Medicenna Therapeutics Corp.
Q4 2021 Earnings Call Transcript

Published: 28 May 2021

[Operator:]

Hello. And welcome to Medicenna Therapeutics Fiscal Year 2021 Earnings Call. All participants are now in a listen-only mode. There will be a question-and-answer session at the end of this call. Please be advised 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. Please go ahead.

[Dan Ferry:]

Thank you, Operator, and thank you all for participating in today’s conference call. Earlier today, Medicenna issued a press release providing financial results and corporate updates for the fiscal year ended March 31, 2021. If you have not seen the press release it is available on the Investors page of Medicenna website.

[Dr. Fahar Merchant:]

Thanks, Dan. And thanks to all listening for joining us on the call today to discuss our fiscal year 2021 corporate update. In addition to Dan, I’m joined by Dr. Mann Muhsin, our Chief Medical Officer; Dr. Kevin Moulder, our Chief Scientific Officer; Mina Merchant, our Chief Development Officer; and Liz Williams, our Chief Financial Officer.

[Dr. Mann Muhsin:]

Thank you, Fahar, and good morning everyone. Today I will be talking about the MDNA11 program. First, I’d like to introduce myself and explain exactly why I’m so excited to be part of the Medicenna team.

[Dr. Fahar Merchant:]

Thank you, Mann. As I mentioned earlier, MDNA55 is an IL-4 guided toxin targeting recurrent glioblastoma. Findings from the Phase 2b trial evaluating MDNA55 in rGBM were recently published in the peer reviewed journal Clinical Cancer Research.

[Dr. Kevin Moulder:]

