Nanobiotix SA (NBTX) 2022 Q2 法說會逐字稿

Good afternoon and good morning, and welcome to Nanobiotix conference call to discuss our first-half 2022 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 would 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 trials, collaborations, regulatory filings, 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 filed with the AMF in France and SEC in the United States, including the RFS and 6-K filed yesterday and our most recent URD and 20-F, each 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 the 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. As Kate mentioned, we issued a press release yesterday, highlighting the company's operating activity and financial results for the first half of 2022.

Before we open the call for Q&A, I would like to take a moment both to review our recent progress and outline how we plan to continue our advanced development of NBTXR3 and drive shareholder value in the near term and long term. Since inception, we have generated a substantial body of evidence pointing to the novel potential of NBTXR3 to play a critical role in cancer care, leveraging evidence of both local and distant tumor control, we have focused our development effort on the immediate need for patients with locally advanced and treatment-resistant recurrent and metastatic head and neck cancer.

With this focus, we believe we can build a comprehensive head and neck franchise that could offer meaningful improvement to current standard of care, both in terms of treatment effect and quality of life, and serve as a model to replicate it across additional solid tumor indications in the future.

During the first half of 2022, we made significant progress toward this goal. Year to date, the most defining moment in our clinical program as being the initiation of patient enrollment in NANORAY-312. Since then, with the support of our partner, LianBio, we have activated approximately 60 sites across 13 countries, including the initial site activation and first patient in LianBio's territory a few weeks ago.

Having also recently initiated clinical site activation in the US, I'm pleased to report that NANORAY-312 is now actively recruiting patients in each of the three core territory that will drive the study, Europe, US, and Asia. These achievements reflect the hard work of our entire Nanobiotix team as well as our collaborator at LianBio, and the impressive support of investigators and patients.

This hard work has including nimble response in the face of multiple regional challenges. As we discussed in March, NANO-312 (sic - "NANORAY-312") was initially intended to include certain site in Russia and Ukraine. In light of the ongoing war in that region, the team set about rapidly assessing alternative strategy for achieving our patient enrollment goal and have already identified replacement site in alternate country.

Because of the swift action, we do not currently anticipate an impact on the overall study timeline. So we need to see some shift in early enrollment curve as a result. Further, while the world continued to make significant progress in battling the pandemic, the effects of COVID-19 continue to reveal themselves in different ways across different territories, including a recent surge in cases in China, continuing shortage of clinical research staffing at the center in the US. While this process is not a simple one under the best of circumstances, I'm very proud of how our team has proven itself capable of rising to the challenges laid before them, united in a purpose for the patient we hope to serve.

With each of our key territories now active in the study, we look forward, not only to continuing to add new sites, but to beginning to capture data that we can use to validate and refine our underlying assumption about recruitment, enrollment, and expected event rate in our target patient population. We anticipate that it will take approximately four to six months of global recruitment to provide data-driven validation of our anticipated study timelines, including our planned futility analysis anticipated in mid-'23 and our planned interim efficacy analysis that is anticipated in H2 '24.

As we saw NANORAY-312 kickoff and ramp up during the first half of 2022, we were equally pleased to complete enrollment in the Study 102, our dose escalation and expansion study in a similar head and neck cancer population. This study has provided incredibly valuable information regarding the activity of NBTXR3 in head and neck cancer and indeed was a key driver in our decision to pursue registration in head and neck cancer as our first global registration pathway.

Having reported median overall survival of 17.9 months in the all-treated population and 23 months median survival in the evaluable patient population, as of February of this year, we made the decision to modify the protocol for this study to limit the required follow-up to a minimum of 12 months.

Based on [deck] of enrollment, this decision impact the planned follow-ups for only four of the 74 patients enrolled in the study and now position us to report a mature and robust final dataset from Study 102 in mid-'23, while reducing the overall expenses of the trial. The first half of 2022 has also seen significant progress in our immunotherapy program. I'm very pleased to now be able to say that what started as exploratory study evaluating radiotherapy-activated NBTXR3 in combination with anti-PD-1 immune checkpoint inhibitor has led to compelling evidence of activity and the identification of second planned registration program for patients with local, regional recurrent, or recurrent metastatic head and neck cancer that are resistant to PD-1 therapy.

