Nanobiotix SA (NBTX) 2021 Q4 法說會逐字稿

Good afternoon and good morning, and welcome to Nanobiotix conference call to discuss our 2021 full-year financial and operational results. Joining me on the call today are Laurent Levy, Co-Founder and Chief Executive Officer; and Bart Van Rhijn, Chief Financial Officer.

As a reminder, today's call is being webcast and will be available on our website for replay. I'd like to remind you that this call will include forward-looking statements, which may include statements regarding the progress, success and timing of our ongoing and planned clinical trial collaboration, regulatory filing, data presentation and future research and development efforts, among other things.

These forward-looking statements are based on current information assumptions and expectations that are subject to change. They are subject to significant risks and uncertainties that could cause the company's actual results to differ materially from our current expectations.

Accordingly, you're cautioned not to place undue reliance on forward-looking statements. Please review the full description of risk factors that can be found in the documents we file with the AMF in France, and the SEC in the United States including with URD and 20-F filed in their last version, both of which are available in the Investor Relations section of our website, along with the press release issued yesterday, highlighting our corporate and financial results for the period.

In addition, any forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. While we may elect to update these forward-looking statements at some point in future, Nanobiotix undertakes no obligation to update them to reflect subsequent events or future circumstances.

With that said, I'd like to turn the call over to Laurent. Laurent, please go ahead.

Thank you, Kate. I would like to welcome everyone participating via conference call and webcast today. This is a busy and exciting time at Nanobiotix, and I'm pleased to have the opportunity to highlight some of the important progress our team has made in the past year. Provide some additional insight at what we expect in this year, and why we continue to be excited by the potential of our lead product candidate, NBTXR3.

As we outlined in January, our priorities for 2022 includes progressing our internal development efforts on our two lead programs, including the execution of 312, our global pivotal study of NBTXR3 as a single agent activated by radiation in locally advanced head and neck cancer patients. And two, the advancement of our follow-on checkpoint inhibitor combination program seeking to expand the treatment benefit of anti-PD-1 therapy.

In parallel, we'll continue to leverage our existing key collaboration to advance and expand our pipeline while we evaluate potential collaboration that could contribute complementary development and core commercial capabilities. As we continue to expand our operating efficiency and carefully align our resources with the strategic priorities, supported by Bob and the rest of the leadership team, we seek to both maximize and deepen our operational expertise in key functional areas of support, of keep continuing growth.

During 2021, we had several key operational steps to position us to build the foundation of future opportunity and achieved this goal in 2022. In May 21, we added a new strategic partner, LianBio to advance and expand the development of NBTXR3 in Asia. We are pleased to have found a partner that is committed to revolutionize patient outcome, share our strategic vision for NBTXR3 and bring substantial regional expertise that should enable a meaningful contribution to our global development and shape.

LianBio will be a key partner for us in our head and neck registration study, enrolling 20% of the 500 patients we planned. Preparation for these is already well underway, and we currently expect LianBio to initiate patient enrollment in 312 in the second half of 2022.

In addition, LianBio has committed to participate to four additional registrational studies with NBTXR3 across indications and therapeutic combination. Founding all development and commercialization expenses in their territory. Highlighting their belief in and commitment to the broad potential of NBTXR3. This commitment to the long-term vision for NBTXR3 mirrors that of our ongoing work with MD Anderson.

We've been engaged in a broad collaboration with MD Anderson since 2018. Research and development support has already generated robust library of preclinical data, functionally around the combination potential that NBTXR3 with immune checkpoint inhibitor that's resulting in multiple presentations and publications.

In 2021, MD Anderson initiated the clinical trial with NBTXR3 under the collaboration, which now includes three Phase 1 studies exploiting the safety and feasibility of NBTXR3 in pancreatic cancer, esophageal cancer and non-small cell lung cancer. And additionally, two Phase 2 studies exploring the potential of the efficacy of NBTXR3 in combination with immunotherapy, this in head and neck.

Having already reported the first patient case study from MD Anderson Phase 1 pancreatic study, anticipated dose escalation of that study to reach its target recommended Phase 2 dose later this year. In Italy, Mentioned Anderson's Phase 1 study of NBTXR3 in combination with chemo is also expected to report recommended Phase 2 dose in 2022.

