Earnings Call Transcript - EVAX Q4 2025

Operator, Operator

Good day, and thank you for joining us. Welcome to the Evaxion Business Update and Full Year 2025 Financial Results Webcast and Conference Call. Please note that today's conference is being recorded. I will now turn the call over to your speaker today, Helen Tayton-Martin, CEO. Please proceed.

Helen Tayton-Martin, CEO

Thank you, and good morning, everyone. Thank you for joining us for Evaxion's business update following the reporting of our 2025 full year financial results yesterday. And apologies that this call is 24 hours later than we anticipated for technical reasons; we are delighted to be here today. My name is Helen Tayton-Martin, and I am honored to be leading this call for the first time as Evaxion's CEO. We move to the first slide. Okay. So on today's call, we will review the achievements of 2025 and touch on the milestones we anticipate for 2026. Our Chief Scientific Officer, Birgitte Rono, will then walk through our key R&D updates for the year, including the latest innovations from our AI immunology platform, after which our CFO, Tom Schmidt, will walk through our 2025 financial results before we close with a few concluding remarks and take questions. Right. Moving to the next slide. And of course, our comments and presentation today may contain forward-looking statements, and all references on today's call will refer to our filed SEC statements and specifically, our most recent 20th annual report for 2025 filed yesterday. So moving to the next slide. I will start with our 2025 achievements and our 2026 milestones. In 2025, we were very pleased to report tremendous progress across all pillars of the company. First of all, in business development, we were delighted with the progress in our collaboration with MSD and our infectious disease portfolio, with the decision by Merck to exercise its option over our EVX-B3 program candidate. Whilst the target for this program is not disclosed, we are very proud that this represents the first in-licensing to our knowledge of an infectious disease vaccine candidate identified and validated through an AI discovery platform. Whilst MSD chose not to exercise its option over our EVX-B2 candidate in gonorrhea, we remain very excited about the data and the prospects for this program, over which we have retained full rights and have seen significant interest. We were also pleased to enter into a collaboration with the Gates Foundation on the design of a new polio vaccine and are also seeing significant interest in our platform and pipeline programs more broadly from a number of parties. In R&D, we were very pleased to be able to present very positive Phase II data at ESMO on our EVX-01 program with a personalized neoantigen-directed cancer vaccine in advanced melanoma patients. We also presented preclinical data at ASH on our first cancer vaccine related to a conserved endogenous retroviral EBR elements that we have identified in AML patients with our EVX-04 program. In our infectious disease portfolio, we were also able to move forward with a new program with candidates identified from our AI immunology platform against Group A strep bacteria. On the platform itself, the team has continued to innovate and use the platform to not only identify optimal vaccine candidates, but improve their design and biology for product delivery through our new automated module. And Birgitte will touch on all of these achievements shortly. We were also honored by the recognition of our AI immunology platform by the Galien Foundation for AI advances in human health. And finally, we were very pleased to see the capital influx into the business last year through financing, business development, and the use of our ATM, which now provides us with a cash runway extending into the second half of 2027. Thomas will talk more about this later. So moving to the next slide. Just as a reminder, our actions have built a broad novel product pipeline of assets from its unique AI immunology platform, clinically validated with the cancer vaccine space with our EVX-01 peptide-based vaccine in advanced melanoma that's supported by assets and data on DNA and RNA platforms and together with a preclinical pipeline of infectious disease vaccine candidates, focused on challenging targets that remain intractable with conventional approaches and subject to significant medical need. On to the next slide. This unique capability with AI immunology is something that we have also begun to investigate within the autoimmune field, given a wide range of diseases driven by autoimmune attack and the direct applicability of our platform to focus on immune mechanisms in disease. Autoimmune diseases affect over 14 million patients annually in the U.S. and are characterized by chronic, debilitating conditions with treatment options focused primarily on symptoms rather than the underlying cause of the disease. Moving on to the next slide. This is why we believe our AI immunology platform is strongly positioned to focus on underlying disease mechanisms with greater specificity to identify autoimmune disease targets, which can be approached in different ways. There will be more to come on this later in the year. So finally, in the next slide, turning to our 2026 milestones. This year, we will be updating on our EVX-01 program with additional biomarkers and immunogenicity data, AACR, and then the clinical data, 3-year data towards the later part of the year. We will be discussing more about the autoimmune applications of our AI immunology platform and bringing forward data on our new EVX-B4 candidate in Group B strep in the second half of the year. And finally, we will be ready to submit a regulatory application for our next EVX-04 vaccine candidate targeting shared antigens in AML by the end of the year. Throughout, we remain committed to driving value from both our platform and our pipeline assets in partnership for our shareholders and patients. I'll now hand over to Birgitte to update you further on our R&D achievements.