Thank you, Fahar. I’m very excited to be speaking on the call today. I would like to start by introducing myself to those listening, since like Mann, I’m also a recent addition to the Medicenna management team. I joined Medicenna with over 30 years experience in drug discovery and development in several fields such as protein design, antibody technology, autoimmune disease and immuno-oncology. This includes my time at Biogen where I ran a predictive medicine department. My time as CSO of F-Star Therapeutics where I established the company’s bispecific antibody technology and led the translational efforts to identify the program for clinical need and my time as Chief Development Officer at Tusk Therapeutics I have directed the development of an anti-CD25 antibody. This antibody showed anticancer activity that stem from its abilities to deplete Tregs while preserving IL-2 activity on effector T cells and advancements in its development subsequently prompted the acquisition of Tusk by Roche. At Medicenna, I will be applying my knowledge from these experiences as we work and leverages the power of the Superkine and BiSKITs to advance first and best-in-class efforts towards the clinic. These platforms are powerful and versatile drug development tools and my desire to work with molecule key asset behind my decision to join Medicenna. I’d now like to give a brief overview as to how these platforms work. I will start with the Superkine platform, which was by enabling the enhancement of natural interleukins process known as directed evolution. During this process, subtle changes are made to interleukins to modulate that desired properties, ultimately, resulting in a library of tunable Superkines designed to address the underlying mechanisms of a particular disease. Select Superkines then be engineered to further improve properties such as half-life as in the case of MDNA11 or to add new capabilities such as the ability to deliver a payload of a cell in toxins specifically to cancer cells, as in the case with MDNA55. The natural progression of our Superkine platform eventually led to the creation of our BiSKITs program, which we unveiled in March. BiSKITs are highly versatile and powerful molecules that consist of Superkines fused to a second anticancer protein such as a checkpoint inhibitor or the second Superkine. By combining molecules in this fashion, we can create immunotherapeutic agents that incorporate two synergistic mechanisms of action and overcome the shortcomings of currently available therapies. At the AACR meeting last month, we presented data on one of these assets derived from our BiSKITs platform. The asset is designed to overcome the shortcomings of checkpoint inhibitors. As you may note, checkpoint inhibitors are designed to target tumors by enhancing the activity of cancer fighting immune cells. However, many tumors have immunosuppressive micro environments that limit the efficacy of these therapies, such tumors referred to as being immunologically cold and it was with these tumors in mind that we designed MDNA19-413. As we discussed during our AACR presentation, MDNA19-413 consists of a super antagonist. It is designed to work via two complementary and synergistic mechanisms of action targeting both IL-2 and IL-4/IL-13 signaling. I will focus first on the IL-4/IL-13 mediated mechanism of action. The molecule was designed to modulate this signal activity by selectively binding the IL-13 receptor alpha subunit on the cells of its tumor micro environment. This leads to the assumption in the IL-4/IL-13 signaling, and ultimately, the inhibition of an M2a polarization of Tumor Associated Macrophages. This is significant blockade of M2a macrophage polarization mitigates the pro-tumoral effects of the immunosuppressive micro environments. Mitigating these effects can affect near term a cold tumor heart, thereby making it susceptible to destruction by anticancer immune cells. Now with regard to IL-2’s signaling MDNA19-413 works in a manner very similar to MDNA11, preferentially targeting CD122 to enhance the activity of cancer killing affected T and NK cells. This IL-2 driven agonists action complements the IL-13 driven antagonist activity I just mentioned making MDNA19-413 a potential anticancer agent is essential to effectively target cold tumors that are often the resistance of cold inflatables therapies. But this potential was demonstrated in our recent AACR presentation and one of them goes through the full data set here are a couple of key points I’d like to highlight. First, the molecule effectively enhanced signaling in cancer killing effector T and NK cells and reduced activation of pro-tumor Treg cells. This was evidence by a 209-fold and 90-fold enhancement in CD8/Treg and NK/Treg ratios in vitro respectively when compared to native IL-2. Second, the molecules selectively binds and inhibits both, IL-4 and IL-13 signaling via the IL-13 receptor alpha 1 subunit, which is normally associated with the pro-tumoral effects of M2a macrophages, while showing reduce affinity for the IL-13 alpha 2 decoy receptors subunits. Compared to long-acting Fc fusion of IL-13, the molecule was approximately 240 times more selective for the alpha 1 subunit compared to the alpha 2 subunit. This selectively led to notable functional outcomes as MDNA19-413 was able to potently inhibit IL-13/IL-4 signaling pathways and mitigates the polarization of M2a macrophages in vitro. Taken together, these results show how the BiSKITs platform can effectively combine the enhanced immune signaling properties of multiple specific items into a single bi-functional compound. In the case of MDNA19-413, this resulted in the novel molecule with the potential to enhance the power of the immune system to address critical unmet need. Looking forward, I’m eager to lead the continued development ofMDNA19-413, as well as our border BiSKITs program. We expect to declare our first lead candidate for the program in the fourth quarter of calendar 2021. With that, I’d like to hand off the call now to our CFO, Liz Williams who will present our financial results for the fiscal 2021.

[Liz Williams:]

Thanks, Kevin, and good morning, everyone. Before I begin, I would like to note that all references to dollar amounts are in Canadian dollars unless otherwise noted. I’m pleased to report that over the past fiscal year Medicenna was able to establish and maintain a strong financial foundation, while advancing our pipeline of cytokines-based immunotherapies. Medicenna had cash, cash equivalents and marketable securities of $40.4 million as of March 31, 2021. These funds provide the company with sufficient capital through late 2022 based on its current plans and projections. Net loss for the year ended March 31, 2021, was $17.3 million or $0.35 per share, compared to a net loss of $8.3 million or $0.26 per share for the year ended March 31, 2020. The increase in net loss for the year ended March 31, 2021, compared with the prior year was primarily a result of increased research and development expenditures related to the MDNA11 programs, as well as costs associated with the NASDAQ listing, in particular directors and officers insurance premiums, as well as no reimbursement under the grant from the Cancer Prevention and Research Institute of Texas in the current year period. Research and development expenses of $10.9 million were incurred during the year ended March 31, 2021, compared with $5.9 million incurred in the year ended March 31, 2020. The increase in research and development expenses in the current year is primarily attributable to higher CMC costs associated with GMP manufacturing of MDNA11 for the planned Phase 1/2a clinical trial, increased discovery and pre-clinical expenses associated with GLP compliant MDNA11 IND enabling studies, as well as discovery work on the BiSKITs platform, increased regulatory costs associated with preparation for the end of Phase 2 meeting for MDNA55, as well as regulatory activities associated with preparation for the initiation of a Phase 1/2a clinical trial for MDNA11. And finally, no reimbursement of expenses with respect to the CPRIT grant in the year ended March 31, 2021, compared with $1 million in the year ended March 31, 2020. General and administrative expenses of $6.5 million were incurred during the year ended March 31, 2021, compared with $2.4 million during the year ended March 31, 2020. The increase in expenditures year-over-year is primary attributable to increased directors and officers liability insurance premiums due to our NASDAQ listing, as well as higher legal fees and listing expenses in the current year due to activities associated with our NASDAQ listing, filing a shelf prospectus in both Canada and the United States, qualifying our common shares with the Depository Trust Company and other current corporate initiatives. 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 now hand the call back over to Fahar.

