Bergenbio ASA

OSE:BGBIO

Earnings Call Transcript 2021-Q2

[Operator]

Ladies and gentlemen, welcome to BerGenBio conference call for the first half of 2021. I will now hand the word over to the speakers. Please go ahead.

[Richard Godfrey]

Thank you, and good morning. This is Richard Godfrey, CEO of BerGenBio. Welcome to our half 1 quarter 2 report and highlights and financials for 2021. I'm joined this morning by Rune Skeie, our CFO. Next slide, please. Firstly, may I draw your attention to our forward-looking statements and the safe harbor comments. As we are a publicly-traded company, it's important that these are beared in mind. Thank you. Next slide, please. Here is a schedule of some of the topics I'd like to cover during this morning's presentation. Next slide, please. On Slide 4, I thought I'd provide a brief snapshot of the first half of 2021 and quarter 2. I guess it's important when reviewing our company's performance to remember that we're still coming out of, or indeed arguably still in, the pandemic of COVID-19. And although our company, as many have made operational adjustments, it's still a challenge for doing business. And in particular, the research sites and the patients have a number of restrictions in place that limit some of our abilities to maintain momentum in our clinical trials. Having said that, our organization is functioning well. We continue to grow and develop our organization to support the next stage of our development, which includes active engagement with the regulators in preparation for late-stage and registration trials. Bemcentinib is our lead asset, active in a number of clinical trials. In COVID-19, we presented now encouraging results from 2 randomized Phase II trials that equally suggests bemcentinib has a great potential to be an effective treatment option for this disease. In acute myeloid leukemia, back in June, we presented an update on our preliminary overall survival data, which is extremely encouraging, and we are in active dialogue with the regulators regarding how we could take this forward to registration. And in non-small cell lung cancer, a study that's been ongoing for a while now in combination with KEYTRUDA, we continue to recruit patients, and we're waiting to report data ideally by the end of this year. Tilvestamab, our anti-AXL antibody, continues its Phase I program without issue. I've mentioned a few times now that we are in active dialogue with the regulators both in the United States and Europe regarding alignment and how we could best develop both our assets in both AML and COVID-19. And as you will have noted a few months ago, the FDA granted fast track designation for bemcentinib in use in second-line non-small cell lung cancer. We continue active discussions with government and industry partners regarding the best route forward. Our cash position remains strong, NOK 574 million. And I think our outlook is strong, with strong clinical data, seeking active engagement with the regulators, a strong organization, and we're well financed for current activities and immediate milestones. I hope this snapshot is useful. Next slide, please. Quarter 2 has been a busy quarter. In April, we presented the first update on our COVID trials where we were able to confirm that bemcentinib was well tolerated in these patients. And as part of that evaluation, we certainly saw a survival benefit from patients taking bemcentinib. In May, we presented an update on clarity on the mechanism of action that bemcentinib deploys in viral infection. And we also presented the first top line data in COVID-19, where we identified, in a post-hoc analysis, that a subset of patients that were most severely affected by the disease, we certainly saw a benefit from taking bemcentinib. June, we reported AML data and also an end-of-trial data from a non-small cell lung cancer study we concluded a few months ago. And in July, at the European Congress on Clinical Microbiology & Infectious Diseases, we are invited to present a late-breaking abstract of our COVID data combining both the ACCORD study and our 020 study. Here, we saw an increased survival for bemcentinib-treated patients, 96% versus 91% patients taking standard of care. We saw a significantly reduced likelihood of patients progressing on to a ventilator when taking bemcentinib, a significantly increased likelihood of shorter times to recovery or early discharge from hospital. We also presented for the first time clear evidence of an antiviral effect in patients, and also preclinical data confirming that bemcentinib is equally active regardless of the variant of COVID that's infected [ the ] patients. So a very busy quarter of data presentation. Next slide, please. Just to remind ourselves, AXL is a tyrosine kinase, it mediates multiple aggressive diseases and it's expressed at very low levels in normal, healthy uninfected tissues. It has an important role to play in cancer, where it mediates many of the hallmarks of cancer, including progression, immune evasion and drug resistance. In viral infection, AXL facilitates