Nanobiotix S.A. (NASDAQ:NBTX) Q4 2021 Earnings Conference Call March 31, 2022 8:00 AM ET
Company Participants
Kate McNeil – Senior Vice President, Investor Relations
Laurent Levy – Co-Founder & Chief Executive Officer
Bart Van Rhijn – Chief Financial Officer
Conference Call Participants
Jonathan Miller – Evercore ISI
Operator
Ladies and gentlemen, thank you for standing by and welcome to Nanobiotix 2021 Full Year Corporate and Financial Update. At this time, all participants are in listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions]
I would now like to hand the conference over to your speaker today, Kate McNeil. Please go ahead, ma’am.
Kate McNeil
Thank you, operator. Good afternoon and good morning, and welcome to Nanobiotix conference call to discuss our 2021 full year financial and operational results. Joining me on the call today are Laurent Levy, Co-Founder and Chief Executive Officer; and Bart Van Rhijn, Chief Financial Officer.
As a reminder, today’s call is being webcast and will be available on our website for replay. I’d like to remind you that, this call will include forward-looking statements, which may include statements regarding the progress, success, and timing of our ongoing and clinical trials, collaboration, regulatory filings, dates of presentation, and future research and development efforts, among other things.
These forward-looking statements are based on current information, assumptions, and expectation that are subject to change. They are subject to significant risks and uncertainties that could cause the company’s actual results to differ materially from our current expectations.
Accordingly, you are cautioned not to place undue reliance on forward-looking statements. Please review the full description of risk factor that can be found in the documents we filed with the AMF in France, and the SEC in the United States, including the URD and 20-F filed in their last version, both of which are available in the Investor Relations section of our website, along with the press release issued yesterday highlighting our corporate and financial results for the period.
In addition, any forward-looking statements represent our views only as of today and should not be relied upon as representing our views as of any subsequent date. While we may elect to update these forward-looking statements at some point in the future, Nanobiotix undertakes no obligation to update them to reflect subsequent events or future circumstances.
With that said, I’d like to turn the call over to Laurent. Laurent, please go ahead.
Laurent Levy
Thank you, Kate. I would like to welcome everyone participating via conference call and webcast today. This is a busy and exciting time at Nanobiotix and I’m pleased to have the opportunity to highlight some of the important progress our team has made in the past year, provide some additional insights as what we expect in this year and why we continue to be excited by the potential of our lead product candidate, NBTXR3.
As we acclaimed in January, our priorities for 2022 includes procuring our internal development effort on our two lead programs, including the execution of 312, our global pivotal study of NBTXR3 as a single agent activated by radiation in locally advanced head and neck cancer patients; and two, the advancement of our follow-on checkpoint inhibitor combination program seeking to expand the treatment benefit of Anti-PD-1 therapy.
In parallel, we’ll continue to leverage our existing key collaborations to advance and expand our pipeline, while we evaluate potential new collaboration that could contribute complementary development and core commercial capability.
As we continue to expand, our operating efficiency and carefully align our resources with the strategic priorities supported by Bart and the rest of the leadership team to both maximize and deepen our operational expertise in key functional areas to support our continuing growth.
During 2021, we took several key operational steps to position us to build the foundation of future opportunity and achieve this goal in 2022. In May 2021, we added a new strategic partner, LianBio, to advance and expand the development of NBTXR3 in Asia. We are pleased to have found a partner that is committed to revolutionize patient outcomes, share our strategic vision for NBTXR3 and bring substantial regional expertise that should enable a meaningful contribution to our global development initiatives.
LianBio will be a key partner for us in our Head & Neck registration study enrolling 20% of the 500-patient we can, preparation for this are already well underway and we’ll currently expect LianBio to initiate patient enrollment in subsidy 312 in the second half of 2022. In addition, LianBio has committed to participate to four additional registrational studies with NBTXR3 across indications and therapeutic combination, funding all the development and commercialization expenses in their territory, highlighting their belief in and the commitment to the broad potential of NBTXR3.
This commitment to the long-term vision for NBTXR3 mirrors that of our ongoing work with MD Anderson. We’ve been engaged in a broad collaboration with MD Anderson since 2018. Their research and development support have already generated robust library of preclinical data, particularly around the combination, potential of NBTXR3 with immune checkpoint inhibitor, thus resulting in multiple presentation and publication. In 2021, MD Anderson initiated the 5th clinical trial with NBTXR3 under it’s collaboration, which now includes three Phase I studies, exploiting the safety and feasibility of NBTXR3 in pancreatic cancer, esophagal cancer and non-small cell lung cancer. And additionally, two Phase II studies exploring the potential efficacy of NBTXR3 in combination with immunotherapy, this in Head & Neck.
