Molecular Partners AG (MOLN) Q2 2022 Earnings Report, Transcript and Summary

Good day, and welcome to the Molecular Partners Second Quarter 2022 Half Year Report. All participants will be in listen-only mode [Operator Instructions]. Please note this event is being recorded. I would now like to turn the conference over to Seth Lewis, Senior Vice President of Investor Relations. Please go ahead.

Thanks, Jason. And welcome, everyone, to the Molecular Partners 2022 Half Year Results Conference Call. My name is Seth Lewis, and I'm joined today by our CFO, Andreas Emmenegger; and our CEO, Patrick Amstutz. Today's call is a chance to catch up and recap the events of the first half of 2022 and is accompanied by the press release and half year report issued yesterday. If you've not had a chance to review these, they are available on our website, molecularpartners.com. Following our prepared remarks, we will open for questions. And as a reminder, during today's call, Management will be making certain forward-looking statements and these statements involve risks and uncertainties that could cause actual results to differ materially from those reflected in such statements. This webcast is being recorded on August 26, 2022, and we refer you to our website, molecularpartners.com, to ensure that you are in receipt of any material updates following the date of this webcast. With that, I'm happy to turn the call over to our CEO, Patrick Amstutz. Please go ahead.

Thanks, Seth, and thanks for everybody dialing in. Warm welcome from my side. And I will be referring to slide numbers that you also find on our home page. So please go there. Perhaps, then it will be much easier to follow my speech. So the first year -- first half of this year was really transforming for us at Molecular Partners. And I'm not talking about the global biotech crisis and the conjunction with need for the full Phase 3 for Ensovibep that had that negative share price reaction that we're all aware of. No. I'm talking about the moment when we unblinded our first-ever Phase 2 blinded trial at Molecular Partner. That was in early this year, and it was really an amazing moment for all of us. It was the first time we did so unblinding and seeing that the data hits that we have safe patient lives, our job did exactly what we have designed it for. And that we have done in record speed in 18 months from idea to those data with a trispecific anti-COVID product. We're also sad that it then didn't go through, and the EUA still open now come to that, but we definitely have wished for another outcome. But the work by the team, the engagement, the energy that we bring and the validation that is still there. And together with the strong cash position, that is really what puts us in an optimal position to execute our strategy and build value going forward. Now on Slide 2, that's our disclaimer. I'll echo what Seth said, I will be making forward-looking statements. Now Slide number 3. I'll start with the science highlights, and I will start with 533, which is our AML drug. It's trispecific, bispecific making great progress to the clinic sites are approaching us to be part of that clinical trial. There is a huge excitement. We have presentations upcoming, and I will also have a slide as a, call it, pertain razor safe to date for an ASH meeting, where we invite you all to join and listen to the experts talk about 533. 317 in Phase 1. We're excited about that. Why are we excited? We're reaching 1 milligram per kilogram. That's the dose where others started to see or already before, had those limiting toxicities. So far, we're going strong on that, and we're very hopeful to be able to dose escalate and have meaningful data in the second half of this year but also next year. We have in Ensovibep, I just spoke about that, the positive data, the license to Novartis or the option exercise, 150 million milestones, 210 million in total. I think that puts us in a great position as you will see. But also, the EUA is still open and pending and should the variant of concern come back that is stronger, I think that EUA will also be used. At the same time, Novartis is still engaged with the FDA, but to find a design that in the current situation allows Phase 3 is not trivial, and they're working hard on that. We have Radioligand Therapies and on the right side of the slide. This is something that we're not only moving forward with Novartis, but also internally, and I will highlight that in a few slides down the road. Just give you a bit more reason why we think DARPins are meaningful. And we have Abicipar back on this slide as the team has solved likely the inflammation problem and how we want to remove the inflammation causing agent and see the path forward with the FDA. We will not fund this trial, we will not run that trial, but we will definitely see if we find somebody who will do that. And maybe the most important point here, and this refers back to the global situation. I mean, it's not every -- that every biotech can say they're funded into '26. We have 285 million in cash. We have a great team. We have a strong pipeline building. And we are in the best position you can wish for to execute and go forward, while many others actually have to make sure that they actually survive, we can really build value and thrive. Let me just use Slide number 4 for a recap of our strategy, and it also explains a bit and helps you understanding which programs do we invest as molecular partners and which ones maybe are more for partnering. The first one is, true patient value in an early clinical readout by directly changing the course of disease. So what we're looking for is sort of single agent activity. And that's something like Ensovibep, like AML, and it's a bit less like 317 or 310, where your Phase 1 is a safety trial, then you go signal seeking in combination. We can't afford that, and that's kind of out of strategy going forward. Everything that will come that we will introduce also Radioligand, you can be sure that we can see value in an early trial. Second point, DARPins provides a unique solution. And I think that's the one point that really sets the platform part that we're not going to try to do to me-toos or even me-betters, but really solutions that matter that are as unique to DARPins as they can be. And the biological hypothesis. So we like clinical problems that have a clear biology, a problem that showed itself clinically that we can solve and that we also can test preclinically if we're on the right track. And as our name says, as you will know, partnering, partnerships, Molecular Partners, that's really in our DNA. And we always use collaboration. We had several just on ensovibep but also -- and I'm talking about academic collaborations, clinicians, also pharma and biotech collaborations to advance what we're doing and always tailored to each individual program. And moving now to Slide number 5. This is a pipeline overview, and you see the whole pipeline from Ensovibep Radioligand therapy the lower two boxes, that's where we're really investing in new ideas. So in fact, there you see mostly oncology but also some additional infections to these work and where I will spend time in 317, 533 and the Abicipar and Radioligand Therapy. Abicipar will be the last one I will cover. Let's start with 317, the clinical candidate that is now in Phase 1. What are we trying to achieve? Immuno-oncology is great but too few patients actually can profit. And that's where -- the problem is that the immune system, the