Biovica Q2 Interim Report August-October 2020/2021

Convincing study results and application submitted to the FDA – commercialization just around the corner

SEK 000s Q2 20/21 Q2 19/20 May-Oct 20/21 May-Oct 19/20 Full year 19/20
Net sales 44 1,249 384 1,616 1,671
Operating profit (loss) -8,285 -5,990 -16,950 -12,087 -29,816
Profit (loss) for the period -8,208 -5,958 -16,581 -12,026 -30,318
Earnings per share, after dilution -0.29 -0.25 -0.59 -0.51 -1.29

 
Significant events during the second quarter
· Clinical validation, which is the last step required for the FDA application, has been completed with positive results and the stated criteria have been met.
· A targeted new share issue of SEK 148 million was made to a number of Swedish and international institutional investors, including the Second Swedish National Pension Fund (AP2), Coeli Asset Management and Lancelot Asset Management.
· Biovica submitted its 510 (k) application for DiviTum®TKa to the FDA.
· The FDA's temporary reallocation of resources to COVID-19 has impacted the timeline for completion of the review of the 510 (k) application for DiviTum®TKa
 
Significant events after the end of the period
· The results from four studies will be presented at San Antonio Breast Cancer Symposium.
o DiviTum®TKa’s monitoring capabilities confirmed in SWOG Cancer Research Network study
o Initial results of clinical gene study with DiviTum®TKa in collaboration with Mayo Clinic.
o CDK 4/6 dosing study supports DiviTum®TKa as an early and effective tool in treatment monitoring and prediction of response
o Prospective study, PYTHIA, sponsored International Breast Cancer Study Group (IBCSG) and run in collaboration the Breast International Group (BIG) announced positive DiviTum®TKa results

Audiocast:
When: 8 December 2020 at 10.00 CET
Where: Link: https://tv.streamfabriken.com/biovica-international-q2-2020-2021
Phone numbers: SE: +46850558350, DK: +4582333194, UK: +443333009268,
US: +18332498406
Conducted in: English

CEO’s comments

For Biovica, the second quarter has been filled with intensive preparations for our market launch of DiviTum®TKa in USA. In September, in accordance with our timetable, we submitted the application for market approval to the US Food and Drug Administration (FDA). We also continued the work with our plan for reimbursement, along with the preparations of studies on the social benefits in the form of cost savings associated with using the DiviTum®TKa assay for monitoring treatment of metastatic breast cancer. A key factor for successful commercialization of DiviTum®TKa is convincing payers in USA of its value.
 
At the end of the quarter, we were notified by the FDA that they would be reallocating resources due to the large volume of COVID-19 tests that need to be reviewed. That decision has impacted the timeline for completion of the review of our 510(k)-submission for DiviTum®TKa. The FDA has estimated that the reallocation will last approximately 90 days. During that time, they will not be reviewing our application. Uncertainty associated with the ongoing pandemic makes it difficult to assess with certainty the extent of the delay. Another uncertainty is the number applications for EUA (Authorization of Emergency Use) of in vitro diagnostics that the FDA will need to process.
 
Subsequent to the end of the quarter, we also learned that our FDA submission would proceed to substantive review once the COVID-19 pause ends, which was of course very good news. Based on feedback from the FDA, we expect that they will resume normal operations and start the substantive review during the first quarter of 2021.
 
One important part of the 510(k) application to the FDA is the extensive clinical validation study on American patients, which we are carrying out in collaboration with SWOG Cancer Research Network. Results from the SWOG study are very positive and in December, they will be presented at the San Antonio Breast Cancer Symposium, which is the world's largest scientific conference on breast cancer,
 
The results from the study not only confirmed DiviTum®TKa’s monitoring capabilities for patients with metastatic breast cancer, but also revealed impressive data on progression free survival and overall survival. Furthermore, the results support that DiviTum®TKa can predict benefit from metastatic breast cancer therapy. The results not only significantly expand the evidence base for DiviTum®TKa, but even more exciting, they also introduce a new possible prediction capability, meaning that, already prior to starting treatment, it could provide information on how the patient is expected to respond.
 
Besides the SWOG study, three additional studies where DiviTum®TKa has been used will also be presented at the San Antonio Breast Cancer Symposium. It is extremely gratifying that DiviTum®TKa will be included in four posters at SABCS. It is an important validation of DiviTum®TKa’s importance and value. The abstracts that have been accepted are based on the prospective European multicenter study (PYTHIA), the study conducted at Mayo Clinic (PROMISE), and a dosing study of palbociclib at Washington University School of Medicine in the USA. In each of those studies, DiviTum®TKa was used to monitor the treatment response of women with metastatic breast cancer.
 
– The results from the PYTHIA study, which was the first major prospective study of DiviTum®TKa, indicate its potential in evaluating treatment efficacy already during the first weeks of therapy.
– The results from the PYTHIA study have been confirmed in the dosing study of palbociclib, which supports the use of DiviTum®TKa for monitoring treatment effect and predicting response to the CDK 4/6 inhibitor palbociclib. The results show that DiviTum®TKa is able to identify progression several months ahead of imaging.
– The abstract on the PROMISE study at Mayo Clinic is based on an initial analysis of a subset of patients enrolled in the study to evaluate the use of genomics and TKa measurements as tools for potential early identification of tumor response and resistance.
 
The presentations at SABCS are an important validation of our test as a potential standard tool for evaluation of the treatment effect on metastatic breast cancer. The attention that we draw at SABCS is also an important piece of the puzzle for successful commercialization. Wide knowledge of DiviTum®TKa at the time of the launch will facilitate quicker progress in the test reaching its full commercial potential.
 
In total, we now have strong clinical results from 14 studies involving more than 2,300 breast cancer patients that were carried out in collaboration with world-leading oncologists at some of the most prestigious institutions in the world. In addition to that, there are currently four published studies underway comprising a total of 400 breast cancer patients. Our collaborations with the laboratory divisions of major cancer institutes are very important, in that they could later become important commercial partners for us.
 
To finance the commercialization plan, we implemented a targeted new share issue of SEK 148 million to a number of Swedish and international institutional investors, including the Second Swedish National Pension Fund (AP2), Coeli Asset Management and Lancelot Asset Management. New investors have thus joined forces with us and I would like to take this opportunity to genuinely thank our previous and more recent shareholders for the trust and confidence they have placed in us.
 
We have also implemented two warrant schemes for the Board of Directors and employees, enabling them to buy if the share price increases more than 50% from the current level. It was very satisfying to witness the confidence that our Board and management team have in Biovica, since 100% of the warrants were subscribed for in this category.
 
Based on the market studies we have conducted, our conclusion is that the market potential in the initial markets for DiviTum®TKa is substantial, at USD 400-700 million per year for metastatic breast cancer. It is important to keep in mind, however, that initially, we are only addressing about 1 percent of all the 43 million people who are living with cancer. The opportunities for wider use, into areas other than metastatic breast cancer, are therefore quite substantial. The first step towards realizing the enormous potential is a successful launch in the USA for use of DiviTum®TKa in treating metastatic breast cancer. Our goal is to achieve a 15 percent market share within three years of having launched DiviTum®TKa in each market. Long term, our goal is to claim 50 percent of the market share in each market.
 
DiviTum®TKa meets an important need in a large, attractive market and our goal is for patients with metastatic breast cancer to receive the best possible treatment from day one. During the quarter, our efforts to prepare for commercialization continued and we look forward to soon being able to make a meaningful difference for patients with metastatic breast cancer. I’m looking forward to what lies ahead and reporting our next successes.
 
Anders Rylander
CEO