Affimed N.V. (NASDAQ:AFMD) Q1 2023 Earnings Call Transcript

Affimed N.V. (NASDAQ:AFMD) Q1 2023 Earnings Call Transcript May 23, 2023

Affimed N.V. beats earnings expectations. Reported EPS is $-0.16, expectations were $-0.21.

Operator: Good day, everyone and welcome to Affimed’s First Quarter 2023 Earnings and Corporate Update Call. At this time, all participants are in a listen-only mode. After the presentation there will be a question-and-answer session. [Operator Instructions] As a reminder, today’s conference is being recorded. I would now like to introduce your host for today’s call, Alex Fudukidis, Head of Investor Relations at Affimed. Please go ahead.

Alex Fudukidis: Thank you, Liz and thank you all for joining us today for our first quarter 2023 update call. Before we begin, I’d like to remind everyone that we issued two relevant press releases earlier today which can be found on the Investor Relations section of our website. On the call today, we have the members of our management team, including Adi Hoess, our Chief Executive Officer; Andreas Harstrick, our Chief Medical Officer; Arndt Schottelius, our Chief Scientific Officer; Wolfgang Fischer, our Chief Operating Officer; Denise Mueller, our Chief Business Officer; and Angus Smith, our Chief Financial Officer. The team will be available for Q&A after the prepared remarks. Before we start, I’d like to remind you that today’s presentation contains projections and forward-looking statements regarding future events.

These statements represent our beliefs and assumptions only as of the date of this call. Except as required by law, we assume no obligation to update these forward-looking statements publicly or to update the reasons why actual results could differ materially from those anticipated in the forward-looking statements, even if new information becomes available in the future. These forward-looking statements are subject to risks and uncertainties and actual results may differ materially from those expressed or implied in these statements due to various factors, including but not limited to, those identified under the section entitled Risk Factors in our filings with the SEC and those identified under the section entitled Forward-Looking Statements in the press release that we issued today and filed with the SEC.

With that, I’d like to turn the call over to Adi. Adi?

Adi Hoess: Thank you, Alex and good morning everybody. Thanks for joining our call today. I’ll start with reviewing key highlights and as Alex has already mentioned, I’m very pleased to report that we continue to make progress on our key priorities across the pipeline. As you can see now on Slide 5, first we are extremely excited to announce the FDA clearance of our investigational new drug application for the combination of AFM13 with AB-101. And we will call this study LuminICE-203.

derived: Across our organization, we’re committed to advancing the development of this therapy as fast as we can. The efficient and quick execution of this trial assessing the combination therapy of AFM13 and AB-101 is a key focus for our company. Wolfgang Fischer, our Chief Operating Officer will go into the details of this study design and timing later in the call. Andreas Harstrick, our Chief Medical Officer will update you on the rest of our clinical programs. Second, we have continued to advance AFM24 clinical studies towards data milestone. AFM24 is our novel innate cell engager targeting EGFR and we believe it has the potential to be a transformative therapy for many patients with EGFR expressing solid tumors. We now plan to present interim data from the monotherapy expansion cohort at the upcoming ASCO meeting on June 3.

Specifically, we will be presenting data from the non-small cell lung cancer cohort, which has been accepted for poster presentation and data from the colorectal cancer cohort, which has been accepted for online publication. The data will include about 15 patients from each cohort. The full text of the abstract will be published later this week and will only include data as of the December 2022 cutoff date. The data in the NSCLC poster will include data from a later close date. We plan to host a call with the financial community to review the monotherapy data in more detail as well as provide a strategic update on the AFM24 program. The virtual event will be held on Saturday, June 3. Details of the call will be included in our abstract release on press.

Finally, our Phase 1 study of AFM28 monotherapy is proceeding quite rapidly. We’re pleased to announce that we already — that the first dose cohort has already been cleared and the study is now actively recruiting patients in the second dose cohort, which means all our pipeline programs have significant potential to address unmet medical needs and improve outcomes for a variety of hematological and solid tumor indications. With this, we are uniquely — quite uniquely positioned to drive shareholder value in the near-term. Before now I hand over the call to Wolfgang, I’d like to mention that considering the current market conditions, Affimed has had to make a difficult decision to control our operating expenses by reorganizing our company to focus our efforts primarily on our clinical programs.

