Medicenna Therapeutics Corp (MDNA) 2023 Q2 法說會逐字稿

Hello, and welcome to the Medicenna Therapeutics Fiscal Second Quarter Earnings Call. Our participants are now on a listen-only mode. There will be a Q&A session at the end of the prepared remarks. Please be advised this call is being recorded at the company's request. I would now like to turn the call over to Dan Ferry of LifeSci Advisors. Please go ahead.

Thank you, operator, and thank you all for participating in today's conference call. This morning, Medicenna issued a press release providing financial results and corporate updates for the quarter ended September 30, 2022. If you have not yet seen the press release, it is available on the Investor page of Medicine's website. Before we begin, I would like to remind you that certain statements and information shared during this call constitute forward-looking information within the meaning of applicable securities laws.

All statements other than statements of historical facts shared during this call and that relate to the future operations of the company and other statements that are not historical facts, including statements related to the clinical potential and development of MDNA11, preliminary clinical data, cash runway and the presentation of additional data and other milestones are forward-looking statements that are subject to risks and uncertainties. A -- there could be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements.

Important factors that may cause actual results to differ materially from the company's expectations include the risks detailed in the annual information form, Management's Discussion and Analysis and Form 20-F of the company and in other filings made by the company with the applicable securities regulators from time to time in Canada and the United States. Listeners are cautioned that assumptions used in the preparation of any forward-looking information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted as a result of numerous known and unknown risks, uncertainties and other factors, many of which are beyond the control of the company.

You are cautioned not to place undue reliance on any forward-looking information. Such information, although considered reasonable by management may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this conference call are expressly qualified by this cautionary statement. Except as required by law, the company does not intend and do not assume any obligation to update or revise publicly any of the included forward-looking statements only expressly required by Canadian and United States securities law.

Speaking on today's call will be Medicenna's President and Chief Executive Officer; Dr. Fahar Merchant, and Chief Financial Officer, Liz Williams. I will now turn the call over to Fahar to begin. Fahar?

Thanks, Ben, and good morning, everyone. Today's call will focus primarily on our September clinical update of new data from the Phase I/II ABILITY study of MDNA11, our beta-only long-acting IL-2 super agonist. These data came from the early and mid-stage cohorts in the trial dose escalation phase. While this portion of the study is designed primarily to evaluate safety and kinetics and pharmacodynamics in order to determine a recommended Phase II dose, we have nonetheless seen clear evidence of MDNA11 monotherapy efficacy in tumors that are typically highly resistant to immunotherapy, an important finding at this early juncture of the trial. This evidence includes a confirmed partial response in a metastatic pancreatic cancer patient in the trials for cohort, which is the first to employ the step-up dosing strategy we will be utilizing going forward.

You may recall that on our last earnings call, we spoke about this patient having an unconfirmed partial response as well as our eagerness to gain confirmation with a subsequent scan. With this confirmation in hand, we can now proudly say that we have demonstrated MDNA11, single-agent potential in a notoriously difficult to treat cancer, thereby achieving one of the ability studies core objectives. To fully understand the significance of this result, it's important to have context on the patient in which it was achieved as well as their treatment history and ability with pancreatic cancer that had metastasized to the liver, despite having previously received surgery and treatment with 3 lines of systemic therapy, which were ultimately unsuccessful or not tolerated by the patient.

That these lines of therapy were unsuccessful is unfortunately not surprising as pancreatic cancer is well known to be one of the most aggressive types of cancer with a 5-year survival rate of only 11.5% according to the U.S. National Cancer Institute. Additionally, pancreatic cancer rarely respond to single-agent immunotherapy -- in fact, we are not aware of any published data showing efficacy with systemic administration of an IL-2 monotherapy in pancreatic cancer. We therefore view MDNA11 ability to generate a confirmed partial response in such a heavily pretreated end-stage patient as an important finding that differentiates it as a potentially best-in-class IL-2 agonist and bodes well for the program moving forward.

