Affimed N.V. (NASDAQ:AFMD) Q4 2023 Earnings Call Transcript

Affimed N.V. (NASDAQ:AFMD) Q4 2023 Earnings Call Transcript March 28, 2024

Affimed N.V. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Good day, everyone, and welcome to Affimed’s Fourth Quarter and Full Year 2023 Earnings and Corporate Update Call. At this time all participants are in a listen-only mode. As a reminder, today’s conference is being recorded. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to Alexander Fudukidis, Head of Investor Relations at Affimed. Please go ahead, sir.

Alexander Fudukidis: Thank you, Towanda, and thank you all for joining us today for our quarterly 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. On the call today, we have our management team, including Andreas Harstrick, our Chief Medical Officer and Interim acting Chief Executive Officer; Wolfgang Fischer, our Chief Operating Officer; Denise Mueller, our Chief Business Officer; and also on the call today, we have Michael Wolf, our VP of Finance; and Harry Welten, our Consulting Chief Financial Officer, to review the financials with us today. The team will be available for Q&A after the prepared remarks.

Before we start, I would 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 the 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 Andreas. Andreas?

Andreas Harstrick: Yes. Thank you, Alex, and good day, everyone, and thank you for joining us today for our Q4 quarterly and full year 2023 earnings call. In 2023, despite challenges in the broader biotech industry, Affimed not only achieved meaningful milestones that underscore our resilience and commitment to advancing our innovative therapies, but more importantly, we laid the groundwork for significant advances across our three clinical assets, AFM24, Acimtamig and AFM28, in 2024 and beyond. For AFM24, we saw clinical activity in combination with atezolizumab across all tested cohorts with the most notable efficacy in non-small cell lung cancer. This data validated the concept of a crosstalk between the adaptive and the innate immune system as suggested by our translational research data from the AFM24 monotherapy study and led to the refinement and focus of our clinical development plan.

Going forward, we will have a heavy focus on non-small cell lung cancer with the ambition to address unmet medical need in patients for whom standard of care, including platinum-based chemotherapy, and PD-1 targeting therapy has failed. For acimtamig, we reached a significant milestone with the initiation of the LuminICE-203 study. Notably, the study design, based on FDA feedback and guidelines, coupled with the Fast Track Designation reflect our commitment to expeditiously bring the therapy to patients in need. Furthermore, we made progress with AFM28 dose escalation study. With recruitment underway in the sixth and final dose cohort, we are making steady strides towards advancing the potential of AFM28 as a therapeutic option for patients with refractory AML.

Looking ahead, our primary objective is to drive the momentum of our clinical programs and achieve critical data milestones. To this end, we conducted a comprehensive strategic review of our operations, financial outlook and market conditions. In response, we implemented a significant restructuring initiative in January to focus our attention and resources on the advancement of the clinical programs, which we believe has the potential to significantly increase in value as they progress. We reduced our workforce by approximately 50% and focus the organization on clinical development, clinical and regulatory operations and translational research. Importantly, we also kept key competencies in relation to NK cell biology and ICE manufacturing in-house.

Now let me give you a quick update on where we stand with our different programs. I will start with AFM24 as we are very excited about the progress that we have made. As we show on Slide 5, we announced earlier this year that we refined our focus to target patients with EGFRwt and EGFR-mutant non-small cell lung cancer. We added EGFR-mutant cohort for our combination trial with atezolizumab after seeing promising results with AFM24 monotherapy in this indication. We believe that the combination of AFM24 with atezolizumab has the potential to demonstrate a meaningful clinical benefit with a favorable safety profile in treatment refractory non-small cell lung cancer patients. As shown on Slide 6, in January’s update report, we highlighted the progress in the EGFR wild-type non-small cell lung cancer cohort, where we observed a disease control rate of 73%, including 47% of patients with tumor shrinkage and four objective responses in 15 patients.

The responses included one confirmed complete response and three confirmed partial responses. Of special importance is the effect that three of the four responding patients had never achieved an objective response to previous PD-1 targeting therapy and that the only patient with a previous response to PD-1 responded to a combination of PD-1 and the doublet chemotherapy, therefore, even in this patient making the contribution of PD-1 unclear. Even more remarkable effects that all four responding patients had progressive disease while still on previous PD-1 treatment regimens. We are now following these patients to generate mature PFS data. The median follow-up for this initial cohort is now six months, and we will be able to report final PFS data around Q2 2024.