immune activity in the tumor is not strong enough. And CD40 is a target that activate immune cells. It sort of heats up a tumor that a, call it cold tumor could become a hot tumor. The problem with CD40 is if you heat up the whole body, you have side effects and your dose-limiting side effects at rather low doses. What we're trying to do is we're taking a DARPin binding to FAP and CD40. FAP is tumor local multimer and if FAP binds in CD40 at the same time, that causes the CD40 on immune cells to cluster and activate. We get intra-tumoral immune activation without systemic toxicity. That's the aim. We have shown that preclinically, we have shown with 310 that the FAP module actually goes to the tumor and can cluster 4-1BB in that case. And now we have reached a dose level without DLTs, where others actually had to stop before they reach that, that's the 1 milligram per kilogram dose. So we're excited about that, and we are filling those escalations, and we're hopeful to also reach the next doses going forward, and I have a slide on that. While the safety is obviously key, and that may be the unlocking event. We're also looking into PD markers. So can we see those cells activated than we did through parabiopsy and as I was speaking about strategy, we will likely partner this asset as we cannot then go into combination trials, that's something then for next year? Just a reminder on Slide 7, we're also giving a bit more clarity on doses. We started with a very low dose, 0.03 milligram. We ramped up now to the 1 milligram per kilogram cohort. That's where we are. We will try two things here, go to a higher dose and also more frequent dosing, obviously, always looking at safety and the PD. What is -- why do we do both every 3 and every week, that's also the partnering dimension as in combination trials, you want to have the flexibility to go more often is the partner product is given more often and to Q3 weeks would allow you a more extended less frequent dosing, but then you can actually choose what you want to do. And I think partners will very much respect this extra activity. Let's go to the -- yes. And so kind of we're recruiting, and we will update as we go. So let's go to the next program, which is 533. This is an admitted key driven selective killing instrument for blast and leukemic stem cells. What's the problem? The problem is AML remains a deadly disease. Leukemic stem cells are the driver while blast or columns killer. We need to kill both, but we have to do a focus on the leukemic stem cell. They are really difficult because they're very less sensitive to chemo. They are -- they don't have good strong surface markers. And what we have now tried to do is the following. LSC. So, Leukemic stem cells and blast, they do express CD33, CD70, and CD123. CD70 is rather specific. So there, we take a high affinity DARPin 33 and 123 are also in healthy cell. So we go for lower affinity. That's what we call optimized affinity. So we tried to kill those cells that have either 70 and 33 and 123 and not the mono 33 and 123. And that would then open a therapeutic window that we can use MP0533 in AML set for targets that usually have a very narrow or even closed window and others have tried in sales. Preclinical results show that, that works we also could show the preferential timing of leukemic stem cells and blast in ex vivo patient samples, and that's the strongest data you can get. That's what we say is high translatable value as we take samples from these patients and could show the differentiator leukemic. First, in human, we're very excited for that. So we're progressing towards that moment, and we will give you an update at ASH. I have a slide on that. How will the trial look? This is a bit more information. It's AML and high-risk MDF patients. Inclusion criteria are listed here, also exclusion criteria, which is not to be underestimated and you see we'll try to include around 20 to 45 patients. Primary endpoint is safety and tolerability, but main secondary endpoints are also efficacy. We do believe that this molecule will show itself in the Phase 1, and we will know if we have a drug candidate in hand or not. Very different to 310 or 317 that needed to have much longer clinical trials until they did show value. Again, trial initiation plans for late 2022. And as I have pointed out before, Slide number 10, the ASH event. So that's really the holy curtain raiser for the program we want to bring together key experts and also with you discuss how they see the program and where the value of it will be. A few words now to Slide 11 on Radioligand Therapy. So we all know radiation is a very good way to kill tumors. We also know it is very limited scope to tumors that are well localized. And I think they can do up to 5 lesions. But then it's done. The delivery of radiation with small or large therapeutic modalities like antibodies or peptides, can work but is restricted. We believe the DARPin could really bring a more general solution. It is small and ultra-high affinity and it can bring the radiometric for high accumulation in the tumor, very fast half-life, so limited systemic exposure, good penetration through the size and high affinity will keep it at the tumor longer. What we're now working on is really the kidney exposure, so limiting the kidney exposure. That's work ongoing. We have demonstrated the penetration at the affinity part. We have validated indirectly with the collaboration with Novartis and kind of ongoing is optimization for kidney exposure. And then when we're there and we are kind of moving forward, we will also work on first candidates and announce those ideally, I hope I can see standing here and do that next year. Just two slides on the science as we are excited about that. So I was before pointing out the antibodies and the peptides. So low molecular weight compounds are usually peptides or peptide derivatives. Antibodies are good, but they are large. So they have less tumor penetration, and they also have a higher exposure to normal tissue as they do circulate very long. And unfortunately, as antibody fragments up to single changes at least don't bring the deep tumor penetration. They're too large. You have to go below 20 kilodalton, and that's where DARPins are. Now peptide, low molecular weight compounds, they are -- have many benefits but usually, they don't have the super high affinity and they're also restricted to some targets. So that's kind of exactly the sweet spot where we think we can actually have all the benefits of the antibody combined with the benefit of the small size. I'm just going to Slide 13 that you understand how such a flow would look like. We have ritual with the tumor. We infuse the drug. These are not one for one, not half last extended, so no HSA DARPin. The drug, it's a lot for the whole body goes everywhere also into the tumor and deep into the tumor. We stopped the infusion. The drug excreted very fast through the kidney. This is first kidney pass so literally within an hour or so the body has no DARPin or radio activity. And we actually, with the high affinity, we stay in the tumor for a long time and the radiation can do its job. We're very excited about this. Obviously, we can do that alone. So we're also speaking with companies that have radioligands and that also work that is ongoing by our collaboration and alliance team. With this, I will kind of stop here, and I'm happy to hand over to Andreas to give you a bit more flavor on the financials where we stand. Andreas, floor is yours.

