Medicenna Therapeutics Corp. (NASDAQ:MDNA) Q3 2023 Earnings Call Transcript

Medicenna Therapeutics Corp. (NASDAQ:MDNA) Q3 2023 Earnings Call Transcript February 7, 2023

Operator: Hello and welcome to the Medicenna Therapeutics Fiscal Third Quarter Earnings Call. All participants are now in a listen-only mode. There will be a Q&A session at the end of the prepared remarks. Please be advised, that this call is being recorded at the company’s request. I would now like to turn the call over to Dan Ferry of LifeSci Advisors. Thank you. Please go ahead.

Dan Ferry: Thank you, operator. And thank you all for participating in today’s conference call. This morning Medicenna issued a press release providing financial results and corporate updates for the quarter ended December 31, 2022. If you have not seen the press release, it is available on the Investor page of Medicenna’s website. Before we begin, I would like to remind you that certain statements and information shared during this call constitute forward-looking information within the meaning of applicable securities laws. All statements other than statements of historical facts shared during this call, and that relate to the future operations of the company, and other statements that are not historical facts, including statements related to the clinical potential, development and tolerability and safety profiles, MDNA11, preliminary clinical data, the clinical potential and development of MDNA55, partnering efforts, cash runway, the presentation of additional data and other milestones and patent protection are forward-looking statements that are subject to risks and uncertainties.

There can be no assurance that such statements were proved to be accurate, and actual results and future events could differ materially from those anticipated in such events. Important factors that may cause the actual results to differ materially from the company’s expectations, include the risks detailed in the Annual Information Form and 20-F of the company and in other filings made by the company with applicable securities regulators from time to time in Canada and the United States. Listeners are cautioned that assumptions used in the preparation of any forward-looking information may prove to be incorrect. Events or circumstances may cause actual results to differ materially from those predicted as a result of numerous known and unknown risks, uncertainties and other factors, many of which are beyond the control of the company.

You are cautioned not to place undue reliance on any forward-looking information. Such information although considered reasonable by management may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this conference call are expressly qualified by this cautionary statement. Except as required by law, the company does not intend and do not assume any obligation to update or revise publicly any of the included forward-looking statements only as expressly required by Canadian and the United States’ securities law. Speaking on today’s call will be Medicenna’s President and Chief Executive Officer, Dr. Fahar Merchant; and Chief Financial Officer, Liz Williams. I will now turn the call over to Fahar to begin.

Fahar?

Fahar Merchant: Thanks, Dan. And good morning, everyone. I’ll begin by discussing the most recent news out of our Phase 1/2 ABILITY study of MDNA11, our beta-only long-acting IL-2 super-agonist. Earlier this morning, we announced that the Phase 1 portion of the ABILITY trial advanced to a sixth dose escalation cohort, where patients will receive a target dose of 120 micrograms per kilogram every two weeks. This is encouraging, as it reflects that MDNA11 has a suitable tolerability profile in the end-stage cancer patients that have enrolled in the Phase 1 study to-date. The decision to advance to the sixth cohort was based on a review of the cohort five safety and preliminary pharmacodynamic data by our Safety Review Committee, which consists of study investigators, key opinion leaders and external devices.

With regards to safety, we are pleased to say that MDNA11 has been well tolerated, with no dose-limiting toxicities, dose interruptions, dose de-escalations, or treatment discontinuations due to safety issues. With regards to pharmacodynamics, we observed further increase in lymphocyte expansion in cohort five when compared to cohort four, which indicates that MDNA11’s ability to stimulate an anticancer immune response had not yet plateaued. Collectively, these data suggests that we may be able to safely administer higher doses of MDNA11, which in turn could further enhance anticancer effects. To begin testing this hypothesis, cohort six’s dosing regimen includes 30, 60 and 90 micrograms per kilogram priming doses of MDNA11 followed by a further step up to the fixed 120 microgram per kilogram target dose I had mentioned earlier.

For comparison, participants in the fifth cohort received two 30 microgram per kilogram priming doses before stepping up to a fixed 90 microgram per kilogram dose. All doses are administered intravenously every other week. In addition to evaluating a higher fixed dose of MDNA11, the dosing regimen in cohort six has the advantage of getting participants to the 60 microgram per kilogram dose after only two weeks, as opposed to after four weeks, this was the case of cohorts five and four. This is important, as the 60 microgram dose of MDNA11 has already led to tumor response as presented last quarter at the SITC Annual Meeting. The data presented at SITC showed tumor control in 5 of 14, or 36% of evaluable patients treated with MDNA11 monotherapy.