In addition to the confirmed partial response, we have observed tumor control in 4 other patients in the ABILITY studies low- and mid-stage dose escalation cohorts for an overall tumor control rate of 36%. And patients achieving tumor control included one with metastatic melanoma as well as one with non-clear cell renal cell carcinoma and 2 with sarcomas. Like pancreatic cancer, sarcomas and non-clear cell renal cell carcinoma are typically highly resistant to immunotherapies. When looking at how ABILITY's data have matured over time, we have also notably seen evidence suggesting durable anticancer activity with MDNA11 monotherapy administered via IV infusion once every 2 weeks. This has come from the aforementioned pancreatic cancer patient as we see continued deep length of tumor reduction over each of the last 3 scans leading up to the confirmed partial response.

Additional evidence of durability comes from the metastatic melanoma patient achieving tumor control as this individual has been on study for more than a year while maintaining stable disease having initially started treatment at the low dose. Collectively, these antitumor activity data from ability's early and mid-stage cohorts, a full overview of which can be found in a streamer spot online in our corporate deck provide a robust demonstration of MDNA11 single-agent potential in advanced solid tumors, unresponsive to established treatments, including 79% of the patients were prior failed checkpoint inhibitor therapies.

Adding to our enthusiasm for which further confirm a mechanistic rationale for MDNA 11's differentiated and potent antitumor activity, while underscoring its best-in-class potential. These results show MDNA11, driving multifold increases in anticancer immune cells that are greater than those achieved with competing agents administered at equivalent IL-2 doses. Moreover, MDNA11 has not been shown to stimulate pro-tumor immune cells or eosinophils, which are linked to one of the most serious side effects of the only approved IL-2 therapy Proleukin.

These favorable pharmacodynamic results are a result of MDNA11 unique design. This design provides MDNA11 with enhanced affinity for IL-2 receptor beta, which is important for anticancer immunity and no affinity for IL-2 receptor alpha, the stimulation of which is associated with pro-tumor immune suppression and toxicity. Together with the inclusion of an albumin protein that provides half-life extension and improves localization in the tumor, the tumor draining lymph nodes and the lymphatic system where cancer-fighting immune cells are resident and primed for recruitment to attack the tumor. This unique binding profile, together with its highly differentiated mechanism fuels our belief that MDNA11 has the potential to become a best-in-class therapy that overcomes the major shortcomings of policing and other competing programs. This hypothesis is already being borne out by the maturing ability data I just discussed.

Looking forward for the ABILITY study, we expect to present additional PK/PD data as well as detailed safety data from the first 4 dose escalation cohorts at the upcoming SITC meeting next week. With regards to subsequent readouts on antitumor activity data, we remain optimistic that the results of future cohorts will provide additional evidence of monotherapy efficacy as we continue to dose escalate. This optimism is fueled by the encouraging disease control rate despite the end-stage nature of these advanced tumor types.

The safety profile to date is encouraging with no dose-limiting toxicities, dose interruptions, dose deescalations nor treatment discontinuations due to safety issues observed to date. Enrollment in the trial shift dose escalation cohort is currently underway, we expect to report initial antitumor activity data from this cohort alongside a broader update from all of the trials, dose escalation cohorts in the first quarter of 2023.

Based on what we see from this fifth dose card, along with the broader update, we will be in a position to make a strategic decision whether or not to advance to the 6-dose cohort. Given the positive safety profile we have seen so far and our confidence in the differentiated aspects of MDNA11, we are committed to find the optimal dose beyond Cohort 5, if needed.

Upon the determination of a recommended Phase II dose during dose escalation, we expect to advance to the trial's single-agent dose expansion phase where early activity data expected in mid-2023. In parallel, we plan to work to initiate the trials combination app, which is designed to evaluate MDNA11, together with the PD-1 checkpoint inhibitor, KEYTRUDA. This portion of the study is enabled by our clinical collaboration with Merck, which we are pleased to begin last quarter. We and Merck will establish a joint development committee to optimally advance abilities combination arm from which early antitumor data are expected in late 2023.

