Transcript of Digital Conference
Participants
- Fahar Merchant – President & Chief Executive Officer, Medicenna
- Mann Muhsin – Chief Medical Officer, Medicenna
- Elizabeth Williams – Chief Financial Officer, Medicenna
- Deniel Mero – Editor, PropThink
PropThink
Welcome to PropThink’s Digital Conference. My name is Deniel Mero, Editor of PropThink. I will be hosting today’s event. PropThink is a biotech focused investment newsletter. PropThink Digital Conferences is a platform designed to give you access to subject-matter experts, including prominent investors, executives, KOLs, and others with unique insights into healthcare investing.
We were intrigued by Medicenna after researching the IL-2 space. It is one of the hottest fields in oncology and has gotten the attention of big pharma and smart money. In 2018, Bristol Myers paid Nektar $1.8B upfront to co-develop their IL-2 agonist in solid cancers. This deal set off a frenzy in IL-2. By late 2019, Sanofi acquired preclinical IL-2 company Synthorx for $2.5 billion, beating out 3 other big pharma bidders in the process. And just in the last month, private pre-clinical stage Synthekine raised over $100M led by sophisticated bio-funds.
So, you have billions of dollars being thrown around to gain access to preclinical and early Phase 1 candidates. Yet, the IL-2 asset with arguably the most promising data is from a small, overlooked Canadian biotech.
We invited the Medicenna team to discuss the current IL-2 landscape, and how their Superkine platform is positioned to take advantage of this IL-2 craze. We will open with a presentation by Mr. Merchant and close with Q&A.
Fahar, you have the floor.
Fahar Merchant – President & Chief Executive Officer
Thank you very much. Great to be here and have the opportunity to talk to your audience today. So, I will talk about these exciting cytokines. Before I do so, just wanted to make sure that I make you all aware that I will be making forward looking statements and encourage you to look at our securities disclosures.
Starting off, first and foremost, as a company we are focused on cytokines. We are developing evolutionary cytokines to generate revolutionary medicines. The focus is on 3 different interleukins. More specifically, IL-2, IL-4 and IL-13. The intent is to develop new immune based therapies with the initial focus in immuno-oncology.
The company is in a strong financial position. We are capitalized all the way through to the end of next year. We are dual listed, both on Nasdaq and TSX with the symbol MDNA. We are headquartered in Toronto. Our current cash balance as of our last quarter was $40M. We do not have any debt or preferred shares. We just have one type of common shares. We have about 53.5 million shares outstanding and on a fully diluted basis, just over 62 million shares. We are funded until the end of next year.
I will share with you our key milestones that are coming up. If you look at our pipeline, you can see that we have a robust pipeline around our Superkine platform. First and foremost, at the top is MDNA55, an IL-4 targeted toxin. This program is being developed for recurrent glioblastoma, has completed Phase 2b study, as well as an end of Phase 2 meeting with the FDA. We are looking to advance a Phase 3 registration trial with a partner.
The second program that has generated a lot of excitement is our IL-2 super agonist asset called MDNA11. Here we are at the cusp of enrolling our first patient this quarter. We expect to give you additional information during this call. To supplement our IL-2 super agonist, we also have an IL-2 super antagonist. The intent here is to develop this molecule (MDNA209) for auto-immune diseases. Finally, we are also developing a first in class set of bi-specific Superkines, which we call BiSKITs. This is a discovery stage asset with plans to have a lead candidate from this platform identified before the end of the year, so that we can commence IND enabling studies next year.
Let’s focus on the IL-2 program. There have been multiple transactions in this hot space. Nektar signed a $3.6 billion deal in total with Bristol Myers. We also saw Sanofi’s acquisition of Synthorx for $2.5 billion just 5 months after Phase 1 initiation in Australia. This year, Merck acquired Pandion for their IL-2 for treatment of patients with auto-immune disease, which was also a Phase 1 deal. These early-stage deals show the upside potential of our own IL-2 program.
IL-2 has been around for a number of years, known by the commercial drug named Proleukin. The problem with Proleukin is that it is a molecule that is not selective and has a lot of life-threatening side-effects. Further, the kidneys clear the drug quickly. About 10-15% of patients with metastatic melanoma or renal carcinoma have had durable response with Proleukin, but it is at the expense of a poor safety profile where patients have to be treated in an intensive care unit. As soon as patients come for the treatment they are enrolled in an ICU. Patients are dosed every 8 hours for 9 days due to its short half-life. As a result, Proleukin has not been adopted widely.
