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Edited Transcript of MOLN.S earnings conference call or presentation 27-Aug-19 12:00pm GMT

Half Year 2019 Molecular Partners AG Earnings Call

Zurich Sep 9, 2019 (Thomson StreetEvents) -- Edited Transcript of Molecular Partners AG earnings conference call or presentation Tuesday, August 27, 2019 at 12:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Andreas Emmenegger

Molecular Partners AG - CFO & Member of Management Board

* Michael Tobias Stumpp

Molecular Partners AG - Co-Founder, COO & Member of Management Board

* Patrick Amstutz

Molecular Partners AG - Co-Founder, CEO, Member of Management Board & Director

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Conference Call Participants

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* Dylan van Haaften

NIBC Bank N.V., Research Division - Research Analyst

* Kenneth Charles Cacciatore

Cowen and Company, LLC, Research Division - MD & Senior Research Analyst

* Laerke L. Engkilde

JP Morgan Chase & Co, Research Division - Analyst

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Presentation

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Operator [1]

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Ladies and gentlemen, welcome to the half year results 2019 conference call and live webcast. I'm Sandra, the Chorus Call operator. (Operator Instructions) And the conference is being recorded. (Operator Instructions) The conference must not be recorded for publication or broadcast.

At this time, it's my pleasure to hand over to Patrick Amstutz, CEO of Molecular Partners. Please go ahead, sir.

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Patrick Amstutz, Molecular Partners AG - Co-Founder, CEO, Member of Management Board & Director [2]

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Thanks for the introduction, and a very warm welcome from my side. My name is Patrick Amstutz, CEO of Molecular Partners. With me for the presentation, I have Andreas Emmenegger, our CFO; and Michael is also here with me then for the Q&A.

It's my pleasure to walk you through on the next slide, the agenda. Okay. So I will give it a start with a review and the highlights of the first half of this year. Then I will hand over to Andreas for the financial results. I will summarize with an outlook and then -- for this year and beyond, and then we will dive into the Q&A. So without further ado, let me start with the R&D highlights.

I will start with oncology, immuno-oncology, and I will there focus first on MP0250. Here, we see encouraging results from our multiple myeloma trials, and this has triggered the further investment also in the IMiD trial, which will start later this year, and we expect to have first patients enrolled in Q4 in the U.S.

On the non-small cell lung cancers trial, where we have lifted the clinical hold, we have taken the strategic decision to discontinue the Phase II to focus our activities on multiple myeloma.

MP0274, our HER2 asset, which is in Phase I, is now approaching the interesting dose levels and is now at 4 milligrams per kilogram and further advancing there. From our innovative therapeutic design activities, we have the first DARPin approaching clinical development, MP0310, in codevelopment with Amgen, and we hope to dose the first patient in the second half of this year.

On the research portfolio, we are advancing more and other innovative therapeutic designs, more FAP x CD40, which has a similar setup as the 310 molecule just using CD40 as activator. And we are looking into peptide MHC-binding DARPins and also T-cell-engaging DARPins to also arm peptide-MHC DARPins or other tumor-associated antigen-binding DARPin.

Next to the oncology highlights. We have also progressed to share with you in ophthalmology, and I think this is a core pillar to our general strategy. While we are not investing there, it is our partner, Allergan. They have got the validation of market authorization by the EMA, and this puts them on track to get decision for approval second half of next year. In their Q2 earnings release, they also reiterated that they are on track for U.S. launch mid-2020. Earlier in the year, they published MAPLE trial results, where they could show that they reduced the severe inflammation by more than half or double to 1.6%, and further improvements are ongoing. And just to remind you, abicipar is expected to be the first anti-VEGF to maintain initial vision gains on a true 12-week dosing interval.

On the team side, also there we have some highlights to share. First and foremost, we have hired a new Chief Medical Officer, Nicolas Leupin, who joins us from argenx, where he had a great run of taking novel ideas, novel therapeutic ideas, and running them into proof of concept and early clinical trials, exactly what we are doing in our pipeline as well. And on the research side, we appointed Daniel Steiner to head the research department, and we want to congratulate and thank him for stepping up and taking that position to support our research pipeline progress. Overall, we grew the organization 14% to now a talent base of 128 employees.

The management slide is now updated just to show you that now Nicolas is taking the place of Andreas Harstrick with whom we are still working together on a consultancy basis, and he was also helpful to hire and onboard Nicolas going forward.