In addition to expanding our external development capability, we also significantly strengthened our leadership team with the appointment of Gary Phillips as Chairman of our Supervisory Board, bringing decades of experience in the pharmaceutical and health care industry. And Bart Van Rhijn, our Chief Financial Officer, bringing proven capability in global financial management, business development and pharmaceutical commercialization.

More recently, we are pleased to welcome Dr. Leonard Farber, a board-certified medical oncologist as our new Chief Scientific and Medical Affairs Officer, adding extensive executive experience in developing and growing treatment center and departments within the radiation oncology field.

Each of this individual has already had a tremendous impact on the company driving execution across key programs and contributing to a culture of innovation, integrity and inclusion while fostering transparency and accountability.

Now before I turn our attention to the results and expectations for our internal development report, I would like to ask Bart, to provide a brief review on our financial results. Bart?

Thank you, Laurent. As Kate mentioned, yesterday after the total dealer's markets, Nanobiotix reported financial results for the year ended December 31, 2021, while highlighted our financial position as well as our recent progress.

As described in the release, our total revenue consisting primarily of revenue related to our prior collaboration with PharmaEngine totaled approximately EUR10,000 compared to EUR50,000 for the year ended December 31, 2020. Other income for the periods includes research tax credits, which increased from EUR1.9 million in 2020 to EUR2.5 million in 2021, due to an increase in research and development expenses.

Our research and development expenses for the year were EUR30.4 million, compared to EUR24.3 million for the year ended December 31, 2020. This increase reflects the increased clinical trial development costs related to the company's priority pathways, including preparation and initial site activation for our pivotal Phase 3 registration study, NANORAY-312 and our immunotherapy combination Study 1100.

Selling, general and administrative expenses were EUR19.4 million for the year ended December 31, 2021, compared to EUR14.6 million for the prior year periods.

The year-over-year increase was related to a change in headcount mix and geography, recruitment expenses. Expenses resulting from the NASDAQ listing and reflects a significant decrease in SG&A during the second half of 2021. A trend that is expected to continue year over year in '22.

Beyond its net loss was EUR47 million for the year, compared to a net loss of EUR33.6 million for the 2020 fiscal year, which includes EUR5.4 million in other operating income and expenses related to the termination of the PharmaEngine agreement in early 2021, and financial income of EUR5.6 million, driven by currency translation gains.

We ended the year with cash, cash equivalents and investments totaling EUR83.1 million compared to the EUR119 million as of December 31, 2020. This net decrease of EUR35.3 million reflects EUR51.8 million of net cash flows used in operating investing and financing activities of Nanobiotix, which was partially offset by EUR16.5 million or USD20 million, upfront payment associated with LianBio, collaboration announced in May 2021.

Finally, as we continue to optimize our capital allocation and drive ever increasing efficiencies and flexibility in our cost structure, we anticipate that our cash, cash equivalents and marketable securities as of December 31, 2021, should enable us to fund operations well into the second quarter of 2023.

And I'll turn the call back to Laurent, to discuss these programs in further detail.

Thank you, Bart. Progress and across our development program afforded us the opportunity to provide several data updates over the course of 2021. Each adding meaningful support to our positive that NBTXR3 offers a unique opportunity to extend and expand potential clinical benefits across spectrum of cancer of [Cetuximab]. And this both as a single agent activated by radiation therapy, as well as in combination with other products on the market and under development.

Rather than detail previously and on database, our and milestone achievements individually. I would like to take this time today to provide an integrated view on how we believe these results provide insight into the future opportunity for NBTXR3 and position us to achieve our development goals for 2020.

Certainly, a key priority for us is the timing execution of NANORAY-312 and successful registration of the products for the treatment of locally advanced head and neck cancer in patients that are intolerant to standard of care platinum-based chemotherapy. Based on the consistently high response rates seen across multiple studies, we have long been confident in the potential of NBTXR3 to provide survival benefit in this patient group and secure Fast Track designation in 2019 to potentially accelerate the proportion.

In 2021, we had the opportunity to report the first survival data from ongoing Study 102, validating the hypothesis. As we presented at ASTRO '21, high-risk elderly patients with locally advanced disease that were ineligible for cisplatin and intolerance for Cetuximab achieved a median survival of 18.1 months. And median progression-free survival of 10.6 months in the evaluable population as of September 21 (inaudible).

