HOOKIPA Pharma Inc.HOOKNASDAQ
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Operator: Good morning and thank you for joining the HOOKIPA Pharma Fourth Quarter and Full Year 2022 Earnings and 2022 Outlook Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] I would now pass the call over to Matthew Beck, Executive Director of Investor Relations. Please go ahead.
Matthew Beck: Thank you. A slide deck accompanying today's call is available through the webcast and in the events section of the HOOKIPA website. Please manually advance the slides as we prompt you through them. Joining me today are Chief Executive Officer, Joern Aldag; Chief Financial Officer, Reinhard Kandera; and Chief Medical Officer, Katia Schlienger. During today's call, we will be making certain forward-looking statements. These statements may include statements regarding, among other things, the efficacy, safety and intended utilization of investigational agents, our clinical and non-clinical plans. Our plan to present or report additional data, the anticipated conduct and the source of future clinical trials, regulatory plans, future research and development and possible intended use of cash and investments. These forward-looking statements are based on current information, assumptions and expectations that are subject to change and involve risks and uncertainties that may cause the actual events to differ materially from those contained in the forward-looking statements. These and other risks are described in our periodic filings made with the SEC including our quarterly and annual reports. You are cautioned not to place undue reliance on these forward-looking statements, which are only made as of today's date. The Company disclaims any obligation to update such statements. For today's call, Joern will provide opening remarks. Reinhard will offer high-level comments on our financials and then we'll open up the call to Q&A. With that, I'll pass the call to Joern.
Joern Aldag: Okay. Good morning everyone. I'd like to focus first on our accomplishments in 2022 and second highlight what's coming in 2023. At HOOKIPA, we're leveraging our arenaviral platform to create therapies that deliver unprecedented antigen specific CD8 T cells to combat disease. In 2022, we saw progress both in and toward the clinic across four different programs in areas of considerable unmet need. Please go to Slide 3, which has our portfolio site. Key developments in '22 were the progress of HPV positive cancer drug HB-200 in a Phase 2 single arm cohort in combination with pembrolizumab, the acceptance of an IND for 300 or prostate cancer therapeutic targeting self-antigens. A material collaboration with Roche are novel approach to target shared new antigens and cancers for lung, pancreas and colon cancers with KRAS mutations and achieving Phase 1 readiness for our Gilead partnered hepatitis B therapeutic vaccine. Let me give you a bit more Broadcom on these major achievements. Our Phase 1 dose escalation study showed that HB-200 was generally well tolerated, rapidly induced a high magnitude of tumor specific T cells and showed early anti-tumor activity and difficult to treat patients as a monotherapy. We progressed to testing HB-200 and HPV16-positive head and neck squamous cell carcinoma patients and Phase 2. We're currently enrolling patients in three dose expansion cohorts, a cohort in the non-randomized first line setting in combination with pembro, a cohort in the non-randomized second line setting and second line plus setting in combination with pembro, and a cohort of patients in the post-standard of care setting at the recommended Phase 2 dose. Regarding the HB-200 trial, I reaffirm our Q2 data guidance. We will disclose data from 10 to 20 patients each in the first and second line settings in combination with pembro and we will provide an update on our monotherapy dose escalation cohort. We will present an update on this trial and all three cohorts in a press release and an investor call in the second quarter and inform about the likely path forward. As a reminder, our HB-200 trial which targets an oncoviral antigen supports the first pillar of our three part strategy in oncology. The second pillar in our oncology strategy is targeting self-antigens which we are pursuing with our HB-300 program in prostate cancer. The trial is now open for enrollment as per our guidance to start the trial in Q1 2023. Targeting new antigens is the third pillar of oncology strategy. In October, we announced a collaboration in this field with Roche to advance our HB-700 acid, targeting KRAS mutations and multiple indications and an option to develop a second undisclosed candidate. We're pleased by the progress