Birgitte Rono, CSO

Thank you, Helen. So 2025 marked a turning point with significant advancements across our R&D pipeline and also our AI platform. As Helen alluded to, we also entered into the in-licensing agreement with MSD on the EVX-03 program. Our 2025 focus has been on strengthening our platform's predictive power, maturing key R&D assets, and building the foundation for future partnerships. The 2025 achievements position us well as we move towards the data with milestones in 2026 that Helen just presented. So with that, I will begin by walking through individual key programs and platform development. So next slide, please. EVX-01, our personalized peptide-based cancer vaccine in advanced melanoma continues to deliver strong clinical data. Our 2-year Phase II data presented at an oral session at ESMO in October showed strong clinical outcomes, including a high objective response rate of 75% and a complete response rate of 25%. Notably, 92% of the responders remained in response at this 2-year mark. Key biomarker data included the very high immunogenicity rate, with 81% of all the new antigens administered across patients giving rise to a specific T-cell response. This very impressive response rate outcompetes data from similar programs conducted by others. This truly underlines the precision of our AI immunology platform to identify better vaccine targets. Two key milestones are expected for this program, as Helen also alluded to: additional biomarker and immunogenicity data expected in the first half of '26, and we also plan to communicate the 3-year data from a subset of patients that are currently in the expansion phase of the Phase II study, which will be reported in the second half of '26. Importantly, we aim to conduct future trials in partnership to ensure the broadest possible impacts for patients. Moving to the next slide, for EVX-04, our therapeutic vaccine for acute myeloid leukemia (AML), we have generated compelling preclinical evidence supporting its development. In this program, we are focusing on a completely novel class of tumor antigens, known as endogenous retroviruses (ERVs), which are selectively and highly expressed in AML blasts, making them attractive therapeutic targets. With AI immunology, we have identified millions of short-listed candidates from patient sequencing and designed the EVX-04 vaccines with 16 optimal ERV anti-fragment selected based on craft patients' profiles and also on their immunological potential. Key data includes invitro vaccination studies demonstrating that all 16 fragments in the vaccine induced strong specific immune responses, preventing tumor growth in several of our tumor models and inducing strong T-cell responses. Again, these findings reinforce the power of our platform. We have expanded it to uncover unique tumor antigens that are not accessible through traditional discovery methods. Next slide, please. As we progress towards clinical readiness for EVX-04, we have completed key steps, including antigen selection and lead development, conducted preclinical efficacy studies, and are currently conducting further human cell-based translational assays. CMC work and GMP manufacturing are advancing according to plan. The next major milestone for this program is the submission of the clinical trial application in the second half of '26, which will enable the first-in-human studies. This program is a prime example of how AI immunology accelerates vaccine design from concept to clinic. Next slide, please. Now turning to our key infectious disease programs. After retaining full global rights to EVX-B2 late last year, we are now fully in control of the development of this highly differentiated vaccine candidate targeting gonorrhea. Our preclinical data package is strong and comprehensive, demonstrating significant protection in a mouse infectious model. We have demonstrated broad efficacy against 50 clinically relevant strains, reflecting coverage across diverse strains, along with significant immunological responses in mice. We have also established a well-defined mechanism of action supported by potent antibody-dependent complement-mediated killing. Collectively, these results position EVX-B2 as one of the most advanced and differentiated infectious disease preclinical vaccine candidates in a field of high unmet need where no approved vaccine exists today. Given the strength of our data, we see a clear opportunity to engage with potential partners to progress the program towards clinical development. Next slide, please. A number of our key infectious disease vaccine programs include EVX-B1, in which we are developing a multi-target vaccine against cytomegalovirus (CMV), integrating both well-described glycoproteins and novel antigens to target the virus from multiple complementary angles. This broad multicomponent strategy is designed to enhance vaccine efficacy and reduce the risk of viral escape. We have applied AI immunology for both optimization of the known glycoproteins and for the identification of two novel antigens. We first improved these established CMV antigens essential for virus neutralization, engineering the glycoprotein B antigen by locking it in a prefusion state. This AI-designed construct has demonstrated superior neutralization capacity compared to the native protein. Secondly, we are identifying and validating entirely novel antigens, several of which have already demonstrated the ability to inhibit viral infection, and we are currently characterizing them. Supported by strong preclinical data, EVX-B1 represents a highly promising program for continued development and future partnership discussions. Next slide, please. Now turning to the recent developments of our AI-Immunology platform. Our AI-Immunology platform continues to expand its capabilities. The platform integrates multi-omic datasets to generate ranked antigen lists within 24 hours. In October last year, we launched an automated vaccine design module enabling sequence and structural optimization directly from short-listed candidates. This end-to-end automation significantly reduces development time and costs. Next slide, please. More specifically, the automated module enhances the design of antigen constructs, enabling higher expression, better formulation, and improved manufacturability. This capability directs the design of scalable antigen constructs and stabilizes antigens using various platforms, resulting in more reliable antigen constructs with fewer variances. This provides a faster and more cost-effective design cycle, fully integrated into our antigen discovery and vaccine optimization workflow. This strengthens the foundation for all our programs across oncology and infectious diseases. In conclusion, we have seen strong progress across our platform and R&D pipeline, and we are encouraged by the momentum. We look forward to keeping you updated as we advance towards 2026. With that, I will now hand over to Thomas, who will walk us through our financial results.