To address these issues, different groups have tried to block binding to an IL-2 receptor known as CD25. Companies have been using an approach called PEGylation to extend half-life and reduce the dosing regimen. This complex process also leads to molecule inconsistencies from one batch to another, which can result in manufacturing difficulties. We’ve also seen the PEGylation process affect safety/efficacy of the drugs by masking Treg binding and reducing affinity to a key receptor, CD122, necessary for cancer fighting immune cells.
Proleukin binds to the alpha/beta/gamma receptor with high affinity, which includes the alpha chain known as CD25. This ends up stimulating the cancer protecting immune cells known as Tregs. In order to stimulate cancer fighting immune cells, you have to bind IL-2 to a receptor known as CD122, or the beta receptor. Unfortunately, Proleukin does not do a good job of binding to this CD122 receptor, unless you dose it at very high levels. This then creates the high levels of toxicity.
We have engineered MDNA11 in such a way so as to preferentially bind to the beta receptor (CD122), while not binding to the alpha receptor (CD25). By not binding to CD25, you avoid toxicity. By preferentially binding to CD122, that change becomes associated with IL-2 efficacy.
If you look at the affinity of MDNA11 versus IL-2 (Proleukin), you can see that IL-2 binds with high affinity to CD25, which is not desirable. MDNA11, on the other hand, does not bind to CD25 due to the mutations that we have inserted into the molecule. This provides a better safety profile and does not stimulate the cancer protecting regulatory T-cells. Also important to note is that Proleukin does not bind CD122 tightly, which is essential for fighting cancer whereas MDNA11 binds CD122 with high affinity.
On slide 10, if you look at published data for Synthorx’s THOR-707, you can see that THOR-707 does not bind to CD122 any better than IL-2. In fact, it is worse. On the right side of the slide, you have Nektar’s drug and for the most part, the molecule is inactive because it has 6 PEGs that blocks the binding to CD122. Eventually the PEGs come off and you will see that the binding to CD122 gradually increases. In all cases, it is worse than Proleukin at binding to CD122. It is therefore not surprising that we see no efficacy for these drugs in the monotherapy setting.
On slide 11 we have some combo data. On the right of the slide, we see Nektar’s drug NKTR-214, is combined with the checkpoint inhibitor, anti-CTLA4. As the combo drug is being administered, the tumor is being controlled. As soon as treatment stops after 3 administrations at about 21 days, the tumor starts to grow again.
Now, if you look on the left of the side, we did a similar study where we combined MDNA11 with the checkpoint inhibitor, anti-CTLA4. We administered the combination only 2 times, instead of 3 times unlike Nektar. We saw the tumor (orange plot of MDNA11 + anti-CTLA4) stay controlled, showing a long-term durable response in this animal study, even after treatment is stopped.
On slide 12 we are comparing THOR-707 in a non-human primate model. We are looking at a key biomarker called Ki67, which is an indicator of how proliferative these cancer fighting CD8+ T-cells are. As we increase the dose from 10mcg/kg to 600mcg/kg, we see a dose response. Importantly, we are maxed out at 100mcg/kg where 80-90% of the CD8+ T-cells are Ki67 positive. This effect lasts for about 2 weeks before the effect comes back down to baseline.
When comparing to THOR-707, although they use higher doses, they do not quite get to the same Ki67 expression levels that we do. They also have to dose these animals every 7 days, instead of 14 days with MDNA11. These are good, strong differentiation that you can see between MDNA11 and Nektar’s and THOR’s.
I also want to point out that our drug is fused to albumin, which as we know tends to accumulate at the tumor site. Albumin targets tumors very efficiently and, therefore, that provides additional safety and efficacy.
We have now progressed to a Phase 1/2 clinical trial design with 3 segments. We have filed applications for approval in Australia that will be followed by applications for approval in the USA, UK, Canada. According to this trial design, the first segment is a monotherapy dose escalation. Here, we want to determine the maximum tolerated dose, identify dose limiting toxicities and establish a recommended Phase 2 dose. Once we have identified a recommended Phase 2 dose, we will proceed to segment 2, which is a dose expansion phase. In this second segment we plan to enroll about 30 patients. 10 patients with melanoma, 10 with renal cell carcinoma and another 10 with other selected tumors based on what we observe in segment 1 of the basket trial.
