Affimed N.V. (NASDAQ:AFMD) Q3 2022 Earnings Call Transcript

Affimed N.V. (NASDAQ:AFMD) Q3 2022 Earnings Call Transcript November 15, 2022

Affimed N.V. beats earnings expectations. Reported EPS is $-0.11, expectations were $-0.18.

Operator: Thank you for standing by. Welcome to today’s Third Quarter Earnings and Business Update Conference Call by Affimed N.V. As a reminder, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. Please note this conference call is being recorded. I would now like to hand the call over to your host for today, Alex Fudukidis, Director of Investor Relations at Affimed. Please go ahead.

Alex Fudukidis: Thank you, Shannon, and thank you all for joining us for our call today. Before we begin, I’d like to remind everyone that we issued the relevant press release earlier today, which can be found on the Investor Relations section of our website. On the call today, we have 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, Chief Operating Officer; Denise Mueller, our Chief Business Officer; and Angus Smith, our Chief Financial Officer. The team will be available for the Q&A session 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’ll turn the call over to Adi. Adi?

Adi Hoess: Thanks, Alex. Good day, everyone. And thanks for joining us for the third quarter update call. Let me start with the most important update that we announced earlier this month. As we are showing on Slide 4 after an extensive evaluation of the available on November 3 we announced the new collaboration with Artiva. Building on our already established relationship to take the combination treatment of AFM13 and Artiva cryopreserved off-the-shelf cord blood-derived NK cell product candidate called AB-101 with . For us this collaboration is a natural evolution of the AFM13 plus NK cell program, as we move this therapy from an early stage into late stage development and begin to position the combination for commercial success.

According to our analysis, this partnership represents the fastest option to make this combination therapy available to patients. We’re convinced that we made the right choice for AFM13. Now through this collaboration, we have gained access to a highly active NK cell product. As shown on Slide 5, we’ve generated preclinical data showing the highly synergistic anti-tumor activity of the combination of AFM13 with AB-101. Overall based on the preclinical data generated, as well as our previous experience of administering AFM13 with a cord blood-derived NK cell product in our AFM13 monotherapy study, we’re confident that AFM13 administered in combination with AB-101 has the potential to generate a robust ADCC response and clinical activity in patients with relapsed or refractory Hodgkin lymphoma in CD30-positive peripheral T-cell lymphoma.

Other factors were considered when selecting AB-101 and this included the fact that AB-101 is already in clinical development with clear IND and is a cryopreserved off-the-shelf product. We demonstrate consistent and high CD16A expression. A GMP-grade manufacturing type was the right scale for clinical trials and future commercialization is available and the product has viable cost structure. Moving to Slide 6, it shows that the terms of the deal with Artiva allow us to accelerate the development of the combination therapy now by leveraging the financial resources of the two companies. Affimed will initially pay for the clinical trial costs of the Phase 2 study and Artiva will supply AB-101 and AB-102 for the study at their cost. Cost of any confirmatory study will be shared 50/50.

And also revenues will be shared with Affimed now receiving 6% to 7% of the revenues after combination therapy. In our efforts to move forward quickly, we’re also making progress on the regulatory front. We already requested a pre-IND meeting with the FDA in early September and the agency has indicated that they will provide feedback to us by the first quarter of 2023. This is a little later than the usual 60-days, which the agency has informed us is caused by significant backlog due to Covid. Still, our goal is to submit an IND for the combination study in the first half of 2023 and begin affinity study later in the year. We believe that we’ll be able to move into the clinic quickly because of the robust clinical and preclinical data that has been generated for each product on its own.

The preclinical data that we’ve collected from over two year collaboration and the very good safety profile that we have seen in our combination study with AFM13 and cord-blood derived allogeneic NK cells. So as you can appreciate, we are at a very exciting point in the development of our company. In addition to the data and business updates we provided in the last few weeks, we are preparing to announce key catalysts that could have a meaningful impact for our company and the patients we serve. These include top line data from the Phase 2 redirect study of AFM13 in peripheral T-cell lymphomas in mid-December and data from the combination of AFM13 with NK cells in action. Now to tell you more about our clinical program and some of our recent data, I’ll hand over the call over to Angus.

Andreas?