Thank you, Patrick. I hope you hear me well. We had to switch to mobile connection. With that, I'm very happy to give you some background on the financials, which look very, very good for the first half year as well as we have a very strong balance sheet. So in the balance sheet, we have CHF 285 million in cash, as Patrick was saying, gives us a very substantial long runway to execute our strategy. In the first half of '22, we booked CHF 184.5 million in revenue and the big bulk of that is on it was coming from Novartis primarily due to the 150 million milestone payment for the exercise of the Ensovibep option. With that, we generated high operating cash from -- mainly from this collaboration and total CHF 151 million in H1 '22, resulting in operating profit of CHF 146. 3 million and a net profit of CHF 148.6 million. And as repeatedly said, we are funded into '26. And we also updated the full year expense guidance, it was CHF 75 million to CHF 85 million range. We reduced it now to CHF 70 million to CHF 80 million. I would say the midpoint of that is certainly a reasonable assumption to take for full year expenses. And last but not least, we also issued 3.5 million treasury shares. Actually, that was yesterday. And this is a result of our shelf filing, which we did in July '22, which is very customary for U.S. listed companies to do that one year of the listing. Then I move to Slide number 16, the key figures. Again, a bit of the same, but this time compared with the first half of '21. Revenues, again, much, much higher than last year, as you see and a bit more background on the details out of the CHF 184 million, CHF 168 million came from Novartis and the rest from the other collaborations. Total operating expenses, CHF 38.3 million. That's about CHF 1 million less than the first half of '21. The CHF 38.3 million were invested into personnel of about CHF 20.5 million, external R&D, CHF 9.5 million and other expenses of CHF 8.3 million. Operating result, again, CHF 146. 3 million versus an operating loss of CHF 34.8 million last year. Net financial result is CHF 2.3 million and we made a profit there, mainly driven by the non-realized currency gains on the U.S. dollar position, resulting into a net result of CHF 148.6 million, as I said before, versus a loss of last year. One thing to add, we have not been paying taxes because we have losses carried forward in the balance sheet. Last year, we had CHF 212 million tax losses carried forward of course, we could use now a big bulk of that and so that we didn't have to pay taxes, and we still have some tax losses carried forward left. Yes, net cash from operations, CHF 151 million versus a net cash out of CHF 52.5 million last year, the first six months, cash balance, CHF 285 million, which is CHF 110 million more than a year ago. And FTEs grew a bit, but not much from 158.3 to 164 FTEs on our payroll. Then I'll move to Slide number 17. The balance sheet. It's very simple, but very remarkable, we have its debt free, obviously, driven by the cash balance, CHF 285 million in terms of some other assets on the asset side and on the right-hand side, equity very strong, CHF 266 million and some liabilities of CHF 33 million. But CHF 14.4 million of these CHF 30.3 million are not through liabilities. It's the CHF 14.4 million or so-called deferred revenues from the NIBR collaboration for radioligand therapy. The CHF 14.4 million, maybe that's more for the analyst to know they expect six of them to be recognized in the second half of this year. CHF 5 million in '23 and CHF 3 million in '24. Obviously, this is subject to the progress and can always change. But just to give you a bit of a guidance so that you can make your mass properly. With that, I move to the guidance '22. Again, just in summary, I expect total expenses of CHF 70 million to CHF 80 million for full year, of which around CHF 9 million are noncash effective costs, and yes, the CHF 285 million gives us a runway into '26, and all this excludes any potential receipts from current or potential future partnerships. And obviously, everything is subject to progress and changes of pipeline as well as, of course, as we all know, the financial market sometimes can also make a difference. With that, I hand back to Patrick, and I'm sure you might have one or the other question at the end.