Based on this promising initial data from the EGFR wild type non-small cell lung cancer cohort, we have extended recruitment and will include up to 40 patients in this cohort. We also made progress in advancing the cohort for EGFR-mutant non-small cell lung cancer patients. The target is to enroll 25 patients in this cohort, and enrollment is well underway. We are very excited by the promising prospects of the AFM24 trials recognizing the profound impact the successful outcome could have in addressing a critical unmet need. As we show on Slide 7, the standard of care for patients with platinum and PD-1 refractory disease is usually chemotherapy, resulting in an average progression-free survival time of around 4.5 months. Importantly, single-agent PD-1 therapy, even in PD-1 naive patients that are platinum resistant has shown a progression-free survival of only around 2.5 months.

Moving now to our hematological assets, starting with acimtamig and LuminICE-203 study, as shown on Slide 9, following FDA clearance to proceed with a Phase 2 study, which we discussed on our last call, recruitment in this study is proceeding. Initial recruitment in cohorts 1 and 2 was slightly slower than anticipated. This was caused solely by the mandatory staggering of enrollment for the first 3 patients per cohort and a drop out of some patients during the screening period. As we are now beyond the period of staggered enrollment for cohorts 1 and 2, we see steady progress and expect to initiate recruitment into cohorts 3 and 4 in the next couple of weeks. On the positive side, we see that patient availability per site appears to be higher than initially expected, reflecting the commitment of our investigators and the dire need of patients for innovative treatments.

On the same slide, we show that LuminICE-203 includes an exploratory arm for relapsed/refractory peripheral T-cell lymphoma patients. PTCL represents a high unmet medical need with more than half of the patients progressing to second-line treatment, where standard of care has very limited activity. Our confidence in the LuminICE-203 study is further enhanced by the presentation of the final results of AFM13-104 study, the investigator-sponsored clinical trial of cord blood-derived NK cells in combination with the [indiscernible] MD Anderson. Final results, as shown on Slide 11 were presented at the American Society of Hematology Annual Meeting in December last year. The final data demonstrated a meaningful duration of responses including about 30% of the complete responses ongoing for more than a year, and first patients approaching now two years of relapse-free survival.

I believe that this data is outstanding, especially if we consider that none of these patients had responded to the therapy that was given prior to the study. So essentially in a patient population with a 0% response rate with any available standard of care. For AFM28, this brings me to our – the update of our third clinical program. Our CD123 targeting innate cell engager designed for patients with acute myeloid leukemia. As we show on Slide 14, we are pleased to report continued progress in this program as we recently completed Cohort 5 at 250 milligrams once weekly without encountering dose-limiting toxicity. Patient recruitment for Cohort 6 is now open, which will be the final cohort of the Phase 1 part of this program. Clinical safety and pharmacodynamic data of the study we reported as guided in Q2, as well as an update on our strategy on how to advance the AFM28 program.

Now, let me pass the call over to Michael to highlight our financial operations results. Michael, please.

Michael Wolf: Thank you, Andreas. Balance sheet and income statement highlights are shown on Slide 16 and 17 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 Standard 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. We ended 2023 with cash, cash equivalents and investments of €72 million compared to €190.3 million on December 31, 2022. Based on our current operating and financing plan, we anticipate that our liquidity will support operations into the second half of 2025.

This takes into consideration a significant reduction in our operating cash burn compared to 2023 as a result of the actions we implemented and the focus of the – on the development of our three clinical programs. Net cash used in operating activities for the year ended December 31, 2023, was €110.3 million, compared to €104.9 million in 2022. Total revenue for the year ended December 31, 2023 was €8.3 million, compared with €41.4 million for the year ended December 31, 2022. Revenue in 2022 and 2023 predominantly related to the Roivant and Genentech collaborations for which we have now completed the work assigned to us under the respective collaboration agreements. Now, I’ll turn the call back to Andreas for final remarks. Andreas?

Andreas Harstrick: Yes. Thank you, Michael. I think 2023 has been a very important and transformative year for Affimed. While it is not easy to reduce a workforce by up to 50% and let very committed and highly qualified employees go, we believe that this strategic decision with a clear focus on our three key clinical programs is in the best interest of the company, of our shareholders and our patients. We have laid important foundations across all three clinical programs in 2023 and this groundwork will enable us to deliver meaningful data readouts in 2024 and beyond. For all three clinical programs, we have established dosing regimens for further development that are based on solid dose effect evaluations, including clinical safety and pharmacodynamic parameters.