Having already reported the first patient case study from MD Anderson Phase I pancreatic studies, anticipated dose escalation of that study to reach its target with Anti-Phase II dose later this year. Similarly, MD Anderson Phase I study of NBTXR3 in combination with chemo is also expected to report with Anti-Phase II dose in 2022. In addition to expanding our external development capabilities, we also significantly strengthened our leadership team with the appointment of Gary Phillips as Chairman of our Supervisory Board, bringing decades of experience in the pharmaceutical and health care industry. And Bart Van Rhijn, our Chief Financial Officer, bringing proven capabilities in global financial management, business development and pharmaceutical commercialization.
More recently, we were pleased to welcome Dr. Leo Farber, a board-certified Radiation Oncologist as our new Chief Scientific and Medical Affair Officers, adding extensive executive experience in developing and growing treatment center and departments within the radiation oncology field. Each of these individuals has already had a tremendous impact on the company, driving execution across key programs and contributing to a culture of innovation, integrity and inclusion, while fostering transparency and accountability.
Now before I turn our attention to the results and expectations for our internal development report, I would like to ask Bart to provide a brief review of our financial results. Bart?
Bart Van Rhijn
Thank you, Laurent. As Kate mentioned, yesterday after the close of the US markets, Nanobiotix reported financial results for the year ended December 31, 2021, while highlighted our financial position, as well as our recent progress. As described in the release, our total revenue consisted primarily of revenue related to our prior collaboration with PharmaEngine, totaled approximately €10,000 compared to €50,000 for the year ended December 31, 2020.
Other income for the period includes research tax credits, which increased from €1.9 million in 2020 to €2.5 million in 2021, due to an increase in research and development expenses.
Our research and development expenses for the year were €30.4 million compared to €24.3 million for the year ended December 31, 2020. This increase reflects the increased clinical trial development costs related to the company’s priority pathways, including preparation and initial site activations for our pivotal Phase III registration study, NANORAY-312 and our immunotherapy combination Study 1100.
Selling, general and administrative expenses were €19.4 million for the year ended December 31, 2021, compared to €14.6 million for the prior year period. This year-over-year increase was related to a change in headcount mix in geography, recruitment expenses and expenses resulting from the NASDAQ listing and reflects a significant decrease in SG&A during the second half of 2021, a trend that is expected to continue year-over-year in 2022.
Nanobiotix net loss was €47 million for the year compared to a net loss of €33.6 million for the 2020 fiscal year, which includes €5.4 million in other operating income expenses related to the termination of the PharmaEngine agreement in early 2021 and financial income of €5.6 million, driven by currency translation gains.
We ended the year with cash, cash equivalents and investments, totaling €83.9 million compared to the €119 million as of December 31, 2020. This net decrease of €35.3 million reflects €51.8 million of net cash flows used in operating, investing and financing activities of Nanobiotix, which was partially offset by the €16.5 million or US$20 million, up from payments associated with the LianBio collaboration announced in May 2021.
Finally, as we continue to optimize our capital allocation and drive ever increasing efficiencies and flexibility in our cost structure, we anticipated our cash, cash equivalents and marketable securities as of December 31, 2021, should enable us to fund operations well into the second quarter of 2023.
And now I’ll turn the call back to Laurent to discuss these programs in further detail. Laurent?
Laurent Levy
Thank you, Bart. Progress in across our development program look forward the opportunity to provide several data updates over the course of 2021, each adding meaningful support to our hypothesisthat NBTXR3 offers a unique opportunity to extend and expand potential clinical benefits across spectrum of cancer of solid tumor. And these both as a single agent activated by radiation therapy as well as in combination with other products on the market and under development.
[indiscernible] detailed previously on date update our endmilestone achievements individually, I would like to take this time today to provide an integrated view on how we believe these results provide insight into the future opportunity for NBTXR3 and position us to achieve our development goal for 2020.
Certainly, a key priority for us is the time execution of NANORAY-312 and successful registration of the product for the treatment of locally advanced head and neck cancer in patients that are intolerant to standard of care platinum-based chemotherapy. Based on the constantly high response rates in across multiple studies, we have long been confident in the potential for NBTXR3 to provide survival benefit in this patient group and secure Fast Track designation in 2019 to potentially accelerate this opportunity.
