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Edited Transcript of HMED.ST earnings conference call or presentation 6-Feb-20 1:00pm GMT

Q4 2019 Hansa Biopharma AB Earnings Call

Feb 11, 2020 (Thomson StreetEvents) -- Edited Transcript of Hansa Biopharma AB earnings conference call or presentation Thursday, February 6, 2020 at 1:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Donato Spota

Hansa Biopharma AB (publ) - CFO & Senior VP

* Søren Tulstrup

Hansa Biopharma AB (publ) - President & CEO

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Conference Call Participants

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* Joseph Hedden

Rx Securities Limited, Research Division - Healthcare Analyst

* Zoe Karamanoli

RBC Capital Markets, Research Division - Analyst

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Presentation

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Operator [1]

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Ladies and gentlemen, welcome to the Hansa Biopharma AB interim report. (Operator Instructions) Today, I am pleased to present the CEO, Søren Tulstrup. Speaker, please begin.

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Søren Tulstrup, Hansa Biopharma AB (publ) - President & CEO [2]

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Thank you, operator. Good afternoon to those of you in Europe, and good morning to those in the U.S. I'm Søren Tulstrup, CEO of Hansa Biopharma. With me today, I have our CFO, Donato Spota; as well as our Head of Investor Relations, Klaus Sindahl. Today, we'll review the overall progress and highlights for the fourth quarter as well as the near-term milestones. Our presentation should take about 15 minutes. And after that, we'll take your questions.

Now please turn to Slide 2. Please allow me to draw your attention to our forward-looking statement, which applies to this presentation.

Please turn to Slide 3. 2019 was an important year for Hansa Biopharma, a year where we have seen significant progress across our pipeline and platform activities. In 2019, we achieved the landmark milestone of getting our first marketing authorization application accepted for review by a regulatory agency, namely the MAA, for kidney transplantation in Europe, which was accepted for review by the European Medicines Agency back in February of last year. If approved, we will be able to launch the first in a series of drug candidates from our internal pipeline, addressing conditions with high unmet medical need across a range of therapeutic areas, and through this, transform Hansa into a commercial stage biopharmaceutical company. The review by the EMA is progressing according to plan. As previously announced, we submitted the Day 120 responses late December.

In the U.S., an agreement with the FDA has now been reached on a regulatory path forward for imlifidase in kidney transplantation of highly sensitized patients. Based on this, we will now conduct a randomized, controlled clinical study in a well-defined population with the highest unmet medical need in the context of the U.S. Kidney Allocation System. I will get back to the details on our next slide.

Looking at the pipeline. We also saw solid advancements across our clinical programs with the completion of enrollment in the anti-GBM Phase II study and the ongoing enrollment of patients in our AMR and GBS Phase II studies. In particular, I'm happy to see that our principal investigator, Mårten Segelmark, Professor at the Universities in Linköping and Lund, has now finalized recruitment in the anti-GBM study. The completion of enrollment in the anti-GBM study marks an important milestone for Hansa Biopharma's expansion outside transplantation.

Lastly, as part of our efforts to drive implementation of a focused and functionally integrated launch strategy for imlifidase kidney transplantation, targeting leading transplantation clinics in Europe, our CSO, Christian Kjellman, will assume an expanded role as Chief Operating Officer effective immediately.

Now please turn to Slide 4. At Hansa Biopharma, our short-term priority is to advance our lead drug candidate, imlifidase, to marketing authorization to enable kidney transplants for highly sensitized patients. In Europe, the regulatory review process is progressing as planned. We submitted our responses to the Day 120 questions on December 20. Assuming the process runs as expected, we should receive a CHMP opinion in the second quarter of 2020. A potential conditional approval from the European Commission could follow in the third quarter.