Thomas Schmidt, CFO

Yes. Thank you, Birgitte. And also a warm welcome from my side to our call today. I will now walk you through the financial results for 2025. So turning to the next page. Throughout 2025, we have been really successful in expanding our cash runway and strengthening our equity position. This has been accomplished throughout the year through public offerings and the use of ATM executed in January, followed by the MSD exercise fee and the ATM used in September. Furthermore, the exercise of investor warrants from our January offering in October and November, all summing up to a cash inflow of USD 32 million. Additionally, as shown on this slide, our EIB debt-to-equity conversion completed in July of USD 4.1 million has significantly reduced our future cash outflows and thereby expanded and extended our cash runway. Finally, with our filing in December of our prospectus supplement regarding our ATM, we now possess further flexibility and options as we move forward with expanding our pipeline and platform. This underlines the strong execution we demonstrated throughout the year. Turning to the next slide, the highlights of 2025 showcase that we have delivered on all the targets we set, progressing towards our aim of becoming a sustainable, self-funding business. Both revenue and costs have improved while we continue to invest in our platform and pipeline programs. As mentioned on the previous slide, activities and execution of the MSD deal, EIB debt conversion, our ATM, and capital market activities have not only improved our cash position and runway but have also significantly strengthened our equity. With an improved cash runway and equity, we have enhanced our stability and reduced uncertainty. I see this as a key highlight for '25. The update on the ATM has removed the constraints of our prior shelf registration, providing us with far greater flexibility and options in support of our long-term strategic initiatives and plans. Next slide. On our profit and loss statement, revenue has improved, as have our operational costs. We've managed to reduce our operational spending while still maintaining quality from our pipeline and platform perspectives. Revenue stems from our NST option exercises, but it's also important to mention that we received a grant from the Gates Foundation in 2025. Our net financial position of USD 4.6 million is driven by a premium from our debt conversion and the remeasurement of a derivative liability due to the fluctuating exchange rates impacting our warrants from the public offering in January. Net loss for the year was USD 7.7 million, better than last year, and represents a strong step toward becoming a self-funding and profitable business. Next slide, on our balance sheet, we finished the year with a cash position of USD 23 million, with a runway now extended into the second half of 2027, which is a significant improvement compared to last year. This cash will be used for operational expenses and investing into our platform and pipeline. We currently have a total outstanding ADS of USD 8.3 million, assuming that all shares have been converted into ADSs. Through the exercise of investor warrants, we have reduced the outstanding warrants in terms of ADSs by USD 1 million, leaving another 2.8 million warrants outstanding. This also represents an improvement and drives us in the right direction. So in summary, we have established a far better financial foundation during 2025 that positions us well to continue executing our strategy and business for '26 and beyond. With that, I hand it back to Helen for some final concluding remarks.

Helen Tayton-Martin, CEO

Thanks, Thomas. Moving to the last slide. In summary, 2025 was a year of strong operational momentum for Evaxion, in which we achieved several key milestones. Overall, we strengthened the business considerably through the validation of our strategy with our AI-Immunology platform, delivering on both data and partnerships. This, in turn, has enabled us to strengthen our financial position and consolidate our position as a leader in AI-based discovery, design, and early development. With a number of potential partnership discussions ongoing, we are already funded into the second half of 2027 through the financial milestones achieved in 2025. We are in a good position to move forward through 2026. With that, I'll hand over to the operator for questions.

Operator, Operator

Our first question today comes from Thomas Flaten at Lake Street Capital Markets.

Thomas Flaten, Analyst

Maybe to start broadly, Helen, you have been in your role for a few months now. I'm curious if you could share some general insights on what you have implemented or plan to implement, including any changes in strategy and any bigger picture observations that might provide us with context regarding your time in this position.