For acimtamig, we have a clear pathway to initial approval through our LuminICE-203 study and we are executing on this. For AFM24, we have identified the lead indication and the lead combination for further possibly approval targeting clinical development. And for AFM28, we have established a dose range that can be carried forward into further clinical development. And we have built an organization of highly experienced professionals with proven track records to run large clinical programs all the way to approval. As shown on Slide 18, we will provide additional data readouts for both non-small cell lung cancer cohorts in the AFM24-102 study in Q2. Furthermore, we will have initial readouts for the LuminICE-203 study and we will provide a status update on AFM28 in the same timeframe as well.

Looking further ahead, we expect the final response readout for the full 40 patient cohort with EGFR-wildtype Non-Small Cell Lung Cancer in Q4 2024 and the mature PFS data from the EGFR-mutant Non-Small Cell Lung Cancer cohort in Q3 2024. We remain focused on our mission to deliver innovative treatments for patients in need and to increase the value for our shareholders. As we navigate through this transition, we are committed to keeping you informed and engaged and we appreciate your ongoing support. And with this, I would give the call back to the operator to start the Q&A session. Thank you.

Operator: Thank you. [Operator Instructions] Our first question comes from the line of Srikripa Devarakonda with Truist. Your line is open.

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Q&A Session

Srikripa Devarakonda: Hey, guys, thank you so much for taking my questions. Given that LuminICE-203 has been advancing. Can you provide a little bit more clarity on how many patients we will see data from? Will we see from all the patients enrolled? And in terms of duration on therapy for these patients, can you help us understand the bookends, like what is the longest time patients have been on? And what is the minimum amount of time they’ve been on? And just regarding the Safety Review Committee meeting that you’re expected to have in April for initiations of Cohorts 3 and 4, just wanted to confirm that you don’t need any additional conversations with the FDA before you move into Cohorts 3 and 4. Thank you.

Andreas Harstrick: Okay. Thank you, Srikripa. That was quite a lot of questions, so I hope I remember all of them. So, to start with the SRC meeting, no, we do not need any conversation or any feedback with FDA. We have clear guidelines that governs the transition from Cohort 1 to 2 to Cohorts 3 and 4, and this can be handled by the SRC meeting only. As far as the data that we expect in Q2, we believe that we have – while we are quite certain that we have fully recruited Cohorts 1 and 2. So this will be 12 patients. Now, again, Cohorts 3 and 4, the first three patients have this staggering enrollment where basically you assign a slot to a patient, can start this patient, then two weeks later, you can assign the next slot, start the next patient, provided that this patient drops not out during the screening period.

This happened to a couple of patients in Cohorts 1 and 2, and then you have to restart the slot allocation process again, which caused somewhat a little delay in the first six patients in Cohort 1 and 2. Again, it’s a little bit hard to predict, but we expect to have a reasonable number of Cohorts 3 and 4 patients for our initial report in Q2 as well. Important probably also to note is that we expect that the data of Cohorts 1 and 2 will already be very informative as we are using a cell dose, three cell applications of 2 billion cells each per cycle that we believe is a therapeutic cell dose.

Srikripa Devarakonda: Great. Thank you.

Andreas Harstrick: I hope I have covered all of your questions. If something remains open, please, please ask again. I’m not sure that I covered everything.

Srikripa Devarakonda: Thank you.

Operator: Thank you. [Operator Instructions] Our next question comes from the line of Daina Graybosch with Leerink Partners. Your line is open.

Daina Graybosch: Thank you. Thanks, guys, for the question. On the 2Q update, and I’m probably most interested in AFM24 and then a acimtamig next, what kind of translational data do you expect you’ll be able to provide that could or could not be supportive of the clinical signal that you’re observing. And would explain why these patients – the lung cancer patients didn’t respond to PD-1 but did have a response to AFM24+atezo.

Andreas Harstrick: Yes. So we will have sub-translational data mainly on blood. So looking at cytokines for this study, we have not implemented mandatory serial biopsies. However, what we have shown and also published in our AFM24 monotherapy study, we have seen, first of all, in circulation, we see an increase in activation markers for NK cells, but also an increase in activation markers for T cells. In serial tumor biopsies, we see an increase in infiltration of NK cells, as well as increase in infiltration of T cells. We believe that these data clearly indicate that you have a crosstalk between the innate and the adaptive immune system. Most likely, the NK cell mediated tumor cell killing leads to availability to liberation of additional tumor related antigens that are processed by dendritic cells.

