TRGNF - Transgene SA (TRGNF) Q2 2023 Earnings Call Transcript

2023-09-20 15:08:03 ET

Transgene SA (TRGNF)

Q2 2023 Earnings Conference Call

September 20, 2023 12:00 PM ET

Company Participants

Lucie Larguier - Head of Investor Relations

Alessandro Riva - Chairman and Chief Executive Officer

Jean-Philippe Del - Vice President and Chief Financial Officer

Conference Call Participants

Martial Descoutures - Oddo BHF

Bo Zhang - Intron Health

Presentation

Operator

Hello, and welcome to the Transgene First-Half 2023 Financial Results and Business Update Call. Please note this conference is being recorded and for the duration of the call your lines will be on listen-only. [Operator Instructions]

I will now hand you over to your host Lucie Larguier, to begin today's conference. Thank you.

Lucie Larguier

Thank you, Francois. Hello everyone, I'm Lucie, Director of IR at Transgene. I have the pleasure today to introduce you to Dr. Alessandro Riva, our Chairman and CEO, along with several members of the executive committee. So you will have Eric Quemeneur, our CSO: Maud Brandely, Chief Medical Officer; Jean-Philippe our CFO; and Christophe Ancel, VP Pharmaceutical Operations. We will review today's news regarding on the progress of the first-half of this year and answer any questions you may have.

Before I turn over the call to Alessandro, I'd like to remind everyone that today's discussion contains forward-looking statements, which are subject to numerous risks and uncertainties. If you're listening to this webcast via the internet, you will not be able to ask questions. So if you wish so, please make sure and you join us via the conference numbers that are available in the press release. You can also directly send me an email at largely transgene.fr and I'll be happy to read your questions.

With this, I now turn the call over to Alessandro Riva.

Alessandro Riva

Thank you, Lucie, and thank you for joining today's call. It's a real pleasure to update you on the progress of Transgene. I spent the last three months getting to know the company, its employees, and its program in details and it has been a very enriching experience that has confirmed Transgene mission to push scientific boundaries in a very highly innovative field of therapeutic vaccine and oncolytic viruses.

During the next few minutes, I will update you on our portfolio, and in particular, the leading compounds that are in clinical development. TG4050, our individualized therapeutic cancer vaccine is a clear example of our ability to innovate by combining the identification of immunogenic mutations through the artificial intelligence and the latest advances in personalized medicine manufacturing.

As you certainly know, earlier this year at the ACR and ASCO Congresses, we presented a highly promising immunological data in a randomized Phase 1 trial conducted in the adjuvant setting of head and neck cancer patients. All available patients have developed a cellular immune response after treatment with TG4050 as a single agent. The response was directed against several target neoantigens in all available patients and included both newly generated and amplified responses against Class I and Class II antigens, in addition to a notable increase of a factor CD4 and CD8 T-cell.

Importantly, the engagement of a broad T-cell response is crucial in enhancing the chances of delay the risk of recurrence. It is worth noting that all treated patients in this randomized Phase 1 trial are still disease free, while two have relapsed in the control arm. We believe that our individualized viral vector-based vaccine is very promising and may differentiate from the current individualized neoantigen therapeutic vaccine in development. Based on this very solid proof of principle Transgene together with its partner NEC, plans to launch a randomized Phase 2 trial in head and neck cancer in the adjuvant setting in 2024. We will continue to update you on the ongoing Phase 1 trial with additional immunological data as they become available and also clinical follow-up that will be presented during the first-half of 2024.

Moving on to the next program, our HPV positive cancer therapeutic vaccine TG4001 remains an important therapeutic vaccine within an evolving treatment landscape. We are running a randomized Phase 2 trial that compares TG4001 in combination with avelumab versus avelumab in HPV induced anogenital cancer patients that have not received biotherapy with checkpoint inhibitors.

We announced late last year that following a pre-planned progression free survival interim analysis, the members of the independent data monitoring committee have recommended that the study continues. The trial currently intends to randomize a total of 120 patients. At ASCO earlier this year, we presented a poster showing that TG4001 induced a specific immune response against the vectorize antigen.

