On November 23, 2022 Nykode Therapeutics reported its financial results for the third quarter (Press release, Nykode Therapeutics, NOV 23, 2022, View Source [SID1234624382]).

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Highlights for 3Q 2022:

• Nykode reported strong cash position of USD 212.0 million at September 30, 2022
• Nykode announced positive results from its Phase 1/2 dose escalation trial of its T Cell focused SARS-CoV-2
vaccine candidate
• Nykode included in the Oslo Børs Benchmark Index (OSEBX) and the Oslo Børs Mutual Fund Index (OSEFX)
• Nykode appointed Louise Stubbe as Chief Legal Officer
Highlights after September 30, 2022:
• Nykode announced positive immunogenicity results from its Phase 1/2a trial of VB10.NEO, an individualized
therapeutic cancer vaccine which is being developed together with Genentech, a member of the Roche Group
• Nykode presented additional efficacy analysis from its Phase 2 trial of VB10.16 in combination with
atezolizumab in advanced cervical cancer
Michael Engsig, Chief Executive Officer at Nykode, comments:
"We are excited about the data from our clinical trials which continue to validate and de-risk the Nykode
technology platform. The read-outs from our next-generation COVID activities and fully individualized cancer
vaccine showed a unique ability to induce broad immune response with strong activation of CD8 killer T cells. The
fourth quarter has opened with positive additional efficacy analysis from the Phase 2 trial of VB10.16 in advanced
cervical cancer; as well as positive immunogenicity results from the Phase 1/2a trial of VB10.NEO, our
individualized therapeutic cancer vaccine. Both trials increase our confidence in the platform’s ability to provide
clinical benefit to patients with advanced cancer. In order to fully capitalize on the potential of VB10.16, we plan to
publish our updated development strategy during the fourth quarter of 2022 and look forward to the key efficacy
data read-outs from the Phase 2 trial of VB10.16, which are expected during the first half of 2023."
Key financial figures
3rd Quarter Nine months ended Full year
Amounts in USD ‘000 2022 2021 2022 2021 2021
Total revenue and other income 1,282 1,314 5,729 3,993 35,766
Total operating expenses 21,187 11,638 44,503 29,473 46,541
Operating profit (loss) (19,905) (10,324) (38,774) (25,480) (10,775)
Net profit (loss) for the period (14,889) (7,447) (30,537) (20,183) (9,414)
Net cash flow (570) (1,437) (2,648) (10,473) 32,351
Cash and cash equivalents, end of period 212,021 172,645 212,021 172,645 216,231
290,069,409 287,011,709 290,069,409 287,011,709 289,619,409
93 % 85 % 93 % 85 % 81 %
Outstanding shares, end of period
Cash and cash equivalents/total assets
Equity ratio 73 % 80 % 73 % 80 % 73 %
Equity 167,111 162,175 167,111 162,175 194,055
Total assets 228,314 202,650 228,314 202,650 265,556
Employees, average 131 79 123 64 73
Employees, end of period 147 87 147 87 102

R&D update
Nykode’s modular immunotherapy technology platform is versatile and may be adapted to generate vaccines
inducing the desired immune response profile. Hence, Nykode’s platform may be applied across a broad range of
oncology, infectious disease and autoimmune disorders.
Please find below an update on Nykode’s current research and development activities.
Oncology
VB10.16
VB10.16 is a therapeutic HPV vaccine directed against HPV16+ induced malignancies and wholly-owned by
Nykode.
• Clinical trial VB C-02:
• VB10.16 in combination with atezolizumab
• Cancer indication: HPV16+ advanced, non-resectable cervical cancer
• Clinical stage: Phase 2
• Fully enrolled
• ClinicalTrials.gov Identifier: NCT04405349
Status and highlights
The trial is fully enrolled and reported positive interim efficacy and safety data on May 9, 2022. Interim results
from 39 patients with a median follow up of 6 months show durable responses with a very high disease control
rate (DCR) of 64% in heavily pre-treated advanced cervical cancer patients. Anti-tumor efficacy was observed in
both PD-L1 positive and negative patients, with 27% objective response rate (ORR) and 77% DCR in PD-L1
positive patients and 17% ORR and 58% DCR in PD-L1 negative patients, respectively. DCR of 71% was
observed in patients with non-inflamed tumors, including both immune desert and T cell excluded tumors. Strong
HPV16-specific T cell responses were associated with clinical responses.
The trial enrolled patients pre-treated with 1-5 lines of prior systemic therapy in recurrent or metastatic setting and
showed a 21% ORR on average across all lines. Additional analysis reviewed patient outcomes based on the
number of previous lines of systemic therapy and number of extrapelvic metastases, showing a robust clinical
benefit with partial and complete responses in 30% of patients treated with up to two prior lines of therapy. The
response rate was similarly higher in patients with lower metastatic burden. A high DCR was observed across all
patient groups. Importantly, the T cell responses continue to show association with clinical outcomes.
VB10.16 in combination with atezolizumab is well-tolerated and has a safety profile comparable to atezolizumab
monotherapy. Nykode expects to report updated key efficacy data read-outs from the VB C-02 trial covering all
patients during the first half of 2023.
The encouraging clinical efficacy and favorable safety profile that was observed with VB10.16 has led Nykode to
focus on updating the development strategy for VB10.16, which is planned for the fourth quarter of 2022. This
includes expansion into additional HPV16+ indications and a dose escalation trial of VB10.16 in combination with
CPI in patients with HPV16-positive SCCHN where safety, efficacy, and immunogenicity of multiple VB10.16 dose
levels will be assessed.