Response rate remained consistent with previously reported results from both publication and of attention paid, showing our response rate of 85.4% and complete response of 63.4% in the target lesion. Given this competency, we were not surprised but certainly pleased by an internal review of data from February can update this year continuous improvement with an ongoing median overall survival of 17.9 months in all treated population, which includes 66 patients and 23 months in the 44 evaluable patients.

We are not only pleased by treatment ethic of certain patient alone this study, but we are highly encouraged by the implication for the 312 stages of fibrosis. As you will recall, patients meeting the criteria for Study 102 are historically [two to three].

With the January order, with the annual level of comorbidities and patient digital costs that we treat well and have two or three times the prevalence of comorbidity compared to the overall locally advanced population.

Where there are no direct comparator literature suggests that locally advanced patients with a better prognosis than all patients have a median overall survival of approximately 12 months, providing us with what we believe is a conservative estimate benchmark.

On an operational front, Study 102 has not completed enrollment with the last patient expected to complete their last treatment within the next month. This allows us now to leverage when and where to site with historically high enrollment for Study 312. As part of our site selection process, we have selected eight sites of the 102 sites for participation of the Study 312, representing approximately 10% of our expected European sites.

As we look more broadly at short-term five plan, we are sensitive to the present geopolitical concern and instability in Ukraine and Russia. While we do not have any one or two sites in the region targeted for the 312, we had previously planned to activate a small number of centers in this region as part of the 312 studies.

These sites were not scheduled for activation into the second half of 2022, and we has actively been working with our CRO to identify alternate site and country. And as of today, we do not expect any impact on our overall timing or execution of the Study 312 at this time.

Looking ahead, we plan to continue adding sites across Europe through the year and expect to activate our first US site in mid-2022. [Seeing files] of partner LianBio, was expected to contribute approximately 100 patients of the 500 patients planned have been actively preparing to initiate Study 312 in China, and currently, anticipate beginning patient enrollment in the second half of 2022.

Overall, execution since the start of the study has been in line with expectation, and we are pleased with the ramp up we are seeing. We look forward to gaining additional insights on patient enrollment rate and add more [sites] in countries come online and look forward to keeping you updated on its progress.

Now, turning our attention to our IO combination program. I will again note that we are pleased to provide two updates related to our ongoing study at ASTRO and Astral. Today's presentations were complemented by new preclinical data journal publication and further review of the clinical data and preclinical findings by a few of our key opinion leader in June. These data lack of Study 102 data is available on our website. And I would encourage those of you that have not yet had the opportunity to lead you to do so.

As this data updates in the clear, evidence continues to support our [quote in it was that], the physical mechanism of action of NBTXR3 triggers subsequent priming of the immune system that when paired with immune checkpoint inhibitor furlough for better-than-expected response to Anti-PD-1 treatment, among not only nine patients, but also appears to rescue prior treatment status.

Updated data from Study 1100 presented at ASTRO will remain consistent with prior basis demonstrating, that it is control of 81% in the evaluable populations, including 73% in patients with prior primary or secondary resistance to Anti-PD-1. In the 16 evaluable patient, three complete responses and five partial responses were reported.

So sadly, only one progressive disease was reported in evaluable population. Some delayed tumor response and or abscopal effects were also reported suggesting NBTXR3 may potentially prime an immune response. To date, this activity is paired with a tolerability profile similar to what is traditionally seen with radiotherapy of Anti-PD-1 therapy.

Study 1100 is a basket trial, including [Trico] of patients in the dose escalation phase. The first one, our local regional, we correct for recurrent metastatic head and neck cancer patients. Still on one, cell lung metastases from any primary cancer that is eligible for Anti-PD-1 therapy. And the third one, are limited to this from any primary cancer are eligible for Anti-PD-1 therapy.

Considering the compelling data, we have seen from this study demonstrating the potential to both increase the response rate and Anti-PD-1 treatment, as well as with two prior treatment failure. We have updated our planned expansion phase of the study to explore this potential more fully in head and neck cancer patients. Therefore, the expansion phase will divide patients into three new cohorts.

