Evaxion (NASDAQ:EVAX) Q1 2021 Earnings Call

0:01 Greetings. Welcome to the Ivaxion first quarter 2021 earnings call. At this time, all participants are in a listening-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Mary Ann Chang of Lifestyle Advisors. You may begin. Thank you, operator, and good morning, everyone. Welcome to the Avaxian Biotech conference call on the first quarter results. Earlier today, we issued a press release that outlines what we plan to discuss today. This press release is available on Avaxian's website.

0:46 During the call, Lars Wegner, CEO of Avaxian, will provide a brief corporate update, after which Glenn Vraniak, the CFO, will review the financial results. After the prepared remarks, we will open up the call for Q&A, where Lars and Glenn will be available to answer your questions. Before we begin, I'd like to remind everyone that statements made during this conference call relating to Avaxion's expected future performance, future business prospects, or future events or plans may include forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. All such forward-looking statements are intended to be subject to the safe harbor protection provided by the Reform Act.

1:38 Actual outcomes and results could differ materially from these forecasts due to the impact of many factors beyond the control of a vaccine. A vaccine expressly disclaims any duty to provide updates to its forward-looking statements, whether as a result of new information, future events, or otherwise. Participants are directed to the risk factors set forth in the vaccines F1 and 20F and other periodic reports filed with the Securities and Exchange Commission. With that said, we'll now turn the call over to Lars. Thank you, Marianne, and good morning, everyone. Welcome to our call. I'm delighted to provide you an overview on our progress over the quarter before handing it over to Glenn to discuss financials.

2:26 So moving into the business highlights, Evaction made strong progress in Q1 2021, successfully concluding our US IPO in February and continuing to advance our clinical and preclinical programs. The recruitment of our Phase I and II A trials on our two lead immune oncology product candidates, EVXO1 and EVXO2, remains on track, and we anticipate data readout late in Q2. We plan to assemble the data and provide an update on the results and next step by mid-July for both EVXO1 and EVXO2. As a reminder, EVXO1 is a peptide-based therapy being assessed in advanced metastatic cancer, including melanoma, non-small cell lung cancer, and bladder cancer.

3:15 Preliminary data showed that EVXO1 to be well tolerated with one complete response and two partial response out of five patients. All patients had reactive T cells with 80.5% of the administered neoibotope, including reactive T cells. The July report will update, will have both the data for the dose escalation and the recommended, and a total of nine patients. EVXO2 is our DNA-based vaccine being assessed in adjuvant melanoma, Five patients have been recruited today and the first part of the trial which assesses this new delivery modality.

4:03 Our other lead product candidate, EVX03 for multiple cancer indication and EVXB1, a vaccine for the prevention of staph aureus, are also progressing as expected to our preclinical development and CMC. We anticipate a regulatory filing for our clinical trial EVX03 in second half of 2021. And we continue to develop our Raven AI platform for vaccine design and development for viral diseases. As most of you know, we closed our US initial public offering in February, raised the net proceed of 27.9 million after underwriting discount and commission. This contributed to our cash position of 27 million US dollars at the end of the first quarter.

4:54 We published a paper in the peer-reviewed journal Scientific Reports describing a study to the bacterium Staphylococcus aureus, which may facilitate a better understanding of the host-pattern interaction during invasion infections. and our Director in Genomic Immune Oncology, Jens Kranlund, also made a presentation at the 4th NEO Antigen Summit in Europe, describing EVAXION's recent improvement in determined cancer neoepithelial through measurement and prediction of peptide MHC complex stability. Last but not least, we also moved to our new headquarter and research laboratory facility located in the DTU Science Park in Hørsel, near Copenhagen in Denmark. In terms of expected milestones, I've already mentioned the Phase 1-2A data readout on EVXO-1 and EVXO-2 expected in late Q2. So we will be busy and have a few exciting months ahead of us.

5:53 With that summary, I will hand it over to Glenn for a brief overview of our financials. Thank you, Lars, and good morning, everyone. On February 9, 2021, as mentioned by Lars, we closed our US IPO, raising net proceeds of $27.9 million after underwriting discounts and commissions. This contributed to our cash position of $27 million as of March 31, 2021, as compared to $5.8 million as of December 31, 2020. Research and development expenses were $3.9 million for the quarter ended March 31, 2021, as compared to $2.5 million for the same period in 2020. The increase of $1.4 million was primarily related to increased spending, net of grant income, for ongoing development on our platforms, preclinical product candidates, and clinical trials. In addition, employee-related expenses increased due to higher headcount.

6:53 General and administrative expenses were $1.3 million for the quarter ended March 31, 2021, as compared to $0.8 million for the same period in 2020. The increase of $0.5 million was primarily related to increases in overhead and professional fees related to the expansion of our corporate function for our initial public offering. Net loss was $4.1 million for the quarter ended March 31, 2021, or a $0.23 loss per basic and diluted share as compared to $3.1 million, or a $0.20 loss for her basic and diluted share for the same period in 2020. In terms of guidance, we reaffirm our guidance that our existing cash resources will be sufficient to support our operations into 2022.

7:38 And that concludes the financial review of Q1, and we will now open the call for your questions. And at this time, we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press start, too, if you would like to remove your question from the queue. For participants using secret equipment, it may be necessary to pick up your handset before pressing the start. One moment, please, while we poll for questions. Our first question is from Kevin DeGieter with Oppenheimer. Please proceed with your question. Hey, thanks so much for taking my question.

