Earnings call transcript: Lytix Biopharma AS sees stock surge after Q1 2025 call

Lytix Biopharma AS experienced a notable stock price increase following its Q1 2025 earnings call, with shares rising 17.78% to $7.42. The company highlighted its strong cash position and promising developments in its cancer treatment pipeline. According to InvestingPro analysis. While the company reported negative EBITDA of -$8.42 million in the last twelve months, its strategic focus on innovation and partnerships positions it well for future growth, despite the inherent risks in the biotech industry. Investors seeking deeper insights can access comprehensive financial analysis and exclusive ProTips through InvestingPro's extensive coverage of over 1,400 stocks.

Full transcript - Lytix Biopharma AS (LYTIX) Q1 2025:

Osten Lechtahl, CEO, Lyttiksberg Pharma: Good morning, everyone. Thank you for joining us today and welcome to our first quarter results presentation for 2025. We are excited to share how we are preparing the company for the next pivotal period. We have strengthened our Board with strong and complementary competencies in commercial drug development within immuno oncology and strengthened our management team with business development. And today, we are also looking forward to introducing our new Chairman later in this presentation.

I am Osten Lechtahl, CEO of Lyttiksberg Pharma. And today, I'm joined by our CFO, Jesper Stain. And before presenting the highlights, I will provide a brief introduction to our company and the innovative technology we are developing that has the potential to transform future cancer treatment. Our innovative technology approach combines the benefits of direct killing of cancer cells and systemic immunotherapy. And the positive results from several Phase II studies demonstrate the potential impact of our technology.

Our licensing partner Verica Pharmaceuticals has achieved groundbreaking results in basal cell carcinoma, potentially positioning our lead candidate as a first line treatment for this prevalent cancer type. The robust clinical results obtained with our lead drug candidate and a commercial agreement already in place have significantly reduced risk and position us to capitalize on the growing market potential for intratumoral immunotherapy. Lytics addresses major shortcomings in current cancer immunotherapy. The last fifteen years, cancer treatment has been revolutionized by checkpoint immunotherapy. However, in most cancer types, the majority of cancer patients do not respond to immune checkpoint therapy due to lack of active immune cells within the tumor.

Our technology addresses this challenge by enhancing the number of immune cells in the patient's tumor as visualized by the photos to the right, showing a high number of immune cells in the patient's tumors after being treated with our drug candidate. In other words, we complement the shortcomings of today's immune checkpoint inhibitors, providing a promising solution to challenges faced in current cancer treatment. Lytic's innovative approach is focusing on killing tumor cells locally, followed by activation of an immune response throughout the body. This dual approach ensure a comprehensive attack on tumor cells at different locations in the cancer patients and can potentially also reduce risk of recurrence. Let's then move to our summary of the highlights from the first quarter of twenty twenty five.

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In the first quarter highlights, we have made significant progress across multiple fronts. Since the last the quarterly report, we have been continuously working on various aspects clinically, strategically and organizationally to bring our unique technology to patients and to the market in a most optimal manner. Verica Pharmaceutical has had a positive end of Phase II meeting with FDA and they plan to provide genomic and immune response data from the Phase II trial by mid-twenty twenty five. Vareka also plans to provide a comprehensive global development program update, including the design of the Phase III clinical program before also within mid-twenty twenty five. This progress in basal cell carcinoma is significant for our shareholders as it demonstrate one commercial avenue for our lead drug candidate.

In the newly started NEO LIPA study, patients at the Norwegian Radium Hospital recruitment is ongoing and where the impact of LTX-three fifteen in earlier stage melanoma are investigated. Eight patients are treated so far and we expect an interim readout in the third quarter of twenty twenty five. In our ATLAS ITO5 study, all patients have completed study treatment and the last hospital visit for the last patient in this study is projected in July 2025. In these late stage melanoma patients that have previously failed to respond to several lines of treatment, positive interim data have been obtained with forty percent disease control for up to two years now after having a progressive disease. Our next generation drug candidate LTX-four zero one is in progress towards clinical trials with a target to initiate the Phase one study in 2026.

