Ultimovacs — Gearing up for UV1 Phase II trial readouts

We anticipate Ultimovacs to make numerous advances in the clinical development of its lead cancer vaccine over the next couple of years. UV1, a peptide-based vaccine with universal application, is designed to trigger immune responses through the recognition of human telomerase reverse transcriptase (hTERT), which has been consistently observed with cancer growth. It is estimated that this protein is detectable in up to 90% of human cancers, but not in healthy tissues, making it an attractive immunotherapy target. Across its active clinical pipeline, Ultimovacs is taking a practical approach to elevate natural immune response, which complements progress made by well-known immune checkpoint inhibitors (ICIs) for the treatment of various cancer indications (Exhibit 1).

In addition to UV1, Ultimovacs is investigating the safety and tolerability of the first candidate from its TET (tetanus-epitope targeting) technology platform. Patient enrolment for the Phase I TENDU trial (prostate cancer, n=12), studying TET, was completed in December 2022, and we expect results to be shared in Q423, along with an update on the TET platform.

While recent personalised therapies, such as Merck and Moderna’s mRNA-4157/V940 vaccine, continue to evolve and dominate mind share, patient-specific vaccines and manufacturing challenges continue to drive up costs, which prohibits accessibility, similar to that of patient-specific cell therapies. Such therapies struggle with production bottlenecks and the timely supply of treatments, which is a serious implication for patients struggling with aggressive cancers. Operational infrastructure is insufficiently equipped for the mass production of personalised treatments, in our view. Conversely, Ultimovacs’ UV1 is a universal ‘off-the-shelf’ treatment option that is simpler to manufacture and offers notable differentiation by addressing key considerations in accessibility and patient access need in this competitive space.

The anticipated readouts throughout 2023–25 from the Phase II trials assessing UV1 with different ICIs across various cancer indications will be the next key catalysts (Exhibit 2).

INITIUM: Topline results from INITIUM are expected in H124. This Phase II trial is assessing the efficacy and safety of UV1 in combination with nivolumab and ipilimumab as a potential first-line treatment for patients with malignant melanoma. Patient enrolment for INITIUM (n=156) was completed in July 2022. Topline results were initially expected in H123, but timelines have been pushed back twice to H223 and, more recently, to H124 as it was taking enrolled patients longer than anticipated to experience disease progression. While this may be considered an encouraging sign for patients and the outcome of the trial, this is not assured as the observation may be driven by the control arm performing better than anticipated. Patient follow-ups are required until disease progression is observed in 70 patients, but the progression has not occurred in the desired number of patients as of 21 August 2023. In case of continued slow progression in multiple endpoint events, management might consider alternative approaches for data readouts for the study, acceptable to regulatory authorities. As melanoma is considered one of the most immunogenic tumour types and since UV1 has demonstrated proof-of-concept in this indication in the UV1-103 trial, the topline readouts from INITIUM represent the most significant upcoming catalyst for Ultimovacs, in our view.

NIPU: Ultimovacs plans to share updated OS data from the investigator-initiated NIPU study with the market in Q423, and is preparing for discussions with regulatory authorities on the clinical path for UV1 in this indication (metastatic pleural mesothelioma). These results will also be presented by the principal investigator at a medical conference. Particular focus should be paid to the complete and updated full data set (especially OS data) for NIPU as it may be pivotal for the company. NIPU is a randomised, multi-centre Phase II trial investigating UV1 in combination with ipilimumab and nivolumab as a potential second-line treatment for relapsed/refractory (r/r) malignant pleural mesothelioma. Despite the initial negative perception of Ultimovacs’ clinical data announcement from the NIPU study in June 2023 (the study did not meet its primary endpoint of progression-free survival (PFS) based on an assessment conducted by a central independent review committee), the study remains ongoing and supported by measures of improvements in PFS (local assessment at the hospital study conducted by a specialist radiographers measured a significant improvement in PFS). They also noted that they were encouraged by the observed trend in overall survival (OS) benefit in the UV1 arm compared to the control arm. NIPU is an investigator-sponsored clinical trial so Ultimovacs does not have much control on how the study is conducted. To reiterate, the PFS primary endpoint was not met according to the independent review committee; this measure of PFS is likely perceived as a more objective reading than the local assessment of PFS conducted by hospital specialists. The NIPU readouts should not detract from upcoming readouts in additional indications, as mesothelioma is considered a challenging indication for immunotherapy with distinct cancer biology to the targets of the other ongoing Phase II trials.

FOCUS: the third of the key UV1 Phase II trials is FOCUS, which is assessing the cancer vaccine in combination with pembrolizumab for the treatment of head and neck cancer compared to pembrolizumab alone. In August 2023, Ultimovacs announced that patient enrolment for this study (n=75) had been completed and that the last patient had been dosed. Topline results, including OS with a minimum follow-up of 12 months and PFS (PFS will be analysed after six months and also at 12 months), are expected in H224, according to the last reported guidance. We note that management believes that its current cash resources should provide a runway through this readout.

DOVACC and LUNGVAC: further on the horizon are readouts from the DOVACC (ovarian cancer) and LUNGVAC (non-small cell lung cancer) studies, for which patient enrolment is at 37/184, and 11/138, respectively. The guided timelines for readouts from these trials were previously H224 for DOVACC and H225 for LUNGVAC, but management plans to update this guidance in its Q423 report.

In April 2023, Ultimovacs reported that it received an Intention to Grant from the European patent office, and in July 2023, a Decision to Grant from the Japanese patent office. These patents will form the counterpart of the US patent granted in August 2023, and protect the use of UV1 in combination with ICIs until at least 2037. Specifically, this covers UV1 combined with CTLA-4, PD1 or PD-L1 ICIs. Management will continue to file extensions as it continues to focus on synergistic cancer treatments including UV1.

Total operating expenses stood at NOK50.6m in Q223, up 43.0% y-o-y from NOK35.4m in Q222. The increase in operating expenses was largely driven by higher R&D expenses of NOK40.7m in Q223 (versus NOK15.6m in Q222), resulting from clinical activities associated with the NIPU and INITIUM trials. Total payroll expenses declined to NOK4.4m in Q223 (from NOK14.3m in Q222) as positive inflows from social security tax related to options more than offset higher salaries during the quarter. Operating losses equalled these expenses in both years as revenue was zero in both periods. Net cash outflow from operating activities stood at NOK71.0m in Q223 (versus NOK33.0m in Q222).

To reflect the anticipated pushed out timeline for the INITIUM topline results in H124 (H223 previously), we have increased our FY23 R&D expenses to NOK120.0m, from NOK109.5m previously. FY23 operating losses are now expected at NOK238.2m versus NOK225.1m previously. To align our full year estimates with year-to-date results, we have also adjusted net financial items to NOK23.4m in FY23 (NOK14.3m previously). As a result, our net loss forecast for FY23 increases to NOK214.8m, from NOK210.8m previously. Our FY24 estimates are essentially unchanged. Ultimovacs ended H123 with a net cash position of NOK344.1m, which management expects to be sufficient to fund operations to H224, which is also in line with our operating cash burn estimates.

Our valuation for Ultimovacs adjusts to NOK7.5bn or NOK219 per share (from NOK7.4bn or NOK216 per share) as we roll forward our model and update the net cash figure to NOK344.1m at end-Q223. Our long-term assumptions for the company remain unchanged for now; however, we might consider revising the launch timelines for respective indications if there are any further delays in clinical results.