HOOKIPA Pharma Inc (HOOK) 2021 Q4 法說會逐字稿

I'm Matthew Beck, Executive Director, Investor Relations. 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.

Looking at slide 2, the HOOKIPA executive team is here with me today, including Chief Executive Officer, Joern Aldag; Chief Financial Officer, Reinhard Kandera; Chief Medical Officer and Global Head of Research and Development, Igor Matushdansky; Chief Scientific Officer, Klaus Orlinger; Chief Business Officer, Christine Baker; and Chief Technology Officer, Roman Nesina.

Slide 3. 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 nonclinical plans, our plans 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 Securities and Exchange Commission, 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 the call to the Q&A.

With that, I'll pass the call to Joern.

Thank you for joining us today in this conference call. 2021 was a year of impressive continuous progress for HOOKIPA. It was a year in which we have successfully navigated tumultuous financial markets and delivered on the need to drive scientific progress and a financing strategy that supports continued company growth into 2024.

We delivered on our claim that we can drive unprecedented levels of antigen-specific T cells in humans. We continue to expand the evidence that our technology applied as a monotherapy helps control the disease in advanced line head and neck cancer patients, motivating us to invest in broadening our pipeline with new oncology indications.

Beyond virally driven cancers, we demonstrated the ability to break tolerance in animals, opening to the wide space of self-antigens and driver mutation-based cancers. We see incredible potential for this platform especially in combination with other oncology modalities to overcome challenges of many immunotherapies in many different cancer types by providing the missing but essential T cell induction.

We're pushing two high-value programs towards the clinic, our prostate cancer candidate HB-300 and HB-700 targeting the most frequent KRAS mutations.

All science has continuously validated through partnerships with leading pharma organizations. We progressed markedly on the partnering front by: one, renewing our collaboration with Gilead, I'll come back to this, by taking responsibility for the clinical Phase 1b of an HIV Cure project; and two, signing a supply agreement with Merck for testing KEYTRUDA with HB-200. The FDA granted us Fast Track designation for this combination trial of HB-200 with pembrolizumab in the first-line setting.

We also advanced partnering discussions in oncology with other prospective collaboration partners. As I mentioned earlier, Gilead faced with bottlenecks in the development area and knowing the T cell data of our HIV development candidates and nonhuman primate models, asked us to take responsibility for the development up to the end of Phase 1b of our HIV functional cure collaboration.

They wanted an option to take the program back after this Phase 1b. And in exchange, we received a nonrefundable $15 million upfront, in addition to $4 million milestone payment and took down the first $5 million of a $35 million equity facility Gilead provided to us. This transaction helped us execute a well-prepared financing in the early 2022, securing $75 million and a follow-on offering extending our cash runway significantly with high-quality existing and new investors.

December 31, cash position plus the Gilead and follow-on proceeds give us a pro forma cash position of $157 million. And adding the additional $30 million from the drawdown facility by Gilead provides us a runway into mid-2024. We believe that these accomplishments speak to the strength of our data and investor faith in our ability to execute in 2022 and beyond.

So what's in store for 2022? Slide 5. Next month at AACR, we will share four poster presentations that provide further preclinical translational and clinical evidence of the broad potential of our arenaviral platform to address unmet needs in various types of cancer either alone or in combination with other modalities.

In midyear, we will update our Phase 1 HB-200 monotherapy data. We will give a comprehensive overview of the HB-200 Phase 1 dose escalation program, including safety, antitumor activity and additional translational data of HB-201 and HB-202/HB-201. We will update the status of all patients in the Phase 1 program and present our selected Phase 2 dose for the HB-202, HB-201 alternating two vector therapy. And we will discuss the clinical path for HB-200 in the advanced setting known as, third line or post standard of care.

To be clear, we will not provide at this time nor comment on any initial Phase 2 data in combination with pembrolizumab during the Phase 1 update. We will, however, report initial safety and efficacy data results of the HB-200 Phase 2 combination trial, which combines HB-200 and pembrolizumab in the first and second-line settings in the second half of this year.

We aim to present an initial dataset on 10 to 20 patients in total and seek to approximately double the current pembrolizumab monotherapy response rates in first-line and second-line head and neck cancer.

