U.S. Markets close in 8 mins

Edited Transcript of VSC.DE earnings conference call or presentation 17-Oct-19 12:30pm GMT

Q3 2019 4Sc AG Earnings Call

Oct 19, 2019 (Thomson StreetEvents) -- Edited Transcript of 4Sc AG earnings conference call or presentation Thursday, October 17, 2019 at 12:30:00pm GMT

TEXT version of Transcript

================================================================================

Corporate Participants

================================================================================

* Frank Hermann

4SC AG - Chief Development Officer

* Jason Loveridge

4SC AG - Chairman of Management Board, CEO & MD

* Larissa Stüttem;Team Assistant

================================================================================

Presentation

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

Hello, and welcome to the 4SC AG 2019 Q3 Announcement. (Operator Instructions) I would now like to hand over to your host, Larissa Stüttem to begin. Larissa, please go ahead.

--------------------------------------------------------------------------------

Larissa Stüttem;Team Assistant, [2]

--------------------------------------------------------------------------------

Thank you, Madam. And welcome everyone to today's 4SC conference call on key developments in the third quarter 2019 and business outlook. I'm Larissa Stüttem, and here with me is our CEO, Jason Loveridge, who will give you his review of the third quarter of the year, then we will go open up the call for questions in which Chief Development Officer, Frank Hermann, will also take part.

I'm sure you've all already seen our press release this morning and the presentation for this call is also available for download on the website. You can find this in the Investors & Media section under Investor Information and then Conference Calls & Webcasts. The slides will give some support for Jason's comments, but anyhow, you should be able to follow the call even if you don't have them in front of you.

Before I hand over to Jason, I would like to give you all a brief reminder. During today's conference call, we may make projections or estimates regarding plans and objectives relating to our future operations, products, services or future financial results or assumptions underlying or relating to any such statements, each of which constitute the forward-looking statement subject to risks and uncertainties, many of which are beyond our control. Actual results could differ materially depending on a number of factors. And with those formalities out of the way, I'll now hand over to Jason.

--------------------------------------------------------------------------------

Jason Loveridge, 4SC AG - Chairman of Management Board, CEO & MD [3]

--------------------------------------------------------------------------------

Thanks, Larissa, and welcome to today's call. I'm going to cover 3 topics, in general. First, the financials for the third quarter, an overview and a little more color on the development program, which will be provided by our Head of Development, Frank Hermann, and then going to the expected upcoming milestones.

So starting initially with the financials. As of the end of the third quarter, 4SC currently holds funds amounting to little over EUR 26 million. The monthly use of cash from operations was below the range forecasted for 2019, amounting to just over EUR 1 million on average in the first 9 months of 2019.

Based on the current financial and operating activities, the Management Board is expecting a lower average monthly cash burn from operations of between EUR 1.3 million and EUR 1.6 million for 2019 as compared to the earlier assumptions of EUR 1.8 million to EUR 2 million.

As you all know, we completed a capital raise immediately before the summer, adding an additional EUR 11 million to the cash balance. We also announced, a little over a week ago, an ad hoc, indicating commitments for our upcoming capital increase for EUR 23 million from our existing investor group. The combination of these cash exercises should provide sufficient resources on the current plan to see the company out into the second half of 2021.

Now turning to the development program. You'll see a summary of this on Slide 5 of the corporate deck, which summarizes the clinical studies we currently have either in operation or planned for both resminostat and domatinostat.

Focusing on domatinostat, I'll ask Frank Herman to provide a little more color on the SENSITIZE study, in particular where we presented data at the last ESMO meeting and to highlight our new program in the neoadjuvant.

--------------------------------------------------------------------------------

Frank Hermann, 4SC AG - Chief Development Officer [4]

--------------------------------------------------------------------------------

Thank you, Jason, and good afternoon, good morning, everybody. So during the European Society of Medical Oncology meeting in Barcelona, Jessica Hassel from the German Cancer Institute on behalf of the coinvestigator presented the first data from the SENSITIZE study. The SENSITIZE study is investigating domatinostat and pembrolizumab in patients with advanced melanoma who did not respond to previous immunotherapy. The data and the data cut over July 15, 2019, reported 23 patients and the key outcomes where the domatinostat in combination with pembrolizumab were safe and well tolerated. We haven't seen any increase in frequency or intensity of immune-related AEs, which is important for us because this gives us a sign about interaction on the safety profile. We have seen signs of efficacy with one patient with a partial response, which was confirmed, and in total 7 patients with stable disease from which 4 were already confirmed at this time point. And this is an indication of dose dependency for domatinostat, and we see an increase of clinical activity in the higher dose cohort, which is also important for us to recognize. In addition, the preliminary biomarker analysis indicate that domatinostat induced change as we have seen in the preclinical models. So just also confirms this -- these signs from our (inaudible) research previously.

