Oxurion NV
XBRU:OXUR
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Good morning and good afternoon ladies and gentlemen. Welcome to the Oxurion First Half 2020 Results and Business Update Conference Call. Throughout this call, all participants will be in listen-only mode. And after the presentation, there will be a question-and-answer session. Just to remind you, this conference is being recorded.
I would now like to hand you over to Patrik De Haes, Chief Executive Officer to begin today's conference. Thank you.
Thank you. Good afternoon and good evening ladies and gentlemen and welcome to our half year results call. Today we'll present you the highlights of our first six months and update you on the progress we are making towards establishing an industry leading DME franchise based on our proprietary assets THR-149 and THR-687.
Next slide. Just to draw your attention to our forward-looking statements, so we can move to slide number three.
Yes, next slide. So, first of all, I want to introduce you to the members of our team who are quite experienced and which I would like to present you today. I'm Patrik De Haes, CEO of Oxurion and I'm joined today by several of my colleagues of the senior team. Grace Chang is our recently appointed Chief Medical Officer, and I'm delighted to welcome her to the company. She brings a wealth of experience, not least from our role as adjunct professor in the Department of Vitreoretinal Surgery at University of Southern California, as well as a considerable industry experience from Notal Vision and Alcon.
Andy De Deene, our Chief Development Officer has over 20 years of experience in drug development and regulatory approval in small and large pharma, including at Janssen Pharmaceuticals part of J&J.
Dominique Vanfleteren, our CFO has over 25 years of experience in senior finance operations, control, and reporting roles in pharma, including former CFO of UCB Asia-Pacific operations and GSK.
For my own part, I spent 25 years in the industry, led the global development and commercialization of the first biotech products, Sandoz, now Novartis. I was the former Head of Roche’s Global Insulin Infusion business and CEO of Disetronic Medical Systems in the States. We're also joined by Wouter Piepers, our Global Head of Corporate Communication.
As you can see, we're fortunate to have talented and highly experienced team at Oxurion, which puts us in a strong position to maximize the value of our assets and build a successful commercial business over the long-term.
Next slide is that we work. Our goal is to develop the industry leading DME franchise, an area where there is still a very significant unmet need, despite the availability of current therapies, most notably the anti-VEGF. Even with the limitation of this current available therapies that the market is currently approaching $4.5 billion.
We aim to augment a significantly improved from the current standard-of-care by developing class-leading drugs with novel modes of action.
THR-149 will be targeted at existing patients who have shown the suboptimal response to current therapy, usually anti-VEGF or corticosteroid, key [ph] as an alternative to the or as an adjunct to the existing therapy. This will allow us to directly target the large minority of existing patients around 40%, who do not achieve an adequate and clinically meaningful response on the current treatment.
THR-687 is being developed as a first-line therapy in treatment naive patients where we believe over time, it has the potential to become the standard-of-care, as well as offering an alternative to existing patients who are looking to switch from anti-VEGF. Together, we believe these two products can address the needs of the majority of existing and new DME patients.
Let's move to flat slides five, if possible. 2020 has been a very busy period for Oxurion as we continue to make rapid progress with our development plans. Remind you in 2019, we announced highly promising data on THR-149 from our early clinical study, with rapid onset and meaningful gain in BCVA, extended duration of action, and an excellent safety profile and all this from a single injection of the drug.
We have recently initiated our Phase 2 study with multiple injections of 149, the first part of which is actively recruiting patients while we speak. We anticipate initial data from this dose response Phase by the middle of next year, which will then allow us to proceed to the second phase comparing our selected dose to current standard-of-care Aflibercept.
In January 2020, we announced similarly promising data from our Phase 1 study with THR-687 including a notable 12.5 letters improvement in BCVA at M3 at the highest dose, again from a single injection. We're actively planning our Phase 2 study, which is expected to start around mid-2021 with data from the first Part A of the study following in H1 2022.
