Bergenbio ASA

OSE:BGBIO

Earnings Call Analysis

Earnings Call Transcript 2024-Q2

[Unknown Attendee]

[Foreign Language]

[Martin Olin, executive]

[Foreign Language] So I'll do this in English.

I'm Martin Olin, the CEO of BerGenBio. Welcome to the second quarter 2024 presentation.

For those who have not heard about BerGenBio. We are about AXL inhibition. And why are we doing that? We're doing that because it's known that AXL, which is a cell surface receptor or protein, is involved and critical in a number of serious diseases. I'm happy to report that, on our very focused strategy, we progressed very well in the second quarter, particular on the clinical and on the financial aspects. In our main study, which is called BGBC016, which is a study on frontline therapy in non-small cell lung cancer for patients who have mutation [indiscernible] called STK11, a significant unmet medical need, I'm happy to report that we have completed all the 3 cohorts in the Phase Ib. So the Ib is a safety study. We tested 3 doses, 75, 100 and 150 milligram. And we received positive recommendation from the Data Safety Monitoring Board, allowing us to include the second dose of 2 doses in the IIa part, which is specifically for patients who have [ a STK11 ] mutation. So that's ongoing, and that's a great achievement for the company. The study is designed to enroll up to 40 patients in the Phase IIa part.

Of course, the Phase IIa study is not a randomized study, so there is, per se, no controller. That's quite usual for a Phase IIa study, but we have addressed the need, I would say, for having a reference instead of a control arm. So we have teamed up with Tempus, one of the leaders within artificial intelligence, for what is called tumor ctDNA profiling, which means gene profiling of the patients, a U.S. company listed on NASDAQ that has a unique network to a number of hospitals in the U.S. And I'll connect to what this means for the study, but that's a very important and encouraging advancement.

We are the leading AXL inhibitor and development for this indication. There is a significant unmet medical need. About 20 patients -- 20% of non-small cell lung cancer patients, even in frontline, have a mutation in the STK11 gene causing them to respond very poorly to standard-of-care therapy. And we have shown that, by inhibiting AXL with bemcentinib, our molecule, we can actually improve both the innate and the adaptive immune system to respond better to standard of care which consists of chemotherapy plus immunotherapy.

We raised very successfully NOK 138.9 million from the warrant exercise. So in combination of what I'll call the 2-stage financing, we've raised almost NOK 400 million since June of last year. And we ended the quarter with NOK 200 million in cash. And our average spend is around 40 million a quarter, so this will take us into the second half of 2025, at which point, we have completed the study. And we'll have several readouts from the study as we go along. We also completed a reverse share split, 100 for 1. So we have dealt with the [indiscernible] stock issue as pointed out by the financial authorization here in Norway, but let's go back to the opportunity.

So what are we talking about? We're talking about addressing probably the most significant market opportunity within medical care, which is cancer treatment. It's projected to grow by almost 10%; and adding $150 billion, getting to a staggering number of 400 billion by 2028 in cancer treatment. And we're only talking about the pharmaceutical part, not the costs for this -- for the additional and surrounding costs for the treatment. Non-small cell lung cancer is one of the largest indications. Unfortunately, it's also the deadliest one, so more than 2 million people die every year from small cell lung cancer. And BerGenBio is addressing what is at least believed by a number of analysts and experts to be the critical areas to change the outcome for the patients, i.e., improve the treatment. And BerGenBio, with our compounds, are actually addressing 3 of the cornerstone approaches.

One is precision medicine, which is you identify an issue when you can actually target that issue very specifically. We're doing that with the STK11 patients, mutated patients. We also have a partner program with a company called ADC Therapeutics, where they're using one of our antibodies in a conjugated fashion so they can get the toxin into the cells. And we have also seen both in preclinical but also in some clinical data that we are able to stimulate the immune response, the innate immune response, which is our own immune response, to actually respond better to both immunotherapy but also chemotherapy.

And if you look at non-small cell lung cancer. 20 years ago, it was just one group of patients. Today, it's actually a very [indiscernible] group. So first of all, you are tested for your PD-L1 expression because that will highly predict the outcome. So if you have a high expression on PD-L1, you're very likely to respond well to immunotherapy, but if you have a low or a negative PD-1 expression, it's not likely that you're going to have any benefit from immunotherapy. But yet it's still applied because there's no alternatives for the doctors today.