Though the expected timing of these upcoming readouts on antitumor activities represent a brief delay compared to prior guidance, we believe that taking the extra time necessary to recruit and optimize patient population in the current and future cohorts will allow us to potentially increase the impact of the data from these dose cohorts from a scientific and value creation perspective.

Lastly, before handing the call over to Liz, I will remind all listening that enrollment in ABILITY's single-agent expansion and combination arms will focus on a select number of tumor types to best inform our development strategy. by generating additional evidence of MDNA11 antitumor activity in key indications, we believe we can accelerate its development and bring the company to a key value inflection point.

Decision to fund our operations into Q2 calendar 2024. This takes us through multiple important clinical readouts and the completion of the ABILITY study, including both its $9 million or $0.01 per share compared to a net loss of $8.2 million or $0.15 per share for the quarter ended September 30, 2021. The significant is Due to the strength of the U.S. dollar during the current quarter, a noncash gain of $1.8 million related to the change in valuation of a noncash warrant liability associated with the August 2022 financing as well as a reduction in R&D expenses in the current year period.

Research and development expenses of $2.4 million were incurred during the quarter ended September 30, 2022, compared with '21. The decrease in research and development expenses in the current fiscal year quarter is primarily attributed to costs associated with the development of MDNA11 incurred in the power incurred during the quarter ended September 30, 2022, compared with $2 million during the quarter ended September 30, 2021. The increase in general and administrative expenses is primarily attributed to onetime transaction costs of $0.7 million related to the warrant liability derivative associated with the August 2022 financing for which there was no comparable expense in the prior year period. For further details on our financials, please refer to our financial statements and management's discussion and analysis, which will be available on both SEDAR and EDGAR, respectively. With that, I'll now turn the call over to Fahar for some closing remarks.

Thanks, Liz. In closing, I'd like to stress the significance of our recent accomplishments and reiterate my enthusiasm for the future of our MDNA11 program. With our recent financing as well as the clinical trial collaboration and supply agreement with Merck, we have added strength to our shareholder base and the resources needed to ensure the ABILITY study is fully funded through multiple important milestones and to its completion. We also generated additional data from ABILITY's dose escalation cohorts, which added to a robust body of evidence supporting MDNA11 potential as a best-in-class therapy.

These data show MDNA11 displaying a pharmacokinetic and safety profile that all comes Proleukins major shortcomings and pharmacodynamic profile that thus far appear superior to other IL-2 variants in development. Moreover, despite ABILITY's dose escalation phase being designed primarily to evaluate safety and pharmacokinetics rather than efficacy. We have seen promising signs of durable monotherapy activity at the low and mid-dose levels. These signs include a confirmed partial response in pancreatic cancer and additional instances of tumor control in patients with difficult-to-treat tumors that have been unresponsive to established therapies.

We are, therefore, optimistic that we will see further evidence of MD11s efficacy as we evaluate higher doses and focus enrollment on patients that better reflect its target addressable population in future cohorts. The trial's progress is expected to provide a consistent cadence of potential catalysts over the coming quarters, and we look forward to its continued advancement. And with that, I would like to extend my thanks to all those who helped us reach this point, including our employees, investigators, shareholders and especially the clinical trial participants. We'll now open the lines for questions. Operator?

{Operator Instructions).

First question, I'm wondering how many patients in Cohort 5 have escalated to the 90 dose? And if DLTs or SAEs occurred, do you know about them generally immediately?

Yes, we are made aware of DLT's SAEs as soon as the site has determined it to be the case and that would notify us pretty much immediately, and we would be made aware of it right there and then. So yes, that's the protocol. With respect to how many patients we haven't disclosed that in terms of the data on Cohort 5, and therefore, we'll sort of provide updates as we collect more data and once we have completed enrollment of that particular cohort and completed a step up-dosing or to the target dose of 90 micrograms in all the patients.

Okay. Second question, you mentioned the brief delay in milestones. I didn't really see a delay versus what I was expecting. But nonetheless, how will -- you mentioned it's because you want to optimize the patients going forward. So I'm wondering how will the patients in Cohort 5 and in the expansion and the combo studies differ from the earlier patients you've enrolled in the study? What does optimizing mean just limiting the tumor types?

