Nykode Therapeutics ASA

OSE:NYKD

Earnings Call Analysis

Financial Overview and Outlook

The company closed the year with $12.9 million in revenues largely attributed to R&D activities under its agreements with Genentech and Regeneron. This performance shows a reduction in revenue compared to the full year 2022, suggesting changes in the company's revenue streams or the culmination of certain agreements. Crucially, they ended with a decreased net loss of $35.2 million for the full year 2023, improving from a $42.7 million loss in 2022. This narrowing of losses might reflect better cost management or growing operational efficiency. Additionally, with a robust cash position of $162.6 million, the organization is well-capitalized to pursue its strategic and R&D efforts into the coming years.

Operational Highlights and Strategic Growth

The company maintains a strong equity ratio of 82%, indicative of a financially robust and risk-averse structure. Looking forward, the initiation of the C-O4 trial marks a significant milestone, signifying the company's transition into an active phase of developing its VB10.16 therapy. Moreover, C-O4 is projected to cater to a market opportunity of several thousand U.S. patients with cervical cancer, pointing to significant commercial potential upon successful development and approval. The company also notes its strategic intentions to expand VB10.16 into the head and neck cancer indication, suggesting a broader vision for its oncology pipeline.

Competitive Landscape Analyzed

The company positions its VB10.16 product as competitively advantageous, particularly highlighting its favorable safety profile compared to the response rate and toxicity concerns of its direct competitor, Tivdak. With an 18% response rate for Tivdak set as a benchmark, VB10.16's lack of added toxicity could become a compelling selling point. This focus on creating a product that offers better tolerability could be critical in achieving market penetration and patient preference.

Advancements in mRNA Drug Development

While the company has noted an expansion to mRNA technology potential, current emphasis remains on building upon its DNA format platform, evidenced by its confidence in the APC targeted technology stemming from positive data in cervical cancer treatments. The strategic orientation leans towards refining and expanding the existing plasma DNA-based vaccine programs, rather than pursuing an internal switch to mRNA. It suggests that any future mRNA endeavors may be collaborative rather than primary in their developmental stages.

Upcoming Trial Milestones

The organization has a clear timeline with the majority of patients in its VB-C-03 trial expected to be in the expansion phase. Although specific numbers aren't shared, the focus on patient safety and lack of dose-limiting toxicities so far offers hope for the subsequent steps in the trial. Another important milestone, the further unveiling of the NYK011 project, is slated for the second half of the year, indicating ongoing diversification and growth of the company's drug development pipeline.

Earnings Call Transcript 2023-Q4

[Operator]

Greetings, and welcome to Nykode Therapeutics Q4 2023 Financial Results Presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Michael Engsig, CEO of Nykode Therapeutics.

[Michael Engsig, executive]

Thank you very much, Brock, and to all our participants, a very warm welcome to the fourth quarter webcast from Nykode Therapeutics. We assume you're all familiar with the forward-looking statements of Nykode. And on that note, we'll immediately move on. It's my pleasure today to be joined on this call here by my colleagues, Agnete Fredriksen, Chief Business Officer and Co-Founder of Nykode; Harald Gurvin, our Chief Financial Officer; as well as Klaus Edvardsen, our Chief Development Officer, who will help me guide you through the highlights of the fourth quarter and answer questions that you may submit in the system. So Q4 was another very exciting quarter for us with a good solid progress for the company. We expanded the oncology pipeline with the addition of NYK011 aimed at preventing and treating colorectal cancer, which is not only addressing a significant patient population with a significant unmet medical need, but it's also the first time that we take our so-called second-generation or next-generation technology in Nykode into the development path. So we are very excited to be moving that program forward. We also presented preclinical data from demonstrating that our APC's or [indiscernible] targeted technology, so the proprietary technology of Nykode, yield superior immune response, whether it delivered as a DNA or mRNA and Agnete will tell you more about those data in a couple of slides.

We finalized a successful private placement, raising USD 45 million. back in October, which means that we are at the end of fourth quarter, well capitalized with a cash position of USD 162.6 million, which last us into 2026 with our current plans. And important to note here that any positive outcome in the tax case, which we have mentioned that we expect will, of course, positively affect the cash position and the runway. In addition, any milestones from our partners as well as any partnership from, for example, VB10.16 or some of our other programs will also have a positive impact on our cash position and our runway. Post the ending of fourth quarter, we presented additional preclinical data from our inverse vaccine platform. That's our effort in the autoimmune disease field, demonstrating long-term protection against diabetes in the preclinical model, following treatment withdrawal and Agnete will also take you through those data later in this call here.