We're also on schedule to file the IND form for prostate cancer program, known as HB-300 during the third quarter of this year.

Current immunotherapies target PAP, a key tumor agent, provide modest efficacy for people with castrate-resistant prostate cancer.

With our versatile arenavirus platform, we're exploring, incorporating additional tumor targets, PSA and PSMA to help address the unmet needs and improve the standard of care for these patients. We aim to dose the first patient in the late fourth quarter of this year or early 2023.

Last but not least, we have started a KRAS program targeting the main KRAS mutations relevant in several large tumor indications. This program has attracted significant interest from pharma companies.

Finally, in our infectious disease programs, we are committed to filing our HIV IND in 2023. And Gilead tells us that they're on schedule to file the HB -- the hepatitis B virus functional cure IND by the end of 2022. Though HOOKIPA is not in control of their timelines, we expect that this is what we can expect.

I reiterate that HOOKIPA is now funded through all of these milestones and beyond. We have bold promises for 2022 and HOOKIPA team is invigorated to deliver.

Now I'd like to pass the call to Reinhard for some brief comments on our financials. Reinhard?

Thank you, Joern. Good morning, ladies and gentlemen. I want to give you a few highlights of our financial results for the year 2021, which actually reflects the clinical progress that we have made in the past year.

Our revenue line includes milestones and cost reimbursement from our Gilead collaboration and the continued high level of revenue is evidence of the good progress that we have been making under this collaboration, as both partners' preclinical programs are now moving towards Phase 1 clinical trials.

Looking at our operating expenses, we increased our investments in the oncology pipeline and internal research and development resources based on the encouraging early antitumor effect seen in our HB-200 trial. The increased spending in these areas was the main driver of the overall increase of our R&D expenses from $55 million in 2020 to $83 million in 2021.

A significant portion of the 2021 R&D spending already relates to the 2022 activities for HB-200 and HB-300. So we expect to be able to maintain this spending level in the coming quarters while executing on those programs.

In terms of general and administrative costs, we were able to keep this well undergo control in 2021 and even to slightly decrease our G&A expense year over year.

Other operating income net, which mainly consists of grants and subsidies was partially offset by currency effects, mainly in the fourth quarter of the year 2021 and is therefore below 2020 levels. Our net loss for the year 2021 was $76 million compared to $44 million in 2020. With this 2021 increase being driven by R&D spending as a result of our clinical progress.

Our cash outflow from operations in 2021 was $66 million. And in addition, we made investments of $12 million in property, plant and equipment, mainly to prepare ourselves for GMP manufacturing requirements in our next growth phase.

Our year-end cash was $67 million, and we were able to significantly strengthen this cash position in the first quarter of 2022 by $75 million follow-on offering and cash inflows from our Gilead transaction. These proceeds lead to a pro forma cash position of $157 million when added to our year-end cash.

With that, we see ourselves well-funded through the coming catalysts, but I would want to add that in a difficult funding environment, as we see it today, we are putting greater emphasis on nondilutive funding sources as well and are making good progress in seeking collaborations to potentially increase our revenues.

With that short overview, I would like to pass the call back to Joern for some closing remarks.

Slide 7. I'm indeed very proud of our people and their drive to support the company's and our shareholders' objectives throughout this difficult market period. And we're laser-focused to produce and present to you our clinical data updates throughout the year as we said earlier. Thanks a lot for listening.

And with this, I would like to open up for Q&A. Operator?

(Operator Instructions) Alec Stranahan, Bank of America.

Good morning, everyone. This is John, on for Alec. And thanks for taking our question. So I think my question -- just one question but that kind of has 2 parts to it and it's about the Gilead partnership.

Since you basically be running the Phase 1b trial for the HIV yourselves, it will be cool to get some outlook about what you're focusing on specifically for the Phase 1b? And what kind of Phase 1 you're contemplating for the HIV? And more specifically, also, could you also shed some light on what would Gilead, specifically believe you're looking for, if there's any specific metrics that they are interested in?

Thanks for the question. So the first part of that question is we will be running a Phase 1b safety immunogenicity trial. The endpoints will be clearly to assure that we have safety and as I said before, reactogenicity and immunogenicity. The patient inclusion criteria, as we have previously stated, will include HIV-positive individuals who are well controlled on antiviral therapies.