Thanks, Andreas. And before we actually go to questions, in summary, I would just have two or three slides on Abicipar, which is a long-standing program was our first to go to the clinics. It was with Allergan. It was then [indiscernible] transition, and we have regained brands. Let me just quickly recap where we are with that. So it's Slide 20 now. So as far as the Long-Acting Anti-VEGF in Wet AMD, obviously, with potential in DME and RVO. It's a huge market, and there is a new player out there, a new winner called Faricimab, [indiscernible] and that's a fixed 8-week and a treatment extend to 16 weeks. The treatment extend looks great in clinical trials, but in real-world setting, patients lose vision. So we actually think that our 12-week dosing now in the history of Abicipar actually could even be at least a good competitor to faricimab. So 12-week dosing 6, nobody has shown so far. You all know that the problem was or is inflammation, and that led to a complete response letter as the risk reward was not giving, especially as Novartis, they who had also inflammation problems, and that did change their tone at the agency. So we've got a complete response letter, which ended in Abicipar being returned last year to Molecular Partners. Now we believe that we have identified and we can remove the inflammation causing agent that was actually work done by an ex Allergan team and also some support by AbbVie and our guys. And then our team went to the FDA just to find out what would it take to resurrect the drug. This is a single safety trial versus Eylea. It's a 40-week readout with around 550 patients. And we are not going to run that trial. But with that, we have something in hand that we can at least offer to partners. Just Slide 21 to recap the data because it is amazing data. And it also once again shows that DARPins are highly effective. What you see here is central retinal thickness. That's the, call it, biomarker that cannot lie. Sometimes visual acuity are a bit difficult because you can get a bit lucky in that, but the central retinal thickness is a hard fact. And you see with 10 injections of Abicipar, you actually end up more or less exactly at the same spot after two years as 25 injections of Lucentis. So the fixed dosing regime works. I don't want to take away the 15% inflammation, that's all not good, but we do believe that we can solve that. And again, we're not going to move that forward ourselves, but we're speaking to interested parties, and there's also interest from investors to fund that trial as it is a single trial towards approval. So those are the avenues we're looking into. For the experts in business and finance, no, there is very high question marks here if this deal can happen or not. We just wanted to raise it to your attention that we are having such discussions as we felt, people kind of have totally disregarded that opportunity. Good. With that, I want to come to the outlook. And so we touched EUA's open submitted. We're certainly waiting since next fall and winter. Let's see. Let's hope we don't need it. But if we do it there. The full Phase 3 is still under discussion that a difficult situation for everyone. Nobody knows how to run such trials at the moment. We're working on it, where we have a next-generation 1 should end the pandemic, raise from the current one. 310, we got back that the tumor local T-cell activator we, as Molecular Partners, will conclude Phase 1 and then shelves to see if there are applications if others validate 4-1BB as a good target, which has not happened so far. So that's one that we keep, but we don't invest in going forward and see how for 4-1BB as a target develops. 317, CD40, we talked about initial results first, second half of this year and then more to come early next year and definitely slated for partnering. 533, that's where we want to find to signal ourselves, highly excited that the trial up this year to collect data next year. The basic part, we just touched on, and then Radioligand, but also other things we're doing kind of really exciting times for building value in our pipeline, and we really look forward especially to next year where we can unveil a few of our programs that are then likely going to reach candidate stage and we'll be ready to be discussed with you. Most importantly, cash in to '26. I don't think many biotechs at this point in time can say that. We are well funded. We are less hit by the biotech crisis. We're in a great situation, proven technology, super motivated team. We know we can do it, and we have the need to do it. So really a good moment for us, and definitely a moment where we see a lot of value ahead of us. With that, I really want to thank the team that was in New York or on the call, but actually the entire Molecular Partners team. They are super energetics. They know what they are doing. I'm repeating myself, but it's so important in a biotech rises to have such a team that is not thinking twice but executing the cash and with the cash that we have. I also want to thank all of our collaborators. So we're not doing this alone. We're working with clinicians. We're working with partners, with suppliers, and all of them are really helping us to move forward. And especially, we want to thank the physicians and the patients in our trial because that's really why we get up in the morning. We are a totally patient-centric, patient-focused company, and that's linking myself back to my intro when we see that we can bring value, we know we have the right job. And with that, I thank you for your attention, and I will open for questions.