And the previous positive feedback from regulatory authorities is encouraging for our clinical development strategy. On the business side, we have reinforced our commitment to enhance focus on commercialization by strengthening our leadership team with Doctor. Ahmed Bouisidi and Brent Meadows and the new Board members that together represent extensive experience in biotech and oncology. Finally, it's encouraging to see a decline in operating expenses as we approach the completion of the ATLAS IT-five study. We would also like to take the opportunity to highlight how the last latest strengthening of the board and the management will be crucial for navigating the complexities of bringing our innovative therapies to market.

Each of the new members brings a wealth of experience from various sectors within the pharmaceutical and life science industries and will contribute significantly to our strategic direction moving forward. The combined strength of this team will be instrumental in achieving our commercial goals and ensuring that we will effectively bring our drug candidates to the market and to the cancer patients. The new Board covers background from clinical development, venture capital, commercial operation and regulatory affairs. And with that, I'm happy to introduce our new Chairman, Erik Falck and who has an extensive background in international leadership and management along with his success in over 50 licensing agreements. His extensive experience in the pharmaceutical industry will certainly help frame our discussion on the future of Biopharma.

So please, Eric, we are looking forward to hearing from you why you decided to be our new chairman and your reflection about the future for Lytex Biopharma. So please, Eric.

Erik Falck, New Chairman, Lyttiksberg Pharma: Thank you, Oystein, for this very kind introduction. And, obviously, just a few words. What I really found in this company is a very novel and very exciting technology, which not only has been proven clinically with a wealth of evidence accumulated over the last ten years, but more recently, with the very interesting phase two results that have been obtained in the partnership with Verica in the basal cell carcinoma, which is really needs to be confirmed very quickly in the phase three trial. When you when you've got a very groundbreaking technology, which has been validated over the years and certainly confirmed with clinical data, this this is extremely exciting. And as you say, it's the the time is right to move for the company.

You mentioned that actually not only me, but all the board has a wealth of experience in terms of commercialization, in terms of when you take transaction, in terms of partnership, in terms of legal development, late clinical development leading to commercialization. And, hopefully, with this board, I think we are all very excited that we can help the management to structure the organization and to to make the right partnership in order to move forward and to reach the patient as soon as possible. So these are the reason why I joined this board, and it's a very interesting time indeed. Thank you, Osten, for this opportunity to talk.

Osten Lechtahl, CEO, Lyttiksberg Pharma: Thank you, Eric, for taking your time to participate and share some of your reflection on Lytics and our technology platform. Thank you very much. Okay. Then let's move on to the clinical and operational updates. It's important to emphasize the breadth of our research and the different stages of development we are engaged in.

This comprehensive approach not only showcases our commitment to innovation, but also highlights our strategic collaboration with partners and hospitals that enhance our capabilities. One Phase II study led by Verica Pharmaceuticals is completed showing strong results in basal cell carcinoma. A second Phase II study ATLAS IT-five in late stage melanoma is almost completed and the NEO LIPA study in early stage melanoma is ongoing. Our second lead candidate LTX-four01 is being prepared to enter a clinical Phase one study next year. When it comes to the Phase two study that has been run by Verica Pharmaceuticals, we have a strong collaboration with Verica, and together, we leverage Lytex innovative and unique technology.

And Verica's expertise treatment of different types of skin cancer. With its impressive results in basal cell carcinoma and due to the challenges associated with current treatment options, particularly the invasive nature of surgery, our lead candidate LTX-three fifteen may offer a paradigm shift in the treatment of this type of cancer by representing a less invasive alternative and with significant benefits for the patients. In addition, due to its ability to evoke the immune system, LTX-three fifteen has the potential to protect against the formation of new lesions and we are very much looking forward to the outcome of the immunological analysis that Verica expect to present mid-twenty twenty five. In addition, as announced in the Q1 presentation earlier this week, Verica have had a positive end of Phase II meeting with the FDA and plan to present the development update for the Phase III program mid-twenty twenty five. We have a tight collaboration with Verica and will update the market accordingly, with additional information once this is available.