Good question. So if you recall, when we were enrolling patients in the earlier cohorts, we had not set what we call the baseline lymphocyte count of these patients. So yes, all the patients in the study are those that have failed standard of care -- they have essentially tried other therapies and have not been eligible to enter into other, say, Phase II, Phase III clinical trials. So yes, these are end-stage patients. However, what we've done is with respect to going forward with Cohort 5 and so on is to make sure that the baseline lymphocyte count is above 1,000. So that certainly means that the inclusion criteria has been made a little bit more stricter and therefore, the pool of patients available is fewer. And therefore, that's adding more time to the process, although not significantly, but a small increase in time for us to get those patients to be in the study.

Now with respect to how these patients would compare to the dose expansion phase of the study, again, in the dose expansion phase of the study, we would expect patients that have not gone through 3, 4 lines of prior therapy. There would certainly be patients who would be eligible for studies where the recommended Phase II dose has been established in sort of typically Phase II settings, particularly in terms of our design of where the patients might benefit the most. So yes, the patient population in the dose expansion phase will certainly be less advanced. They certainly will have the sort of the baseline neuphocite count being above 1,000. But in this current dose escalation portion, there still are end-stage patients, but at least they have sort of a better baseline demphositeca than the patients enrolled in the earlier dose cohorts.

Okay. Great. Yes, last question. You mentioned you're getting responses in stable disease in patients with tumors that you wouldn't expect to respond to immunotherapy. What about patients where you would expect them to respond to immunotherapy? How is the drug doing in those patients? And are you gleaning what defines a patient who will respond or is more likely to respond? Are you seeing, for instance, that if they have over 1,000 lymphocytes at baseline that those are the ones that are responding? Or are there other characteristics?

Yes, it's sort of difficult, especially in the Phase I portion of the study where, clearly, we are trying to accumulate as much data as we possibly can. Now if you sort of go back to data from earlier studies of Proleukin and other competing clinical trials with competing IL-2 programs, we've generally found that the baseline lymphocyte counts in those patients have generally been between 1,000 and 2,000 lymphocytes per microliter. So basically by us using 1,000 microliters is sort of 1,000 cuts per microliter. You sort of aligning ourselves to what we've seen with Proloking, for instance.

Now with respect to patients, it's sort of difficult because each of them, as you know, this is a basket portion of the study where we are dose escalating, we've allowed patients with as many as 8 different tumor types. And it's difficult to sort of generate any kind of trend lines. But I think the important thing here is that we certainly have seen a patient, as you know, with pancreatic cancer. We know that pancreatic cancer does not respond well to immunotherapies. We also know that there has been no report of single-agent activity of prolokine on pancreatic cancer patients. So this is an encouraging sign. What might be the reason we cannot say for certain, but we just know that MDNA11, because of its selectivity of its high potency, its ability to stimulate both the innate and the adaptive immune systems has that potential additional ability to perhaps have a much better response in patients that have cold tumors.

Now mind you, when we have patients that have been in the study, as I mentioned, the pancreatic cancer patients, we also see a similar situation with a stable disease, as we mentioned, in a patient with renal cell carcinoma. Now normally, you would expect patients with renal cell carcinoma to respond to Proleukin as it has been approved for that patient population. But generally, if you look at renal cell carcinoma, the patients that will respond are the patients with what we call clear cell renal cell carcinoma. In our case, this is a patient that has stable disease with non-clear cell RCC. And that is a much more challenging situation with Proleukin as well. So again, we're seeing that sort of activity in this kind of patient population, which is, again, encouraging. However, as you know, patients in the study have gone through multiple treatments. It's not only the tumor type that matters. I would say that it also perhaps the fact that these patients had low lymphocyte counts might be an issue. The other thing is that some of these patients might have gone through more therapies and failed multiple lines and their baseline condition might not be as good, especially if they have gone through additional chemo and radiation therapy with fewer immune cells. So we are certainly getting to this -- the intent is we'll be able to see the effect more clearly as we enter into the sort of the IP 2-dose range.