viral entry into host cells and dampening of the immune response. And in fibrosis, it has an important role in the way in which sells toggle from one form to another in response to their unfavorable environment. We're developing 2 drugs against AXL, tilvestamab -- an anti-AXL antibody, which works on the outside part of the actual receptor -- and bemcentinib, a tyrosine kinase inhibitor that works on the intracellular component of the actual receptor. Next slide, please. These new drugs come in different forms as we can see here. Bemcentinib is an oral once-a-day pill that's really ready for Phase III development now. Tilvestamab is an antibody. It's administered as an intravenous infusion on a 2-weekly schedule, and both products are stabile robust formulas and well tolerated by patients. Next slide, please. Here we have a summary of our development pipeline of programs that we are sponsoring. As you can see at the top, we've now completed our Phase II programs in COVID-19. The studies in acute myeloid leukemia are progressing very well, both as monotherapy and also in combination with low-dose Ara-C. It's the low-dose Ara-C that held that combination where we see the greatest potential, which I'll refer to later. And the studies in lung cancer, as previously reported, part 1 in checkpoint-naive patients is complete; part 2 and part 3 are ongoing. And tilvestamab, as I previously mentioned, continues in this Phase I development. Next slide, please. I thought I'd spent a little bit of time recapping and revisiting the data from our 2 randomized Phase II studies in COVID-19 patients in hospital. At this ECCMID conference back in June, we presented very encouraging consolidated data from these 2 studies showing survival benefit, reduced likelihood of progression and so an increased speed of recovery of patients. Next slide, please. Just to be reminded, the patient journey and the treatment journey of patients infected with COVID-19 is clearly defined by the World Health Organization 9-point ordinal scale from 0 to 8, with 8 being death and 0 being uninfected. We've conducted our trial in patients grade 3, 4 and 5. The vast majority of SARS-CoV-2 infected patients recovered without the need for hospital treatment, and of course the vast majority of patients survive. But this is important to bear that in mind, when testing a drug against COVID. Next slide, please. The study was conducted in a broad geography as well as the broad patient population in the U.K., India and South Africa. And in total, 179 patients were enrolled in the study. And it was -- they were randomized to receive either bemcentinib or standard of care that predominantly was corticosteroids and a significant part of the patient population also received antivirals, such as remdesivir. Next slide, please. In understanding the patients and the learnings from these clinical trials, it's important to study the patient characteristics as well as the safety profile. We reported a post-hoc exploration of the patient characteristics, where we identified a subset of patients, 61% of the patients. These are the patients that had the most severe disease. And they were the patients who, in actual fact, saw the greatest benefit from bemcentinib. You can see here that there were very few patients who were Grade 3 in actual fact, just 14 patients. The vast majority of patients were grade 4 or 5. In fact, Grade 4 predominantly. And you can see that it was pretty even, the patients that had steroids and -- sorry, the vast majority of patients also received steroids as part of their treatment. In addition, what we also looked at was something called CRP, C-reactive protein. It's a very common blood-based marker to measure the level of inflammation as a gauge of how severe the patient infection is. And again, you can see that the patients were quite high, quite a large portion of the patients who had quite a high CRP, greater than 30 milligrams per liter. Collectively, what we could see was that 61% of the patients, Grade 4 or 5 with a CRP greater than 30, were the ones who were the most severely affected by the disease. We'll refer to this several times going forward because this is the post-hoc analysis that allows us to really understand where bemcentinib will be of most benefit to, in actual fact, the vast majority of hospitalized COVID patients. On the right here, you can see a summary of the safety profile. In essence, there were no severe adverse events of concern, an independent data monitoring committee on 3 or 4 occasions actually confirmed that the drug was well tolerated. There was no safety signal of concern and the further development of bemcentinib in COVID-19 patients should be continued. Next slide, please. Survival being a very, very significant and important endpoint in treating COVID patients. And here, we can see that there was most definitely a great advantage from patients taking bemcentinib. Indeed, the vast majority of patients thankfully do survive a COVID infection. But in actual fact, what we can see in our patient population