For the financial highlights, I will mention a few of those. We are in an ongoing strong financial position with CHF 123.3 million in cash and short-term deposits. And I think importantly, this brings us well into 2021. Operating loss is CHF 12.4 million and the net loss is CHF 12.7 million. The positive net cash inflow from operating activities was CHF 27 million in H1, and this is mainly from the Amgen collaboration. Our guidance for the full year remains at CHF 60 million to CHF 70 million, while we will guide more towards the lower end of this and update the numbers in the Q3 release. And to repeat my ingoing statement, this runway we have leads us well into 2021, beyond the launch of abicipar with large milestones in 2020, and none of these milestones are included in this runway forecast.

So bringing this together, I think the pipeline slide gives us a nice overview. You see the lower part, abicipar has made progress for its approval, especially in Europe but also the U.S. Then we have our oncology trials, where we see a focus after discontinuing the non-small cell lung cancer trial in multiple myeloma, but really having more activities there going forward in the IMiD combination. The HER2 trial is now approaching the interesting dose levels. So this will be one of the key focus area for us. And for the immuno-oncology side, we are now approaching first in man with the novel therapeutic design of tumor-local agonist, which I will also discuss a bit later in this presentation, and we have more exciting activities moving forward there.

With this, I will hand over to Andreas to give you the financial results of the first half of 2019.

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Andreas Emmenegger, Molecular Partners AG - CFO & Member of Management Board [3]

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Thank you, Patrick. Hello, everyone. In the next 10 minutes, I'll walk you through some more details of the financials for first half '19 and a few words about our projection, and more details can be found in the half year report, which is also available on our website.

I am now on Slide 12. It's a bit the same of what just Patrick was explaining on the financial highlights but in a table format. So let me highlight again. We are well capitalized with CHF 123.3 million cash at hand with no debt as per the end of June, and we are funded with that. We are funded into '21, which is well beyond the expected market launch of abicipar in 2020. And again, this runway does not include any of the large potential milestones and/or royalties which would flow into the firm as of approval of abicipar.

In terms of P&L top line, we recognized the total revenues of CHF 13.6 million. That represents an increase of CHF 4.2 million or 44% compared to the same period last year. And all the 2019 revenue so far relate to the CHF 50 million upfront payment we collected in January from Amgen, which accounting-wise is revenue recognized pro rata over time until the end of 2020. Total expenses in the first 6 months amounted to CHF 26 million, which is CHF 3.9 million more than in the same period last year, and H1 expenses included CHF 2.3 million noncash costs for share-based payments, pension accrual and some depreciation and amortization. This led to an operating loss of CHF 12.4 million in the first half, which is slightly less [intense] in the same period last year.

We posted a net financial expense of CHF 300,000, resulting from unrealized foreign exchange losses on dollars and euro cash positions. And bottom line, we incurred a net loss of CHF 12.7 million for the first half '19 compared to a net loss of CHF 11.7 million in the first half '18. And we generated a positive operational cash flow, as Patrick was saying, of CHF 27 million, thanks to the cash collected from Amgen from the upfront payment they paid us early this year.

On Slide 13, you see a more detailed breakdown of our P&L. Just in very few words, R&D expenses were CHF 19 million; G&A expenses were CHF 7 million, resulting in operating loss of CHF 12.4 million, net of the CHF 300,000 financial loss; a net loss, CHF 12.7 million.

Moving to Slide 14. In terms of revenues, we are up versus last year, again, thanks to the pro rata recognition of the upfront payment from Amgen and which is -- relate to the -- our codevelopment arrangement of MP0310. And we are still sitting on CHF 35.2 million on the balance sheet, and that amount will be recognized as revenue from now until the end of 2020.

With that, I move to Slide 15, giving a bit more granularity regarding the operational expenses. Our investments in R&D in the first half of the year went up from CHF 7.7 million to CHF 19 million driven by additional spend for external R&D as well as additional people in the R&D workforce. On the G&A side, the cost increased to CHF 7 million, which includes facility losses cost, professional fees, consulting, personnel and depreciation. Overall, H1 expenses included CHF 2.3 million on a noncash effective basis for pension, share-based payments and depreciation, as I said before.