[Dr. Fahar Merchant:]

Thanks, Liz. Before we move on to the Q&A, I’d like to emphasize how proud I am of our team for all that they have accomplished over the past fiscal year. They showed a tremendous amount of talent and dedication amid the pandemic, which enabled us to generate strong clinical and preclinical data across our pipeline. This has left us poised to achieve a steady cadence of value creating milestones over the next year as we work to drive our sustained growth, and most importantly, improve the lives of patients. With that, we will now open the lines for questions. Operator?

[Operator:]

Thank you. Our first question is from Matt Bieg -- I’m sorry, Biegler with Oppenheimer. Please proceed.

[Matt Biegler:]

Okay. Hey. Thanks, guys. Thanks for the questions and welcome to the new members of the C-suite. Fahar and Mann, appreciate the details on the planned Phase 1, maybe if we could just get a little bit more granular. Have you actually nailed down or agreed upon with Australia and U.K. start those yet. And based on preclinical models, how long do you think into dose escalation it might take us until we get into a therapeutically active range?

[Dr. Fahar Merchant:]

Right. Thanks, Matt. Thanks for calling in. Appreciate the question that you’ve asked. Clearly, as I’m passing it on to Mann, so he can elaborate a bit more. But suffice it to say that, as I mentioned earlier on that we had positive meetings with the MHRA regarding the CMC, the preclinical, as well as the clinical plan. And therefore that has been reviewed and we have received comments, and incorporated those in our dossier that we are preparing right now. With respect to dosing and et cetera, I pass it on to Mann, perhaps, you can elaborate a bit more. Mann?

[Dr. Mann Muhsin:]

Thank you, Fahar. So at this point in time, we won’t be disclosing our first inhuman dose or give you a projections regarding how many escalations would we need before getting into recommended Phase 2 dose and hitting an IMPD level. But we will continue to provide frequent updates and progress towards initiation of the trial in Australia dosing the first patient. And as indicated earlier, we will be communicating earlier results from the available patient population dose throughout this year by end of 2021. Thanks, Matt.

[Dr. Fahar Merchant:]

And -- yeah. And I’ll also add to that, of course, the discussions with MHRA, for instance, they were keen to make sure that the first cohort would get a dose that was close to therapeutically active and that is remains our plan. And once we have shared the protocols with the regulators and ethics committees and those have been approved, we’ll be much better able to disclose the dosing plan in subsequent disclosures that come by, okay?

[Matt Biegler:]

Got you. Okay. Maybe I could just sneak one question and then about the safety profile, obviously, the IL-2 space in general, safety is a potential concern and kind of striking that right balance between safety and efficacy is kind of the Holy Grail I think as we see it. So are you using any -- as you think about your Phase 1 trial, are you are you using any lessons learned from your competitors, such as prophylactic hydration to reduce the risk of hypertension. Anything that you can incorporate into the Phase 1 trial that you think could lower any safety risks? Thanks.

[Dr. Fahar Merchant:]

Well, first, I’ll just give my brief comments. Suffice it to say that, of course, all the regulator agency ethics committees, who are familiar with the ongoing studies with different IL-2 programs that are in the clinic at the moment will always want to ensure that we had appropriate language and procedures, protocols, et cetera to address those. So that would be expected from any ethics committee. But I will sorts of also let Mann something like to add.