In the U.S., we met with the FDA back in November last year with the purpose to agree on a clear regulatory path forward for imlifidase in highly sensitized patients. Given the request by the FDA to run a clinical trial in the context of the U.S. Kidney Allocation System, we are now preparing to conduct a randomized, controlled clinical study in a limited group of highly sensitized patients using kidney function measured by eGFR, a surrogate endpoint. The results from this new clinical study could support a BLA filing in the U.S. by 2023 under the accelerated approval pathway. Obviously, we'll do what we can to compress the process and time line as much as possible.

The study will enroll a well-defined and limited group of approximately 50 patients on U.S. kidney waitlist with a cPRA level of 99.9% or above. This is a patient group with very limited access to transplantation for whom the only available therapy today is waiting while remaining on dialysis. In the U.S., there were around 3,000 patients registered on the waitlist in 2019 with a cPRA level of 99.9% or above. Patients in the control arm will wait on the waitlist for a compatible donor organ and patients in the control arm that are not transplanted within the study period will be assigned an eGFR level of 0.

Looking back across our Phase II studies. We've seen 100% success rate for imlifidase in enabling kidney transplantation in 46 highly sensitized patients. At study completion, all patients were alive with stable eGFR levels around 60% and 94% graft survival at 6 months post transplantation, which is in line with the general kidney transplant population. The new study design is thus strongly powered to show a significant clinical benefit in the imlifidase arm over remaining on the kidney waitlist.

Now please turn to Slide 5. In Europe, we are preparing for the first product launch for the company. The potential near-term launch in the EU will be subject to conditional approval and subsequent implementation of a post-approval study. Our initial launch focus will be on the leading transplantation centers across Europe to ensure that key centers and commissions build positive experience and knowledge around desensitization with imlifidase. We will implement a center-focused and sequenced launch strategy targeting leading clinics that are likely to be early adopters.

The post-approval study will form an important element in our integrated launch efforts and will help broadening the experience with imlifidase. As part of the preparations towards a potential launch in Europe, we have increased our presence in key markets over the last 12 months through medical science-licensed personnel to build awareness around desensitization among key opinion leaders and clinical experts.

Please turn to Slide 6. Beyond imlifidase for kidney transplantation, we made solid progress across our pipeline and platform activities over the last 12 months. In anti-GBM, the enrollment in the investigator-initiated Phase II study run by Professor Mårten Segelmark was recently completed. A total of 15 patients were enrolled across 5 countries in Europe. The aim of the study is to evaluate safety and tolerability of imlifidase as well as assess the efficacy based on renal function at 6 months post treatment. We expect the first data readout during the third quarter of 2020.

Anti-GBM is an ultra-rare disease, where the immune system mistakenly develops IgG antibodies, resulting in an acute immunologic attack, where the majority of patients lose their kidney function and end up in chronic dialysis, waiting for a potential kidney transplantation. Anti-GBM affects approximately 1.6 out of 1 million.

In acute antibody-mediated rejection, also known as AMR, we have recruited the first 2 out of 30 patients in our Phase II study with imlifidase for the treatment of acute AMR after kidney transplantation. Acute AMR episodes occur in 10% to 15% of patients and remain a significant medical challenge that can lead to a loss of graft function. Today, there is no approved therapy for the treatment of acute AMR in heart, lung and kidney transplants. We believe that imlifidase may have the potential to immediately halt progression of AMR by rapidly inactivating IgG and thereby becoming an effective treatment in acute cases. We expect enrollment to be completed towards the end of 2020.

In Guillain-Barré syndrome, also known as GBS, the first 2 out of targeted 30 patients have been enrolled in our Phase II study. This is our second Phase II study outside of transplantation and marks the continued expansion of our enzyme platform into autoimmune diseases. The GBS study is now actively recruiting patients at 6 out of the targeted 10 clinics across France, U.K. and the Netherlands. Our GBS study is an open-label, single-arm, multicenter trial evaluating the safety, tolerability and efficacy of imlifidase in combination with standard-of-care IVIg. We expect enrollment to be completed in the first half of 2021.

Now please turn to Slide 7. As depicted on this slide, we have a broad clinical pipeline in both transplantation and autoimmune diseases and we have preclinical projects ongoing in cancer and antidrug antibodies. During 2019, we made solid progress across several indications with 1 indication under regulatory review and 3 others in ongoing Phase II trials.