As a result of the reorganization, we have reduced our full-time equivalent headcount by approximately 25%. We took extra care to ensure that this reorganization will not impact the development of our three clinical programs, and we believe we are well positioned to meet key data milestones for all three programs within the next three to 15 months. This now includes data from AFM13 in combination with AB-101, data from all three AFM24 clinical studies and data from AFM28 mono in AML, as we continue to make progress with a dose escalation. And with that, let me turn over the call to Wolfgang, who will provide additional insights on the progress we’re making in our pipeline. Wolfgang?

Yago: Across our organization, we’re committed to advancing the development of this therapy as fast as we can. The efficient and quick execution of this trial assessing the combination therapy of AFM13 and AB-101 is a key focus for our company. Wolfgang Fischer, our Chief Operating Officer will go into the details of this study design and timing later in the call. Andreas Harstrick, our Chief Medical Officer will update you on the rest of our clinical programs. Second, we have continued to advance AFM24 clinical studies towards data milestone. AFM24 is our novel innate cell engager targeting EGFR and we believe it has the potential to be a transformative therapy for many patients with EGFR expressing solid tumors. We now plan to present interim data from the monotherapy expansion cohort at the upcoming ASCO meeting on June 3.

Specifically, we will be presenting data from the non-small cell lung cancer cohort, which has been accepted for poster presentation and data from the colorectal cancer cohort, which has been accepted for online publication. The data will include about 15 patients from each cohort. The full text of the abstract will be published later this week and will only include data as of the December 2022 cutoff date. The data in the NSCLC poster will include data from a later close date. We plan to host a call with the financial community to review the monotherapy data in more detail as well as provide a strategic update on the AFM24 program. The virtual event will be held on Saturday, June 3. Details of the call will be included in our abstract release on press.

Finally, our Phase 1 study of AFM28 monotherapy is proceeding quite rapidly. We’re pleased to announce that we already — that the first dose cohort has already been cleared and the study is now actively recruiting patients in the second dose cohort, which means all our pipeline programs have significant potential to address unmet medical needs and improve outcomes for a variety of hematological and solid tumor indications. With this, we are uniquely — quite uniquely positioned to drive shareholder value in the near-term. Before now I hand over the call to Wolfgang, I’d like to mention that considering the current market conditions, Affimed has had to make a difficult decision to control our operating expenses by reorganizing our company to focus our efforts primarily on our clinical programs.

As a result of the reorganization, we have reduced our full-time equivalent headcount by approximately 25%. We took extra care to ensure that this reorganization will not impact the development of our three clinical programs, and we believe we are well positioned to meet key data milestones for all three programs within the next three to 15 months. This now includes data from AFM13 in combination with AB-101, data from all three AFM24 clinical studies and data from AFM28 mono in AML, as we continue to make progress with a dose escalation. And with that, let me turn over the call to Wolfgang, who will provide additional insights on the progress we’re making in our pipeline. Wolfgang?

Wolfgang Fischer: Thank you, Adi. Good morning everybody. As Adi mentioned, we now have the IND clearance from the FDA to take AFM13 into a Phase 2 study in combination with the AB101 NK cells from Artiva. This study will build on data from the AFM13-104 study, which we reported at ASH in December, 2022.

derived: In addition, the treatment was well tolerated with no cases of cytokine release syndrome, immune effector cell-associated neurotoxicity or graft versus host disease observed. Since we disclosed the data from the AFM13-104 study, we have had conversations with treating physicians and we know that there is a lot of interest in the medical community about the possibility of having such treatment available to patients. In the past we have also shared with you information about why we are confident in the combination of AFM13 with AB101 as outlined on Slide 8. We believe Artiva’s AB-101 NK cell has all key features that will allow for similar clinical results as those we saw with the combination of AFM13 with the MD Anderson NK cell, and very importantly, it meets critical commercial requirements.

A new IND is for a Phase 2 clinical study to investigate AFM13 in combination with AB-101 from Artiva in patients with relapsed refractory Hodgkin lymphoma who have exhausted all standard of care therapy including chemotherapy, brentuximab vedotin, and the PD-1 checkpoint inhibitor. As is shown on Slide 9, the primary endpoints of the study are to assess the antitumor activity by objective response rate, including complete responses and partial responses. Secondary endpoints of the studies are to assess efficacy, probability of response, safety and tolerability, as well as immunogenicity of the combination therapy. Now on Slide 10, we introduce the design of the clinical study, which as already mentioned before, will be called LuminICE-203.