The patients will receive a planned limited number of doses followed by approximately six months of observation off therapy to assess how long the post-dose immunogenicity lasts. We are currently planning two doses and with a total number of patients somewhere in the 30 or 40 range. That are the current plans but have not yet been finalized.

In terms of your second question, what might Gilead be looking for, we don't have specific clarifications on that. But again, as you could see from the way the trial is designed, what they will be looking for in general is a safety and the immunogenicity that actually is lasting at the endpoint of six months after our last dose.

All right, thank you.

Brian Abrahams, RBC Capital Markets.

Thanks and good morning. This is Steve, on for Brian. Congrats on all the progress and thanks for taking our questions. As you think about HB-300 targeting the tumor associated antigens, how much of the learnings from the HB-200 on dose vector combination and checkpoint inhibitors will translate to the prostate program? Or do you expect similar T cell responses and infiltration there? Do you think there are kind of unique challenges with that antigen that might require some additional clinical testing? Thanks.

Thanks for the question. So I'd say there is a fair amount of learning from the 200 program that are being translated to the 300 program.

First of all, we have discussed with the FDA about whether or not meet extensive pre-IND studies or whether or not we can use pre-IND specifically, GLP toxicology from a 200 program to apply to 300 program. And they do believe that is appropriate and are looking at our technology as a platform technology, and where we don't have to repeat all of the majority of the pre-IND studies and use the 200 to actually support the 300 filing.

In the clinic itself, we do believe that we will actually see similar immunogenicity in terms of T cells induced for the 300 as we did for the 200. Why do we believe this? Preclinically, when we looked at our technology comparing viral vector antigens to mouse self-antigens, we are actually able to induce equivalent amount of tumor antigen-specific CD8 T cells regardless of whether that antigen comes from a virus or a mouse self-antigen.

Since our data for the viral program is translated so nicely from the preclinical to the clinical, we anticipate that the data will translate similarly for mouse self-antigens to human self-antigens. So we do expect that the kinds of CD8 T cell tumor antigen-specific responses we observed for the 200 program will be seen for the 300 program as well. There is, I would say, no rational way it would not because the technology that drives these T cells is the same. And we have shown that preclinically, it doesn't matter whether it's viral or it's self-antigen.

The questions on dosing, we do believe we are actually know what is the appropriate dosing regimen as well as the appropriate, I would say, dose level that we will be starting at and escalating with. And we know the dosing schedule of Q3 week is the preferred schedule and intravenous is the preferred administration.

So we do anticipate that these things, which we have learned from the dose escalation of the 200 program will be applied to the 300 program. So a dose escalation of that program, we anticipate should be significantly shorter. Does that answer your question?

Yes, it is. Yes. Thanks for that color. I appreciate it.

Andrew Berens, SVB Leerink.

All right, thanks. So, just a couple for me. It sounds like for the checkpoint combo, I just wanted to clarify that there'll be no more efficacy from the Phase 1 portion and it didn't sound like there was going to be any efficacy from the Phase 2. It sounded mostly safety, scalability of PK. And then you threw out a benchmark of doubling head and neck cancer responses versus checkpoint alone.

Can you just give us what that number would be? And how does that compare to some of the -- I know it's obviously a targeted opportunity but some of the best specific data we've seen, like (inaudible) GFR, eGFR activity so far in a small number of patients?

Now, Andrew, maybe I can just comment on a couple of things that were said. Let me just clarify the 2022 update that we have previously commented on, just to be clear.

In the middle of the year, we will be updating the kind of monotherapy or the advanced cancer patient population focusing on updates on 201 as well as 202/201. This will update the November presentation that we gave, where at that time, we had several patients that were still either ongoing or have not yet been on therapy long enough where efficacy scans were yet attained.

So at the middle of the year, we would anticipate that there will be approximately an additional 10 patients in total that were not yet ready for efficacy determination because they have not been on therapy long enough or have since gone on therapy since our November update.

So in the middle of this year, there will be approximately 10 patients that we will talk about that are new or have not yet did, has not yet been presented because it was not yet available at some of our last presentation.

The combinations with pembrolizumab in the first and/or second line setting, that data will be updated at the end of 2022. Okay.