This included a confirmed partial response in a fourth-line metastatic pancreatic cancer patient treated at 60 micrograms per kilogram, demonstrating MDNA11’s single-agent potential in a notoriously difficult-to-treat cancer. We also observed encouraging signs of MDNA11’s potential to drive durable clinical benefit as the patient achieving the partial response for further deepening of tumor response on each of the two consecutive scans, while another patient with metastatic melanoma has maintained stable disease for more than a year and remains on study. These promising antitumor activity data were notably achieved in an extremely challenging patient population, with nearly 80% of patients having failed prior immunotherapy, including the pancreatic cancer patient achieving a partial response.

The data are supported by PD results that showed dose-dependent and multi-fold increases in anticancer immune cells with MDNA11 treatment, but not stimulation of Tregs or eosinophils. This is important, as Tregs are associated with pro-tumor immune pathways, while eosinophils are associated with vascular leak syndrome, a serious life-threatening side effect of the only approved IL-2 therapy, Proleukin. Presented alongside these PD data, were results demonstrating MDNA11’s tolerability at doses as well as PK data that showed dose-dependent increases in exposure that remain consistent with repeat dosing, suggesting a lack of an anti-drug-antibody response. Those interested in reviewing any of these data in detail, can find both SITC presentations on the Events section of our IR website.

Collectively, we believe ABILITY’s early results demonstrate how MDNA11’s carefully engineered design positions the Superkine as a potentially best-in-class, long-acting beta only IL-2 therapy. We believe the key design features of MDNA11 can provide cancer patients with clinical benefit by avoiding the PK and safety shortcomings that’s like Proleukin. ABILITY’s data to-date supports this hypothesis, which we plan to continue exploring with several important readouts from ABILITY expected over the coming months. The first of these readouts is anticipated later this quarter, and will include initial antitumor activity data and high level PD findings from ABILITY’s fifth dose escalation cohort, alongside updated data from cohorts one through four.

As in earlier cohorts, cohort five enrolled difficult-to-treat patients unresponsive to prior treatments. The same will be true for cohort six, as each dose escalation cohort utilizes similar inclusion criteria. We do however, plan to take a different approach to enrollment for the Phase 2 expansion portion of the trial, where the objective will be to not only demonstrate safety in approximately 40 patients, but importantly, evaluate the efficacy of MDNA11 in patients with less advanced cancer and tumor types that are most likely to benefit from our IL-2 Superkine. Therefore, rather than enrolling patients with a dozen or more disparate tumor types, which has been the case with the Phase 1 portion of the ABILITY study, the Phase 2 portion will only focus on two or three different cancer populations that better reflect MDNA11’s target addressable population.

As we look towards the identification of MDNA11’s optimal regimen and ABILITY’s Phase 2 expansion phase, we are optimistic on the trial’s outlook. Having shown an ability to achieve enduring tumor control in a challenging patient population, we expect that MDNA11’s demonstrable durability of response, which is a major challenge with approved immunotherapies could be further enhanced with optimal dosing regimen, and in a population of patients with better initial prognosis. Our current projections have us reporting data from ABILITY’s six and potentially the final dose escalation cohort, together with early antitumor activity data on the Phase 2 dose expansion cohort in the third quarter of this calendar year. In addition, we anticipate reporting early data from the trial’s combination arm evaluating MDNA11 plus Keytruda in the fourth quarter of this calendar year, providing us with multiple near-term opportunities to derisk MDNA11 and demonstrate its potential as a vital component of cancer immunotherapy.

Shifting gears, I would like to provide a brief update on MDNA55. The top line results from the single-arm Phase 2b clinical trial of MDNA55 in patients with recurrent unresectable glioblastoma, a uniformly fatal form of brain cancer, have been published in the peer reviewed journal, Neuro-Oncology, which is the official publication of the Society for Neuro-Oncology. These results showed that the trial met its primary endpoint, with median overall survival in the primary and supportive analysis populations exceeding pre-defined success criteria and key historical benchmarks. These promising results helped us to align with the FDA on an innovative, open-label hybrid design for a potential pivotal trial. I’m also happy to mention that the World Health Organization has approved the international nonproprietary name for MDNA55, which will now be referred to as Bizaxofusp.

Looking forward, we continue to pursue Bizaxofusp’s further development and potential commercialization to external partnership, as we have stated consistently in the past. This will allow us to enable Bizaxo’s advancement, while maintaining our internal focus and resources on MDNA11 in our BiSKITs program, which was the subject of a key patent issued earlier this year. This new issued patent extends protection into at least with an IL-2 Superkine in combination with checkpoint inhibitors, such as an anti-PD1 inhibitor, which is being advanced in the combination arm of the ABILITY study. And for BiSKITs, such as MDNA223, which comprises an IL-2 Superkine linked to an anti-PD1 antibody. With checkpoint inhibitor patents, due to start expiring in 2028, we believe the data from ABILITY’s combination study as well as MDNA223’s IP could be an important tool to facilitate collaborations or partnerships with leaders in the space.

And with that, I’d have Liz review our fiscal third quarter financial results. Liz?