As we reported two weeks ago, following enrollment of 29 patients across three cohorts of patients with advanced metastatic disease, we have completed the dose escalation phase of the Study 1100 and determine the recommended Phase II dose to be 33% of gross tumor volume for all patient cohorts. And those will now be further evaluated in the dose expansion part Study 1100, as you will recall, in the first half of 2022, we modified the three expansion cohorts in the study from a more robust data collection in our target population of patients with head and neck cancer resistant to prior immunotherapy.

As we advance the dose expansion part of Study 1100, we're looking forward to providing everyone with an updated look at data from the dose escalation phase at a medical congress in the fourth quarter. Based on previous data generated by Study 1100, we initiated discussion with FDA earlier this year to better assess what a potential registration pathway for this patient population could look like. This dialogue was very informative and has put us in a strong position to develop a potential Phase III protocol that we intend to submit for agency review and comment by Q1 2023.

I would like now to turn the call over to Bart to briefly discuss our financial results for the period. Bart?

Thank you, Laurent. The focused execution of our clinical development programs during the first half of 2022 were matched by a similar focus on strengthening our financial position and the success is equally apparent. This time last year, we reported that our capital resources were expected to fund operations into Q1 of 2023. Since that time, we have undertaken several initiatives intended to improve our financial flexibility and extend our operating runway.

First, we implemented cost control initiatives intended to drive a double-digit reduction in 2022 SG&A expenses. And in the second quarter of this year, we expanded on these initiatives by prioritizing R&D expense, supporting our late-stage development programs, and scaling back auto clinical, preclinical, and manufacturing expense while reducing our infrastructure cost to achieve a target reduction in operating cost of approximately EUR12 million to EUR15 million through 2023, SG&A included. These efforts collectively added nearly two quarters to our anticipated operating runway.

Second, we announced our intention to restructure our existing debt obligations, and I'm pleased to report that earlier this month, we reached an agreement in principle to restructure EUR30.7 million in outstanding debt obligations related to the company's 2018 loan agreement with the European Investment Bank. As detailed in our prior press release and filings yesterday, this restructuring aligns the repayment schedule with our anticipated commercial timelines and defer the majority of our principal payments due in 2022 and 2023. We anticipate that this agreement will be finalized in the next several weeks and resulted in an additional quarter of operating runway in 2023.

Finally, during the second quarter of 2022, we secured access to flexible equity financing line through Kepler Cheuvreux. Significantly, we are not committed to issue shares now or at any time in the future, nor are we obligated to do so at any price. Through this structure, Nanobiotix has the full authority to activate or suspend access to capital through this facility at its sole discretion. However, it would ensure that Nanobiotix has guaranteed access to capital to extend its operating runway by approximately one quarter.

These initiatives, combined with EUR63 million in cash and cash equivalents reported as of June 30, 2022, are expected to support our planned clinical development programs into the first quarter of 2024. As Kate mentioned, yesterday, after the close of the US markets, Nanobiotix reported financial results for the six months ended June 30, 2022. As both our release and associated filings with the SEC and AMF detail the financial results for the period, I will refer you to these documents for more complete breakdown of our financial results.

However, I will note that the operating cost for the period decreased from EUR31.1 million for the six months of 2021 to EUR27.2 million for the first six months of 2022. Operating costs for the period reflect an increase of approximately EUR1.1 million in R&D expense, primarily driven by costs associated with the initiation of our global Phase III study, a decrease of approximately EUR0.5 million in SG&A expense due to increased efficiencies and a decrease of nearly EUR4.5 million in other operating income and expenses related to the PharmaEngine contract termination in 2021.

Net loss attributable to common shareholders for the first six months ended June 30, 2022, was EUR26.4 million or EUR0.76 per share compared to a net loss of EUR30.4 million for the comparable period in 2021.

And now I'll turn the call back to Laurent. Laurent?