The third segment will be combination of MDNA11 with a checkpoint inhibitor. We will be looking at safety/efficacy. Overall, the number of patients in the Phase 1/2 will be in the 80 plus range. We are starting recruitment in Australia due to it being easier and faster to commence the study. Also, Australia has a higher incidence of melanoma so it will help enrolling those patients. Our approach for Phase 1 will be similar to what Synthorx did.
Slide 14 shows the multiple milestones we have coming up. Phase 1 MDNA11 will start enrolling patients in Australia this quarter. Before the end of this year, we will report top-line safety, PK and PD and biomarker results from the Phase 1 monotherapy cohorts enrolled. The dose escalation segment will continue next year with a longer follow up. Monotherapy efficacy data will be presented in the first half of 2022.
We are looking to expand our pipeline opportunities around our IL-2 asset. Unlike other IL-2 programs which depend on PEGylation, our molecule is engineered to be very selective for CD122. This advantage grants us flexibility in terms of creating versions of IL-2 that can insert the entire gene sequence into viruses or CAR-T cells, or fuse our IL-2 asset directly to antibodies that target the tumor site. Before the end of this year, we will identify a lead program from our BiSKIT platform and commence IND enabling studies next year.
I want to quickly review MDNA55. Phase 2b clinical trial showed that the median survival in recurrent glioblastoma patients is 15.7 months, better than the 6-9 months survival of patients treated with current approved therapies for recurrent glioblastoma. To further de-risk the program, we decided to conduct another study where patients where enrolled in an external control arm.
These patients met the same exclusion/inclusion criteria of the MDNA55 trial. They had already received currently approved standard of care. The median survival in these patients was 7.2 months. Therefore, a single treatment with MDNA55 improved survival by over 100% ; from 7.2 months to 15.7 months.
Slide 17 shows the planned design of the pivotal registrational trial. We had a meeting with the FDA and agreed on a novel registrational trial. This was historical in a sense because it was the first time the FDA agreed to have a majority of patients in a Phase 3 trial in the control arm to be from an external control arm; similar to how we conducted the Phase 2b trial.
This study will have a 1:1 randomization. For every 3 patients enrolled in the MDNA55 arm, 1 Patient will be enrolled in standard of care arm and the other 2 patients will be from an external database from patient registries. We are looking to partner this particular asset. We are not looking to use Medicenna’s cash resources on a registrational Phase 3 trial. Our future partner will conduct this Phase 3 study and we are having ongoing discussions.
With that said, I am happy to answer any questions.
Question-and-Answer Session
PropThink
Thank you for the presentation, Fahar. We will now start the Q&A portion of this event. As a reminder to our audience, you may submit a question using the text box at the bottom right-hand corner of your screen. I will go ahead and ask some questions that were submitted leading up to the presentation.
The first question, an investor asked about the MDNA11 biomarker data that is expected by the end of the year. What sort of biomarkers are you expecting to show? How do you define success for these different biomarkers?
Mann Muhsin – Chief Medical Officer
The study will be looking at biomarkers in the peripheral blood that are known to be associated with T-cell activation, exhaustion, recruitment, and tumor infiltration. The study will examine CD8/Treg ratio, as well as change from baseline. We will also look into increase in expression of biomarkers in favor of clinical benefit driven by immune cell activation such as Ki67, ICOS, CD25, PD1, RX40, CTLA4 and many others.
Furthermore, we anticipate favorable trends in surrogate efficacy markers. Albumin mediated half-life extension, preferential bio-distribution in the tumor and TH1 bias in tumor microenvironment as measured by T-cell priming, trafficking, infiltration TIL and paired biopsies. We will also look at markers such as CD3, CD4, CD8, GNLY and Natural Killer cells. T-cell subsets will also be examined. These include CXCR3, CCR6, CCR7 and exhaustion markers like PD1 and LAG3. Finally, we will study gene expression patterns using nano string IO360 panel which is commonly used in IO therapies.
Based on preclinical data, half life of MDNA11 seems to be longer than comparable novel agents in the IL-2 drug class, allowing us to have dosing of approximately every 2-3 weeks. Half-life flexibility is significant because it will enable MDNA11 to be combined with checkpoint inhibitors whether the backbone treatment has a treatment cycle of 3 week or 4 weeks.
PropThink
The next question is coming from David Martin. He asks what doses will you be testing in the MDNA11 escalation part? Also, how long between dosing the last patient in the cohort and starting the next cohort.
