Molecular Partners AG Q2 FY2022 earnings call

• Science highlights: MP0533 (AML drug) is progressing to clinical trials with high excitement, 317 is in Phase 1 showing promise in targeting CD40 with FAP module, Radioligand Therapy is being developed as a unique solution with focus on tumor penetration and kidney exposure, and Abicipar has inflammation issues but potential to be resolved through partnerships.
• Key programs: MP0317 in Phase 1 aims to show safe and effective immune activation in tumors without systemic toxicity, MP0533 in Phase 1 for AML targets high co-expression of markers and expects single-agent activity, Radioligand Therapy is a proof of principle for fast-acting approaches, and Abicipar's inflammation issue is being addressed with interest from potential partners.

In the first half of 2022, Molecular Partners had revenues of CHF 184.5 million. The bulk of this revenue came from Novartis, specifically the 150 million milestone payment for the exercise of the Ensovibep option. Operating cash flow was CHF 151 million, resulting in an operating profit of CHF 146.3 million and a net profit of CHF 148.6 million. The cash balance stood at CHF 285 million, providing a strong runway into 2026. Total operating expenses for the first half of 2022 were CHF 38.3 million, with personnel costs being a significant portion.

• Full-year expenses are guided to be between CHF 70 million and CHF 80 million. The company has a cash balance of CHF 285 million providing a runway into 2026. Deferred revenues from the NIBR collaboration for radioligand therapy include CHF 14.4 million with expectations of recognition in subsequent years subject to progress.

• Uncertainty surrounding the design and timing of Ensovibep's full Phase 3 trial as Novartis navigates challenging trial conditions. Inflammation issues with Abicipar and the uncertainty around resolving them and securing partnerships.

Q: On 317, what should investors expect from data disclosure later this year and how will it be used for a go/no-go decision?

A: Data shared publicly will be limited compared to partner discussions. Safety is key, and paired biopsies will be used to show activity, with partnering discussions starting. For MP0533, high co-expression of markers is expected, with pretreatment and T-cell activity being factors.

Q: On Ensovibep, how long do you think it will take for Novartis to work through Phase 3 trial design?

A: Timing is uncertain as it depends on variant of concern and Novartis' discussions. The EUA is open, and if a bad strain returns, it could facilitate Phase 3, but current timing is unclear.

Q: On radioligand therapy, is it more likely the next candidate will be radioligand rather than another multi-DARPin?

A: Radioligand therapy is a different approach but not exclusive. The company is making progress on radioligand but other multi-DARPin approaches in oncology and virology are also ongoing, and the next candidate isn't determined yet.

Q: On MP0310, why the decision not to pursue further development?

A: Strategic decision based on current focus on MP0317 as 4-1BB target is underwhelming in combination trials currently, and resources are better invested in MP0317 for better return on investment.