Ablynx NV (OTC:ABLYF) Q2 2014 Results Earnings Conference Call August 28, 2014 10:00 AM ET
Edwin Moses - Chief Executive Officer
Antonin de Fougerolles - Chief Scientific Officer
Wim Ottevaere - Chief Financial Officer
Dominique Tersago - Chief Medical Officer
Olav Zilian - Helvea
Jan De Kerpel - KBC Securities
Sachin Soni - Kempen & Co
Good day and welcome to the Ablynx's half-year results 2014 conference call. Today's conference is being recorded. At this time, I would now like to turn the conference over to Edwin Moses, CEO of Ablynx. Please go ahead, sir.
Good afternoon, everyone and thank you for joining us on this webcast where we have the pleasure to present first half results for 2014. I am Edwin Moses and will be giving this presentation. And I am joined by our CFO, Wim Ottevaere; our CSO, Tony de Fougerolles; and Dominique Tersago, our CMO. My colleagues will all be available for the Q&A session.
May I begin by asking you to read our Safe Harbor slide, as we may be making forward-looking statements as a part of this discussion. This afternoon we'll begin by reviewing the progress we have made in the first six months of this year together with some events that occurred after June 30. We will provide an outlook for the rest of the year and then we will be happy to take any questions you may have.
We are very pleased with the continued significant progress that has been made in the first half of 2014. With regard to our product pipeline, we were delighted to achieve a third clinical proof of concept with a Nanobody when we announced the data from our TITAN study with caplacizumab in patients with acquired thrombocytopenic purpura.
In addition, we successfully completed to further Phase I studies in anti-RSV program and we now expect to start a Phase II study with inhaled Nanobody during quarter four of this year. Importantly, as part of our major collaboration with AbbVie on our anti-IL-6R Nanobody, we initiated a Phase 1 bioavailability study with a subcutaneously administered form of ALX-0061 in April which we expect to readout by the end of this year.
Finally on the product pipeline. We were very pleased to our partner, Merck Serono, successfully complete a single ascending dose study in healthy volunteers of the first bi-specific Nanobody [treated clinic] (ph) anti-interleukin 17A and F. And they have now initiated a Phase 1b study in patients with psoriasis with this Nanobody. We have already reported on the major immuno-oncology deal which we signed with Merck & Co. in February.
In the area of corporate financing, we announced that we would raise €41.7 million in an over-subscribed, accelerated book building operation at the end of June. We were pleased at that time to welcome a number of important new American and European investors to our register, including Fidelity from the USA. Also this month we were delighted to receive a €2.1 million grant from IWT to develop nanobodies in the exciting area of ocular medicine.
Let's now take a look at the excellent financial results of 2014. We saw an impressive 72% increase in revenues compared to H1 2013 to €22.2 million, with important contributions from AbbVie ALX-0061 deal and the Merck Serono discovery deal, both signed last year and the Merck & Co. deal signed early this year. As you can see, despite a considerable increase in clinical activity, our R&D cost remained very well controlled at €24.5 million. Our cash position at the end of first half remains very strong at €196 million and this does not reflect the proceeds from the ABO in which we raised €41.7 million which we received in early July. Our net cash burn guidance for the year remains at €30 million to €35 million.
Now let's look in a little more detail at the evolution of our pipeline. Many of you will be familiar with this pipeline graph which represents approximately 13 Nanobody programs at various stages of discovery and development. This slide illustrates a broad number of therapeutic areas where nanobodies are potentially applicable and the different types of risk/reward strategies we have in place across the portfolio. There has been much good progress so let's look at some of the more advanced programs in a little more detail.
Let's start with caplacizumab, our anti-von Willebrand Nanobody for the treatment of TTP. In June we announced the results of Phase II TITAN study where we achieved proof-of-concept. Just to remind you, (indiscernible) designed the TITAN clinical study where patients received the standard of care plasma exchange together with caplacizumab or placebo daily during the plasma exchange and then for 30 days after plasma exchange is stopped. We had initially wanted to treat 110 patients. But earlier this year we decided to stop the trial with 75 patients recruited so that we could analyze the data and determine next steps.