The study will begin with a safety run-in phase. During this phase, we will evaluate different combination doses of AB-101 and AFM13 in four cohorts of six patients each. Now let’s go through the cohorts. Cohort one will evaluate a dose of 2 billion AB-101 cells administered weekly combined with AFM13 200 mg weekly. Cohort two will be exactly the same, except that the AFM13 dose will be 300 mg. Cohort three, there we will evaluate the dosing regimen of AB-101 of 4 billion cells in week one, followed by two weekly doses of 2 billion cells in each case combined with 200 mg AFM13. And finally, cohort four will be the same as cohort three, except that we will administer AFM13 300 mg weekly. During the run-in phase, we will evaluate the safety and preliminary efficiency of these dosing regimens with the goal of selecting two dosing regimens for the dose optimization phase, which follows assignment two stage design.

The study has then the potential to continue with one or both cohorts from the optimization phase into the expansion phase. The trial will enroll up to 140 — 134 patients, and currently all our clinical sites are located in the United States. As you can see, there is also an exploratory cohort with CD30-positive PTCL patients, which will include another additional 20 patients. On Slide 11, we show the treatment regimen. In LuminICE-203 patients will be treated with lymphodepleting doses of fludarabine 30 mg per square meter per day and cyclophosphamide 300 mg per square meter per day prior to the first AFM13 AB-101 dosing. This dose and schedule of lymphodepleting chemotherapy is based on other cell therapy studies that have demonstrated the safety and effectiveness of this regimen, including our own study AFM13-104.

As you can see on the slide one treatment cycle will consist of three weekly co-administered doses of AFM13 and AB-101, followed by three weekly doses of AFM13 monotherapies, up to three cycles of treatment. Looking ahead as outlined on Slide 12, we are very focused to get the study up and run-in Q3 2023. During the IND process, we requested feedback from the FDA on the suitability of the study to support an accelerated approval in Hodgkin lymphoma. As a recommendation of the FDA in parallel to advancing the study, Affimed will have further discussions with the agency on the requirements for registration application in the U.S. Finally, we expect to be able to share data from the safety run-in phase during the first half of 2024. As a final note of this discussion about the combination of AFM13 with AB-101, many of you have asked us questions about when Artiva plans to share data from AB-101 in B-cell lymphoma.

We wanted to bring to your attention that Artiva is planning on presenting data from the AB-101 Rituximab combination study in a poster presentation at ASCO on June 5th. Now, I’ll hand over the call to Andreas to discuss the updates for our other clinical programs. Andreas?

Andreas Harstrick: Yes, thank you Wolfgang, and also welcome from my side to everyone on the call. Let’s now move to AFM24 and as we show on Slide 13 at ASCO Affimed will present initial data from two expansion cohorts of the monotherapy study of our EGFR targeting innate cell engager AFM24. As mentioned by Adi, we have been accepted to present interim results from the EGFR mutant non-small cell lung cancer cohort in a poster presentation and in addition, interim results from the colorectal cancer cohort have been accepted for online publication. As you will be aware, full abstracts for ASCO and for both of our cohorts will become available on May 25th. So for today, we are limited in what we can share with you. However, what we can tell you is that the data reported on May 25 in the abstracts will have a cutoff date of December, 2022.

At ASCO for the non-small cell lung cancer cohort, we will share updated data with a significantly later cutoff date. Specifically, we will present data from 15 patients from each of the non-small cell lung cancer and the colorectal cancer cohorts. As Adi mentioned, we are also planning to host a call with members of the financial community to discuss the data and to review our AFM24 strategy going forward. Our second AFM24 study, the combination of AFM24 with atezolizumab, we are continuing to treat patients with non-small cell lung cancer, EGFR wild type, gastric, and gastroesophageal junction adenocarcinoma, and pancreatic, hepatocellular, and biliary tract cancers in three separate cohorts. The dose escalation portion of the study is complete and we have confirmed the 480 mg weekly dose of AFM24 as the recommended Phase 2 dose.

Enrollment in the expansion cohorts is ongoing and the treatment continues to show a well-managed safety profile. As shown, we plan to provide data from this ongoing study in the second half of 2023. The second combination study of AFM24 is investigating the combination of AFM24 with SNK01 ex vivo expanded and activated autologous NK cell product from NKGen Biotech. Here, both agents are given weekly to patients with non-small cell lung cancer, EGFR wild type squamous cell carcinoma of the head and neck and colorectal cancer. We continue to enroll patients in the dose escalation phase of the trial and expect to have this completed within 2023. Also for this trial, we plan to provide data in the second half of 2023. Now moving to AFM28 on Slide 15, we show the exciting progress that we were able to make with our ICE designed to bring a new immunotherapeutic approach to patients with CD123 positive myeloid malignancies, which include acute myeloid leukemia and myelodysplastic syndrome.