The ongoing ATLAS ITO5 study in late stage melanoma is showing promising results. In this study, LTX-three fifteen has been tested in combination with a PD-one immune checkpoint inhibitor in patients who have previously failed to respond to various therapies, including PD-onePD L1 checkpoint blockade. And all the patients had progressive cancer before entering the study. The disease control rates obtained in forty percent of the patients up to 24, with two patients showing partial response and complete regression in both treated and untreated tumors highlight the effectiveness in our treatment. Some of the patients have experienced significantly extended survival compared to what could be expected without our treatment.

However, since it's very challenging to see long term effects in this patient population, particularly with immunotherapy due to their weakened immune system, we are very excited to have initiated a study in earlier stage melanoma patients with a more responsive immune system. The study is now ongoing and is named NEO LIPA. The aim of the NEO LIPA study is to evaluate whether LTX-three fifteen in combination with immune checkpoint inhibitor pembrolizumab prior to surgery can improve the outcomes for early stage melanoma patient compared to standard of care. The dual action of three LTX three 15 is not only is not only aims to reduce tumor size before surgery, but also enhance the immune response potentially decreasing decreasing the chances of cancer recurrence after surgery. The study is ongoing at Usher University Hospital and led by Doctor.

Henrik Esberschen, a leading expert in melanoma. The timeline indicates key milestones and interim results are expected in Q3 this year. This study targets a naive patient population with a more robust immune system, which is important for optimal effect of immunotherapy and also represent a larger patient population than late stage melanoma population. And we are very excited to see the interim results from this patient population and whether LTX-three fifty could advance treatment options for these patients. Regarding our second lead candidate LTX-four zero one, it represents a promising oncolytic molecule with significant commercial potential, particularly for treating deep seated cancer like liver cancer.

With positive feedback from regulatory authorities, preparation for the Phase one clinical trial are on track with a target initiation in 2026. This molecule is designed to address various solid tumor types and a new formulation not only enhances anticancer effects, but also potentially extend patent life, which is critical for commercial viability. Additionally, LTX-four zero one exhibits strong synergy with checkpoint inhibitors and the combination could potentially improve treatment outcomes. Its small molecule in nature, similar mode of action to LTX three fifteen and its strong result in liver cancer models further underscores its therapeutic promise for different types of deep seated cancer. With this, I will hand over to Jesper Estrain, who will provide you with a financial update.

Jesper Stain, CFO, Lyttiksberg Pharma: Thank you, Estrain. Let me now walk you through our financial performance for the first quarter of twenty twenty five and highlight how our disciplined financial strategy supports Glutic's path to value creation. This slide summarizes the main elements of a profit and loss statement. The most notable development this quarter is the reduction in operating expenses. This decline primarily reflects that the ATLAS ITO5 study is approaching completion.

All patients have received treatment, and we are now finalizing data collection, cleaning the study database and preparing for the clinical study report. With this major trial wrapping up, our cost base is shifting toward high priority initiatives, most notably the NEO LIPA study in earlier stage melanoma, and the regulatory preparations for LTX-four zero one. We continue to be highly disciplined on capital allocation. Every heroine spent is directed towards activities that moves us closer to commercialization and longer term value creation. Following the successful capital raise at the end of twenty twenty four, Lutix entered 2025 with significantly strengthened cash position.

At the end of Q1, our cash and short term investments totaled $118,000,000 up from $26,000,000 1 year earlier. This provides us with a solid financial runway well into 2026 and gives us a strategic flexibility to navigate the challenging macroeconomic environment. Combined with disciplined cost control and a more focused pipeline, our current financial position reduces risk and supports continued progress toward development milestones, partnering activities and ultimately the commercialization of LTX three fifteen. Here is a snapshot of our balance sheet as of Q1 twenty twenty five. Our total assets and equity have increased in line with the improved cash position.

Total liabilities stood at $35,000,000 up from $11,600,000 at the end of Q1 twenty twenty four. This increase is mainly related to the accrued expenses of the ATLAS ITO5 study. Altogether, the balance sheet reflects a strong financial foundation to support ongoing development and commercialization activities. This slide outlines Lytic's roadmap for creating long term shareholder value. Our strategy is clear and focused.

