Affimed N.V. (NASDAQ:AFMD) Q3 2023 Earnings Call Transcript

Affimed N.V. (NASDAQ:AFMD) Q3 2023 Earnings Call Transcript November 14, 2023

Operator: Good day, everyone, and welcome to Affimed N.V. Third Quarter 2023 Earnings and Business Update Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there’ll be a question-and-answer session. [Operator Instructions]. Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your speaker today, Alex Fudukidis, Head of Investor Relations at Affimed. Please go ahead.

Alexander Fudukidis: Thank you, Norma. And thank you all for joining us today for our third quarter 2023 update call. 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. The presentation is also on the website. On the call today, we have the members of our management team, including our Adi Hoess, our Chief Executive Officer; Andreas Harstrick, our Chief Medical Officer; Arndt Schottelius, our Chief Scientific Officer; Wolfgang Fischer, our Chief Operating Officer; and Angus Smith, our Chief Financial Officer. The team will be available for Q&A after the prepared remarks. Before we start, I would like to remind everyone 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: Thank you, Alex. Good day, everyone. And thanks so much for joining us today also from my side. We have entered a very important and exciting phase for Affimed, our investors, and patients that do require novel options in order to prolong their lives, so that they can spend more time with their families and friends. We have been progressing well with all three clinical programs, and are now in a period where we plan to report data frequently over the next weeks and months. Moving to slide 5, we recently announced that the new name for AFM13 will be acimtamig. Acimtamig is developed in combination with Artiva AlloNK product in the LuminICE-203 study. We’re now actively recruiting non-Hodgkin lymphoma [Technical Difficulty] LuminICE-203 [Technical Difficulty] efficacy and safety data from the study in the first half of [Technical Difficulty].

As a reminder [Technical Difficulty] phase of the study, we will be treating 24 patients with Hodgkin’s lymphoma in four cohorts. And all these cohorts will use active doses of acimtamig and AlloNK. In addition, our interactions with the FDA have been very productive. In September, we announced that we received Fast Track designation, and today we announced that we received positive feedback from the FDA in their responses for our Type C meeting, which Andreas will discuss in just a moment. But from the FDA’s written responses, we believe that the LuminICE-203 study design based on FDA feedback and guidelines puts us in a very good position to pursue accelerated approval. The LuminICE-203 study builds on the unprecedented results observed in AFM13-104.

The investigator sponsored clinical trial we have been running in collaboration with MD Anderson. Updated data from that study will be presented by Dr. Yago Nieto, the lead investigator, at the ASH Annual Meeting 2023 on December 11. Affimed will host a dedicated call for the financial community to provide an in-depth insight into this important update, which will include longer follow-up data. Now turning to AFM24, we remain on track to provide an update on the first three expansion cohorts from the combination study of AFM24 with atezolizumab in December. This combination is based on finding that AFM24 activates both innate and adaptive immune cells. And the idea now is to enhance efficacy by combining AFM24 with atezolizumab. As a reminder, we already have seen that our interim data, acimtamig in combination with PD-1 is able to double the complete response rate of PD-1 alone in relapse refractory Hodgkin’s lymphoma patients.

During the third quarter, we also initiated enrollment in the non-small cell lung cancer EGFR mutant cohort and have begun treating patients. Again, as a reminder, AFM24 as a single agent showed partial responses and durable stable diseases in this indication. Data from this expansion cohort is expected in the first half of 2024. And last, we continued to make good progress in our AFM28 monotherapy dose escalation. During the third quarter, we completed treatment of patients in the third dose cohort without any dose-limiting [Technical Difficulty] and completed enrollment of patients in the fourth dose cohort, now administering a flat dose of 20 milligram BD. On slide 6 and 7, we provide important background on the treatment of the indications we’re targeting with LuminICE-203.

In Hodgkin lymphoma, BV and PD-1 checkpoint inhibitors have changed the way patients are treated. As these therapies move to earlier lines of therapy, a patient population with high unmet medical need has emerged, the BV and PD-1 double refractory population. Now, let me quickly talk about which therapies exist in general for relapsed refractory Hodgkin lymphoma. For this patient population, cytotoxic agents such as platinum-based chemo and bendamustine or even targeted agents such as lenalidomide or mTOR inhibitors are listed in the NCCN guidelines. But it’s important to note that these therapies were studied in relapsed refractory Hodgkin patients before the introduction of BV and checkpoint inhibitors. And limited information is available on their efficacies in the double refractory population.