In our Phase 1 study, we treated the first patient in March and since then we have been able to complete the first dose cohort of 25 mg once weekly without encountering dose limiting toxicity. This has allowed us to open the second dose cohort at 50 mg weekly in which we are currently actively recruiting patients. Given the aggressive nature of this disease and the need for viable treatment options, we are working diligently to bring this treatment option to refractory and relapsed AML patients as quickly as possible. With this short summary, I will turn the call over now to Angus to update you on the quarterly financial numbers. Angus, please?

Angus Smith: Thank you, Andreas. Balance sheet and income state highlights are shown on Slide 17 and 18 of the presentation. As a quick reminder, Affimed consolidated financial statements have been prepared in accordance with IFRS as issued by the International Accounting Standard Board or IASB. The consolidated financial statements are prepared in euros, which is the company’s functional and presentation currency. Therefore, all numbers that I will present on this call unless otherwise noted, will be in euros. As of March 31, 2023 cash and cash equivalents totaled €155.8 million compared to €190.3 million on December 31, 2022. Based on our current operating plan and assumptions, we anticipate that our cash and cash equivalents will support operations into 2025.

Net cash used in operating activities for the quarter ended March 31, 2023 was €33.2 million compared to €28.4 million for the same period in 2022. Total revenue for the quarter ended March 31, 2023 was €4.5 million compared with €8 million for the year — for the quarter ended March 31, 2022. Revenue predominantly relates to the Genentech Roivant collaborations. Research and development expenses for the quarter ended March 31, 2023 increased by 60.7% [ph] from €18.4 million for the same period in 2022 to €29.5 million in 2023. The increase was primarily due to higher expenses associated with the development of AFM13 and AFM24, resulting from increased procurement of clinical trial material, increased clinical trial costs, and increased costs associated with other early stage programs and infrastructure.

General and administrative expenses decreased 2.8% from €7 million in the quarter ended March 31, 2022 to €6.9 million in the quarter ended March 31, 2023. An increase in personnel costs were offset by a decline in legal, consulting and insurance expenses. Net finance income and costs for the quarter ended March 31, 2023 decreased from income of about €0.5 million in the quarter ended March 31, 2022 to costs of about €0.5 million in the quarter ended March 31, 2023. As a reminder, net finance income or costs are largely due to foreign exchange gains or losses related to assets that are denominated in U.S. dollars as a result of currency fluctuations between the U.S. dollar and the Euro during the year. Net loss for the quarter ended March 31, 2023 was €32 million or €0.21 per common share compared with a net loss of €16.7 million or €0.14 per common share for the quarter ended March 31, 2022.

The weighted number of common shares outstanding for the quarter ended March 31, 2023 was 149.3 million. Additional information regarding these results is included in the notes to the consolidated financial statements as of March 31, 2023, which will be included in Affimed’s filings with the SEC. I’ll now turn the call back to Adi for closing remarks. Adi?

Adi Hoess: Thanks a lot, Angus. Now moving to Slide 19. We show a snapshot of all our programs and we are very excited on behalf of patients that could benefit from the combination treatment of AFM13 with AB-101, and we’re now looking forward to getting this study started and bringing new updates as we’re making progress. We also are looking forward to our call with you on June 3 to discuss the findings from the non-small cell lung cancer and colorectal cancer studies, during which we are also planning to update you on our broader plans for AFM24 going forward. And as you’ve heard, we are indeed quite excited about the progress we are making with AFM28 in AML, which we believe has a huge potential as we mentioned in the past, as NK cells can play a major role in AFM28, has a very pronounced activity redirecting NK cells.

We’re also thankful for the support and efforts of our employees who have pulled together to move things forward. It is through their dedication and the support from you and the patients and their families that gives us inspiration to continue our growth of bringing these lifesaving therapies to the market. We are now ready to take questions and I hand back to the operator.

Q&A Session

Operator: [Operator Instructions] Our first question comes from the line of Maurice Raycroft with Jefferies. Maurice your line is now open.

Maurice Raycroft: Hi, thanks for taking my questions. A question on the LuminICE study. Presumably the assignment two stage designed part of the study is open label, just wanted to clarify that? And then also wondering what is the bar for success on overall response rate and duration of response, and is there anything additional you’re saying on powering for the study?