Andreas Harstrick: Thank you, Adi, and also a warm welcome from my side to everybody on the call. I would like to take the opportunity and provide an update on our clinical programs and the progress that we have achieved. Let us start with our AFM13 program on Slide 9. Our registration-director monotherapy study of AFM13 in relapsed and refractory peripheral T-cell lymphoma, also known as REDIRECT has completed enrollment earlier that year. As previously communicated, we expect to report data from the study in mid-December. The study has enrolled more than 100 patients with relapsed or refractory CD30-positive peripheral T-cell lymphoma. And the focus of the initial data release will be on the overall response rate as assessed by a blinded Independent Review Committee, which is the primary endpoint of study and a preliminary assessment of the duration of responses, as well as an analysis of safety.

And as a reminder, peripheral T-cell lymphoma is a disease with still significant unmet medical need. In our estimates, there are about 1500 patients in the U.S. alone with relapsed refractory PTCL and the treatment options remain very limited. And the prognosis for these patients is poor. As also previously communicated we plan to initiate discussions with the FDA following our analysis of C data. The second AFM13 study that is ongoing is our Phase 1/2 AFM13-104 in collaboration with MD Anderson Cancer Centre, evaluating cord blood-derived natural killer cells pre complexed with AFM13 given one infusion, followed by three single agent AFM13 treatments in patients with relapsed and refractory CD30 positive lymphomas. On Slide 10, you can see the highlights from the ASH abstract from a couple of weeks ago.

We showed that as of July 31, the cutoff date for the analyzers that provided data for the abstract, 24 patients have been treated at the highest NK cell dose of NK cells per kilogram body weight. This represents an increase of 11 patients since the data reported at AACR earlier this year. To highlight, the overall response rate at this dose has been maintained at 100% as a complete response rate increased to 70.8%, an improvement over the 61.5% CR rate as reported earlier this year at ACR. As announced in our press release, Dr. Yago Nieto, Professor of Stem Cell Transplantation and Cellular Therapy at the University of Texas MD Anderson Cancer Centre and principal investigator of study will provide an update from the ongoing Phase 2 trial at ASH on December 10.

Now let’s turn to AFM24. As you can see on Slide 11, we shows that we are continuing to enroll patients in all three ongoing studies, including the expansion cohorts of our monotherapy study and the dose escalation cohorts for the combination studies with atezolizumab, and SNK01 autologous NK cell product from NKGen respectively. In the AFM24 monotherapy trial, we are continuing to enroll patients in the expansion phase at the recommended Phase 2 dose of 480 milligrams weekly. The expansion cohorts include patients with renal cell carcinoma, non-small cell lung cancer with activating EGFR mutations, and colorectal cancer which are KRAS wild-type. In the combination studies, we are continuing to enroll patients in the dose escalation phases of the two studies.

As a quick reminder, the primary purpose of the dose escalation phase of the studies is to establish the safety of the two combinations and identify the recommended phase two dose for further testing. In AFM24-102, the combination study of AFM24, given weekly with atezolizumab at the recommended phase – the recommended dose given every two weeks. We are enrolling patients with non-small cell lung cancer, which are EGFR, wild-type, gastric or gastroesophageal, junction, adenocarcinoma, and pancreatic/hepatocellular and biliary tract cancer. We completed the first dose escalation cohort of 160 milligrams weekly of AFM24, without any dose limiting toxicities. Furthermore, the first three patients at a 480-milligram dose has now been enrolled and completed their dose limiting toxicity period without DLTs. According to protocol, we are enrolling additional three patients at this dose to confirm 480-milligram as the recommended Phase 2 dose for this combination.

As a second combination study AFM24-103 is investigating the combination of AFM24 with SNK01. The ex vivo expanded and activated autologous NK cell therapy from NKGen Biotech. In these studies both agent AFM24 NK cells are given weekly to patients with non-small cell lung cancer, EGFR wild-type, squamous cell carcinoma, the head and neck and colorectal cancer. In this study, we have completed the first dose escalation cohort, which treated patients at 160 milligrams of AFM24, with no dose limiting toxicities. We are currently enrolling patients at the 480-milligram dose of AFM24. On Slide 12, we are showing a summary of two presentations that were presented at SITC Immunotherapy Congress last week. For the monotherapy study, correlative science data from the dose escalation portion of study provided interesting insights into the mechanism of action of AFM13.