VB10.NEO

VB10.NEO is an individualized neoantigen cancer vaccine targeting multiple cancer indications in patients who
did not reach complete responses with immune checkpoint inhibitor therapy as their standard of care treatment.
VB10.NEO is exclusively licensed to Genentech, a member of the Roche group.
• Clinical trial VB N-01:
• Cancer indications: Melanoma, non-small cell lung cancer (NSCLC), clear renal cell carcinoma,
urothelial cancer or squamous cell carcinoma of the head and neck (SCCHN)
• Clinical stage: Phase 1/2a
• Fully enrolled
• ClinicalTrials.gov Identifier: NCT03548467
Nykode Therapeutics ASA | Gaustadalléen 21, N-0349 Oslo, Norway | W: nykode.com | Org.no. N-990 646 066 MVA
• Clinical trial VB N-02:
• VB10.NEO in combination with atezolizumab
• Cancer indications: Locally advanced and metastatic tumors
• Clinical stage: Phase 1b
• ClinicalTrials.gov Identifier: NCT05018273
Status and highlights
Recruiting sites are open in US, Germany and Spain. Data was presented in October 2022 at the NeoantigenBased Therapies Summit showing that VB10.NEO induces a broad, strong and long-lasting CD4 and CD8 T cell
response against patient-specific tumor antigens. Profiling of the T cell responses indicates an active phenotype
known to have strong anti-tumor efficacy. In addition, the safety profile supports that VB10.NEO is well-tolerated
in combination with other cancer treatments.

Infectious Diseases

Nykode’s infectious disease initiative continues to generate data supporting the potential of the platform to control
immune responses in addition to explore and evaluate a diverse set of pathogens as potential next future clinical
vaccine targets.

VB10.COV2

Nykode has chosen a 2-arm strategy for its VB10.COV2 project to fight SARS-CoV-2 variants of concern.
VB10.2129 (RBD candidate) and VB10.2210 (T cell candidate) are two vaccine candidates designed using
Nykode’s modular and Antigen Presenting Cell (APC) targeted technology.
• Clinical trial VB-D-01, investigating the two vaccine candidates, VB2129 and VB2210
• Pathogen: SARS-CoV-2
• Clinical stage: Phase 1/2
• ClinicalTrials.gov Identifier: NCT05069623
VB10.2129 – 2nd generation vaccine addressing novel variants of concern
VB10.2129 contains the RBD domain of the Beta variant of concern B1.351. Nykode’s RBD vaccine candidate
has shown in preclinical studies a potential to induce rapid and strong levels of neutralizing antibody responses
addressing a range of variants of concern supported by strong Th1 and CD8 T cell responses.
VB10.2210 – 3rd generation universal broadly protective T cell vaccine
T cells appear central in maintaining the protection against severe disease and death across current variants of
concern. Nykode aims to induce a broad T cell responses against validated epitopes from multiple SARS-CoV-2
antigens. The aim is to induce long-lasting protective immunity across all population groups and across current
and future variants. Various sub-populations such as immunocompromised subjects and long COVID patients are
being analyzed as potential initial target populations to better understand the unmet medical need and potential
development path for a T cell based vaccine.
VB-D-01 trial

The VB-D-01 trial is a Phase 1/2, open label, dose escalation trial to determine safety and immunogenicity of two
SARS-CoV-2 vaccine candidates VB10.2129 and VB10.2210.

Status and highlights

VB10.2129 (RBD candidate): First subject dosed November 3, 2021. The VB10.2129 trial-arm is fully enrolled.
VB10.2210 (T cell candidate): First subject dosed December 27, 2021. The trial is fully enrolled at all three dose
levels in the dose-escalation cohort.
Nykode presented positive interim data from the VB10.2210 trial-arm in September 2022. VB10.2210 was found
to boost Spike-specific T cell responses and induced de novo T cell responses to conserved non-Spike antigens
found across SARS-CoV-2 variants, generating broad and CD8 dominated T cell responses post vaccination.
Nykode’s vaccine candidate was safe and well-tolerated at all three dose levels. Nykode plans to guide on the
future development strategy during the first half of 2023.