Angus Smith: Yes, thanks Maurice and good morning. So I’m handing this question over to Wolfgang. Wolfgang?

Wolfgang Fischer: Yes, thanks Angus. Hi Maurice. As you can see on Slide number 10, the dose optimization right, we have two cohorts selected from the safety run-in 13 patients per cohort, and each of these cohorts will follow assignment stage two design. So that means we are evaluating each of these cohorts separately rights, to a futility whether to move forward, yes or no. That’s, that’s number one. The other question was the bar success, right? Based on the data we have generated with AFM13-104, right, we believe that the bar or that we can achieve very high response rates very similar to what we have seen in the 104 study. And the third question I do not remember, could you please repeat?

Maurice Raycroft: If you’re saying anything additional on powering for this study?

Wolfgang Fischer: Andreas, do you want to take that question regarding the power of the study?

Andreas Harstrick: Yes, I can, I can take this question. As Wolfgang has said and as I think it’s also depicted on the slide, the second part of the study, which starts with two dose selected from the initial four cohorts, and then the option to continue basically into the expansion consists of two separately powered assignment two stage cohorts. So there is no direct comparison on a statistical level between the different cohorts and on the totality of the data we can decide to either move one or two cohorts until the final number of 55 patients per cohort. This was something that specifically came out of our discussions with FDA and I think it’s also in line with FDA’s attempt to have more data available on those optimization and the effect of different doses on the outcome. So again, these two arms are separate, two assignment, two stage arms, which do not have a statistical comparison between the two arms.

Maurice Raycroft: Got it, makes sense. And anything else you can tell us about the, the nature of, nature or timing of FDA discussions to be had on registration or requirements? I guess would that be first half 2024 or after you get the run-in data or would that be later on? And has — have you — can you say if you’ve spoken with FDA at all about the feasibility of doing a randomized study as opposed to a single arm study?

Adi Hoess: Oh yes, Wolfgang go ahead. Yes.

Wolfgang Fischer: Yes. So we have designed that study with the intent for an accelerated approval, very clear, right? And also following also the draft guidance from FDA from March, 2023, where still very clearly says that single arm study is still feasible in certain senses. So we asked the FDA for that feedback and the FDA came back to us and recommended that we continue that discussion in a separate meeting with them. So basically they recommended while starting the study, reaching out to them for further discussions. During these interactions with the FDA, the FDA did not provide us specific, specific guidance or feedback regarding, regarding their concerns.

Maurice Raycroft: Got it. Okay, makes sense. Thanks for taking my questions.

Operator: Our next question comes from the line of Li Watsek with Cantor Fitzgerald.

Li Watsek: Hey guys, thank you for taking our questions. Maybe just follow up on, I guess the registration application, understanding that you’re still in the process of that with the agency, but I guess can you give us a sense of what kind of different scenarios that you’re preparing for here?

Wolfgang Fischer: I mean, we are in constant contact with our project manager at FDA and we will determine the next steps. Once agreed with the timelines we will give, provide further guidance. We also believe that it is currently too premature to discuss or to speculate what is the FDA’s position and what are different scenarios.

Li Watsek: Okay, got it. And then just for the sitting wrong in portion, I guess do you need to discuss with the agency before you proceed to the optimization dose portion or it will be pretty seamless? And I guess for the safety run-in portion, how long is the follow-up?

Adi Hoess: Wolfgang, you want to take that?

Wolfgang Fischer: Yes, sorry, Adi. The first question, right? These patients are treated as outlined on the slide. We have provided, I guess it’s Slide number 11. And also these patients can receive up to three cycles. The assessment for selecting two dose cohorts moving forward into the optimization phase will happen after the first assessment. And the first question was whether we need to go to FDA before moving forward? No, the FDA provided full commitment to that study.

Li Watsek: Okay, thanks.

Operator: Our next question comes from the line of Srikripa Devarakonda with Truist Securities.

Srikripa Devarakonda: Thank you so much, guys for taking my question and congrats on getting the IND cleared. Quickly, what else needs to be done in order for you guys to get the trial going? You said third quarter you should be able to get it going. And based on the trial enrollment that you saw with your previous partnership with MD Anderson, how confident are you that we will have enrollment and will be able to see data from the run-in patients? It’s about 24 patients in first half. And do — is there any likelihood that we could see, we could also see enrollment in stage two by then, not data, but at least enrollment? Thank you.

Adi Hoess: Again, Wolfgang?

