MOLOGEN reached key strategic milestones and successfully implements capital measures in 2017
The biopharmaceutical Company MOLOGEN AG reached key strategic milestones in 2017: one major development was the preparation of a first licensing and cooperation contract for the further development and commercialization of the lead compound lefitolimod in China, which was successfully concluded with the U.S. company ONCOLOGIE Inc. beginning of 2018. The sustainable funding of the Company was once again a focus in 2017: following the successful issuance of a convertible bond in January 2017 as well as the Share Subscription Facility with the U.S. investor Global Corporate Finance, further convertible bonds were issued after the end of the reporting period to the Luxembourg-based European High Growth Opportunities Securitization Fund (EHGO) and a further successful capital increase was carried out. As a result, the financing of MOLOGEN has been presumably secured until the end of 2018.
Alongside the financial and strategic successes, the Company also made some significant progress in the area of research and development in 2017. Key data was presented for two clinical studies: the phase II IMPULSE study in the indication of small cell lung cancer and the phase Ib/IIa TEACH extension study in HIV, which has been conducted in collaboration with the Aarhus University Hospital in Denmark. In 2018, MOLOGEN is planning to start a further clinical study in the indication HIV together with the partners in Aarhus and further prominent international centers, and which will be funded by the U.S. biopharmaceutical company Gilead Sciences Inc.. In this study, lefitolimod will be tested in combination with innovative virus-neutralizing antibodies.
“We have had an eventful and productive 2017, a year in which we have continued to consistently implement the Next Level corporate strategy and made sustained progress in our product development program. We were particularly pleased that we were able to conclude a licensing contract for our lead compound lefitolimod for the first time at the beginning of 2018. In ONCOLOGIE, we have found a right partner to further develop our product candidate and prepare it for market entry. The focus will continue to be on the ongoing development of our product pipeline and the international commercialization of lefitolimod in 2018,” comments Dr Mariola Soehngen, Chief Executive Officer (CEO) of MOLOGEN AG.
The successful further product development is above all owing to the efforts of the new Chief Medical Officer, Dr Matthias Baumann, who joined the Executive Board of MOLOGEN in May 2017.
Signing of first licensing contract for lead compound lefitolimod
Fiscal year 2017 was characterized by activities relating to the potential out-licensing of the lead compound lefitolimod. In February 2018, this important milestone was reached on conclusion of the contract with ONCOLOGIE Inc., which has operations established in Boston, Massachusetts U.S., as well as in Shanghai, China. The company specializes in cancer treatments and intends to develop innovative personalized drugs in the area of immuno-oncology. The contract with ONCOLOGIE comprises the development, manufacturing and commercialization of lefitolimod in the markets of China and other regions in Asia as well as a global development cooperation. On conclusion of the contract, MOLOGEN received a first payment in the amount of €3 million. A capital contribution of €2 million becomes due to MOLOGEN within 12 months of the contract being signed. Furthermore, the agreement sets out further milestone payments, which are paid on reaching certain development targets, on attaining market approval for lefitolimod and on achieving certain sales thresholds. The total of these payments could amount to more than €100 million over the course of several years. Additionally, MOLOGEN will be receiving low double-digit royalties on sales.
First notable results in the TEACH and IMPULSE clinical studies
At the beginning of August, MOLOGEN presented key findings from the phase Ib/IIa TEACH extension study in the indication HIV, which was carried out in collaboration with the Aarhus University Hospital in Denmark. The study provided positive findings with regard to the safety profile and the effects o the reactivation of the immune system in HIV. This suggests that lefitolimod could play an important role in combination therapies for the treatment of HIV in the future. In January 2017, the Danish Aarhus University had already received a grant of US$2.75million from the U.S. biopharmaceutical company Gilead Sciences, Inc. to finance a clinical study in patients with HIV on antiretroviral therapy, in which MOLOGEN’s TLR9 agonist lefitolimod will be investigated in combination with innovative virus-neutralizing antibodies. Preparations are currently underway for the study to start presumably in 2018.
The key data from the exploratory phase II IMPULSE clinical trial in patients suffering from an extensive disease stage of small cell lung cancer presented for the first time in April 2017 was confirmed in a final evaluation in the first quarter of 2018: the study showed notable results with regard to overall survival in two patient subgroups when compared with the control group. These findings indicate that activated B cells may serve as a valid biomarker in the potential further development of lefitolimod in patients with extensive-disease small cell lung cancer. The clinical phase III IMPALA pivotal study in the indication of metastatic colorectal cancer progressed as planned. Patient recruitment was completed in May 2017. The evaluation of the study results is expected to commence in 2019.
In addition, lefitolimod is being tested in a phase I combination study with the checkpoint inhibitor Yervoy®, which MOLOGEN is conducting in cooperation with the MD Anderson Cancer Center Texas, U.S.. In 2017, progress continued to be made with patient enrollment.
MOLOGEN has also successfully carried out preclinical combination studies with lefitolimod and other immuno-oncological approaches, which are known as checkpoint inhibitors, as well as with the next-generation molecules from the EnanDIM® family. In discussions with potential partners, it is currently reviewing the option of conducting clinical combination trials.