Mann Muhsin – Chief Medical Officer
Dose escalation was presented in slide 13 of Fahar’s presentation. The time between each cohort depends on DLT reviews. The DLT observation period is 28 days. Upon completion of the third patient in each cohort and clearance of DLT period, we are allowed to quickly open the new cohort. There will be cohort review group which will look into all the DLTs experienced in each cohort. This will enable us to expand to the subsequent cohort without much delay. The cohort review group meetings will be prescheduled according to the cohort prespecified in the protocol to ensure a seamless dose escalation paradigm.
PropThink
Do the patients in the lower dose cohorts have the opportunity to dose up into the higher cohorts?
Mann Muhsin – Chief Medical Officer
Yes, all the patients in the lower dose levels will be given the opportunity to take part in intra-patient dose escalation. Upon clearance of the subsequent higher dose, we will give the opportunity to each patient, and we will discuss with the PIs to dose escalate patients who received lower doses. This, of course, depends upon confirmation of safety and tolerability of higher doses and in accordance with the clinical picture of those patients. So that will actually enable patients to receive optimal doses and to avoid giving subtherapeutic doses to patients in the lower cohorts.
PropThink
Have your models given any indication which dose range you can start seeing some efficacy in form of clinical responses?
Mann Muhsin – Chief Medical Officer
Yes, we do have some preliminary information, but we cannot yet fully disclose that until testing in clinic. We do have lots of pre-clinical modeling and simulation, and preclinical data is very solid, which tell us very detailed information where we would see the clinical activity. But until all tested in clinic, we may not be able to disclose it with full confidence, as you know.
PropThink
Can you elaborate on the differences and similarities between the IL-2 super agonists, like MDNA11, and the partial agonists?
Fahar Merchant – President & Chief Executive Officer
Yes, so with the super agonist, as I said, in our initial slide deck, what we have done with the super agonist is clearly develop a version of IL-2 where the affinity for CD122 is substantially increased and the affinity for CD25 is essentially abolished, while maintaining binding to CD132.
Now, because we have the ability to fine-tune the creation of either super agonist at the one extreme, and on the other extreme have a super antagonist, we can fine-tune, (because of our mutational librarie), and create what we call partial agonists (or partial antagonist) as well.
For example, with MDNA11, we have 5 mutations to enhance binding to CD122. We can reduce that to maybe just 2 or 3 mutations, so that it becomes a partial agonist and while maintaining some binding to CD25 as well. So, you can balance and fine-tune those kind of binding activities the way you want to.
We feel that with MDNA11, particularly in the case of oncology, a need for a super agonist is essential because we want to make sure, particularly in tumors that have a high population of Tregs, the selectivity towards stimulating effector T-cells is maintained and that we are able to stimulate natural killer cells as well.
Also, it is important to note that when you look at patients who have undergone treatment with checkpoint inhibitors, these patients end up getting to a stage of what we call NK cell exhaustion or T cell exhaustion or you might even have tumors that have MHC class 1 loss that are essential for effector T cells to attack.
Fortunately, what we have clearly seen in the work done by Chris Garcia and David Raulet’s lab is that MDNA109 (MDNA11’s precursor) has the ability to reverse NK cell anergy (exhaustion) and also to attack tumors that have lost MHC class 1 status.
So that is really important. It sort of gives you a much wider, broader window to treat patients with tumors that are resilient, particularly those that are not responding to checkpoint inhibition.
PropThink
You mentioned the affinity with CD122 and then also CD25. Let’s focus on CD122 first.
Why do you think that high CD122 affinity has not translated into better response rates so far for what THOR has reported in their Phase I earlier this year and also Nektar? And how do you see that being different for MDNA11?
Fahar Merchant – President & Chief Executive Officer
First and foremost, cancer-fighting immune CD8+ T-cells and NK cells exclusively express what we call the intermediate affinity receptor, which has the CD122 and CD132 receptors.
On the other hand, the high affinity receptor also contains CD25. Now when you mention as to why is it that molecules that are binding to CD122 are not showing monotherapy efficacy, I think this is where there is a huge misunderstanding.
The problem is that the molecules that are in the clinic right now, yes, they don’t bind to CD25. But what we don’t realize is the fact that the PEGylation approaches that are being used, are also blocking binding to CD122.
So in reality, they are less efficacious than Proleukin. They are molecules that are selective towards CD122 (relative to CD25), but not necessarily binding efficiently to CD122 as Proleukin does. And that is where the problem is. And that is why, I believe, we see these mediocre clinical results to date.
PropThink
You mentioned the PEGylated IL-2 and how some of the companies that have reported Phase I have been using that approach. How are you different? And why do you think your difference will be a benefit, specifically to the clinical response of MDNA11?