We recently opened for enrollment for the next dose level or the second dose level in our VB-C-03 trial, where we are investigating VB10.16 in advanced head and neck cancer, which means we'll now be testing the 6-milligram dose following the successful safety running in the first dose level cohort. Just a few words on our private placements, which we successfully concluded in October. So we raised NOK 505 million corresponding to USD 45 million. The operating was, as we've announced earlier, significantly oversubscribed and demonstrated a robust interest from international life science specialist investors, which was really the key point for us with that direct placement. As we announced, the used proceeds will be directed towards advancing our VB10.16 program, our wholly owned lead program through the clinical studies, including VB-C-05, which is our entry into the locally advanced cervical cancer fields. It will also be used or direct towards expanding our pipeline, accelerating our R&D to further improve the Nykode platform and broaden our scope into the autoimmune disease field. We'll also be directing this towards further strengthening our CMC and manufacturing operations.

A quick look at the pipeline. As you can see, we continue to expand the pipeline, which is really a testament to the technology of Nykode's applicability and broadness of scope addressing a broad range of both oncology programs and disease areas. And with our lead program, we now have several trials ongoing with important milestones expected during the year. So within the cervical cancer area, we will be reporting updated data in the first quarter, and we'll be initiating the CO-4 trial in the first quarter for our CO-3 trial. We have -- as I've just mentioned -- opened the second dose level and also aim to conclude on the recommended dose level going forward into Part II of that trial during the year. Our CO-5, which is our expansion into the local advanced field, which is, as you'll hear later today an even larger opportunity. We are still in the protocol development, and we'll provide further update on the timelines of that trial as we progress through the year. Then as we said in today's report, we have expanded pipeline with NYK011 and we'll be providing further update on that program in the second half of this year, and we'll be providing also a further update on our autoimmune disease programs in the first half of 2024, which is a slightly moving forward in time compared to what we have earlier reported. And with those words, I'll hand over to Klaus Edvardsen, Chief Development Officer, to take us through an R&D update. Klaus?

[Klaus Edvardsen, executive]

Thank you, Michael. Klaus Edvardsen here. Nice to be with you virtually. Just before I go through the more relevant update, let me just remind you a little bit on our proprietary technology platform that allows us to target antigen presenting cells to direct relevant immune responses dependent on the disease area that we are working in. To do so, the platform is having a targeting unit that targeting units can be modified, as I said, for some new reactions, it will be desirable to have a killing mechanism and other immune reaction, it would be desirable to have a dampening tolerizing effect and therefore, there are obviously possibilities to change and model that according to the program that we are looking into.

I'm not going to spend too much time on the actual backbone of it, but just to emphasize that for the antigenic unit, we can decide which antigen that we would like to put into that antigen units. Not really limited by anything except for the size of the plasmid, but it would be only for very, very large antigen that, that potentially would possess an issue, and I can hardly dream up any issues that would limit us in that regard. Also important to emphasize that we have the IP protection to deliver on this platform, whether it is on DNA, messenger RNA, viral vectors or recombinant proteins, which may be an important thing to bear in mind when Agnete is taking you through some of the subsequent data that we have obtained on utilizing a different modality to deliver on our platform.

I will move straight on to the next slide, the VB10.16 our HPV16 cancer vaccine that can address the most prevalent of the oncogenic HPV strains, 16. Especially if you look in the European and in the U.S. setting, there is the majority of HPV-driven cancers driven by HPV16. In the antigenic units of VB10.16, we have utilized the full-length HPV16 E6 and E7 antigens and the targeting unit is chemokine ligand-3-like-1, which is targeting the MIP-1 alpha on antigen-presenting cells, which raised the capability of cross stimulation with the preferential CD8 killer cells as a consequence of the immune response. The VB10.16 program, as you may know, fully owned by Nykode. Let me go to the next slide and just again emphasize why we are excited and why we have expanded the VB10.16 or the HPV16-driven cancer franchise into more than just the recurrent metastatic setting, but also with expectations of being capable later this year of announcing the final design on moving into locally advanced cervical cancer and potentially also moving into locally advanced head and neck cancer at a later time point. This has all been based on the results that we did present earlier this year from the C-O2 data that is depicted on the left of the slide, where we use VB10.16 plus atezolizumab in patients that had recurrent or metastatic cervical cancer in the second line or beyond. And as you can see from the results in the PD-L1 positive part of that trial, we obtained an overall response rate of 29% and median PFS of 6.3 months and the median overall survival at the time of analysis not reached, but expected to be 25-plus month.

If you compare that to the most relevant other treatment modalities in the second-line recurrent metastatic cervical cancer. That would be the checkpoint inhibitor monotherapy and there are listed three different trials sitting here that is showing the Skyscraper trial with atezolizumab giving, as you can see, a 16% overall response rate at 1.9 month medium PFS and overall survival medium of 10.6 months. Also the pembrolizumab in PD-L1 patient population, again recurrent metastatic cervical cancer, you can read the numbers as well as I can. And again, Cemiplimab or the Regeneron checkpoint inhibitor, also in a PDL1 positive segment in the Empower-Cervical 1 trial with a response rate of 18 PFS of 3 months and a medium overall survival of 13.9 months. I mean, obviously, everyone will have to be careful in doing cross-trial single arm trial interpretation, but I think it is very clear, and there is no doubt in my mind, in Michael's mind, and in other experts that we are consulting with that, obviously, you're not obtaining results like we saw in the C-O2 trial without being in a position to clearly say that there is a vaccination effect that is adding those increment to top on three other trials that only utilized a checkpoint inhibitor as monotherapy.

