Bergenbio ASA

OSE:BGBIO

Earnings Call Transcript 2022-Q2

[Unknown Executive]

Good morning, and welcome to the BerGenBio Second Quarter 2022 Report. I will just remind everyone about the formalities.

So what is BerGenBio about? We are entirely focused on the development of selective AXL inhibitors, in particular, the focus is on our lead compound bemcentinib, which is an oral, potent and highly selective inhibitor of the receptor tyrosine kinase AXL. We are developing bemcentinib in 2 specific indications, which are both significant in our opinion. First one being first-line non-small cell lung cancer STK11-mutated patients where we are preparing for a Phase Ib/IIa study in the second half of this year. And secondly, the hospitalized COVID-19 population, where we are engaging in a Phase IIb study across Europe. We are laser-focused to deliver value drivers in the next 12 to 18 months.

This is a highlight of our second quarter 2022. So in May of this year, we announced a focused strategy being the focus on development of bemcentinib in 2 significant indications, as I mentioned, the first line STK11-mutated non-small cell lung cancer indication and hospitalized COVID-19 patients. We also reported the Phase IIb data from the ACCORD2 study, which met the primary and secondary endpoints and showed an improved clinical response, including a reduction in death and clinical deterioration, very encouraging. Post period, it means after the quarter, we also can announce that the EU-SolidAct study is now open for enrollment, and we hope to treat the first patient imminently. We are preparing for the initiation of a Phase Ib/IIa study evaluating bemcentinib in a significant population in first-line non-small cell lung cancer, particularly the STK11-mutated patients in the second half of this year. And recently, in August, we filed the IND for the trial and thus, moving forward towards opening the study later this year.

ADC Therapeutics dosed the first patient in a Phase Ib study evaluating the compound, which contains an AXL targeting monoclonal antibody, which has been in license from BerGenBio previously. The initiation of the Phase I study itself does not trigger a milestone, but there are milestones related to the further development of the ADC compound.

We strengthened the leadership team with the addition of Cristina Oliva as the Chief Medical Officer. If we pause for a second and ask ourselves why AXL? Well, in a healthy situation or a normal tissue hemostasis, AXL is not upregulated. It's actually very lowly expressed. But in severe diseases, AXL gets upregulated or activate -- or activated and results in several deleterious effects in both cancer -- respiratory infections and cancer. We see that it leads to invasion and migration drug resistance, proliferation survival and immune suppression. And in respiratory diseases, it confers to viral entry, migration, immune suppression, ECM production, basal cell proliferation and reduced cytokine signaling.

So it plays a significant role in the progression of severe diseases. And to that end, bemcentinib, we believe hosts a significant potential in both of the 2 lung indications that we are pursuing. Bemcentinib inhibits AXL activation and thus prevent the progression of serious disease through the modulation of resistance mechanisms and the adaptive immune system, specifically the bemcentinib mechanisms of action in the lead indications: one, STK11, non-small cell lung cancer.

Bemcentinib aims to unlock the immunosuppressive environment, which is caused by excellent activation and thus drive the proliferation of immune cells to restore the effect of checkpoint inhibitors.

For the hospitalized COVID-19 indication, bemcentinib works through 3 distinct mechanism of action. It blocks viral entry. It stimulates the innate immune system, and it promotes the tissue repair regardless of the variant or mutations. We also have seen that bemcentinib mechanism of action is probably also linked or more attractive due to the fact that it accumulates by up to 40-fold in lung tissue. We have seen an attractive clinical profile from our previous studies in 179 COVID-19 patients and 159 non-small cell lung cancer patients. [ And we see ] attractive clinical profile, which specifically mean in relation to the 2 indications that we are pursuing.

This is a snapshot of our clinical pipeline as of today, which clearly shows that we are focusing on bemcentinib specifically in first-line STK11 non-small cell lung cancer, where we are planning to initiate the Phase Ib/IIa study, as I said, we're, of course, also completing the second line non-small cell lung cancer study, the 008 study and the relapsed/refractory AML study, the 003 study, and we will report the data when they are available. But currently, it's not our focus to pursue bemcentinib in those 2 indications. We are also advancing bemcentinib, as I mentioned, in the EU-SolidAct Phase IIb study, which is now open for enrollment.

