Earnings Call Transcript - APLM Q4 2023

Operator, Operator

Good morning ladies and gentlemen. Welcome to the Apollomics Full Year 2023 Results Conference Call. Before we begin, we want to advise you that over the course of the call and question and answer session, forward-looking statements will be made regarding events, trends, business prospects, and financial performance which may affect Apollomics future operating results and financial position. All such statements are subject to risks and uncertainties, including the risks and uncertainties described under the Risk Factors section, including an Apollomics annual report on form 20-F, registration statement on Form F1, and other reports filed with the Securities and Exchange Commission. Apollomics advises you to review these risk factors in considering such statements. Apollomics assumes no responsibility to update or revise any forward-looking statements to reflect events, trends, or circumstances after the dates they are made. It is now my pleasure to turn the floor over to Dr. Guo Liang Yu, Apollomics Chairman and Chief Executive Officer. Sir, you may begin.

Guo Liang Yu, Chairman and CEO

Thank you Shannon. Good morning, everyone, and thank you for taking the time to join us today as we provide an overview of recent business highlights and discuss our full year 2023 financial results. Joining me for the call today is Dr. Sanjeev Redkar, our President, Dr. Peony Yu, our Chief Medical Officer, and Dr. Matthew Plunkett, our recently appointed Chief Financial Officer who joined us earlier this month. Matt brings to Apollomics an outstanding track record of executive leadership in financial strategy and business development. We look forward to his contributions as we continue to execute on our vision of bringing Vebreltinib or APL-101 and our other pipeline candidates towards regulatory approvals to better serve patients with a number of underserved indications. I'll begin the call with some introductory remarks which will be followed by a review of our recent corporate and development progress by Sanjeev. Matt will also cover our full year 2023 financials and then we'll open the call for Q&A. We recently reviewed interim data from our global SPARTA Trial and KUNPENG trials with the FDA in February 2024 and received informative and encouraging feedback on our lead product candidate Vebreltinib. But first, before we go into that, I want to remind everyone of our strategic focus and what we accomplished in 2023. 2023 was a year of significant accomplishment as we made substantial progress in our two lead drug candidates, Vebreltinib and Ophthalescelen. Both have shown promising clinical results. First, we substantially advanced our phase two registrational trial of our lead product candidate Vebreltinib in non-small cell lung cancer and other solid tumors with MET dysregulation. Vebreltinib is a novel orally active brain-penetrating highly specific CMET inhibitor being evaluated in global clinical trials including the US, Europe, and China. Dysregulation in CMET signaling can play an essential role in the development, progression, and survival of cancer. Vebreltinib has the potential to treat cancers with MET or HGF dysregulations beyond MET Exon 14 skipping. Our multicohort global SPARTA Trial, which includes over 90 clinical sites in North America, Europe, and Asia, together with our partner Everstone Pharmaceutical technology company, more than 500 patients have been treated to date and have observed encouraging efficacy from Vebreltinib in clinical trials. The safety profile is generally similar to other MET tyrosine kinase inhibitors on the market at this time. Given our encouraging clinical data on Vebreltinib monotherapy to date, we are focused on three initial indications. We expect the first to be non-small cell lung cancer with MET exon 14 skipping mutation, for which Vebreltinib has the potential to be best in class to further improve patient treatment beyond available therapies. The other two indications are expected to be first-in-class targeted treatments including non-small cell lung cancer with MET amplification and glioblastoma multiforme with PTPRZ-MET Fusion. Sanjeev will provide a further update on where we are in clinical and regulatory development with each of the indications in a moment. In December 2023, we reported the overall response rate of Vebreltinib by gene copy number or GCN subgroup analysis in 83 non-small cell lung cancer patients from the ongoing multicohort phase two KUNPENG trial in China and the ongoing global multicohort phase two SPARTA Trial. The interim data demonstrated broadening efficacy in non-small cell lung cancer patients with MET Exon 14 skipping mutation, providing a robust overall response rate and an acceptable safety profile in patients with and without co-occurring MET amplification. In November 2023, Everstone received conditional approval from the National Medical Products Administration of China for the commercialization of Vebreltinib to treat patients with MET Exon 14 skipping non-small cell lung cancer. Note under our partnership agreement, Everstone holds the exclusive rights to Vebreltinib in Greater China, while Apollomics retains the exclusive rights in the US, Europe, and the rest of the world, and partners have access to each other's data. In addition, in January 2024, we announced the completion of patient enrollment for our phase three bridging study in China for Apollomics APL-106 in patients with relapsed or refractory acute myeloid leukemia or AML. Apollomics licensed APL-106 from Glycomimetics, including the right to clinical development, production, and commercialization in the Greater China market. APL-106 is a first-in-class E-selectin inhibitor being used in combination with standard of care chemotherapy in patients with AML. It has the potential to improve the efficacy and tolerability of chemotherapy. APL-106 has been granted breakthrough therapy designation by both the FDA and the NMPA. Glycomimetics expects top-line results from its pivotal phase three study in the relapsed and refractory AML patient population to be fully enrolled as of November 2021 and expects top-line results in the second quarter of 2024. Finally, in March 2023, we successfully transitioned to a public company by completing our business combination and listing on NASDAQ. With that, I will turn the call over to Sanjeev.