[Dr. Mann Muhsin:]

Yeah. Thank you, Fahar. It’s a great question. So, yeah, absolutely, all the above, we will use all the lessons learned from agents in the IL-2 landscape. All the lessons learned all the adverses and thing with this drug class myself worked on IL-12, high dose Il-2, a related IL-2, and as you know, there is a cluster of adverse events that we typically see with this drug class anticipated for all those agents and we will typically follow the usual institutional guidelines and specific guidelines in managing toxicities seen with this drug class in IL-2 specifically. Thank you.

[Matt Biegler:]

Okay. Thanks, guys. Looking forward to the next 12 months.

[Dr. Fahar Merchant:]

Thank you. Thanks, Matt.

[Operator:]

Our next question is from RK Ramakanth with H.C. Wainwright. Please proceed.

[RK Ramakanth:]

Thank you and good morning Fahar and team. A couple of questions here. So, Dr. Muhsin, if you could have helped me kind of compare and contrast the MDNA11 program here versus the programs that have been -- are being run by Nektar, especially like NKTR-214. So we understand how these programs here are situated against what’s out there in the competition? Thank you.

[Dr. Fahar Merchant:]

Thank you.

[Dr. Mann Muhsin:]

Hi.

[Dr. Fahar Merchant:]

Well, great, thanks. Really, I’ll sort of from a mechanistic point of view, let me just bring and then I’ll let the further clinical aspects to be presented by Mann. But just from a structural perspective, the way the molecule has been designed, is such that we have, as you know, engineered into the molecule, two different key characteristics. The first one being that we have knocked out the binding or inserted mutations that would block binding to CD25. And second of all, we have inserted mutations that dramatically increase the affinity for CD122, and therefore, selectively stimulating effector T cells, NK cells and naive T cells as well. So that’s the key aspect that’s differentiated, and then, of course, the way we have approached this molecule with respect to how we extend the half-life is to use albumin fusion instead of pegylated approaches that you mentioned was the case with NKTR-214. And we believe that that’s a big differentiator because we know that albumin does extend half-life as we’ve shown in our non-human primate data. But also that albumin tends to accumulate in the tumor, as well as draining lymph nodes. And that by itself also allows us to better localize our engineered IL-2 at the tumor site. And I’ll pass it on to Mann, who’s obviously got a lot more experience with NKTR-214. Mann?

[Dr. Mann Muhsin:]

Thank you, Fahar. So on top of what Fahar indicated from mechanistic, from drug design and MLA, I cannot disclose much or anything to about NKTR-214, but I can tell you about our compounds. And of course, given that we don’t have yet clinical data, but based on the preclinical data and animal models we’ve seen the drug being utilized and dosed in those animal models. And it doesn’t look like we will have issues related to cytokine release syndrome, vascular leak syndrome or -- and other toxicities seen in this drug class and become a dose limiting toxicities in some patients. Based on the data available so far, it doesn’t look like it will be an issue that similar to agents in this drug class that have this issue based on mechanistic and pathway drug class effect. Obviously, the data -- the clinical data will throw everything and we’ll keep you updated based on the clinical data obtained and dose escalation portion of the program. Thank you, Fahar.

[RK Ramakanth:]

Thank you. Thank you. And the one additional question, this is on the BiSKITs program. So this -- from what I understand this is a balancing act between enabling your pro-tumoral activity and activating a pro-inflammatory response. So in such a program, what sort of safety signals should we be looking out for, especially in your preclinical work and also when you get into a clinic in the Phase 1 study?

[Dr. Fahar Merchant:]

Yeah. So, again, here, clearly, if -- it all depends on what components or what to bi-functional molecules become part of the candidate that goes into the clinic. And as we said, we are currently conducting research to identify the best candidate and we will disclose the best candidate towards the end of this year as a lead candidate. So it’s a bit difficult for us to predict as to which molecule, is it the one that goes into the clinic at this time and based on the key components of the molecule, for instance, it contains the IL-2 super-agonist then, of course, we will need to incorporate the safety issues that are consistent with the IL-2 space. And with respect to any other fusion partner, whether it’s a checkpoint inhibitor, a targeted antibody or an IL-4/IL-13 antagonist that will then be based on those molecules characteristics, and potentially, we will obviously know a lot more once we’ve done some initial screening in non-human primate studies just to what safety signals we need to look at. So it would be premature for us to say anything at this time.