If we then go back and home in on STK11 mutated non-small cell lung cancer. We believe that there is a significant opportunity for bemcentinib to improve the life of patients who are carrying quite a common, but nonactionable mutation. And the word nonactionable mutation can put into some context. So the treatment of first-line non-small cell lung cancer, a lung cancer by itself is based on a precision medicine approach under which the patients are diagnosed or characterized by whether or not they have a molecular driver, which is causing the progression of the cancer.

And it's very clear that STK11 is one of the most common non-actionable mutation, meaning that there are currently no targeted therapies that can address that mutation. We have seen that there are targeted therapies for actionable mutations like the ALK inhibitors, the MET inhibitors, BRAF and EGFR inhibitors, and we've seen some pretty significant clinical improvements for some of those targeted therapies. But we also can see here that the majority of the mutations are nonactionable and STK11 represents 20% of the nonactionable mutations for this specific patient population.

So it is a significant medical need. STK11 mutations are detected, as I said, in up to 20% of the population in the U.S. and the 5 biggest countries in Europe that accounts for more than 30,000 patients a year. It is a recognized resistant mechanism for anti-PD-1 or PD-L1 or immune checkpoint inhibition, monotherapy with poor responses both on overall response, but also on overall survival. It is on the panel of leading liquid biopsy providers, i.e., it is used in the clinic to detect whether the patient had the mutation or not.

And we have seen that the STK11 mutation occurrence are increasing with immunotherapy. The patients that harbor the STK11 is characterized by a reduced response to the CD8+/PDL1+ T cell infiltration, which I'll come back to. It also shows lower level of PD-L1 expression. It has increased AXL expression on the dendritic cells, and it has relatively low level of actionable co-mutations, i.e., other relevant mutations like ALK or EGFR. And of the most frequent co-mutations which are KRAS, TP53 and KEAP1, none of them are actionable.

This is a real-world data reported at ASCO represent a significant amount of patients, which clearly shows that STK11 mutation confers to a poor outcome on all relevant measures being overall response, median progression-free survival or overall survival. So if we pause for a second in a situation for a checkpoint inhibitors to work, it works through the engagement created by the CD8+ T cells that are present in the tumor and therefore, it improves the prognostic of killing the tumor cells with the immune checkpoint inhibition in a STK11 mutated situation, the CD8+ cells are excluded or exhausted.

And therefore, there is a reduced type 1 interferon production by the dendritic cells, which then turned the environment into what is called a cold tumor that basically result in a limited response to the immunotherapy simply because the CD8+ cells are not present for it to engage.

Bemcentinib selectively blocked the AXL in the receptor and restore the sensitivity to immune checkpoint therapy and also potentiate chemotherapy. It has 2 distinct mechanisms of actions that are relevant for this population.

It increases the type 1 interferon secretion from the dendritic cells. Thus, it drives the expansion of tumor-specific CD8+ cells to restore the therapeutic response to PD-1 therapy. And the downregulation of AXL activation that we have seen in our previous studies in chemo-resistant cancers, delays and may even potentiate chemotherapy. And thus, we believe that bemcentinib in combination with a PD-1 and chemotherapy in this setting is a very attractive opportunity.

This is to remind you about the data that we have previously reported, where it's shown that bemcentinib restore the sensitivity, as I said before, to immune checkpoint inhibition through the expansion of CD8+ T cells. And the reason for why we're showing it again here is that on the left-hand side, we have 2 cell lines, the A549 and the H2122. The A549 -- and in both situations, we see the expansion of the CD8+ cells, so a clear indication of the ability to increase the population of CD8+ cells.