Sanjeev Redkar, President

Thank you, Guo Liang. In February 2024, we sought feedback from the FDA in a Type C meeting with the objectives to review our development plan as well as our registration pathway for Vebreltinib for the treatment of three conditions. The first was non-small cell lung cancer with MET exon 14 skipping mutation, the second non-small cell lung cancer with MET amplification, and the third glioblastoma multiforme with PTPRZ-MET fusions. Now the interim results in the first indication, MET exon 14 skipping mutation, included 107 non-small cell lung cancer patients with centrally confirmed MET exon 14 skipping mutations. Of the 107 patients, 71 were treatment naive and 36 were previously treated patients with no prior MET inhibitor and no immune checkpoint inhibitor treatment immediately prior to Vebreltinib. In the 71 treatment-naive non-small cell lung cancer patients, about half are from SPARTA and half are from the KUNPENG trial. The objective response rate was 66.2%, supported by a median duration of response of 16.5 months. In the 36 previously treated patients, of which 19 are from SPARTA and 17 from KUNPENG, the objective response rate was 61.1% with a median duration of response of 16.7 months. An updated efficacy analysis by Gene Copy Number or GCN subgroup continues to show similar Vebreltinib activity in the treatment of non-small cell lung cancer patients with MET exon 14 skipping mutations, regardless of overlapping MET amplification. In the absence of overlapping MET amplification, where the GCN gene copy number was less than four, the objective response rate was 67% in a pooled analysis of 86 patients from the SPARTA and KUNPENG trials. In the treatment-naive patients with GCN less than four, the objective response rate was 64.3% in 28 SPARTA patients and 71.4% in 28 KUNPENG patients. Based on the feedback from the FDA from this Type C meeting, we will continue to enroll in these SPARTA cohorts and review additional information on patients from the SPARTA and KUNPENG trials with the FDA on the NDA readiness for this indication. We will analyze data after all patients have achieved a 12-month follow-up to support a traditional approval. Now, based on discussions with the FDA, we believe that pre-treated non-small cell lung cancer patients with MET amplification may remain an unmet medical need and that the preliminary data presented could represent an improvement over available therapy. We'll continue to enroll non-small cell lung cancer patients with MET amplification in this SPARTA study to increase the precision around the point estimate for the objective response rate and provide geographic diversity in the NDA package to support an accelerated approval. The primary efficacy analysis could potentially be based on the single trial results from KUNPENG and SPARTA. We expect enrollment of these incremental patients in SPARTA to continue into 2025, and if these results are positive, we could potentially submit an NDA in 2026 to seek accelerated approval of Vebreltinib as a second-line treatment for non-small cell lung cancer patients with MET amplification. Now for patients with glioblastoma multiforme with PTPRZ-MET fusions, the agency acknowledged that PTPRZ-MET fusion-positive high-grade glioma is a serious illness with an unmet medical need. We do need additional study data to determine if the randomized phase two or three study completed by Everstone, which showed a 48% reduction in the risk of death supported by data from the SPARTA study, could support a marketing authorization for this indication in the US. For the remainder of 2024 and into 2025, we look forward to the following milestones and updates. We look forward to disclosing exciting new preclinical data on Vebreltinib at the AACR meeting in San Diego next week. We are planning to present results from multiple preclinical studies in two posters. Now on APL-106 at GLYCOM. Apollomics' partner in the US, Glycomimetics, expects to report top-line results from its pivotal phase three study of APL-106 in the relapsed refractory AML in the second quarter of 2024. Our phase three bridging study in relapsed refractory AML in China was fully enrolled at the end of 2023 while waiting for data to mature in this event-driven study. We expect to report top-line data in the first half of 2025.