Wolfgang Fischer: Yes. So first question, we are preparing for first patients, first patient in Q3 2023, right? And we are fully on track on that. So we are interacting with the CROs, we are interacting with the sites, et cetera, et cetera. So that’s all fine and on track for Q3 2023. Regarding the first data, yes we plan to provide a first data from the safety run-in, so from the 24 patients in H1 2024. Did you have another question? So, sorry, maybe I missed it.

Srikripa Devarakonda: Oh, sorry, sorry, I was on mute. I was just wondering if by first half, by the time you have the data, is there no, should we expect enrollment to already begin in stage two of the trial as well?

Wolfgang Fischer: I mean, we will, we will start with stage two of the trials. So it would be the optimization phase, as soon as we have finished, basically the safety run-in right, after the first assessment, as I said before, because that’s the basis for moving forward. And as soon as we have completed that, we will start with the stage two. When that exactly will be, I can’t say.

Srikripa Devarakonda: Okay. Thank you, that’s helpful.

Operator: Our next question comes from the line of Brad Canino with Stifel.

Bradley Canino: Hi. Thanks for the updates. I’m looking at Slide 10 here for the dose expansion portion where it says you’ll select one or two cohorts depending on the interim clinical data. I’m wondering, can you comment on what length of follow-up will be required for the interim data to make that decision to move into the pivotal period?

Adi Hoess: Wolfgang again?

Wolfgang Fischer: Yes, so after the dose optimization, the patient will be followed-up for two treatment cycles and after these two treatment cycles, right, the decision will be made, the interim analysis will be made, and then a decision based on the assignment two stage design to move forward and not to move forward, so after two treatment cycles, two assessments.

Bradley Canino: Okay, thank you. And then as you continue the FDA discussions, can you help us understand how much your partner is included in these? Particularly, I’m thinking about how much buy-in they might have if one of the decisions end up being to run a concurrent confirmatory study along with this single arm study? Thank you.

Wolfgang Fischer: Yes, so Adi, I’ll take that at least the first part, and then I give it to you for the second part. The partnering with Artiva, is going very well. It’s a very nice and very good collaboration on a team level, on a transferring committee level. Right? And we are all aligned in our interactions with the FDA. We aligned before we discuss, right. And have a common path forward. Right? So that’s going really well. Regarding the confirmatory study, right, and their commitment, I will hand over to Adi. Adi, please?

Adi Hoess: Yes, contractually, as you know this is a shared study in the sub-cost. And we have not yet started the details of this discussion as we’re fully focused on getting the IND cleared and obviously Artiva has played a major role in depicting the IND and input into the study design. So as we’re now through with the IND clearance and can start the study, we will now take up and move to the next steps on what kind of confirmatory studies we were contemplating. We have already mentioned in the past that we have obviously a number of options in Hodgkin lymphoma where we can place it, but we also focused in terms of moving forward with the PTCL at least initially based on the cohort findings that, on the findings within the 20 patient cohort. That’s our plans here.

Bradley Canino: Okay. I appreciate the comments. Thank you.

Operator: Our next question comes from the line of Daina Graybosch with SVB Securities.

Unidentified Analyst: Hi, this is Raghu [ph] online for Daina. The questions we have are surrounding ASCO in particular, especially in regards to Artiva. What are you looking for, for this first disclosure in clinical data for Artiva, given that this product is being used for the LuminICE-203 trial as opposed to the MD Anderson product from previous Artiva? And then what are we looking for in the AFM24 monotherapy data in [indiscernible] that give us confidence for future readouts in second half 2023 or with the combination with NK cells and or PD-L1?

Adi Hoess: Yep. Thanks for the question. I’ll hand over to Andreas, please.

Andreas Harstrick: Yes, so, it’s difficult to answer question because it relates basically in all parts to data that will be published at ASCO. As you know, for Artiva the, or Artiva has an ongoing study that evaluates both the AB-101 cell as a single product, so without targeting agent. And here they are looking at a couple of different dose levels in patients with B-cell malignancies and they also have the combination of AB-101 cells with rituximab, so we’re targeting agents in B-cell malignancies, and they will provide update on the current status of their study. Again, given that this is an upcoming ASCO presentation, we cannot go into more details as all of the, especially the updated newer datas are under ASCO embargo.

For AFM24, again we will show updated data for the patients with EGFR mutant non-small cell lung cancer, treated with single agent AFM24. We will also have an online publication for the colorectal cancer cohort. Again, both will have updated data compared to the abstracts that come available or become available later this week. And as we said after our poster presentation, we will also host an investor event to discuss the, or to have a comprehensive discussion of CA FM24 strategy, of course, taking into account the new data that we will show at ASCO. But think until then, I unfortunately cannot share more details with you.

