Molecular Partners - H1 2024

Transcript

Operator (participant)

Good day, and welcome to the Molecular Partners First Half 2024 Results Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note, today's event is being recorded. I'd now like to turn the conference over to Seth Lewis, Senior Vice President, Investor Relations. Please go ahead.

Seth Lewis (Senior VP of Investor Relations)

Thanks, Rocco. Good morning and good afternoon, everyone. Welcome to the Molecular Partners First Half 2024 Results Call. My name is Seth Lewis, Senior Vice President of Investor Relations, and I'm joined this morning by Patrick Amstutz, CEO, Philippe Lejeune, Chief Medical Officer, Daniel Steiner, Senior Vice President, Research and Technology, and Robert Hendriks, Senior Vice President of Finance. Management will take a few minutes to make brief remarks, and then we will open up for question and answer period. If you have not had a chance to review the H1 press release, please feel free to do so on our website, www.molecularpartners.com. Also on the website is today's updated presentation, which management may refer to when speaking or answering your questions. As a reminder, today's call is being recorded.

Today's discussion and presentation will contain certain forward-looking statements based on the information available to Molecular Partners as of the date of this release, and actual results may differ materially from what's discussed today. With that, I'm happy to turn the call over to Patrick Amstutz, CEO, to review the highlights and outlook for the company. Please go ahead.

Patrick Amstutz (CEO)

Thanks, Seth, for the nice introduction, and a very warm welcome from my side to everyone on the call, investor, analysts, and people interested in our update. As Seth alluded to, we have the slides on our homepage, and what we will do is not go through every slide, but really jump to the highlights. We will say which slide number we are on and go rather fast, that we have more time in the end to answer your question. With that, I will jump to slide number 5, the corporate highlight of the first half of twenty twenty-four. The first half was really active. We progressed a lot of programs, and I will start with 533, where we have great progress.

We have reached the top dose, and despite not reaching the optimal exposure or concentration due to half-life and target-mediated drug disposition, we see activity, and Philippe will allude to that, and we also see a way forward to dose higher and more frequent. On staying with the immune cell engager front, I go to 621, where we have updated the molecule presented at EHA, and this is a c-KIT targeting switch molecule, a very innovative way of killing HSCTs and LSCs and best applied in for stem cell conditioning. On 317, that's where we have finalized the clinical trial for our tumor-localized CD40 agonist. We have a nice safety profile, and we can conclude biological proof of concept and are looking into combination settings going forward.

I do end with quasi the most exciting part, which is the Radio-DARPin, where with MP0712, we have a first candidate. That's the DLL3 targeting DARPin, optimized for low kidney uptake and high tumor accumulation, and that is in a collaboration with Orano Med, where we struck a strategic alliance earlier in the year to work together on targeting lead-based radioisotopes via DARPins. We call that a strategic collaboration, as we believe lead access circumvents key limitations of other isotopes, including supply, and Danny can speak a bit more about that. On the operating side, we are in a strong financial position with CHF 159 million in cash, and that put our runway into 2027, which is a bit further than we had so far on our chart.

Before handing over to Philippe, I go to slide, I think it's now number six, where I have a really personal nice announcement to make. I'm very happy about this, which is that Philippe Lejeune has been promoted to full Chief Medic after serving a year in that role as acting Chief Medic. He really deserves this role, on the one hand, by impressive recruitment. I mean, our trials, the cohorts were full when they were opened, and the execution was flawless. For in my two CEO of biotechs, we know how important that is. That's where you build all the credibility, that's where you build all the value. Big thanks to Philippe and his team for that, just excellent execution. That is only possible because Philippe has a gift to engage investigators into our trials.

So they think of our trials first, they understand the importance, and he's really a strong networker there. It doesn't really end on the investigator side. It includes the KOLs that he brings in to review our data, help us on the next steps, and that's also how we came about how to move forward on 533 with the top global experts in the room. Given that he is not only an AML specialist, but he has a really broad understanding of tumors, he can apply that also to our earlier pipeline, so DLL3, radiotherapy. In that sense, he's in a perfect position to apply his knowledge, his skills, and with his team, bring forward the molecules in our pipeline. There, he profits also from his industry background with Novartis, GSK, and Amgen.

And as I just pointed out, it's also his personal dedication, passion, his team leadership, and the way he works, not only with the KOLs but also with us and with his team, is inspiring every day. It's a great pleasure to have you as full Chief Medical Officer now, and it's also a great pleasure to give you the word to give us an update on the 533 molecule.