To add to the complexity, this slide can be sliced even further down into what is called mutational status. And there are a number of mutations that are known to be oncogenic drivers, which means that these are the reasons for why -- the primary reason for why the cancer grow. And there's no therapy if it's nonactionable, but there are some actionable mutations, which means that there are targeted therapies that can address the EGFR receptor mutation. And those treatments have turned out to be extremely successful; i.e., it prolongs the life significantly for those patients, but the majority of the mutations that are known today and are involved in the growth of cancer are nonactionable, which means that there is no therapy available for them.

STK11 is probably the largest group in these nonactionable mutations, and there is currently no therapies available for the patients. And the outcome for these patients are pretty devastating. So from you are diagnosed until you no longer respond to therapy, less than 6 months -- and you can expect to live less than 10 months. And this is from the first diagnose. This is a pretty devastating diagnose.

If we look at the market opportunity, doing the numbers. So we're talking about first-line non-small cell lung cancer STK11 patients. It's about 31,000 patients in the Western world. If we take out those mutations, if you recall it, EGFR, BRAF and ALK, we're down to around 30,000 patients. The average monthly price for a treatment in the U.S. today is around USD 14,300. And we expect at least to be able to treat the patients for 10 months. So we extend the time on treatment from around 6 to 10 months, and hopefully, we'll extend the life even more for these patients. And this comes down to a market opportunity of around $4 billion on an annual basis, so a very significant opportunity.

Why is it that we believe that we have a go at it? Well, first of all, we have some very unique features about bemcentinib. It's a small molecule, so you can take it as a pill. It's [ already ] available. It's very potent and highly selective for AXL, so it doesn't inhibit any other cell surface proteins. It concentrates, [ very interestingly ], in the lung compared to other tissue, which is of course needs -- that's the disease we are addressing, but it also crosses the blood-brain barrier, which is very important because unfortunately a lot of these lung cancer patients have metastasis in brain. And we can address that because our molecule actually can cross the blood-brain barrier.

We have a very extensive safety database. More than 600 patients have been treated with the drug. We have seen activity in -- from the drug by itself, so not combining it with other drugs. We've seen activity in multiple indications. We know that it combines very well with chemotherapy and immunotherapy. We've done 2 studies in second-line non-small cell lung cancer in more than 100 patients, where in both of the studies we extended the time people were on treatment, but we also extended their life compared to the reference. We have a fast track designation issued by the FDA, which means that the regulatory agency in the United States have acknowledged the medical need and they are encouraging people like us to move forward fast -- as fast as possible in this indication. The fast track designation means that we'll have a -- we'll be at the same side of the table with the FDA instead of on the other side of the table as we progress in the study. And we have patent protection until '42.

So this is actually the core of why we believe we have a drug that potentially could change the outcome for patients. So if we look on the left-hand side, this is the characteristics of a tumor that respond well to treatment. So chemotherapy and immunotherapy. And why do they respond? Well, it's because they have presence of CD8+ T cells. These are the T cells that can kill the cancer cells. They also have a very high expression of PD-L1, which is needed for immunotherapy to work. So Keytruda, for example, does not work if you don't have a PD-L1 expression -- then there's nothing to bond to, but they also are characterized by having stimulatory dendritic cells. So this is [indiscernible] immune system.

If we then look at an STK11 mutated tumor, what we can see is that the CD8+ T cells are excluded. So they're not present. There is no or low PD-L1 expression. And there is suppressive dendritic cells. So this is actually what we call an immune desert where everything works against the immunotherapy to work. What we can see when we inhibit AXL is actually that we restore the immune system to get the CDL T cells presented. And we have stimulatory dendritic cells. And we can also see that we can activate the response to PD-L1 expression even if there is a low PD-L1 expression. Why is that? You could argue that, if you don't have the expression, you don't -- you cannot get the activity, but the reality is that it's not only the tumor cells that are important. It's also the micro environment around the tumor cells. So that's why we can activate the result.