was that 96.6% of the patients taking bemcentinib survived as opposed to 91% just receiving standard of care. This, of course, is referring to our high-severity patient population. And again, putting this into numerical form, it was 3 versus 8. The hazard ratio at the bottom there is really quite an important measure to understand how effective the drug is. Hazard ratio of 1, which suggests that there was no difference between standard of care and bemcentinib. Here, we have has a ratio of 0.306 suggesting there's a very meaningful benefit in patients taking bemcentinib. The number of patients on the study, and thankfully the number of patients that died on this study, was relatively small and therefore statistical significance was not reached. But nonetheless, in the numerical gap, it was quite significant, 3 versus 8, and the hazard ratio quite compelling. Next slide, please. A secondary endpoint of great interest was the time for worsening or, in other words, ventilator-free survival. This is really the time to any worsening starting -- from the starting date, including death from any reason up to day 29. And of course, if we realize that the vast majority of patients that came on to [day] 30 were Grade 4 or 5, you could see that progressive -- actually include the progressing on to a ventilator, which actually is quite, quite a severe move in terms of patient care. Next slide, please. The time to worsening according to this World Health Organization score system is a very, very important measure in showing how effective our treatment is. And again, in our most severe affected patients, the 61% of the patients that were Grade 4 and 5 on CRP greater than 30, you can see that we had a hazard ratio of 0.31. Indeed, that really manifests itself such that there was a significantly reduced likelihood, 69% in fact, of progressing to ventilator in patients taking bemcentinib.Again, what we can see on the right here on the red trace is the patients taking bemcentinib. And you can see there was a fairly quick benefit for these patients receiving bemcentinib, where the line dropped quickly, and that benefit was sustained throughout the treatment duration, as opposed to the blue line which was fairly level in actual fact. Moreover, not only is the hazard ratio compelling here, suggesting the 69% reduced likelihood, but also the p-values confirmed a very, very significant, statistically speaking, outcome here. Next slide, please. The primary endpoint of the study was to determine the time to improvement or early discharge of patients according to this WHO scale. Now again, it's worth reminding ourselves that the vast majority of patients, in actual fact, do recover from COVID, the disease is self-limiting and intensity of infection is quite low. Our study was also compounded by the fact that we recruited patients from a very broad population, multiple geographies and compounded by all sorts of field hospital crisis management in different hospitals, different jurisdictions we record during the trials. So this was a very challenging endpoint and one that was compounded by many external factors. Next slide, please. Again, when we look at our 61% of patients that were most severely affected by the disease, we saw a significant increase in the likelihood of shorter time to recovery or discharge in those patients. Here again, you can see that it was an 88% improvement in recovery times or early discharge in these patients. And again, statistically a very valued result, with a p-value of 0.003. So although the primary endpoint of the trial was not achieved for all patients, with this post-hoc analysis we can see that there most certainly is a real benefit for these patients taking bemcentinib. Next slide, please. Again, just as a reminder, the mechanism of action and the role that AXL plays in COVID infection has now quite nicely been elucidated specifically by collaborators at the University of Iowa, where we understand that AXL plays an important role in viral entry through the so-called endosomal path on the left. And after it's been infected, you then see an upregulation of AXL that results in a dampening of the type 1 immune response, which is the cellular antiviral mechanism. So next slide, please. So in actual fact, by inhibiting AXL with bemcentinib, we see 2 things. We see a reduction in viral entry and we see an increased immune response to the viral infection, and we now presented clinical data that confirms that we actually see an antiviral effect from bemcentinib. Next slide, please. So just by way of summary, bemcentinib has great potential for treatment of COVID-19 patients in hospital and requiring oxygen, and hopefully by limiting their progression on the ventilation and indeed survival outcomes. This is in addition to and on top of standard of care corticosteroid-treatment and/or antivirals. We saw a survival benefit of 96% versus 91%, reduced likelihood of progression by 69%, and increased change of faster recovery by 88%. We know that bemcentinib impairs viral cell entry, promotes immune response and