across our oncology portfolio as well as the acceptance by the FDA last July about Drug Master File. The information from that master file can be used to support new IND filings using our platform leading to reduce pre-clinical cycle times. Regarding our Gilead collaboration, much progress has been made. After restarting the HIV program HB-500 under our control to bring it to the end of Phase 1b, we're working with our academic collaborators and plan an IND filing in 2023. The hepatitis B program progressed well, as planned we completed, we will keep the contributions for IND preparations and 2022, triggering a 5 million milestone payment. Gilead guided to start at the trial, this HPV program in 2023. So what's in our plans for '23? The readout of all three HB-200 Phase 2 expansion cohorts in the second quarter of 2023 shall guide our decision to move into a randomized HB-200 trial in combination with pembro versus pembro alone. We have Fast Track designation for such a trial and a supply agreement for pembro with Merck U.S. In our HB-300 Phase 1 trial targeting prostate cancer, we are recruiting now, we will start dosing patients, expect initial data in the first half of 2024. We had a good start into 2023 with two significant milestone payments, reflecting significant progress in our collaborations. First one, $5 million from Gilead for the completion and delivery of a regulatory support package for their Phase 1 clinical trial of a therapeutic cure for chronic hepatitis B using HB-400 and the second $10 million payment from Roche. We are starting GMP manufacturing of the KRAS Therapeutic, an important step before filing the IND, which we expect to happen in the first half of 2024. We expect to file our HB-500 HIV therapeutic cure candidate IND in 2023. We will continue our work for Roche both on the KRAS Therapeutic as well as on the option package for an additional target, which Roche may decide to exercise in 2024. In summary, we have made significant progress in 2022, and we are positioned for an exciting 2023 with materials [indiscernible] to come from our key programs. Finally, I'd like to highlight that we have significantly strengthened our cash balance with $113 million at year end 2022. We are well funded for many major data readouts. With that, I'll turn the call over to our CFO for more financial details. Reinhard?
Reinhard Kandera: Thanks, Joern. Good morning, everyone. So, I want to give you a few highlights of our financial results for the fourth quarter and the full year 2022. As shown on Slide 4 of our presentation, we ended the year with a strong quarter in revenues, which amounted to $7.8 million, and included a milestone payment from Gilead, and the start of the recognition of the $25 million upfront payment received under the Roche collaboration. Our Q4 spending was very much in line with the average of the previous quarters, leading to a quarterly net loss of $12.3 million for Q4. For the 2022 results, I want to start by pointing out our significantly strengthened cash position, which we achieved through our $75 million capital raise in the first quarter and cash inflows from partnering, including $19 million from Gilead and $25 million from Roche. I'm also proud to report that we were able to achieve a significant 2022 R&D progress that Joern has just detailed at a 17% lower spend compared to 2021. Our G&A expenses moderately increased, but the increase was more than offset by higher grant and interest income. Bottom-line, we reported a full year 2022 net loss of slightly less than $65 million, which is 14% below 2021. We continue to manage our run rate tightly and to rely on partnerships to support our spending. We expect to moderately increase our expenses in 2023 as the pipeline progresses. The financial contributions from partnerships were already evident in the first quarter of 2023 by the receipt of a total of $15 million in milestone payments. With a cash balance of $113.4 million at the end of '22 plus the $15 million in partner milestone income already achieved in 2023. We consider ourselves well funded to reach beyond important upcoming pipeline catalysts. With that, I'd like to hand back to Joern for some closing remarks.
Joern Aldag: Thanks Reinhard. We're coming to the end of this call. I'm indeed very proud of our talented people and their drive to support the companies and our shareholders objectives throughout this difficult capital market environment. We're laser focused to produce and present to you our clinical data updates throughout the year. With that, I'd like to reopen on the line for Q&A. Operator?
Operator: Thank you. [Operator Instructions] We'll go first Brian Abrahams at RBC Capital Markets.
