Molecular Partners AG Q4 FY2024 earnings call

Key Points:

• 20th anniversary of Molecular Partners, coinciding with 10 years listed on stock exchanges.
• Progress on DLL3 targeting 712: lead compound passed IND-enabling studies and ready for clinics. Selected mesothelin target. Expanded Orano Med collaboration, securing 10 slots for Lead-212 products.
• On T cell engager 533: tackled target mediated drug disposition issues and working to get back on track.
• Switch program upgraded from NK engager to T-cell switch. Program 317 finalized Phase I, with good safety and biological activity, moving forward in combination with PD-1 in investigator-initiated trial.
• Late 2024 financing round brought in CHF 20 million, providing well-capitalized runway into 2027.
• Radio DARPin franchise progress: DLL3 targeting 712 in preclinical with potent molecule, good biodistribution, and safety window; mesothelin target program with DARPin differentiation.
• 533-DARPin in AML: worked through challenging settings to improve efficacy, with plans for new amendments and integration of scientific concepts to mitigate risks.

In 2024, revenue was exclusively from the Novartis collaboration, amounting to CHF 5 million. Operating expenses were CHF 66 million, with R&D-related costs making up 74% of that. The net financial result benefited from high interest rates on U.S. dollar-denominated deposits. The strategic cash balance ended 2024 at CHF 149 million, down from CHF 187 million at the end of 2023, with a cash burn of around CHF 54 million for the year. The cash balance provides a runway into 2027.

Guidance:

• Will not guide on revenue or other metrics.
• Total operating expenses for 2025 guided to CHF 55 million to CHF 65 million, with around CHF 7 million noncash.
• Guidance subject to pipeline progress and excludes partnership payments.
• Cash balance of CHF 149 million at end of 2024 provides runway into 2027, putting the company in a privileged position.

Risks:

• Target mediated drug disposition issues for 533-DARPin in AML initially posed challenges.
• Isotope supply challenges initially, though Orano Med collaboration helped secure access.
• Regulatory uncertainties in clinical trial submissions and approvals for programs like 712.

Q: Provide more color on MP0712 IND submission process and preparations for study initiation, and initial clinical data by year-end; why mesothelin is a good target for radio DARPin?

A: MP0712 GMP manufacturing moved forward in 2025, Q2 submissions to FDA anticipated, with first therapeutic doses possible in Q3, and clinical data on therapeutic part anticipated in early 2026. Mesothelin is a good target for radio DARPin as it's a clinically validated problem, DARPin unique and differentiated for addressing shedding and on-target off-tumor effects in ovarian cancer, which is radio-sensitive but difficult for other approaches.

Q: Learnings from Novartis programs before discontinuation; key for 712 kidney ratio?

A: Learnings from Novartis programs included understanding what makes good radio therapeutic profiles, testing many candidates for optimal tumor to kidney ratio. For 712, ideal tumor to kidney ratio in animal models is above 1:1, but therapeutic window is key in patients, with focus on tumor uptake and safety of other organs like pituitary gland.

Q: On 712, on-target off-tumor DLL-3 expressing organs to concern; switch DARPin platform partnering scope?

A: Pituitary gland is the only place with some DLL-3 expression outside tumors, but not a major concern. For switch DARPin platform, partnering could be for individual molecules or platform-wide, depending on partner needs, with discussions ongoing on both opportunistic candidate-based and platform-based partnerships.

Q: Structure of deal with Orano Med; how programs are split, timeline for disclosing additional programs?

A: Deal with Orano Med has programs split with 50-50 cost share and split, commercial lead for some programs with Molecular Partners, others with Orano Med. Additional programs likely to be disclosed roughly two per year pending results of 712, with clinical data from 712 key to ramping up more programs if successful.