is also independent of variants that could potentially be very, very important going forward. Our next steps include continuing dialogue with governments, regulatory agencies and industry partners how best we can take this forward, and I look forward to updating the market with that news in due course. Next slide, please. The core focus of our business continues to be in oncology and specifically, is emerging that we see an opportunity in treating acute myeloid leukemia patients. Here, we have FDA orphan status and also fast track designation. Through our study, we've now defined a new patient population, patients that have relapsed in the second line. We've also presented recent data at the EHA conference. Next slide, please. Just to remind us, acute myeloid leukemia is a cancer of the blood and bone marrow. It's most usually present in older patients; 2/3 of the patients are over 60 years of age. Acute myeloid leukemia is the largest indications of the leukemias. Recent improvements in standard of care has really left a vacuum in second line, which we've filled now or potentially will fill with bemcentinib plus LDAC. You can see that also results in quite an attractive market growth anticipated over the next few years. Next slide, please. In developing a new treatment for any indication and especially so for acute myeloid leukemia, where there is a dynamic change in the first-line setting, it's important that we understand the treatment algorithm that we have listed here on the left-hand side. The vast majority of patients are not suitable for intensive chemotherapy, and therefore, cannot pursue the induction chemo consolidation and hematopoietic stem cell transplant. Instead, they follow the line in the center here where they receive low-dose chemotherapy plus/minus a new medicine that was just approved in October and May of this -- of last year and this year, called venetoclax. That actually results in fairly good first-line control of the disease, a 65% completed the response rate. And the survival outlook for patients partaking in that therapy are 14.7 months, still quite dismal. However, all patients relapse. And when they do relapse, their survival outlook is just 4.7 months. These are the patients that we think we can add the most benefit to in the first instance. We've been testing bemcentinib in this so-called relapsed and refractory patient population for a few years now, evaluating bemcentinib as a monotherapy in both AML and myeloid dysplastic syndrome in combination with hypomethylating agents in Cohort B3 and in combination with low-dose Ara-C, a low-dose chemo agent, in Cohorts B2 and B5, and it's there that we've seen the most interesting and compelling clinical signals so far. Next slide, please. Here we see some of the data that we presented at the European Hematology Association Conference in June. It was from the cohort of patients from B2 and B5; these are patients who have relapsed AML, which means that they had a response on the first line but they've subsequently relapsed, and they were able to tolerate at least 2 cycles of bemcentinib and LDAC. In other words, they were not so ill that they actually could have progressed to evaluation. This was a data set taken from April of this year and included just 11 patients. But in actual fact, what we could see in these 11 patients is that 8 of them saw benefit, 4 of them with disease stabilization, meaning the disease stopped progressing and their disease stabilized, and 4 of them saw a complete response or a CRI. That's quite a remarkable observation in such a sick patient population. But where this becomes of even greater value, particularly in the second-line setting, is when we look at the benefit in terms of survival. In actual fact, the median overall survival has not been achieved, meaning that 50% of the patients have not died at this data cutoff point. But what we could see quite clearly was that the 12-month survival was 70%, meaning that the vast majority of the patients at this point were still alive after 1 year. Remembering that the median overall survival for relapsed patients is just 4.7 months by historic controls. Here we are defining a new patient population with a first-in-class medicine and a novel mechanism, and the novel mechanism of course is all linked to the role of AXL and AXL inhibition in preventing immune evasion, and we continue to -- continue our translational research confirming this mechanism of action. We look forward to updating the market with more data towards the end of the year. Next slide, please. We continue to explore the potential of AXL inhibition with bemcentinib in non-small cell lung cancer in combination with KEYTRUDA, that's pembrolizumab. Next slide, please. We know, of course, that non-small cell cancer is the largest cancer killer, with nearly 2 million lung cancer deaths per year. And of course, we're also aware that in spite of recent development, the 5-year survival horizon for these patients is still quite dismal at sort of less than 5%. Next slide, please. Similarly, we need to