Unidentified Analyst: It's Leo on for Brian and congrats on another quarter and thanks for taking my question. How are you thinking about the bar for HB-200 and what's achievable? If the response rates fall in the 25% to 35% range, how are you thinking about next steps for the program? And what's your sense of where standard of care is for each line and what docs would find meaningful? I mean, would you add more patients to tease out or respond? Or would you pivot and look to modify the program, depending on what you see? And maybe I'll have a follow up after that.
Joern Aldag:
cut:
Katia Schlienger: Yes. And I think it's a bit too that, we will look at the totality of the data. So if we are in the resume, it's not clear to me online. We would look at other marker of efficacy, we would look at the immunogenicity, and we will then decide if we want to start the trial or not.
Joern Aldag: So in brief, if we make 40% objective response rate, there's a clear go ahead signal that we will be looking at the totality of the data in making that final decision, but because you know that this is going to be a Phase 3 trial with a fairly significant investment.
Unidentified Analyst: And then maybe just a quick follow-up on that. Have you talked about how much follow-up you'll be expecting for the patients that you present at the upcoming data cut? Is it going to be only patients with more than two scans? And you mentioned we'll be presenting the data in a press release. Are you still looking at a medical meeting submission around that same time?
Joern Aldag: We intended this point in time to have a press release and also an investor event. So, we will substantially detail the data and the medical conference some point after the summer. Katia.
Katia Schlienger: Yes. Nothing more to add to that, exactly that. Of course, we will present our data scientific conference afterwards.
Operator: We'll go next to Vikram Purohit at Morgan Stanley.
Unidentified Analyst: Hi, everyone. This is Will on for Vikram. Thanks for taking our questions and congrats on the quarter. Just kind of the same vein as Leo's question. How would you frame expectations for the initial data expected for HB-300 and the first half? Could you just give us a sense of what we can expect to see in terms of the data points so what you would consider and when?
Joern Aldag: We're looking at a self-antigen, clearly establishing immunogenicity against the antigens that we've chosen would be a significant win in the first half of 2024. Katia.
Katia Schlienger: No, exactly that, I think it's our readout as well as [indiscernible] safety profile, we don't expect a lot of surprise, you know based on the excellent safety profiles that we have demonstrated with the 200 program using exactly the same vectors. So, all this information will come into 2024.
Unidentified Analyst: And is that going to be just a press release or is that can be associated with medical conference as well?
Joern Aldag: Depends on the timing of the data availability versus a major conference, which we could represent, it's not decided yet.
Operator: We'll move next to Alec Stranahan at Bank of America.
Alec Stranahan: Just a couple from us. Appreciated the additional color on the 2Q updates for the 200 program. As we're thinking through the historical controls, obviously, those are in a broader head and neck population. Is there any reason to think that KEYTRUDA monotherapy would perform better or worse than the HPV16-positive population? Just trying to think if that's an apples to apples? And then just on the capital allocation priorities next 12 months, starting a few new studies, obviously, it's got some partner funding as well. So I guess where does that sort of put you guys in terms of runway and where it's sort of your main focus in terms of capital allocation?
Joern Aldag: Katia, would you take KEYTRUDA monotherapy question?
Katia Schlienger: Yes, absolutely. So, in terms of [indiscernible] which is a randomized Phase 3 trial that led to pembrolizumab approval in first line for patient with head and neck squamous cell carcinoma. Now, I'm known difference between those patients with HPV positive and HPV negative head and neck ready and so let's to answer the first question, but were you thinking of something specific around that question?
Alec Stranahan: No, I think that's helpful. And from the capital allocation.
Joern Aldag: Okay, so on the capital allocation, clearly the key priority at this point is moving HB-200 along. HB-300 from a strategic perspective is important because for targeting and self-antigen, and if we're able to generate significant T cells immune responses against self-antigens, by that breaking tolerance. We are clearly in a pretty good camp. So that is our priority number two, strategically important. Clearly, also important from a capital allocation perspective, our HB-500 which is the HIV program, which we are running until after the end of Phase 1b or Gilead has an option to take it in and the very interesting KRAS program that we are running with Roche. But both these programs are basically funded through payments that we are receiving from Gilead and Roche. So your question actually addresses the key spend and that's obviously HB-200 in its progression and where we have various avenues to take it forward, including the HB-204 randomized trial and HB-300. Regarding the cash runway, I would like to have Reinhard answer that question.
