Molecular Partners AG Q4 FY2022 earnings call

Key Points:

• DARPin Technology: Invented DARPin technology to bridge small and large molecules, with 7 clinical stage compounds and 2,500+ patients tested.
• Pipeline Programs:
  • 533: Novel tri-specific T-cell engager in AML, first patient dosed, preclinical data supports mode of action, aiming for safety and efficacy results in second half of 2023.
  • MPO317: Local CD40 agonist, completed dose escalation safety trial first half of 2023, initiating partnering discussions.
  • Radio DARPin Therapy: Focus on reducing kidney uptake for better tumor uptake, collaborating with Novartis, aiming for first radio DARPin Therapy in clinic in 2024.
  • Virology: Ensovibep program quasi on hold due to SARS-CoV-2 variant, but opened path for Novartis discussions.
• ESG Initiatives: Corporate sustainability is part of the company's culture, covering pillars like human capital management, access to medicines, product safety, etc.

In 2022, Molecular Partners had revenue of almost CHF190 million. The revenue was largely driven by Novartis collaborations. CHF173 million of revenue related to Novartis, with CHF163 million triggered by Novartis' license agreement exercise in January, CHF10 million from a December 2022 collaboration (including FTE recharge and upfront payment recognition), CHF10 million from Amgen related to MP0310, and CHF7 million from the Swiss government reservation agreement. Revenue contribution from Novartis was significant, making up a major portion of the total revenue in 2022.

Guidance:

• Operating Expenses: Guided total operating expense for 2023 to be CHF70 million to CHF80 million, with around CHF9 million non-cash.
• Cash Position: Cash balance of near CHF250 million, funding the company through 2026, assuming current spending levels.

Risks:

• Virology Program: Ensovibep program on hold due to SARS-CoV-2 variant variance reducing medical need.
• Radio DARPin Therapy: Challenges in selecting tumor-specific antigens and potential difficulties in securing collaborations with radioligand companies.
• Clinical Trials: Uncertainties in clinical trial timelines and potential challenges in dose escalation and safety for programs like 533.

Q: Joe Walton asked about recruitment for 533 trial, Novartis radioligand collaboration, and funding guidance.

A: Patrick Amstutz responded that 533 trial recruitment is 25-45 patients, Novartis collaboration is proceeding as planned with no setbacks, and funding is through 2026 with steady spending unless program progress changes.

Q: Georgi Yordanov asked about durability of 533 and selection of tumor-specific antigen for radioligand therapy.

A: Patrick Amstutz said 533's durability is key with preclinical data supporting targeting leukemic stem cells, and for radioligand therapy, DARPin platform allows expanding target space beyond ligandable targets.

Q: Daina Graybosch asked about pharmacodynamic markers for 533.

A: Patrick Amstutz responded that they are measuring receptor occupancy, T-cell activation, and cytokine patterns to update on pharmacodynamic markers.

Q: Unidentified Analyst asked about 533 clinical sites in US and abicipar status.

A: Patrick Amstutz said 533 trial initiation is planned in Europe first with US expansion if successful, and abicipar program has discussions ongoing for potential path forward but is an optionality.

Q: William asked about 317 trial results and suitable partners.

A: Patrick Amstutz said 317 dose escalation recruitment closing, expecting biomarker data on immune system activation, and suitable partners likely in immuno-oncology with PD-1/PD-L1 franchises.