This slide shows a summary of the data from the TITAN study. The primary endpoint was time to platelet normalization. And as you can see on both subgroups of patients on active drug, those that received no plasma exchange prior to treatment with caplacizumab and those that received one plasma exchange. There was an approximately 40% decrease in the time to platelet normalization. The hazard ratio is greater than 2, meaning the patients that were treated with caplacizumab achieved the primary endpoint of more than twice the rate of those receiving just placebo on the standard of care.
The p-value was 0.013, so we show statistical significance despite the fact that our patient population was 30% smaller than originally intended.
This slide shows the secondary endpoints from the TITAN study which was also very compelling. You can see that there was a 73% reduction in exacerbation during the 30-day period after plasma exchange was stopped in the caplacizumab arm compared to the placebo arm. There were also 76% more subjects in complete remission in the caplacizumab arm compared with placebo. The fact that the proportion of subjects with exacerbations and/or relapses at the one month follow-up after study drug treatment was stopped approximately equalized between the active and placebo group, indicates to us that some patients made nearly more 30 days of caplacizumab treatment post-plasma exchange ensure that they benefit from the full protective effect of the drug.
The safety profile of caplacizumab was broadly as we expected and considered to be acceptable and manageable in the context of this serious disease.
Our next step to caplacizumab are to complete the analysis of TITAN data and to discuss it with key opinion leaders and potential collaborators to help design the optimal Phase III study. In parallel, we are completing a Phase I study in healthy volunteers to demonstrate bioequivalence of the liquid formulation used in TITAN study with a lyophilised formulation which we have developed and which will be used in the Phase III trials and for subsequent commercialization. As well as preparing for the Phase III study to start in 2015, we are also evaluating a number of partnering scenarios.
So with the help of the cash raised in the recent ABO, we are capable of running the Phase III independently, if we conclude that this is the best option for the company.
Now let's briefly consider some of the other Nanobody clinical programs. ALX-0761 is a billion-specific anti-inflammatory Nanobody targeting interleukin 17A and F which was originally developed as part of the Co-Co deal with Merck Serono on which they took on complete responsibility in 2013. Ablynx is eligible for milestones and royalties. Merck Serono has now completed the single ascending dose study in healthy volunteers for this billion-specific Nanobody and has initiated a Phase Ib trial in patients with Psoriasis, which is expected to readout in early 2016.
In the anti-interleukin-6 receptor program partnered with AbbVie, we started a Phase 1 trial in April to determine the bioavailability of the subcutaneously administered Nanobody which will be used in the Phase II trials in RA and SLE planned for 2015. Results from this study will be available in Q4 of this year and initial indications are that the Nanobody is behaving as expected.
In our RSV program, ALX-0171, in addition the very encouraging pre-clinical data in a neonatal lamb model published early this year, we also completed two further Phase I studies which generated positive additional PKN safety data. Preparations are now well underway to initiate a Phase II pediatric study in Q4. Finally, Boehringer Ingelheim has decided to stop the Alzheimer's program which had been in Phase I. This program was developing an anti-Abeta biparatopic Nanobody that Boehringer has decided not to take this program forward. At this time Ablynx does not intent to invest further in the Abeta project.
Having looked at the clinical programs, let's just review some of our commercial relationships. Here you see a summary of the collaborations with our six important partners. In addition to the wealth of expertise and resources that these partnerships have allowed us to access, they have also generated over €330 million of non-dilutive capital to date and have the potential to generate over 3 billion in milestones plus royalties.
The AbbVie relationship on ALX-0061 is progressing well and we remain very focused on starting the Phase II trials in RA and SLE in 2015. There are still 8 active programs in our strategic alliance with Boehringer Ingelheim. The first of these is now expected to reach the clinic in 2015.
There are approximately 10 programs ongoing as part of the four deals we have signed with Merck Serono. From the first contract signed with them in 2008, the two programs which were recently [coco] (ph) development programs are now both reverted to being under the full control of Merck Serono with Ablynx having the potential to receive milestones and royalties. Most advanced of these is the anti-IL-17A/F program which is at the Phase Ib. The other is an oncology program.
The important immuno-oncology deal with Merck & Co signed earlier in the year is up to €1.7 billion in milestones plus royalties. And this area of pharmaceutical development continues to attract a huge amount of interest and this shows the potential to have a major impact in areas of higher unmet medical needs. Merck & Co are an excellent partner and the collaborative programs with them have got off to a very good start. We continue to evaluate opportunities for certain of our assets in emerging markets as we did in the licensing last year of our anti-RANKL program to Eddingpharm for Greater China.