As we progress, the build out of Oxurion, adding the right people to take the business forward is crucial. We have further strengthened our management team with the addition of Grace Chang as Chief Medical Officer, whom I already have mentioned, as well as Michaël Dillen, as our Chief Corporate Development Officer and Corporate Secretary, and Kathleen Paisley as our Chief Legal Officer. All these individuals are highly committed to help position Oxurion to bring its potentially transformative therapies to the market and build value for our shareholders.
We ended the period with cash of just under €38 million and I will now pass you over to Dominique who will take you through the financial results for the period in a little bit -- in a little more detail.
Thank you, Patrik. I will take you quickly through the financial highlights for the period. So, if we move to slide seven. As can be seen in this slide, our income from the year was down slightly versus the prior periods, and is mainly due to discontinuation of sales support for JETREA in the U.S. and unavoidable impact of COVID-19. Although this one relatively small for the first half of the year,
While we incurred high R&D expenses and our lead asset, THR-149 and THR687, we at the same time halted the THR-317 program and reduce TB-403 and JETREA clinical support so that the overall R&D costs were actually lower than in the previous half year. Again, reflection of the discontinuation of commercial support for JETREA in the U.S., our selling expenses reduced substantially.
Without the impairment losses that we incurred in the first half of 2019, our operating loss for the first half of this year was substantially reduced to a loss of €13.3 million.
So, if we move from the P&L to slide eight, we're going to talk about the cash. Turning to slide eight, you can see that we have a prudent management of cash that led to an effective outflow of €15 million in the first half. This brings the cash at the end of the period to €37.9 million compared to the opening cash of €52.9 million.
Looking at the cash flow analysis and corrections on non-cash items that are washing out, we see other results the difference between €13.3 million of the P&L and the €15 million cash outflow is due to the variation in receivables and payables.
So, this €15 million cash burn was very much in line with our plan. We continue to manage our cash resources very carefully, while committing to fully fund the development programs for THR-149 and THR-687.
I will now hand over to Patrik.
Thank you, Dominique. I know wants to give you some background on DME and tell you a bit on how we're seeking to create the leading DME franchise. Slide 10, as many of you will know diabetic retinopathy is a serious chronic complication of diabetes and a major public health concern which has grown driven by the increasing incidence of diabetes in the global population. This is sight threatening and life altering for those who are fortunate enough to suffer from its effect.
The slide attempts to show a pictorial view of how the world appears to an individual suffering from diabetic retinopathy. As you can see, this is characterized by blurred vision and scotoma or blind spots within the visual field, which can become permanent.
On slide 11, you can see a picture of the retina at the back of the eye, which includes the macula. In DME, there is an accumulation of fluid in the macula due to leaking blood vessels, which can occur at any stage of diabetic retinopathy.
Since the macula is the part of the retina those controls detailed division, the resulting edema, an injury is part of the eye results in the type of vision loss that we could see characterized on the previous slide.
Slide 12, the anti-VEGFs when they were introduced transformed the treatment of DME and are now used as the mainstay of first-line setup in the majority of DME patients.
Despite the widespread use, it is clear that there are limitations to these current therapies, particularly in the real-world setting. Important patient needs remain only partially fulfilled and result in an opportunity to improve on existing treatment in terms of both treatment outcomes and treatment burden.
Speed of onset is an issue for many patients with an opportunity to shorten the induction phase and which optimal dosing and therapeutic effect more rapidly. Efficacy also has room for improvement, translating into better improvement in visual function as measured by Best Corrected Visual Acuity or BCVA in a higher proportion of the patients receiving treatment.
Giving the intraocular administration of DME therapies, increased duration of response means longer treatment intervals together with improved treatment convenience and our highly sought-after improvement from a patient perspective.
Slide 13 shows patients grouped by the response to existing therapy as measured by the improvement in BCVA. What this data shows, as you can see from the chart, is that a very significant portion from 40%, in fact, highlighted at the bottom of the graph, respond poorly to existing anti-VEGFs with little improvement in visual acuity. This represents a huge opportunity for to serve those underserved patients and is a very sizable commercial opportunity if it can be addressed successfully.
At Oxurion, we're positioning the two key products within our DME franchise to become game-changers in the treatment of a very wide cross section of DME patient.