Unidentified Analyst: Just a short follow up. We’ve heard that companies are not permitted to provide updated data after the abstracts are released if the data are different than what was written in the abstract. Is that something we can look from Affimed?

Andreas Harstrick: Yes. Adi maybe I can take that one.

Adi Hoess: So yes, please.

Wolfgang Fischer: Thank you for the question. It’s something we’ve obviously looked very, very closely at the ASCO is unique in this regard. Ultimately since we have a poster presentation at ASCO out of respect for our investigator who will be at the poster our decision was to provide the updated data at ASCO itself on June 3rd and as Adi and Andreas mentioned to then host an investor call subsequent to the poster discussion to provide further updates on AFM24. So that was the decision, that’s kind of what went into our decision to wait until June 3rd. And as was mentioned, the abstracts with the December cutoff date will be published on Thursday.

Unidentified Analyst: Thank you so much.

Operator: Our next question comes from the line of Yale Jen with Laidlaw.

Yale Jen: Good morning and thanks for taking the questions.

Adi Hoess: Good morning.

Yale Jen: Good morning. How are you? Sorry. My first question is that you guys mentioned that in the press release that you are going to have preclinical data presented at the ICML. My question is that what should we in anticipate from that data, sort of data release and, do you show anything comparison to the cord blood cell derived in case they are as well?

Adi Hoess: Andreas, do you want to take the question please?

Andreas Harstrick: When it’s relating to preclinical data, I think Arndt would probably be the right person to respond.

Adi Hoess: Okay. Sorry.

Arndt Schottelius: Okay. I’ll be happy to take the question, Yale. Very nice to, thanks for your question. So you will have noticed we have not given any specifics because we want to also respect the embargo for this conference. But as you can assume, we will show frequent data, the combination of the products, and some of that we had actually previously shown also at some investor conferences. So we will show the preclinical basis for moving into the clinic. So you can expect that there’s synergistic activity to be shown, but I cannot share more specifics that will be shared at the conference, I’m sure you’ll understand.

Yale Jen: Sure. Not a problem and thanks for that. And may be just one more housekeeping question, also in the press release you indicated that the Genentech collaboration, at least for time being since completed, you handed out the product. So just from a modeling purpose, should we anticipate the revenue to be slightly lower going forward as you at least assume there’s only one collaboration panel at the moment until otherwise?

Adi Hoess: Andreas?

Andreas Harstrick: Yes, I can take that. So as you mentioned, right, with the work that we were responsible for under the Genentech collaboration has now been completed and the targets that we were developing on their behalf have been handed over to Genentech. So that’s good news on that front. As you know, we’ve been recognizing revenue, which is associated with the upfront payments we received under that collaboration over time based on the complete percentage of completion basis. So naturally we have not recognized the bulk of the revenue, from the upfront payments we received. There will be a small tail on that for certain upfront payments that are recognized on a time basis. But as we’ve disclosed in our financial statements, you can certainly assume that the revenue we will be recognizing, which is non-cash by the way is, will be lower than what we’ve recognized in previous quarters as a result of now that the completion of our work under those projects.

The same will hold true eventually for Roivant, as we have moved forward towards completion of the work we have there and now recognize a large proportion of the upfront payments we’ve received under that collaboration. An easy way to sort of tell what may be coming, in the next 12 months is to look at the contract liabilities that we have the short-term portion of the contract liabilities we have, and that should give you an estimate for what we would expect to recognize over the course of the next 12 months.

Yale Jen: Okay, great. That’s a very helpful and detail and thanks and congrats for all the progresses.

Operator: Our next question comes from the line of Zhiqiang Shu with Berenberg.

Unidentified Analyst: Hi, thank you for taking my question. This is Andy on for Zhi. Regarding your Phase 2 trial it looks like you’re doing four cohorts, two doses for AFM13, two doses for NK cell therapy. Can you please remind us how were those doses selected and what level of confidence behind those doses chosen? And my other question is regarding the restructuring 25% of your employee how does that — how is that going to affect your operating expenses going forward, if you can provide some guidance, please? Thank you.

Adi Hoess: Yes, thanks for asking. I will hand over the second question to Angus and then move back to Wolfgang. Angus?