In terms of the expected response rates that we are hoping to attain, we have stated before that we would like to double the response rate of checkpoint inhibitor similarly pembrolizumab in the frontline data.

We believe that the reason why a checkpoint inhibitor like pembrolizumab has approximately a 23% response rate, even in a preselected CPS or PD-L1 high patient population wide is only 23%, is because the other 77% that are not responding are missing significant tumor antigen-specific CD8 T cells that would allow them to have a response.

So we do believe that by providing tumor anti-specific CD8 T cells on top of pembrolizumab, we should be able to double 23% response rate. And so we have constantly thrown out a number that is somewhere in the 45% to 50% range based on a doubling of the 23% in the first line.

In the second line, pembrolizumab has an approximately mid-teen response rates somewhere in the probably 15%, depending on which study you quote. So we would like, for similar reasons, to believe that the 85% that are not responding concurrent with our understanding of biology is that they're missing tumor agent-specific CD8 T cells.

And again, we would like to bring those in and believe we can double that response. And so in the second line, I would like to get us somewhere in the 30% response rate.

Okay. No, that would definitely be very compelling. But just to clarify, you'll have enough patients and enough data by the end of the year to give us response rates in both lines of therapy?

We are anticipating that in totality, we might have somewhere between 10 to 20 patients in total to support these assertions.

Okay, great. (inaudible) Thanks for the color, Igor.

RK, H.C. Wainwright.

Thank you. Good morning and good afternoon, folks. At the ASCO conference coming up in a couple of weeks, can you give us an idea of what to expect there since you have four different presentations?

Right. So as Igor already commented on, they will focus predominantly on our preclinical, translational and some biomarker data from our ongoing studies. We will focus on updating on some of our prostate cancer work and some of our 202, 201 work as well as additional biomarker work from our ongoing clinical trial with 201.

And then for the HB-700 program, two questions.

One, what needs to be done? And two, how are you going to kind of stage this program, in the sense, do you need to get to a certain level of development with that 200 and 300 before you start putting 700 into clinic? Or is it going to get started much sooner, in the sense, maybe late '22 or early '23?

So let me answer the second question first, because I didn't get to hear the first question well. The program, the KRAS-700 program, is not dependent on any additional clinical data from those programs. So that program will start as soon as we are actually ready to manufacture that product and move that forward.

We believe we have sufficient data from the 200 program a sufficient read-through and sufficient preclinical data with our KRAS constructs that we are convinced that that program will have activity in the clinic. We do not need a way to further clinical data or additional clinical readthrough of the other programs to initiate that program.

So the only point regarding your timeline, it's not going to be '22 for the IND. It's going to be more like '23 or beyond.

Okay. Thank you so much for taking my questions gentlemen.

(Operator Instructions) Roy Buchanan, JMP Securities.

Hi, thanks for taking my questions. So I guess to start, maybe a follow up on the 700 program. So you mentioned in the prepared remarks that it's attracted significant interest from pharma. Are you guys planning to partner this out, maybe just ex US? Or what are you thinking about there? I know it's early.

And then Igor, you just said that once you have sufficient -- you're able to manufacture it. I guess, is it dependent on your capacity to manufacture at this point? Or is it just the standard time it takes to ramp up the program? Thanks.

I'll answer the second question first. I mean it's a question of standard timeline to ramp up the program combined with CRO slots. CROs for viral vector manufacturing are always at a premium and a lot of them are currently booked up with vaccine for COVID and others. So I think it's a matter of standard ramp-up times then when we can get a time slot.

And the first part of the question, obviously, KRAS is a very interesting target if we want. We have looked at the possibility to put together a string of beads incorporating the most common mutations, it's actually five, that play a role in the context of KRAS induced cancers.

And combined with the strong T cell responses that we're seeing we do have pharma companies interested actually in the approach. I cannot say more. It's clearly something that we're progressing internally and think as a high-value program.

Okay. Great. And then just had a quick one on the CMV program. I know you guys are not focused on infectious disease but are you actively seeking out partners for that program? And are you seeing any inbound interest? Thanks

It's early stages partnering. We have committed to not investing our dollars into infectious disease programs and we're progressing through an outreach to pharma companies to see the level of interest in the HB-101 program.