But even still, they’re characterized by [indiscernible]. We believe this is where a symptomatic plus in T cell therapy has the potential to transform the treatment landscape for double refractory patients. The response rates reported from AFM13-104 are outstanding. And in particular, the CR rate of 70 plus percent is higher than the CR rate of other treatments, even in less heavily pretreated [Technical Difficulty]. At ASH next month, we’ll provide a definite view on the duration of response and event free survival for the therapy for each of those patients at the recommended [Technical Difficulty]. LuminICE-203 further includes relapsed refractory PTCL patients. PTCL has a very high need with more than half of patients moving to second line, which now offers only agents with limited efficacy and still no [indiscernible].

Based on our market research, we believe [Technical Difficulty] acimtamig plus [indiscernible] in double refractory Hodgkin lymphoma alone is in excess of €1 billion. And with the inclusion of second line relapsed refractory PTCL, this would increase to over €3 billion combined. Finally, during the quarter, we saw a significant reduction in our operating cash burn [Technical Difficulty] the first two quarters of the year as a result of the actions we implemented during the first half of the year to focus our investments on our three clinical programs. With that, I’ll turn the call over to Andreas who will provide additional insight on the progress we’re making in our pipeline. Andreas?

Andreas Harstrick : Thank you, Adi. And also welcome from my side to everyone on the phone. I would like to start my clinical overview with our progress that we made with AFM13, as Adi said, now called acimtamig going forward. We are pleased to update you on the progress that we have made regarding the development of acimtamig in combination with AlloNK or as it’s known AB-101 from Artiva. After receiving the clearance from FDA to proceed with initiation of the Phase 2 clinical trial earlier this year, we made significant progress towards our goal of getting the study up and running. And we now have the first sites open and we are actively recruiting patients. Furthermore, as shown on slide 9, in September, we received Fast Track designation for acimtamig.

And in October, we got a written feedback from FDA on our Type C meeting request. On slide 10, we show the updated LuminICE study design. In accordance with FDA’s feedback, we will now add a cohort to the LuminICE-203 trial, which will treat patients with relapsed or refractory Hodgkin’s lymphoma with AlloNK plus IL-2 only. This will address the contribution of individual components in the combination. This cohort will be designed as an observation cohort with the option available to patients to cross over to the combination with acimtamig if they don’t show a response to their initial treatment. We believe that the study which was designed based on FDA’s recommendation and guidelines puts us on track for regulatory approval, pending the final assessment of the magnitude of clinical benefit.

We are very encouraged with the outcome of the FDA interactions and look forward to continuing our discussions with the agency as we are generating data from the study. As announced, we expect to report initial safety and efficacy data from this trial during the first half of 2024. In addition, as Adi mentioned, Dr. Yago Nieto, the lead investigator of the original study that investigated the combination of acimtamig was cord blood derived NK cells at MD Anderson Cancer Center will present updated data in an oral presentation at the ASH 2023 Annual Meeting on December 11. The abstract for the presentation was published earlier this month. As shown on slide 11, at the cutoff date for the abstract, a total of 42 relapsed refractory CD30-positive Hodgkin lymphoma and non-Hodgkin lymphoma patients were enrolled in the study, with 36 of these patients treated at the recommended Phase 2 dose.

Important to mention that all patients were heavily pretreated and refractory to their most recent line of therapy, with active progressive disease at the time of enrollment. Of note, all of the Hodgkin lymphoma patients were double refractory to BV and PD-1. The combination treatment achieved an overall response rate of 94.4% with a complete response rate of 72.2% at the recommended Phase 2 dose. The treatment regimen continues to demonstrate a good safety and tolerability profile, with no cases of cytokine release syndrome, immune effector cell associated neurotoxicity or graft versus host disease of any grade. At a median follow-up of 14 months, the overall survival rate was 76% and the median overall survival has not been reached. An in-depth analysis included updated event-free survival and overall survival data will be presented during Dr. Nieto’s oral presentation, including a comprehensive analysis of the efficacy, durability and safety outcomes, demonstrating the potential for acimtamig in combinations allogeneic NK cells.