Autoimmune disorders
Autoimmune disorders are caused by unwanted immunogenicity to self antigens. Antigen-specific tolerization for
the treatment of auto-immune diseases has the potential to suppress autoimmunity without compromising normal
immune function.

Nykode’s platform is uniquely positioned to induce tolerogenic T cell responses through specific targeting of
tolerizing antigen specific cells. Initial preclinical proof-of-concept studies with tolerizing vaccine constructs are
encouraging. Nykode has demonstrated the ability to increase antigen specific T regulatory cells and to shift the
cytokine balance towards an immune suppressive profile in mice models. Patent applications have been filed to
protect the overall concepts.

The Company plans to provide further preclinical data from the tolerization project during 2023.
4th Module, novel vaccine formats

The 4th module platform allows Nykode to introduce additional new coding regions to the vaccine with the
purpose of further boosting or directing the immune responses.

Nykode has demonstrated how the Vaccibody molecule can be co-expressed with various immune-modulatory
polypeptides from one plasmid using a multicistronic design. Compared to the Vaccibody molecule alone, the
simultaneous expression of selected immune stimulatory cytokines was shown to boost the overall immune
response of cancer vaccines and to stimulate an enhanced anti-tumor immune response in preclinical models.
Similar, 4th module cytokines have also been demonstrated to boost T cell and antibody responses induced by a
SARS-CoV-2 subunit vaccine in preclinical models. An additional 5th and 6th module may be added to even
further boost and/or direct the immune responses. Nykode continues to explore the potential of additional immune
modulatory polypeptides and combinations of these.

Other

Nykode uplisted to the main list of the Oslo Stock Exchange (OSE) earlier this year and was included in the Oslo
Børs Benchmark Index (OSEBX) and the Oslo Børs Mutual Fund Index (OSEFX), effective mid-September 2022.
Louise Stubbe was appointed Chief Legal Officer. She brings over a decade of life sciences industry experience
from both private and listed companies and has experience from building and managing global legal departments.

Financial review

(Numbers in brackets are for the corresponding period the previous year unless otherwise specified)

Income statement

Three months ended September 30, 2022 and September 30, 2021
The net result for the third quarter of 2022 was a net loss of USD 14.9 million compared to a net loss of USD 7.4
million for the same period in 2021.
Total revenue and other income amounted to USD 1.3 million in the third quarter of 2022, compared to USD 1.3
million for the same period in 2021.
Total operating expenses amounted to USD 21.2 million in the third quarter of 2022, compared to USD 11.6
million for the same period in 2021. Other operating expenses increased from USD 8.5 million in the third quarter
of 2021 to USD 14.8 million in the third quarter of 2022, mainly driven by the recognition of a non-recurring cost of
USD 6.3 million related to an onerous contract for R&D Services. Employee benefit expenses were USD 5.9
million in the third quarter of 2022 (USD 3.0 million). The increase in the employee benefit expenses is due to the
increased number of employees, partly offset by a decrease of the social security cost accrual related to sharebased payments. This accrual is dependent on the share price as Nykode is required to accrue for the social
security cost for all warrants and options that are in-the-money at the balance sheet date. This relates to both the
current and the non-current portion. As the share price decreased during the quarter the accrual is also reduced.
The corresponding reduction in the third quarter of 2022 is USD 0.4 million (USD 1.5 million decrease).
Net financial income and expenses was positive USD 0.7 million in the third quarter of 2022 (USD 0.3 million
negative). Finance income and finance expense mainly relate to interest income, movements in foreign currency
exchange rates and fair value adjustments of financial instruments.
The Group recognized tax income of USD 4.3 million in the third quarter of 2022 and USD 3.2 million in the same
period of 2021. The income tax expense is primarily related to movement in deferred tax.

Nine months ended September 30, 2022 and September 30, 2021

The net result for the nine months ended September 30, 2022 was a net loss of USD 30.5 million compared to a
net loss of USD 20.2 million for the same period in 2021.

Total revenue and other income amounted to USD 5.7 million in the nine months ended September 30, 2022
compared to USD 4.0 million for the same period in 2021. The increase was mainly due to increased R&D service
activities under the agreements with Genentech and Regeneron.

Total operating expenses amounted to USD 44.5 million in the nine months ended September 30, 2022,
compared to USD 29.5 million for the same period in 2021. Other operating expenses increased from USD 19.6
million in the first nine months of 2021 to USD 32.5 million nine months ended September 30, 2022, driven by
increased operating activity as well as recognition of a non-recurring cost of USD 6.3 million related to an onerous
contract for R&D Services in the third quarter of 2022. Employee benefit expenses were USD 10.6 million in the
nine months ended September 30, 2022 (USD 9.6 million). The increase in the employee benefit expenses is due
to the increased number of employees, partly offset by a decrease of the social security cost accrual related to
share-based payments. As the share price decreased during the period the accrual is also reduced. The
corresponding reduction in the nine months ended September 30, 2022 is USD 7.0 million (USD 2.3 million
decrease).

