The Power of Immuno- Therapies
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ANNUAL REPORT 2017 IMMUNOTHERAPIES THE POWER OF MOLOGEN THE POWER OF IMMUNO- THERAPIES ANNUAL REPORT 2017 MOLOGEN ANNUAL REPORT 2017 HIGHLIGHTS / KEY DATA HIGHLIGHTS FURTHER IMPLEMENTATION OF THE NEXT LEVEL I Exploratory phase II IMPULSE study findings (indication of STRATEGY small-cell lung cancer) Key milestones achieved in the implementation of our strategy: I Results of the extension phase of the phase Ib/IIa TEACH study I Stronger orientation on closer-to-market product candidates in HIV-positive patients I Focus on TLR9 product family with the lead product candidate I MOLOGEN’s cooperation partner Aarhus University received lefitolimod and next generation molecules EnanDIM® a grant from the U.S. company Gilead for a combination study I Preparation for potential market entry and out-licensing of with lefitolimod in HIV lefitolimod I Progress made in the phase I combination study with a I Intensification of activities related to outsourcing and upscaling checkpoint inhibitor in patients with solid tumors conducted by production processes cooperation partner MD Anderson Cancer Center in the U.S. I First licensing and cooperation agreement signed in February 2018 FURTHER FUNDING SECURED FOR OUR FIRST LICENSING AGREEMENT FOR PRODUCT DEVELOPMENT PROGRAM LEAD PRODUCT CANDIDATE LEFITOLIMOD I Capital measures carried out in 2017 and the first quarter of I Significant progress in lefitolimod strategy for eastern Asian 2018 as well as additional framework agreements, together markets (China, Hong Kong, Macao, Taiwan and Singapore): with first payments from the licensing and development Licensing agreement for these markets and a global development agreement, have secured funding for the Company up to the contract for lefitolimod both signed end of 2018 STUDY PROGRESS – FURTHER KEY MILESTONES WELL-COORDINATED TEAM: ACHIEVED EXECUTIVE BOARD COMPLETE AGAIN I Patient recruitment completed for phase III IMPALA pivotal study I Our new Chief Medical Officer (CMO) has sustainably driven in the indication of colorectal cancer forward the product development program KEY DATA IFRS In million € 2017 2016 Change % Revenues 0 0 0 Profit (loss) from operations (EBIT) –18.7 –21.0 –11 Expense structure Personnel expenses 5.1 5.5 –7 Research & Development expenses 14.0 17.0 –18 Earnings per share in € (basic) –0.56 –0.85 –34 Cash flows from operating activities –19.1 –19.3 –1 Cash and cash equivalents (as of 31 December) 6.5 20.5 –68 Shareholders’ equity (as of 31 December) –4.9 11.8 n. a. Equity ratio (as of 31 December) –60% 55% n. a. Total assets (as of 31 December) 8.1 21.4 –62 Number of employees (as of 31 December) 52 59 –12 n. a.: not applicable CONTENTS 1 THE POWER OF IMMUNOTHERAPIES 01 I THE COMPANY MISSION STATEMENT / PROFILE 3 LETTER FROM THE EXECUTIVE BOARD 4 EIGHT QUESTIONS FOR DR MATTHIAS BAUMANN 6 THE POWER OF IMMUNOTHERAPIES DOUBLE POWER FOR THE IMMUNE SYSTEM: COMBINATION THERAPIES 12 NEXT LEVEL STRATEGY 18 PIPELINE: FOCUS ON TLR9 PRODUCT FAMILY 22 THE MOLOGEN SHARE 32 REPORT OF THE SUPERVISORY BOARD 34 02 I FINANCIAL INFORMATION MANAGEMENT REPORT 40 INDIVIDUAL ANNUAL FINANCIAL STATEMENTS 68 NOTES 73 AUDITOR’S REPORT 99 RESPONSIBILITY STATEMENT OF THE EXECUTIVE BOARD 104 03 I FURTHER INFORMATION GLOSSARY 106 FINANCIAL CALENDAR / IMPRESSUM 108 2 MOLOGEN ANNUAL REPORT 2017 THE POWER OF IMMUNOTHERAPIES 01 | THE COMPANY MISSION STATEMENT / PROFILE ANNUAL REPORT 2017 MOLOGEN 3 »AS A PIONEER IN THE FIELD OF IMMUNOTHERAPY, WE INTEND TO PROVIDE PATIENTS WITH NEW HOPE, OFFER EFFECTIVE TREATMENT METHODS TO DOCTORS, ATTRACT INVESTORS WHO RECOGNIZE THE POTENTIAL IN THE COMPANY AND ITS PRODUCTS, MAKE INNOVATIVE ACTIVE AGENTS AVAILABLE TO OUR PARTNERS AND INSPIRE PRIDE IN OUR EMPLOYEES FOR WHAT THEY HAVE ACHIEVED.« MOLOGEN AG is a biopharmaceutical company and considered a colorectal cancer. The results of this are expected for release in 2019. pioneer in the field of immunotherapy on account of its unique active This means that lefitolimod is one of the relatively few product agents and technologies. Alongside a focus on immuno-oncology, candidates in the field of immuno-oncology to be close to market. MOLOGEN develops immunotherapies for the treatment of infectious diseases. With our product developments, we want to help combat In addition to the advanced development in colorectal cancer, lefitolimod some of the most threatening diseases. In addition to the focus on is also being tested in other indications: Key data of a phase II IMPULSE immuno-oncology, we also develop immunotherapies for the treatment study in small cell lung cancer have been announced in April 2017, of infectious diseases always with a focus on diseases for which there which were confirmed in the first quarter 2018 after detailed evalua- is a high medical need. tions. In August 2017, the announcement of key data of an expansion phase Ib/IIa (TEACH) in HIV-patients followed. In addition, lefitolimod is MOLOGEN is oriented toward the development of closer-to-market being investigated with the checkpoint inhibitor Yervoy® (ipilimumab) proprietary product