Thank you, Bart. To close out this call, I would like to reiterate how excited we are about our continued clinical and operational progress so far this year. This disciplined execution of our priority pathways and careful management of our resources have enabled us to continue to invest in our pipeline, drive value across our business and ultimately advance our goal of delivering significant innovation, and improve outcome for patients with head and neck cancer.

Looking ahead, NANORAY-312 remains a key operational priority, and we look forward to critical advancement in this study over the coming months. Additionally, our Study 1100 continues to offer a validation of our I/O combination strategy, we look forward to each step that move us closer to our second Phase III registrational program. With dose escalation complete, we will now set out to have a dataset supporting our second target indication to the dose expansion phase of Study 1100 and leveraging our existing data to support development of a Phase III protocol submission to FDA by Q1 of next year. We look forward to keeping you updated on our program in couple of days.

This concludes our prepared remarks, and we will open the call to questions. Operator.

Mike DiFiore, Evercore.

Hi, guys. This is actually Jon Miller on with Mike. I was going to ask about your efforts to extend cash runway. It seems like you've made a great deal of progress extending cash runway potentially out into 2024, but still not to potential data readouts for NANORAY-312.

So I guess, in the interim, when -- as we're seeing more results from Study 1100, what additional levers are you going to have to pull to further extend that cash runway and get coverage for the pivotal trial?

Hi, Jon. This is Bart. Thank you for your question. As you can tell, we're sensitive to the financing demands of the pipeline and the product that we have. We have undertaken numerous internal and external initiatives that have begun to reflect in the H1 2022 financials. We'll see more of that in the second half of this year. We're very diligent in every opportunity to drive additional efficiency. And we're optimistic and we'll explore all options including all the ways that biotechs would consider, including VD. More specifically, we have a conference ahead of us with Citi where we will do an update that I think will be of interest. In addition, we look forward to bringing to the market results on the pancreatic study that is ongoing as well as esophageal early in 2023.

Great. That makes -- it makes great sense. Can we focus then on what we could potentially see at Citi? That'll be the dose escalation, I assume, for most of the patients in that cohort. Can you confirm how many additional patients will have there versus prior attendees? Do you have that data?

Hey, Jon, Mike. Good morning. So that's long staging. So for the Citi Conference, what we do expect to present is the result of the escalation part of the Phase I we have completed. In total, there have been 28 patients injected and evaluable for safety and feasibility, and there will 10 patients evaluable for efficacy that will be presented. And also now we started the recruitment in the expansion phase, but it's too early to show the expansion phase now as we speak.

Awesome, awesome. That makes sense. I guess. So one final one from me. What is your pathway towards developing further indications? I know you already mentioned pancreatic and esophageal, and obviously, you have an ongoing collaboration with MD Anderson. But given your bandwidth limitations, I'm wondering what the opportunity is to start expansion cohorts or start additional early cohorts in indications beyond head and neck?

So good question. Right now, the company is really focused in this head and neck franchise, both with the Phase III that is ongoing across the world, and also when we are preparing in combination with I/O in refractory patients.

Now, as you may have noticed, the collaboration with MD Anderson is including already five ongoing trials and there is still remaining space in this collaboration to go further. Not only for Phase I, but for also potential Phase II randomized trial. So here there is an opportunity at low cost to move forward into this program. But I think, as we continue to grow and bring new data to the market, we may have new opportunity raising to develop further indication. But right now, all the cash and the company is really focused in the head and neck franchise.

Great. Thanks so much for the color.

You're welcome.

(Operator Instructions) Colin Bristow, UBS.

Hi. This is Elliott Bosco on for Colin, UBS. Could you -- I just wanted to confirm some timelines here. So it sounds like NBTXR3 might be on the market in 2025 following the completion or the interim analysis of NANORAY-312. Could you just give us your thoughts on that? And then also when might we expect a readout of the expansion phase of Study 1100? Thank you.

Thank you for the question. I think as far as the time to market is concerned, we -- it is not something we did communicate because that will involve multiple steps for that. What we think is that if the interim readout on the primary endpoint, PFS is positive and according to previous discussion we have had with the FDA, we may be eligible for an accelerated approval. So if we assume that H2 '24 will be the readout for this interim, then we need to have the usual time for getting the data submission and getting approval through FDA. So that's a possibility.