In November 2017, an international consortium to which MOLOGEN belongs was awarded a grant from Global Health Innovative Technology (GHIT) Fund, Tokyo, for the further development of a leishmaniasis vaccine based on MIDGE® technology. Of this grant, MOLOGEN is to receive around €2.2 million. Pursuant to the Next Level strategy, MOLOGEN continued with the planned spin-off or sale of the MIDGE® technology.
Funding secured until the end of 2018: first-time involvement of U.S. investor
Following the successful issuance of a convertible bond at the beginning of 2017, which had an issuance volume of €4.99 million, a further important step was taken in October 2017 with regard to the financing of the Company: with Global Corporate Finance, a relevant investor for the Company was found in the U.S. for the first time and a Share Subscription Facility signed for the commitment to purchase up to 10% of the share capital of MOLOGEN. MOLOGEN has the right to draw down shares in the amount of up to €1 million each for a period of up to 30 months. By drawing the first two tranches at the end of 2017 and beginning of February 2018, MOLOGEN has already raised around €1 million from this capital increase. After the end of the reporting period, MOLOGEN concluded a contract with the Luxembourg-based financing provider European High Growth Opportunities Securitization Fund. Pursuant to this agreement, MOLOGEN can place convertible bonds in an aggregate amount of up to €12 million with the investor over a period of two years. To date, €1 million in convertible bonds have been issued. In March 2018, MOLOGEN successfully concluded a further capital increase from authorized capital and generated gross proceeds in the amount of €4.99 million.
“We have successfully diversified the funding of MOLOGEN and, by means of capital measures in 2017 and early 2018 as well as the licensing agreement, we have secured financing presumably until the end of 2018, based on current planning,” comments Walter Miller, Chief Financial Officer (CFO) of MOLOGEN AG.
Reduced expenses for research and development
In fiscal year 2017, research and development expenses amounted to €14.0 million and were therefore down year on year (previous year: €17.0 million). This development was above all owing to the lower study costs for the concluded IMPULSE study and the IMPALA study, which has recruited all payments required. Owing to the lower research and development expenses, EBIT improved to €-18.7 million (previous year: €-21.0 million).
Cash and cash equivalents amounted to €6.5 million as of 31 December 2017 (31 December 2016: €20.5 million). This decrease is due to the cash utilized within the scope of operating activities. As a result of the increased accumulated deficit, MOLOGEN AG’s shareholder’s equity amounted to €-4.9 million as at the reporting date of 31 December 2017 (31 December 2016: €11.8 million).
Confident outlook for Full Year 2018
The successful development of the product pipeline so far, the further steps in the implementation of the Next Level corporate strategy and the commencement of commercialization activities provide the foundation for the continued positive development of MOLOGEN.
The development of the financial performance and financial position of MOLOGEN AG in fiscal year 2018 essentially depends on the continued success of commercialization activities for the product candidate lefitolimod as well as (pre-)clinical progress and the successful execution of market preparation. The required additional expenditure in the area of clinical development is expected to remain at a high level, but down on the costs of the financial year under review. Alongside the further funding of the Company, the commercialization, specifically the conclusion of further license agreement for additional regions, will therefore continue to be a central task for 2018.
The capital measures and the additionally concluded framework agreements in 2017 and the first quarter of 2018 together with the first payment from the licensing and development cooperation contract concluded with ONCOLOGIE in February 2018 have presumably secured the financing of the Company until the end of 2018.
The full 2017 Annual Report of MOLOGEN AG is available on the Company's website at: www.mologen.com.
MOLOGEN AG is a biopharmaceutical Company and a pioneer in the field of immunotherapy on account of its unique active agents and technologies. Alongside a focus on immuno-oncology, MOLOGEN develops immunotherapies for the treatment of infectious diseases.
The focus of the development work is on the product family of DNA-based TLR9 agonists. This includes the lead compound lefitolimod and the next-generation molecule family EnanDIM®.
The immunotherapeutic agent lefitolimod is the Company’s lead compound and is currently being investigated in a pivotal trial. It is regarded as the best-in-class TLR9 agonist. Treatment with lefitolimod triggers a broad and strong activation of the immune system. On account of this mode of action, lefitolimod could potentially be used in various indications. Lefitolimod is currently being developed within the framework of a pivotal study for first line maintenance therapy for colorectal cancer. Key data of the phase II IMPULSE study in small cell lung cancer have been announced in April 2017, and the final analysis in the first quarter 2018 confirmed the data. Furthermore, data from the extension phase of the TEACH study in HIV have also been published in 2017. In addition, lefitolimod is currently being investigated in a phase I combination study with the checkpoint inhibitor ipilimumab (Yervoy®) in various cancer indications. Along with various checkpoint inhibitors, lefitolimod, which is being investigated as part of a phase III clinical trial currently, is one of the few near-to-market product candidates in the field of immuno-oncology.
MOLOGEN’s pipeline focus is on new innovative immunotherapies to treat diseases for which there is a great medical demand in particular.
MOLOGEN AG is a publicly listed Company, headquartered in Berlin. The shares (ISIN DE0006637200, SIN 663720) are listed in the Prime Standard of the German Stock Exchange. www.mologen.com
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