HOOKIPA Pharma Inc. (NASDAQ:HOOK) Q4 2022 Earnings Call Transcript

HOOKIPA Pharma Inc. (NASDAQ:HOOK) Q4 2022 Earnings Call Transcript March 15, 2023

Operator: Good morning and thank you for joining the HOOKIPA Pharma Fourth Quarter and Full Year 2022 Earnings and 2022 Outlook Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. I would now pass the call over to Matthew Beck, Executive Director of Investor Relations. Please go ahead.

Matthew Beck: Thank you. A slide deck accompanying today’s call is available through the webcast and in the events section of the HOOKIPA website. Please manually advance the slides as we prompt you through them. Joining me today are Chief Executive Officer, Joern Aldag; Chief Financial Officer, Reinhard Kandera; and Chief Medical Officer, Katia Schlienger. During today’s call, we will be making certain forward-looking statements. These statements may include statements regarding, among other things, the efficacy, safety and intended utilization of investigational agents, our clinical and non-clinical plans. Our plan to present or report additional data, the anticipated conduct and the source of future clinical trials, regulatory plans, future research and development and possible intended use of cash and investments.

These forward-looking statements are based on current information, assumptions and expectations that are subject to change and involve risks and uncertainties that may cause the actual events to differ materially from those contained in the forward-looking statements. These and other risks are described in our periodic filings made with the SEC including our quarterly and annual reports. You are cautioned not to place undue reliance on these forward-looking statements, which are only made as of today’s date. The Company disclaims any obligation to update such statements. For today’s call, Joern will provide opening remarks. Reinhard will offer high-level comments on our financials and then we’ll open up the call to Q&A. With that, I’ll pass the call to Joern.

Joern Aldag: Okay. Good morning everyone. I’d like to focus first on our accomplishments in 2022 and second highlight what’s coming in 2023. At HOOKIPA, we’re leveraging our arenaviral platform to create therapies that deliver unprecedented antigen specific CD8 T cells to combat disease. In 2022, we saw progress both in and toward the clinic across four different programs in areas of considerable unmet need. Please go to Slide 3, which has our portfolio site. Key developments in ’22 were the progress of HPV positive cancer drug HB-200 in a Phase 2 single arm cohort in combination with pembrolizumab, the acceptance of an IND for 300 or prostate cancer therapeutic targeting self-antigens. A material collaboration with Roche are novel approach to target shared new antigens and cancers for lung, pancreas and colon cancers with KRAS mutations and achieving Phase 1 readiness for our Gilead partnered hepatitis B therapeutic vaccine.

Let me give you a bit more Broadcom on these major achievements. Our Phase 1 dose escalation study showed that HB-200 was generally well tolerated, rapidly induced a high magnitude of tumor specific T cells and showed early anti-tumor activity and difficult to treat patients as a monotherapy. We progressed to testing HB-200 and HPV16-positive head and neck squamous cell carcinoma patients and Phase 2. We’re currently enrolling patients in three dose expansion cohorts, a cohort in the non-randomized first line setting in combination with pembro, a cohort in the non-randomized second line setting and second line plus setting in combination with pembro, and a cohort of patients in the post-standard of care setting at the recommended Phase 2 dose.

Regarding the HB-200 trial, I reaffirm our Q2 data guidance. We will disclose data from 10 to 20 patients each in the first and second line settings in combination with pembro and we will provide an update on our monotherapy dose escalation cohort. We will present an update on this trial and all three cohorts in a press release and an investor call in the second quarter and inform about the likely path forward. As a reminder, our HB-200 trial which targets an oncoviral antigen supports the first pillar of our three part strategy in oncology. The second pillar in our oncology strategy is targeting self-antigens which we are pursuing with our HB-300 program in prostate cancer. The trial is now open for enrollment as per our guidance to start the trial in Q1 2023.

Targeting new antigens is the third pillar of oncology strategy. In October, we announced a collaboration in this field with Roche to advance our HB-700 acid, targeting KRAS mutations and multiple indications and an option to develop a second undisclosed candidate. We’re pleased by the progress across our oncology portfolio as well as the acceptance by the FDA last July about Drug Master File. The information from that master file can be used to support new IND filings using our platform leading to reduce pre-clinical cycle times. Regarding our Gilead collaboration, much progress has been made. After restarting the HIV program HB-500 under our control to bring it to the end of Phase 1b, we’re working with our academic collaborators and plan an IND filing in 2023.

The hepatitis B program progressed well, as planned we completed, we will keep the contributions for IND preparations and 2022, triggering a 5 million milestone payment. Gilead guided to start at the trial, this HPV program in 2023. So what’s in our plans for ’23? The readout of all three HB-200 Phase 2 expansion cohorts in the second quarter of 2023 shall guide our decision to move into a randomized HB-200 trial in combination with pembro versus pembro alone. We have Fast Track designation for such a trial and a supply agreement for pembro with Merck U.S. In our HB-300 Phase 1 trial targeting prostate cancer, we are recruiting now, we will start dosing patients, expect initial data in the first half of 2024. We had a good start into 2023 with two significant milestone payments, reflecting significant progress in our collaborations.

First one, $5 million from Gilead for the completion and delivery of a regulatory support package for their Phase 1 clinical trial of a therapeutic cure for chronic hepatitis B using HB-400 and the second $10 million payment from Roche. We are starting GMP manufacturing of the KRAS Therapeutic, an important step before filing the IND, which we expect to happen in the first half of 2024. We expect to file our HB-500 HIV therapeutic cure candidate IND in 2023. We will continue our work for Roche both on the KRAS Therapeutic as well as on the option package for an additional target, which Roche may decide to exercise in 2024. In summary, we have made significant progress in 2022, and we are positioned for an exciting 2023 with materials to come from our key programs.