But now let's move forward in the trial, get the results, and see where they are to move forward into the next steps. So that's for the head and neck Phase III trial ongoing now. But your question on the 1100, as I just mentioned, we started recruitment in the expansion phase that will include three cohorts, little different from the three cohort from the escalation phase because here, we want to look at a patient based on their need, for example, cohort number one being head and neck patient, refractory to PD-1. That could have either zero met or unmet or local relapse in the head and neck area.

And this quarter is particularly important because it will pave the way to our pathway to registration with the same population. So no, that will be an open-label trial. So we will be able to give along the way some update. But we did not define yet when would be the first one. But I think as soon as we get a good number of patients in one of the cohort -- or cohort, then we will give that update.

Thank you. That's all for me.

Suzanne van Voorthuizen, Kempen.

Hi, good afternoon, guys. This is Suzanne from Kempen. Can you perhaps elaborate a bit more what benchmark we should keep in mind for the Study 1100 data that we will be getting at Citi? I believe we saw a somewhat higher response rate in treatment-naive in the previous preliminary datasets, although these were small number of patients. I'm wondering and should we be expecting a different response rate between patients that had prior checkpoint inhibition or those who are treatment-naive? And then I have a follow-up after that as well

Thank you, Suzanne, and thanks for asking the question. So here in the Phase I escalation part, okay, there is a mixed population of patients. So it is not direct when you want to make comparison with what's happening in those patient.

Nevertheless, I think looking at what has been published in the I/O world, and especially in the head and neck population, could be a good basis to think about it, and we could have two different tasks for that. The first one is, for example, KEYNOTE-048, which gives a reference in head and neck patient early line getting PD-1 where we see an overall response at the end through responder around 15%. So that could be a good baseline to look at for naive patients, meaning that there's around 85% of those patients that will not respond being either primary or secondary refractory patients.

Now looking at the literature, when you look at past failure of PD-1 in this population, as an example, we see a fairly low response of the patient regardless of the treatment they would get. Would it be chemo or other type of treatment, but I think we should assume something around 5% to 7% maybe but depending on the series.

So let's say those could be some of the baseline for responder. And then from a more broader perspective, I think when you look at naive patients versus refractory, you see patients that have different baseline, not only being on refractory, but also in time of the disease progression. And obviously, we could legitimately think that we could have a greater effect for naive versus refractory. But for that, we need to have to wait and see the data we have generated that, as we speak, we are extracting at the moment to be ready for SITC.

Arthur He, HCW.

Hey, everyone. This is Arthur, on for RK. I have two questions. One is regarding the NBTXR3 immunotherapy combination trial. So for the plan to submit to the FDA regarding the registration pathway, could you give us more color on that part? And I assume that's the focus on the PD-1-resistant patient population.

So where we are at the moment having been completely escalation path, we have our recommended Phase II dose. So we are able to complete and finalize our proposal to FDA for the protocol that we expect to submit for discussion beginning of next year, let's say, Q1. That's what our plan is. And I'm sorry, I'm not sure I got the second part of your question.

The second part is what the patient population for the potential registrational part is for the PD-1 resistant patient population or also including the PD-1 naive.

Okay. So at this stage, what we want to achieve is to show a big delta in patients that are refractory to PD-1 that could include both primary or secondary resistant to PD-1. And this was in the head and neck metastatic setting or locoregional resistant setting. When you look at the cohort number one of our 100 trial expansion phase, you should have a similar population.

Got you. Thanks for that. And my second one is, just curious regarding your collaboration with MD Anderson for the pancreatic cancer patient. For those data by the end of this year, which value we could expect it from and the -- yeah, so that's it.

So what would we expect to get by the end of the year is, I guess the RP2D from the Phase I part and assuming the data are positive to be able to move in the expansion part of this trial. Just maybe, as a reminder, the escalation part will have on truly inoperable patients and both pancreatic cancer patients. And if we think there is enough sign here and a good safety and tolerability, then we will move into the borderline operable setting.