Slide 16 gives a snapshot of our balance sheet as per the end of June '19. As in the past, very simple, solid and debt-free with CHF 123.3 million on the debit side as cash, representing 91% of total balance. The remaining CHF 11.6 million is working capital, tangible assets and some very minor intangible assets. The other -- and on the credit side, excuse me, we have CHF 78.1 million equity and CHF 56.8 million other liabilities. The other liabilities include CHF 35.2 million so-called contract liabilities versus Amgen. These are not true liabilities in the sense that we would have to pay something back. No, in practice, it's our deferred revenues related to our -- to the collaboration, which will again be recognized as revenue on a noncash basis from now until the end of 2020. So they will disappear over time. Other liabilities all include 3 more elements: CHF 3.2 million lease liabilities, stemming from the introduction of the new IFRS 16 standard, plus CHF 8.6 million accrued employee benefits and CHF 9.8 million other current liabilities such as trade payables.

On Slide 17, you can see the shareholder structure as per the end of June. The VC holdings, so the reddish part, went down from 23% to 20%; holdings of management, Board and founders remained unchanged at 18%; and the remaining 62% are in the hands of institutional, private and public investors, both in Europe and in U.S. And as of today, there are no lockup restrictions in place.

With that, I come to my last Slide 18. As Patrick was saying at the beginning, so there is no change to the full year expense guidance. It remains in the range of CHF 60 million to CHF 70 million. And this includes CHF 6 million noncash effective costs, about CHF 2 million of -- for capital expenditures that were upcoming on top overall for the full year. And as in the past, unfortunately, we cannot give any guidance on the net cash flow as the details of our contractual arrangements with our partners are confidential.

Thank you. So with that, I hand back to Patrick to give you more background on the pipeline assets and then the outlook.

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Patrick Amstutz, Molecular Partners AG - Co-Founder, CEO, Member of Management Board & Director [4]

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Thank you, Andreas. So let me spend a few slides on our key assets to explain you what we're doing there and why we are excited to move these products forward, and I will start with 250, go to 274 and then 310 and then go to abicipar.

MP0250. MP0250 was the first systemic DARPin we brought into the clinic. It's a VEGF-HGF inhibitor, so it blocks these growth factors. And the therapeutic rationale we have today is that this can block the adaptive resistance that tumors develop if they're assaulted by standard-of-care therapies, and our focus is in multiple myeloma.

And on the next slide, you also see a bit how multiple myeloma looks like. This is an indication where there are many treatment options and patients eventually relapse and go through one line of treatment after the other. These include IMiD, proteasome inhibitors, antibodies and also CAR Ts are being developed in this space. So very crowded space. And while it's good for the patient to have all these options, still, they progress eventually. And usually, with each line of therapy, the relapse comes faster and the depth of response goes down.

What we're trying to do is to combine MP0250 with these therapies to actually reactivate them and to give them more time on these therapies by blocking VEGF and HGF, which are important for angiogenesis, for tumor cell survival, but also for the bone formation. So we're acting not only on the MM cell but also the tumors surrounding. With that, we have a new mode of action that is compatible to all of these other drugs that are being developed or have been approved. The first, our initial trial, our first trial is the combination with a proteasome inhibitor, Velcade, and this is kind of the proof of the hypothesis, if you want. We have published results, and this is a data cutoff from earlier in this year, May 4, and we're aiming to give an update later in this year with more patients and longer duration of patients as shown here.

First thing is that we see a response rate of 8 out of 18 at 8 milligrams per kilogram, so we see a good response rate and actually quite a few going to a very good partial response. So durable remissions in heavily pretreated patient.

Why we are so excited about the drug? I want to explain with 2 case studies, case A and C. I'll start with patient A. Patient A is here plotted on the left-hand side axis. You see the best response over time. This patient first had progressive disease, then 3 months of stable disease, then 5 months on stable disease and then progressive disease 6 months on Bor/Len/Dex. Then this patient was enrolled into our trial and the first time ever achieved a very good partial response that was holding for almost 2 years and is still ongoing. So what we see here is the deepest response and the longest response in the fourth line of treatment, and this patient showed that VEGF-HGF have an importance in biology for treatment of these patients. You can see that the second or third line with Bor/Dex or Bor/Len/Dex, it only leads to stable or progressive disease. So MP0250 must be contributing heavily to the success of the treatment of this patient.