This is a schematic of our Phase Ib/IIa study. So Phase Ib study is a safety study to make sure that the drug, when combined with Keytruda and chemotherapy, is safe in this patient population. And you can say, "Why are you doing that, when you have tested your drug in 600 patients?" Well, we've never tested it in a triplet combination, which is Keytruda; chemotherapy; and bemcentinib, our drug. I'm very happy to report that all the 3 doses were cleared by the Data Safety Monitoring Board, meaning that they are safe and tolerable. And we have, earlier this year, taken the first dose, which is 100 milligram daily, into the Phase IIa part. And recently we announced that the third and final dose of 150 milligram per day were cleared by the data safety monitoring board, so we're also moving that forward.

So these 2 doses, 100 milligram and 150 milligram, will be dosed in 20 patients each, so in total 40 patients. And this will be done in a -- what we call a global study. So both in the U.S. and in Europe. And recruitment is ongoing. And I would say that we are very much on plan. What's really groundbreaking and interesting is that we've been in dialogue with Tempus for a while. And we have agreed to sign up with Tempus for them to basically -- for each of the patients that we enroll in our study, they will have the genetic profile and the characteristic of that patient. And then they will enroll a patient through a -- their network in the U.S. so we get what I call a digital twin who will receive standard of care. So by doing it this way, we will prospectively -- and not looking backwards but looking forward. We'll actually be able to identify 40 patients who will be on standard of care, who have the same genetic profile as the patients in our study. And therefore, these provide a very meaningful contextual benchmark to the data that we generate, which is standard of care plus bemcentinib.

So this is kind of, in my opinion, one of the ways we will see clinical studies in serious diseases like cancer being conducted going forward. Because doing it the traditional way would probably double the expense and double the time lines to do the study. So we are doing this in a very cost-effective and timely fashion, but yet we are giving a very meaningful data to compare with.

This is an overview of the competitive situation. And I can say that we are still the leading AXL inhibitor in frontline therapy in non-small cell lung cancer. There's no one else who is competing exactly for our population, but there's also no one who is competing against an -- with an AXL inhibitor in this patient population. There are, of course, a number of other approaches. And I would not say that any of them would not work, but at least we are the only one who is specific to frontline and are including all STK11 mutated patients regardless of whether they have a co-mutation or not. There are some of them who are doing it with a KEAP1 and KRAS. That's a minor portion, so although they might be successful, we are still addressing the lion's share of the market opportunity with our approach.

So if we summarize it. It's well established these days that STK11 represent a major unmet medical need in lung cancer. And we believe that our approach is one of the interesting one. We know that AXL expression is a key driver of resistance to chemotherapy and checkpoint inhibition in STK11 patients. We also know that they have a high expression, which is interesting, so it actually works well together. In a normal population, you probably see an AXL expression of around 60%. We're talking about lung cancer patients. In STK11 patients, it's probably above or around 90%. This is maybe the reason for why these patients are resistant to chemotherapy and immune checkpoint inhibition. We know that our drug have activity. We are progressing the study very well. And we are going to -- because it's not a closed or randomized study, we have access to the data, so we will give an update to the market later this year and then the beginning of 2025. And again, we are the leading AXL inhibitor.

Most recently, we announced a very interesting and very promising approach, which has been published by Josephine Taverna from the university hospital at San Antonio. And the science is pretty groundbreaking. It shows that the statutory pathway is very tightly linked to the AXL pathway and maybe the reason for why lung cancer patients does not respond well to therapy. This is not non-small cell lung cancer but lung cancer generally speaking. And based on that publication, Dr. Taverna has actually received a sponsorship from the NIH in the U.S., so it is a fully sponsored study. And we are participating in this study, so we are combining bemcentinib with pacritinib or Vonjo, which is owned and marketed by Sobi, a Swedish pharmaceutical company, but not approved in lung cancer. So there's a significant interest both from Sobi and, of course, BerGenBio but certainly also to test whether the groundbreaking scientific publication that Taverna has published actually translate into efficacy in patients. So this is a new opportunity and it's fully sponsored, so there's no additional cost for BerGenBio other than the fact that we are sponsoring bemcentinib, which we have on the shelf, anyway.