Findings showed that starting at low doses of AFM24 NK cell activation could be seen in the peripheral blood. CD16A receptor occupancy also increased in a dose dependent manner at lower doses, but leveled off at a dose of 320-milligram and above, indicating that at this dose receptor occupancy was saturated. We could also demonstrate activation of cytotoxic T cells in the periphery pointing to a simultaneous activation of the adaptive and innate immune system. Furthermore, when we looked into tumor biopsies by immune histochemistry and gene expression profiling, translating the findings from the peripheral blood to the tumor, we saw that NK cells and cytotoxic T cells increased in the biopsies of AFM24 treated patients indicating that cytotoxic cell function of both NK and T cells are increasing significantly.

This data demonstrated AFM24 activates the innate and the adaptive immune system in the periphery and in the tumor microenvironment and paves the way for combinations with checkpoint inhibitors and NK cells. This brings me to the combination with atezolizumab, the – Phase 1 dose escalation study. Here we showed that clinical activity was observed in two patients in the first dose escalation cohort of 160 milligrams of AFM24 weekly. As you can see on the slide, one of the patients was a patient with gastric cancer. This patient had already been treated with pembrolizumab and chemotherapy combination in first line, followed by three lines of various chemotherapy regimens before included into the trial. Importantly, to the pembrolizumab chemotherapy combination in first line, so patients had only achieved a very short lasting partial response, which was followed by progression of metastasis, while still on pembrolizumab treatment.

It is important to note that this represents a patient profile where response to single agent PD1 rechallenge is very unlikely. The second patient a patient with pancreatic adenocarcinoma, exhibited stable disease on the combination of AFM24 plus atezolizumab after showing progressive disease on three different previous chemotherapy regimens. We are expecting to submit data from all three AFM24 studies to major scientific conferences in the second and third quarter of 2023. On Slide 13 for AFM28, we announced an abstract at ASH which will describe the preclinical in vitro models using a panel of AML lines showing efficiency and antibody dependent cell mediated cytotoxicity against CD123-positive tumor cells by a combination of allogeneic NK cells and AFM28.

This combination induced highly potent and selective lysis of CD123-positive leukemia cells and included cytotoxicity against leukemic stem cells and progenitor cells. We believe that this is an important finding, as the ability to eradicate leukemic stem cells is associated with durable responses, and the potential for long-term remissions in patients with refractory or relapsed AML. Given the aggressive nature of the disease and the need for viable treatment options, the AFM24 and 28, program is of high priority for Affimed. And we remain committed to being able to offer this treatment options for relapsed and refractory AML patients as quickly as possible. Accordingly, we moved quickly to file clinical trial applications in a number of European countries with Spain and France leading the way.

Additional filings in different jurisdictions are expected in the next few months. With that, I would turn the call over to Angus to update you on the quarterly financial numbers. Angus please?

Angus Smith: Thank you, Andreas. Balance sheet and income statement highlights are shown on Slide 15 and 16 of the presentation. Affimed consolidated financial statements have been prepared in accordance with the IFRS as issued by the International Accounting Standards Board or IASB. Financial statements are prepared in euros which is the company’s functional and presentation currency. Therefore all financial numbers that I’ll present in this fall unless otherwise noted will be in euros. As of September 30, 2022 cash and cash equivalents totaled €222.9 million compared to $197.6 million on December 31, 2021. Based on our current operating plan and assumptions, we anticipate that our cash and cash equivalents will support operations into mid-2024.

Net cash used in operating activities for the quarter ended September 30, 2022 with €19 million compared to €25.6 million for the quarter ended September 30, 2021. Total revenue for the quarter ended September 30, 2022 was €14.9 million compared with €18.7 million for the quarter ended September 30, 2021. Revenue predominantly relates to the Genentech and Roivant collaborations. Research and development expenses increased by 27% from €20.6 million for the quarter ended September 30, 2021 to €26.1 million for the quarter ended September 30, 2022. The increase was primarily due to higher expenses associated with the development of the AFM13 and AFM24 programs a result of an increase in procurement of clinical trial material, clinical patient trial costs and manufacturing costs and increase in costs associated with other early stage programs and infrastructure and an increase in share based payment expense.