Now third line or fourth line is not that far in treatment as patients go up to many more lines, but also in later lines, as shown with patient C on the next slide, you see such effect. This patient had many lines of treatment. The best response or the partial response of 8 months in the first line and it's usual to have the deepest and longest response in first line. This patient came directly from daratumumab, a CD38 antibody, with stable disease for 2 months, and then with Bor/Dex and here you see Bor/Dox/Dex in second line only gave 3 months stable disease where beyond 4 months on a very good partial response. So again, deepest and long response in the sixth line of therapy. So it's these signatures, these patterns, which really make us excited and show us the way that we are on to something with the inhibition of VEGF and HGF in this patient population and can reactivate or even activate other standard-of-care drugs. And we're obviously looking forward to expand this trial.

This is shown on the next slide, where we are further enrolling into this trial. So PI to PI. What you see here is a bit how patients are treated. You see 75% go to an IMiD, PI or an antibody, 25% on transplant. At one point in time, unfortunately, most of the transplanted patients relapse and then also go on IMiD, PI or antibody. Then these treatments are switched and we see different combination for different lines. And what we're now trying to do with the second trial is to look at the IMiD combination with 250 for the pomalidomide combination that we can now progress forward as we have lifted the clinical hold of MP0250 in the U.S. And it will be exciting for us to see if we can replicate the success of the PI combination with the IMiD-based backbone. In theory, this is not the end. You could also go to triplet. You can go to combinations with antibodies. So the opportunities of development combination is rather unlimited. And I would just want to point out that we are the only one targeting VEGF-HGF if you want the tumor microenvironment and as such are an ideal backbone for combination in later lines of treatment.

With this, I will switch now to MP0274, a molecule we have not discussed that much in the first half of the year as we were in low dose escalation and kind of not expecting a lot of activity at those low doses. And now we're entering the interesting phase of 4 milligrams and above per kilogram. 274, if you want, is a molecular handcuff. It binds HER2 on 2 different side -- domains, and by that locks inactive confirmation that leads to direct tumor cell suicide also called apoptosis. If you just mix the antibodies, Herceptin, Perjeta, which also binds 2 different epitopes on 2 domains, you don't see this effective. You really need the handcuffing, the short linker with the 2 binding domains. And if you compare the cell-killing ability to an antibody drug conjugate as Kadcyla, you also see this is around 100x more potent without the need of the toxic agent, which also could lead to differentiation in overall less of target toxicity as we don't need the conjugation of this drug.

The trial, on the next slide, is progressing well. And here, we are in HER2-positive patients. And just to point that out. While they are treated with HER2 agents, often they progress and need other agents later on and that's what we're testing, if we can have activity in later lines in HER2-positive patients. The trial is run in Europe. And as I said, we're now at 4 milligrams per kilogram, which actually could be an active dose, and we can further progress pending on the safety results that we will collect and also share with you in the second half of this year.

With this, I will move to our preclinical pipeline and to the immuno-oncology realm, where we're really pioneering novel therapeutic designs that are allowed like our DARPin approach. The picture here on Slide 28 shows you the view of agonistic antibodies, so activation of immune cells, also T cells. These are activated by targeting specific antigens on their surface that gives them the signal to be active and proliferate and kill other cells. Antibodies usually do this systemically and by that have a very small therapeutic window limited by systemic side effects.

We built a DARPin-specific switch where we target the same targets with the DARPin but do not induce clustering if we hit a resting T cell in the system. Only if the second DARPin that binds the tumor-local cluster engages at the same time as the first DARPin we get the switch mode, we get activation and tumor-localized immune cell activation. And with this, we hope to open the therapeutic window and get tumor local activity. This principle can be applied to different combinations. And this matrix, if you want, is shown on Slide 29.

You see OX-40, 4-1BB, CD40, but also other targets qualified for this mode of action. And you can take different tumor-associated antigen for clustering. For our first program, we chose FAP tumor stromal antigen for clustering. MP0310 is now partnered with Amgen in a very interesting collaboration where we run the Phase I and then Amgen combines with their BiTE approaches and other assets they have in their pipeline. FAP x CD40 is then the next candidate, which is still in research and approaching preclinical development and will be the second, if you want, from this family of DARPin approaches this therapeutic design.

