The fourth quarter was somewhat uneventful. We await the start of the phase IIa part with fostrox. This part should be able to recruit patients more quickly and proceed more quickly than the dose escalation part, as all patients can be recruited simultaneously at several sites. The 3+3 dose escalation format means that only three patients are recruited at a time before progressing to a higher dose. Medivir has communicated a high interest in participating in the clinical trial and there are waiting lists for the expansion cohorts. In the conference call, it was mentioned that the dose escalation parts might be completed at various times. Medivir expects the TKI arm to finish first. The PD-1 arm might finish some months later (though it this a conjecture). Results from the expansion cohorts (part IIa) are expected in the second half of 2023.

The phase IIa part will enroll up to 30 patients. It will consist of two arms: Keytruda + fostrox (PD-1) and Lenvima + fostrox (TKI). This trial will be followed by a larger randomized phase IIb trial in 2024. Medivir had a pre-IND meeting with the FDA in December, where it received positive feedback. The investigative new drug (IND) application for the phase IIb trial is planned for 2023. The TKI combination will likely be more popular in the second line. However, as checkpoint inhibitors have demonstrated efficacy in the first line and the combination atezolizumab+bevacizumab is becoming standard of care, the PD-1 combination arm with fostrox might also prove interesting for further development in the first line. Medivir is in fact investigating triple combinations pre-clinically and will present data at conferences later in 2023.

In the SITC poster from November, two pre-clinical models were presented. It was shown that fostrox+PD-1 changed the tumour micro-environment in one of the models; this combination led to the largest infiltration of T-cells. Both models also demonstrated tumour shrinking; the results from the hepatocellular model (i.e. liver cancer) are shown below. An initial dosing with fostrox lead to an improved effect of the PD1 inhibitor, as can be seen in the red-dotted line. This could be due to neoantigen release from the early treatment with fostrox, since the vehicle and fostrox alone had similar growth.

METX-X is developed by Infex therapeutics under a license agreement with Medivir. It is a Metallo-β-lactamase inhibitor. It restored the activity of β-lactam antibiotics in preclinical models. Infex intends to begin safety studies that will enable it to send in an application for a phase I trial in 2023. Medivir is entitled to a share of any future revenue. Infex will have to sublicense the project to a larger pharmaceutical company at some point. As there are no well-defined cash flows associated with the shared revenue deal, we do not include it in our Base Case at this point.

Medivir had a net turnover of SEK 2.3m in Q4. Operating expenses were SEK-21m. The operating cash flow before changes in working capital was SEK-16m while the cash flow for the period was SEK -25m, mainly due to a large negative change in working capital. The cash position is SEK118m. It should finance currently ongoing activities, but it will not finance the phase IIb trial that is being planned after the completion of the ongoing phase Ib/IIa trial with fostrox.

We push the market launch of Tango’s TNG348 from the USP-1 project to 2030 (2029). We expect a milestone payment upon the initiation of the phase I trial. Otherwise, we do not make any material changes except updating existing figures such as the cash position.

Our Bear Case Increases somewhat to SEK 5.9 (5.3) while our Bull Case Increases to SEK 48 (46). You can read more about our valuation assumptions in our in depth research update from 2022.