I will now hand over the call to Donato, who will walk us through the financials. Donato?

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Donato Spota, Hansa Biopharma AB (publ) - CFO & Senior VP [3]

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Thank you, Søren. Please turn to Slide 8. The significant progress made during 2019 in both our R&D programs as well as our evolution towards a fully integrated commercial-stage biopharmaceutical company is also reflected in our 2019 financial performance.

SG&A expenses amounted to SEK 53 million for the fourth quarter of 2019 and SEK 167 million for the full year compared to SEK 36 million and SEK 90 million, respectively, for the same periods in 2018. The increase reflects our investments in marketing, branding, market access, patient advocacy, congress and supply chain activities in preparation for a potential commercial launch of imlifidase in kidney transplantation in Europe.

In 2019, we also increased investments in our R&D pipeline and medical organization. R&D expenses for the fourth quarter amounted to SEK 58 million and were SEK 15 million higher compared to the same period of 2018. For the full year, R&D expenses ended at SEK 193 million compared to SEK 155 million in 2018. The expanded level of development activities with imlifidase in transplantation and in autoimmune diseases as well as the establishment of new functions, such as medical affairs and market access, were the main drivers of the increased R&D expense level compared to 2018. The net loss for the fourth quarter 2019 amounted to SEK 111 million and to SEK 360 million for the full year compared to SEK 81 million and SEK 248 million, respectively, for the same period in 2018.

Cash flow from operating activities amounted to minus SEK 75 million in the fourth quarter 2019 and minus SEK 335 million for the full year. At the end of December, our cash position included short-term investments -- including short-term investments amounted to SEK 601 million, which is equivalent to approximately USD 60 million. We expect our cash position to finance operations into 2021.

With this, I hand back to Søren to give his final remarks.

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Søren Tulstrup, Hansa Biopharma AB (publ) - President & CEO [4]

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Thank you, Donato. Please turn to Slide 10. Throughout the past year and here in the beginning of 2020, we've continued to show solid progress across both our pipeline and platform activities. The organization has also expanded as we continue to prepare for the potential upcoming launch of imlifidase in Europe. We're looking ahead to further advancement with many important milestones in 2020 and the years to come.

Assuming the EMA review process progresses as expected, we anticipate a CHMP opinion in the second quarter. Following a potential conditional approval by the European Commission in the third quarter, we are foreseeing a launch in the second half of the year. After summer, we should also have the first data readout from the completed anti-GBM study. The readout from this Phase II trial will be the first high-level set of complete data from a study outside transplantation and will mark Hansa's continued advancement into new indications and therapeutic areas. As discussed, we also expect to complete the enrollment in our Phase II study in AMR towards the end of the year.

In summary, an exciting year lies ahead of us, and I look forward to updating you on our journey and progress during 2020 as we continue the transition into becoming a fully integrated global biopharmaceutical company.

Please turn to Slide 11. With this, we're now ready to take your questions. Operator, please begin.

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Questions and Answers

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Operator [1]

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(Operator Instructions) And our first question comes from the line of Joseph Hedden of Rx Securities.

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Joseph Hedden, Rx Securities Limited, Research Division - Healthcare Analyst [2]

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Can you just please highlight what steps are remaining before you can start the U.S. pivotal trial of imlifidase in kidney transplant? And then on the GBM study, what result on the endpoints -- what would constitute success for you? I note that the endpoints are a proportion of patients off of dialysis and there's eGFR measures in there as well. What do you -- what are you happy with seeing for you to proceed to the next steps? And what would the next steps of development in that indication be?