In 2021, we have the opportunity to report the first survival data from ongoing Study 102 validating this hypothesis. As we presented at ASTRO 21, high-risk elderly patients with locally advanced diseases that were ineligible for cisplatin and intolerant to cetuximab achieved a median survival of 18.1 months and median progression free survival of 10.6 months in the evaluable population as of September 2021 update. Response rate remained consistent with previously reported results from both dose escalation and dose expansion phase, showing a response rate of 85.4% and complete response of 63.4% in the target lesion.
Given this consistency, we were not surprised but certainly please by an internal review of data from February cut-off date this year, continued improvement with an on-going median overall survival of 17.9 months in the all-treated population, which includes 56 patients and 23 months in the 44 in evaluable patients. We are not only pleased by treatment effect observed in patients enrolled in this study, but we are highly encouraged by the implication for the 312 study, a pivotal phase.
As you recall, patient meeting, the criteria for Study 102 are historically full proof. They are generally order with a higher level of co-morbidity than patient eligible for Study 312 and have two or three times the prevalence of co-morbidity compared to the overall locally advanced population.
While there are no direct comparator lead director subject that locally advanced patients with a better prognosis than all patients have a median overall survival of approximately 12 months, providing us with what we believe is a conservative estimate benchmark.
On an operational front, Study 102 has now completed enrollment with the last patient expected to complete their last treatment within next month. This allows us now to leverage 102 sites with historically high enrollment for Study 312. As part of our site selection process, we have selected eight sites of the 102 sites for participation of the Study 312, representing approximately 10% of our expected European sites.
As we look more broadly at short-term site plan, we are tentative to the present geopolitical concern and instability in Ukraine and Russia. While we did not have any one or two sites in the region targeted for the 312, we have previously planned to activate a small number of centers in this region as part of the 312 study. These facts were not scheduled for activation until the second half of 2022, and we are actively working with our CRO to identify alternate sites in countries. And as of today, we do not expect any impact on our overall timing or execution of the Study 312 at this time.
Looking ahead, we plan to continue adding sites across Europe throughout the year and expect to activate our first US site in mid-2022. In parallel, our partner, LianBio was expected to contribute approximately to 100 patients of the 500 patient planned, have been actively preparing to initiate study 312 in China and currently anticipate beginning patient enrollment in the second half of 2022.
Overall, execution since the start of the study has been in line with expectations, and we are pleased with the ramp-up we are seeing. We look forward to gaining additional insights on patient enrollment rates and as more players and countries come online and look forward to keeping you updated on this progress.
Now, turning our attention to our IO combination program, I will again note that, we are pleased to provide two updates related to our ongoing studies at ASCO and ASTRO. These presentation were complemented by new preclinical data, journal publication, and further review of the clinical data and preclinical filing by a few of our key opinion leader in June. This data, like our Study 102 data are available on our website, and I would encourage those of you that haven’t — not yet had the opportunity to review to do so.
As this data update made clear, evidence continues to support our process is that the physical mechanism of action of NBTXR3 triggers subsequent priming of the immune system that, when paired with immune checkpoint inhibitors, allow for a better-than-expected response to anti-PD-1 treatment, among not only naïve patients, but also appears to rescue prior treatment failure.
Updated data from Study 1100 presented at ASTRO remained consistent with prior database, demonstrating a disease control of 81% in the evaluable population, including 73% in patients with prior primary or secondary resistance to anti-PD-1.
In the 16 evaluable patients, three complete responses and five partial responses were reported. Notably, only one progressive disease was reported in the evaluable population. Some delayed tumor responses and/or abscopal effects were also reported, suggesting that NBTXR3 may potentially prime an immune response.
To date, this activity is paired with a tolerability profile similar to what is additionally seen with radiotherapy or anti-PD-1 therapy. Study 1100 is a basket trial, including three cohorts of patients into does escalation phase.
The first one, our locoregional recurrent or recurrent metastatic head and neck cancer patients. The second one, our lung metastasis from any primary cancer that is eligible for anti-PD-1 therapy; and the third one, our liver metastasis from any primary cancer eligible for anti-PD-1 therapy.
Considering the competing data we have seen from the study demonstrating the potential to both increase the response rate and anti-PD-1 treatment, as well as rescue prior treatment failures. We have updated our planned expansion phase of this study to explore its potential more fully in head and neck cancer patients.
Therefore, the expansion phase will divide patients into three new cohorts. Cohort 1 will include only head and neck cancer patient naïve to anti-PD-1 treatment. Cohort 2 will include only head and neck cancer patient resistant to prior anti-PD-1 treatment.