Philippe Lejeune (CMO)

Many thanks, Patrick. You know, I'm glad it's an audio and not video, otherwise you would see me blushing. I want to thank you for this, and again, it's an honor to be with this MP team and to help, you know, and lead and contribute to push our program to clinic, and having the fortune to be able to reach and work with the worldwide experts, so I will want to give you, in a very quick mode, an update on the 533, and basically, in my few minutes here, I will refer mainly to the slide number fourteen.

You know, we can spend more time later on to go through Q&A, come back to any slides where there will be questions, but basically, I want to give you a summary and outlook of where we are. On that slide 14, basically I have mainly four points of updates on the program. First of all, is that we are reporting here up to cohort 6. And as we speak, we are, you know, at cohort 7 now. But basically, we have seen an ongoing and a very, very steady engagement from the PI teams, and basically there is very good dynamics on this team, on this trial recruitments from the very beginnings up to now. What have we observed?

We have observed, first, is that, you know, an acceptable safety profile, a manageable safety profile with mainly IR and CRS, as would be expected on a T-cell engager. And we see them, you know, basically in the first cycle and rapid decrease in second cycle onwards. We've seen indisputable activity, you know, reduction in myeloblasts in half of the patient population recruited, and in 25% more than 50% reduction in those. And that translates into ELN responses, you know, with one responder per cohort from DL 3, 4, 5, and 6.

So in this clinical activity, yes, but in a way, we need to have more than that to be completely satisfied and to qualify that we would unlock the potential of that compound. And when we observed in greater detail, in fact, we realized that we still have to improve the exposure of the product. In fact, we need to increase that exposure and have it more durable in order to increase the response rate, the depth of response, and the durability. And therefore, we are further amending the protocol for again a higher and more prudent dosing, especially in the first weeks to densify this exposure.

We will share later this year at the end, and also especially in the next year, 2025, results from those amended scheme. Obviously, we will redo those results very carefully to see whether we can truly gauge the future developments and move into the expansions, and phase two steps. That's my update, and again, I'm very glad to go into more detail in the Q&A part of the discussion of the session.

Patrick Amstutz (CEO)

Thanks, Philippe. And with that, I would then hand over to an update from our on the radio side of Daniel Steiner, who is, with his colleagues, leading that effort.

Daniel Steiner (SVP, Research and Technology)

Thanks, Patrick. I'm so happy to guide you through this update, top-line update on the radiotherapy therapy. With the first candidate, as Patrick already introduced, MP0712, the first program, we're moving towards the clinics. For those of you who are on the slide, I'm jumping now to slide number 25. As I said, top-line update there, and I'm super proud about the great progress the team has made to successfully move the RTT platform to profiles with an attractive biodistribution profile in terms of tumor to kidney to blood ratios. We can dive into Q&A way more into the details if you're interested and if you have questions.

The data on MP0712, which has been selected as the lead candidate for the targeted lead-212 DLL3 program, has been presented at SNMMI, and it really showcased the strength of the platform that we have been establishing. The IND-enabling activities are now ongoing with Orano Med, and the initial clinical data is expected in 2025. As I've been mentioning, super excited what the team has achieved here, and even more excited about the opportunities that this all opens up. We are advancing MP0712 and the current pipeline together with Orano Med, which we see as a very strong and committed collaboration partner, but also with Novartis, where we have an ongoing collaboration since the start of our activities in the radioligand space.

And we are evolving and expanding the platform for next differentiated RDT programs. And this is what I'm looking for most, and I'm gonna tell you a bit more about this in on the next slide. So if you move to slide 26. So this is just an initial, I'd say, glimpse or preview of how we are thinking about leveraging the DARPin properties to really build differentiated RDT and RDT portfolio and RDT candidate with a high level of differentiation. So if you look at the top panel of the slides, for me, this is just two examples, and there is more, and we're gonna tell you more about this in the months and future to come.

These are two examples of how we are thinking about targeting proteins, tumor targets, which are difficult to address with classical, I say, radioligands, radioligands in the sense of low molecular weight or peptides. And one class, depicted on the left-hand side, is like, where you have a high amount of soluble antigen, which is interfering, shed soluble antigen, which is interfering with tumor uptake. And there we found an approach to target specifically the membrane-bound form only. There we're building on the selectivity and the binding properties of the DARPin. And on the right-hand side, you see another class of targets we are heavily investing to, is like, targets which have homologues with high identity on healthy cells, where you, by this, using the selectivity of DARPin, can really tumor specifically target the DARPin by only recognizing this specific form.