To the right on this slide, just before completion. As you have likely all picked up, tisotumab vedotin or Tivdak had an accelerated approval. They are in a position, and it has been announced by the FDA that [indiscernible] date. I can't remember it on top of my head, but I think it's coming up in May that this will be turned into a full approval. That would obviously be in a PD-L1 agnostic setting because it is a totally completely different mode of action. That comparator is important because that is in reality the same patient population that we will target with our C-O4 trial that I will come back to momentarily. Here, we saw a response rate of 18%, a median PFS of 4.2 months and the median overall survival of 11.5 months. Again, be careful with cross-trial comparison, but it is very clear that if you do that anyway that we are staying up very well through the result that tisotumab obtained and will turn their full approval into. Bear in mind, they turned their accelerated approval into a full approval based on overall survival. They were up against chemotherapy alone. So a relatively simple bar. The reason that we believe that we have an opportunity in this patient population is that the expected label that FDA will issue in May time frame will be in patients that have failed chemotherapy. That's not exactly the patient population that we do target with C-O4 we do target patients that do fail standard of care as today, which would be chemotherapy but also pembrolizumab.

If we turn to the next slide, just a few words on, as I alluded to, we have on the basis of the C-O2 result being very encouraged and therefore, planning an ambitious program with the aim of obviously addressing all of the Veli/Lin patients with an HPV16-driven disease that would primarily be cancer -- cervical cancers, head and neck cancers, but also anal, vulvar, vaginal, and penile cancers. And as you can see on this slide, we start with a strategy of fast-to-market or the fastest possible path to market that would be on the C-04 trial, where you go in and offer a treatment setting for patients that fail first-line therapy in the recurrent metastatic setting, which would be pembrolizumab plus chemotherapy. Today, these patients are only left with an option of Tivdak or chemotherapy. And therefore, we have expectations that these can play in this arena and will give patients a better option, a safer option, but that will have to, of course, wait and see the outcome of C-O4.

Also based on our dose escalation trial in head and neck cancer, bear in mind that, that is in the first-line setting with the aim of positioning a vaccine as part of standard of care in the setting of, again, pembrolizumab or other checkpoint inhibitors plus chemotherapy in first line, there are significant need for improvement in that setting, and that's why we decided not to expand in the first-line cervical setting because the results there are very, very difficult to beat. They are maximizing out by having the effect of current standard of care, it's a completely different ball game in head and neck cancer, and that's why the strategy has been like that. We would also like to move into an even bigger patient segment until that would be in the Adjuvant setting. We will and have talked about our aim of getting into the Adjuvant locally advanced setting in cervical as I also alluded to, there is, in principle, nothing that would also prevent us from address that patient population in a head and neck cancer setting, which could be assessed and obviously communicated if and when we decide to go that path. So in reality, starting with the fastest possible access to the market and with a very high unmet need in recurrent metastatic cervical cancer moving fast into a potential in first line, also recurrent metastatic head and neck cancer, but finally where the big need in regard to patient numbers would be in the adjuvant locally advanced setting, where we start in the first place in cervical cancer.

If we go to the next slide, let me just give you a quick status update on where do we stand on the development program on VB10.16 as of today. Starting to the left with C-O2, again, in the recurrent metastatic cervical cancer in second line and beyond. You know that trial has been finalized. We have reported outcome earlier in the year. We have promised you to give an update on overall survival. We will keep that promise. We are in the final phases of analyzing the data as well as writing the data for presentation in the scientific literature, more to come within the next month. Moving to C-O3, the recurrent metastatic head and neck cancer, as Michael alluded to in his introduction, we have now opened up in the dose escalation phase moving from 3 milligrams to 6 milligram, and we are on track to have the recommended Phase II dose that will be needed to go into the expansion phase the real Part II or Phase II part of the program within the second half of 2024. Moving on to C-O4. I have alluded to what C-04 is the fast-to-market strategy in recurrent metastatic cervical cancer second line of the failure of standard therapy first line. We will initiate that trial in this quarter. And more important, I guess, is to emphasize that we will be final at Q4 of this year with Part I of that trial.

For the ones that's been following us, you know that the C-04 trial is a two-step approach. Step one is a randomized part where we test out is it a good idea to add the vaccine to atezolizumab. In this case, against just having the vaccine plus placebo. That is a 30-patient plus 30 patients designed and we are fully on track to be finalized with that infliction or catalyst at the end of this year to make a decision based on the data outcome and obviously, discussion with the FDA on how do we move this into the registration intent by adding what we expect to be 70 more patients if that is justified based on the data that we will be guided by end of this year. Why do I dare to say that? I dare to say that because for the first time in my career, what has happened here is that as you can also see on the slide, we have 36 slides -- sites that have been lined up in collaboration with GOG or GOG sites. It isn't what that means and what is very different from what we normally do when we conduct trials is that you start out with a very few, maybe a handful of sites that are ready to be initiated and the new build sites on here, we will almost start with all of the sites that are needed to finalize the trial at one of the same day and therefore, we are very adamant and [indiscernible] that we can do the timely enrollment of that trial and get to the decision point as to whether we will move into the registration part in the right setting of the two randomized part that we do in C-O4.