G&A expenses increased 19% from €6.8 million in the quarter ended September 30, 2021 to €8.1 million in the quarter ended September 30, 2022. The increase predominantly relates to hire personnel and share-based payment expenses and an increase in insurance premiums and higher consulting costs. Net finance income increased from €1.5 million for the quarter ended September 30, 2021 to €2.7 million for the quarter ended September 30, 2022. Net finance income is largely due to foreign exchange gains related to assets 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 September 30, 2022 was €16.5 million or €0.11 per common share compared with a net loss of €17.1 million or €0.14 per common share for the quarter ended September 30, 2021.

The weighted number of common shares outstanding for the quarter ended September 30, 2022 was €149.3 million. Additional information regarding these results is included in the notes to the consolidated financial statements as of September 30, 2022, which will be included in Affimed’s filings with the U.S. Securities and Exchange Commission. I will now turn the call back to Adi for closing remarks. Adi?

Adi Hoess: Thank you, Angus. Now, as you’ve seen in our most advanced program is called AFM13 and is validating a three-pronged approach and has shown very good safety profile with broad activities. As everything works out as planned, we expect to take the drug forward as monotherapy as well as in combination with natural killer cells, which could create significant value for patients and investors. As shown on Slide 18, with monotherapy and NK cell and combinations, we can initially address the needs of about 3,500 patients in the U.S. only and indeed far more when developed in the EU and Japan with relapsed and refractory so you get CD30-positive Hodgkin and peripheral T-cell lymphoma. And we can even expand beyond to address about 7,500 patients now again just in the U.S. only again it will be more in Europe, Japan by moving to earlier lines.

Considering the lightly value based on current data of the AFM13 NK cell therapy to patients and the payer feedback, we believe we can AFM13 a major commercial opportunity for our company. Now through the partnership with Artiva, we’ve achieved a major milestone that enables us to pursue this substantial market opportunities. If you have heard in parallel AFM24 is moving forward in all three studies, indeed addressing multiple major solid tumor indications. Important overall the safety of AFM24 is monotherapy and in combination looks quite favorable, which now allows us to treat patients at the 480-milligram dose across all three studies. The first data of AFM24 in combination with atezo presented at SITC is highly encouraging and as shown on Slide 19, we are on track to provide additional data updates throughout 2023 at major medical conference.

Our pipeline is further enhanced through AFM28, which is in the filing stage for a clinical Phase 1 study outside the U.S. Also our ongoing partnerships are moving forward. In the case of Genentech, we have made good progress in various preclinical programs and handed over several programs to them for further preclinical development. In our second collaboration, Roivant just presented a poster at SITC which showed that AFM32 represent a novel approach to treating folate receptor alpha expressing tumors by engaging the innate immune response for safe and effective tumor cell killing. Roivant announced that it is expecting to enter into Phase 1 CAR-NK trials in 2023. We’re therefore eligible for additional proceeds from these key collaborations in the near term, including preclinical milestones as well as milestones based on early regulatory achievements.

With this, I’d like to thank you all for your continued support, the patients and their families and for our employees in the U.S. and Europe who are continuing to do the best they can in supporting our efforts to move things forward. We’re now ready to take questions. Operator?

Q&A Session

Operator: Thank you. Our first question comes from the line of Kripa Devarakonda with Truist. Your line is now open.

Srikripa Devarakonda: Hi, guys. Thank you so much for taking my questions. And congratulations on the poster presentations at City. The AFM24 PD-L1 poster that you presented, the patient where you reported a PR in gastric cancer, it’s clear from the closure impact on the cutaneous lesions. Can you tell a little bit — sorry if I missed it, but the impact on the primary tumor cells. And also, it looks like you continue to see a reduction in lesions with multiple doses. Can you remind me how long these patients are expected to be treated at this dose. Thank you.

Adi Hoess: Andreas, please?

Andreas Harstrick: Yes, I can take this. So the patient’s manifestation was mainly skin metastases, which were, as you have seen on the poster quite bulky. The patient also had a primary tumor, which was in the gastric wall. However, due to the difficulty to really objectively measure thickening of the gastric walls lesion was more regarded as an evaluable lesion, but not as a real measurable reason. We also saw some reduction in the gastric wall again with a limitation that it’s very difficult to measure. But again, a major reduction of the skin metastases, which represented the vast bulk of the tumor load in this patient. In terms of duration of treatment, the protocol is designed that we can continue treatment as long as the patient derives clinical benefit. So there is no upper limit of possible cycles that can be given.

Srikripa Devarakonda: Got it. Thank you so much.