Finally, I’d like to highlight that we have significantly strengthened our cash balance with $113 million at year end 2022. We are well funded for many major data readouts. With that, I’ll turn the call over to our CFO for more financial details. Reinhard?

Reinhard Kandera: Thanks, Joern. Good morning, everyone. So, I want to give you a few highlights of our financial results for the fourth quarter and the full year 2022. As shown on Slide 4 of our presentation, we ended the year with a strong quarter in revenues, which amounted to $7.8 million, and included a milestone payment from Gilead, and the start of the recognition of the $25 million upfront payment received under the Roche collaboration. Our Q4 spending was very much in line with the average of the previous quarters, leading to a quarterly net loss of $12.3 million for Q4. For the 2022 results, I want to start by pointing out our significantly strengthened cash position, which we achieved through our $75 million capital raise in the first quarter and cash inflows from partnering, including $19 million from Gilead and $25 million from Roche.

I’m also proud to report that we were able to achieve a significant 2022 R&D progress that Joern has just detailed at a 17% lower spend compared to 2021. Our G&A expenses moderately increased, but the increase was more than offset by higher grant and interest income. Bottom-line, we reported a full year 2022 net loss of slightly less than $65 million, which is 14% below 2021. We continue to manage our run rate tightly and to rely on partnerships to support our spending. We expect to moderately increase our expenses in 2023 as the pipeline progresses. The financial contributions from partnerships were already evident in the first quarter of 2023 by the receipt of a total of $15 million in milestone payments. With a cash balance of $113.4 million at the end of ’22 plus the $15 million in partner milestone income already achieved in 2023.

We consider ourselves well funded to reach beyond important upcoming pipeline catalysts. With that, I’d like to hand back to Joern for some closing remarks.

Joern Aldag: Thanks Reinhard. We’re coming to the end of this call. I’m indeed very proud of our talented people and their drive to support the companies and our shareholders objectives throughout this difficult capital market environment. We’re laser focused to produce and present to you our clinical data updates throughout the year. With that, I’d like to reopen on the line for Q&A. Operator?

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Q&A Session

Operator: Thank you. We’ll go first Brian Abrahams at RBC Capital Markets.

Unidentified Analyst: It’s Leo on for Brian and congrats on another quarter and thanks for taking my question. How are you thinking about the bar for HB-200 and what’s achievable? If the response rates fall in the 25% to 35% range, how are you thinking about next steps for the program? And what’s your sense of where standard of care is for each line and what docs would find meaningful? I mean, would you add more patients to tease out or respond? Or would you pivot and look to modify the program, depending on what you see? And maybe I’ll have a follow up after that.

Joern Aldag:

cut:

Katia Schlienger: Yes. And I think it’s a bit too that, we will look at the totality of the data. So if we are in the resume, it’s not clear to me online. We would look at other marker of efficacy, we would look at the immunogenicity, and we will then decide if we want to start the trial or not.

Joern Aldag: So in brief, if we make 40% objective response rate, there’s a clear go ahead signal that we will be looking at the totality of the data in making that final decision, but because you know that this is going to be a Phase 3 trial with a fairly significant investment.

Unidentified Analyst: And then maybe just a quick follow-up on that. Have you talked about how much follow-up you’ll be expecting for the patients that you present at the upcoming data cut? Is it going to be only patients with more than two scans? And you mentioned we’ll be presenting the data in a press release. Are you still looking at a medical meeting submission around that same time?

Joern Aldag: We intended this point in time to have a press release and also an investor event. So, we will substantially detail the data and the medical conference some point after the summer. Katia.

Katia Schlienger: Yes. Nothing more to add to that, exactly that. Of course, we will present our data scientific conference afterwards.

Operator: We’ll go next to Vikram Purohit at Morgan Stanley.

Unidentified Analyst: Hi, everyone. This is Will on for Vikram. Thanks for taking our questions and congrats on the quarter. Just kind of the same vein as Leo’s question. How would you frame expectations for the initial data expected for HB-300 and the first half? Could you just give us a sense of what we can expect to see in terms of the data points so what you would consider and when?

Joern Aldag: We’re looking at a self-antigen, clearly establishing immunogenicity against the antigens that we’ve chosen would be a significant win in the first half of 2024. Katia.

Katia Schlienger: No, exactly that, I think it’s our readout as well as safety profile, we don’t expect a lot of surprise, you know based on the excellent safety profiles that we have demonstrated with the 200 program using exactly the same vectors. So, all this information will come into 2024.

Unidentified Analyst: And is that going to be just a press release or is that can be associated with medical conference as well?

Joern Aldag: Depends on the timing of the data availability versus a major conference, which we could represent, it’s not decided yet.

Operator: We’ll move next to Alec Stranahan at Bank of America.

Alec Stranahan: Just a couple from us. Appreciated the additional color on the 2Q updates for the 200 program. As we’re thinking through the historical controls, obviously, those are in a broader head and neck population. Is there any reason to think that KEYTRUDA monotherapy would perform better or worse than the HPV16-positive population? Just trying to think if that’s an apples to apples? And then just on the capital allocation priorities next 12 months, starting a few new studies, obviously, it’s got some partner funding as well. So I guess where does that sort of put you guys in terms of runway and where it’s sort of your main focus in terms of capital allocation?