THR-149, our Plasma Kallikrein Inhibitors, we believe, could become the main-stage [ph] therapy for the 40% of patients who, as I have just outlined, respond poorly to anti-VEGF treatment.
THR-149 has recently entered a Phase 2 study evaluating multiple injections of [technical difficulty]. It targets a completely VEGF independent pathway and we believe we'll have the utility in second line therapy, either alone or as an alternative to anti-VEFs or in combination with them.
THR-687, our Pan-RGD integrin antagonist has the potential to become the standard-of-care in a first-line setting offering a broad biological effect profile, which means that over time, it could even replace the anti-VEGF.
We plan to initiate a Phase 2 study with THR-687 around the middle of next year, and we'll discuss this in more detail later.
Slide 15, I now want to give you some more details on why we're so excited about the potential of our new generation of DME clinical candidates, starting with 149.
Slide 16, THR-149, as mentioned earlier, is a novel highly potent Plasma Kallikrein Inhibitor, which was licensed from Bicycle Therapeutics. In preclinical studies, it exhibited promising characteristics for potential new non-VEGF therapy with activity in anti-inflammatory and anti-edema models, which are key hallmarks in DME.
While clinical data to-date has been confined to single injection studies, it is important to point out that our preclinical work has shown that multiple injections of THR-149 could offer even more potent effect on visual acuity, both in terms of BCVA and central retinal thickness, or CST, another measure of disease severity.
Given these highly desirable characteristics stated before, we believe that THR-149 could become the treatment of choice for the high proportion of patients who respond sub-optimally to anti-VEGFs.
On slide 17, we show a summary of our Phase 1 clinical study with THR-149. It was an open label multicenter study with three dose levels and we evaluated safety and preliminary efficacy.
To free those levels of the drug with primary endpoint being the incidence of dose limiting toxicities, DLTs at day 14 and you can see the criteria we use in the box on the lower right of the chart.
Slide 18, despite the study being largely focused on safety, as you can see from slide 18, we observed promising signs of efficacy with a rapid increase in BCVA from baseline even starting on day one.
With increasing average improvement in BCVA of up to a maximum of 7.5 letters on day 14, the gain in BCVA was maintained at every visit and at M3 after injection; an average improvement of 6.5 letters was still maintained. Again to remind you, this was following just one single injection of the drug. THR-149 was well-tolerated and safe with no dose limiting toxicity
This promising data showed the potential of 149 to become a best-in-class PKal inhibitor. With its validated non-VEGF mechanism of action, we aim to target non-poor responders to VEGF, either as monotherapy or in combination.
Slide 19, we're actively recruiting patients in Phase 2 at this stage, which importantly encompasses multiple injections of the drug. Study is split into parts. The first of which, Part A is designed to select the optimal dose to be carried through to Part B, where the selected those 149 will then be compared with the standard-of-care currently Aflibercept and this in a one-to-one randomized fashion.
We expect the initial results from the dose level selection, Part A by the mid of next year. And assume -- assuming all goes according to plan, we should then have topline data from the randomized comparison versus Aflibercept in Part B of the study in the first half of 2023
Slide 20, we have a clear view of the target profile we are hoping to achieve with 149 as well as a clinically significant improvement in BCVA. We also expect the data from our Phase 2 study to confirm the drug's fast onset of action and long duration of response, which we observed in our Phase 1 study.
With multiple injections we expect to see enhanced efficacy and have powered Part B of the study versus Aflibercept would follow. The data generated here will give us clinical proof-of-concept and will be used to help design the pivotal Phase 3 study.
Moving on to 687, slide 21. 687 has the potential to largely replace indeed existing anti-VEGF therapy. Slide 22, to remind you 687 is a Pan RGD integrin antagonist which we in-license from Galapagos and which has a long IP runway.
So, why do we believe that this product has the potential over time to become the mainstay of first-line therapy, replacing current use of anti-VEGF? The key to this is the broad Pan-RGD integrin activity of the drug, which means that it targets multiple important DME disease hallmarks including neovascularization, vessel permeability, inflammation, and fibrosis. Anti-VEGFs lacks such a broad spectrum of activity and hence 687 could represent a more efficacious treatment options in a wide intersection of patients.