The A549 also has a KRAS co-mutation, which -- so this indicates that this also would work in a situation of a co-mutation with KRAS. And in the other cell line, we have a KRAS and a TP53 mutation, would also indicates that it also has the same effect. So regardless of co-mutation, it may actually work in all situations. These are, of course, limited data. But the important message here is that they both lead to a significant reduction in the tumor volume and thus potentiate the effect of immune checkpoint inhibition.

This is the anecdotal data from our 008 study. These are the STK11-mutated patients only, so it does not include STK11 IP, which we are evaluating further and may come back on. But this is comparing the outcome. And these are second line patients, I would remind the audience about that. The real-world data is shown at the top of the slide. So for second-line patients, we have a STK11 mutation, real-world data show median progression-free survival of 2.2 months and overall survival of 6.3 months. And for each of the 3 patients, we see an encouraging signal. And I'll remind that this is second line patients. But of course, it's a limited data set, but it's encouraging from the fact that we see clinical activity in this population.

The next step for bemcentinib in this population, first-line non-small cell lung cancer, STK11 is a Phase Ib safety study. And which is a traditional 3+ 3 design, where we -- where the primary endpoint is, of course, safety and tolerability. Secondary endpoints will be responses and overall survival. And the selected dose or selected doses will be taken forward into an expansion study, which will be STK11-mutated patients, specifically while the Phase Ib study will be all comers, so not necessarily STK11-mutated patients.

It's scheduled to start in the second half of this year, as I said. It will be -- bemcentinib will be combined with the current standard of care treatment in first-line non-small cell lung cancer. In this case, pembrolizumab + doublet chemotherapy. And the Phase IIa expansion study may start while the last dose is still ongoing, which is not uncommon. And we expect the data from the Phase Ib study to be available in the second half of 2023.

If we then shift over to the other indication of bemcentinib hospitalized COVID-19 patients, we believe that despite the huge amount of agents that are being studied for COVID-19. Bemcentinib offers a novel approach to effectively treat hospitalized COVID-19 patients. So the focus here is for hospitalized patients, severe cases. That's a discussion as when the pandemic will -- how long it will last and when it will end, but it's very clear that we see waves coming. We've seen the wave here in the summer.

We believe that certainly, the pandemic will continue even with milder variance and remind the audience that we still have about 350 million people in the Western world that would be at risk under a pandemic situation. So we have the immunocompromised patients. We have the unvaccinated and there's still 120 million of them. And we also have the waning immunity of -- so when you have the boost and time goes, over time, you will be at risk.

So we do see that there's still a relevant market opportunity here. And the important notion of why we are pursuing bemcentinib in this indication is that unlike all the other anti-virals, bemcentinib acts through 3 distinct mechanism of action. So one, it prevents the viral entry. It promotes the innate immunity, and it also supports the repair of the damaged epithelium, the lung tissue, which is critical for hospitalized patients.

And currently, we have also seen that bemcentinib is insensitive or agnostic to variance. So we have not seen that it doesn't work through the mechanism of action that I just referred to in any of the known variants. The ACCORD2 data, which is bemcentinib plus standard of care clearly show the clinical potential of bemcentinib by having very meaningful clinical efficacy of increasing the number of patients who were alive at day 29 and at day 60, but also significantly reduced the need for automatic ventilation or progression into a more serious disease during the treatment.

And if we look at the treatment guidance for hospitalized COVID-19 patients, these are the NIH guidelines. What you would see is that you have basically 3 stages. So patients require supplemental oxygen. They may progress and require high flow device or they may require mechanical ventilation. This is the critical stage. The available treatments are basically [indiscernible]. So there are actually not a lot of opportunities for the hospitals to treat the patients according to the medical need that we are seeing for these patients. And we do believe that bemcentinib when added to the standard of care would provide significant and very meaningful clinical benefit for this specific population of patients being hospitalized.

We're also proud that we were selected to be part of the EU-SolidAct platform, which is an established capability that has shown that it's able to recruit into hospitalized COVID-19 patients. We have applied a captive study design. So the demonstration of the platform comes from the fact that baracitinib that was recently studied under the platform has been approved. We also believe that our study design reflects the evolving nature of the disease behavior due to the effect of the vaccine and variants. So this will be part of those patients that will be enrolled.