Operator: Thank you. Our next question comes from the line of Maurice Raycroft with Jefferies. Your line is now open.

Maurice Raycroft: Hi, congrats on the progress. And thanks for taking my questions. Just wanted to check on the regulatory path going forward for AFM13 and PTCL. So given some of the regulatory updates with other oncology companies in the space as it relates to accelerated approval path and confirmatory studies. Can you talk about your plan for PTCL based on the redirect study and FDA feedback that gives you confidence for your accelerated approval path.

Adi Hoess: Wolfgang, can you take this question?

Wolfgang Fischer: Yes, sure. Hi, Maurice, this is Wolfgang. Once we will have the data, we will consult with the FDA discussing the path forward, right? Because currently, we do not know what the data look like. And this will also include a registration-directed study. Yes, we are aware that the FDA is also talking to other companies, right? And we just heard last week or the week before about that company and that they are requesting that a confirmatory study is underway. However, we do not know what other factors have been considered here, right? So we think we go with our data and discuss with the FDA.

Maurice Raycroft: Got it. That makes sense. And maybe one follow-up just for AFM28. If you do the dose escalation in Europe or start looking at combinations in the EU, how do you eventually plan to pivot back to our development in the United States.

Adi Hoess: Andrea?

Andreas Harstrick: Yes, I think we will generate initial data, initial safety data as we have announced in the European jurisdictions. Now the requirements for FDA to use foreign data is that the patient population and treatment algorithms should represent the standard of care and the usual population in the U.S. I think both factors are given by the selection of the countries that we have. So I mentioned Spain and France will lead the way. So I think as soon as we have cleared initial dose cohorts and have demonstrated also the clinical safety of the program, we should be able to revert back to the U.S. and then embark into a global development program that will include U.S. as well as Europe.

Maurice Raycroft: Okay. Thanks for taking my questions.

Operator: Thank you. Our next question comes from the line of Daina Graybosch with SVB Securities. Your line is now open.

Daina Graybosch: Yes. I want to ask a question about the ASM 24 response in gastric cancer. The cutaneous lesions are obviously — it’s a very clear response. And I wonder if there’s something about cutaneous lesions and the mechanism of targeting EGFR that’s notable. And of the other cancers that you’re going for, if there’s any similarity either in the monotherapy PD-1 or NK cell combinations with manifestations of cutaneous regions. Thank you.

Adi Hoess: Thanks, Daina, Andreas.

Andreas Harstrick: Yes. So thank you for the interesting question. I mean this patient, as you have seen happen to have skin metastases and skin, of course, is an area where you have a high EGFR expression. Now biologically, we think that this is not connected as the EGFR expression would be limited — the hike would be limited to the normal keratinocytes normal cells. The gastric cells still maintain their EGFR expression pattern that they have in the primary tumor. So to my knowledge, there’s no indication that EGFR on tumor cells is upregulated when they home into the skin. So as we announced previously, we have conducted a very specific and very detailed analysis of the tumor microenvironment of a number of very different tumor histologies, which forms the basis for selecting certain indications for monotherapy for combination with PD-1 and for combination with NK cells.

But skin metastasis or the likelihood of skin metastases was not part of the consideration. Again, we believe and the most biological data show that tumor cells irrespective to where the metastasizes will maintain their biological fingerprint or footprint. And therefore, I think a gastric cancer cells at homes to the skin is biologically not very different from a gastric cancer cell that may go to the liver or to the bone or other more frequent metastatic locations?

Daina Graybosch: I have a follow-up. I mean do you see any impact potentially other companies will target normal or stromal cells around the tumor, let’s say, with SAP? Do you see any indication that other cells in the tumor microenvironment or around the normal could have an impact in your sort of mirroring and in vitro model.

Andreas Harstrick: I think for the in vitro model, I could hand over to Arnd. I think clinically, again, the NK cell reactivity is very specific to the cell where the NK cell attaches to and then to the microenvironment, I would not see a difference between skin locations of our tumor cells or other locations. But Arndt, maybe you can take the vital question.