Matthew Plunkett, CFO

Thank you, Sanjeev. Please refer to our press release issued earlier this morning, March 28, 2024, for a summary of our financial results for the year ended December 31, 2023. As of December 31, 2023, cash, cash equivalents, bank deposits, and money market funds were $37.8 million, as compared to $58.9 million as of December 31, 2022. In March 2023, the company raised $23.7 million before transaction expenses in a PIPE financing in conjunction with the business combination and listing on NASDAQ. Based on current projections, we believe our cash position is sufficient to fund planned operations through the first quarter of 2025. For the year ended December 31, 2023, research and development expenses were $34.2 million, including stock-based compensation of $5.9 million. This compares to $35.4 million, including stock-based compensation of $2.4 million for the full year 2022. General and administrative expenses were $20.6 million, including stock-based compensation of $6.8 million for the full 2023 year. This compares to $9.9 million, including stock-based compensation of $0.6 million for the full year 2022. The increase was primarily due to administrative expenses related to our business combination in 2023, directors and officers insurance as a result of being a publicly listed company, and an increase in employee stock-based compensation. Net loss for full 2023 was $172.6 million or $2.32 per diluted share, as compared to a net loss of $240.8 million or $8.44 per diluted share for the full year 2022. The net loss includes a non-cash expense for change in fair value of convertible preferred shares of $76.4 million in 2023 and $189.6 million in 2022 and also includes expenses related to capital markets activities of $46.0 million in 2023 and $6.6 million in 2022. For the year ended December 31, 2023, net cash used in operating activities was approximately $43.2 million, as compared to $42.8 million in the prior year. At this point, I'll now turn it back over to the operator for our Q&A session.

Operator, Operator

Thank you. Our first question comes from Tim Moore with EF Hutton. Your line is now open.

Tim Moore, Analyst

Thanks for your press release and your prepared comments on the call. It's great that you want to move forward with enrolling the SPARTA cohorts. So I just want to maybe clarify the timing you need to reach the 12-month follow-up period. It sounds like you will expect the enrollment to be finished by maybe early 2025. So does that mean you'd have more data that you're pretty confident on submitting to the FDA sometime? I guess it would be early 2026. Does that timeline make sense?

Guo Liang Yu, Chairman and CEO

Maybe, Peony, would you be able to answer Tim's question here?

Operator, Operator

Peony, your line may be on mute.

Guo Liang Yu, Chairman and CEO

I can do another question if you want. Come back to that one. Sure. Yep.

Tim Moore, Analyst

Great. So that's good that you might seek the NDA application route. And that was good news. And is there anything else you can maybe share feedback from the FDA meeting there? Anything that they want you to do or follow up on or any kind of request that they had?

Guo Liang Yu, Chairman and CEO

Yeah, so I think the key message is that the FDA basically requires us to continue to enroll more patients to specify the results that we already have. So we will just continue what we're doing. I think Peony is on. Could you answer the previous question Tim has asked? Puny, are you on? If he's not. Okay. Yeah, so actually maybe I'll give you a high-level answer. I think the timeline might be a little shorter than what you think. With the current patient that we have presented to the FDA, the 12-month follow-up time will be coming up in the summer, but if we need additional patients to be enrolled, that will basically extend another 12 months. So we are thinking of in the year of 2025 rather than 2026. That answer your question?