Now let's take a moment to look at the key news flow we can expect over the next months and years. In 2014 so far, we have already seen the positive results from the two RSV Phase I studies. The very encouraging proof-of-concept data from the TITAN study with caplacizumab, which we expect to present at ASH at the end of the year. And the success of completion of the single ascending does Phase I study that Merck Serono ran with the anti-interleukin 17A and F Nanobody.
Still to come this year is data from the bioavailability study with ALX-61 and the bioequivalence study with caplacizumab. In addition to having started three clinical trials this year, we also expect the RSV pediatric study to be initiated in the fourth quarter.
As part of ongoing business development, we continue to have multiple discussions on a range of topics including exploring possible commercialization opportunities for caplacizumab. If we look further into the future, then we you can see that we have a constant flow of clinical data from our partnered and wholly-owned programs. Including potential clinical proof-of-concept in the RSV program next year, Phase IIb results in rheumatoid arthritis with our [partnered] (ph) anti-IL-6R program in 2016 and expected data from our Phase III trial with caplacizumab in 2017. To name just a few examples.
This exciting product pipeline reflects our commitment to exploit the Nanobody platform broadly, targeting areas where there is a high unmet medical need and where we believe that nanobodies have a real competitive advantage. So in summary, the first six months of 2014 have comprised considerable progress in research programs, clinical programs and business development and we look forwards with optimism to delivering on our plans during the rest of this year.
Now I would like to open the floor to any questions.
(Operator Instructions) Our first question today comes from Olav Zilian of Helvea. Please go ahead.
Olav Zilian - Helvea
Could you please comment on the Nanobody that unfortunately failed in Boehringer Ingelheim's hand when it was tested for the Alzheimer's indication?
Yes. Thank you, Olav. We will comment on that. We won't describe it as having failed and Dominique will give you a little bit more information on that.
Okay. As you may know the clinical trial was actually -- the clinical trial in healthy volunteers was suspended due to some findings that they saw. They then took that opportunity to analyze all the data that they had from that the study and a number of other considerations around Abeta for the treatment of Alzheimer's disease. The PK profile, the half-life of that Nanobody was shorter than anticipated. That together with the questions around Abeta as a relevant target for the treatment of Alzheimer, basically led to some commercial strategic decisions to stop the program.
Olav Zilian - Helvea
Maybe a follow up on this one. So there are a variety of different antibodies or antibody like compounds in development against Abeta. So based on the data you have seen, would you conclude that other our particular approaches to target Abeta would be more successful?
I think that's difficult to sort of say -- it's a difficult field. It's also difficult to know which patient population -- how to sort of define the patient population, at what point, which targets are the relevant targets to treat. So I think that is actually quite a challenging question. It's a number of [procedures] (ph) they are looking into. So I feel the data around Abeta is not yet that compelling but there are still some research efforts there.
Olav Zilian - Helvea
I understand. So then I would assume that the same Nanobody had been tested earlier in animal models. How was then the (indiscernible) on [plax] (ph) possibly tested in (indiscernible). Could you comment on that?
As those data, they have not been published that we own currently to Boehringer Ingelheim. The program will be transferred back to us in its entirety over the next months or two. And we will review those data at that time.
Olav Zilian - Helvea
And then on the safety findings, what percentage of your findings?
So there were hyper-sensitivity reactions and there were...
Olav Zilian - Helvea
And that -- yes.
That we considered, given the fact that it was a healthy volunteer study and also because of pre-specified stopping rules in the protocol due to, for example, one serious adverse event and not specifically because of the nature of hypersensitivity. There were quite strict stopping rules in that protocol which was designed by Boehringer Ingelheim and basically they were forced to sort of suspend the recruitment for the trials.
Olav Zilian - Helvea
So I assume it was some intravenous administration?
Thank you. Your next question today comes from Jan De Kerpel of KBC Securities. Please go ahead.
