MEDIVIR AB – INTERIM REPORT JANUARY – MARCH 2020

Positive results for MIV-818 and continued tempo in business development

January – March

Significant events during the quarter

• Data from the phase Ia study with MIV-818 in liver cancer patients presented at Medivir’s R&D-day on March 2. The analysis supported the liver-targeted effect of MIV-818. Biomarker analysis showed a selective effect: while tumor tissue had clear DNA damage, healthy liver tissue showed only minimal or no DNA damage. Five of the nine patients were assessed to have stable liver disease after treatment.
• The first liver cancer patient included in the MIV-818 phase Ib study.
• Medivir’s patent applications for MIV-818, covering both substance requirements for MIV-818 and its use for liver cancer treatment, were approved by the patent authorities in both the EU and Japan.
• End of February, a licensing agreement was signed for Medivir's drug Xerclear® for labial herpes with the Chinese company Shijiazhuang Yuanmai Biotechnology Co Ltd.
• In March a licensing agreement was signed with US biotech company Tango Therapeutics for one of Medivir’s preclinical research programs.
• The phase II study with MIV-711 in patients with osteoarthritis was published in the esteemed journal Annals of Internal Medicine.

Financial summary for the quarter

• Net turnover amounted to SEK 7.3 (2.0) million.
• The loss before interest, tax, depreciation and amortization (EBITDA) amounted to SEK -20.7
  (-54.2) million. Basic and diluted earnings per share amounted to SEK -0.96 (-2.30) and SEK -0.96 (-2.30) respectively.
• Cash flow from operating activities amounted to SEK -16.6 (-56.3) million.
• Liquid assets and short-term investments at the end of the period amounted to SEK 116.6 (228.6) million.

 
Conference call for investors, analysts and the media
The Interim Report January - March 2020 will be presented by Medivir’s President & CEO, Uli Hacksell.

Time: Tuesday, May 5, 2020, at 16.00 (CET).

Phone numbers for participants from:
Sweden + 46 8 505 583 75
Europe + 44 33 3300 9272
US + 1 833 5268 381

The conference call will also be streamed via a link on the website: www.medivir.com
The presentation will be available on Medivir’s website after completion of the conference.
 
CEO’s message
Medivir's business during the quarter was mainly characterized by successes in the clinical development of our proprietary and wholly owned candidate drug MIV-818 for liver cancer.

MIV-818 has been designed to provide a targeted anti- tumor effect in the liver while minimizing potential side effects. At our R&D-day on March 2, we presented positive data from the phase Ia study with MIV-818 in liver cancer patients. The analysis of data from all nine patients confirmed our previous conclusions. Biomarker analysis of liver biopsies from patients showed a selective effect of the treatment: while tumor tissue had clear DNA damage, healthy liver tissue showed only minimal or no DNA damage. Five of the nine patients were assessed to have stable liver disease after treatment. The pharmacokinetic analysis showed that patients were exposed only to low levels of MIV-818 and acceptable troxacitabine levels outside of the liver, providing experimental support for MIV-818’s liver targeted effect. The adverse events were mainly mild and the few more serious side effects observed were reversible.

These results constitute a clinical proof-of-concept showing that MIV-818 has potential to be the first liver cancer-targeted, orally administered drug that can help patients with primary liver cancer.

On March 10 we announced that the first patient with advanced liver cancer had been dosed with MIV-818 in the phase Ib study. It is a classic 3+3 between-patient dose-escalation multi-center study in patients with advanced liver cancer. The primary objective is to establish the safety and tolerability profile of MIV-818. A secondary objective is to further explore the efficacy of MIV-818.

Earlier in the quarter, the strong patent protection for MIV-818 was reinforced as our patent applications, covering both composition-of-matter and liver cancer treatment claims, were approved by the patent authorities in both the EU and Japan. Corresponding patents are already in place in USA, Australia, Indonesia, Israel, The Philippines, Russia, Singapore and South Africa. Applications are pending in a large number of other countries, mainly in Asia. The patents will be in force until August 2035.