Reinhard Kandera: Yes. Given the uncertainty of the business and the dependence on R&D outcome, we don't give specific numbers, but I can give you some orientation. I've mentioned that our R&D cost is going to increase moderately. On the other hand, we have two big partnerships with Roche and the Gilead that provides increasing support from partnership revenue to cover that cost. So by and large expect our net loss in the current year to be similar than in the previous year around $65 million. As I've mentioned, we have more than $113 million in cash at year end. There is another $15 million that already came in from partnerships in the first quarter. So, I'll let you to do the math for this takes us approximately in terms of cash runway.
Alec Stranahan: Great. Thank you. Looking forward to the update.
Operator: We will take our next question from Arthur He at H. C. Wainwright.
Arthur He: Hi, hello, everyone, and thanks for taking my question. Just for the HB-200 program. Regarding the randomized study, could you give us a more specific regarding the study initiation, and when could we expect data from the randomized Phase 2 study for the first line patient?
Joern Aldag: Well, the first point, obviously, a lot of preparation has been done with a manufactured HB-200 product. We have a clinical protocol in place that we can apply. We have had discussions with the relevant CROs that would support the clinical trial. And we have to make the decision and informed folks that we would make that decision based on information that is coming from our clinical trial, which is currently ongoing and running, which we will be reporting about June. So more specific timelines, you will hear when we do the data release. And Katia maybe a flavor on initial data from HB-200 program to randomized trial when it gets started?
Katia Schlienger: Yes. And just as a reminder, we have a first recognition of disease that we have seen from the NDA for that study. We have a disciplined agreement with Merck. We have already discussed the design of our trial with FDA. And we just would like to have a deep look into our data from the HB-201 data is a single arm cohort to make basically the decision to move ahead. Is that the helpful Arthur or should I enter something else or?
Arthur He: No, that's helpful. Yes, that makes sense anyway. And so, for your upcoming presentation at the ACR is quite interesting for the target, could you elaborate more on that particular candidate?
Joern Aldag: We do know that a significant number of immunotherapies are sub-optimally working with regard to efficacy because they're lacking T cells at the site of the tumor. For that reason, we were claiming that we're able to drive on very high levels of antigen specific T cells. And that this ability to drive these antigen specific T cells towards the tumor could actually help a number of different immunotherapies to work. You may remember that last year at AACR, we demonstrated the combination with some 4-1BB. In this AACR presentation, you will be looking at a different immunotherapeutic IL-2, which we think has a significant promise in combination with HB-200 as well. And what we're what we're trying to show, albeit preclinical for the time being is that with these types of combinations, we can actually significantly enhance therapeutic effects in cancer patients across many different diseases. And we're very pleased that at AACR, we have the minisymposium going over a presentation of that data that you're referring to.
Operator: And we'll go next to Asthika Goonewardene at Truist Securities.
Asthika Goonewardene: I want to go back to the first question asked about the bar here in the [indiscernible] patients with the data they're looking forward during the second quarter. You told us about in response rate, but as we know I-O also shows that the denial works, you have a nice durable response of. What do you think is the boss of duration of response and in both those cohorts that you're planning on presenting? And I've got a couple of follow-ups on that.
Joern Aldag: Katia.
Katia Schlienger: Yes. So, we're planning on so to look at a number of other efficacy endpoints like disease control rates. Indeed, sometimes and we have shown that with our vector as a single agent. We see some patient with stable disease for months. And so, we're planning to report that as well. In terms of duration of response, this will be what we will have knowing that we have started and wanting to patient at the beginning of 2022. So, we will put in the maximum of data that we have at this point we guided to 10 to 20 patients in first line and 10 to 20 patients second line.