Given this unique broad profile, we also believe that 687 has potential across multiple back of the eye diseases, which we aim to explore in the future.
Slide 23 shows the efficacy data from our Phase 1 study with 687, again, following a single injection of the drug. As you can see, we saw evidence of a dose response with the biggest improvement in BCVA in the highest dose group. This group showed the mean BCVA again of a full 12.5 letters at M3 are highly promising and clinically relevant improvement, again after one injection. Further 687 was well-tolerated and showed the good safety profile with no drug related serious adverse events.
Slide 24, following this very promising data, we are currently advancing our clinical development plan for 687. We expect to initiate a two-part Phase 2 study in DME in mid-2021. Part A, the first part of the study will evaluate multiple doses of the drug to select optimal dose to take forward in development. We expect data from this first dose selection phase of the study in the first half of 2022.
In Part B of the study, we will move on to compare our selected those with an active competitors. Headline data from the second part of the study will be available in 2023 and will allow us to then plan a pivotal Phase 3 study.
In addition to advancing our clinical program in DME, we are exploring the wider potential of 687 in additional indications with both spectrum of activity confers an ideal profile for developing new treatment. The preclinical work includes assessing the potential of 687 in wet AMD as well as retinal vein occlusion.
Each of these disease areas have significant commercial potential in addition to DME and means that we fix it we may be able to develop a broad pipeline of indications addressing a series of large market opportunities.
We look forward to reporting back on our plans to expand the applications of 687 beyond just DME.
In conclusion, slide 25; we aim to be a game-changer in the treatment of DME by building the industry-leading DME franchise. We believe that our products could bring advances to patients that are on par with the first introduction of anti-VEGF which revolutionized the treatment prospects for patients at that time.
As we have described to you today, 149 is now in a Phase 2 study, which we expect to confirm its excellent profile and will bring meaningful proof-of-concept data in a much larger group of patients. The initial dose response data from the first part of this study will be available by mid of next year.
687 has the potential to become the standard-of-care in first-line treatment for all DME patients, potentially replacing the anti-VEGFs. We set to enter a Phase 2 trial in the middle of next year, showing the significant momentum we have in this business.
We have strengthened our management team over the last six months and remain highly committed to advancing our two lead candidates through the next phase of clinical development.
Our ultimate goal is to bring major benefits to patients suffering from DME, a sight threatening and life-changing disease, and in so doing, create significant value for our shareholders.
So, thank you, ladies and gentlemen. We are now ready to take your questions.
Thank you, ladies and gentlemen. [Operator Instructions]
All right, we have a question submitted in the queue. Our first question comes from the line of Frédéric Gomez from Pharmium. Frédéric, go ahead with your question.
Yes, thank you for taking my question and congrats on the recent progress. I have two questions first on the on the 149. So the Phase 2 just started using it the three different doses based on the Phase 1 data, which was perfect on the safety.
I know that in the Phase 2, there are three injections; one injection every month for three months. So, you will, of course, increase the increase the level of product that you will inject into the eyes. But why -- how did you select the dose for the Phase 2, the three doses and why you decided not to go higher -- the higher dose because you will test 0.13, in Phase 1, it was 0.125?
So, I was just wondering, while it was not possible for you guys to go up for the higher dose in the Phase 2. So, can you give me more color on the dose selection for the Phase 2?
And then on the cash position and your expenses and the cost of the Phase 2 -- Phase 2 and the one for the 687? How should we think about the balance sheet and the expenses going forward? And do you expect to raise cash in the coming 12 months? Because given the bionics consider that you can in the future you will need to strengthen the balance sheet? Thank you.
Thank you, Frédéric for the questions. So, the clinical question, I will refer to Andy, our Head of Development. Andy.
Thank you, Patrik. For your question, we'll evaluate the dose in the Phase -- in the Part A of the Phase 2 with BCVA and CST. So that will be the important parameters and we will select based on that outcome what will be the right dose, because, yes, we evaluated in the Phase 1 the three different doses. But it is good to reiterate the article based on three injections instead of one injection.