understand the treatment algorithms for these patients. Whilst the first-line therapy is evolving, it now includes predominantly KEYTRUDA and chemo in the first line, effectively leaving a vacuum in second line once these patients have progressed. Now some patients will only receive a checkpoint inhibitor in the first line, some patients will only receive a chemo agent in the first line. And we are somewhat indifferent to that with our study design. Next slide, please. We're actually evaluating the combination of bemcentinib and KEYTRUDA in patients that are checkpoint-naive, chemo-refractory, Cohort A; checkpoint-refractory, Cohort B; and checkpoint chemo refractory in Cohort C. We have, of course, presented data from Cohort A and B1 previously, and we're pending the data on Cohort C. Next slide, please. A few months ago, we are very pleased to announce that the U.S. Food and Drug Administration granted fast track designation for bemcentinib in combination with a checkpoint inhibitor for treatment of patients with AXL positive advanced metastatic non-small cell lung cancer. This was a very significant statement for BerGenBio to announce. It was the first time that we'd received formal recognition from a highly regarded international regulator of actual positive patients in a discernible patient population. As you know, BerGenBio has been developing proprietary biomarkers and companion diagnostic assays for selecting AXL-positive patients. And indeed, our cAXL, our composite AXL assay, is validated and is ready for clinical trial use. So this was a very significant recognition by the FDA. Retrospective analysis of patients in our clinical trials suggests that approximately 50% of patients in the second line position are cAXL positive. And these are the patients that achieved clinical responses and extended survival benefit as we've previously reported. This is the second fast-track designation that bemcentinib has received from the FDA, the first one being in acute myeloid leukemia and this one being in non-small cell lung cancer. And there are numerous benefits, regulatory advantages of being fast-track designated. It means we have more frequent access to the FDA. We can potentially submit rolling review when seeking market authorization, and that often leads to earlier drug approval. It means that we are eligible to apply for accelerated approval and priority review. And what happens is, generally, the submission to our part get easier for a new drug application. So this is a very significant opportunity for bemcentinib BerGenBio. And most important is the recognition that AXL-positive patients can be identified and treated separately. Next slide, please. This data has been previously reported, and I'll not dwell on it too long other than to say that the cAXL status predicts patients that respond and survival benefit when treating with bemcentinib and pembrolizumab in this checkpoint-naive patient population. We can see a fourfold improvement in progressive-free survival and an overall survival benefit of 17 months versus 12 months. Next slide, please. And in Cohort B1, these are the patients that are checkpoint refractory. Again, we see a 2.5% improvement in progression-free survival in these patients. And we're also able to elucidate and confirm the immune modulatory effect of AXL inhibition. Next slide, please. Just a brief update to keep you informed regarding the progress of tilvestamab, our anti-AXL antibody, which continues in Phase I. Next slide, please. I'll remind you that this is an antibody. It works on the extracellular domain of the AXL receptor. It displaces a lag in GAS6 with high affinity. We've developed a robust product, a stable product and manufacturing process. The first safety study that we conducted was completed with no dose-limiting toxicities and no safety signals of concern, and we also saw quite proportionate of pharmacokinetic and pharmacodynamic exposure. We're now continuing to what we call a multiple ascending study, which is ongoing. Next slide, please. So this just reiterates what I just said. Phase I single ascending dose was completed. Phase Ib multiple ascending dose is ongoing right now, and that will position us then to initiate a Phase II study once the Phase I study is completed. Next slide, please. The Phase Ib study that we refer to as BGBC149-102 (sic) [ BGB149-102 ] is in platinum-resistant ovarian cancer patients. We selected these patients for this PK/PD study because we know that they have a high exposed to -- of AXL, a high expression of AXL. It's also quite possible to do serial biopsy to these patients. So we're able to take pre- and post-treatment biopsy to determine the impact that we have on AXL expression by inhibiting it with Tilvestamab. So there are multiple biopsies being taken from these patients during their treatment. And the benefit of that is that we should have very clear understanding of the mechanism of action of Tilvestamab. Next slide, please. If I could now hand over to Rune Skeie to present an update on our financials. Thank you.