Fahar Merchant – President & Chief Executive Officer
Our approach is really to work with a different way of extending the half-life. So we’ve avoided using PEGylation. Nektar uses a complex manufacturing process to PEGylate and we’ve seen that it results in molecular inconsistency, batch to batch.
The thing with MDNA11 is that we take the entire gene sequence of albumin and link it up to the gene sequence for our IL-2, so that we are creating a single molecule that has the functionality of both, an extended half-life, but also targeting CD122 very specifically.
Finally, the other thing that is very different from other approaches is that we know that albumin accumulates in the tumor, and that’s where you are able to localize the drug; albumin also accumulates in tumor draining lymph nodes. This is what makes our IL-2 accumulate right at the place where it is needed the most.
And these are the kind of features that you do not see with PEGylation. That is where we feel MDNA11 provides a big differentiation here with respect to our approach.
I’ll pass it on to Mann and see if he’s got anything else to add.
Mann Muhsin – Chief Medical Officer
I worked in my prior clinical development life with two PEGylated compounds – Halozyme’s PEGPH20 and Nektar’s Bempeg, a PEGylated IL-2 (NKTR-214). In both cases the toxicity management was not the easiest.
PEGylation has its own safety issues and has effects on cardiovascular and on vasculature in particular, when it comes to increased risk of thromboembolic events and so forth. I think with our approach – with the albumin-fused molecule – it won’t only eliminate those potential safety concerns seen with other molecules, it will also increase the bioavailability of albumin in tumor tissue. Therefore, this will give us the clinical activity needed where it should be.
If we look into the approval in desmoplastic tumors like pancreatic cancer, the only drug approved in it is Abraxane. And what is Abraxane? It’s a NAB-Paclitaxel – a nanoparticle albumin-bound paclitaxel. So, if it can penetrate and can accumulate in a tumor as desmoplastic, as pancreatic, then MDNA11 should be able to actually have a better bioavailability in all the tumor types that we have selected in our clinical development plan and currently in our protocol. So, it is a two-fold benefit – on efficacy and bigger one on improvement in safety.
PropThink
Moving onto CD25, what indications do you have that CD25 does not play a role in anti-cancer efficacy? Proleukin showed monotherapy responses and they had CD25 binding that was stronger than certain other clinical candidates currently being tested.
Fahar Merchant – President & Chief Executive Officer
First and foremost, Proleukin, has the ability to bind to the high-affinity trimeric receptor (which has CD25, and is expressed at high levels on regulatory T cells). What we have seen is that low-dose Proleukin has actually shown to benefit patients with autoimmune disease, which is the reverse of cancer, mainly by virtue of its ability to stimulate the immunosuppressive Tregs. That’s what’s happening with low-dose Proleukin.
Unfortunately, Proleukin does not bind efficiently to the dimeric IL-2 receptor (which has CD122 and not CD25). And because the dimeric receptor is highly expressed in the cancer-fighting CD8 T cells as well as NK cells, low doses of Proleukin does not activate the cancer fighting immune cells.
However, at the higher doses, Proleukin is able to bind to CD122 and is, therefore, able to stimulate CD8 T cells and NK cells. Unfortunately, that occurs at the expense of severe safety issues and toxicity.
So therefore, when you are designing a “not alpha IL-2”, you have to make sure that you do not compromise its binding to CD122.
What you’re actually hearing is that, well, these IL-2 drugs are not working because they’re not binding to CD25. That’s not true. They are not binding to the CD25, but they’re also not binding effectively to CD122 as well. That is the problem, which we are addressing with MDNA11.
PropThink
Mann, there is a follow-up question for you. You mentioned a number of biomarkers when talking about the MDNA11 biomarker data later this year.
Can you list a few, maybe 1 or, 2 of the most important biomarkers that could support the class-leading profile of MDNA11? And what would you think would be benchmarks to compete on these biomarkers?
Mann Muhsin – Chief Medical Officer
If you look Ki67, ICOS, CD25, PD-1, OX40, CTLA-4 and FOXP3, CCR6 and CCR7, many others will tell us how superior and further confirm the preclinical data we have and position MDNA11 as best-in-class.
It is hard to tell exactly which one is the most important one because they’re all, as you know, work in the tumor microenvironment and in peripheral blood in synchrony. And as long as we see increase, for example, in CD8/Treg ratio and change from baseline and the level of increase, that’s very crucial and supportive..