On the next slide, I just want to quickly highlight how this can look into tumors. On the right-hand side, you see a tumor section of an animal model, where you see the T cells in green and FAP stromal cells in red. And you see -- on the top panel, you see nice staining of T-cells and stromal cells. In the lower panel, we now have added MP0310 and you see many more green cells or many more T cells. And they also migrate from -- where FAP from the tumor stroma into the tumors. So they are not, let's say, Velcro-ed or stick. They don't stick to FAP but can actually migrate into these tumors, and it's these types of experiments that led also to the successful closure of the deal with Amgen, and we are on track to dose the first patient in the second half of this year with this molecule.

With this, I will go now to an even earlier program but highly exciting program. What we're trying to do here is really build or target a whole class of targets called peptide-MHC complexes with DARPin. Most antibody approaches but also CAR Ts are limited to tumor surface antigens, making this a very crowded space, HER2, EGFR and many more. A lot of intracellular targets are known for tumors, but they are not displayed on the surface and as such are not accessible for large molecule approaches like antibodies or cell approaches. Antibodies have tried to target these, and these targets are displayed on the MHC as small little peptides shown in different colors here.

Now the specificity and selectivity for these targets usually is the limiting factor. So why would the DARPin work in such a circumstance? And that's why I -- we added to explain this Slide 32, where you can see the difference of an antibody and the DARPin. Antibodies on their tip have soluble surface loops. This is called -- so-called CDRs, complementary determining regions, 3 of them per domain. And these are randomized, and we also recognize like fingers reaching out to the target. You can also guess that these are rather flexible and adaptable to the target, making specific binding of a fixed surface more difficult. The DARPin setup is different. Here, you see the surface that is randomized, is very rigid. It's on the side. If you want, the palm of a hand, and it does not adopt itself to the target structure, so we call this rigid body interaction.

Now this can, and this is shown on the next slide, the idea to target difficult structures. And difficult meaning here in gray you see such an MHC and the peptide is an orange stretch of around 10 amino acids shown in the gray structure. And from gray structure to gray structure, the only difference will be this little stretch of amino acids and the difference has to be picked up by a binder. And with some imagination, this is a schematic illustration, you can recognize how a DARPin could have the ideal binding surface to create this specific interaction. We started this work around a year ago and Gilead got aware of this and was fascinated by the approach and is supporting us by sponsoring workforce on this. No other right to touch than for initial information rights. And with a focus also on virology as these targets are not only interesting in oncology but also viral peptides can be displayed or are displayed on MHC-peptide complexes.

With this early snapshot of what we're doing in the research pipeline, I'll do a big jump into Phase III, the most advanced program, abicipar, and just give you an update from the activities of Allergan.

Just a short recap. Abicipar is on track to become the first fixed 12-week anti-VEGF. And this has 2 key implications. One is a reduction of burden from injections and less doctor visits. So at the moment, you have drugs that are given once a month, once every 2 months. And in some subset of patients, less than 50%, it's once every 3 months, but mostly as needed. So the injections are spread as much as they can, and this leads into the real-world setting to loss of vision. And we are of the belief that a fixed 12-week dosing of abicipar that has a long half-life in the eye and actually remains in the eye gives the patient a better and durable treatment and possibly less visual acuity loss in the real-world setting next to the need for less injections into the eye, which is, per se, a differentiator.

Early in the year, Allergan published the results from the MAPLE trial where they have optimized the manufacturing process and were able to reduce severe inflammation from 3.5% to 1.6% and had no cases of endophthalmitis or retinal vasculitis. More recently, Allergan has communicated that the EMA has validated the MAA for abicipar and so it's on track for a possible approval in H2 2020, and they also communicated to be on track to a possible approval mid-2020 in the U.S. This is noteworthy as there was no delay versus plan on the development of this drug. They also communicated to start the DME trial in 2020, now obviously with the modified and improved manufacturing process.

So before opening for Q&A, I have 3 slides to summarize the messages. I will start with kind of the backward-looking, so the summary of the slides I presented. On the clinical side, we have MP0250 with very encouraging results and a focus on MM after the strategic decision to discontinue non-small cell lung cancer. And with 274, we are now entering the interesting dose cohorts. In immuno-oncology, we're proud that the first of our novel therapeutic designs is about to enter clinical development. This will be a big step for us, and we're also eager to see our FAP x CD40 move forward and to see more results from the peptide-MHC but also the CD3-binding DARPin that I have now presented today. Abicipar remains, if you want, a stable pillar and an important pillar of our pipeline, on track to launch next year, and this will obviously then give us, on the cash side, a different setup to invest in our oncology pipeline.