Asthika Goonewardene: So maybe I'll ask more directly. Do you think the duration of response data will be maturing enough to see a signal when you present this data in the second quarter? Or will you need more follow-up to really understand what the median duration of responses in these cohorts?
Katia Schlienger: Yes, we will probably need to continue to follow up here. It's quite frequent that for this kind of data. There's update something that are regularly at each of the conference. So, we will continue to follow-up the patient no matter what. This would be a first release that we will continue to follow up the patient and provide regular updates at scientific conference.
Joern Aldag: So, I think this is important to note. Yes, Sorry Katia.
Katia Schlienger: No, go ahead, Joern.
Joern Aldag: Yes, it's important to note that the median progression free survival, for example, for pembro alone is very short. And while we will not have data that has fully matured across the entire data set of patients, you will be able to see how we compare against the median progression free survival from pembrolizumab.
Asthika Goonewardene: And when you're looking at this at the more longer term follow-up that either hopefully later this year or maybe early next year, what is the bar then for progression free survival or duration of response that you would like to see, given that you said that you're looking for double the ORR? Would you want to see double the median PFS or double the duration?
Katia Schlienger: So I can take that. We know that fine oncology PFS is not necessarily the best permanent end point. We know that on the map for example it's three months in first line and two months in second line plus that does not reflect the huge advantage that is provided in first line and second line for this patient. So, I would like just two questions that yes we will provide all what we have. The PFS is not necessarily the right measure for immuno-oncology products. In terms of duration of response, so this is measuring the timing on treatment with a progression in patients who are responding. This will take several months to assess. And we will probably provide an update later on to scientific conference, abstract and presentation.
Asthika Goonewardene: And then just lastly, just bigger pictures here. Previously, in our discussions and we felt this too the really strong immunogenic response that was that you were generating HB-200 and the platform that was really attractive. And it's kind of made sense that adding something like PD-1 was a logical step to making this work, given what you know today, and the emergence of other beta preclinical and otherwise. How do you feel about that? And if there's anything that you would like to add that to a combo, what would that be?
Joern Aldag: I'm not sure about what you specifically want to find out here, but could you just specify your question.
Asthika Goonewardene: Yes, I mean, I'm just wondering like, do you need to you're getting the imaging response with the HB-200. You're getting checkpoint blockade with the PD-1. Is there anything else from an immunological perspective that you think would be useful to add to this combination? Maybe like, do you think like getting more dangerous signals for chemotherapy, but what do you think is the next logical component that you might want to add to this time of therapy here from an immunological perspective?
Joern Aldag: It may be interesting to look at the data that we will present at AACR, but I'll let Katia answer the question.
Katia Schlienger: Yes. So, certainly as like we know. So what we saw in monotherapy, we saw that, we were able to see clinical response and stable disease in some patient. We saw huge immunogenicity injection with very high level of CD8 T cells specific to the tumor antigen in the circulation. We saw that those T cells are poly functional and that they do infiltrate the tumor. So, we would like to continue to develop those data in monotherapy and in combination with pembrolizumab over the next months. To tell you exactly what we will show and what it means. I think, Joern and the team is looking for general correlation between the immunogenicity and the efficacy. And we recently look at that, as we report and what we find.
Asthika Goonewardene: Awesome, guys. Thanks. I look forward to it and look forward to your updates at AACR as well.
Katia Schlienger: Thank you.
Operator: We will take our next question from Roy Buchanan at JMP Securities.
Roy Buchanan: Hey, great. Thanks for taking the questions. Just a few quick ones. First one for Reinhard, can you just remind me, if Gilead has a timeframe they need to make the purchase of stock? I think this $30 million, they are still eligible to purchase. Is there a certain timeframe on that?
Reinhard Kandera: Yes, there is a timeframe. We have actually the choice to draw that additional equity, and it is until end of 2023.
Roy Buchanan: Okay, great. Thank you. And then has Gilead said if the Phase 1 and hepatitis B is going to be in patients or healthy volunteers?
Joern Aldag: We don't have to disclose that yet and I don't think we can. We have to leave that to Gilead.