So that's the information we should get by the end of this year. Then MD Anderson, based on that, will decide when they present those data in a medical congress. But at this stage, we don't have yet the date for that presentation.

Got you. And so as of now, these trials fully is fully supported by MD Anderson?

Correct.

Got you. Thanks for taking my question.

You're welcome.

Thank you. We will now take a written question. It will be read by Kate McNeil. Please go ahead.

Yeah. Hi, Bart and Laurent. I had a question that's come in from Clément Bassat at Portzamparc. Unfortunately, he's having a little bit of difficulty with his connection. So he asked that I share his questions on two fronts. The first relates to Study 312, and he is asking about some information about the progression of enrollment in 312 as well as what is the biggest location expected in the study, the US, Europe, or Asia?

His second question relate to the anticipated Phase III in immunooncology asking if we can please provide more information about the endpoints for the planned study asking if we will watch the PFS like we do in 312 or the response rate. Also, will we have a control arm, or do we plan to have a control arm in that study as we do with 312?

Thank you, Kate. So maybe let's start with 312, which is our ongoing Phase III recruiting. So just to give you an overall view on where we are and the progress we've made, as you know, we started injecting patients at the beginning of this year in Europe. And we've been pleased to also be able to recruit the first patients in Asia a few weeks ago, and now the US have activated site that are recruiting. So we see a very good progress in the number of open site.

We mentioned 50 in our press release and as we speak, we even have more than 50 sites now. So we're happy about that. Now, I think to get a good view on how fast we're going to recruit patients in this trial and to refine the readout timelines for interim or security, we will need, I guess, around four to six months of full cycle recruiting to get a good view and especially of the number of patients that could be recruited per month per site.

So we're progressing. We're happy about the progress, and in months, we will be able to give a bit more visibility on patients and in time to readouts we find based on the actual life recruitment. So that's what for the 312 part.

On the I/O front, what we expect -- but of course, this is subject to a final approval by FDA, nevertheless, based on the previous discussion we have had with them is that we may go for endpoint linked to overall response rate as one of the key endpoints along with at the end overall survival, which is one of the key.

I think during our last call, we also mentioned that during the last interaction we have had with the FDA on that matter, they told us that we could have the possibility to design a trial where a readout on overall response rate could be used for an accelerated approval. So that's along those lines that we are designing the trial.

And to your question about the control arm, yes. This trial will need a control arm knowing that in the head and neck metastatic refractory setting, as an example, it's hard to find another standard of care. So here we're looking at what could be done as a control arm, especially because we have seen in many clinical trials, no later than ESMO, there was another one that when you just choose radiation alone with a checkpoint inhibitor anti-PD-1, we do not provide benefit for patients. So I think it will be more -- or alone a more open control arm than just radiation plus PD-1.

Suzanne van Voorthuizen, Kempen.

Hi. Thank you. Sorry, I got disconnected for a bit. So maybe you have touched upon it already, then I apologize, but I had a follow-up regarding the Study 1100 upcoming data. There's a portion of patients that you are re-sensitizing to checkpoint therapy. And I was wondering if there's data available or what is seen with your anti-PD-1 retreatment and how was patient doing that? Thank you.

Well, it is hard -- and thank you for the question, Suzanne, and that's a very key question. And it's hard to find the data post failure of patients that are continuing treatment under PD-1 alone. What we see and it was part of the answer, as mentioned here, is when you have patient's refractory or non-refractory that you treat with radiation plus PD-1, the add-on of that does not bring a lot of value.

Altogether, patients that are refractory to PD-1 could get chemo. Some of them will get a continuation of PD-1 and some of them, some other experimental treatments, but there's no predefined treatments for those patients. So it's coming more to a palliative saying than any standard of care.

Got it. Thank you very much.

You're welcome.

Thank you. There are no more questions at this time. I would like to hand back over to Laurent Levy for final remarks.

Thank you. Listen, it was a good call. Happy to have answer to your question and interacted with you. And we hope to see you soon during the different conferences or different calls or investor conference that we are planning to attend.

On that note, I'm going to issue an excellent day and a very good week. Thank you very much.