To your other question, in fact, why don't you go higher? It is because formulation-wise and also I would say that is the dose that we use in the talks as the highest dose. And in fact, for us really not need to go higher because we see these excellent results already from the Phase 1. And yes, you're correct, anticipating the three injections, we will potentially go higher in efficacy. So, high for us is really not needed and is in fact, also not possible from a formulation perspective.
Okay. Thank you.
Does that answer your question Frédéric?
Yes, thank you. Yes.
Okay. Dominique, can you handle the second?
Yes, like all the possible biotech companies we are constantly in light of all the development funds looking for cash needs and the financing options. So, we saw the end to ensure that the company is well-funded so that we can bring all development plans to fruition.
Okay. So, it means that of course, you're looking; but you can expect me maybe you are quite flexible and we can expect maybe you our do a kind of security line or a debt financing or private placements with few investors? Maybe in the U.S.?
We are looking at all the open options and I think many are open. I think we have -- say that with the cash we have, we certainly can reach out one of 2020. The burn rate is going to decrease in 2021 because we have less projects going. So, I think we are not in an urgency, but we still continuously looking at all the options that are in front of us.
Okay, okay. Thank you.
All right. Our next question comes from the line of Sandra Cauwenberghs from KBC Securities. Sandra, go ahead with your question.
Hi, thanks for the update. I have two questions. The first one is on the selection of the patient populations for the two compounds so forth, 149 and 687. If you could get some more color, some more granularity on the decision to go for, in one case, suboptimal EGF responders and in the other case, naive patients become correct.
And then the second question is still for Dominique to give us a little bit more of an indication on the [Indiscernible] rate going forward. So, you mentioned that in 2021, costs will be decreased most likely because R&D expenses will decrease -- decrease, I'm trying to understand a little bit as well what we can expect for the second half of this year and then into 2021. And if it's possible to correlate that as well to the -- new flash sales and marketing ratio, let's say going forward with the JETREA sale that would be great. Thanks.
Can you repeat the last part of the question, please? Because it was a very long one.
Yes, sorry. And with regard to the topline, revenue picture, and the sales and marketing cost decline, how we should model that in for the second part of this year, if that's going into the same direction as the first part of the year or numbers that you just reported, or should we have a different view there. And when do we see this fully swapping to almost full zero cost reduction because of the sale of JETREA?
Should I answer the full set now? I think for 2020 saying we were going to be in the high well above 30 million. I think that is still something that is going to happen, but this is going to be closer to 30 million than anything else.
So, as such, the guidance -- the cash burn that we have how pure is a good figure to estimate what was going to happen at the end of next year -- the end of this year, sorry. For the next year when I say that there is less projects, I think an important one is JETREA as you mentioned, a substantial reduction in expenses and even more in 2027.
We have all licenses, but we still have 22 -- sorry 2020, 2021. You know that we have old license to the product. So, the revenue is going to be a composition of sales of vials, our cost of goods, right, and royalties. And at the same time, we're still producing it. So, we certainly come from a breakeven for the next year on JETREA. That is also a part of the reduction in cost for next year.
Yes, I'll deal the -- to your other question on the patient population, and I'll start with 149. So, with 149, it's correct, we are targeting the suboptimal responders. And this is based in fact on hypothesis that is in fact even externally validated with the publication of [Indiscernible] what they see that there is more than VEGFs, but also PKal influencing DME. So, that's the reason based on the pharmacological profile that we are targeting some optimal responders.
For 687, in fact, it's also based on the pharmacological profile, because it's a molecule that is influencing the VEGF pathways, but even much more than that. In fact, you can see this also on the preclinical findings that Patrik just mentioned, you can see that with this molecule we influence not only edema, but we also influence neovascularization, fibrosis, and inflammation. So, you can see is a very broad molecule, which will not only influence DME, but also for example, potentially, the progression to diabetic retinopathy. So, that's the reason.
-- and they're [Indiscernible] to start treating these patients earlier on and the disease image with 687? Would that be a gain reserve that goes through the market the way forward so that you actually avoid initial VEGF biosimilar use in these patients?
