Evaxion Biotech A/S (EVAX) Q2 2022 Earnings Report, Transcript and Summary

Good morning, and welcome to the Evaxion Biotech Second Quarter 2022 Earnings Call. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation, there’ll be an opportunity to ask questions. [Operator Instructions] Please note, that this event is being recorded. I would now like to turn the conference over to Corey Davis. Please go ahead.

Thanks, Joe. Hello, everyone. Thanks for joining us this morning. Let me quickly remind everyone that the following discussion contains certain statements that are considered forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Because forward-looking statements involve risks and uncertainties, they’re not guarantees of future performance and actual results may differ materially from those expressed or implied by these forward-looking statements due to a variety of factors, including those risk factors discussed in the company’s annual report on Form 20-F, filed on March 31st, 2022, and the company’s current and future reports filed with or submitted to the Securities and Exchange Commission. At this time, I’m pleased to turn the call over to Lars Wegner, the company’s President and CEO. Lars, take it away.

Thank you, Corey. Good morning, everyone. So, thank you for joining us for this Evaxion Biotech Q2 earnings call. I’m Lars Wegner, the Chief Executive Officer of Evaxion, and with me today is; Evaxion’s Chief Financial Officer, Bo Karmark. We’ll give you a short presentation on our business and results, and then open the call up for your questions. Let me begin by saying that Evaxion announced multiple exciting milestones in the second quarter of 2022. Starting with our oncology program, in May 2022, we announced the successful production using our PIONEER AI platform of all batches of personalized cancer immunotherapies for all patients enrolled in our Phase 1/2a clinical trial of our EVX-02 product candidate for resectable melanoma. Demonstrating once again, that Evaxion runs a feasible and efficient production chain that we were successfully managed to provide a truly unique and personalized therapies within this critical time window. The ongoing clinical trial is expected to be finalized according to plan with a full clinical readout in the first half of 2023. In June 2022, we announced the expansion of our third cancer immunotherapy program EVX-03 into a new indication, non-small cell lung cancer due to encouraging data in pre-clinical studies. We intend to submit regulatory filing for our Phase 1/2a clinical trial in the second half of 2022. In addition, we plan – as planned, we expect to begin the Phase 2b combining the EVX-01 with Merck’s KEYTRUDA for the treatment of patients with metastatic melanoma in the second half of 2022. We believe that these significant steps, including the progression of our clinical programs and the successful manufacturing of our EVX-02 personalized cancer therapy, highlight the potential for our existing pipeline of cancer therapies to improve the treatment landscape in melanoma, non-small cell lung cancer and eventually, other cancers. In our bacteria program in June 2022, we announced gonorrhea as the second bacterial trial for treatment without EVX-0 – EVX-B2 product candidate that we developed using our EDEN platform. We plan to select our first viral candidate from our RAVEN platform in the second half of 2022. As you may know, Evaxion business model is to develop our programs through Phase 2 before seeking to out-license them. We are actively discussing potential partnership with multiple pharmaceutical and biotechnology companies. Outside of the clinic, we also hosted a Key Opinion Leader webinar with acclaimed expert on the metastatic melanoma and personalized cancer immunotherapies. As of June the 13th, 2022, our cash reserve totaled $25.3 million. We expect these funds, including the use of financial facilities to support our product development efforts for the next 12 months. The company also entered into an equity financing arrangement for up to $40 million with Lincoln Park Capital Fund, LLC to further strengthen our financial resilience. This concludes our business and operational update for Q2 2022. I will now turn the call over to Bo for our second quarter 2022 financial review.

Thank you. As Lars mentioned, in the second quarter of 2022, we enter into an equity financing agreement for up to $40 million with Lincoln Park Capital Fund. As of June 30, 2022, cash and cash equivalents were $25.3 million as compared to $32.2 million as of December 31, 2021. The decrease in cash and cash equivalents during the first six months of 2022 was primarily related to our operating expenses for the first six months of 2022, partly offset by the proceeds received from the first tranche of our loan from European Investment Bank. We expect our six – cash and cash equivalents, including the use of financing facilities will be sufficient to fund our operating expenses and capital expenditure requirements to at least the next 12 months. Research and development expenses were $4.1 million for the three months ending, June 30, 2022. This compared to $5.1 million for the same period in 2021. The decrease was primarily due to lower external costs related to the clinical trials. General and administrative expenses were $2.1 million for the three months ending, June 30, 2022, as compared to $1.9 million for the same period in 2021. The slight increase was primarily due to an increase in fees associated with the expansion of our business as a listed company. Net loss was $4.8 million for the three months ended, June 30, 2022 or $0.2 loss per basic and diluted shares compared to $6.8 million or $0.36 loss per basic and diluted shares for the three months ended, June 30, 2021.