On the same day, Affimed plans to host an investor call to provide additional information about the status of the LuminICE-203 study, the treatment landscape in Hodgkin lymphoma and peripheral T cell lymphoma and the respective market opportunities. Now let me turn to AFM24. As shown on slide 12, in the ongoing study, AFM24-102, we’re treating patients with AFM24 and atezolizumab. In the ongoing study, the original three cohorts included patients with non-small cell lung cancer, EGFR wild type, gastric and gastroesophageal junction adenocarcinoma and pancreatic hepatocellular and biliary tract cancers respectively. Based on the promising activity seen with AFM24 in monotherapy study, we added also in cohort for EGFR mutant non-small cell lung cancer patients that is now actively treating patients.

We believe that AFM24’s role in activating the immune system by specifically triggering NK cells and macrophages to destroy tumor cells and to liberate tumor associated antigens is crucial. These antigens can be processed by macrophages and dendritic cells with the possibility to activate tumor reactive T cells. The combination of AFM24 which activates the innate immune system with atezolizumab, which impacts the adaptive immune system, therefore, has, in our opinion, a very good logical rationale. As Adi mentioned, we will report data on the first three cohorts of 10 to 15 patients per cohort in December and we planned to report the data on the non-small cell lung cancer EGFR mutant cohort in the first half of 2024. If we turn to AFM28 on slide 13, we follow the progress for our third clinical program.

AFM28 is targeting CD123 in acute myeloid leukemia. In this program, we have completed treatment of patients in the surge dose cohort of our ongoing dose escalation trial using a dose of 100 milligram flat once weekly. As mentioned, we have not seen any dose limiting toxicities at this dose cohort. And we meanwhile have completed the enrollment of patients in dose cohort 4 treating patients at 200 milligrams weekly. Now, where do we go with AFM28? The first step is to complete the dose escalation study and to identify a safe recommended Phase 2 dose based on correlative science and initial clinical activity. After that, for us, there are two options, either to develop AFM28 as single agent or in combination with allogeneic NK cells. We are planning to provide the next progress update on this during the first half of next year.

Now, thank you again for your attention. And with this, I will turn over the call to Angus to update you on the quarterly financial performance. Angus, please.

Angus Smith : Thank you, Andreas. Balance sheet and income statement highlights are shown on slides 15 and 16 of the presentation. A quick reminder that Affimed’s consolidated financial statements have been prepared in accordance with IFRS as issued by the International Accounting Standards Board, or IASB. The consolidated financial statements are prepared in euros. Since our financials are described in detail in the press release we issued this morning, I will only provide highlights on this call. As of September 30, 2023, cash, cash equivalents and financial assets totaled €97.5 million compared to €190.3 million on December 31, 2022. Based on our current operating plan and assumptions, we anticipate that our cash and cash equivalents along with our financial assets will support operations into 2025.

Net cash used in operating activities for the quarter ended September 30, 2023 were €18.2 million compared to €19 million for the third quarter of 2022. Importantly, our operating cash burn for the quarter reflected a 45% drop from the previous quarter and is reflective of our efforts to carefully manage our cash burn going forward. Cash flow from investing activities for the quarter reflects the fact that we allocated a portion of our cash resources to short term government bonds during the quarter in an effort to diversify and get access to higher interest rates on our excess liquidity. Total revenue for the quarter ended September 30, 2023 was €2 million compared with €14.9 million euros for the quarter ended September 30, 2022. Total revenue predominantly relates to the Roivant and Genentech collaborations and the reduction as compared to the prior-year period is due to the fact that we have now completed our obligations under both collaborations, and therefore recognize the significant majority of the associated revenue.

We remain eligible for future milestone payments under both collaborations based on the advancement of the licensed molecules, which is at the discretion of our partners. I will now turn the call back to Adi for closing remarks. Adi?

Adi Hoess : Thank you, Angus. Let’s move to slide 18. Here you see the details of our upcoming milestones for all our programs. As I said in my intro, we have entered a very important and exciting phase for us at Affimed, our investors and, in particular, patients that do require novel options in order to prolong their lives, to be able to spend more time with their families and friends. We have been progressing well with all our three clinical programs and are in this period where we plan to frequently report data over the next weeks and months. Thank you all for your continued support and trust in our mission to make a difference in the lives of patients. We look forward to sharing more exciting developments with you in the very near future. We’re now ready to take questions. Operator?