Then finally, C-O5. I have alluded to the locally advanced cervical cancer. We have not yet decided on the dose. We have not yet decided on the final protocol. It's not because we are dragging our feet in this sense. You all know that what we were waiting for primarily was the readout of the Merck MSD KEYNOTE-A18 trial that tested out adding pembrolizumab to standard of care in locally advanced cervical cancer. Those results are now finally out. And they are, to some degree, very clear on where you have to add vaccine to get an incremental effect. But obviously, you have to do that right. And therefore, the assessment of the full data set are being done currently, and we will imminently be ready to announce the design with an aim of getting that trial going as fast as we possibly can because again, based on the C-O2 results, we believe that here is the next most important step for showing the value of the VB10.16. Finally, just a few words on the next slide, Michael already alluded to NYK011, an expansion of our pipeline so far within the preclinical setting. Just as a prelude before Agnete will share a little bit of thoughts on data generation in that arena. Let me frame what we actually announced, I think, before we closed last year, the intent to address colorectal cancer, but the intent to address colorectal cancer in a way where we acknowledge that most colorectal cancers actually are preset by a polyp. They can be preset by a spontaneous polyp which are, at an individual level, not having a very high risk of developing into malignant cancer, whereas there are some genetic drivers that one in specific families. One of those called familial adenomatous polyposis is a population where you know that if you have those genetic characteristics, if you are a part of such a family, you will 100% eventually develop into colorectal cancer. So this program is defined as kind of a continuum and full honor of the strategy from Michael of addressing highly unmet cancer population need but also try to address the population as early as you can in the development of disease, so to speak, an element of both prevention for some very high-risk polyps in the familial adenomatous polyposis setting, but also with the end game in mind for the ones that actually do transform into a fully malignant colorectal cancer. And by that, I will hand the next part of the presentation to Agnete. Thank you.

[Agnete Fredriksen, executive]

Thank you, Klaus. And I'm happy to add a few [ assets ] here on the design of the vaccine and how we're using Nykode's technology to address this patient population. So this NYK011 is really going to be -- aimed to be a first-in-class vaccine. That means that the composition of the antigens that we will incorporate will be a new and novel combination of this particular antigen. And there is a reason why we also are intrigued by incorporating tumor-associated antigens in this program. Tumor-associated antigens is a class of tumor antigens that are broadly expressed in multiple cancer patients with the same disease that can also be expressed across different cancer indications, which obviously opens up for a vaccine to have a broad patient potential to address. This it also further based on the data that we presented back in September, which has been performed by our partner with Regeneron, where they see that when we or they are using the APC targeted technology that they are able to break tolerance against the tumor-associated antigens, which is an important finding because tumor-associated antigens are expressed in a normal setting and are highly overexpressed in tumors and for these antigens to be successful, we need a specific strong vaccine technology that can really break this tolerance. And we believe that the data generated and presented back in September provides a very intriguing starting point for us to enter into this field of tumor-associated antigens.

In addition, in this program, this will be the first time we bring Nykode's second-generation technology, including the fourth module technology into the clinic, which we are very enthusiastic about seeing how it performs also in the clinic, and that's on the basis of a range of preclinical data, as you also see here to the right where fourth module technology that we are incorporating is allowing us to express both the vaccibody molecule that you are familiar with, with the APC targeted vaccine. But in addition, also secrete an additional proteins, one or two or up to three is what we've tested so far. These can be cytokines, ligands, adjuvant can also be antigens. And as you see, when we do this, we can even further customized immune response. As an example here, for instance, see when we add GMCSF, we see a specific infiltration that is increased with a particular subset of these antigen-presenting cells known to be of interest for cancer vaccines. So it will be very exciting to see this program moving forward. And as we allude to later, and you'll see in a couple of slides, we will present further data on this concept in the next year -- in this year.

Next slide. And then another important data set that we presented back in Q4 is based on broadening the scope of the modalities that we can use with the APC targeted technology that we are working on here in Nykode. So far, we have shown earlier that targeted delivery via this antigen presenting cells have given us a broader and stronger CD8 positive T-cell immune response versus the antigen alone approaches across different modalities. This is normally based on most of our data being generated on the plasma DNA format. But then, now back in Q4, we were then able to present preclinical studies where we've demonstrated that this -- our APC targeted vaccines also delivered as an mRNA-based vaccines improves the number of immunogenic antigens versus antigen alone approach. And for us, this is an important strategic phase for us where we have the ability to explore the breadth and the potential of the technology above and beyond what we are focused on initially. And so we can present a significant growth opportunity for Nykode across and also broadened the number of potential partners that we can team up with if they are interested for it, for example, very focused and interested on mRNA. We now also see that this can be a pretty simple way to improve the MRN -- standard mRNA technologies out there.