Tim Moore, Analyst

That's why I was curious because these extra patients might push out that timeline a bit. Right. For the 12-month follow-up. I'm just wondering if the FDA is going to redefine the 12-month follow-up. If it's not this summer and it gets moved out to early 2026. Yeah. So for the non-small cell lung cancer with MET exon 14 skipping because we're going after the traditional approval, therefore a 12-month follow-up is required. Okay. Okay, I got it then. One other question I had was you added the CFO role last week. Dr. Plunkett spoke a bit. I'd just love to hear from him. What is he expected to enhance and improve at the company? Is he bringing over some best practices for commercialization and regulatory approval learned at Imago and Carta Therapeutics?

Unidentified Company Speaker, Company Representative

Great question. Matt, would you be able to share your thoughts?

Matthew Plunkett, CFO

Yes, I certainly can, Tim, thanks for the question. My near term focus here is really to help the existing team with our 20-F filing, which you'll see come out later today. As you've seen, I do have some extensive experience in a variety of finance and business roles in various small biopharma companies, ranging from capital formation to strategic collaborations. And those are some of the things that I'll be looking to work on in the coming months. So stay tuned there.

Tim Moore, Analyst

Great, great. Not to put Matt on the spot, but whoever wants to answer financial expense questions, I'm just trying to update my model for this year. I got to imagine that your R&D expense climbs. I think it was $34 million for 2023. Is it reasonable for me to expect because you got enrollments and other expenses and clinical trials going on, is $50 million this year maybe too much, and just kind of curious about the R&D number?

Unidentified Company Speaker, Company Representative

Yeah. Happy to answer that for you. What I would really do is look at our guidance for cash runway and kind of back into it from there. So $37.8 million in cash, bank deposits, and mutual fund balances at the beginning of 2024. And we said we've got cash through the first quarter of 2025. So five quarters there. So basically, you can just do the math there and kind of get a total expense number. I would point out that with the completion of enrollment in the APL-106 phase three trial, obviously those expenses one would expect are not going to be as great in 2024 as 2023. So hopefully that gives you a little bit of help there. And then obviously, with some significant one-time expenses related to the de SPAC transaction in 2023, first time ever, public reporting, etcetera, we're going to expect some of those G&A things not to be as large in 2024 as 2023, but really the best thing to do is just look at the overall cash burn guidance and runway guidance. So I think that should get you where you need to go.

Tim Moore, Analyst

Yeah, that's what I was thinking originally. It's just I was kind of curious. You know, it was really helpful to say through the first quarter next year. Makes you feel comfortable on the cash burn, but I didn't know how much that does factor in the additional patient enrollment, if that's the route you're going to go, you know, the extra patients.

Unidentified Company Speaker, Company Representative

It sure does, Tim.

Tim Moore, Analyst

Okay, good, good, good. Anything else to add on the rest of the pipeline? I know you touched on a couple of other indications. Anything else going on with some of the other drug candidates?

Unidentified Company Speaker, Company Representative

Not really. We try to stay focused with Vebreltinib and APL-106 at this time, especially with the limited cash that we have. So we really kind of try to stay focused and get our first drug approved.

Tim Moore, Analyst

Good. No, I like the focus. I think that's very good. Too many biotechs try to fund five or six things at once, and you're focusing on your two top ones. So I appreciate it. And that's it for my questions. Thanks.

Operator, Operator

Thank you, Tim. I would now like to hand the call over to Dr. Guo Liang Yu for closing remarks.

Guo Liang Yu, Chairman and CEO

Okay, thank you, everyone, for joining today. We appreciate your interest in the company and thank you for the questions. I look forward to updating you on our business in the near future.

Operator, Operator

This concludes today's conference call. Thank you for your participation. You may now disconnect.