[Rune Skeie, Chief Financial Officer]

Thank you, Richard. My name is Rune Skeie, I'm the CFO in BerGenBio, and I would give you a update on the key financials for the second quarter of 2021. Next slide, please. So we are reporting an operating loss of NOK 92 million for the second quarter of 2021. This is significantly higher than the second quarter of 2020 and it's due to costs for new clinical trials started up in the last few quarters, particularly on the COVID study, which had a significant number of patients enrolled, data analyzed and reported during the quarter and the first half year. In addition, we have continued to develop the organization in preparation for late-stage development. Overhead cost is well managed with close to 90% of the operating expenses in the second quarter spent on research and development activities, which all is invested in development program for our 2 assets, bemcentinib and tilvestamab. Next slide, please. The net cash flow in the quarter was negative by NOK 82 million. And average for the last few quarters was NOK 62 million. And we closed the second quarter with NOK 574 million in cash. Next slide, please. I just want to remind you about our analyst coverage and reports from our sponsored research, Edison, are available from the BerGenBio website. And the next event in our financial calendar is the third quarter reporting on the 16 of November. I'll then hand back to you, Richard, to summarize this presentation.

[Richard Godfrey]

Thank you, Rune. So if I could just summarize 2021 highlights and outlook thus far. Next slide, please. You can see that we continued with our trial of achieved milestones through last year and into the first part of this year, having now presented the data from COVID-19 and pending regulatory alignment and discussions with government and industry partners. We're also anticipating similar position in our acute myeloid leukemia. Again, we have preliminary survival data that's very encouraging and we have active dialogues with the regulators regarding our way forward. And of course, tilvestamab, as previously mentioned, is progressing safely through Phase 1 and ready for Phase II in the near future. Next slide, please. The first half of this year has indeed been very busy, reporting a lot of data and a lot of clinical outcomes in the first part of the year, both for leukemia and for COVID. Two scientific conferences on our radar for the second part of this year. The SITC, that's the immuno-oncology conference in November, where we're presenting some more data from bemcentinib and KEYTRUDA in non-small cell lung cancer; and the American Society of Hematology, the ASH conference in December, where we have more data again on -- in AML patients receiving bemcentinib and LDAC. Next slide, please. So just by way of summary of the investment case for BerGenBio. Again, I think we're an exciting investment case with near-term milestones, regulatory alignment being sought in COVID-19 and acute myeloid leukemia, ideally with the ability to progress into registration. We have a diversified pipeline and risk AML with fast track and orphan status, COVID-19, non-small cell lung cancer with fast track designation. Compelling data presented last year in acute myeloid leukemia and myelodysplastic syndrome, MDS, and multiple investigator-sponsored studies ongoing. We are developing our 2 first-in-class AXL inhibitors. And as you know, we continue to be world leaders in understanding the role and function of AXL in mediating aggressive disease. And as a business, we have an experienced, evolving and developing -- development team in Oxford and our R&D team based in Bergen, multiple industry and academic partners and collaborators. And with that, I'd like to end the presentation and the quarter 2 first half update and open for any questions. Thank you. Rune, do you know if there are any questions from the audience?

[Rune Skeie, Chief Financial Officer]

Yes, we have some questions connected to the COVID program. So the first one is other possible drugs against COVID are able to go from Phase II to Phase III quite fast. Now it's around 4 months since BGBC020 was finished, why does it take so long time?