[Operator Instructions] Our first question comes from Georgi Yordanov from Cowen and Company. Please go ahead.

Hey guys, congratulations on all the progress. And thanks for taking my questions. So maybe starting with 317, what should investors expect or I guess, focus on from the data disclosure later this year? And maybe can you just walk us through how do you expect to use this initial data for a go, no-go decision for further development? And then just on 533, as we're thinking about the Phase 1 trial, do we have any data about the percentage of AML blasts that express at least two of these markers? And do we know whether this ratio is also seen in heavily pretreated patients and the specific patient population you're targeting in the Phase 1 trial? And maybe if you can talk about whether or not you expect to see monotherapy activity. And then we have just one follow-on question.

Sure. Thanks, Georgi, all good questions. So I'll start with MP0317. And it is not so easy to kind of -- what data will we share that is sort of interesting or valuable for, let's call it, analysts and investors. And what we want to do is partner up. So most of the data, we will not actually share with the public, but in partnering discussions. And what we are aiming to do is show that the drug active and show that it does not have the side effects that other tumor-targeted activities of CD40 has. So many companies are working on CD40, people believe that there is value in that pathway, but they can't unlock it. So the first thing, and that's why we are really also excited today to show that 1 milligram is that you actually can dose into a region where you hope you actually have activity. Then the PD markers that paired biopsies, that's a bit more up in the air because you have, you can really show how that works. But I think the safety is key. And with the paired biopsies, that's what we need to have to convince partners to then enter into the discussions and in the end, do a partnership with us to look for combination trials. So the data we will share to the public is maybe much more limited than what we share with potential partners. And those partnering these discussions are certainly starting up. And the good thing is the industry likes and beliefs in the target. So we don't -- we can sort of ask those companies, large ones, midsized pharmas that are on that pathway and the interest is definitely given to look at the data and then let's see when the data holds also partner. Now MP0533. The Phase 1 trial and you were asking kind of what is the percentage of co-expression. And I think the percentage is very high. So we're talking above 90% for sure. That's on the co-expression. And also the pretreatment. And here, we have an interesting situation as one of the successful drug there is venetoclax. Venetoclax actually drives CD70 upregulation. So we believe the right pretreatment can actually even help us to have more effect with our CD70 targeting domain that is in there. And so we actually do expect that we -- that most patients in principle will be able to profit. It won't be 100% for sure. But we definitely believe that the number of patients that have the phenotype to profit is above 50% that is. And so we are kind of looking into this and we will get the data. And to your last point is we do expect that we should see single agent activity. We actually need single agent activities. These are so deadly if we don't have even fast single-agent activity won't help. So we need to see this early. And the drug is designed to do that. I think the risk call it risk is maybe less on the targeting side and more on the T-cell side. The question is how many active T-cells that your patients have. And that's why you will see some of our exclusion criteria. Those patients that have no T-cells can also not profit. So we have to make sure that they actually have a good immune system that can be activated. I'll repeat myself. We expect data next year. I cannot say when it depends a bit which dose actually shows activity. I do have to say that we will start with a very low dose as we have no cross reactivity to monkey, so there's no formal monkey pox, so we have to start at a lower dose, but we definitely see fast dose escalation. I would invite you all to ASH. That's where the experts can answer all those questions, much more in-depth than I. And so I think that's a good repetition of the ASH event.

Thanks, Patrick. Georgi, its Seth as well, just to follow up on Patrick's point, you're asking about the amount of patients who have expression of these markers and he's right, it's a very high number. But you have to remember, the mechanism of action for MP0533 is avidity driven to activate the CD3 T-cell engager in the presence of either 2 or 3 of the expressed markers. So that high number would be any combination of those 3 markers resulting in that high number of expressing patients. Just to make sure that was clarified. Thanks.

Great. Thank you. And then just finally, on the radioligand assays also very interesting application of the DARPin technology. Maybe just briefly, are there any initial indications you feel like you could be differentiated in? And when would we be expecting the next milestone in terms of payment from your collaborator.