In particular 11 out of 13 patients with an immune response had either stable, partial, or complete tumor response according to the international RECIST criteria. Also two patients with a strong epitope 6 and 7 immune response experience a complete clinical response. We are observing a progressive slowdown in patient recruitment in the trial due to the recent availability of new treatments in first-line and second-line cervical cancer.

In response to this situation, we are assessing all options to have data read out from the trial by the end of 2024. We continue to believe that there is a very strong unmet medical need in HPV positive cancer patients, including cervical cancer and head and neck cancer. Transgene is currently in active discussion with all stakeholders to define the optimal path forward to continue developing of TG4001 in the most appropriate target patient population.

Moving now to our oncolytic virus portfolio. As you know, Transgene capitalize on its viral vector expertise to develop another type of innovative immunotherapy, the oncolytic viruses. Oncolytic viruses with their selective replication in tumor cells only, our idea of [Indiscernible] transporters inducing site specific expression of [proteins] (ph) in the tumor to boost the immune response. With the ability to be administered intravenously our novel Invir.IO platform based candidates can really be differentiated from our oncolytic viruses in development.

Our leading intravenous candidate is TG6050 a novel oncolytic virus that vectorize interleukin-12 and anti-CTL4 antibody. We have decided to move the compounds into clinic based on very encouraging preclinical data showing a sustained expression of interleukin-12 in tumors, remodeling of the tumor microenvironment, activation of numerous innate and adaptive immune pathways and a very strong antitumor activity in several mice models.

The first patients in our ongoing clinical trial in relapsed refractory non-small cell lung cancer was treated with monotherapy TG-6050 in May this year. We plan to complete the trial in second-half 2024, which will be the basis of a future potential evaluation in combination with an immune checkpoint inhibitor.

Moving on into our intra tumor and oncolytic virus program and collaboration with BioInvent. We communicated a positive Phase 1 data with BT-001 in solid tumors in May 2023. Out of 18 patients who received escalating doses of BT-001, to show the decrease of injector lesion size of 50% or more and 11 out of 18 had a stabilization on the injected lesion. Safety data was also satisfactory. We are now progressing the trial with our co-development partner BioInvent and MSD, while supplying pembrolizumab for using combination with BT-001. The combination part of the trial with pembrolizumab is due to start in Q4 2023.

A few words on finance. As you have seen Transgene is a standard [Indiscernible] way from early 2024 until the end of 2024. This was made possible by non-dilutive financing in the form of a non-current account advance from our leading shareholder Institut Merieux. This additional funding will allow us to focus on delivering key value creating milestones next year, including significant additional clinical data on all programs in clinical development, as well as the start of the TG-4050 randomized Phase 2 trial for head and neck cancer patients in the adjuvant setting.

The rest of our financials are very much in line with our expectation, and Jean-Philippe will be more than happy to answer question that you have during the Q&A session. I hope that this brief overview has clearly highlighted the potential of our immunotherapy pipeline. As you can see, our strategy based on our strong portfolio of assets and the significant innovation and differentiation that can bring to patients with solid tumors. Innovation and differentiation are at the center what we are doing here at Transgene in with an approach that allow us to maximize the chances of success for all key stakeholders.

Over the last four months, since taking up my role as a CEO, there's been lots of detailed assessments, significant internal discussion, and very careful forward planning. I believe that Transgene is on the path to an exciting future ahead, and I look forward to telling you more about our plans in the coming months as we progress.

The team and I will now take your question. Lucie?

Question-and-Answer Session

Operator

[Operator Instructions] And our first question comes from the line of Martial Descoutures. Please go ahead.

Martial Descoutures

Good afternoon, everyone. Martial Descoutures from Oddo BHF. Thank you for taking my question. So my first question concerns the development of TG4050. In Phase 1, the objective is to achieve 18-months without relapse. So we are at more than and probably 10 or 11 months at this step, I think. So, we could expect to achieve, according to me this objective in Q2 next year. So my question is, will you wait this data to adjust your trial, or could you launch the Phase 2 before this data? It is my first question.