[RK Ramakanth:]

And one last question, this is on the MDNA55. I understand you can’t really talk too much about ongoing discussions. But, obviously, this is -- this has been a subject for you, folks, for a while now. So what exactly - I mean, what exactly are you looking for in the partnership and what are the major discussion points at this time that that you need to get through before you can sign an agreement?

[Dr. Fahar Merchant:]

Yeah. It’s difficult for us to present anything with respect to what the discussion points are. Of course, those, as you say, it may be private, and therefore, I can only say that we are in active discussions and we will be able to provide an update as soon as the timing is appropriate. So that’s the plan going forward and suffice it to say that we do have discussions going on. So that’s all I can say for now.

[RK Ramakanth:]

Thank you, Fahar.

[Dr. Fahar Merchant:]

Thanks.

[Dr. Mann Muhsin:]

Thanks.

[Operator:]

Our next question is from Jason McCarthy with Maxim Group. Please proceed.

[Unidentified Analyst:]

Hi, everyone. It’s Dave on the line for Jason. Thanks for taking my question. So, with respect to MDNA11, would the ex-U.S. trials help guide the direction of U.S.-based trials and do you think it’s possible that data gathered from these trials could possibly help expedite the development process, change the MDNA11 in the U.S.?

[Dr. Fahar Merchant:]

Sorry, I didn’t quite get the question. Could you sort of repeat it once more, please?

[Unidentified Analyst:]

Sure. So the trials that are initiating outside of the U.S. MDNA11, I was just asking is, those trials would help guide the future direction of U.S.-based clinical trial. And if you think data gathered from the ex-U.S. trials to help expedite the development process of MDNA11 here in the U.S.?

[Dr. Fahar Merchant:]

Yes. Of course. So any data we gather from outside the U.S. will be part of the same protocol, and therefore, if any submissions that we make to the regulatory agency and as part of the protocol itself, we will make sure that there is a unified protocol that can be used globally. So I will let Mann also supplement that, please, Mann.

[Dr. Mann Muhsin:]

Yes. Fahar, it’s confirmed the data that we will be gathering from Australia will contribute to the overall program and will be combined with the data generated in U.S. and other regions ex-U.S. And that will constitute the total efficacy, safety data, the total sample size for the Phase 1 and the Phase 2 portions of the program. Thank you.

[Unidentified Analyst:]

Great. Thanks for the excellent color. I appreciate it.

[Operator:]

Our next question is from Kumar Raja with Brookline Capital Markets. Please proceed.

[Kumar Raja:]

Thanks for taking my questions and congratulations and welcome Dr. Moulder and Dr. Muhsin. So, first, maybe, with regard to the characteristics of the patients who plan to enroll in the Phase 1 trial, are there any particular histologies you are planning to target? And also looks like initially you are looking at finding with the naïve patients, but how are you guys thinking about patients who are resistant to checkpoint inhibitors, as well as progressing on those? And what are your thoughts on combinations with checkpoint inhibitors, at what time point do you think you will be able to move into that?

[Dr. Fahar Merchant:]

Right. Thank you, Kumar. Good to talk to you today. I will ask Mann to respond to that question. Mann?

[Dr. Mann Muhsin:]

Yeah. Thank you, Fahar. Thanks for asking. So, the histologies and the patient population to be included in the Phase 1 and the Phase 2 portions of the program. We will be including patients who are resistant, who failed prior lines, failed checkpoint inhibitors, and in certain cases, they’re resistant. The tumor types are yet to be fully disclosed. But I can tell you in general, we will follow the tumor types that have highest likelihood of response and have higher probability of success based on the high dose IL-2, based on the and based on what we know about the IL-2 activity in the immunogenicity spectrum, why patient population will be naïve, as well as previously treated, but we won’t be accepting heavily pre-treated patient population, as you know, this is the safety -- first part of this study is a safety focusing arm that will evaluate the dose and toxicity. So we have to be mindful of that. And in regards to the checkpoint inhibitor part, yes, we will be having a checkpoint inhibitor arm in the study, but also after clearing the dose shifting monotherapy part of the program, as well as seeing the activity before combining it with the checkpoint inhibitor ideally PD-1, PD-L1. Thanks for asking.