Arndt Schottelius: Yes. Then let me see if I got the question correctly. I mean if you talk about sales in the vicinity in the tumor marker environment. Of course, what we know, and we talk a lot about NK cells. Of course, we have also quite clear growing data in macrophages. Of course, in terms of attempts, they will be recruited. We don’t have evidence for other neighboring cells. Of course, the bulk of the data is for the NK cells. And as Andreas pointed out, these indications have also been carefully selected to see that the Matin system is accessible or actually the cells of the Matin systems are there. I mean above, we have also seen, as Andres described in the talk that the SITC poster, we do see the activation of the innate and the adaptive immune system, which we think is a very natural physiological way to get both systems going in the immuno-oncology cycle.

So much more in a natural way getting adaptive immune cells in there as well. I’m not sure if that answers your question, and we’ll be happy to do follow-ups also.

Daina Graybosch: No, that’s good. Thank you.

Operator: Thank you. Our next question comes from the line of Do Kim with Piper Sandler. Your line is now open.

Do Kim: Hi, thanks for taking my question. I also had a question on the AFM24 Atezo poster that you presented at SITC. In the patient who had a partial response in gastric cancer. Knowing that the patient failed pembro prior, do you think Atezo is contributing to the antitumor activity? And does this partial response change how you think about the monotherapy or give you more confidence in advancing that monotherapy study?

Adi Hoess: Andreas?

Andreas Harstrick: Yes. So let’s start with the pembrolizumab, atezolizumab question. Again, the literature is quite limited. We have not found meaningful data for gastric carcinoma. Most of the experience really comes from retreatment attempts with PD-1, PD-L1 in patients with non-small cell lung cancer. And if you look across the literature, what you see is that the response is possible to PD-1 rechallenge. But these responses are largely limited to patients who have either stopped pembrolizumab or any PD-1 inhibitor, while still in a response or who had to stop temporarily because of immune-related adverse events. If you look at patients who have a demonstrated progression while receiving PD-1 especially when this PD-1 was also given in combination with chemotherapy.

The response rates of PD-1 rechallenge are extremely low in many studies, they are 0%. So we do not think that this patient belongs to patient groups that would have responded to PD-1 rechallenge alone. We attribute this activity clearly to the combination of AFM24 and PD-1. And as Arndt said, I think this is also increasingly supported by our preclinical and clinical data now that we really show also in the patient and activation of the adaptive immune system. So — and now I have a long answer and forgot your second question. Could you repeat, please?

Do Kim: Yes. The second question was, does this response change how you think about monotherapy? Or do you think that atezo was important in getting to this partial response in the gastric patient?

Andreas Harstrick: For monotherapy, we are currently collecting the data. And as we said, we will report initial data into a major scientific conference next year. Whether it really changes our belief — I think our belief from the get-go is that AFM24 is an extremely potent drug that can recruit NK cells, and as Arndt mentioned, can also very potently activate macrophages. So clearly, the combination with a PD-1 or PD-L1 inhibitor is very promising. Again, we believe that there are certain tumor indications out there where the NK cell infiltration into the tumor microenvironment could be sufficient enough to support monotherapy activity. But we will learn more as we are generating more data. But again, for combination with any PD-1 inhibitor — this is now the second data point in addition to the AFM13 studies that we have seen in combination with pembrolizumab, where we saw a significant increase in complete response rate and overall response rate.

I think combination with PD-1, PD-L1 inhibitors and ICs in general look extremely promising.

Do Kim: Thank you. That was very helpful.

Operator: Thank you. Our next question comes from the line of Li Watsek with Cantor. Your line is now open.

Li Watsek: Hello, thank you for taking my questions. Maybe just two from us. I guess, first, regarding maybe the confirmatory study of AFM13 plus EB-101 combo. I guess, is it sort of part of the discussions that you’re having with FDA right now aside from the trial design of the potential Phase 2 study? And the second is in terms of the selection for the potential Phase 2 trial of this combo, can you give us a sense of what parameters that you’re looking for with a size mostly the systemic centers perhaps with therapy experience? Or are you looking at some community sites as well?

Adi Hoess: Andreas, you want to take this question?

Andreas Harstrick: Yes. So let me start with the second question. So when we are — or in terms of sites that we are anticipating to have on our combination trial on our Phase 2 trial, we are not limiting these sites to academic sites or sites with NK cell or cell therapy experience are simply based on our experience with the MD Anderson trial, which showed a remarkably good safety profile. In fact, most of the patients received their patient or their treatment on an outpatient basis. So other than other cell therapies like CAR T cells we do not think that cadets a treatment that will be restricted to academic centers. We believe that this can very well be given also in experienced community hospitals. Now in terms of our discussions with FDA, as Adi mentioned, we have already submitted a pre-IND request containing a lot of also clinical questions.