For LTX-three fifteen, we see two key priorities. Basal cell carcinoma. With a highly promising phase two data presented by Verica, this indication represents our fastest route to market and initial revenues. Neolipa. This earlier stage melanoma study has strong scientific, rational and positive interim data is expected in q three could significantly strengthen our position in the new advanced setting for multiple cancer indications.

The ATLAS I two five study has already demonstrated some systemic immune activation and durable disease control in heavily pretreated patients. As highlighted by doctor Robert Antpaca, these results suggest that three fifteen may offer new treatment options and extended survival for patients who have currently very few, very limited alternatives. For LTX-four zero one, we are preparing for a phase one clinical trial. This molecule builds on the validate validation of LTX-three fifteen, with potential applications in deep seated tumors, a largely untapped and commercially valuable area. Lutix is now in a position to drive progress on multiple fronts, scientifically, clinically and commercially.

We are focused on executing this roadmap to maximize the value of our shareholders and bring these innovative therapies to market. And with that, I'll hand it back over to Hester.

Osten Lechtahl, CEO, Lyttiksberg Pharma: Thank you, Jes. As we conclude our presentation, I want to emphasize our persistent dedication to bring our drug candidates to patients. We are looking forward to several major upcoming milestones. Reporting of the immune response results from Verica's Phase two study in basal cell carcinoma is set mid-twenty twenty five. Additionally, Verica will share the outcome of the end of Phase two meeting they have had with FDA also mid-twenty twenty five and present the development program update for LTX-three fifteen in basal cell carcinoma, including the Phase three clinical program.

We expect to share interim results from the Neolipa study in the third quarter of twenty twenty five, which could significantly influence our next step for LTX-three fifteen in metastatic cancer. By the second half year of twenty twenty five, the ATLAS ITO-five study will be finalized and by fourth quarter of twenty twenty six, we expect to start Phase one study with LTX-four zero one. As earlier reported, we have strengthened the Board and management with commercial experience and we will continue to focus on late stage development and commercialization through strategic partnership, ensuring we remain on track to deliver our innovative treatment technology to cancer patients. So with this, I will hand it over to Peter Thannberg, who will take you through the Q and A session.

Peter Thannberg, Moderator/Q&A Host, Lyttiksberg Pharma: Thank you so much, Oustein. We have received a few questions here today. Let's start on the topic of Verica Pharmaceuticals and their upcoming Phase III study. There's been quite a few and also similar coming questions on this topic. So maybe rather than naming them all, we'll start with one question, and I'll let you elaborate on this topic in general, Eisthen.

Is Sverica financially equipped to complete Phase three on their own or will they need additional funding or partnerships?

Jesper Stain, CFO, Lyttiksberg Pharma: So

Osten Lechtahl, CEO, Lyttiksberg Pharma: analytics and we are not in a position to comment on Verica's financial situation. But what I can say is that LTX-three 15 is a very valuable asset for both Lytics and Verica. And we are very excited about very promising and strong results in basal cell carcinoma and encouraging conversation Verica has had with FDA for moving LTX-three fifteen forward. So we are very convinced that Verica is fully committed to bring three fifteen forward and to the patients and commercialization, including for seeing now a Phase three study be report more detail about mid-twenty twenty five. And we are we trust that Verica are fully committed also to ensure necessary resources to complete bring the compound towards market approval with these promising results.

Remember, this is very strong data in one of the most prevalent cancer of all. So I think there are no doubt that both Veric and we have strong optimism and are fully committed. And we also will make sure that we support Veric as much as possible to get this brought forward.

Peter Thannberg, Moderator/Q&A Host, Lyttiksberg Pharma: Thank you. And then we have a question on the Neulipa study. Interim data is expected in Q3, but eight patients have already been treated. Are you able to share any early indications or results based on the patients already treated?

Osten Lechtahl, CEO, Lyttiksberg Pharma: So we as you say, there are eight patients that have been treated, then they have to undergo surgery and then doing analysis. So we will see interim results in third quarter twenty twenty five. We have strong expectation for this based on the very promising result in late stage melanoma patients and also the results in basal cell carcinoma, which also is three fifteen where three fifteen is given before surgery, which also is the case in earlier stage melanoma. So we have strong expectation, and we are very we are soon being able to share with you data in the third quarter of twenty twenty five.