Roy Buchanan: Okay. Fair enough. And then just the last one, can partners use the Drug Master File? Like can Roche use it for the KRAS program?
Joern Aldag: Yes, we can use it as we are preparing the Phase 1b and we are doing the IND work, and we can use that Drug Master File from the HB-200 and 300 in that context as well.
Roy Buchanan: Okay, great. What about partners that are doing the Phase 1 themselves? Can they use it?
Joern Aldag: Katia, can you answer this?
Katia Schlienger: Yes. They can certainly use it, like, once they use our product, this could be something that they can use when they find an IV in projects that are related to those, the ones that are using Gilead is a bit different than the ones that we are using in oncology so that -- file was done for the two vector replicating, which is different from the 400 technology. So depending on what our partner will use, so for example, for Roche as weekly, this will be used for the IND submission as well.
Roy Buchanan: Great. Okay.
Joern Aldag: So just very, very briefly, yes, they can use it. At this point in time, no one is doing a Phase 1 with our program.
Roy Buchanan: Got it. Great.
Operator: And our next question comes from Suzanne van Voorthuizen at Kempen.
Suzanne van Voorthuizen: Hi, good afternoon. Thanks for taking my question. I just wanted to circle back to the Q2 update on the HB-200 program. I'm not sure I heard it right. So can you clarify what you will include in terms of duration data in the press release? Will it include both duration of response in PFS? And what conference in the latter half of the year are you targeting to get the data presentation? And then I'll follow-up as well.
Joern Aldag: Katia.
Katia Schlienger: Yes. So in terms of duration of response, the challenge would be to obtain a median on patient probably we will not have any agenda at that time, but I'm just speculating. The duration of response for pembrolizumab is 22 months. So, it's difficult to know if we will be able to reach anything at that time. We will disclose on what we have in terms of object response rate uses control rates and associated efficacy endpoints. We will disclose those chosen safety profile and the immunogenicity data that we will have at that time. Is it helpful or?
Suzanne van Voorthuizen: Yes, for sure. Thank you. And what conference in the latter half year are you targeting for presentation?
Katia Schlienger: So, we do not decide yet. And we will release it when we are ready.
Suzanne van Voorthuizen: And then a follow-up is on a different topic with now Gilead and the addition of Roche as partners for HOOKIPA. How are you looking at potential 4-1BB? We'd like to hear your considerations and preferences in terms of type of deals on quality or infectious diseases, development stage or platform deals? Yes, just some thoughts that you can share there.
Joern Aldag: Yes. So, any collaboration is actually quite a complex undertaking. Working with bigger pharma companies like Gilead and Roche, that's trigger a lot of activity organizational and otherwise within an organization and adding business development activities, has to take account of that. So we, at this point in time would like to retain value in our programs and now partner them away. Having said that, we have a technology platform and we know that there are many different antigens that we're currently not tackling, which we could, if a pharma company was interested in it. And clearly, the development of capital markets, the way we're seeing them today, may also trigger one or the other thought about interesting deal structures that provide -- that would provide funding capital to the Company. So, you're asking a complex question. At this point in time, we're very, very happy about our collaborations with Roche and Gilead. We can see that as our datasets mature and the strength of the technology gets more and more proven, other people could be interested and we would not be adverse to partnering. At the same time, we do know that retaining value in the Company is important. And therefore, we would have to look at it at the moment that such partnership discussions come up.
Operator: And there are no further questions at this time. I would like to turn the conference back over to management for any additional or closing remarks.
Joern Aldag: Very briefly, I think we've had a great year 2022. We're gearing up to some important value inflection points and milestones and are looking forward and curious to see the outcome of all of this. And would basically tell our shareholders that we're doing our utmost to keep our burn low up until better times and help the markets to really progress the Company to big value inflection points that will change its valuation and with that the future. Thanks a lot and talk to you soon. Bye, bye.
Operator: And that does conclude today's conference. Thank you for your participation. You may now disconnect.