[Richard Godfrey]

Okay. It was actually in July, I think, when we presented the consolidated data from the 2 studies, that actually becomes a more compelling data set in 179 patients. And with that data, we're now able to have active dialogues with regulators, governments and other partners about how we could best go forward to treat these COVID patients. I think it's also noteworthy to recognize, of course, that the pandemic and the state of the pandemic is evolving. And there are a number of factors to consider there, not least of all where, in actual fact, we could conduct the study, the potential Phase III study in hospitalized patients most successfully. So we are evaluating all of these options and we will update the market in due course. But I think it's most important that we get it right rather than do it quickly.

[Rune Skeie, Chief Financial Officer]

Next question is also linked to COVID. Are there enough patients in the COVID-19 study so bemcentinib can be proved to the government? And there are follow-up questions about, have the other studies also enough patient now? I believe that's linked to our other studies.

[Richard Godfrey]

Okay. I think in terms of seeking -- presented the government in terms of -- I'm not quite sure. I guess the question is asking if we could secure what is referred to as emergency use authorization. And I think the answer to that question is simply no, I don't think it is. All feedback that we've received thus far is that confirmatory study will be required, although I took a few minutes in this presentation to talk about the hazard ratio and the statistical significance. And I believe we mentioned in the report as well that, in actual fact, we believe that the power of the sigma that we've seen would mean that a confirmatory study would not necessarily be that large in terms of number of patients. But it would be important that we do have a confirmatory study, where we control and limit the patient population more precisely so that we can have confidence that we know which patients will benefit most and the patients that won't just be self-limiting. So a confirmatory study would be required, for sure, of that. And the second part of the question was linked -- sorry, could you please repeat that, Rune, it was linked to something else?

[Rune Skeie, Chief Financial Officer]

Yes, it was linked to -- if the other studies also have enough patient, it's not very specific if it relates to our other studies or other COVID studies.

[Richard Godfrey]

Yes. Well, I think we -- I think I understand the question. We've now worked hard over the last few years to identify where we see the clearest and strongest signal in cancer patients and also where we've been able to navigate and position in light of the evolving standard of care. And I, of course, refer to the relapsed elderly AML patients, which is a new patient population that has emerged now. And I think we're now in a very, very nice position to now progress into a registration trial. And again, similar answer to that with COVID in that we must define the patient population, define the endpoints that we're seeking, have a robust comparator drug, most likely would be LDAC and then perhaps that the study design, sufficiently powered and statistically validated so that any result would be statistically meaningful.

[Rune Skeie, Chief Financial Officer]

Next question is, could you talk about some of the strategic and scientific advantages of having both an inhibitor and an antibody against the AXL?

[Richard Godfrey]

Definitely, I mean, I think the strategic opportunities are quite broad. And that clearly, AXL has an important role to play in many different diseases; cancer, fibrosis and virology are the 3 that we identified. And potentially different ways in which those patients could be treated, from a one-a-day medicine through to once every 2 or 3 weeks in hospital with an infusion. But also, I think, referring to the strategy, we also need to be conscious of pricing and reimbursement. So I think there's lots of advantages such that we can position different drugs to different indications going forward. So that would be the advantage there. And then, of course, not least of all we have 2 assets that potentially could be developed and licensed and partnered with 2 different players. So I think we have 2 shots on goal from that respect as well, which I think puts us in quite a unique and potent position. We are definitely the AXL company to watch.

[Rune Skeie, Chief Financial Officer]

Next question is, bemcentinib appears to have a broad applicability across a range of aggressive cancer. How are you thinking about potential partnering opportunities to fully take advantage of this progress late-stage clinical trials?

[Richard Godfrey]

Yes, I think it certainly does have a very broad applicability across a broad range of cancers, potentially as a monotherapy but most likely in combination with either chemo or checkpoint inhibitors, both in solid and hematological indications. I think as I mentioned just a moment ago, we most definitely are the AXL company. And I think we're being watched by many industry partners. I think it's our role actually to demonstrate this compelling role of AXL inhibition in treating disease and then for a partner, basically, to see how that would fit into their strategic plans and their development strategies. So our role certainly is to demonstrate proof-of-concept. And as I say, we consciously developed both in hematological and solid tumors because we can most certainly imagine that hematological indications such as the one we've defined here, the second line small non-small cell -- second-line acute myeloid leukemia, could be an indication that we could pursue through Phase III ourselves on sort of getting it -- get over the line, get ready for the new drug application and add a huge amount of value to the assets, and indeed to the actual franchise.