So if we look at the value and milestones of this next year, you recognize that on abicipar we have the MAPLE results ticked and we're on track to launch next year and the filing was done. 250, we have -- we're gathering more data on 250, so that is still to come, and we will present more data in the second half of this year but also next year, especially of the IMiD combo that will start later this year. The non-small cell lung cancer trial we put on hold, so this is discontinued and also led to a short, if you want, delay of the IMiD combination trial as that was also on hold as a consequence of the non-small cell lung cancer trial. We have resolved these holds and can now move forward in the IMiD trial.

274 is on track, as I showed you, to reach the higher doses, and we will definitely post more data going forward. 310 is on track for first in human, and we're looking forward to see then combination trial starting as of next year. On the research side, we're making very good progress with establishment of novel therapeutic designs with the peptide-MHCs, with tumor local agonists, and we are looking forward to hopefully advance the CD40 x FAP to candidates later this year.

On the capital side, with the non-small cell lung cancer discontinued, our cash reach now goes well into 2021, which is now almost a year beyond when we can expect abicipar launch, which will come with large milestones to cross-fund the activity.

I will end with a picture summarizing this. Here, you see one way that we can draw the DARPin tree, the roots or the platform from that, and this is the oncology tree, if you want. You see MP0250 as a lower branch with fruits on it. These are dual antagonists. That's very important for the initial validation and also the pioneering of VEGF and HGF in multiple myeloma. The higher levels of the trees show more differentiation to antibody-like approaches with the molecular handcuff 274, the tumor local agonists, but also peptide-MHC, and obviously, more to come.

I think now we're entering these higher levels of differentiation, which are really core to our purpose to develop differentiated DARPin candidates to move the needle of medicine for patients that today don't have treatment option. And I don't want to forget abicipar, which is the watering can, and this is on track to supply water and funding for the DARPin oncology tree for us to move forward these exciting molecules in oncology.

With this, I would like to thank you, and I will open the floor for questions, and I will also ask Michael to join us for those.

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Questions and Answers

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Operator [1]

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(Operator Instructions) The first question comes from Ken Cacciatore from Cowen and C (sic) [Cowen and Company].

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Kenneth Charles Cacciatore, Cowen and Company, LLC, Research Division - MD & Senior Research Analyst [2]

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I had a couple questions. Congratulations first on all the progress. On the abicipar, just wondering, could you clarify, would you get milestones on approval and launch or would it only be on launch? That would be my first question.

And then second question. On the DME program, is this going to take the MAPLE formulation forward? Or is Allergan and is it your understanding that Allergan continues to work and there could be an even more refined formulation going forward in DME?

And then my last question, just looking at 250 and all the progress there and understanding we're going to be starting the combination studies shortly. Can you just talk about patient size in those studies? Any type of enrichment? What you've learned? Obviously, you identified and gave us good interesting case studies. Anything about patient enrollment, patient enrichment? And then maybe working fast-forward here, can you talk about when pivotal studies might be able to begin? Obviously, these -- in terms I'm assuming couldn't flip into pivotal, but just wondering if there's a possibility that they could.

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Patrick Amstutz, Molecular Partners AG - Co-Founder, CEO, Member of Management Board & Director [3]

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Okay. Thanks. I will start with the launch question, and I think then Michael can talk more about the DME and which formulation is used there, and then we can share the 250 question. So on the when will we see the milestones, and I think it's fair to say with launch, that's when we get the approval milestones as the approval includes the approval of the price. So that's around then. Just to remind you, we have CHF 360 million milestones open, CHF 210 million or up to launch but in 2 indications for DME and wet AMD and in different regions of the world. Maybe, Michael, you can touch on the DME formulation.

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Michael Tobias Stumpp, Molecular Partners AG - Co-Founder, COO & Member of Management Board [4]

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Yes. Thanks, Ken, for the good question. Obviously, it's an Allergan study, which at some point will transform into an AbbVie study. I have no information when exactly that will happen. Everything so far is planning, of course, based on MAPLE. And as you probably know, all these things take a lot of time. So my guess is clearly they will continue to improve the formulation, but everything will be based at least on MAPLE. Going forward, there could be, of course, some tweaks and small changes that the colleagues have already done, but personally, I would expect an even better result in the DME study. But obviously, the proof is in the pudding and the study will start hopefully the next year, and we will again see data in the years to come.