And of course, on the other side, and that's at the lower part of the slide, we're building on the deep expertise we have built in making multispecific molecules. Here in the context of having a broader and more homogeneous tumor distribution to address heterogeneity, which we believe is especially in the context of short-range, alpha-emitting particles, a key aspect to consider. And there, and that's what we see on the left-hand side, we are not thinking mainly about classical multispecifics as they are used in our IO project. It's really more building on the concept of having two paratopes in one single DARPin domain, which we call the two-in-one, which keeps the size of the molecule small by maintaining all the binding properties of the DARPin.

So this is something, just a teaser in what to come in the next twelve months. Looking very much forward to give you more details on that. Starting to present on those approaches on conferences, but it's just like getting a bit of an outlook of what we're up for. And with this, I would like to hand over to Robert to give you insights into our financial forecast.

Robert Hendriks (SVP of Finance)

Thank you, Danny, and prior speakers. Before we move to the summary and the Q&A, I will briefly guide you through the financial highlights and the key figures, and the updated guidance for this year. My name is Robert Hendriks, and I'm the SVP of Finance at MP. The numbers I'll show are stated in CHF million, and full detail of the financials is available on the website and on other means. If I move to slide 28, with the highlights, I'd like to focus firstly on our cash position. We ended last year with around CHF 187 million, and by the end of June, we are at CHF 159. That's a cash burn of CHF 28, in line with our expectations. If we take this to a full year, twelve months running, the burn is CHF 59 million.

We had no additional cash coming in from collaborations in 2024. With that, moving on to the updated guidance for the full year, we are now guiding our operating expenses to end up in the CHF 65-75 million range. This is a reduction from the previous guidance, largely based on what we see in our actuals at the moment and the current expectations we have on the development of the cost and the workforce. We will not guide on revenue, and for clarity, this guidance is, as always, subject to the progress and changes of our pipeline. Thirdly, following also from the updated guidance is our runway. We are now feeling comfortable to say that we are funded into 2027, which is a small change from late 2026, which we had guided on before.

We do feel that this runway and the cash that we have at the moment do put us in a privileged position in the industry. It will allow us to reach the milestones as presented by my colleagues, in particular, the funds that we ring-fence for 533, as indicated by Philippe, as well as the further progression of the radio pipeline. We then turn over to the next slide. I'll briefly show a comparison with last year for six months running. Overall, the results you can see are in a pretty similar range. Revenue is slightly up, as well as operating expenses, resulting in an almost equal operating result. Financial result was driven in the first six months by a positive exchange impact on our cash positions, as well as an increase in the interest income on the same balances.

The revenue that we show continues to be driven by the Novartis radioligand contract collaboration. And a focus on operating expenses, R&D expenses are up a bit, G&A expenses came down a bit. On SG&A, we were able to see a reduction in our, D&O insurance expense. When looking at R&D, in the first six months of 2024, in comparison to last year, we did invest more in drug product and the dose escalation trials for 533, as indicated by Philippe. We also were able to increase our investments in the overall platform and the radio space, and, a few reductions we saw on, for instance, 5, 317 and some legacy programs. We are and do remain diligent and careful when looking at our expenses.

We feel that we are cost-effective, run a tight ship, that remains on course for us to deliver on the promises. In combination, I think that these numbers continue to show the strong financial base, entering into the second half, that will allow us to keep investing in the pipeline. Thank you for your attention. Any questions, happy to take them in the Q&A. And now I hand back to Patrick.

Patrick Amstutz (CEO)

Thanks, Robert. Thanks, Danny. Thanks, Philippe. Thanks, Seth. And before turning to questions, let me quickly summarize. I'm on slide 34, which is the outlook on the upcoming milestones. 533, we heard, we're testing both higher and more frequent dosing to come to a conclusion on the potential of this molecule, where we will update in 2025. Switch-DARPin, we are in animal trials. We'll summarize the data, present, and then define next development step for that molecule. 317, the phase 1 is completed. We are in discussions with investigators to do investigator-initiated trials for that. We don't plan to invest heavily ourselves, but we would like to understand more on 317, what combination trials could help, and there is a good means to test that.