Our next question comes from the line of Matthew Biegler with Oppenheimer.

This is Matt Hagan on for Matt. I was wondering if you could just expand a little bit on the dose escalation strategy kind of just sort of what criteria you're looking for to know you've reached that optimal dose versus dosing higher? And I guess, do you think you'll need to dose all the way to DLTs to find the optimal dose.

Good question. So certainly, we'll be monitoring DLTs as you are aware, the sort of the protocol is very specific, but we would certainly not be able to dose beyond the DLT. So the first and foremost thing in terms of defining or reaching a certain dose is once we see signs of DLTs, then of course, that's when we would stop further escalations and revisit the lower dose. So that might be -- that's one aspect. Now in the event we don't see the LT as we had dose escalating.

The other thing that we will be looking at is when we achieve a plateau of immune cell proliferation and activation. So that's the sort of the other set of information that we'll really monitoring in order for us to determine the RP2 dose. So those are the 2 parameters that will be sort of optimizing. And based on that, we'll be able to decide on proceeding with the RP2 dose. I hope that answers your question.

Our next question comes from the line of Catherine Novack with Jones Research.

I'm just curious, since you have so far been seeing good safety results with this priming dose, is there a possibility to change the step-up dosing strategy to possibly expedite getting patients up to a more efficacious dose?

Good question. And that is something that certainly as part of the dose escalation strategy would be perhaps 2 things. We could increase the target dose, there's opportunities to expedite the -- also the duration or reduce the duration during the priming phases or the step-up dosing. So those options are open and therefore, something that would be visited if we find that, that has potential benefit to the patient.

Yes. And is there an update on the pancreatic cancer patient? Are they still on study? Do you plan to dose escalate them if they're still on study at the time when you're reaching higher doses?

Yes, So the protocol does allow that as long as patients are in the study, and we have cleared sort of the next higher dose, those patients will be eligible for the higher dose. So in that case, patients -- the pancreatic cancer patients received the 60-microgram dose as the target dose. Once the 19-microgram dose clears, that patient would be then eligible for receiving the higher 10-microgram dose. And yes, the patient is -- continues on study as is the melanoma patients and the renal cell carcinoma patient.

Got it. And just one more, if you can give any color on patient characteristics that have been enrolled in cohort 5 in terms of tumor types that previously would have been sought to respond to IL-2.

Well, the thing is that we haven't -- as we did proceed with the dose escalation portion of the study that did not have any sort of constraints in types of tumor types. We had a list of about 12 to 15 different tumor types that are eligible. So the same patient population is eligible even in cohort 5. The only thing that we have implemented going forward is to make sure that the baseline lymphocyte count was above 1,000, having seen particularly in the cold tumor in pancreatic cancer patients, which was certainly unexpected to see a response encourages us not to, at the moment, limit the tumor types. We'd rather continue with the tumor types, just in case patients with other tumor types that we haven't tested might even show stable disease response, et cetera. So we are not constraining there. But just that we have increased the threshold or let's put it this way, we've set a threshold for 1,000 lymphocyte counts per microliter. So that's the only big change we've made.

Got it. That's very helpful.

And our next question comes from the line of David Bolt with Zacks.

I'm curious what the status is on any type of paired biopsy samples that you have for the patients? And is that something that you can try to maybe emphasize more going forward here in the trial?

Well, we haven't received too many of them yet. I think we have, if I'm not mistaken, about just 2 or 3 paired biopsies so far. We hope to get some additional as we enroll patients and get patients in Cohort 5 to do the same. More likely that we'll get more of the paid biopsy patients in the dose expansion phase. But we plan to analyze whatever data we get from the pet biopsies to date, hopefully, we'll have that done after the dose escalation is completed and certainly continue the same process. Hopefully, we'll learn a bit more from the paid biopsies before we get started with the dose expansion.