Jan De Kerpel - KBC Securities
I wanted to zoom in on what you said in the press release regarding TTP. You mentioned that you are engaged in exploratory discussions with potential partners. Could you elaborate a little bit more on what type of partner these are? Are these global pharmaceutical companies? Are these companies with a specific interest in rare diseases, that kind of things. And what kind of partnership are you look for? And then finally on that, when do you think you will make a final decision on doing the Phase III by yourself or with a partner. Second question is also on the Boehringer Alzheimer project. Just wanted to know if you will be returned to full rights to the program. And if your analysis is positive, do you intent to seek a partner for that? Thank you.
Thanks, Jan. Let me deal with the last question and to the outcome of this program. Our current view, although we haven't seen all the data that has come back, is that we would not invest further ourselves in that program and we think it's unlikely that it will be partnered. Dominique's mentioned that PK data that were gotten is not appropriate for commercialization. We think that will be true for any other partner. The possibility of developing any molecule what we think currently in that area, that’s unlikely. On the TTP question, in terms of the type of partner you mentioned, the answer is both. So we are looking at both global partners but also -- global pharmaceutical companies but also those companies who specialize in rare or orphan diseases. We are fortunate in that we don’t have strict timetable in mind for these discussions and we think it's very (indiscernible) to put to explore potential collaborations and the thoughts on the program towards some next steps with partners. But if you know from -- particularly based on the financing we did a couple of months ago, we can move forward with all the preparations for Phase III ourselves which we will do. So those discussions will go along in parallel but we are not working to a specific deadline on when we might want to conclude. Whether we work with a certain partner or whether we go independently into Phase III ourselves.
Jan De Kerpel - KBC Securities
Thank you, Edwin. Just to follow up a little bit on that. When the data was presented, it really looked like your preferred thought would be to go alone in Phase III and maybe even further. What has triggered, if something has triggered it, but what has triggered that you are now more looking towards partnership. Or am I reading that incorrectly?
It's not the message we intended to give. What we gave -- the message we intended to give was that we wanted to maintain the choice until you actually talk with partners about the data, talk about potential but also evaluate carefully what it would mean for us to go independently, you can't make a decision on which way to go. What we want to do is make sure we could choose to either go with a partner or independently and that we put ourselves in a financial position where we could do that. So nothing has changed in that at all. We think it's very valuable to talk to other pharmaceutical partners about their thoughts on this program and the thoughts on next steps and commercialization. And then we will look at what they believed the compound can do and what they believe they can add in terms of the next stage of development and commercialization and come to a conclusion on whether we wish to remain -- keep this program independent or go with them. But nothing has changed in that view at all. I think just the quality of the data we saw a couple of months ago just really gave us more options than we have had previously.
Thank you. (Operator Instructions) Our next question today comes from Sachin Soni of Kempen & Co. please go ahead.
Sachin Soni - Kempen & Co
My question is also regarding Alzheimer's. At Alzheimer's conference, this poster of Nanobody was particularly presented and I happen to speak to the scientist standing next to the poster also, who was more enthusiastic. I do understand from his or her perspective they can be more enthusiastic because they worked on it. But it looks like explanation doesn’t say there was an issue with efficacy. Wouldn’t it be a possibility that you are able to change the formulation and retry in bi or a tri-specific mode for Alzheimer's and try to partner it. Thanks.
I will just take this up and then I will let Dominique or Tony add. But just, we haven't had the full data back to back so we haven't been able to evaluate it. So you are right, we shouldn’t rule out anything going forward. However, having said that, we are all aware what a difficult area this is. What the challenges are and what the ongoing questions around the AB target maybe. So I think you are right. We will continue to look at those things that the platform could do.
Antonin de Fougerolles
This is Tony de Fougerolles here, just to add to that. There are two separate questions. One is what to do with the returning assets and the other question is, could you do something with that as part of a building block. And then as you say, use a multi-specific or bi-specific approach and go after multiple targets. That’s something that I think until we see the full data set, we will need to see is, is there a path forward for something that’s more along the multi-specific path. But as we pointed out, this is a fairly difficult kind of clinical development path. So again, it's something that’s we will take a look at.
(Operator Instructions) At this time we have no further questions in the telephone queue. (Operator Instructions) Once again there are no further telephone questions in the queue at this time. Thank you.
Okay. Well, thank you very much everybody. We have had a very good first six months to 2014. We are looking forward to continued very positive progress towards the end of this year. So thank you for your time, attention and your support. Thank you very much.
That will now conclude today's conference call. Thank you for your participation ladies and gentlemen. You may now disconnect.
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