Yes. So indications, you're looking at really hard to treat tumors that are, let's call it, highly metastasized, so where kind of other let's say, approaches will not be ideal. So you have to go into that segment where you kind of -- where the highest value rise. The big milestone next year would be that we kind of come up with or come up. We're working on targets that we disclosed, which targets we're working on and maybe present the development candidate. And then it can be rather rapidly progressed towards the clinic. This is a moment DARPin and it just needs to be linked. So this is a rather type path forward. Milestones with Novartis, I can't comment about because that's going to fund this growth when they come. But I can say that the collaboration is going really well where we're kind of making very good progress, but on milestones and timing of that, I cannot comment.

Thank you guys. Thank you so much.

Maybe I'll just add that -- I mean if the radioligand space works, we're not in principle restricted to radioligand as warhead. For us, it's a great showcase to optimize the tumor to call a kidney ratio. And then we can also replace a radioligand with another drug conjugate. So if -- so we see this also a bit of a proof of principle for short, fast in, fast out, hit hard approaches, starting with radioligand, because there you see everything. You can follow it, you can do the science. And if that works, you can also then have, call it, spillover effect into the drug conjugate space, so DARPin drug conjugates. And we're not engaging yet there, but keep that in mind when -- if this works, there's more to come.

The next question comes from Richard Vosser from JPMorgan. Please go ahead.

Sorry, excuse me. Thanks for taking my questions. So just 2two, please. Just on Ensovibep, you mentioned the path forward and Novartis looking at a Phase 3 trial. How long do you think it will take for them to maybe work through that and get that started? Just some idea of time lines, if possible, would be useful. And then on Abicipar, maybe you could elaborate a little bit on the causes of inflammation and the processes to remove that information given the many processes we tried in the past, and if you have any data to show that, I don't know, preclinically or whatever with -- that the inflammation has gone in new material? Thanks.

I'll take the difficult question first, which is Ensovibep. So the problem with Ensovibep at the moment is that the end points that we had in Phase 2, which is hospitalization and death have changed. So you can't use at this point in time, you might use the same endpoint, but the number of patients you would have to include are very high. So that's not a straight path forward. Then again, we have variations of different viruses. And so it is really how would you prepare to be ready for the next barrier to come that you then have an agreed endpoint and you can run that trial fast. And I really find it difficult, and I know that Novartis is engage in that discussion. And I also know from other companies who are in that space, it's very challenging space to run trials. I actually get calls from others just kind of asking similar questions. How is it for you? I think we're all experiencing that that it is a bit an unchartered territory, at least for these, call it, early intervention drugs. This depends again on the variant of concern. If one comes back that this has higher hospitalizations, I think then it's much easier, then the drug is also more needed. If we are more towards the seasonal flu with less hospitalization, I think then that's definitely more difficult to design that trial. Timing when we will know, I cannot comment on, that's really something for Novartis. But again, the EUA is open. I think that's what we sort of -- this is an insurance policy should a really bad strain come up, and that's the way we see it for now. And then again, let's see how this drug can be developed once we know more about the variance that come. This will also depend a bit on the vaccines. You can think that now we will have Omicron vaccines. The Omicron vaccines will then give protection like Omicron, but maybe we'll then see a resurgence of the original variance again. And that maybe that spend the time for Enso. But that's me speculating here, and I'll leave it with that. For Abicipar, and I think that's a great question. So I can tell you what we found. So first of all, we have invested a lot in the purity. And the purity is really what the first thing we had to get right. And it was several iterations until we think now and if we can have our experiments to show that we are at a very, very good purity that should not cause inflammation. And then we have the conundrum that we have this high purity, but still inflammation, and that was the MAPLE trial. And we were a bit surprised that we had the 9% in MAPLE. And it now turns out that what was happening, and this is good and bad, it's actually a contaminant you introduced in the syringe, which is silicon oil. Silicon oil is used to lubricate syringes and with the DARPin that is pegylated, you can cause, call it, sub-physical particles that can drive inflammation, basically take non-silicon oil syringes, you can take that away. And we actually have shown that with very impressive animal data in rabbits. And Rabbit is -- has more sensitive eyes than humans and there, we really bring the inflammation down to quasi zero. So we're very fortunate to have sound what it was. It was not, call it, the DARPin was not there, but -- and it is not in the DARPin substance. It is in the syringe. So by all the material we have, we can actually use. So while it is, I'd say, not ideal there to find it out so late, at least this is something we can easily fix.

Very clear. Thank you.

The next question comes from Daina Graybosch from SVB Securities. Please go ahead.

A couple more in Ensovibep. I wonder if you can clarify whether you've looked in vitro and locate activity with circulating BA2 claim variants. The second question is, wonder if you could help us a little bit more with potential scenarios for Phase 3 if the disease doesn't come back. Are there any paths in terms of new end points? And how do you have to combine on top of standard of care? And I think I'll leave it there. Thank you.