On the financials, I would say overall we are tracking completely in line with the guidance we have provided previously. So we have significantly reduced the spending in the company after we did the strategy change in 2022, in the beginning; and then in 2023, fully implemented. So our burn rate is around NOK 40 million a quarter on average, and 75% of that is related to the clinical study. So there may be small variations between the quarter but also one in the second quarter. Probably around 8 million of that variation from the 40 million is explained by the fact that we are purchasing standard of care to be given to the patients. And we're buying the drug upfront, the standard of care; and then using it in the quarter after. So we -- if we adjust for that, the quarter was kind of dead-on NOK 40 million.

We ended the quarter with NOK 200 million. And we expect the burn rate to be the same as we go forward, NOK 40 million a quarter. So we have another [indiscernible] of runway. And we expect to complete the study in the summer 2025. And we will have ongoing readouts, so we're pretty sure that we're going to be able to provide the market with updates from the study, meaningful data points that can guide on what should be the next step for the development of bemcentinib for the non-small cell lung cancer.

This is an overview of the news flow. We have completed the Ib, and we have also announced that we have initiated the second dose. We have established a synthetic control arm, which we have also guided on that we would do. And then for the remainder of this year, we will have the first patient, hopefully, included in the NIH-funded study, the one conducted by Dr. Taverna. We'll have an update on tilvestamab, our antibody also addressing AXL, on the out-licensing process; an update from the partner program with ADC Therapeutics. We'll also provide some additional bemcentinib data from the 008 study, which was in the Phase IIb study, where we combined bemcentinib with pembrolizumab. And what we are looking for is actually to see the argument: If we can validate that in the clinic, as I just showed you before, on these cells, can we actually see that we are improving the ability of the immune system to respond? We'll have safety overview in the second half as well. And we'll also have the first interim analysis from the Phase II part.

On the regulatory side we're going into next year, we will meet with the regulatory agency to have some guidance on what should be the next development or the next study and, hopefully, a pivotal study in this significant indication with an unmet medical need. We will complete the enrollment under plan. And we will provide interim analysis on the Phase IIa data, which will be, in our mind, very meaningful and probably the opportunity to potentially provide some very valuable data to the shareholders. So all in all, a very clear focus in frontline therapy where there is a significant medical need; no treatments that are effective, available to the therapy. We have shown that our combination is safe. Sounds easy, but very important: safety first. The Phase IIa is on plan. And we now have the 2 doses in. The collaboration with Tempus provides a very relevant and innovative approach to getting a controlled set data because everyone will ask you, "Okay, so how are patients doing if they are on standard of care?" And most companies have been looking backwards on historical data, but there's always some caveat that it's not the same patient population or -- so you're data mining. This approach provide us with [ the math ] of the patients, so we can be sure that these patients have the similar profile as the one in our study, very important.

The interim analysis that we will provide will be the first kind of look at what's the efficacy of this treatment. Is it as good as we can hope for? Hopefully. And this will unlock significant value, in our mind. And we have the money to complete the study. If we don't have the money, if you ask me, to have the final readout of the study -- because I hope that these patients will live much longer than they do on standard of care.

That's the presentation. And I think we will open for questions. Anyone from the audience?

[Unknown Attendee]

Yes. First of all, any live questions in the audiences? Yes?

[Unknown Analyst]

[ Hans Hekton ] from [indiscernible]. I would just wonder. You mentioned the pivotal study that you are supposed to discuss with FDA.

[Martin Olin, executive]

Yes.

[Unknown Analyst]

Do you have any idea of the size, the number of patients that, that will be; and then the timing for such a study?

[Martin Olin, executive]

It -- as you know, it always depends on the strength of your data. If we can bring back the STK11 mutations as if they did not have the mutation, which will be a very strong signal, I would say that 250 patients is probably what you'd be thinking about in a [indiscernible] fast track designation. So 250 patients in a randomized study, 2-for-1 randomization probably. The enrollment always depends on how much you are prepared to invest in it. How many sites? And is it at a global study, et cetera? But it's not unreasonable to believe that you can enroll this kind of study in 2 years with the right partner, I would say.

[Unknown Attendee]

Any other questions here? If not, we have some online questions. So the first one is, what is the status on patient recruitment, Phase IIa?