And we will be looking at the classical markers that are studied in this drug class and seem to be driving clinical benefit, but we also have high number of novel biomarkers that even further highlights the potential of MDNA11.
PropThink
Let’s talk about Australia and the Phase 1 that you’re running with the IL-2 program. Australia is facing this new COVID crisis due to the Delta variant. And to combat it, they’re going through lockdowns.
Do you have any indication that these lockdowns are going to impact your Phase I initiation? You’ve previously mentioned it’s going to be in Q3. Is that still the plan? Is biomarker data still expected by the end of the year? Or do you think there’s a chance for delays here?
Mann Muhsin – Chief Medical Officer
It is true that Australia is currently experiencing a COVID wave. Certain urban centers, including Melbourne and Sydney, are in lockdown. We’ve spoken to multiple clinical sites that are currently working with us on our MDNA11 program on the ABILITY Study.
I personally spoke to many colleagues in the medical community and PIs in Australia in a number of cities. We covered wide geographical locations within Australia. And we also work with our CRO, which is in Australia, Novotech, who all have confirmed that the treatment of oncology patients is considered to be an essential service under the definition of the local governments.
And the treatment of medical conditions are exempt from all COVID restrictions, including the restrictions related to travel between different regions, allowing patients to travel as needed and participate in clinical trials.
Hence, with all the information we’ve gathered from all sites, physicians and PIs in the region, we do not currently anticipate that COVID restrictions will have a materially negative impact on the enrollment of our study. And therefore, we anticipate that all of our milestones and timelines that we have in place will not be affected as a result of the COVID situation in Australia.
However, we continue to monitor the situation in Australia, and we do not believe that there will be any change in the near future that affect our current plans or enrollment projections.
PropThink
Very good to hear that. Can you explain, either Fahar or Mann, why did you select Australia as the country for Phase I? And, in addition to that, when do you expect that the other countries will start enrolling U.S., UK, Canada?
Fahar Merchant – President & Chief Executive Officer
Australia has much more flexibility in terms of conducting clinical trials. They allow patient enrollment in a way that prefers that the dosing in patients, particularly end-stage oncology patients, can be treated at doses that are not substantially subtherapeutic as you would normally expect in, let’s say, if you were to conduct a clinical trial in the U.S. So that clearly helps us to have fewer dose escalation cohorts with respect to starting this trial in Australia while benefiting the patient.
The other thing is, also, as you know that the large percentage of patients in the clinical trial, we expect about — just under 30% or so patients, to have melanoma, and Australia is a country which has the highest incidence of melanoma in the world. So that also played a role.
And then finally, with respect to other jurisdictions, we are looking to submit and seek approval from Canadian, U.K. and especially U.S. FDA to start enrolling patients. Hopefully, we can get those approved before the end of this year.
Mann Muhsin – Chief Medical Officer
Australia will enable us to initiate faster clinical testing without exposing patients to subtherapeutic doses, which Fahar articulated very well. Patient population aligned with our clinical development plan and unmet need as Fahar indicated, melanoma and other tumor types that we have included in our protocol.
Also, we have access to great sites and exceptional network of KOLs and colleagues, physicians in the medical community in Australia that will enable us to set up the program and position it for success.
In my view, those are the 3 main reasons why Australia, for the time being, represent itself as a great opportunity for us at Medicenna to initiate the program from there and then launch it to other regions in the world.
PropThink
Just last month, private company Synthekine raised close to $100 million from top institutional investors. That same company is using a technology license from Chris Garcia’s lab at Stanford. That is the same lab that Medicenna licensed its technology from.
Can you talk about the difference between the 2 candidates. And then follow-up, should we read into why Garcia is on the Scientific Advisory Board of Synthekine, but not Medicenna?
Fahar Merchant – President & Chief Executive Officer
First and foremost, Medicenna licensed the Superkine platform from Stanford when the company was private. At that time Stanford also invested into Medicenna as a private company. Upon licensing the technology, what we did at Medicenna was, very early on, worked together with Chris Garcia’s lab to transfer the know-how to Medicenna as well as work with individuals that were co-inventors of the Superkine platform who worked directly in Garcia’s lab. They were much more easily available to help the transfer of the know-how.
So we have, in a sense, indirectly worked with Garcia’s lab. Although the Superkine technology, at the time of in-licensing, was really promising, it was also in a very early discovery stage. And as you are aware, Medicenna has made substantial enhancements to the program. And we have, in fact, filed our own new intellectual property to further improve the safety, the selectivity and to extend the half-life. Essentially taking a molecule that came from Garcia’s lab and made it more druggable.