And last but not least, obviously, the radio franchise, where MP0712 going into clinics next year. I'm also very excited, as Danny pointed out, the differentiated DARPin programs, where we will update our portfolio and give you a deeper insight how we are thinking about those programs and how clinical value can then build in the future. And obviously, we're not doing that alone. We're working with Novartis and especially also with Orano Med, where we are excited to be working with the leader in the lead-based isotope field. As Robert said, we're running a tight ship, so the cash runway is now into 2027, and I think with really the effectiveness of our research and development engine, it puts us on course to find many important programs, many updates to come, and a really exciting year ahead of us.

Before moving on to Q&A, I would like to take the opportunity to, first of all, thank the people here with me in the room, my speakers, but also all other coworkers at Molecular Partners. We are partners, we're coworkers, we're a team, and what we present to you today is really the hard work of a whole company coming together and executing and debating and thinking and positioning our DARPin work.

I would also like to extend the thanks to our partners, Novartis and Orano Med, but also our academic partners that we have, and obviously also our investigators and KOLs who are using our molecules or applying the molecules in the clinic, and there, my last thanks goes to all the patients in our trials and their families, because without them, this would not be possible. And that links me back to the key purpose of our company. We're all here today to make drugs that matter. And with that, I would close the presentation and open for your questions. Thanks.

Operator (participant)

Thank you. If you would like to ask a question, please press Star then one on your telephone keypad. To remove yourself from queue, please press star then two. We do ask that you limit yourself to one question and one follow-up if needed. If you have further questions after that, you may rejoin the queue. At this time, we'll pause for just a moment to assemble our roster. And today's first question comes from Daina Graybosch with Leerink Partners. Please go ahead.

Daina Graybosch (Senior Research Analyst)

Hi, guys. Thanks for the update and the question. I have one back on MP0533. I'd love your thoughts on how you're thinking about escalating now to higher doses and the trade-off between efficacy and tox, and I wonder, as you get to these higher doses, do you expect to bind and single antigen-expressing tumor cells or normal cells? And what specific tox are you looking for that might indicate that you're actually at such a high dose that you no longer have the advantageous therapeutic window of needing to bind multiple antigens? So basically, what, yeah, what are you looking for in the clinical signal to balance that tox and efficacy as you go higher? Thank you.

Patrick Amstutz (CEO)

I can lead in as maybe more the generalist view, and then I'll hand over to Philippe for more expert view. I think, first of all, why are we going to higher doses? And it was an observation also by our KOLs when we looked at the data, is that we have the dose escalation, where we have an induction at a very low dose, and then we dose up, and that was to manage the safety. And so we started low dose, and then over the first 20 days, we had injections with always higher doses. And they realized that with maybe a bit touch faster PK than expected and maybe also more target-mediated drug disposition than expected, we were not getting the exposure that we were hoping for, and we were rather underdosing.

So the dose intensification now is that we will give more higher doses, but maybe not even higher top doses, but just go faster to the full dose and then dose more frequent. That in the side effects that we have seen so far are IRRs and CRS, which is really the T cell activation. So far, I don't think we have seen target-dependent toxicities, and Philippe can talk about that. Now, if the patients will tolerate this intensification, that's what we have to explore. There is, and maybe there will even be a lower dose, but more frequent dose that will actually end up being the most efficacious dose in the beginning. We also know that once the disease is under control, we cannot dose every two, three days. That's not possible and also not practical.

So then we'll go back to the weekly dosing scheme at that point in time. So that's why we're talking about the dose intensification in the early weeks, and then back to weekly. Hopefully, that's then enough once the disease is under control, and we also don't expect the target-mediated drug disposition anymore. So Philippe, maybe you can explain a bit more. And there's also some slides in our deck where we show that especially the patients with low disease burden profited more, because obviously they also had maybe a bit less of those problems, and there was just enough drug to keep the disease under control. Philippe?

Philippe Lejeune (CMO)

Thanks to you, add a couple of comments to what you, Patrick, just said. First of all, again, we have seen good tolerability, manageable toxicity up to now, and mainly CRS, with very little pattern beyond that, those CRS IRR. And we've been carefully looking, for example, at cytopenia or neutropenia, you know, which could be expected, which we have seen on some other programs. We want to densify, as Patrick said. Why? Because we see a higher sink for target-mediated drug disposition than we had anticipated. And so we want to, and also because it's safe so far, we think we can go quicker high. We put that in place.