To bring this more into context, it's important to mention the patient population we looked at. So 100% of these patients had Stage IV disease and the majority had M1c disease, which is the worse stage of melanoma. And none of these patients have responded to standard of care, which is anti-PD-L1 or the combination of CTLA-4 and anti-PD-1. So that means that these patients are not principally good candidates for immunotherapy.

Nevertheless, more than half of the patients were brought into stable disease in the highest dosed cohort, and we could show some confirmatory biomarker data. Of course, the data will be analyzed further, and updated data will be presented at the upcoming conferences. But still this is promising for us and encouraging us to proceed as planned.

So this is for SENSITIZE. For the new adjuvant study concept and you have probably also read the press release 2 days ago. So we entered the collaboration with the national cancer institute in the Netherlands, and to bring this also into context, this is part of the International Neoadjuvant Melanoma Consortium, which is an organization of clinics in Houston, Sydney and Amsterdam, to bring forward the use of immunotherapy in the neoadjuvant setting that means in the period before a tumor can be fully resected to prevent patients from relapse. And there have been interesting and remarkable data during the last 2 years in melanoma and what they want to do is to increase and to even improve the treatment often in the neoadjuvant setting with immunotherapy, and we are happy to be part here and start the study and that our investigator in Amsterdam and in Sydney will start recruit patients soon. The neoadjuvant concept is really something very, very attractive at the moment, which is also reflected by the data presentation in the presidential session at the ESMO meeting where the first immunotherapy data were presented in the neoadjuvant setting also in breast cancer, probably also changing the practice. So our ambition here is not only to investigate in melanoma but to position and to investigate domatinostat in combination with immunotherapy in melanoma and beyond, and therefore, we see the collaboration with NKI within the International Neoadjuvant Melanoma Consortium, a very, very valuable one, and we're looking forward to the collaboration during the next months and years.

So this is for neoadjuvant, and I can also refer here to Page 18 of our company presentation, where there is a little bit more background and information on neoadjuvant treatment and our plans here and what the scientific rationale is used. Domatinostat in this earlier setting in melanoma and for the tumor indications, in general. With that, I hand over back to Jason to proceed with the presentation.

--------------------------------------------------------------------------------

Jason Loveridge, 4SC AG - Chairman of Management Board, CEO & MD [5]

--------------------------------------------------------------------------------

Thanks, Frank. We'll now move to the final part of today's presentation, which is on Slide 20 of the company deck, which is to look at the upcoming and expected development milestones.

So as noted on the slide, we presented the Stage I SENSITIZE data in melanoma that Frank has just gone through. We have a plan to initiate 2 studies in the fourth quarter of this year. The MERKLIN-2 study, which is in second line Merkel cell carcinoma in combination with the PD-L1 inhibitor and the DONIMI study, which is, as Frank just outlined, a proof of concept for the combination of domatinostat and checkpoint blockade in the neoadjuvant setting.

For resminostat, obviously, we have the ongoing pivotal study, RESMAIN, which is progressing through the patient recruitment in 2019. Our expectation is that we will exceed the 150 patients mark by the year-end. At 150 patients, there will be a data safety monitoring board review of the data, and we expect to publish the result of that in January 2020.

Furthermore, in 2020, for resminostat, we expect to complete recruitment of the study, and we expect to see the required 125 events necessary to unblind the study around the middle of 2020 and to present top line data as fast as possible after that date. So domatinostat, in the first half of next year, we expect to provide data from the EMERGE study Stage I and to take a decision on the expansion of that study. We will see data at the end of the year from the DONIMI study, and one of the advantages that we have here in the neoadjuvant setting is the really speedy pace by which we can execute on clinical studies and generate new data. The second of the Merkel cell studies will be initiated in the first quarter of 2020, that's the MERKLIN-1 study, which in first line Merkel cell carcinoma. I think this is a very data rich program in 2020, and as Frank said, we are looking forward to executing on that plan and presenting results throughout 2020. With that, I'll hand the call back to Megan and open for Q&A.

--------------------------------------------------------------------------------

Operator [6]

--------------------------------------------------------------------------------

(Operator Instructions) We have no questions on the line, so I'll hand back for any further remarks.

--------------------------------------------------------------------------------

Jason Loveridge, 4SC AG - Chairman of Management Board, CEO & MD [7]

--------------------------------------------------------------------------------

Thank you, Megan. So as we have no questions, we'll bring the call to a close, and thank everybody for dialing in and look forward to speaking to them at the next quarterly call. Thank you very much.

--------------------------------------------------------------------------------

Operator [8]

--------------------------------------------------------------------------------

This concludes today's call. Thank you for joining. You may now disconnect your lines. Have a lovely day.