Sure. So I think I'll start where we're not active, just to remind everyone, we're super transparent there. Then 1 mutation where Ensovibep will not be active is the 486 mutation. We always knew that's the Achilles heel, you find that in the variance 4 and 5. But the VA2 does not carry that mutation so we see activity there, and we actually have shown that. So that's sort of the good ones. And if now the boosters come with more Omicron variants, I think that's definitely not a bad thing for us. So in principle, we believe that the drug should be active has a good chance to be active on future variants. Let's keep it with that. We never know what happens to how it pans out. I think the other one is really a deeper discussion, and I don't think anybody knows how this will be developed also at Novartis. Very different angles. I was on the phone also with Lutz, the Head of Global Health because it is with Global Health and it is or might be a real global health issue. So there's different ways to look at this. Now Novartis at this point in time, will not comment on that. I think we have to understand that. We have to respect that. And that is what it is. They have done a great job in bringing forward. I can tell you they have done a great job on manufacturing. So the manufacturing is flawless, and that's also a good validation for the whole platform just at a conference. And just the ability to manufacture large amounts of trispecific, bispecifics or whatever, that's actually really a differentiating feature that our platform has that sometimes goes undervalued. So just out of that. But on timing and on design, I think that I really need to leave in Novartis. So thanks, Daina, great question. Unfortunately, not for me to ask.

Thank you.

The next question comes from Jo Walton from Credit Suisse. Please go ahead.

Thank you. Just a few financial questions really. Firstly, just to understand your freedom to operate in radioligands outside of Novartis. So all the work that you're doing at the moment is effectively within that collaboration. But you talk about your proprietary work and freedom to operate. When would you expect everything to be with Novartis for the next couple of years? Or when would you expect to be able to do something on your own? My second question is just a tiny one on Ensovibep and Swiss authorities who put money up there. Is there a chance that the Swiss -- that there is any progress outside of the U.S.? I know we're incredibly focused on what the FDA wants to do. If there were to be some sort of resurgence in Europe, could there be a small amount of income that you could get from perhaps Switzerland this year? And my final question is, one, really on finance. So you are spending CHF 70 million to CHF 80 million a year, and that's -- and there's a bit that's noncash within that. And you say you've got funding to 2026. But that doesn't really allow for much of a step up in your spending. And you're at the very, very early stages with a lot of your products. And I would imagine that you wanted to actually do more of the work yourself. So can you just tell us a little bit more about your ambition as to where you would want to do more work yourself, which will keep more work for yourself, but will be expensive versus your willingness to partner?

Jo, really great questions. Let me first focus on the freedom to operate, as you call it. So what we have license to Novartis is the exclusivity for radioligand therapies and mono activity on two individual tumor-associated antigens. So two column targets are with Novartis. Molecular Partners have the full right to do anything on all other targets in regulating therapy. So there's absolutely no exclusivity going on with Novartis. So we can tomorrow start type programs if we want. So we actually have, call it, pre programs. So we have research activities on targets, obviously, ongoing as we speak. And so that's important. So we're not linked to Novartis. We collaborate with Novartis on to targets. It also makes maybe sense because what type of radioligand might be indication-specific might be targeting specifics. So to be 2 exclusive in the beginning to 1 ligand is maybe not the right way to go. Then taking your question on Ensovibep outside U.S., it's a very interesting one. And I actually haven't thought it through. But if we have, let's say, a wave of a variant in a specific country, how will that pan out? I don't know, but it's definitely something I will bring up in the market to take a local wave in India or wherever and works. And I think there is a moral obligation to make that drug available to that country. So I'll bring that up and let's see, and maybe you ask them to because it's important. I mean, and I haven't thought it through case you're right, the approval of the EUA is in the U.S. and many countries will follow the U.S. But what changes if you have a local search? I don't know, but it's a great question. Your last question on kind of how far does the money bring us? And I love it because I can actually explain how capital effective we are. And our strategy, keep in mind, we're now looking for programs at MP0533 like also radioligand after a few patients we will know in principle, if this drug works. We don't have to do on Phase 1 safety trial and combination trials. So -- and manufacturing is not that expensive. So with a rather limited amount and that is in those CHF 70 million to CHF 80 million per year, we can bring compounds to the clinics. We can manufacture, we can run those trials. And then when we have the signal, you're absolutely right. If AML hits -- if we have a draft it, we think we need to move forward then our cash will not be sufficient, then we would have to raise new cash, but that's after that signal. So this is a worst-case scenario, if you want, that we will not have a signal too late. In that case, we hit early share price been reacting, then we would also have to raise capital either through a partnership or through a category that we will have to find out depends also a bit which one of the compounds hit and how it looks. But so we feel we can run into '26. We have several also chances of clinical readouts that can bring us kind of where we need and then obviously, we can really take the strategy and then the capital need. If we go into Phase 2 and 3, for sure, that will not be enough.