We don't know yet what will be the exact impact on the half-life, but we may still have, you know, significant sink. That's why we do not anticipate so far too much drug accumulation. Therefore, we do not think that we would get, you know, much more on target toxicity. We will be especially monitoring, you know, the cytopenia. That's the one we will be looking at mostly for the moment.

Daina Graybosch (Senior Research Analyst)

Can I ask a follow-up then? So as you have modeled out, the PK and the drug-mediated clearance, do you model a specific dose? What sort of dose level do you expect to sort of maximize your activity then, in the exposure based on your preclinical model?

Philippe Lejeune (CMO)

Basically, we are ready and the protocol amendment, which we are currently putting in, allows for a few higher dose escalation. So not, you know, dozen, but a few higher dose escalation. And again, counting a lot on the densification, even more than the higher than the dose increase. So that's basically we want to modify the exposure. We are not very far from where we would be hoping to be in terms of C-max, but we need to work on the C-trough and longer exposure, or at least densifying all those peaks, which we already see, but want to really, you know, harmonize, if I may say.

Patrick Amstutz (CEO)

Philippe, is it fair to say from the modeling we saw that with just the max increase, we will not reach what we need, that's why we need to intensify with more dose?

Philippe Lejeune (CMO)

Yes. We see again, on one hand we are reassured, and the experts with us are reassured that we see there is an impact, you know, on the tumors. There is an impact on the mass. We really hit them. But we think it's not long lasting enough, it's disappearing too quickly, and we need to modify that trend. So to gain that increase in effects and especially the duration of the effect.

Patrick Amstutz (CEO)

Thanks.

Operator (participant)

Thank you, and our next question today comes from Richard Vosser at J.P. Morgan. Please go ahead.

Richard Vosser (Managing Director and Senior Analyst)

Hi, thanks for taking my question, and maybe another one on MP0533. Just back on that, I suppose the dose intensifying after a period of time. If you then go back to weekly dosing, are you gonna have enough drug on board to maintain the response? How should we think about that? Would be the first question.

Philippe Lejeune (CMO)

... Very good question. You know, you should join us for our protocol discussions. So, but what we hope is that we are going to, you know, debulk, if I may say, or reduce the tumor magnitude, tumor burden, you know, because we see again that we have more responses in the lower tumor burden than in the higher. So we want to, and we hope that when we are there, then we may need less, because there could be some less of a sink. So that's one aspect. We are still discussing, in fact, and in terms of we also want to avoid, by design, having chronic exposure, because we are also conscious, you know, of that concept of a T-cell exhaustion.

So we wouldn't want to be continuous all the time. Then the question is: how little is enough? We are, in fact, discussing, you know, should it be one day of reexposure in that maintenance phase or more than one day? But we know that it will not be continuous, and it will be a short time. We are just finalizing that discussion as we speak, but very close to finalize and submit.

Richard Vosser (Managing Director and Senior Analyst)

Excellent. I've got a separate question, not related, so I'll get back in the queue and ask it in a second, if it's still there. Thanks.

Patrick Amstutz (CEO)

Thanks, Richard.

Philippe Lejeune (CMO)

Thank you.

Operator (participant)

And our next question comes from Sebastiaan van der Schoot with Van Lanschot Kempen. Please go ahead.

Sebastiaan Van Der Schoot (Equity Research Analyst)

Hi, team. Thank you for taking my questions. Regarding the Radio-DARPin, can you remind us on when the clinical trial is supposed to start? And can you also give some insight into what the clinical trial design will be, how you are thinking about the different steps, and when we can see first data for the DARPin, conjugated to the lead payload? Thank you.

Patrick Amstutz (CEO)

I can give you a rough outline. We have defined the candidate. We are now starting up production. It's gonna be GMP production. Then, we will be working with Orano Med for the next payload. We are expecting clinical entry next year, second half, so first half is not possible. We have guided that we are expecting to have first data, and the data will not be efficacy or safety, it will be images, where we can follow the molecule. That is the beauty of this setup, where we can create an image after dosing and seeing where the drug is. I think from the image, we can do some predictions. I mean, it would... Is it less in the kidney, more in the kidney, more in the tumor? But the safety and efficacy will obviously follow later.

Now, I'll be happy to hand over to the expert, and Philippe from on the clinical side. I think the good thing is the image is actually available rather short after dosing, so you don't have to wait for three months for the pictures. You actually can get them rather fast. That's why clinical entry and initial data are rather close together. Philippe?