And I had another, maybe a general question for, Alessandro, if I may, last week Moderna, I like it during its customer today to change these, to produce, its oncology vaccine. So how do you consider, the transient position in the -- in terms of manufacturing that step? Do you also see maybe a few changes in short or mid-term and, that's what do you expect for the mid-term?

And my third question is maybe for Jean-Philippe, if you're here, we observe in your communication and increase of your other expenses. So, it's just my model, could you give us maybe more details on this aspect? Thank you very much.

Alessandro Riva

Thank you very much. Maybe, I start from the first question, and that is about 4050 and the initiation of the Phase 2 trial based on the Phase 1 data. Of course, we'll continue to update the community on the Phase 1 study. And in particular, we will have the immunogenicity data for all patient centered in the randomized Phase I study that we plan to present at the ACR or ASCO next year. And of course, we will have the information before the official presentation. This is a very important milestone for us to consolidate, you know, our decision to move forward with the randomized Phase 2 study.

And then we will have the updated follow-up analysis. We will have the two years follow-up analysis in July 2024 for the randomized Phase 1 trial. However, you know, we are going to start the -- what we call, the startup activities related to the trial before receiving the two-years follow-up data in July 2024. In other words, we are going to start to activate the startup activities, a little bit, I would say it’s a risk in order to prepare to launch the recruitment immediately after. So you will see some activities during the first semester 2024. But, you know, the official, I would say, you know, speed up of recruitment that we have handled immediately afterwards. So that's for your first question.

For your second question, I guess, you assume, if I understand your question, you're asking about the manufacturing optimization with regards to the 4050?

Martial Descoutures

Yes. So, yes, it’s for 4050 and the other asset in your portfolio?

Alessandro Riva

Right. So, one of the strengths of Transgene is that we have our internal manufacturing capability to support the early phases of development of our compounds both from a therapeutic vaccine perspective and also oncolytic viruses perspective. However, we also realized that as the programs move to the next step, and for example, TG4050, our personalized cancer vaccine, we will need also to strengthen our capability to make sure that we can speed up and recruit quickly in the new trial in the randomized Phase 2 over the neck.

There is also a component, as you know, for the personalized cancer vaccine of the lead time, that is the time between the biopsy and the vaccine available to being fused to patients. So we are also committed to work, I would say, very closely on this matter in order to make sure that we continue to improve the lead time to make the vaccine available to patient. And therefore, of course, to strengthen the recruitment even better.

And also to open a potential, also, you know, new indications that maybe a very interesting for a personalized cancer vaccine. So, of course, I cannot comment about Moderna and what they are doing, you know, better than me, what they have shared in the public domain. And now, I guess, I turn on Jean-Philippe, that will answer your financial question.

Jean-Philippe Del

Yes. Thank you, Alessandro. [Indiscernible] Martial, so you're right that we have seen an increase in other expenses in the first-half of ‘23. This increase comes for decision that we took in early ‘23 to definitely stop infectious disease activities and to close our labs in Lyon. So we have a one shot cut here, at the end of June ‘23, corresponding to the cut of this close of this site.

Martial Descoutures

Thank you very much, very clear. Thanks a lot.

Operator

The next question comes from the line of Bo Zhang from Intron Health. Please go ahead.

Bo Zhang

Hi, good afternoon. Thank you for taking my questions. I got a couple, going back to the 4001 program. You mentioned a slowdown in patient enrollment, and you want to adopt different methods to ensure a readout. Could you elaborate a bit more on what type of methodology, that you have in mind?

And then perhaps a follow-up to that. Does that mean, we will expect to see a higher sort of R&D costs associated with enrollment? And together with the initiation of 4050, what does that mean for the R&D cost, going forward in 2024? Thank you.

Alessandro Riva

So maybe I start from the second question. So there will be no impact whatsoever on the R&D cost, you know, with regard to the potential next step on the trial with 4001. So, of course, we cannot disclose the methodological details, but the bottom line is that we'll make it very fortunate to have a readout of the trial within the year 2024, while keeping a statistical power that is consider a good one to have data interpretation. So then, you know, again, we cannot discuss the details, but of course, we’ll communicate it in a formal way as soon as we have also an agreement with our clinical partner, you know Merck, Serrano, that is supporting the fire with available [Indiscernible].