We have been able to build out on our own, not only MDNA11, but also the BiSKITs platform. Chris Garcia, although he was a co-inventor of Medicenna’s licensed technology and Synthekine’s, he is also a co-founder of Synthekine and therefore it makes sense that he is on their Scientific Advisory Board.
PropThink
Let’s move on to MDNA55. You’ve been looking for a partner for quite some time now. Can you give us an update on what is going on there? Are we close to a partnership being announced? And if so, what sort of terms do you expect? If not, what are the plan B options? Do you have enough cash on hand to get to interim Phase III data?
Fahar Merchant – President & Chief Executive Officer
I want to make sure that it is very clear that Medicenna is not intending to use its cash resources to fund the MDNA55 Phase III registration trial. We expect that to be funded entirely by a partner.
And with respect to the partnering process, it is progressing well. We are confident that the transaction will be completed, and we will be able to update shareholders on a number of different aspects as it becomes finalized over the coming months. I really cannot disclose details, but suffice to say that the activity is progressing well.
PropThink
We’ll move on to a couple of questions on the finance side. Last quarter you had about $40 million in the bank. Will you raise before biomarker data later this year?
Elizabeth Williams – Chief Financial Officer
We can’t comment on when we’re going to raise capital, but I think what’s important to note is we do have capital through to the end of 2022. So that takes us through the biomarker data update quite comfortably as well as early efficacy data in the first half of next year. So, we are well capitalized, and certainly not in a position that we need to raise funds in the near term.
PropThink
Can you talk about the warrant position and any outstanding ATM? How much potential cash can be coming in from either of those 2 sources?
Elizabeth Williams – Chief Financial Officer
We currently have about 3.8 million warrants that are outstanding. They have a weighted average exercise price of $1.83. So, generally, they are in the money, and they expire over the next 12 to 24 months. So yes, there’s potentially an additional $6 million or $7 million that could come in from those warrant exercises.
Generally, the warrants are in strong hands, so we don’t expect to see exercises in advance of catalysts, more likely on the back of catalysts. We don’t factor in proceeds from warrants when we talk about runway. That is just based on the cash we have in the bank.
In terms of the ATM, we still have USD 19.2 million that can be utilized on the ATM. We have not been using the ATM. The last time we used it was in March, and that was for a single block trade with a long health care-specific institutional investor. And we used it a little bit in January when the markets were quite strong. But otherwise, it has been turned off.
PropThink
Can you talk about what the costs are going to be like for MDNA Phase I — MDNA11-, the monotherapy? And then when you decide to go combo with PD-1 as well, what are the costs like?
Elizabeth Williams – Chief Financial Officer
We haven’t publicly disclosed that yet, and part of that is just going to be, once we have all the necessary regulatory approvals in place, we could talk about it in a little bit more detail. But we do have the capital that we need to run that clinical trial to efficacy readouts. I think that’s the important takeaway.
PropThink
One of the questions that I see submitted here is: do you expect to spend any of your cash doing stock buybacks? I know that is a rare thing to do in clinical stage biotech, but investors want to know.
Elizabeth Williams – Chief Financial Officer
It’s a question we’ve been asked before. My understanding is that we actually wouldn’t be allowed to do that. I think to do a stock buyback, it has to be out of profits.
The capital that has been invested into Medicenna has been by investors who want us to take MDNA11 clinical trial through to completion. That’s our mandate from the investors and the use of proceeds that were allocated to those funds. So, that’s what we’ll be doing with funds, not a buyback. Even though it’s tempting at these prices.
PropThink
One of the questions that has come up has been with regards to stock performance. 4 million shares have been traded in the last month. That equates to about $12 million.
During this time, the price has fallen from high $3s to mid-$2 range. Have you gotten wind of any big shareholders or funds selling their position?
Elizabeth Williams – Chief Financial Officer
We are not aware of any institution that has been selling at this point in time. So we’ll be keeping an eye on the filings when they’re done in August. We’re not aware of anything.
PropThink
A few more questions are coming in now for MDNA11 and MDNA55, so either Mann or Fahar. I’m going to have to call on you again.
Can you elaborate on the MDNA55 partnership timelines? Do you think it will happen before MDNA11 biomarker data? Or after? Are interested parties waiting on the MDNA11 data before making a commitment on MDNA55?