And we know that AFM24 also has activity on the macrophage part of the innate immune system, which then can trigger additional novel tumor specific T cell clones. So this is our working hypothesis, and this is also our explanation why we believe that, if you will, we can break PD-1 resistance. So we make patients responsive to this combination treatment that have never had a response to PD-1.

Daina Graybosch: Let me restate, though. So you have – you’ve already presented a lot of preclinical and clinical work that supports the mechanism. So our expectations should not be too high for correlative translational support in this next update? Is that fair? And what should our expectations then be at the end of year?

Andreas Harstrick: That is fair. So the focus of our updates in Q2 will really be on the clinical data, most importantly, on progression-free survival in this initial non-small cell lung cancer cohort and the response readout for the EGFR mutant non-small cell lung cancer cohort.

Daina Graybosch: And then what should we expect in the 40-patient cohort at the end of the year in terms of the type of data that you have?

Andreas Harstrick: The 40 patients of course will provide a significantly broader database. Again, response data and progression-free survival data for the full 40-patient data set as well as the PFS data for the EGFR mutant non-small cell lung cancer cohort.

Daina Graybosch: Okay. Thank you very much.

Operator: Thank you. Please stand-by for our next question. Our next question comes from the line of Maury Raycroft with Jefferies. Your line is open.

Unidentified Analyst: Hi. This is Kevin on for Maury. Thanks for taking our questions. Just the first one, just a follow-up on AFM13, could you characterize the experience you’re seeing so far with this trial and whether it’s similar to the MD Anderson experience particularly with respect to safety and efficacy? And then for the data updates in the second quarter especially for the AFM24 update, are you just – are you saying whether that’s going to be at ASCO or potentially a company event? Thanks.

Andreas Harstrick: Yes. So for the first question, as we have guided we will give the first update both on safety and efficacy in Q2 when we have a meaningful number of patients. So today, I can only comment on the recruitment, and this I think we addressed already. For the AFM24 study, we have not finally decided what’s the right or the venue will be. As you know, ASCO will notify on the program over the next couple of days and this will guide our programs or our plans, how and when to disclose and which forum to disclose this data.

Unidentified Analyst: Great. Thanks. And just one more on AFM28, it seems like the focus here is potentially on the combination. Can you talk about when you could potentially start that? And if you’re talking with potential partners here for Allogeneic NK’s?

Andreas Harstrick: Yes. Yes, you are right. We believe that the main focus, if you look at the biology of AML will be also development in combination with an Allogeneic NK cell. And as I said during my talk, we will provide an update in Q2 including a detailed plan how to move forward.

Unidentified Analyst: Great. Thanks.

Operator: Thank you. [Operator Instructions] Our next question comes from the line of Yanan Zhu with Wells Fargo. Your line is open.

Unidentified Analyst: Hi. Thanks for taking our question. This is Quan Han [ph] for Yanan. So you mentioned the – sorry, it’s for AFM13. You mentioned the enrollment in Cohorts 1 and 2 are slower than expected due to staggering and patient dropout. I wonder if you can share any colors on the patients who drop out and what’s the rate of dropout? Thank you.

Andreas Harstrick: Yes. So the reasons for dropout were very heterogeneous and as it happened during the screen period, obviously not related to any treatment. One of the patients, for example, who was already about 2.5 weeks in the screening period, acquired COVID infection. We then waited for the COVID infection to clear. However, this patient – this was an elderly patient had a remaining or residual impairment in his lung function. So this was one of the reasons for dropout. We had a second patient who acquired a CMV infection again, not clearing and then dropping out of it. So it’s only a few patients, but again as you can only assign one cohort at or one slot at a certain period in time. This always will delay the refilling of the next slot by three to four weeks.

Again, we are through the staggering period now. Now we can recruit in parallel, and we see good recruitment, which gives us confidence that by Q2, we will report data on the 12 patients from Cohort 1 and 2 and then a certain number of patients from Cohorts 3 and 4.

Unidentified Analyst: Got it. That’s very clear. Thank you. And any color on the safety you have seen so far? Is there any difference compared to what you have seen in your NDA study? Thank you.

Andreas Harstrick: Again, we will provide more detailed safety update in Q2. However, we are very confident with the progression through the SRC. So we have not encountered any dose-limiting toxicities or anything like that.

Unidentified Analyst: Got it. Thank you so much for the colour.

Operator: Thank you. Ladies and gentlemen that concludes our Q&A portion for today. Thank you for your participation in today’s conference call. You may now disconnect. Everyone, have a wonderful day.