Peter Thannberg, Moderator/Q&A Host, Lyttiksberg Pharma: Thank you. On the financial side, we also have a few questions coming in. How long will your current cash position last considering expected costs?

Jesper Stain, CFO, Lyttiksberg Pharma: Thank you. This is a recurring question, and we are very, optimistic, entering 2025 with, raising capital at the end of, 2024 and have a really strong cash balance together with a very encouraging clinical data we have seen from both Verica and ATLAS study. So we are very optimistic about the future of our technology and how we're this. We will continuously assess how to best support the future growth of lytics, and the current cash balance is expected to last well into 2026. And then all the ongoing activities is being funded with that within that cash.

Peter Thannberg, Moderator/Q&A Host, Lyttiksberg Pharma: And maybe in the extent of that, there's coming a question on is the cash burn of 13,000,000 in q one what we can expect going forward as an average quarterly cash burn?

Jesper Stain, CFO, Lyttiksberg Pharma: Going forward, I expect quarterly cash burn to be significantly lower than what we see saw in 2024 due to the ATLAS ITO five study being there to completion. There will be cost of closing the study, but my expectation is that it's at will will continue at the similar level and lower than 2024.

Peter Thannberg, Moderator/Q&A Host, Lyttiksberg Pharma: Thank you. And then also still on the on the finance side, there's a few questions coming in on milestone payments and potential milestone payments from from Verica. Can you tell us how the milestone payments is going to be paid out in the Verica deal?

Jesper Stain, CFO, Lyttiksberg Pharma: Thank you. The total milestone payments from Verica is hundred and $10,000,000, and that's both sales and development milestones. Unfortunately, we cannot go into the exact details on the different milestones per se. But what we can say is that the next milestone payment is related to the phase three study as the previous milestone was related to the phase two study. And we expect to receive more, from that one milestone than we have already received so far.

So and all in all, we're very positive about the development program in BCC, and we are high hopes that the phase three study will be initiated and started as as soon as possible.

Peter Thannberg, Moderator/Q&A Host, Lyttiksberg Pharma: Thank you so much. And then moving back to the NEOLIPA study. You mentioned there's been eight patients treated to date. How many NEOLIPA patients do you expect to present data from in Q3? And when do you also expect the final readout?

Osten Lechtahl, CEO, Lyttiksberg Pharma: So in agreement with Radiomosbu, we plan to share interim results based on 10 patients that have been treated both with three fifteen and pembrolizumab and undergone surgery. And after that, we look at analyze the effect of the treatment. So 10 patients is the plan to present interim results during the within the Q3 of twenty twenty five. And to answer the last question, the plan is to recruit 27 patients in total and final top line results will be presented mid-twenty twenty six.

Peter Thannberg, Moderator/Q&A Host, Lyttiksberg Pharma: Thank you. And in the extent of that, can you remind us how the primary endpoint complete pathological response is measured and what your benchmark is?

Osten Lechtahl, CEO, Lyttiksberg Pharma: Yes. So currently, there are immune checkpoint inhibitors that are giving patients in this early stage melanoma patient with resectable tumors, meaning that the tumor is removed by surgical. And the complete pathological response means that you look at the clinical effect on the tumor that is treated, the reduction in size, but you also look into the tissue in the tumor and check whether there are viable living cancer cells or the cancer cells has died. So it's both like a clinical and pathological evaluation of the removed tumor and that's also what has been done studied with immune checkpoint inhibitors so we can compare directly with standard of care with the combination of three fifteen and pembrolizumab compared to pembrolizumab alone. In addition, in this study, we will do a number of immunological analysis to also predict and follow the time for and the risk for occurrence in this patient population.

Peter Thannberg, Moderator/Q&A Host, Lyttiksberg Pharma: Thank you. Next question, has your business development strategy changed considering your new management appointments? What pharma interest in terms of deal making are you seeing in the earlier stage melanoma?