If you go to the next slide. These are some examples of the data where we are looking into the T-cell responses generated after vaccination with Nykode's APC targeted mRNA vaccines against the set of 20 tumor-specific neoantigens. And you can see the breadth and the strength of the T cell responses in the middle using Nykode's technology compared to the more standard mRNA-based vaccines that we see out there from the major players, the way they are using their technology these days, where you see that each color here represents the strength of the T-cell response to 1 out of those 20 neoantigens, and we clearly see an improved breadth, meaning we see a T-cell response to more to a higher number of the neoantigens when we use the APC targeted technology compared to the antigen alone, and that is very significant after a single dose and also is being kept as a significant improvement. And you clearly see the breadth increase when we make sure that these antigens are properly targeted to the right antigen-presenting cells.

So it will be interesting to follow up. We will provide more data and investigate the potential of our technology in mRNA formulations also and give more insight into that throughout the year. If you go to the next -- then we also at the end of the third quarter, we were very happy to present some strong anti-[indiscernible] specific efficacy in two autoimmunity models where we basically make an inverse vaccine. So instead of using our targeting unit to generate this strong CD8 T-cell responses that are applicable for cancer immunotherapies. We changed the targeting unit, and we can also here incorporate the 4th module technology. And by that really skewed immune response into the complete different direction and induce tolerance against the antigens specifically, which means that the aim of this is really to provide patients that have an established autoimmune disease with a treatment that can help them fix the wrongfully induced immune response to certain antigens and leave the rest of their immune system intact and thus have a treatment that does not make these patients prone for infections and cancer development, for instance.

We were able here in -- at the JPMorgan conference to follow up with long-lasting efficacy in the not diabetes model, as you can see here. And this experiment has been ongoing for, as you can see, almost half a year, and we actually stopped to treat this mine at week 16, in this case, and is very promising for us to see that we still see a long-lasting effect after withdrawing treatment in this model. That's a very good start for us, and we are really now doubling down on the data generation and the platform sophistication of our inverse vaccine platform. And as of today, we've also updated the guidance on when you can expect to see more data in this particular field, and we will provide more data this first half of 2024, which will be interesting. Based on these data, obviously, we will be very intrigued to see more into later onset start of the treatment from the very start in both the multiple sclerosis model as well as the diabetes model and other mechanistic experiments that can help us really explain and get this program both ready for product development in-house, but also importantly, for potential partnerships with other companies that we can take advantage of. I think we can move to the next slide, and then I will hand over to you, Harald.

[Harald Gurvin, executive]

Thank you, Agnete. Looking at the income statement. We reported revenues from contracts with customers of $2.2 million in the fourth quarter and $12.9 million for the full year 2023, relating to the R&D activities delivered under the agreements with Genentech and Regeneron. Employee benefit expenses were $8.9 million in the fourth quarter and $27.5 million for the full year 2020, up from $7.4 billion and $18 million for the same period in 2022, reflecting the increase in the organization. It should be noted that the full year number for 2022 includes a noncash reduction of $8 million relating to social security cost accrual on share-based payments. Other operating expenses were fairly stable for both the quarters and the full year, but the full year number for 2022 includes a nonrecurring cost of $6.3 million.

In line with increased interest rate levels, interest income has increased and amounted to $2.7 million in the fourth quarter and $8.9 million for the full year 2023. We also had unrealized currency gains on the cash position in Norwegian kroner following the private placement in October due to fluctuations in the use of the NOK exchange rate. So overall, we recorded a net loss of $5.3 million for the fourth quarter and $35.2 million for the full year 2023 compared to $12.2 million and $42.7 million loss for the same period in 2022. Next slide, please. Then moving on to the balance sheet. We had a strong cash position of $162.6 million at year-end, meaning we are well positioned to execute on our strategy over the next years. As previously communicated, we received a decision from the Norwegian tax authorities in the fourth quarter, where they reiterated their position that upfront payments received under a license agreement entering in 2020, should be recognized as taxable income in full in 2020 rather than the use of taxable gain loss account, whereby part of the taxable income would be deferred to subsequent year based on a 20% decline impact. The decision generated a payable of approximately $30 million in the fourth quarter. Nykode is confident that the use of taxable gain loss account is the correct treatment of the upfront payment, [ OU ], which has also been confirmed by third-party experts. Nykode has appealed the decision and the payment has been booked as a receivable while we await the outcome of the appeal. Next slide, please. Moving on to equity and liabilities. We had a total equity of $171 million at year-end, which represents a strong equity ratio of 82%. And with that, I will give the word back to Michael.