So in other words, no impact on our spending, we are committed to have a readout in 2024 with a statistical power that is, kind of, credible to have an interpretation of randomized Phase 2 data. I guess, these were your two questions, if…

Bo Zhang

Thank you for that. Can you also comment on, sort of, the R&D expense expectation for that in 2024?

Alessandro Riva

You mean for 4001?

Bo Zhang

Just, overall R&D expense for 2024, please?

Jean-Philippe Del

Yes. So we do not discuss the detail of our expected cash burn for ‘24, but as you can imagine, we can -- we'll do our best to remain -- to keep the level of R&D expenses at the similar that we have today or we will have a slight increase, but it should be a master in our expenses.

Alessandro Riva

Yes. Overall, I would say that our expenses for 2024, you know, are not very significant of what you are observing in 2023. So -- and we will, you know, keep the spending, you know, overall, kind of, flat with, I mean, plus and minus, but it's not -- that's not very significant. But of course, by, you know, by applying discipline in any way we spend money. And we think also that we have an appropriate characterization in our portfolio across clinical development compounds and the research. So you will see plus or minus the same, kind of, spending that you're absorbing now in 2023.

Bo Zhang

Okay. Thank you very much.

Operator

There are no further questions. So I'll hand you back to Lucie to reply to some written questions.

Lucie Larguier

Yes. Thank you. I received some questions from Jamila El Bougrini from Invest Securities by email. So one of the questions is with regards to the signing of the funding with Institut Merieux. So she assumes that the [fence] (ph) are available as of today and wanted to understand, why there's sort of a delay in initiating the Phase 2 trial of 4050 in 2024 versus end of 2023, if we have the available resources?

And another question, given 4060 is to know what our plan is to go with a Phase 2 followed by a pivotal Phase 3 trial? Or if we want to stick to the idea to have a very robust Phase 2 that could potential be considered as pivotal depending on the results that we'll be obtained and discussions with regulators and agency?

Alessandro Riva

Okay. So I guess, thank you for the question. I start from the first one, so the delay in the initiation of the mice Phase 2 in head and neck cancer patients is not related to budget of financing reasons. But essentially, because we made the decision to have a consultation of the food and drug administration around the randomized Phase 2 study. And to have a sense from them what they think about the higher design and also the manufacturing that is associated in manufacturing process, that is associated to this important fire. And of course, based on their feedback also, we will have a sense on whether this study may be consider eventually as potentially for a [sub-party] (ph) accelerated approval moving forward.

So we think that, before embarking into the finalization of the trial design and the input from the food and drug administration is very important. And also because we wanted to expose this trial to U.S. head and neck cancer patients. So that's essentially, I would say, the reason no financial, kind of, reasons, but really methodological reasons, you know, that we would like to, kind of, strengthen based on the inputs from the food and drug administration.

I guess, yes, this will be -- and then whether there is a Phase 2 followed by Phase 3, again, this will depend from the FDA inputs, today and also it really depends on the evolving landscape in head and neck patients. And we are convinced that if we have a very strong randomized Phase 2 trial with a clear disease free survival data with a reliable follow-up that usually is at least two-years follow-up, we can discuss with the agency the potential to have an accelerated approval in United States of America and inventory conditional approval in Europe.

So that -- these are the two questions from -- yes.

Lucie Larguier

Thanks. We don’t have any other questions in the Internet or via phone. Maybe you want to join your closing statements that [Indiscernible].

Alessandro Riva

I think, I would just to say thank you for the people that have joined the call. We look forward for further updating you as our pipeline and our business strategy progresses. And, please not hesitate to reach out to Lucie or me or Jean-Philippe for any questions. Thank you very much and great afternoon or evening. Thanks.

Lucie Larguier

Thank you.

Operator

Thank you for joining today's call. You may now disconnect your lines.

For further details see:

Transgene SA (TRGNF) Q2 2023 Earnings Call Transcript