8:23 You know, maybe two on O1 and O2, and then I go to follow up on O3. With regard to the data update, you know, should we expect to learn more about the recommended phase two dose for O1, you know, during that update? And with regard to, you know, O2, what is, you know, a realistic expectation in terms of, you know, duration of follow up on those five patients? Thank you. Thank you, Kevin. So on EVX01, we will have nine patients, and we expect to be able to determine the dose that we're going to move forward with. We also expect to have the full readout, immunological and clinical, on those patients for EVX01 for the update in late Q2.

9:15 For EVX02, we are basically primarily looking at immunogenicity for a decision of moving into a potential Phase II. And we'll be expecting to have an immunological picture of our DNA technology in the new epitope space as the foundation for that decision. as you are probably aware of, the EXO2 trial is run in adjuvant melanoma looking for relapse-free survival. So the base decision for potential phase two on EXO2 will be based on immunological data. Thank you for that. I'm sorry, Lars, you had more? No, no, proceed, Kevin. Okay, and then with O3, Can you just walk us through what needs to be completed with regard to DMC to support, you know, potential IND filing and remind us of how you're thinking about patient population for potential, you know, phase one for that compound.

10:26 Yeah, so our EVX4-3 is a DNA targeted therapy, basically targeting the antigen-presenting cell. We are currently running our talk stories on that program and everything is running according with plan so we expect to be ready for the R&D filing as we have previously mentioned. We have not yet chosen the indication for EVX03 but we will when we are done with the talks and of course prior to the R&D filing we will of course share the clinical development plan for EVX03. And maybe just to add to that, new epitope therapies, we have a lot of different indications to choose for.

11:18 The majority of the solid tumors have a lot of mutations and hence are potential candidates for new epitope therapies. And we're doing that exercise analysis as we speak. Thank you. and our next question is from Wong Zee with Lattenburg. Please proceed with your question. Hi, thanks for taking my question. Starting with the 01, 02, any comment on the timing on your Phase II kind of decision and design after you reported the Data in the second quarter, where you started the phase two immediately, quickly, or it will take some time? Just any color on the kinetics?

12:12 Thank you, Ang. So we are, of course, as most other companies are also doing, we are, of course, already preparing for a potential phase two. We have not communicated any timelines for the phase two, but, of course, we plan to move it forward if the data support as fast as possible. But no exact date has been shared with the markets yet. and we'll do so together with the readout. Okay, I understand. And then for 0-3, I understand you are still selecting the indication, but the high level of the design will be like old comers for different type of tumor or selective multiple tumors or will be different cohorts for each tumor type?

13:04 And accordingly, how do you evaluate the immunogenicity data if it is different tumor types? Yeah, that's a good question. So we haven't settled for a design yet. and we will probably design the study as a potential phase one and two that extend into two arms. We have not made a decision if it's one indication or multiple indication and the numbers are of arms yet. So I can't share any more details on that. As you were also mentioning, I think there are some similarities between the tumor types, so you will be able to compare immunological data across tumor types, but I will still say there will be noise in a data set like that.

14:00 And preferable, if you want to compare immunogenicity, you want it from the same study, the same tumor type. But our expectation in these high mutation tumor types is that you will see pretty similar immunogenicity. At least that's what we expect. So that's also what we expect among technologies, even if they are in different indication. as long as they are high mutational burden tumors. If you go down to some of the very low mutational burden tumors, I would also be a bit concerned on concluding from high mutational burden to low mutational burden on new epitope therapies. We believe that will be a difference there.

14:47 Hope that makes sense. Yeah, it makes sense. Thanks a lot for answering my questions. You're welcome. And just as a reminder, if anyone has any questions, you may press star one on your telephone keypad to ensure you're sliding that question and answer key. And our next question is from Kevin DeGieter with Austin-Hartman. Please proceed with your question. Hey, Lars. Just want to unrave and help you thinking about You know, internal investment, you know, in Raven versus, you know, opportunities for, you know, third-party, you know, funding, whether they be, you know, government-related or other entities. And then just kind of, you know, from a bandwidth standpoint, just how you think about the right way to optimize, you know, the learning embedded within Raven.

15:45 Thanks. Yeah, I think it's an excellent question. So the RAIM platform has always been supported by non-diluted grants, which basically means that the majority of the research is actually financed by government grants. As most of you are aware of, in cancer, the T-cell components are pretty similar to the viral space. So we are, of course, moving very rapidly forward on the viral platform based on all the experience we have from the cancer space. We do believe that the world needs a platform that will rapidly take not just corona but any virus and find the right targets, but also find targets that are broadly protective also when you see mutation and strain mutations within a virus or viruses. and that's what we're currently building.

16:45 So as we announced the start of this program, we already moved it pretty rapidly forward on the software side and are now of course starting to test the platform in different preclinical models. And of course as soon as we have some interesting data and proof of concept to share, we will of course share it with everyone. Thanks for taking my questions. You're welcome. And it looks like we have reached the end of the question and answer session. I'll now turn the call over to Lars Legner for closing remarks. Perfect. So there's no more questions, so that concludes this call.

17:34 Thank you all for your interest in evaction, and we look forward to speaking again soon. And this concludes today's conference and you may disconnect your lines at this time. Thank you for your participation.