And Cohort 3 will combine patients with lung, liver or soft tissue metastasis from any advanced cancer eligible for anti-PD-1 treatment. Enrollment in each of this cause is expected this year and will begin after reaching the recommended Phase II dose for each patient group.
In addition to informing the expansion phase of Study 1100, the data generated to date has also added to a sense of urgency in defining a registration path for our radiation activated NBTXR3 in combination with immune checkpoint inhibitor, and we have initiated discussions with the FDA to guide us in this process.
Preliminary feedback has been very encouraging, and we will be working with the aim of finalizing a protocol and proposed regulatory effects paths for review by the end of this year. While our clinical program exploring the combination potential of our product candidate with proof anti-PD-1 treatment represents the priority pathway in our combination strategy. We have presented clinical and all preclinical data that support the potential synergy of NBTXR3 with chemotherapy, late, TG and CTLA-4. Early last year, we presented initial data from the dose escalation phase of our chemo combination study in Rectal cancer and look forward to update these results, along with the Phase I chemo combination study in head and neck cancer to be presented next quarter by our former partner in Asia.
Further, both our previously reported and ongoing preclinical work suggests that as the oncology treatment landscape continue to evolve and innovation leads to promising new product candidates, NBTX [ph] maybe uniquely suited to revolutionize the pillar of cancer, as a conventional component of future treatment, potentially having efficacy without increasing safety or tolerability concerns. We remain committed to fulfilling this promise through disciplined execution and look forward to continuing to advance our development program through 2022 and beyond. We hope to make a significant impact on unmet need with our solid tumor agnostic, IO [ph] combination agnostic platform.
Before I open the call for questions, I would like to thank our patients, investigators and collaborators. Your support and contribution to our mission are invaluable, and our successes will not be possible without you. We would now be happy to open the call for questions. Operator?
Question-and-Answer Session
Operator
Ladies and gentlemen, we now begin the question-and-answer session. [Operator Instructions]
Kate McNeil
All right. Team, while we’re waiting for questions to queue up on the call, we have received a few inbound questions from investors prior to the start of the call. So I think we’ll get started there. There have been a number of questions on similar topics. So I would state the questions with the hope that you can address them. So we did receive a number of questions regarding the status of 312, which we addressed during the call and how we plan to communicate around the progress on that study going forward and specifically questions regarding the status of that study from clinicaltrials.gov?
Laurent Levy
Thank you, Kate. So as we just mentioned some minutes ago, the 312 study is progressing well according to plan, our site have been initiated already last year in Europe and the first patients have been injected at the beginning of January. So now we are progressing according to plan we would be go to open outside Europe, the US site for mid-2022 and the Asian part with our partner LianBio for H2 this year. In regard to clinicaltrials.gov, the update has been made last week, and we’ll come to live as soon as we are validated.
Kate McNeil
Okay. Great. One more question from our investors before we go to questions on the line. The next regard status updates related to our non-priority pathways, including where we stand with the Liver study, the Prostate study and both of the chemo combination studies conducted in Asia.
Laurent Levy
Just as a remainder, the priority of the company is really to move forward this Phase III trial in Head & Neck cancer. And the priority two is to open this new path for registration within the IO combination field. So, we believe that those two paths will be ensuring the success of the company. Now as you know, our product has a wide applicability and could go for many other tumors. So, the other trial we’ve been running for us are opening new doors for potential future level of growth.
Just as a reminder, the Head & Neck trial with chemotherapy and radiation, data will be presented in Q2 this year. And concerning the trial on the rectum cancer, again, with radiation, chemo plus nano will also be reported in Q2. So, we are very happy with the data generated in liver and prostate and other trials. So after we have developed and move forward in the two priority pathway, we will start exploring other opportunity for NBTXR3.
Kate McNeil
Operator, I think we can turn to the question that we have on the line right now.
Operator
We have one question from the phone is from Jonathan Miller from Evercore ISI. Please go ahead. Your line is open.
Jonathan Miller
Hi, guys. Thank so much for taking the question. I guess a lot of what I was really curious about from the release has been addressed in your prepared remarks, thank you. But I’ll focus, I guess, instead on financials. You said you’ve got a runway well into 2Q of next year that gives you about 12 months of cash. But obviously, registrational data, which I think is the big catalyst isn’t expected until possibly as late as 2024. So I was wondering what you were thinking about your cash position and how you were thinking about the prospect of some sort of financing and what your priorities were from a financing perspective?