Helen Tayton-Martin, CEO

Sure. Thanks for the question. Yes, I joined at the end of November last year. So the last three months have flown by. But I already have a strong impression from my prior seat on the Evaxion Board. In terms of broader changes, I think the fundamental action remains really strong. In fact, I believe it has only strengthened throughout 2025. The ability to have an AI platform built up over many years, with many iterations grounded in data and testing for that data in the lab, and ultimately in the clinic has really enhanced the core offering. I remain excited about the power of the platform in the oncology space and also in the infectious disease space. I think we're seeing a lot more traction around what we can do with the platform now from external engagement. Therefore, I think the fundamental strengths and core offerings of Evaxion are even stronger now than before. In a world where AI is paramount, achieving products that produce candidates generating vaccines with biological and clinical responses has significant meaning and is becoming recognized as valuable, especially in our partnering conversations, etc. I think a clear observation I had before joining the company has only been strengthened by my insights. Additionally, I am impressed by the team in place that can deliver on this. In terms of overall strategy, Evaxion has effectively handled early discovery and early validation, with deep scientific and informatics embedded expertise. We can certainly bring things forward into early clinical development and late preclinical trials. Currently, we are optimizing where we see the most value in the near term, particularly focusing on our oncology assets, but also within the infectious disease area. We are cautious about taking too many assets into the clinic, yet we see strength in the growing interest from external parties regarding the assets we already possess, as well as the capability of our platform. So there's no fundamental change to strategy, but rather a sharpening and deepening of focus around the assets that will provide the most value. I hope that's helpful.

Thomas Flaten, Analyst

Yes, that's great. And just keying off your last comment there about taking products into the clinic. You mentioned with EVX-04 in Birgitte's presentation that you would be looking to submit regulatory paperwork. Is that a product that you think you need to take into Phase I given that ERVs are a bit new and different in order to attract partner interest?

Helen Tayton-Martin, CEO

I think that's a very good question. We are certainly preparing to take it into the clinic, and we believe we can do that to gain some initial proof of concept. There's a lot of interest around the platform's particular meta-candidate antigens in the vaccine. I think we're doing some further validation, which will continue to strengthen it. So, the answer in short is, not necessarily, but clearly, the more critical validating data we can add to the package, the stronger the value proposition to an external partner. That's what we're focused on: maintaining and building value for as long as we can to strengthen our position. We are very confident about what we can do with it both preclinically and potentially clinically.

Operator, Operator

Our next question today comes from the line of Michael Okunewitch from Maxim Group.

Michael Okunewitch, Analyst

Congrats on all the great progress you made. I guess to start off, I'd just like to see if you could comment a little bit on the partnering efforts for EVX-01. If there's anything you've heard either in your feedback from partners that you think is particularly important for us to watch for from the upcoming data releases, whether that's the 3-year data or the biomarker immunogenicity. Is there anything specifically key for driving these partnering discussions?

Helen Tayton-Martin, CEO

That's a really good question. The cancer vaccine space has faced its challenges, but we are witnessing a resurgence in the checkpoint era. Our data resonates well with companies who are interested in cancer vaccines and understand the complexities of achieving strong cancer antigens for immune recognition and clinical benefit. This therapy's administration is complex, but it also has the potential for effectiveness. The factors gaining interest among potential partners go beyond just response rates we've achieved in two and three years at ESMO; it's about the recognition of antigens, the response rates, and the translational data we've gathered. That data elucidates why and how the immune response occurs parallel to the clinical response, which I believe serves as a differentiator, especially in advanced melanoma populations. We are also observing interest in this whole approach in other high mutational burden cancers as well. So the updated clinical data package combined with the translational insights we have is quite strong. Many companies are weighing their options right now, and we are receiving great interest.

Birgitte Rono, CSO

There’s no doubt that the ability of our AI immunology platform to identify relevant targets is garnering a lot of interest from potential partners and academic circles. With our 81% hit rate, this achievement stands out. We've compared our performance with similar programs and found that many report hit rates below 60%, which indicates that the antigens in their vaccines are not all effectively inducing a specific T-cell response. This reflects the strength of our platform.

Michael Okunewitch, Analyst

Thank you. I appreciate that additional color on that. As a follow-up, I wanted to ask if you could provide a bit more detail on how you're applying the AI immunology platform to autoimmune disease. You've identified this as a new area of interest. Do you expect that this would focus more on allergies or on the major large autoimmune and inflammatory diseases? Any additional color you could provide on that would be helpful.

Helen Tayton-Martin, CEO

Sure. The first thing to say is it's early in our prioritization of indications, but we've done work around that based on parameters. Birgitte, you're welcome to add to the high level in terms of what's guiding our focus.