Okay. And regarding the recent financing, it sounds like the ABILITY trial is fully funded. I'm just curious, one, if that takes into account a potential 6 or higher dosing cohort? And then also, how much will that fund the biscuit program, your current cash on hand?

Yes. So we do have room to add additional cohorts if necessary, in the dose escalation portion -- as you might have noticed, we have also increased the number of patients in the dose expansion to 40 each in the monotherapy and the combination part of the study. So that's sort of being covered as well. And with respect to the biscuit program, this financing has been is adequate for us not to commence a phase a clinical trial with the biscuit program, but sufficient enough to advance it further to the stage where we are able to commence some IND-enabling studies. Liz, perhaps you might be able to provide a bit more clarity there.

Yes, sure. Thanks, Fahar. Yes. So our current focus is obviously on the MDNA11 ability study. So our current runway projections cover 100% of the cost for both the monotherapy and population arm as well as work on the biscuit platform to get a molecule to IND readiness, and that takes us into Q2 2024. And we have the ability to kind of allocate proceeds between the programs as needed to ensure that the runway stays intact or like this?

All right. Sounds good.

And our next question comes from the line of David Martin with Bloomberg.

I wanted to go back to the selecting patients with baseline lymphocytes of 1,000 per microliter or above. You mentioned with Proleukin, you'd see that trend. If they were above, they were more likely to respond to low less likely. What about in your dose escalation so far? Are you seeing the patient the patient that responded and the patients with stable disease as being the ones who have this 1,000 or higher at baseline?

Yes. So patients -- the thing is that with Proleukin, what we see is published literature. They haven't actually shown us that the baseline lymphocyte -- they haven't provided data on patients with baseline lymphocyte counts less than 1,000. Generally, we'll see that those data show that the baseline nuphocite counts is anywhere between 1,000 to 2,000 more close to 2,000 than 1,000. It's around 1,500 or so in those Proleukin studies that have been published, and there has been no sort of correlation per se. However, when we look at the sort of the peak lymphocyte count, -- we've seen data from certain studies where Proleukin has shown that when the peak lymphocyte count increases above 3,000, there is a higher probability of patients responding or having stable disease versus those patients that do not get to the 3,000 threshold.

Now when we look back at our first 3 or 4 cohorts of the patients that we have treated, especially the first 3 cohorts. We find that the baseline lymphocyte counts were sub-1,000 on average. And we rarely saw the lymphocyte counts go above 3,000 in those situations because of the baseline being so low, in some cases, it was as low as just 300 tons per microliter. So as we've gone into Cohort 4 and enrolling patients in Cohort 5, at least in Cohort 4, our baseband lymphocyte counts, as you will see and what we've presented at the previous -- our corporate debt, you will see that the baseline lymphocyte count on average is above 1,000. And that's why we are seeing again on that corporate deck, the lymphocyte counts being above 3,000. And it's too early to say. It's been very few patients with that kind of baseline lymphocyte counts. So we are hoping that as we proceed into Cohort 5 and 6, especially in dose expansion where we have less patients that will sort of translate into better responses. And exceeding the 3,000 threshold that Pro looking was able to achieve.

So set that as the bar for inclusion in the trial, does that de facto define the patients is less heavily pretreated.

Well, let's say it this way. It does define patients who are likely to have a better immune system or they have received less -- let's put it this way less chemotherapy or radiation therapy that might have substantially impacted their lymphocyte counts or patients might have received chemo or radiation therapy, but not recently, those patients that would have just recently gone through chemoradiation, et cetera, would more likely have lymphocyte cancer are quite low.

Okay. Got it. That's it for me.

And we have reached the end of the question-and-answer session. I will now turn the call back over to Dr. Fahar Merchant for closing remarks.

Thank you very much. I'd like to thank you all for joining the call today, and it's been a pleasure for us to update all of you listening any participation. Our recent progress has certainly strengthened the outlook of our pipeline, particularly our MDNA11 program. We look to -- we look forward to providing periodic updates as our programs continue to progress. Thank you all, and have a great day.

And this concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.