Bart Van Rhijn
Thank you, Jordon. This is Bart Van Rhijn. At Nanobiotix we’re always evaluating all our options to ensure sufficient capital on hand and disciplined capital allocation. We’re sensitive to capital dilution, even more so given the current state of the markets. We look forward to keeping you appraised on the progress and are feeling good about what is ahead of us.
We have initiated a cost optimizations program that are bearing fruit already, and we’re very excited about the two strategic partners that we’re collaborating with both MD Anderson and LianBio, which allow us for a very efficient pathway from a development perspective. Thank you.
Jonathan Miller
Thank you. Great. That makes sense. And then I guess one follow-up then, since you’re talking about these collaborations. I think we’re all excited to see a little bit more out of those MD Anderson trials, both in terms of the different combos and the different indications that they’re exploring there. In terms of the data that you have said, we should expect to see in the next year, it seems like there’s a bunch of different datasets coming. What do you think is the most important catalyst for you guys in those upcoming data releases? What should we be paying most attention to in terms of the ability to really generate interest in the NANO story?
Bart Van Rhijn
So I think we have rich year in the front of us. We say that in Q2, we will report two new set of data, one in the expansion phase of the rectal cancer, the other one in the Head & Neck chemotherapy setting — that’s the first part.
We also wait for second part of the year, the RP2D of the pancreatic cancer trial that is done at MD Anderson. The overall program there, including esophageal cancer, non-small cell lung cancer and two, Phase II in Head & Neck in combination with IO is also moving in the right direction.
Where we really want to focus the attention is in the definition of what’s going to be our tax to market with the I/O Combination. Our recent discussion with FDA let us think that we will have enough to start finding what should be this pass. And we tend to communicate that to market by the end of this year to make sure we have another pivotal trial running in parallel to the treat level.
Jonathan Miller
Is there any possibility that, that I/O Combination pass would be more rapid than 312? Is there, any possibility that the I/O Combo could be approved before the Head & Neck studies is done?
Bart Van Rhijn
There’s nothing we can say at this stage.
Jonathan Miller
Okay. Fair enough. Thank you so much. That really helps.
Operator
Thank you for your question. I hand back the conference to the speaker for Webcast question.
Kate McNeil
Yes. We have received a question online from [indiscernible]. His first question, I think, was discovered in our Q&A. So we’ll move to question two, which is asking if you could please provide the breakdown of your R&D expense program for 2022?
Bart Van Rhijn
Yes. Thank you. Thank you, Kate. Thank you for the question. For 2022, the majority of our expenses will relate to the Phase III NANORAY-312 STUDY, which will be reaching a peak, as we expect the enrollment to reach its peak in 2023. The other part of the expenses will primarily relate to the 1100 study, which is our I/O Combination in line with the two priority pathways that we have explained.
Kate McNeil
Very good, thank you for that clarification, Bart. We do have another question that was submitted online during the call, asking what we can expect from a discussion about immunotherapy with the FDA — do you want to add color to that Laurent if you could?
Laurent Levy
We could, I think we discussed this topic a little bit already. What we said and what we were expecting with this meeting is we to clarify a question about the population, about the use of the day one about the type of endpoints we should use us to move forward into market.
And we’ve been very satisfied with the answer we got. And now we are in the active phase of designing this program with our internal team and external PI. So we’re really keen to continue that and to, as far as the overall present issue what is our plan to move forward.
Kate McNeil
Thank you for that Laurent. Our final question actually is a combination of a couple of questions that were submitted in advance and they relate to our ongoing work with Curadigm and if you could provide a status there and as well as work related to the CNS platform.
Laurent Levy
Sure. So just to put that into context or perspective, our priority, meaning the investment and the attention of the vast majority of the company is focused on development of NBTXR3. Nevertheless, there is a small team working for the future and preparing what will be our next platform. And we have two platforms in that result under development at a preclinical stage. The first one is Curadigm, and the other one is linked to CNS disorder.
So in the previous first platform, Curadigm, there is an ongoing collaboration with Sanofi that has been expanded to continue preclinical work, and that should provide some data, I think in the future. According to the previous development we’ve made, and I think you can look at the patents we have published, and you will see the content of this two platform, if go to the one concerning the CNS, this is moving at the right pace from a breaking goal perspective and establishing proof-of-concept, and we’ll report things as soon as we think it’s agreeable after having moving our priority programs in NBTXR3
Kate McNeil
All right, Laurent. It looks like that concludes the Q&A session for today’s call. I’d like to thank everyone for joining us in today’s discussion and look forward to keeping you updated on future calls as the year progresses. Thank you.
Operator
That concludes the conference for today. Thank you for participating. You may all disconnect.
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