Liz Williams: Thanks, Fahar. I’ll begin today by reminding those listening, that all references made during this section of the call are in Canadian dollars, unless otherwise stated. As of December 31st 2022, Medicenna had cash and cash equivalents of CAD36.2 million. Based on our projections, our current cash resources are sufficient to fund our operations through the second quarter of calendar year 2024. This cash runway is expected to take us through several important clinical readouts and the completion of the ABILITY study, including both the monotherapy and combination expansion phases designed to assess MDNA11’s efficacy in relevant patient populations. Net loss for the quarter ended December 31st, 2022 was CAD1.1 million or CAD0.02 per share, compared to a loss of CAD4.8 million or CAD0.09 per share for the quarter ended December 31st, 2021.

The significant decrease in net loss for the quarter ended December 31st, 2022 compared with the quarter ended December 31st, 2021, was primarily a result of a non-cash gain of CAD3.7 million related to the change in valuation of a non-cash warrant liability associated with the August 2022 financing. Research and development expenses of CAD2.9 million were incurred during the quarter ended December 31st, 2022, compared with CAD2.9 million incurred in the quarter ended December 31st, 2021. Research and development expenses were consistent quarter-over-quarter. General and administrative expenses also remain consistent quarter-over-quarter, with CAD2 million incurred during the quarter ended December 31st, 2022 as well as during the quarter ended December 31st, 2021.

For further details on our financials, please refer to our Financial Statements and Management’s Discussion and Analysis, which will be available on SEDAR and EDGAR, respectively. With that, I’ll hand the call back to Fahar for closing remarks.

Fahar Merchant: Thanks, Liz. Before opening up the call for Q&A, I’d like to first thank all those who have supported the progress we spoke about today, including our employees, partners, investigators, shareholders, and clinical trial participants. I’d like to also emphasize how our recent progress has us set up for an exciting calendar year ahead with crucial milestones anticipated throughout 2023. The first of these milestones is expected later this quarter, which is when we anticipate reporting high level PD findings from ABILITY’s first five dose escalation cohorts and an update on antitumor activity. In cohorts one through four, MDNA11 displayed promising signs of monotherapy activity, as well as safety, PK and PD profiles that position it as a potentially best-in-class IL-2 therapy.

The key objectives of cohorts five and six are to confirm if MDNA11’s immunologic activity can be enhanced with higher doses, and whether these higher doses will be adequately tolerated. Based on what we’ll see in additional readouts from ABILITY’s dose-escalation phase, we will select the optimal dose and schedule for the trials Phase 2 monotherapy expansion and combination arms. The Phase 2 component of the study will be specifically designed to assess MDNA11’s efficacy in patients that are similar to its target populations. We therefore believe that the readouts anticipated from the Phase 2 portion of the trial which are expected in the third and fourth quarter of calendar 2023 may represent significant derisking events for the MDNA11 program.

With encouraging signals of efficacy already observed in the extremely difficult-to-treat patients during the trial’s dose escalation. We are optimistic about the ABILITY’s studies outlook. We look forward to its continued progress and to providing periodic updates along the way. And with that, we will now begin our Q&A session. Operator?

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Q&A Session

Operator: Thank you. The floor is now open for questions. The first question today is coming from Charles Zhu of Guggenheim. Please go ahead.

Charles Zhu: Good morning, everyone. Thanks for hosting the call and for taking the questions. First one from me, if I recall dose cohort five, was also the first when you instituted the new requirements around baseline lymphocytes. To what degree might the enhanced lymphocyte stimulation or PD markers you’re observing be influenced by this higher baseline? And how do you think about that relative, you know due to the higher doses of MDNA11 you’re evaluating? Thanks.

Fahar Merchant: Thank you, Charles. That’s a good question. Certainly, as you know, we set a threshold for lymphocyte counts in this particular study. And we clearly are seeing that and we’ve seen mostly from previous studies with Proleukin, where a high baseline lymphocyte count generally results in better patient outcomes. The key thing here is, although that’s something that’s been demonstrated historically, we certainly do not have as much data with our therapy and our therapeutic regimen that we use with MDNA11. Needless to say, we have, I think, if you recall, between the first three cohorts where the doses were below 60 micrograms per kilogram, we still saw patients with stable disease, including a patient that continues to be treated in cohort two, who started at 10 micrograms per kilogram where the lymphocyte count or the baseline lymphocyte count was not necessarily set at 1,000 per microliter.

So it may be a sort of a threshold that’s maybe more relevant for Proleukin or other IL-2 based agents. But certainly, as far as we are concerned, although we feel that you can get to the threshold lymphocyte count or a higher lymphocyte count or expansion to occur, we certainly haven’t seen any consistency in the data that we have so far. Nevertheless, we expect that as we entered into sort of the Phase 2 portion of the study where we have patients with higher or sort of less heavily pre-treated healthier patients more likely that we have patients with higher lymphocyte count. So it’s a bit premature right now to come to any conclusions based on the data we have, only 14 patients so far. But we are encouraged to see that even a patient who started at less than 1,000 lymphocytes per microliter continues to be on study for now 15 months.