Recently the European Medicinal Agency provided a positive opinion on orphan medicinal drug designation for MIV-818 for the treatment of hepatocellular carcinoma.

MIV-828 is the next candidate drug in our proprietary and wholly owned series of pro- drug substances. It is a nucleotide-based prodrug that has been optimized for the treatment of acute myeloid leukemia (AML) and other forms of blood cancer. We intend to prepare MIV-828 clinical studies on our own, but this will happen first when Medivir has the financial resources required.

Remetinostat is our topical HDAC inhibitor that is developed to treat mycosis fungoides, the most common form of cutaneous T-cell lymphoma. Medivir has determined the design of a phase III study and is searching a partner for the continued development and commercialization of remetinostat.

In two ongoing investigator-initiated phase II studies in collaboration with researchers at Stanford University, the efficacy of remetinostat is studied in patients with basal cell cancer (BCC) and squamous cell carcinoma (SCC). The preliminary results from the BCC-study indicate that remetinostat has potential as an effective and well-tolerated treatment of local skin tumors in BCC patients.

With Medivir's SMAC mimetic birinapant, an investigator-initiated phase I study is ongoing in which the safety and tolerability of a combination of birinapant and radiotherapy are evaluated in patients with recurrent squamous cell carcinoma in the head and neck region. Potential signs of treatment efficacy is also studied. The study is sponsored and funded as part of the National Cancer Institute's Cancer Treatment Evaluation Program.

For MIV-711, Medivir's cathepsin K inhibitor for the treatment of osteoarthritis, we have a robust and comprehensive data package. At the beginning of the quarter, our phase II study was published in the esteemed journal Annals of Internal Medicine. The study was also commented on positively in an editorial. We continue to strive to reach a licensing or collaboration agreement for the continued development of MIV-711.

Our business development efforts have rendered us two agreements in the quarter. End of February, a licensing agreement a licensing agreement was signed for Medivir's drug Xerclear® for labial herpes with the Chinese company Shijiazhuang Yuanmai Biotechnology Co Ltd (SYB). The agreement gives SYB the right to register, manufacture and market the product in China. After market registration and production in China, Medivir will receive a fixed royalty for each unit sold and the agreement guarantees a minimum sale during the first three years on the market amounting to single-digit million amounts in SEK.

On March 16 we announced that Medivir had entered into a licensing agreement with the US biotech company Tango Therapeutics for one of our preclinical research programs. After the agreement was signed, Medivir received a first payment. This also includes multiple undisclosed development and commercial milestones as well as low single-digit royalties on future products.

Obviously, the ongoing Covid-19 pandemic has affected us all. Not only by limiting our mobility and our social contacts, but above all by the great stress it entails for health care and by the large number of deaths it has harvested. Medivir has implemented measures to protect its employees, to take its social responsibility and at the same time to minimize the negative impact the Covid-19 pandemic may have on Medivir's operations.

We see that in our industry, the pandemic has impacted the recruitment to clinical trials. The recruitment for the ongoing Phase Ib study with MIV-818 is likely to be slower than expected. Thus, topline data from the phase Ib study is not expected until the first quarter of 2021. We are continuously monitoring the situation to estimate how this and other clinical studies may be affected.

Medivir's most important task is to develop and realize the value of our clinical candidate drugs. In the fall of 2018, we concentrated our operations in order to ensure our ability to develop and exploit the values within Medivir’s clinical portfolio. Since then, the development has shown that our proprietary and wholly owned projects have great potential, especially the continued development of MIV-818. During the quarter, we furthermore completed two out-licensing agreements, of a preclinical project and of Xerclear. Business development remains our focus when it comes to remetinostat, birinapant and MIV-711.

All in all, the development shows that the concentrated focus and the reorganization were just right for Medivir. We are today a lean and efficient development company with the ability to use our resources where we can create the greatest value.

Uli Hacksell
President & CEO
 

For further information, please contact
Uli Hacksell, CEO, +46 (0) 8 5468 3100
Magnus Christensen, CFO, +46 (0)73-125 0620

This report has not been subject to auditors' review.

The information was submitted for publication at 08.30 CET on 5 May 2020.

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