Philippe Lejeune (CMO)

Thanks, Lot, for that. So again, you know, we want to very quickly or quickly after patients are included, they will be imaged for biodistribution and dosimetry. And then on the heels of that, obviously, those escalations start. I just also want to make sure this. We're envisioning, you know, a single trial which will have those two steps, but again, the images come first, and then therapeutic comes in. That. And obviously, we would want to go. What we are planning to do for the moment is to include patients with small cell lung cancer, mainly. And we, depending on the signal that we get, you know, we'll expand in potentially the prostate neuroendocrine. But you know, think it's a bit difficult to integrate both subpopulations at the very start.

Sebastiaan Van Der Schoot (Equity Research Analyst)

Got it. Very clear. Thank you.

Operator (participant)

Thank you. And as a reminder, ladies and gentlemen, if you'd like to ask a question, please press star then one. Our next question comes from Michael Nedelcovych with TD Cowen. Please go ahead.

Michael Nedelcovych (Director Equity Research)

Thanks for the question. I have another follow-up on MP0533, and this is maybe a slightly different version of a question that was already asked. But, do you all have a Cmax or an exposure level in mind at which you would expect activity or at least more activity than you've seen, and are aiming for that level? Or are you approaching this more empirically in trying to raise the dose and the dose frequency, and the dose regimen and just waiting to see what you see? So that's the first question. And then, you know, I have to admit that the language around this program is a little bit ominous in the slides. If we learn in about a year that you have discontinued this program, what do you think would be the most likely reason?

Would it be because your hypothesis has not panned out, or would it be that you have so many other compelling opportunities that resource allocation has to come first, and you'll pursue those other opportunities? And I realize that's not the fairest hypothetical, but I'm just curious, where your minds are at the moment. Thank you.

Patrick Amstutz (CEO)

Maybe Philippe can take the first, and I'll take the next one.

Philippe Lejeune (CMO)

Okay.

Patrick Amstutz (CEO)

Congratulations on your promotion, Philippe. Please go ahead.

Philippe Lejeune (CMO)

Thank you for this. So, a good question again on the C-max, you know, and our model. Obviously, we model and we think that, you know, we are not very far in terms of C-max from where we were, where we wanted to be... and we see activity. So, it's more about we see too much, too quickly, disappearance of the drug. That's why we need to change, you know, evolve our, our-

Patrick Amstutz (CEO)

Dosing pattern.

Philippe Lejeune (CMO)

Dosing pattern, our scheme of administration, to really let's say have a more again dense approach during that first phase. So we are not very far, and we still think we can go a bit higher, and we would like to tease that out. Again, we can do this because it has been safe up to now, or safe enough. It will be more about looking at the shape of that exposure curve more than the C-max. And again, we'll have a heavy focus on the trough, because we need to have more time with you know higher than mean expected exposure during that time here.

Patrick Amstutz (CEO)

Maybe just kind of, obviously, I'm not a medic, but a bit more the layman view, and please apologize if it is too crude, but this disease progresses very fast. If you cannot control the patient in the first days even, you are behind the disease. If you look at the data that we also did show, I think on slide 12, you see we have some impact, and then just the disease takes off. So it's very important that we not only... I think it's more the trough, that we actually give the dose, and we give it also faster just to give the drug more chance to actually act before it's too late. I would and you were asking about the empiricism of it.

I personally was surprised that we saw, let's say, no dose response in the sense of we had patients in almost all those cohorts that responded, but we don't see a dose response in that sense. We see activity in patients that have low disease burden. Maybe that's also why we just need to tease that out and see if we can expand that activity to more patients by what we call intensifying the dose. We will have a poster at ASH, where you then can see what dose we have now, and it is definitely less than we would like. I think that was the modeling, call it a bit surprised that we saw less drug in circulation, and that's what we are correcting for, based on also some responses we see despite the low exposure.

I'll now take the other part of the question, which is sort of what to expect, and it was a good discussion with our investigators, and there is just a high medical need, and everyone in the room, the KOLs on the trial, but also those not on the trial, said we should really test this. As we have activity, there is a need there, and the higher dosing is just what jumps into the eye when you saw the data that we have. So I think there is almost an ethical imperative for us to test this. At the same time, outcome, we will see what it is. The good thing, and I'll turn almost your question around, is we have options. We don't have to progress this one if the radio franchise works well.