Net financial income and expenses was negative USD 0.1 million in the nine months ended September 30, 2022
(USD 0.9 million negative). Finance income and finance expense mainly relate to interest income, movements in
foreign currency exchange rates and fair value adjustments of financial instruments.
The Group recognized tax income of USD 8.1 million in the nine months ended September 30, 2022 and USD 6.2
million in the same period of 2021. The income tax expense is primarily related to movement in deferred tax.

Statement of financial position
Cash and cash equivalents amounted to USD 212.0 million at September 30, 2022 compared to USD 216.2
million at December 31, 2021. The decrease in cash is mainly a result from operating and investing activities.
Total other current financial assets amounted to USD 0.0 million at September 30, 2022 compared to USD 12.2
million at December 31, 2021. The reduction is due to sale of money market funds during the third quarter of 2022
Total equity amounted to USD 167.1 million at September 30, 2022, compared to USD 194.1 million at
December 31, 2021. The change mainly reflects the net loss of the period of USD 30.5 million, the exercise of
warrants and options and recognition of share-based payments.
Trade receivables amounted to USD 2.5 million at September 30, 2022, compared to USD 23.8 million at
December 31, 2021. The decrease is mainly due to the receipt of the USD 20 million milestone payment from
Genentech in the first quarter of 2022.
Trade and other payables amounted to USD 5.3 million at September 30, 2022, compared to USD 8.5 million at
December 31, 2021.
At September 30, 2022, total contract liability amounted to USD 19.7 million, compared to a contract liability of
USD 16.0 million at December 31, 2021. The contract liability is mainly due to timing of invoicing to Genentech as
well as recognition of the service component under the Genentech agreement.

Cash flow

Three months ended September 30, 2022 and September 30, 2021
Net change in cash and cash equivalents was negative USD 0.6 million in the third quarter of 2022 compared to
negative USD 1.4 million for the same period in 2021.
Net cash flow from operating activities was negative USD 8.0 million in the third quarter of 2022 (USD 5.4 million
negative). This was primarily driven by increased loss before tax, offset by the increase in contract liability.
Cash flow from investing activities was positive USD 9.0 million in the third quarter of 2022 (USD 3.8 million
positive). The amounts mainly relate to the sale of money market funds, offset by the purchase of property, plant
and equipment.
Cash flow from financing activities was negative USD 1.6 million in the third quarter of 2022 (USD 0.1 million
positive). The amounts primarily relate to payments of lease liabilities.
Nine months ended ended September 30, 2022 and September 30, 2021
Net change in cash and cash equivalents was negative USD 2.6 million in the nine months ended September 30,
2022, compared to USD 10.5 million negative for the same period in 2021.
Net cash flow from operating activities was negative USD 9.6 million in the nine months ended September 30,
2022. compared to USD 19.4 million negative for the same period in 2021. This was primarily driven by the
decrease in trade receivables due to the receipt of the milestone payment from Genentech, offset by a negative
profit before tax.
Cash flow from investing activities was positive USD 8.3 million in the nine months ended September 30, 2022
(USD 8.1 million positive). The amounts mainly relate to the sale of money market funds, offset by the purchase
of property, plant and equipment.
Cash flow from financing activities was negative USD 1.4 million in the nine months ended September 30, 2022
(USD 0.8 million positive). The amounts primarily relate to payments of lease liabilities, offset by proceeds from
equity issuance.

Outlook
Expected outlook and news flow regarding Nykode’s key priorities for the coming 12 months include:
VB10.16 – Updated development strategy to fully capitalize on the potential of VB10.16
VB10.16 – Updated C-02 Phase 2 data following conclusion of the treatment phase for all patients (1H 2023)
VB10.16 – Initiation of C-03 Phase 1b trial in HNSCC
VB-D-01 trial – Guidance on future development strategy
Further preclinical data from the tolerizing vaccine project for use in autoimmune disorders
Update on manufacturing strategy
The Company has a strong cash position and no debt.
The Company is in continuous dialogue with academic and industrial entities and will announce new key
collaborations and partnerships if or when they may occur.
The COVID-19 pandemic and the situation in Ukraine may impact timelines and operations negatively.
Disclaimer
This announcement and any materials distributed in connection with this announcement may contain certain
forward-looking statements. By their nature, forward-looking statements involve risk and uncertainty because they
reflect the company’s current expectations and assumptions as to future events and circumstances that may not
prove accurate.
A number of material factors could cause actual results and developments to differ materially from those
expressed or implied by these forward-looking statements.