Birgitte Rono, CSO

Yes. We've conducted extensive analysis on the most prevalent autoimmune diseases and see a clear fit for our platform. We need to further improve it and build a few additional components that will enable us to apply immunology in this area. However, many of the building blocks we can apply to these types of diseases are already in place. We will share more once we narrow down the key indications to pursue and finalize additional adjustments to our AI-immunology for these diseases.

Operator, Operator

Our next question today will come from the line of RK from H.C. Wainwright.

Swayampakula Ramakanth, Analyst

Thank you. This is RK from H.C. Wainwright. Just to start off, Helen, you have served as the architect of multibillion-dollar balances at the immune sector, particularly with the large deal transacted with GSK. You've also accumulated significant experience in transactions. While Evaxion is technically robust, they've traditionally faced challenges in translating that strength into meaningful transactions. Merck is a strong partner. Based on your experiences, how do you manage these discussions, especially when dealing with large pharmaceutical companies, to convince them that AI tools are as predictable as physical assays and drive interest in Evaxion's generated products?

Helen Tayton-Martin, CEO

Thanks for the question. There are multiple dimensions to consider. Timing is everything, as is data that validates the notion that our platform is more than just an AI tool. We've validated and iterated candidate targets discovery and candidate development. While most large pharma companies have in-house AI platforms, few have our integrated longitudinal depth of expertise. We are crystallizing our offering through the validation of our candidates and engaging with the right people. From my own experience and background from a large firm, building relationships and understanding the broader strategies are critical to getting deals done. Our team is well-versed with several of these groups, and we're expanding our profile.

Swayampakula Ramakanth, Analyst

Perfect. Moving on to relationships with Merck, regarding EVX-B2, Merck chose to extend the evaluation of the molecule rather than exercise the option. Is this due to them needing more time or conducting additional experiments?

Helen Tayton-Martin, CEO

I’m sorry, but I can't comment on the specifics of the interactions. R&D programs occasionally face unforeseen delays, requiring reevaluation. The timeline can differ for many reasons. However, we remain excited about the data we continue to build during this period. We feel very positive about our data package.

Swayampakula Ramakanth, Analyst

Regarding the EVX-01 durability, you've shared that 92% of responders remained in response after 24 months. As we anticipate the 3-year durability, what exhaustion markers will you track to measure how durable the response is?

Birgitte Rono, CSO

Thank you for that question. It’s correct that 92% of responders remained in response at the 2-year mark. Our plan includes analyzing T-cell exhaustion through deep profiling, examining activation markers, exhaustion markers, and different phenotypes of T-cells, including CD4 and CD8, as well as looking into regulatory T-cells. So far, we’ve shown a favorable T-cell profile, indicating a dominance of CD4 T-cells while some patients also exhibit a CD8 T-cell response over time. During this extension phase of the study, we have been collecting additional blood samples that we are analyzing in our lab. This analysis is quite exciting as EVX-01 functions as an immunotherapy in this phase, and we are also keen to understand its effects without the influence of background checkpoint inhibitors.

Swayampakula Ramakanth, Analyst

I have one last question regarding EVX-04.

Operator, Operator

In the interest of time, we will move to our next question. Our next question comes from the line of Daniel Ben Hill from Jones.

Daniel Ben Hill, Analyst

On the autoimmune disease program, can you provide more detail on your strategy for validating early candidates?

Helen Tayton-Martin, CEO

Thanks for the question. It’s early, and we might not be able to provide much detail at this time. Birgitte, would you like to add your thoughts?

Birgitte Rono, CSO

Yes. The first step is to finalize the indication. We’ve conducted landscaping and analyzed the most prevalent autoimmune diseases, and we are now narrowing down our focus to those indications that align well with our platform. This work is ongoing. We are close to completion. Our next step is to build the additional components needed in AI immunology to enable therapy development for these diseases. In parallel, we are utilizing mouse models in our lab to ensure we can test the candidates designed by AI immunology. This is our current plan.

Operator, Operator

Thank you. This concludes today's question-and-answer session. I will now hand the call back to Helen Tayton-Martin, CEO, for closing remarks.

Helen Tayton-Martin, CEO

Thank you very much for everyone participating on the call today. It's been a great year for Evaxion in 2025, with multiple milestones achieved and strong operational momentum that has left us in a better financial position than for some time. We hope to take the company forward and deliver on our 2026 milestones, while continuing to enhance the value that comes from our platform and assets. Thank you for your questions and engagement, and we look forward to our next update. Thank you. Bye-bye.

Operator, Operator

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