This will be, of course, followed by an IND then. And as we are planning to discuss with FDA an accelerated approval option an accelerated approval pathway for this treatment, also discussions of potential confirmatory studies, I think, will be part of these interactions with FDA.

Li Watsek: Okay. Thank you.

Operator: Thank you. Our next question comes from the line of James Shin with Wells Fargo. Your line is now open.

James Shin: Hi, good morning guys. Thanks for taking my question. For AFM13-104, can you share whether you think the memory-like phenotype of the cells may be contributing to the response? And then secondly, given AV-101 will be co-administered, do you think the lack of IL-12, 15 and 18 as is somewhat of uncertainty or risk of matching what you’ve seen in Hodgkin’s lymphoma?

Adi Hoess: Yes. Thank you. So I’ll start here in terms of — we have obviously a very intensely looked at NK cells and the way how they are produced. And what we have learned from in particular, working with Artiva is they do have a pre-activation of solvent can as well. It’s a little different to what NDN does. Overall, from our internal experiments, we have very — we have seen almost no differences between different cell types. So we have studied cells that are you right from the periphery from cold-blood also IPSCs. And there was one key denominator that was truly important it is the CD16 expression. So as long as these cells when manufactured express a significant level or a good level of CD16, T-cells synergize extremely well with our Intel engagers.

We have the high affinity to cover them in very high quantities. As you know, when this is established, you can’t really wash it off. So it forms a stable complex and then these cells become active. So our own learning scheme that there has been very little differentiation amongst many different cell types with a one denominator that it expresses CD16A. So the reactivations that you were mentioning, we did not see an outstanding activity as compared to other cell types. So this is important, and that’s what gave us great confidence that we indeed have a number of options where we wanted to partner with. And our option — basically, our choice with Artiva has been because they are so far advanced in the manufacturing, and that could indeed induce or start a initiates IS-2 clinic study fairly quickly with product that’s very similar to the product that we eventually want to commercialize.

That was important. And that’s what Artiva is basically bringing to us in this partnership. Now the other question, I’ll hand over to Arndt and see what he wants to add.

Arndt Schottelius: So let me see if I understand what the other question was. I think maybe referring to the James, the preclinical data that we have shared and maybe most relevant the mouse model…

Adi Hoess: To interrupt you quickly. It was about co-administration and pre complex, sorry.

Arndt Schottelius: Yes. So the — what we have seen, James, and we shared it at the call, and we have it summarized on one of the slides today, when we look in the CD30-positive carpet cells and directly compared pre-complex in co-administration, AV-101 with 13, we saw, yes, there was a slight better cytotoxicity with core administration, but we see that in the same ballpark, very comparable. And when we review again the mouse model that we did with court administration, we see a very excellent tumor growth inhibition and referencing back to your initial question, while that was not done side-by-side, very similar results, the total tumor growth aggregation as we had seen with the MD Anderson cells. So taken together in addition to what Adi already said, is we really do not see a difference preclinically, just feel very confident with moving forward with AV-101 in the code administration setting?

Adi Hoess: So there are two additional data set. One is published. It’s that we can determine the receptor occupancy of AFM24 when infused that monotherapy. So this shows that we can — basically, our inner cell engagers back to the NK cells in the body. So this is a kind of not following the co-administration because here, the patient is bringing the NK cells, but we can detect AFM24 and binding to CD-16. That’s our published data. So that gives us, again, very good confidence. And you know why we are seeing this strong binding it for several reasons. One is the very high activity that our engagers have on to CD-16, plus they’re biting an epitope that is not impacted by circulating IgG. So this is the advantages, and that’s why we believe with co-administration, we can achieve a very solid binding of the NK cells that we infused in this case, AB-101.

A second phase is that we have never published yet, but we have also looked at from 13 in-patients if it’s binding to NK cells. And again, we can see AFM13 bound on patient-owned intakes. So those set of data give us a reasonably good basis to follow through with the strategy of co-administration on top, we have generated obviously a multitude of preclinical data that confirms that co-administration and pre complexing results in basically similar data and with similar activity.

James Shin: Thank you for the detailed response. Very much appreciated.