And the primary endpoint was selected with consultation with experts and has also been informed by the previous data that we generated in the 2 previous COVID-19 studies. The study is open for enrollment, and we hope to announce the first patient having been treated imminently.

The key financials from the quarter is we are basically running on the average as my CFO, Rune tells me. We had a small increase this quarter compared to the previous quarter related to employee costs after restructuring or rightsizing the organization into the focus that we announced in May. We are a well-managed company, spending more than 80% or around 80% of all our custom R&D, which is what the company is all about.

If you look at it, our average cash burn is around NOK 75 million and -- which tells you that we will probably have 4 quarters of runway measured from the end of the second quarter this year, but of course, all depending on the activities that we engage in.

Going forward, the key catalyst for bemcentinib and for BerGenBio are related to specifically the 2 indications that we are pursuing. In first-line, STK11 non-small cell lung cancer patients, of course, critically to initiate the Phase Ib study in first-line this year, additional preclinical data on STK11 and co-mutations, which will be very informative for our expansion study to follow the Phase Ib study. The data from the study in the second half of next year and the initiation of a Phase IIa expansion study in the STK11-mutated population specifically in hospitalized COVID-19 patients, the outcome of the Phase II study in the second half of next year. And also additional data on respiratory infections through collaborations that we will soon announce.

That is today's presentation. Thank you. And I think we will open for questions.

[Unknown Executive]

Question regarding the planned Phase Ib/IIa trial in first-line STK11 mutation -- mutated non-small cell lung cancer. How many study sites are you planning to open?

[Unknown Executive]

Cristina? -- which -- I should say that we -- I forgot to say that, but we have Cristina Oliva, our Chief Medical Officer here; and also Nigel McCracken, our Chief Scientific Officer. So when we have specific questions related to clinical or research, I will direct to some Cristina.

[Cristina Oliva, executive]

So now we are currently actually opening the Phase Ib, which is going to be in kind of sort of limited number of patients, and the plan is to open between 4 and 6 sites, clearly depending on the potential for recruitment that they will show.

[Unknown Executive]

Okay. Great. One more question related to the financials. Before summer, you closed on the AML program, do you expect operating expenses to be reduced in the coming quarters? Or do you think this is more, as you said, the average expenses?

[Unknown Executive]

I don't think -- Rune, I can start. I don't think that [ the story ] necessarily can predict the future for how the operational burn or spend will be. But it's very clearly -- but it's very clear that it's almost 100% linked into the clinical activities for bemcentinib in the 2 indications and the CMC activities related to that. So we don't provide guidance specifically on our financial forecast. But the -- let's call it, the cost of the operation itself is pretty much the same, and it will stay the same for the foreseeable future. But the variations is related to the clinical and the CMC activities.

[Unknown Executive]

Okay. We have some online questions as well. So one question is within the current cash runway, do you think you will be able to present attractive preliminary data from STK11 or COVID in time to attract the partners or investors.

[Unknown Executive]

That is difficult to say. What I can say is that we feel that we are in a position to continue to pursue our strategy of those 2 clinical indications. But the timing of the data is unknown at this time. So that's -- we cannot provide a specific guidance as to whether we will deliver the data within our current cash position.

[Unknown Executive]

The market was expecting end results from BGBC003, which was the AML study and 008, the second-line lung study in first half 2022. Do you think you will publish the data soon?

[Unknown Executive]

We will publish the data when they are available, i.e., meaning when the table -- when the data has been cleared and [indiscernible] and checked as it's no longer a focus for the company. Of course, you would expect this to take a little bit more time than in a situation where it was a priority.

[Unknown Executive]

That ends the Q&A session.

[Unknown Executive]

Okay.

[Unknown Executive]

Well, thanks, everyone, for attending, and have a nice day. Bye.