Fahar Merchant – President & Chief Executive Officer
No. There isn’t any condition regarding MDNA11 data being a prerequisite to partnering MDNA55. These 2 are not linked in any way.
PropThink
The approaches to IL-2 at Medicenna and Synthekine, are they similar or different?
Fahar Merchant – President & Chief Executive Officer
They are different in a way of what they are trying to accomplish. Unfortunately, because they’re not publicly listed, there is not much publicly available information on their mechanism.
Let’s look at the beta and gamma C receptor, which are essentially expressed on the NK cells and cancer fighting immune cells. I believe their approach is targeted and binds to CD122, but with diminished signaling through 132, which is the gamma C chain. So, in this way, instead of having full agonism, you have partial agonism.
Whether that is the best approach, I’m not sure. Obviously, I’ve seen data with partial agonists before, and we were screening a number of different molecules internally that were also partial agonists. We found that the super agonist did much better, and that’s why we’ve pursued with that approach.
PropThink
Do you know which indications in solid tumors MDNA11 will be going after? Is pancreatic cancer one of them?
Mann Muhsin – Chief Medical Officer, Medicenna
Short answer, yes, pancreatic cancer (PDA) is one of the tumor types in the basket portion of the study. The study, as Fahar presented, and the expansion portions will have 1:1:1 ratio of patients in melanoma, RCC and a cluster of solid tumors that have high probability of success based on the data available.
So pancreatic cancer, together with gastric with cholangiocarcinoma, gall bladder and colorectal are the tumor types in the GI portion of the cluster of basket tumors. Of course, we will be examining other tumor types, looking for a signal of activity. Example of those tumors are triple-negative breast, lung in both variants, squamous and non-squamous, non-small cell lung cancer and other tumors in the cutaneous territory, Merkel cell carcinoma, cutaneous squamous cell carcinoma, basal and so forth.
We have a very smart selection of tumor types that increase the probability of success and increase the likelihood that we will see a signal. We will also explore the pan-tumor potential of MDNA11 based on the data and based on the information Fahar presented related to the drug design and based on our most advanced understanding of the drug class itself, the pathway and the data available from Proleukin as well as other agents in this class.
We learned from others’ success as well as failures to inform the clinical development plan and the trial strategy in which we will increase the likelihood of success and optimize our clinical development plan and the target product profile.
PropThink
There’s a question for Mann asking why you joined the company and how excited you are for MDNA11?
Mann Muhsin – Chief Medical Officer, Medicenna
I’ll start with the easy part, which is the excitement. Yes, I am definitely excited about MDNA11, the Medicenna technology, the drug design and the potential of working on the IL space on the interleukin space and cytokines. There is no question, as a pathway, it’s validated. It works. We know they work, all of them. The question is how to optimize both efficacy and safety and to get it to work with less toxicity, which I do believe MDNA11 has the highest potential when it comes to this regard.
Why I joined? I spoke with Fahar a couple of times. He explained to me the drug design, the technology, the lean model of the company, the efficient approach, how Medicenna develops drugs. And overall, it’s very appealing and promising. And I do believe we have a great team, great science and fantastic execution approach. This gives me the full confidence that we will not only be successful with MDNA11, but also MDNA55. We will have really high potential for future molecules, bispecifics and future programs.
As Fahar alluded to briefly, BiSKITs and many other cytokines that, in my view and in my humble opinion, working in solid tumors, there is a huge unmet need. And I referenced some of those tumors, earlier in the study design, and we all agree that those tumors do have substantial unmet need.
There is clinical activity for agents in the drug class, but there is huge room for improvement, which I think Medicenna platform positions itself as a very brilliant approach to address unmet need in those solid tumors.
So this is my short answer. But I think, overall, the company, the science, the leadership when I spoke with them is very exciting and very promising. And when you join a company, you join the science, but you also look at it from a probability of success, and this is a very good team that is well positioned, well equipped for success. And I’m proud and happy to be part of it.
PropThink
Perfect. Well, there you have it, folks. Everyone, thank you so much for your time. I think this proved to be very insightful. This concludes the presentation and Q&A portion of our event.
As a reminder, we are not registered investment advisers. Nothing in this presentation should be construed as investment advice. Always consult a professional before making any decisions.
If you’re interested in getting in touch with Medicenna, you may do so via the website, www.medicenna.com. All of the management team is very accessible there. And if you’re interested in learning more about PropThink, please visit www.propthink.com or follow us on Twitter at the handle @propthinker. Thank you so much for attending and hope to see everyone again.
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