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Patrick Amstutz, Molecular Partners AG - Co-Founder, CEO, Member of Management Board & Director [5]

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And so the next question was on 250 multiple myeloma. And so the first of the number of patients we enrolled is around 40 to 50 patients in each of these trials and then to the enrichment. And the one enrichment we actually can talk about is that the -- is about the pretreatment. So we have seen patients that directly come off bortezomib, so the proteasome inhibitor, and then were retreated, actually have a higher level or higher chance to respond again to the combination. That's why we have now included that, if you want, a stringency to only look into patients that are directly coming off a PI than a retreat to the PI. This also allows us to track all the activity back to MP0250 as the PI alone was not active in the immediate prior line of treatment. We will be definitely more vocal about the trial results. And while we came to this decision and while this is an enrichment, it obviously also poses a stricter enrollment criteria, so it also slows down the trial as less patients are allowed into the trial, which is obviously something to keep in mind in multiple myeloma that is a very crowded field.

And your question to kind of how one could fast-forward, the beauty of this approach is that all activity is for MP0250 so we will know that the activity can retract that. And depending on the results, this can lead to registrational activities. On the other hand, there's many other ways of reaching the market, and I think this goes from penta-refractory patients as Selinexor was done or other approaches in combination. And depending on the results and how the field evolves, we will definitely have to cross that bridge when we are there, but this is something we are monitoring heavily. And the guiding principle for us is how can we design trials that benefit the most patients going forward. Mike, do you want to add something, too?

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Michael Tobias Stumpp, Molecular Partners AG - Co-Founder, COO & Member of Management Board [6]

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Not really. Just to add that, of course, the U.S. study, in combination with pomalidomide, will be designed and explore the same principle so can we help patients who have just progressed on that regimen by adding 250 to that regimen. We have seen very nice results with the current study. But the question now is, can we expand that to the new combination regimens? Obviously, we have to be careful in so choosing the dose and finding the optimum and then seeing whether many patients are profiting or not. That's the hypothesis of this study.

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Patrick Amstutz, Molecular Partners AG - Co-Founder, CEO, Member of Management Board & Director [7]

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I'll just add that we're obviously very close to the treating physicians and are obviously in contact and are understanding now better how they are using the drug and how they want to use the drug going forward. So that will be also a learning element from the ongoing trial.

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Operator [8]

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The next question comes from Dylan van Haaften from NIBC.

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Dylan van Haaften, NIBC Bank N.V., Research Division - Research Analyst [9]

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Just 3 for me. The first one is on MP0250. The first patient cohort response is mentioned in the press release. I was just wondering if there's any -- if that comment reflects anything since the cutoff in May as you show in the presentation. Maybe anything on responses and safety since then you could share would be helpful.

Second question is on -- just continuing on the question on pretreatment. So you can confirm there are no new patients coming off Dara in the extension phase? And it will also be helpful to know if any patients went into Dara from the combo in the trial. If you have that, that will be helpful as well.

Third question would be if you could characterize a comment on DME. I can't find a trial yet and didn't -- indeed see abicipar and the AbbVie-Allergan deck. Can we figure that DME trial has sort of faded from being subject to the customary takeover risk and is just slated to continue on schedule from here on out?

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Patrick Amstutz, Molecular Partners AG - Co-Founder, CEO, Member of Management Board & Director [10]

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Okay. Let's go first for MP0250 and I can take those questions. So from the -- the data cutoff is obviously May -- in May. So we have to have more data. And without kind of going into any detail, in the order of magnitude, we just continued to see similar results as we have, but very encouraging results, and we will update as we go forward.

On the Dara question, I think that's an interesting one. That's why also we have one slide in the presentation from a patient coming directly from Dara and then achieving a response. We don't formally exclude on the other -- in the contrary, most patients going forward will have seen Dara in the first or second line. We don't think this changes anything to the biology and Dara could be a good combination partner of the -- for 250. So it's something to keep in mind and we might want to enrich for patients that come directly from Dara/Bor, Dara/Pom into our trial. That is something we will definitely be very open for and actually is almost mandatory in the U.S. as Dara is approved for second line. So this will be almost mandatory for that trial. What was the next question?