So, it is correct that 687 is going to be positioned as a first-line. Like we said, it has the potential to replace anti-VEGF treatment. Once on the market, of course, it will be a dynamic. I agree with you that -- that certain physicians will maybe start off with an anti-VEGF and see that those are not really responding and start using 687. But it's really market adoption. At a certain moment, they will see that 687 has that potential and then it will certainly become first-line.
Okay. Thank you.
All right. There are no further questions in the queue. [Operator Instructions]
All right, we have another question. Our next question comes from the line of Danny Van Quaethem from Econopolis. Danny, go have a good question.
Hello, could you tell us a little bit more about the concrete contribution that Dr. Chang will bring to the company and future?
Thank you, Danny for the question. So, Grace joined us a few weeks ago and she has -- she's still practicing at the University of Southern California. So, she has worked with Notal Vision and also Alcon and I'll give the word to Grace. So, Grace, can you hear us?
Yes.
Okay. So, have you heard the question Grace?
Yes, I believe so. He's asking what contributions I can make. So, as a doctor [Indiscernible]. I certainly have been in the field and know what's going on with the various molecules and technologies. So, I'm also on the ground in that sense, and so I can see how -- what the word on the ground is. My background is also as previous Chief Medical Officer of Notal Vision and also my job was to handle the strategic aspects of the research and development at Alcon in the retina space.
I think that I have been quite well versed in the industry aspects of things because I've been here for quite a number of years now. And so, I feel that with my background also in neuroscience as well as electrical engineering and chemistry, can bring strength to the team and value in -- because I have a background that others perhaps do not have with the combination of current practice as well as multiple years in development in a very well-known company.
If I can add to that, as you know, we are going to operate two Phase 2s, which is going to be global studies also in the U.S. Grace is based in the U.S., but will also operate in the U.S. and that will give us finger on the pulse on this two important Phase 2s. So, that's another big advantage having Grace.
Okay. Thanks. My question, by the way, had nothing to do with your background, which is incredible. So, I was extremely and highly positively surprised that you were accepting that offer. My question was more what you would do practically, I mean, because the trials have been prepared, et cetera. So, the groundwork has been done. So, it was just to see more practical things, what you would do?
Well, there is quite a lot going on right now as various sites are coming on. So, I am certainly leading the Phase 2 trials and as also as we come to them the development of the Phase 3 trials.
Also in terms of expansion, as Patrik mentioned, into other potential realms like 687 certainly has possibilities for other indications and there are other things brewing in our preclinical program as well. And so for the strategic development and the clinical development of that, I feel that my background will hopefully bring value to this company in that way.
Okay. And one final question on the 149, could you give your scientific view on that molecule because while we have others -- other molecules in development, what's your scientific idea on it?
I feel very positive about it. I think what drew me to this company was the Phase 1 results actually, because you can see a lot of what's going on out there. But it's a they had a really nice safety profile where they had no significant adverse events and they had after just one injection, as you could see the 7.5 maximum letter gain which persisted through several months.
And so I thought this is particularly interesting and knowing the mechanism faction, as we've seen in the preclinical studies that it affects like not only the VEGF pathway, but other aspects of the pathways for diabetic retinacular edema. I feel like the potential is quite high for this large group of potential non-responders.
So, if you're up to 40% of patients are for responders to the anti-VEGF, which works pretty well as you know, so. But if you're falling into that 40%, you want something to really help you out because it affects your quality of life significantly. And so I am quite hopeful and very positive about the potential for this molecule.
Okay. Thank you very much. Thank you very much, by the way for joining the company that's promising to Phase 3.
Thank you.
All right. There appear to be no further questions at this time. So, I'll hand you back to Patrik De Haes for any closing remarks.
So, once again ladies and gentlemen, thank you for attending today's call and your interest in Oxurion. As you can see we're making excellent progress towards building the industry-leading DME franchise based on 149 and 687 and we're confident that this strategy will allow us to generate significant value for our shareholders.
I look forward to talking to you again and continue to update you on our progress. Thank you.
Thank you, ladies and gentlemen. That concludes today's conference. You may now disconnect your line. Host, please stay on the line and await further instruction.