[Michael Engsig, executive]

Thank you very much, Harald, Klaus, and Agnete. And just to finish off here before we open up for the questions, look at the milestones for the coming years, at least those milestones that we are able to provide a guidance on in addition to these. We may, of course, have additional milestones or events coming up from our partnerships. So it's going to be an exciting year. We kick off in first quarter with initiating the C-O4 trial. As Klaus mentioned, we have a number of sites lined up for this trial year waiting for the first sites to be activated, so we can get the enrollment off the ground. We also look forward to update you on the C-O2 on the survival data in the first quarter. Moving on to our head and neck program, VB10.16. And I think there is a typo, I apologize for that. This should reach the second half of 2024. We will be able to determine the recommended dose for the Part 2 of the C-O3 trial. And as I said, we've now moved to the second dose level. There is one more dose level in that trial. Also -- and this is in the fourth quarter. We expect to finalize the enrollment for Part 1 of the C-O4 trials. So we are on track for investment milestone. For the new program that we announced in December and NYK011 in colorectal cancer, we will be providing an update on this preclinical program in the second half of '24. Moving to the autoimmune disease platform. We will be providing you an update from our inverse vaccine technology platform in the first half of '24. So as I said earlier, this has shifted forward in time across some of the data we're seeing. And in general, for our platform, we will also be providing further updates on the technology when we use mRNA as modality with our APC targeted vaccine technology. So another exciting year in front of us, and we look forward to keep you all updated on the progress here. With those words, Brock, I think we are open to take questions.

[Operator]

[Operator Instructions] Our first question today is from Geir Holom, an analyst with DNB: "How many patients in the U.S. do you estimate constitute the addressable market for the specific patient group that you address in the C-04 trial?"

[Michael Engsig, executive]

Thank you very much, Geir, for that question. And as always, when we try to help indicate patient populations, I think the business should take this with a healthy grain of caution and do their own assessments. But I think we can say that our own assessment as well as those we see from the analysts leaning to the one here indicate that C-04 would be addressing an opportunity of a couple of thousand patients in the U.S. And we're excited about this program for two reasons. First of all, this represents a patient population with a significant unmet need, but also because this patient population and this trial represents a potential fast-to-market opportunity for Nykode, which obviously would be extremely important also in terms of derisking our platform in the eyes of the broader investor community. But as Klaus also mentioned, we do have a very clear, crystal clear, and ambitious growth strategy for VB10.16, so we are not stopping with C-O4. We are now opening up into the adjuvant setting for cervical cancer, which would very likely open up for an addressable patient populations in the double digits, thousand numbers of patients, as well as owning up into the space of head and neck, both in advance and as Klaus indicated in the future also into the adjuvant setting. And also here, we are talking about even larger patient opportunities than for cervical cancer. So in total, we are looking at a very large number of patient populations for VB10.16 across those two indications. Next question please?

[Operator]

The next question is from Patrick Trucchio, an analyst with H.C. Wainright: "Can you tell us the status of the potential interim analysis in the VB-C-04. Is there expected timing for the data? And what would you need to see in this data to determine if the program can transition to a registrational program?"

[Michael Engsig, executive]

Thank you very much, Patrick. I think this is a question for Klaus.

[Klaus Edvardsen, executive]

No, happy to address it. I mean which enrollment for the first part, 30 plus 30 patients finalized at the end of this year, there will be a necessity of having a fixed month follow-up on all patients. So it will be mid-2025. To the expected outcome, I kind of alluded that when I went through the current setting for treatment options for patients in that segment. Our direct competitor would be Tivdak with a response rate of 18%. Then you can discuss back-and-forth is 18% the target? Or is it lower? I think it's slightly lower because Tivdak is not an easy compound to administer. It is toxic in many ways. Whereas the safety profile so far on VB10.16 in combination with a checkpoint inhibitor, in reality not added any real toxicity on top of what you see on something that's already well tolerated, the checkpoint inhibitor. So that's as much guidance I will give on what we need to see. Thank you.

[Michael Engsig, executive]

Next question

[Operator]

The next question is also from Patrick Trucchio, an analyst with H.C. Wainright: "Can you discuss the timing and expectations around the long-term survival data expected in the VB-C-02 trial? And what read-through, if any, could this data have to be through the VB-C-04 trial?"

[Michael Engsig, executive]

I think that's also a question for you Klaus.

[Klaus Edvardsen, executive]

Sorry, I got so eager. Yes. No, I wouldn't give any expectations here because if I have the expectation we would have addressed them upfront today. But I mean, if we can assume a number of things, and let's assume that we confirm that the overall survival data presented to you last year will be confirmed. Then you can obviously use that and transition that into saying, as I said, that you have in a single-arm trial, then somewhat of a close as you can get without having it randomized that you see a vaccination effect. So of course, you can utilize that result to drive an expectation of a positive outcome in subsequent trial. On expectation, I can go as far as to say that you may recall that when we gave the data last year, that was on the foundation that every patient had passed the treatment phase, meaning at 12 months total follow-up. Now we have all patients passed the follow-up period in 12 months, and therefore, all patients have a follow-up time of plus 24 months. And therefore, obviously, the data set that we will announce within this quarter will be more mature and therefore, obviously, also stronger.