Cohort one, will it include only head and neck cancer patients naive to Anti-PD-1 treatment. Cohort two, will include only head and neck cancer patient resistant to prior Anti-PD-1 treatment. And Cohort three, will combine patient with lung, liver, or soft tissue metastases from any advanced cancer eligible for Anti-PD-1 treatment. Enrollment in each of these calls is expected this year and will begin after reaching the recommended Phase 2 dose for each patient group.

In addition to informing the expansion phase of Study 1100 to data generated to date have also added to our sense of urgency in defining a registration path for our addition activated and NBTXR3, in combination with immune checkpoint inhibitor. And we have initiated discussions with the FDA to guide us in this process.

Preliminary feedback has been very encouraging, and we will be working with the aim of finalizing a protocol and proposed regulatory path for review by the end of this year. While our clinical program exploring the combination potential of a product candidate with pooled Anti-PD-1 treatment represents the priority pathway in our combination strategy.

We have presented clinical and or preclinical data that support the potential synergy of NBTXR3 with chemotherapy, [electric], TG and CTLA4. Early last year, we presented initial data from the dose escalation phase of our chemo combination study in rectal cancer. And I look forward to updates and schedules along with the Phase 1 chemo combination study in head and neck cancer to be presented next quarter biopharma partner in Asia.

Further, both our previously reported and ongoing preclinical work suggests that as the oncology treatment landscape continues to evolve and innovation leads to promising new product candidates, NBTXR3 may be uniquely suited to revolutionize the pillars of cancer have a foundational component of future treatments.

Potentially, having efficacy without increasing safety or tolerability concerns we remain committed to fulfilling this promise through disciplined execution, and I look forward to continuing to advance our development program through 2022 and beyond. We hope to make a significant impact on unmet need with a solid tumor agnostic I-O combination agnostic platform.

Before I open the call for questions, I would like to thank all patients, investigator and collaborators. Your support and contribution to our mission are invaluable and our successes will not be possible without you.

We would now be happy to open the call for questions. Operator?

Ladies and gentlemen, we now begin the question-and-answer session. (Operator Instructions)

All right, team. While we're waiting for you to queue up on the call, we have received a few inbound questions from investors prior to the start of the call. So, I think we'll get started there. There have been a number of questions on similar topics or aggregated their questions with the hope of interest.

And so, we did receive a number of questions regarding the status of three trials, which we addressed during the call, and how we plan to communicate around the progress in our strategy going forward. And specifically, questions regarding the status of that study on clinicaltrials.gov.

Thank you, Kate. So, as we just mentioned some minutes ago, the 312 study is progressing well according to plan. Sites have been initiated already last year in Europe and the first patient has been injected beginning of January. So now we are progressing according to plan, with the goal to open outside Europe, the US site for mid-22 and the Asian part with our partner, LianBio for extra this year.

In regard to clinicaltrials.gov, the data has been met last week and it will come to life as soon as get validated.

Okay, great. One more question from our investors before we go to questions on the line. The [metal guard] status updates related to our non-priority pathways, including where we stand with the liver study, the prostate study, and both of the chemo combination studies conducted in Asia?

Just a reminder, the priority of the company is ready to move forward the Phase 3 trial in head and neck cancer. And priority two, is to open this new path for registration within the I-O combination sale. So, we believe that those two paths will be ensuring the success of the company.

Now, as you know, our product has a wider applicability and could go for many other chemo. So, the other trial we've been running for us are opening new door for potential future lever of growth. And just as a reminder, the head and neck trial with chemotherapy and radiation data will be presented in Q2 of this year.

And concerning the trial in the rectum cancer, again with radiation chemo plus NANO, will also be reported in Q2. So, we were very happy with the data generated in liver and prostate and other trials. So, after we develop and move forward into two primary pathways, we will start exploring other opportunities for NBTXR3.

Operator, I think we can turn to the question on, that we have on the line right now.

Jonathan Miller, Evercore ISI.

Hi, guys. Thanks so much for taking the question. And I guess a lot of what I was really curious about from the releases that's been addressed in your prepared remarks, thank you. But I'll focus, I guess instead on financials. So, you've got a runway well into 2Q of next year, that gives you about 12 months of cash.

But obviously registrational data, which I think is the big catalyst isn't expected until possibly as late as '24. So, I was wondering what you were thinking about your cash-to-cash position? And how you were thinking about the prospect of some sort of financing and what your priorities were from a financing perspective?