[Kumar Raja:]

And in terms of the U.K. trial, when do you think it will come on Board and how do you plan to coordinate with Australian trial?

[Dr. Fahar Merchant:]

So just to let you know, we will -- as you know, we will be starting off in Australia and the same protocol will apply to U.K. From a timing perspective, of course, as we generate some initial data and prepare the IMPD dossier for submission to MHRA, those all will be sequential. And also filing and submitting the package to the FDA as part of an IND package. These will all follow after we have started enrollment in Australia. So timing is not confirmed per se, but we will provide guidance as we advanced with the enrollment in Australia first.

[Kumar Raja:]

Okay. And maybe finally in terms of dose escalation based on the animal models, how are you thinking that how quickly can you dose escalate? Thanks.

[Dr. Fahar Merchant:]

Mann, maybe you can answer that.

[Dr. Mann Muhsin:]

Sorry, if you could repeat the question, I didn’t get the second part of the question.

[Kumar Raja:]

No. I’m asking how quickly you think you can dose escalate based on the data from the animal models. Thank you.

[Dr. Mann Muhsin:]

Thank you. So, as Fahar indicated, and we also articulated in the call, we will not be starting from sub-therapeutic doses or low doses, it will be an accelerated sequential dose escalation that will allow us to choose intermediate doses, de-escalate, and in some cases also we could skip a dose levels based on the availability of safety, PK data and others. I don’t anticipate we will have multiple escalations. I do anticipate that we will get into our recommended Phase 2 dose relatively quickly. I’m confident the drug will deliver a favorable safety profile, superior efficacy profile to competing agents in the landscape, and certainly, compared to high dose IL-2. Thanks for asking.

[Kumar Raja:]

Okay. Thanks so much.

[Operator:]

Our next question is from David Bautz with Zacks Small-Cap Research. Please proceed.

[David Bautz:]

Hey. Good morning, everyone. Thanks for the update this morning. And thinking about the development pathway for the MDNA19-413 bispecific molecule, do you eventually think you’ll end up testing that and combination with like a PD-1 molecule or that more likely, say, as a monotherapy?

[Dr. Fahar Merchant:]

Right. Good question, David. The key aspect is that, of course, as you know, we have different modalities with respect to the BiSKITs program itself and one of them we demonstrated was the MDNA19-413 as a potential candidate. So that’s not really etched in stone as that being the molecule that we will take ahead. What it could be a molecule that has a fusion to a checkpoint inhibitor, for instance. So until we’ve done some additional studies, identify the lead candidate and studied these molecules, either in a monotherapy setting or also in a combination setting. Once we have that data, we’ll be able to judge further as to what will be appropriate combination partner or if we even need a combination partner. So that’s still not to be -- it’s still to be determined. So that’s a bit too early at this moment.

[David Bautz:]

Okay. And then do you foresee the company presenting any additional preclinical data on either MDNA11 or the BiSKITs program later this year?

[Dr. Fahar Merchant:]

We are obviously looking forward to certain conferences that are on our horizon as to potential places where we would present additional data on MDNA11. This will be preclinical, as well as additional data on our BiSKITs pipeline. So we look forward to updating these different programs that we have ongoing, and hopefully, there will be those presentations before the end of the year.

[David Bautz:]

Okay. Great. Thanks for taking the questions.

[Dr. Fahar Merchant:]

Thank you, David.

[Operator:]

We have reached the end of our question-and-answer session. I would like to turn the conference back over to management for closing remarks.

[Dr. Fahar Merchant:]

Well, thanks again, to everyone for joining us on the call. We look forward to the continuous advancement of our pipeline and discussions along the MDNA55, partnering activity as well and we’ll keep everyone updated along the way. Thank you very much and good-bye.

[Operator:]

Thank you. This does conclude today’s conference. You may disconnect your lines at this time and thank you for your participation.