Thank you, Bo. That concludes our presentation today. And now, it’s time to open up the call for any questions.

We will now begin the question-and-answer session. [Operator Instructions] Our first question will come from Thomas Flaten with Lake Street Capital Markets. Please go ahead.

Good morning, guys. I appreciate you taking the questions. Lars. I was curious if you could comment on the ongoing delay in first patient in for the Phase 2b EVX or EVX-01 study. It’s been a while since you guys got clearance. I know you were screening patients actively. But I was just hoping you could provide some color around that.

Yeah, and good question and thank you for that. So, we actually had the first initiation of the first site actually today. We plan to open 25 sites and we have patients that are being screened as we speak, so we are expecting actually the first patient to be starting very, very soon. We had a smaller delay compared to what we actually announced earlier this year, which was primarily due to logistics and planning. We expect to be able to actually get that delay kind of caught back during the next couple of months, so it will not influence any of the readout of the EVX-01. But we are actually quite happy that the initiation of the first site was actually today. And then, we are, of course, opening up additional 24 sites to have a fast recruitment. So we will expect to have the readout as planned.

And then any updates on the regulatory submissions in the EU and US for EVX-01?

Yeah, that’s actually moving according with the plan. We start first 5 sites actually in Australia and then we plan to open up in Europe. And we will, of course, also announce when they have the first sites up and running in Europe and US. So that is moving according with the plan, but the first 5 sites will be opened in Australia, where we have actually also a lot of experience in running our previous trial, such as EVX-02, and where we also have a very, very broad KOL network with people like Georgina Long.

And then one kind of non-clinical question. Any – I know it’s only been a few weeks since your transition was announced, but any updates on timing of transition from the old company to the new company, et cetera, for the incoming CEO?

Yeah. We expect to be able to announce the exact date within a matter of weeks as, of course, our new CEO, Per will have to arrange that with his current company. So, I will expect to have a firm date within a matter of weeks. And, of course, we hope he will start soon, so we can have a very, very solid transition. But regardless of how and when he is starting, I am not – so I probably also mentioned earlier, leaving for another company. So I will be there to help out as long as needed.

Excellent. I appreciate you taking the question. Thank you.

Thank you.

[Operator Instructions] Our next question will come from Ahu Demir with Ladenburg Thalmann. Please go ahead.

Hello, everyone. Thank you for taking my question. This is [inaudible] for Ahu Demir. I have two questions. Can you please give us more details on the EVX-03 in non-small cell cancer in terms of the patient population, treatment regimens and timeline? And my second question is, could you please give us some information on the data from the platform AI-DeeP to predict the responders and non-responders? When can we see the data? And in what format? Thanks.

Thank you, and very good question. So let’s start with the first one on non-small cell lung cancer. So right now, of course, we are in the midst of preparing for that trial. And we are targeting first-line metastatic non-small cell lung cancer in combination with Checkpoint inhibitors. We have also announced that we expect to do our regulatory filing in this second half of ’22 and we expect to be able to deliver on that. More details on the different timelines, we will be sharing in the upcoming month as we progress on the submission. But we expect to be able to deliver on the timeline that was also previously communicated when we launched the program. And AI-DeeP, which is truly interesting platform that is able to predict who will respond to immunotherapy, in general, not just our immunotherapy, but also checkpoint inhibitors. We had some very interesting data when we have basically run all our patients through it. And it was very precise in being able to predict who responds to a combination therapy. Right now, we are actually gathering additional data to validate it on a data set from other studies. And as soon as we have that data and have run through AI-Deep, we will be sharing that data. We don’t have an exact timeline for that, but our expectation is, we will be able to share data around the year shifting from ‘22 to ‘23 with a lot more patients. And there – and that setting, of course, also what is our business model for this new platform.

Okay, that’s really great. Thank you very much for taking my question.

You are welcome.

This will conclude our question-and-answer session. I’d like to turn the conference back over to Lars Wegner for any closing remarks.

Thank you [to all] [ph] and thank you for joining us today. This concludes today’s conference. You may disconnect your lines at this time. Thank you.

The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect your lines.