commercialize bemcentinib in this indication when we hopefully get that.

[Unknown Executive]

And then it's a question about the new trial you announced yesterday. So what do you expect as an outcome from the new trial in lung cancer? And is there any overlap with the current 016 trial?

[Martin Olin, executive]

So the study is a Phase Ib/II, as Cristina alluded to. And so we will certainly get an idea and hopefully confirm that the combination is safe. There might be some early signs of efficacy from the combination, but it's not a randomized study. So we have to be cautioned about what the data will generate. But it's going to be very informative in the sense that this is pretreated patients, so second-line lung cancer patients.

So we believe that it -- first of all, it's not at all competitive to the strategy we are pursuing, but it will potentially add a new potential indication or line of therapy in lung cancer.

[Unknown Executive]

A follow-up question here on the same trial. Will you report the first patient is enrolled in the new study? And can we expect that in the near future?

[Martin Olin, executive]

So the study is an investigator-led study, which means that it's under the control of Dr. Taverna and her group, and we don't, per se, have any control or access to information other than when it's provided by the Dr. Taverna Group.

[Unknown Executive]

Thank you. That completes the Q&A.

[Martin Olin, executive]

Thank you.