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Q&A Session

Operator: [Operator Instructions]. Our first question comes from line of Maury Raycroft of Jefferies, your line is now open.

Unidentified Participant: This is James [ph] on for Maury. Congratulations on the progress. For the Type C meeting, did the FDA provide any more specifics on the magnitude of clinical benefit? And did they seem more focused on ORR or durability measures? And then after that, I have a quick follow-on?

Andreas Harstrick: I can take it. Or Wolfgang, who I think is also on the line. But I can probably start. As you may know, when you talk with FDA, they will never give you a fixed number of what they consider is a meaningful magnitude of effect. However, when we look at the landscape and when we talk to key opinion leaders, and we have done quite a number of interviews right now, I think the consensus seems to focus on 50% response rate or higher, with the majority of responses being complete responses. And when you look at time-related factors, I think it’s probably duration of or even progression free survival of six months or longer for these very heavily pretreated patients. Now, again, I have to stress, this is more feedback from key opinion leaders.

FDA will always tell you it’s a review issue. And we expect that FDA will look both at overall response rate as well as time related factors, like the duration of response or event or progression free survival. I hope this addresses your question.

Unidentified Participant: Yes, that’s helpful. And the second question is, how many patients and follow-up do you need to adequately address the contribution of single components in the AlloNK IL-2 cohort that you reported today?

Andreas Harstrick: Again, that is a question that basically – or probably will be answered by the data. We expect that the response rate for a non-targeted NK cell will be relatively low. So we will see or we expect to see already very significant differences in the response rates, which clearly will diminish the importance of long term follow-up. If you only have a couple of responses compared to response rate, which is an excess of 50%, 60%, I think the magnitude of differences would be sufficient.

Unidentified Participant: So how many patients do you think you would need?

Andreas Harstrick: Again, this is something that we will discuss further with FDA. The initial design is somewhere between 10 and 20 patients.

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

Srikripa Devarakonda: I have actually a follow-up on the previous question. Just to confirm, were there any changes to the protocol that the FDA ask for just broadly? And also, based on the Type C meeting, can you move ahead with part two of the study? Or following part one, is there any need to meet with the FDA again? I know you can have multiple meetings with the FDA given your designation, Fast Track designation?

Wolfgang Fischer: I can take it. So the first the first question, whether there have been changes to the protocol requested by the FDA, the answer is no. And as Andreas mentioned before, we are going to add this one cohort AlloNK cells alone. That’s the first question. And the second question, there is no need for us to go back or consult with the FDA to proceed with our study. So that means we can proceed from the beginning to the end as approved by the FDA.

Srikripa Devarakonda: Just another clarification, is this AlloNK IL-2 cohort needed for accelerated approval submission?

Wolfgang Fischer: When we when we spoke to the FDA during IND process and also during Type C, contribution of single components is important to the agency. And therefore, the assumption is yes, this is something which we need to get accelerated approval.

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

Li Watsek: Maybe just a follow-up for the new NK cohort? Can you just clarify, do these patients need to progress before they can crossover? Maybe just a little more color on the criteria for crossover? And then, can you count these patients in the total and to support the efficacy as well?

Wolfgang Fischer: I can take that question. Yes, these patients when treated with AlloNK IL-2, if they are not responding, that means if they are not showing a partial response or a complete response, they will have the opportunity to cross over to the combination treatment. Now, this brings me to your second question, whether these patients then could go cross over into the analysis cohort for the primary endpoint? And the answer is no, because there could be a bias. So what we are having is that we say they can cross over to the combination treatment and will be treated, but not be part of this analysis for the primary endpoint.

Li Watsek: You mentioned earlier you have the first site open, enrolling patients. Can give us some sense in terms of how many sites do you need to fully enroll the run-in portion.

Andreas Harstrick: For the run-in portion, as you know, there is somewhat of a staggered approach, especially for the first three patients per cohort. So, our current assumption is that we probably need five to six good recruiting sites for the initial four cohorts. And then, we will bring more sites on board as the study progresses or continues. But we are in active process to add sites. But as we said, we are on track to provide the initial safety and efficacy data first half of 2024.

Operator: Our next question comes from the line of Daina Graybosch with Leerink Partners.