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Dylan van Haaften, NIBC Bank N.V., Research Division - Research Analyst [11]

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That was just on DME.

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Patrick Amstutz, Molecular Partners AG - Co-Founder, CEO, Member of Management Board & Director [12]

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Okay. I'll hand to Michael.

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Michael Tobias Stumpp, Molecular Partners AG - Co-Founder, COO & Member of Management Board [13]

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Thanks for the question, Dylan. So as far as we know, the DME Phase III study has not yet started and is planned to start early 2020.

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Dylan van Haaften, NIBC Bank N.V., Research Division - Research Analyst [14]

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And so that essentially means that -- I mean, there was some worry, right, on whether that would be continued by AbbVie, but essentially, the combined company has looked at it. They've put it in their deck. They've committed to it, so it will just go on then.

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Patrick Amstutz, Molecular Partners AG - Co-Founder, CEO, Member of Management Board & Director [15]

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Yes. I think as far as I know, currently, Allergan is still Allergan, so they have to take care of their own decisions, but I don't know when they will merge and whether this will change. But as far as we know, this is planned for only 2020. And I think from a product logic, this makes a lot of sense as with the launch of abicipar in wet AMD, doctors will also want to use the drug in DME. DME is also a large and attractive indication. And for us, this -- and that's what Ken's question before alluded to. It's actually integral part, if you want, of the cleanup of the manufacturing process, that, that will then give a label with less inflammation that will be available for doctors. So from a product logic, it makes a lot of sense to run that trial.

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Operator [16]

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The next question comes from Laerke Engkilde, JPMorgan.

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Laerke L. Engkilde, JP Morgan Chase & Co, Research Division - Analyst [17]

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Laerke Engkilde from JPMorgan on behalf of James Quigley. First, now that you've discussed the data with the FDA and they've lifted the clinical holding EGFR-mutated lung cancer, can you give us more color on the adverse events that the FDA were concerned with? And how confident are you that this will not impact the pomalidomide combination trial?

And second, the data for MP0250 in myeloma in combination with pomalidomide continues to look encouraging. But from what you've seen so far, how does the depth of the patient's response evolve over time? Are they reaching maximum response early on in treatment? Or is the depth of response improving over time? If we look at the May data cutoff compared to the data in ASH 2018 for patients in the dose-escalation cohort, it seems that 1 had an improved response to VGPR but 3 had a similar response classification and 1 seems to have had a PR downgraded to an MR. So how should we think about how the depth of response changes with treatment?

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Patrick Amstutz, Molecular Partners AG - Co-Founder, CEO, Member of Management Board & Director [18]

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Thanks a lot for excellent questions. It sounds like we should go and sit down once and have a more detailed look. So we have seen the ASH poster we had last year and we are hoping to disclose the entire data set again later this year. What we can say today is that we are confident to share good data ahead. However, we cannot discuss at this moment individual patients, but I think everything you said basically was right.

MP0250, from its mode of action, which goes after adaptive response, will basically help patients most. We, of course, have developed this adaptive response. And now doctors and we are looking forward to finding these patients who have acquired this adaptive response. Then hopefully, in combination with pomalidomide but also with bortezomib, these patients will continue to profit and thus would be ideal because the doctors are looking for something which they could add to an established treatment before they go into a more aggressive treatment that have also more side effects.

In terms of side effects, you can also find this information on the posters. So there were some related events for the kidney, and this was also something we have got first in Phase I in the non-small cell lung cancer with risk of renal injury. There are different grades. If you have a higher grade, then it's also sometimes called a nephrotic syndrome. That's why we paused the recruitment. FDA looked at it, gave us the go-ahead with our proposal, and we have not seen the side effects in the multiple myeloma trial. But of course, they could still reobserve in the next study. So all we can do is now go forward carefully and try to find the best efficacy to Phase I for our drug, hopefully, without these kidney effects.

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Operator [19]

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(Operator Instructions) Gentlemen, so far there are no more questions.

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Patrick Amstutz, Molecular Partners AG - Co-Founder, CEO, Member of Management Board & Director [20]

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Okay. Thanks. With that, I would thank everyone joining our call and a special thanks to all the people posing the questions. And with that, we will end this session. Thank you.

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Operator [21]

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Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call and thank you for participating in the conference. You may now disconnect your lines. Goodbye.