[Rune Skeie, Chief Financial Officer]

And a question about the expected operating expenses going forward, specifically on the second half year of this year. A few questions about that. May be fair to comment that we don't guide on that. But when the COVID study have completed, we should expect that those costs is definitely decreasing or not even there. But we have other programs ongoing. So before we start any new clinical trials, we should expect at least not an increase in operating expenses in the second half year.

[Richard Godfrey]

Yes, that's right. We obviously had a substantial amount of clinical development activity in the first half of this year with these COVID trials that are ongoing. And of course, they're fairly rapid in both start-up execution and close down. So I don't know that the full expense was realized in the first half of the year, but there certainly were substantial expenses by our historical measure in this first half of the year.

[Rune Skeie, Chief Financial Officer]

Next question is, given the different -- differing mechanism of action, do you see the potential to investigate a combination of bemcentinib with venetoclax?

[Richard Godfrey]

Potentially, absolutely, yes. So I think there's a very strong rationale there. We know that venetoclax, the BCL-2 inhibitors sort of promote apoptosis and cell death. And as a consequence, of course, they are quite toxic medicines, these BCL-2 inhibitors, they're not without quite unsavory side effects. But certainly in the first-line setting, I think there's a very real potential to combine with venetoclax in the first-line setting. I think the question to ask, and we don't know the answer, will be whether or not that would be just be venetoclax and bem or whether it would also require a low-dose chemo agent. But it's certainly subject of ongoing preclinical evaluation as part of our R&D strategy.

[Rune Skeie, Chief Financial Officer]

Next question is, can you comment on the median overall survival for the AML patient? You mentioned that 12 months overall survival is around 70%. Can you discuss what impact, if any, these patients have had from the other treatments after bemcentinib had stopped working?

[Richard Godfrey]

We haven't presented that data. Some patients would have gone to other treatments. I think that's just the course that medicines take and patients take. I think there was no -- I don't think there was any pattern there. There was no obvious pattern in the patients' progression with something else. I think it's noteworthy that patients who came on our study would have previously received a hypomethylating agent or 2, plus/minus venetoclax and potentially other agents as well. So they were fairly heavily pretreated. So it's not as though there was any other approved medicine that they could have gone on to. They may have taken some experimental agents or most likely just palliative care.The reason why we're so intrigued by this, of course, is that we know that actual inhibition sort of resets the tumor microenvironment and allows the immune cells, particularly the NK cells, to be active again in the myeloid compartment, part of the translational work that we presented at EHA. So and that's what we believe that we can allow the body to control this disease a lot more effectively than it could while AXL was highly, highly unregulated. I think the other thing to note, of course, as I just mentioned earlier, one would only expect these patients who take whatever options were available to them after relapse to have a median survival of just 4.7 months. We had -- in April when this data was cut off, we had [all] reached the median survival, but 70% of the patients have been alive 12 months and counting. So I think we've already exceeded 2 times what we'd expect for those patients, regardless of whatever they went on to afterwards.

[Rune Skeie, Chief Financial Officer]

It's a follow-up question, do you know which treatment these patients have received after bemcentinib, if any?

[Richard Godfrey]

I'd say we haven't -- I don't know that actually. We haven't analyzed that. And every patient would have potentially received something different. There is no standard of care that they would have gone on to. So it could have been palliative care, supportive care or maybe another experimental agent, but there's no standard of care that they progressed to.

[Rune Skeie, Chief Financial Officer]

Okay. Thank you. I think that completes the Q&A section.

[Richard Godfrey]

Thank you. Thank you, Rune. Thank you, everyone, for listening.