Yes. Thank you, Jonathan. This is Bart Van Rhijn. As any other biotech, we're always evaluating all our options to ensure sufficient capital on hand and disciplined capital allocation. We're sensitive to capital dilution even more so given the current state of the markets. We look forward to keeping you apprised of the progress and are feeling good about what is ahead of us.

We've initiated our cost optimizations program that are bearing fruit already. And we're very excited about the two strategic partners that we're collaborating with, both MD Andersen and LianBio which allows for a very efficient pathway from a development perspective. Thank you.

Great. That makes sense. So, then I guess one follow-up then, since you're talking about these collaborations. I think we're all excited to see a little bit more out of those MD Anderson trials, both in terms of the different combos and the different indications that they're exploring there.

In terms of the data that you -- I've said, we should expect to see in the next year. It seems like there's a bunch of different datasets coming. What do you think is the most important catalyst for you guys in those upcoming data releases? What should we be paying most attention to, in terms of the ability to really, I generate interest in the NANORAY?

So I think we have rich year in front of us. We said in Q2, we will report two new set of data. One, in the expansion phase of the rectum cancer. The other one, in the head and neck chemotherapy setting. That's the first part.

We also wait for the second part of the year. The RP2D of the pancreatic cancer trial that is done at MD Anderson. The overall program there, including a potential cancer and non-small cell lung cancer, and two Phase 2 in head and neck in combination with value is also moving in the right direction.

Where we really want to focus the attention is in the definition of what's going to be a fast market with the I-O combination. Our recent discussion with FDA, a letter saying that we will have enough to start defining what should be the best. And we intend to communicate that market by the end of this year to make sure we have another pivotal trial running in parallel to the 312.

Is there any possibility that that I-O combination path would be more rapid than 312? Is there any possibility that the I-O combo could be approved before the head and neck study as read is done?

If there is nothing we can say at this stage.

Okay. Fair enough. Thank you so much, [Ed]. That really helps.

Thank you for your question. I hand back the conference to the speakers for word (inaudible).

Yes, we have received a question online component part. The first question, as it was discovered in our Q&A. So we'll do question two, which is asking if you could please provide the breakdown of your R&D expense per program for 2022?

Yes. Thank you, Kate. Thank you for the question. For 2022, the majority of our expenses will relate to the Phase 3 NANORAY-312 study, which will be reaching a peak as we expect to the enrollment to reach its peak in 2023. The other part of the expenses flow primarily relate to the 1100 Study, which is our I-O combination in line with the two priority pathways that we have explained.

Very good. Thank you for that clarification, Bart. We do have another question that was submitted online during the call asking, what we can expect some discussion about immunotherapy with the FDA? Want to add some color to that if we could?

We could. I think what we've discussed is for big hurdle it'll become already. And what we can say and what we were expecting with this meeting is which clarify a question about the population about the use of the PD-1, about the type of endpoint we should use to move forward into market. And we've been very satisfied with the answer we got.

And now we are in the active phase of designing this program with our internal team and external TI. So, we really are keen to continue that into -- but that's what we're going to present to you what is our plan to move forward.

Thank you for that, Laurent. Our final question, actually, a combination of a couple of questions that were submitted in advanced, and they relate to our ongoing work with [Teradyne]. And if you could provide a status there, as well as work related to the CNS Platform?

Sure. Now just to put that into context or perspective, our priority, meaning the investment and the attention of the vast majority of the company is focused on development of NBTXR3. Nevertheless, there is a small team working for the future and preparing what will be our next platform. And we have two platform in that regard, under development at a preclinical stage.

The first line is [Teradyne], and the other one, is linked to CNS disorders. So in the premise that first platform, [Teradyne], there is an ongoing collaboration with Sanofi, and that's been extended to continue preclinical work and that should provide some data in the future. According to the previous development we've made, and I think you can look at the patents we established, and you will the content of those two platforms.

If you go to the one concerning the CNS, this is moving at the right pace from a preclinical perspective and establishing proof of concept. And we will report seeing that as soon as we think it's agreeable after adding moving of priority program in NBTXR3.

Okay. All right. Now, it looks like that concludes the Q&A session for today's call. We'd like to thank everyone for joining us in today's discussion and look forward to keeping you updated on future calls as the year progresses. Thank you.