Osten Lechtahl, CEO, Lyttiksberg Pharma: So to answer the first part of the question, drug development is a long journey with many different phases. We have now passed the significant milestones with the phase two data. We are moving towards Phase three and commercialization and normally big pharma are taking over when Phase three studies are going to be performed. So we are now coming to a new point, we've alluded into a more commercial phase and then it's very normal that you change board members that from science to clinic to normal commercial. So this is a very normal way of building up your company together with the phases you are moving into.

Regarding interest for larger pharma into early stage Neodion setting, I think the whole community within immunotherapy understands this need to have a responsive immune system to really get an optimal effect of your immune therapy. And the pity is that very sick patients have a more weakened immune system and going earlier you can expect them more responsive. So we believe that this is the reason why we see big pharma also trying to test the immune checkpoint inhibitors in this early stage patient population and we believe strongly that we are in ideal setting with our compound that both have the ability to reduce the size of the tumor but also evoke the immune system to protect against recurrence.

Peter Thannberg, Moderator/Q&A Host, Lyttiksberg Pharma: Thank you. And we also had a question on LTX401. Can I say something about what does trial preparations consist of for lytics at this stage?

Osten Lechtahl, CEO, Lyttiksberg Pharma: So as I mentioned, we have a small molecule LTX four zero one that has similar mode of action as LTX315 but has some properties that make it ideal towards deep seated cancer. But also very positive, have been able to make a new formulation thanks to our strong preclinical and CMC teams that not only have shown increased anticancer activity but also give the runway patent protection for LTX for one potentially up to twenty more years. But with this new formulation, we of course have to check that this is also safe. It can be upscaled. So we have therefore been in dialogue with the regulatory authorities where we're going to do the Phase one study that has been positive.

We make need to make and they are of course most concerned about ensuring that this compound is safe for the patients so we have to document safety. We also need to plan the protocol with the right dosing and dosing escalation. So there are a number of activities that make the pre clinical package necessary to be allowed to start the Phase one study. But we are on good track and we have very great optimism that we will move forward a very good plan for a Phase one study.

Peter Thannberg, Moderator/Q&A Host, Lyttiksberg Pharma: We just have to be conscious of time here, but let's round up with a few more questions. Is the company's patent portfolio strong enough to protect LTX three fifteen from competitors?

Osten Lechtahl, CEO, Lyttiksberg Pharma: Good question. So our strategy has always been to make very broad patent umbrella protection and then follow-up with more specific patents on on the molecule, on formulation, on combination, method of use. So we have quite a strong patent protection, which makes it quite difficult for other competitors to make similar drugs to three fifteen or four zero one. Of course, you can never say that it will never be a new oncolytic molecule, we are far ahead. We have done a lot of research to find these compounds with the best possibility to succeed in the clinic.

We are quite comfortable that we have a very good patent situation for our compounds.

Peter Thannberg, Moderator/Q&A Host, Lyttiksberg Pharma: Then Farley, how is the CMC part going? Do you have control on scaling up production and distribution of your LTX three fifteen and also LTX four zero one product?

Osten Lechtahl, CEO, Lyttiksberg Pharma: Yes. And as mentioned, we have experienced and excellent CMC team that make sure that we have the right manufacturer company to upscale four zero one and three fifteen, and we don't see any hurdles with the ability to upscale both three fifteen and four zero one for larger studies and market.

Peter Thannberg, Moderator/Q&A Host, Lyttiksberg Pharma: Thank you. And that will conclude the Q and A for today. If you have additional questions, feel free to go to our website, liticsbiopharma.com, and submit them there, and we'll answer if there's any outstanding questions as well. I'll then leave the floor to you, Oestein, for some closing remarks.

Osten Lechtahl, CEO, Lyttiksberg Pharma: Okay. Thank you. So I will take the opportunity thank you for your support and your attention. Biotech drug development is a long journey with high risk and but also potentially high revenue. We have made significant milestones reached significant milestones and derisked our technology, and we are fully committed to bring this forward to the patients.

But we really have to say we couldn't do it without the strong support from our shareholders and also thank the patients that are willing to take part in studies to prove that this has a future in the market. And luckily, some of these patients have already seen very good efficacy, either complete responses or even prolonged survival. So I will thank you very much for your support. Without you, we could not move this forward. And hopefully, we together will reach success in the near future.

Thank you.

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