Thank you. And then just I'm being a little sick here. Just one more clinical question. We just didn't understand your comment about how we wouldn't see much data on MP0317 because most of it would be based on discussions with partners. Isn't it to your advantage to make everything as obvious as possible in order to bring the partners in? Or are you already having good discussions with partners, which is why you won't need to show it to us, the independent investors?

Yes. I think you see those companies who know CD40, we are in contact with them anyways. So yes, we might show data. But if you go for a public publication or, let's say, way to AACR or whatever to publish, like we can't wait, we have to share that with those partners as we get to data. And it will also be likely, hopefully, at least a competitive process, and it actually seems to be that way so people are asking because this is a target people are following. So that was my comment. We will also show you all the data, but we will definitely give a preferential look to those parties who are interested in the transaction.

And you're still expecting to show us some data late this year?

I mean the sum data will be definitely -- for this year, mostly safety data. Yes, we definitely can give you an update. We're now in a dose cohort 1 milligram per kilogram and you can go to other CD40 and you will see that not many have reached 1 milligram per kilogram. So we're already at a dose. That's why the disclosure today is, I would say, that meaningful. We will dose escalate to higher doses. We will keep you posted. We will go to more frequent injections. And then the, call it, maybe more biomarker data showing that the immune cells locally react is something more for beginning of next year. We will definitely keep you guys updated. But there is a preference, obviously, also to show to partners.

But Jo, this is Seth. Directly to your point, yes, we've submitted to Scientific Congress for the second half of this year based on the accumulation of data that we're already gathering now. And yes, the plan is to have person human data displayed publicly in Scientific Congress in this year.

Thank you very much.

You can ask what is it's [indiscernible].

We'll tell you when we get accepted.

Good.

[Operator Instructions] Our next question comes from Zoe Karamanoli from RBC Capital Markets. Please go ahead.

Thank you for taking my questions. Two questions from me, please. The first one, from the presentation today, it sounds like you're putting more resources and focus on radioligand therapy. So I'm just wondering, does this mean that it is more likely the next candidate that will be added to your pipeline to be radioligand rather than another multi DARPin? That's the first question. And then second question around MP0310. I'm wondering if you can give us some more color on your decision not to pursue further development. And I imagine that this means then that you're not looking to partner this asset anymore. Thank you.

I'm glad you asked. So we took the radioligand because it's also very different to the multi-DARPin approach. So we also have exciting multi-DARPin approaches that are not behind radioligand therapy. So -- and actually in oncology and in virology there. So if it is we will find out. But we're making good progress on radioligand therapy, and it is a bit an antithesis to the multi-DARPin so that's one reason we wanted to also highlight at this time. But it makes good progress, but I'm not saying the others are not and it might well be that we choose another one at next candidate and not this one. So -- or even two in parallel can happen. So -- but thanks for asking. So we're not trying -- at this point in time, it's still signal seeking its research, nothing has -- the dies have not been rolled on which program is the next one. MP0310, I think that's one that, again, it came back. It had likely -- I mean, it was a strategic decision, but possibly also a bit driven by this overlaying toxicity of IRRs of T-cell engagers and this molecule makes sense. Again, the repartnering that could be one option. It's just that 4-1BB at this point in time, I would say, is as hot as CD40. And I think there's a few trials, especially the Roche trial. They have also the FAP 4-1BB that is ongoing. And our feeling is that at this point in time, it's more -- better investment time in MP0317, so, I call it, better target for the moment. There is more impact in -- and 4-1BB is rather underwhelming in this combination for now. We did not have a lot of activity so far. It doesn't mean the drug doesn't work, but it needs the combos, but it's also not that partners are kind of knocking on our door. If that was the case, we would definitely also re-partner. But I think we just need a bit more data out there that would validate the targets. So let's put it like that. We have it. It's -- call it on the shelf. We'll finish the work. And then 4-1BB especially with FAP has a revival, we have it. And if not, I think we have other places where we get better return on investment.

Thank you.

There are no more questions in the queue. This concludes our question-and-answer session. I'd like to turn the conference back over to Patrick Amstutz, for any closing remarks.

Thanks for all those great questions. It's great to have you guys out there asking those and bringing the story across to investors. So thanks to all my analysts here, and it's a pleasure to work with all of you. Thanks to my team also all out there, getting everything ready and prepared and definitely looking forward to a very exciting end of this year, but especially also '23. And a lot of the earlier research signs will be made more public. And also, I can also say that I will bring my team more often to such calls. So as of next year, I think a bit larger group will do the communication efforts. Looking forward to that, I'm also very much looking forward to working with all of you in the future. Thanks. Take care.

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