[Martin Olin, executive]

So as I said, we have included the second dose. And the first dose, 100 milligram, were initiated in May this year. We're not providing specific guidance on numbers per se. We are rather focused on the fact that we will enroll the study by the summer next year, but we will provide data as we go along. And the first data point will be late this year and the beginning of '25.

[Unknown Attendee]

And what are the major milestones remaining on the Phase II? And when do you expect to present these interim data from the [ Phase IIa ]?

[Martin Olin, executive]

Kind of the same question, but first interim data, late this year, beginning of '25. For me the really important milestone is the final data set from the IIa study, in comparison to the Tempus data.

[Unknown Attendee]

Why was the dose for the Phase II decided just recently? This is the second dose then. Are you lagging behind?

[Martin Olin, executive]

No. So the IIa study consists of 2 doses. And that's to address a requirement from the regulatory agency in the U.S., which is a fair requirement. It's that, "Don't show us your highest dose. Show us your best dose," which is the balance between safety and efficacy. And that's why we have 2 doses in the IIa study. That's to address that issue upfront and not to have to address it later on in a study. Because if we would have to have 2 doses in a Phase IIb or a pivotal study, that will probably expand the study to be 375 or even 500 patients. So we're addressing that issue upfront. That's why we're doing it.

[Unknown Attendee]

Can you say anything about what in your view would make a positive readout in the Phase II part? Which study provides the best reference? And what magnitude of improvement are you aiming for?

[Martin Olin, executive]

So there are no comparative studies, but we're trying to generate one with a synthetic approach. In my opinion, if we can increase the response time for patients how long will they be able to positively respond on treatment by, hopefully, more than 3 months -- the longer the better, but more than 3 months, improvement of PFS from around 5 months to 8 months and overall survival from around 10 months to all the way up to 14 or 15. That will be extremely good data, in my opinion.

[Unknown Attendee]

So why do you plan to burn cash on external data set, the synthetic control arm, when you still need randomized data?

[Martin Olin, executive]

So this is actually to try to address the issue of what's the reference of your data. When we are in the front of the FDA, the agency, with our data set, if we have no data to compare it to and would use historical data, I'm very sure that the FDA would say the same thing as I saw them the last time. "Well, these data are not comparative to the data you have generated." By doing it this way, we are at least generating a comparative and relevant data set. Yes, it's not randomization, but it will provide very valuable insight into the strengths of our data and, hopefully, convince the FDA that we have enough to go into a Phase IIb/pivotal study.

[Unknown Attendee]

And can you say anything about the financial terms on the Tempus agreement?

[Martin Olin, executive]

I cannot say anything about the financial terms, but I can assure you that doing it this way comes at less than half the cost and less than half the time that they would otherwise be if we have to generate it by ourselves.

[Unknown Attendee]

Any updates on the ADCT 601 study, the Phase I trial?

[Martin Olin, executive]

No. We are in dialogue with ADC therapeutics on an ongoing basis. And I think we can expect an update in the remainder of this year.

[Unknown Attendee]

And same questions for the Sobi-UT Health San Antonio study, the Taverna study.

[Martin Olin, executive]

So we know that the study has -- the protocol has been approved by the FDA. And we are basically waiting for the patients to be enrolled. So that's probably coming very soon.

[Unknown Attendee]

And one question. Given the ongoing clinical success and the steady cash flow, what specific strategics are in place to transition BerGenBio towards profitability and ensure long-term financial sustainability?

[Martin Olin, executive]

That's a very good question. I think that strategy that we have applied since 2 years almost now is to conduct the study in a significant unmet medical need, a patient population that really is underserved today. We feel that we have a very good shot at it. If we can generate attractive data in our BGB 16 study, so the Phase Ib/IIa study, we feel confident that we can either continue to raise money to conduct the next study ourselves or partner with a significant player to conduct the study and therefore also get access to sales and marketing capabilities which we don't, arguably, have ourselves. So these are the 2 very, in my opinion, obvious options. And it's going to be data-driven, so the data will tell us and dictate which direction we will go for.

[Unknown Attendee]

Thank you, Martin. That completes the Q&A sections.

[Martin Olin, executive]

Okay. Thank you. Thank you for attending.