Operator: Thank you. Our next question comes from the line of Yale Jen with Laidlaw & Company. Your line is now open.

Yale Jen: Good morning. And thanks for taking the questions. I know you mentioned a lot of similarities between the Anderson and the Artiva sales. Do you speak with — going to speak with FDA, do you anticipate that could be some sort of bridging study needed before you move to the full Phase 2 study for the potential celery approval?

Adi Hoess: Wolfgang?

Wolfgang Fischer: Yes. So how the FDA looks at the differences that we can’t say before we haven’t talked to them. So that’s important. But we believe that we have a good data set showing the similarity comparability between these cells, right? All as mentioned by Arnd and Andreas and Adi before, I mean the preclinical studies in vitro, in vivo demonstrate the similarity, right? So we do not anticipate that we have to under bridging study. However, we can give more guidance once we have spoken to the FDA.

Yale Jen: Okay. Great. Maybe just a follow-up on this one. If — let’s assume if a bridging study might be needed, are you guys in your mind, have any sort of setup or designed to fulfill that request if that happens. Thanks.

Wolfgang Fischer: Yes. Of course, right in preparing for the FDA interaction, we are evaluating all potential ways. And yes, we are thinking about all these different parts and look for solutions for that.

Adi Hoess: When you look at the chemical study of Artiva, they all started with 1 billion cells as the first dose and are adding in now also rituximab, and they will only do 1 dose escalation to €4 billion. So with nonmodified cells, you have far less hurdles in terms of running dose escalations in this context. So you can do a running. And that’s what the most rightly scenario will be that you may have just to treat initially three patients see if this is taken, then you can continue to recruit the larger number of patients. This is our assumption. And as Wolfgang said, the assumption is based on a number of experiments that we’ve conducted. We have just to understand — to make this understanding is treated over 200 patients with AFM13 as monotherapy and also in communication.

So we have a very thorough data that on top, we have shown a very good safety profile in combination with NK cells already. So our base case assumption is that there is a phase to run and then we can start recruiting these patients — there should not be any separate studies being conducted. But as Wolfgang said, obviously, we’re prepared to react to anything because we believe that there is a high chance that this treatment is coming through in an accelerated approval study and can really make patient lives very different just based on the data that you have seen in the ASH abstract. Thank you.

Yale Jen: Okay. Thank you.

Operator: Thank you. Our next question comes from the line of Zhiqiang Shu with Berenberg. Your line is now open.

Zhiqiang Shu: Hi, good morning. I want to ask also on AFM24 in combination with atezolizomab. I’d like to ask about the two pancreatic patients you reported. One, I think, has some durable stable disease. I wonder from disease biology standpoint, any color you can provide on why NK engager or macrophage engager should work in this sort of co-tumor situation. Thanks very much.

Adi Hoess: Andreas.

Andreas Harstrick: Yes. I mean you’re right, pancreatic is probably one of the most difficult to treat tumors with immunotherapy. Now given the mechanism of action of AFM24, we believe that we could be able or should be able to really get initial NK cells into these cold tumors. We also believe that we have a chance to activate macrophages in these cold tumors. And I think increasingly, our data indicate that this could kickstart really a concerted action of C-innate and C-adaptive immune system. So pancreatic cancer was selected based on these assumptions that we provide a completely different mechanism of action with both parts of the immune system activated. And it’s an area of very significant unmet medical need. No immunotherapy has really worked here.

So we wanted to give these patients really a chance. And again, I think we have some quite good preclinical rationale that even pancreatic carcinoma could show some could drive some benefit from the unique mechanism of action of AFM24.

Zhiqiang Shu: Great. Thank you. And maybe a quick follow-up on your out-licensed AFM32 other receptor alpha program. I guess, can you remind us the economics over there? And given last output ADC is just recently approved, I guess, any upside from debt program that you see going forward? Thanks.

Angus Smith: Yes. Angus here. I could probably chime in on that. We have — as you’re aware, we have licensed AFM32 a subsidiary of Roivant as part of that deal. And through that deal, that subsidiary will be responsible for funding the clinical trial costs and in return we’re entitled to miles and royalties on net sales.

Zhiqiang Shu: Great, thank you.

Operator: Thank you. I’m showing no further questions at this time. Thank you all for your participation. This does conclude today’s call. You may now disconnect.