Means not that we would stop it for no reason, but it puts a clear bar that we can put out there and say, "If we don't reach the 20 or even 30-plus response rate, if we don't have the duration of three, six, maybe nine months, that's just not gonna be good enough, and that's gonna be a clinical response." I mean, that's what we're looking for. I think the costs stay more or less the same as we always have. I mean, that's what would allow you to move forward into phase 2/registrational trial. We can just be very clean about that. I don't think it will just go away, so we will definitely update on the data. We want to update on the data and our reasoning why we would stop it or not. So, but I do think that the idea that we have options, obviously, is a good one, and the more competition there is for the cash we have, it's a good sign for the company.

Michael Nedelcovych (Director Equity Research)

Very helpful. Thank you.

Patrick Amstutz (CEO)

Thanks, Mike.

Operator (participant)

Thank you. And our next question is a follow-up from Richard Vosser at J.P. Morgan. Please go ahead.

Richard Vosser (Managing Director and Senior Analyst)

Hi, thanks for taking my question. It was just back on the Radio-DARPin side of things, just maybe an update on the Novartis partnership, as much as you can give. Just where we are with that one, how that's progressing relative to MP0712, and when we might see something from that side of the collaboration?

Patrick Amstutz (CEO)

Maybe Danny can give a short update, and, and maybe just frame that obviously in our pipeline, our compounds are like, we have five, and they're all five high priority, and in Novartis's pipeline, there are close to 30 compounds, and that explains maybe a bit less speed. But maybe over to Danny to explain how we are progressing our pipeline and why we think we are faster and how Novartis is going forward.

Daniel Steiner (SVP, Research and Technology)

Happy to give as much insight as we can in that context of that collaboration. So as outlined on the slide, it's two specific targets we're collaborating on with Novartis. As Patrick said, we're part of a bigger endeavor that Novartis takes in the whole radioligand space, which makes a lot of sense for them to keep the leadership in a space which they've been entering as one of or as the first one in the field. So we're progressing there with the candidates, we're analyzing the candidates, and as many of you know or might know that our

... knowledgeable in the field is like, it's a lot about testing, but bringing forward molecules, testing them in vivo models, and going through the iterations. And there, it's just like one observation we are making with Orano Med, and that's certainly the other side of the whole equation. With Orano Med on board, we found a partner that is extremely agile and following our approach to test as quick as possible, as many as possible candidates in the relevant models, often in vivo models. Unfortunately, there is not a lot of preclinical in vitro models that help you to predict the outcome in the in vivo model.

That's how we're progressing, and that's why I think also that allowed us that agility and way to maneuver that whole preclinical pipeline, allowed us to nominate the first candidate with Orano Med, and I very much look forward to also nominate further candidates in that collaboration.

Patrick Amstutz (CEO)

And maybe just I will add, because there is a bit of a conceptual difference between how Novartis looks at radio and we, and it goes back to the isotopes that we have. And we work with lead, which has a very short half-life, and the decay in the blood is likely gonna be much more safe than if you have lutetium or even actinium, and the jury there is out. But Novartis also is looking for a slightly different profile than what we are looking for, because we have different isotopes.

So not all learnings and not all technology that we are developing for our pipeline is one-to-one addressing the Novartis needs. So it's also there, a slight difference, so not every learning from Orano Med collaboration, from what we do, applies directly to Novartis. And that is their history on beta and now maybe more actinium versus lead.

Richard Vosser (Managing Director and Senior Analyst)

Excellent. Thank you.

Patrick Amstutz (CEO)

Thanks.

Operator (participant)

Thank you. And our next question is a follow-up from Daina Graybosch at Leerink Partners. Please go ahead.

Daina Graybosch (Senior Research Analyst)

Thank you, guys. The discussion on MP0533 has been very helpful, so I have one more follow-up there. When I look at page 11 in your presentation in the talk, I do see some of the tox you said you'd be looking out for. So it looks to me like two grade three febrile neutropenia, as well as some grade three lymphopenia. And I wonder if you could talk through those toxicities in those patients and why that shouldn't be concerning in terms of the therapeutic window, and the tox that is most on target.

Patrick Amstutz (CEO)

In general, that's why I think just to translate what Philippe was saying, we're not only trying to do the Cmax, but the Ctrough by more frequent dosing. But Philippe, maybe you'll give an insight.