[Michael Engsig, executive]

Next question.

[Operator]

The next question is from Luis Santos an analyst with H.C. Wainright. "Will patient selection risk stratification for the evaluation of NYK011, be determined from biopsy or from polyp tumor imaging?

[Michael Engsig, executive]

Klaus.

[Klaus Edvardsen, executive]

That will be from -- sorry, again. That will be from biopsy because as I alluded to, it -- going from the full continuum in a program where you want to capture all polyps also the spontaneous polyps where the risk at an individual level to transform into malignant cancer is relatively limited. The frequency of [indiscernible] you would do biopsy is relatively limited. But if you go to the high-risk polyp patients as familial adenomatous polyposis, then as soon as you discover after colonoscopy, you will remove that. So it will be based on biopsy.

[Michael Engsig, executive]

Next question.

[Operator]

The next question is from Sebastian Vanderscoot an analyst with Kempen. "Will you disclose also additional ORR data with the RP2D and H224 from HNSCC and how many doses plus patients are you targeting?"

[Michael Engsig, executive]

Klaus?

[Klaus Edvardsen, executive]

Yes. I mean I'm not sure that it will make much sense to release overall response rates for the dose escalation phase, sorry, because that would be a relatively limited number of patients. I don't think we have been giving any guidance prior on what we intend to do with this data set. It's not that it is a secret. But again, if you have limited patients it's likely a lot of super significant value. Remember that the whole trial designed here is in the escalation phase to decide what you would compare in the expansion phase. So again, another testimony that you would, again, not have something that you can really compare to based on the very small patient number. But I mean, of course, we will look at the results and we will do the interpretation, but it's not something that will drive us to say if we are not hitting a certain mark that this is not worthwhile continuing or whether we hit a big mark until now we have proven something that will only be proven in the expansion phase. So short answer, likely not.

[Michael Engsig, executive]

Next question.

[Operator]

The next question is from Patrick Trucchio, an analyst with H.C. Wainright: "regarding the potential expansion to mRNA, when would you envision announcing your first mRNA drug development candidate, would the intention be to develop this candidate and others to emerge from the platform on your own or with development partners? At what stage of development would you seek potential collaboration?"

[Michael Engsig, executive]

Agnete, can you add some color on that?

[Agnete Fredriksen, executive]

Yes. Thanks, Patrick. Yes, I think it's important to be aware that I think Nykode is fully confident and happy with the data that we've seen pan-out from the APC targeted technology on the DNA format, particularly we see also this very long-term duration, as Klaus has alluded to when he refers to the C-O2 data, even in patients pretty advanced stage of cervical cancer. So we are not internally committed to pursue mRNA-based vaccine as an improved alternative to the plasma DNA based vaccine we have ongoing. We want to build further on the plasma DNA format and the data we've generated so far. To that extent, our IP covers this APC targeted technology beyond plasma DNA, and we are obviously intrigued by seeing also both in the preclinical data as we have been the first game. So now we're also potentially in the clinic to explore how this is going to work as an mRNA format. There are also other modalities as you may have noticed that our tolerance data on the inverse vaccine platform, we also tested purified proteins as the potential delivery -- so for us, we have reached a stage now of the company where we want to also lay the ground for potential use of our platform evolving beyond plasma DNA. But that does not mean that we ourselves want to change our development programs into something that is not plasma DNA-based. So in principle, to answer your question in more detail. Currently, the main cost for our mRNA data insulated ground for a potential collaboration and the potential collaboration that expands into those companies that have a particular focus on mRNA.

[Michael Engsig, executive]

Very good, thank you. Next question.

[Operator]

The next question is from Arvid Necander an analyst with Carnegie: "On VB-C-03, can we expect data from the initial dose escalation part later this year? And if so, what data can we expect and roughly when? In addition to that, roughly what proportion of the 51 targeted patients will be enrolled in the dose escalation part versus dose expansion part? On NYK011, when will you provide more details on this project such as the targeted TAA and when the program is expected to enter the clinic?"

[Michael Engsig, executive]

Can you handle those, Klaus, please? You may be on mute, Klaus.

[Klaus Edvardsen, executive]

Sorry, I was. I think I partly addressed the first part of Avid's question. And I mean, the dose escalation is a safety one-in phase. So the data that will be released will obviously be that it is safe to move in to the expansion phase with whatever doses we will move into the expansion phase with. But again, as I addressed, the overall response rate is likely not relevant. And that obviously alludes to the second part of the question, what is the proportion of patients in the expansion phase to the escalation phase. I would address it in this way that the vast majority of patients will be in the expansion phase. But I cannot give you an exact number. We have guided on the total number of patients en route, but how many patients that will be utilized in the escalation phase will somehow be determined whether any dose-limiting toxicity will appear. But expectation is that the vast majority in the expansion phase. We are not expecting any safety signals here, but I think it's also fair to say that we have never ever tested VB10.16 out in a head and neck cancer setting, but I see no reason that the safety profile should be any different from what we see in cervical cancer, but obviously, that's what we want to show. The NYK011, I think, as Michael alluded to in the catalyst slide, in the second half of this year.