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Søren Tulstrup, Hansa Biopharma AB (publ) - President & CEO [3]

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Well, thanks so much for the questions, Joseph. First, on the U.S. situation. Right now we are in close contact with the FDA, working to finalize the final study protocol. Once we have that ready, we'll submit it to the FDA for formal approval. Already at this point, we have also reached out to potential investigators, and we are working with each to align them around how the study should be set up and make sure we're ultimately prepared for study start once we're there. After we've submitted the protocols to the FDA, obviously there is the standard process to review it and have it formally approved by the FDA. And following that, we'll work with investigators to set up the centers and gain the necessary ethical approvals. Having completed that, we should then be ready to enroll the first patients in the second half of this year. So that's essentially the situation in the U.S.

As far as your question around anti-GBM is concerned, I mean we really see this as a very exciting next step. We're waiting for the results from this trial, which could be a kind of PoC for acute autoimmune diseases. As you said yourself, right now the situation is that the majority of patients who get this disease end up in dialysis where they lose their kidney function. And so what we're looking at is not only, of course, the ability to deal with the older antibodies but also what proportion of patients in this study end up in dialysis. So that will be our main focus here.

As far as the next step is concerned, clearly once we have the data, we will review them internally. We'll discuss the dataset with the regulatory authorities and see what the path for is in terms of potentially getting a label around anti-GBM. But as I said, importantly, this study will work as a very important way to inform our decision-making around the path forward in the very exciting and large universe of autoimmune diseases.

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Operator [4]

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Our next question comes from the line of Zoe Karamanoli of RBC.

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Zoe Karamanoli, RBC Capital Markets, Research Division - Analyst [5]

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Two questions for me. First one, in Europe, you mentioned that you will have a center-focused launch. I'm wondering if you have an assumption about how many patients you could perhaps treat with imlifidase in 2020 hopefully after an approval.

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Søren Tulstrup, Hansa Biopharma AB (publ) - President & CEO [6]

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Yes, clearly. So as you said, we have a center-focused launch strategy here rather than a country-by-country kind of traditional launch. So obviously, there is a sequence of getting access at the early launch countries, where you get pricing and reimbursement earlier than some other countries. But critically, what we are focusing on really is to go center by center and enable the most important centers. Those where there is the highest chance of having early adopters and where there is a high degree of supports and probability that you'll have early positive experiences.

As far as the number of patients that we expect to have treated in 2020, assuming that we can launch in 2020, the key thing really is to enable, as I said, the most important centers. So that is our focus at this point in time. You could have a launch strategy where you went out rather broadly and probably you would get good early sales, right? We've had a lot of incoming around, "Could you allow access to imlifidase for these patients or those patients on a compassionate need basis and so on?" We are not focused on getting fast uptake in the very few first months. It's more a question of enabling the best centers and having the right launch sequence. I've been involved in launching transformational therapies before. And that is critically important. If you get that right, given the overall potential of this therapy, we think that there is a very large potential ahead of us essentially. But you really need to get it right. So that is our focus at this point in time rather than having a large number of patients treated in 2020.

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Zoe Karamanoli, RBC Capital Markets, Research Division - Analyst [7]

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That's helpful. And then second, regarding now the regulatory process, do you have any insight as to what the label from imlifidase would look like? Is there any change on this? Could it be broader or more narrow?

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Søren Tulstrup, Hansa Biopharma AB (publ) - President & CEO [8]

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So we have been focused from the very start on making sure that the label really includes the patients with the highest degree of unmet medical need for many reasons. Again, as I said, this is potentially a transformative therapy. And what you typically see over time is obviously broadening use. But initially, it's very important that you focus on those patients that have the highest benefit of the therapy. And that will be the patients where it's unlikely that they would be able to find an organ that's a good match. So that's the nature of the dialogue we have with the authorities. We need to find the appropriate language that captures that patient segment essentially.

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Operator [9]

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(Operator Instructions) And there are no further questions on the line. Please go ahead, speakers.

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Søren Tulstrup, Hansa Biopharma AB (publ) - President & CEO [10]

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Well, thank you very much. Thanks for the interest in this call. As I said, this will be a very exciting year for us with the progress within the transplantation field and with new indication areas also being opened up. So we look ahead to continue to update you on progress. So thanks so much, and have a nice day.