Philippe Lejeune (CMO)

Yeah, and also to good review. And, yeah, obviously, we are following those. What we do, we also have obviously a dose escalation committee, where I just, what I want to say is that we are following those very carefully, and not just us, okay? So, I, I'm comfortable talking here with our dose escalation committee and our safety review committee. So basically, those are mainly, or those are mainly disease related. And, and they are non, and they are non-lasting. So, and, it's always difficult to adjudicate, you know, in the context of such a trial. But for the moment, we have not seen, we have discussed those at length and have those not, not...

They are, in a way, it's hard to completely say that they are not related, because they happen, you know, temporarily, during the trial. However, with adjudication, they are not, you know, worrying from the study safety committee standpoint. So we will keep, obviously, looking at this, and we want to see whether is that transforming into a pattern or not, but so far, we do not think it is.

Daina Graybosch (Senior Research Analyst)

Very helpful.

Patrick Amstutz (CEO)

You have a follow-up?

Philippe Lejeune (CMO)

But, again, you know, just maybe one last thought on this. As Patrick has mentioned, we need to, you know, the best proof of that will be to show that because the drug is active very quickly in those patients, basically, we see a reduction or non-occurrence of those. It's very difficult to keep that promise in the context of a relapsed refractory patient, but that's what we want to aim at. And that's why we say we should take more risk, finally, say, in terms of safety, because we think we can identify that exposure during the first weekends.

Patrick Amstutz (CEO)

Thanks, Philippe. Thanks, Daina.

Operator (participant)

Thank you. And our next question today comes from Joris Zimmermann with Octavian. Please go ahead.

Joris Zimmermann (Partner and Senior Advisor in Healthcare Research)

Yeah, thank you. Thank you to the Molecular Partners team for the presentation and answering all the questions. So we've talked quite a bit about MP0533 and the Radio-DARPin area and platform. I feel we have not talked too much about the Switch program, so maybe just a little update as well on the progress with your Switch platform. And you specifically mentioned additional preclinical data announced in H2 this year still. So what can we expect there? Can you give us a little bit of flavor also in particular to the translatability of those data?

Patrick Amstutz (CEO)

... No, great question. And so maybe I'll quickly allude to the platform that is an either or DARPin. So we can create in an immune cell engager, an off DARPin that is switched on while we target while an on target, and in this case, it's a c-KIT, switched on c-KIT, where we then bind or open block CD47 and engage NK macrophage to kill. So this molecule is, at the moment, we are, we're running non-primate trials, and we expect the translatability to be rather high from the data we have in the cyno versus the human. The data we'll collect, and that will also inform, obviously, a clinical trial. And there we are looking into different routes, and one could be more into, call it AML, the other more into more global stem cell conditioning.

AML is a very high bar because you need very complete killings. Stem cell conditioning is a high medical need in the field for all the gene therapy companies, but a bit less on our radar, as that is really more than, again, in some, in a setting of a partnership, as the key value is in stem cell transplant. So we are taking the data, and we will then also analyze and see what the best clinical route is based on that data. I think your question is spot on. That, again, will link to what is the best clinical position and how to investigate that versus maybe the other pipeline assets. I think that we didn't speak about it that strongly is because we have to focus on radio. Radio is really where it's happening, where it's groundbreaking.

But stem cell transplant, given the high medical needs, is maybe a bit less, call it, strategic for Molecular Partners. That's the way to think about it. At this point in time, we believe it's high value because of high translatability and the medical needs. We will definitely see how, if and how we then would move forward, seeing the rest of the pipeline developing. I hope that helps you more on the strategic side, how we think about this.

Joris Zimmermann (Partner and Senior Advisor in Healthcare Research)

Yes, certainly. Very helpful. Thanks.

Operator (participant)

Thank you. This concludes our question and answer session. I'd like to turn the conference back over to Patrick Amstutz for closing remarks.

Patrick Amstutz (CEO)

So big thanks to everyone, and especially all the great questions we had, and I think it has turned out a good way to do it. I think we'll keep on doing a rather extensive slide deck, shorter presentation and opening for the Q&A. As you guys are following our work, you have the questions, and we love to take the time to listen to you, see how we can answer those questions and remain in a very open and good dialogue. With that, I thank you all for that. All the others who were listening, thanks. Our investors for the trust and support you give us. To the team again, and we look forward to meet you at investor conferences as they come or reach out to us if you want the meeting. We have a lot to tell. We will be sharpening the story a lot about the radiotherapy, be out there, and really look forward to interact with all of you. Thanks for that. Take care and stay safe.

Operator (participant)

Thank you. This concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.