So that’s quite encouraging.

Charles Zhu: Got it, great. Thanks for taking the question.

Operator: Thank you. The next question is coming from Matt Biegler of Oppenheimer. Please go ahead.

Matt Biegler: Hey, guys. Thanks for the update. I’m curious Fahar based on the preclinical data. Do we expect to plateau out on lymphocyte count in cohort six or I guess another way to ask the question is, how do we know when we’re at the recommended Phase 2 dose? And I have a follow-up.

Fahar Merchant: Right. Thanks, Matthew that’s a good question again. And I must say that you’re right on spot when you talk about the data from preclinical studies. So, certainly what we have. The way we have projected dosing regimens and selecting the different doses and different cohorts is given mostly by extrapolating from data we have from non-human primate studies. And based on the safety windows that we saw in non-human primates, as well as where we saw the threshold occurring in non-human primates, I would say that the current dosing regimen that we are enrolling patients in which is the cohort six at 120 micrograms per kilogram is pretty much close to where we’re expecting this to plateau. As you know, we saw pretty impressive results at studying at cohort four and for 60 micrograms per kilogram dose so far we’ve had, as you know, the data we have shared of just seven patients that have received more than 60 or 60 micrograms per kilogram or higher.

And based on the data we have so far, it seems like we are seeing pretty impressive clinical activity. Add to that, the fact that we are continuing to see increases in lymphocyte count at 90 micrograms per kilogram as we reported today, we believe that when we get to 120 micrograms per kilogram, we should be pretty much on par with the upper limits of dosing where we had from non-human primates. So, so far, the trends from non-human primate data are predictive of what we’re seeing with the lymphocyte counts with other expansion of CD8+ T cells, NK cells. So being consistent, and we believe that we are pretty much close to that upper limit. And we do not expect that we will necessarily have to go to sort of next higher dose. But we already have a promising data from the 60 micrograms, we have data from 90 and 120.

So we have three sets of data or dosing to pick from, in view of the fact that we’ve met the safety burden with both the 60 and 90 micrograms, and see if we meet the same safety burden at the 120. But generally, across the board, we feel pretty comfortable that above 60 onwards, we should be having a therapeutic activity that’s more than adequate for MDNA11, obviously, we want to make sure that before we enter the Phase 2 portion of the trial, we need to make sure that we can confirm that by testing the higher doses as well.

Matt Biegler: Right, right. That makes sense. Okay. And then maybe just a quick follow-up on, I’m sure you’re aware of Proleukin was effectively sold to Iovance few weeks ago. I’m just kind of curious on your view of that transaction, and kind of what that means for the field. And if, you know, in the future there’s any opportunities to combine with other therapeutic modalities outside of checkpoint inhibitors? Thanks.

Fahar Merchant: Right. Again, really good question, Matt. That really was an indication as to how large the potential opportunity is for molecules such as MDNA11. I think if you recall the data from Iovance that presented at SITC, clearly indicated that in the Phase 3 setting, where they were using Proleukin, the toxicities were clearly there, they were obviously not desirable. And it’s not surprising that Iovance is also looking to develop a much safer version of IL-2. So, I believe about that the potential for IL-2, particularly MDNA11, where we have the selectivity for boosting NK cells and CD8+ T cells and not Tregs, becomes really important, because after going through a sort of a long process of isolating your T cells from the patient, and then having to expand them through ex-vivo manufacturing, and then re-infusing the T cells.

That itself, I think, as you know, is a long process and you want to make sure that you have the best quality of T cells that you’re infusing into the patient. The good thing about a molecule such as and doing a good job of stimulating your immunosuppressive Tregs, and this is exactly what we want, this is from a manufacturing perspective, make sure that you’re able to boost the population of CD8 + T cells and NK cells, not Tregs, which unfortunately is not the case with Proleukin, because it will boost the population of Tregs. And then when you insert or re-infuse the T cells, you want to continue to expand those T cells selectively, not expand your Tregs. And this is again where MDNA11 has its distinct selectivity and therefore distinct advantage.

So we believe that this particular Iovance transaction sets the stage clearly for all other T cell-based processes or car-T-based processes, et cetera, where not only what a drug such as MDNA11 be ideal for manufacturing purposes, but more importantly, is to then stimulate those T cells in the patient without boosting your Treg population. So that’s, I think, an important industry or important opportunity to exploit and I think MDNA11 is really well suited for the purpose.

Matt Biegler: Very cool. Thank you guys for the question.

Operator: Thank you. The next question is coming from David Martin of Bloom Burton. Please go ahead.