candidates which have advanced beyond the basic in various solid tumors within the scope of a phase I combination study. research stage. Our foremost objective is the successful out-licensing To further characterize the potential of our development candidates, and marketing of our products, particularly our lead product candidate preclinical studies were conducted in 2017 with lefitolimod and lefitolimod. EnanDIM®, both as monotherapy and in combination with check- point inhibitors. Our approaches are based on the same active principle: they activate the human immune system to combat the disease itself. It is a highly promis- Our product portfolio includes the proprietary cell-based therapeutic ing approach which we are driving forward with great confidence and vaccine MGN1601 to treat advanced renal cancer. The further develop- from which patients who are reliant on innovative treatment options ment of MGN1601 has been shelved for the time being with the stand to benefit. Without exception, our development candidates have opportunity to advance it at a later date, for example following the demonstrated promising therapeutic effects and good tolerability, successful out-licensing of lefitolimod. which is a particularly noteworthy characteristic for cancer therapies. The focus of our development work is on MOLOGEN’s proprietary plat- form technology: the product family of DNA-based TLR9 agonists. This includes our lead product, the immunotherapeutic agent lefitolimod, and its follow-up molecules EnanDIM®. Since the summer of 2014, lefitolimod has been subject to a phase III pivotal study IMPALA for 4 MOLOGEN ANNUAL REPORT 2017 DEAR SHAREHOLDERS, We have had an eventful, positive year. We are particularly delighted to results with regard to overall survival in two relevant patient subgroups. once again have at our disposal a complete, well-coordinated team We are proud that the presentation we held at the ESMO Conference following the appointment of Dr Matthias Baumann as Member of the and the assessment of the experts invited by the ESMO have garnered a Executive Board and Chief Medical Officer with effect from 1 May 2017. great deal of attention in professional circles. The final evaluation of the Together, we have succeeded in promoting our Next Level strategy and study results in the first quarter 2018 confirmed the findings already have achieved some significant milestones. In particular, we have made available. substantial progress with regard to our primary aim of making lefitolimod market ready and sourcing suitable licensing partners to market it. The assessment of our HIV study TEACH, which was carried out in collaboration with the Aarhus University Hospital in Denmark, has One huge success was the conclusion of the first license and coopera- yielded positive results with regard to the safety profile and effects of tion agreement. In August 2017 MOLOGEN already signed a binding lefitolimod on immune system reactivation in HIV-positive patients. term sheet with the Chinese drug development company iPharma. Following further negotiations and a re-opened negotiation process Another clinical study in HIV-positive patients in collaboration with the also for additional parties, a contract with ONCOLOGIE Inc. has been Aarhus University Hospital is planned to start in 2018. The study will signed in February 2018. The contract includes the commercialization examine lefitolimod in combination with innovative virus-neutralizing of lefitolimod in China and other Asian countries and a global antibodies. The American biopharmaceutical company Gilead Sciences co- development program. With this agreement, we have the oppor- has already provided the necessary funding to conduct the study. tunity to exploit the potential of our lead development candidate, particularly for the attractive Asian market. We completed patient recruitment for the clinical phase III pivotal study IMPALA in the indication of colorectal cancer in May 2017. We expect Long-term funding for our Company has been and continues to be the to be able to start the study assessment in 2019. focus of our efforts: following the successful issuance of a convertible bond amounting to over € 4.99 million at the start of 2017, we gained The importance of drug combinations as a promising approach in the a relevant U.S. investor Global Corporate Finance (GCF) for the first field of immunotherapy remains on the rise. As such, we are currently time in October 2017. We have a share purchase agreement with GCF testing lefitolimod in a combination study with the checkpoint inhibitor to take on up to approximately 3.4 million shares. This corresponds Yervoy®, which MOLOGEN is conducting in collaboration with the MD to around 10% of the outstanding shares in MOLOGEN AG. The sub- Anderson Cancer Center Texas, U.S. Patient recruitment was continued scription of shares by GCF is carried out in tranches – until February in 2017. We have also successfully carried out preclinical combination 2018 two tranches were already obtained, achieving gross proceeds of studies with lefitolimod and follow-up molecules from the EnanDIM® more than € 1 million.