[Michael Engsig, executive]

Very good, can we have the next question?

[Operator]

The next question is from Luis Santos, an analyst with H.C. Wainwright: "For which programs do you plan to use LNP mRNA technology? Is your LNP delivery technology proprietary or outsourced? Did you assess immunogenisticity of mRNA versus DNA on a head-to-head comparison?"

[Michael Engsig, executive]

Agnete, do you want to add to that?

[Agnete Fredriksen, executive]

Yes. I think some of this we answered in the previous question, in principle, we have -- we are not committed yet, the current strategy is not for us to move into the clinic with a wholly owned mRNA LNP technology, but rather to lay the ground to understand how our APC targeted technology improves the current mRNA LNP technologies in order to team up with a partner that has the mRNA focus and interest and technology. So this is a way for us to further expand the technology. But as mentioned, I think we are very satisfied with the data we've seen on the plasma DNA format that the focus that we have internally for development programs in the near future. When it comes to assessing immunogenicity mRNA versus DNA on head-to-head comparisons. There are things you can do there, and things you cannot do there, is doses and kinetics and everything is different. So in principle, we don't necessarily [indiscernible] how this will be translated to the clinic as to what would be the best modality of Vaccibody mRNA versus Vaccibody DNA in the clinic. But as you've seen, the Vaccibody DNA performing very well in the clinics. Currently, there is no data, but we've seen that changes that. But obviously, although the data that we have generated supports that Vaccibodyadds something for those that are currently working on the mRNA formats. There are lots of different things there that we are intrigued about potentially the kinetics, the durability of the responses with mRNA versus DNA, the T-cell phenotypes that we will generate, et cetera, they may be different, and that can be of huge interest in the future. So we are pulling this out there as a potential improvement of mRNA-based vaccines currently not as an improvement of the vaccibody DNA.

[Michael Engsig, executive]

Very good, can we have the next question?

[Operator]

The next question is from Patrick Mume of Pareto Asset Management: "On autoimmunity, what do you consider to be your technology's competitive edge to attract partnering interest versus other immunotherapies, CAR-T among others?"

[Michael Engsig, executive]

Agnete, I guess that's for you?

[Agnete Fredriksen, executive]

Yes. So we have a very differentiated technology when we move to this adverse vaccine platform for autoimmunity. So for autoimmunity traditionaly has been drugs that inhibit the entire immune system. And as you also alluding to CAR-T, primarily, the CD19 CAR-T's are now moving forward, which is basically not antigen-specific, but more B-cell-specific, so that's one step towards having a more limited negative impact on the immune system, but far from providing these antigen specific effect on the immune system, which means basically that -- we only target those wrongly induced to disease-specific T-Cells and leave the rest of the immune system intact, including all the other B-cells, for instance. So that's basically all antigen specific technologies. And then again, having this unique technology where we make sure that we can target these antigens to a specific subset of antigen-presenting in cells that gives us an opportunity to really control the immune response towards these antigens. And when we're adding this 4th module technology on top of the targeting unit per definition, this is a technology that can really control what kind of immune responses is going induced against the antigen, which we don't necessarily see with other technologies that are driving antigen specific. They are more broadly getting the antigens, for instance, in to deliver or something, but not as specific as what we can do controlling, [indiscernible] cell type and which receptor on the cell types that we target and also other signals given to that particular cell type. So we're definitely seeing a very huge interest for potential partners if we continue to see promising data on the platform moving forward. I think we have a unique technology to offer.

[Michael Engsig, executive]

Very good, thank you. Next question

[Operator]

The next question is from Luis Santos, an analyst with H.C. Wainright: "On what basis do you expect the tax payment outcome to be positive?"

[Harald Gurvin, executive]

Yes. Thank you, Luis. I mean this relates to the [indiscernible] agreement, which naturally is a very complex agreement and with very limited precedent for similar agreements in Norway. So we have, of course, received advice from external tax experts in the process, and they all agree on our conclusions on the treatment. So following the deal, it goes now to a panel of experts within the Norwegian tax demonstration, and we are confident that they will reach the same conclusion asset as we have.

[Operator]

And that's all the time we have for questions today. I would like to turn the call back to Michael Engsig for closing remarks.

[Michael Engsig, executive]

Yes. Thank you very much, Brock. Thank you very much to everybody joining in for this call and posting good questions. I'm sure you'll share our enthusiasm not only for the fourth quarter that we just reported on, but also for the time ahead of us. Very exciting times indeed for Nykode and the entire team. I'd like to take this chance also to extend -- and thank you to the entire Nykode team for having achieved all these results during 2023 and for continued efforts into 24. With those words, I'd like to thank you again and wish all a great day and look forward to giving you updates on our progress going forward.

[Operator]

This concludes today's conference. You may disconnect at this time. Thank you for your participation.