Angus Smith: Sure. So I mean, looking at the reorganization, on its own in the vacuum, I mean the reduction in headcount costs that we would expect on an annualized basis, is in the range of about €5 million. Obviously, that won’t be recognized immediately. There are notice periods and severance obligations that will come with that, but we do expect to begin to recognize savings this year and then next year start to see the cool impact on an annualized basis. So on its own the reorganization will have roughly a €5 million annualized impact. On operating expenses that will be spread across R&D and G&A. And then obviously within that context there are other investments that in the, primarily in the early stage pipeline that are, that will be reduced.

So over time we do expect to see, both in particular the R&D numbers start to come down. We’ve actually, we’re kind of at a period here as a company where we have overlapping programs. You have the AFM13-202 study winding down. Our work as mentioned on the Genentech and Roivant collaborations are now winding down with those molecules being handed over to our partners. So operating expenses beyond the reorganization should start to come down as we go through the rest of this year.

Adi Hoess: And now moving back to Wolfgang.

Wolfgang Fischer: Okay, the question, the question was the dose selection for the safety run-in cohort. Right? Let’s start with AFM13, and for AFM13, we have a recommended Phase 2 dose of 200 mg flat, right, which has been used also in the PTCL trial, but which we also used in the AFM13-104 trial. And we decided also to evaluate a higher dose, namely 300 mg after discussion and feedback from the FDA. And this decision is driven basically by the fact that when we add additional NK cells, that we are providing meaningful higher number of CD16A binding sites, and therefore higher doses of AFM13 may be needed to optimize receptor occupancy. This has been the reason for the 200 mg and the higher dose of 300 mg. When we move to the AB101, these two doses have been selected, of course, after discussion with the colleagues from Artiva.

And these are based on initial data from their ongoing Phase 1 study, which Andreas mentioned earlier. The initial data from this study will be presented at ASCO, as he said, and therefore our and our embargo at that time, therefore we cannot further comment on this. Does that answer your question?

Unidentified Analyst: Yes, thank you. Congratulations again.

Wolfgang Fischer: Thanks.

Adi Hoess: Thank you.

Operator: Our next question comes from the line of Swayampakula Ramakanth with H.C. Wainwright.

Unidentified Analyst: Thank you. This is [indiscernible] from H.C. Wainwright. So most of my questions have been answered. Just want to understand on AFM28 and see what’s the update you can provide in terms of how the Phase 1 study is currently enrolling and should we expect any data in 2023?

Adi Hoess: Andreas, do you want to take that please?

Andreas Harstrick: Yes, so the study is I would say running very well. As I said, we only started in March to recruit first patients. We have already completed the first dose cohort, which were two patients. However these patients are required to receive four infusions of AFM28 to be dose limiting toxicity valuable. So as we said, we don’t have seen any DLTs, which allowed us to open the second cohort. So currently we are enrolling patients at 50 mg, and we are extremely satisfied with this kind of speed. Again, we have not made our detailed plans whether and in which form to release data from the initial cohorts, but that’s something that we will provide guidance, I would say, in the very near future.

Unidentified Analyst: Thank you. Thanks.

Operator: [Operator Instructions] Our next question comes from Yanan Zhu with Wells Fargo Securities.

Yanan Zhu: Hi, thanks for taking the questions. Two quick ones on the Phase 2 trial. One is, the first one is on the cadence of enrollment, do you have to have a safety evaluation for each patient or a group of patients before enrolling the next group of patients within the same cohort? Then another question is about the FDA regulatory discussion. Since you mentioned there seems to be additional discussion needed for determining the accelerated approval path. I was wondering would — do you think that discussion will require data from the Phase 2 trial? Yes, thank you.

Adi Hoess: Wolfgang?

Wolfgang Fischer: Okay. Now to the first question, right? That’s the study design. And if you look at slide number 10, you can see that cohort one and two start in parallel, and then cohort three and four start in parallel. What we do, the first patient of each cohort will go first and then there is a staggering, and we wait seven days before we start with the second patient. So there is, for the first patient, there is a staggering of seven days. Now the second question, the additional discussion whether it will require Phase 1 data or not, currently we can’t say as I mentioned before, right? We are in close interaction with the FDA to determine next steps and then move that forward. But we do not — we do not know and cannot speculate right on the position of the FDA and therefore, we cannot comment on that currently because it’s too premature. Thanks for understanding.

Yanan Zhu: Understood. Thanks for the answers.

Wolfgang Fischer: Sure, welcome.

Operator: That concludes today’s question-and-answer session. This concludes today’s conference call. Thank you for participating. You may now disconnect.