Evaxion Biotech A/S (EVAX) Q1 2025 Earnings Conference Call Transcript

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Overview

While the earnings call highlighted some positives, such as a strong cash position and potential income from business development deals, it also revealed significant risks, including regulatory uncertainty and financial market turmoil impacting deal execution. The Q&A section showed mixed sentiment, with unclear management responses to some questions. Despite the potential for positive developments, such as the Merck option exercise, the overall sentiment remains neutral due to the balance of positive financial indicators and significant external risks.

Key Financial Performance

Cash Position $17.8 million, up from $6 million at the end of 2024, due to capital market activities in Q1.

Total Equity $10.3 million, a significant strengthening compared to the end of 2024.

Operating Loss $3.9 million, compared to $4.4 million last year, due to lower operating expenses.

Net Loss $1.6 million, compared to an income of $1.2 million last year, primarily due to a significant financial income of $5.6 million last year from derivative liability reassessment.

Financial Income $2.4 million, mainly from reassessment of derivative liability.

Cash Burn Estimate Approximately $14 million for the year, consistent with last year.

Cash Runway Until mid-2026, which includes potential option exercise from Merck and EVX-01 two-year clinical data readout.

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Operating Highlights

EVX-01 Phase 2 Data: EVX-01 is yielding positive data, with 80% of new antigens eliciting an immune response. The two-year readout is expected in the second half of the year.

Infectious Disease Pipeline Candidate: A new infectious disease pipeline candidate is set to be selected in the first half of the year.

Precision Cancer Vaccine Concept: The selection of a lead candidate for the precision ERV cancer vaccine concept is on track for the second half of the year.

Partnership with Merck: The partnership with Merck is on track for potential option exercise in the second half of the year, which could yield $10 million.

Business Development Deals: The company aims to complete at least two new business development deals in 2025, despite challenges in the financial markets.

Cash Position: Cash position improved to $17.8 million, providing a runway until mid-2026.

Operational Cash Burn: Estimated operational cash burn for the year is $14 million.

Multi-Partner Approach: The company continues to focus on a multi-partner strategy to generate future business development income.

AI Immunology Platform Optimization: Efforts are ongoing to optimize the AI platform for novel target discovery and development.

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Risk or Challenges

Regulatory Uncertainty: Increased regulatory uncertainty is impacting deal execution, with potential partners pausing discussions to focus on internal assets.

Financial Market Turmoil: Current turmoil in the financial markets is affecting the ability to execute business development deals.

Supply Chain Challenges: No specific supply chain challenges were mentioned, but the overall macro environment poses risks to partnerships.

Economic Factors: The macroeconomic environment is increasing risks related to business development and partnerships.

Cash Burn and Financial Position: Operational cash burn is estimated at $14 million for the year, with a cash runway until mid-2026, but future income from business development deals is uncertain.

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Guidance & Outlook

Partnership with Merck: The partnership with Merck is on track towards potential option exercise in the second half of the year, which could yield $10 million if both compounds are exercised.

Business Development Pipeline: The business development pipeline remains solid, with a target of at least two new business development deals in 2025, despite increased regulatory uncertainty.

AI Immunity Platform: The company is deploying its AI immunity platform to develop new pipeline candidates, with a new infectious disease candidate expected to be selected in the first half of the year.

2025 Milestones: Key milestones include the Merck decision on option exercise, EVX-01 Phase 2 two-year readout, and the selection of a lead candidate for the precision ERV cancer vaccine concept.

Cash Position: The company has a cash position of $17.8 million, providing a runway until mid-2026.

Operational Cash Burn: The estimated operational cash burn for the year is $14 million.

Future Financial Projections: The company expects to receive additional income from business development deals, which is not included in the cash burn estimate.

Equity Strengthening: Total equity at the end of Q1 is $10.3 million, significantly improved from the end of 2024.

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Shareholder Return Plan

Cash Position: $17.8 million, up from $6 million at the end of 2024.

Operational Cash Burn: Estimated at $14 million for the year.

Potential Income from Business Development Deals: Expected to be additional to the operational cash burn.

Merck Option Exercise: If both options are exercised, Evaxion will receive $10 million.

Cash Runway: Cash runway until mid-2026, potentially extending to 2027 with Merck's option exercise.

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Key Q&A

Q:In the two-year EVX-01 data, was there a meaningful bias between CD4 and CD8 positive T cells?

A:We mainly see CD4 T cells. So in all the patients, we have all the samples from the patients we have analyzed so far. We have CD4 T cells. We also see CD8 in approximately half of the patients. And I think this virus is mainly driven by the fact that EVX-01 is a peptide-based vaccine. And we know that the way that the immune system is taking up these peptides and presenting them that directs a strong T cell response.

Q:On the lead ERV candidate, is it the intention that it will be an ERV hotspot vaccine only? Or will you combine that with personalized cancer neoantigens?

A:So the idea with this precision concept is to do an off-the-shelf vaccine. So we basically are able to design a vaccine that has what we call broad coverage, meaning that patients with different immune system and also expression profiles of these tumor antigens would benefit from receiving this type of therapy. So it is a precision-based vaccine, and we will at least not in the beginning, combine it with any other types of vaccines, including personalized approaches.

Q:What are your thoughts on the UK repurposing a meningitis vaccine for gonorrhea?

A:Before Birgitte speaks to the scientific content, then I can just say, Thomas, I mean, of course, this is just shows the level of desperation for having some effective therapy for preventive therapy for gonorrhea. Looking at the numbers that also was disclosed for the number of cases in the UK. It's a pretty significant increase. So clear that something needs to be done. And of course, this gives us a lot of comfort in regards to the commercial potential for EVX-B2 and then Birgitte, you can speak to the scientific rationale which of course is there, but --

Q:What may be your partners at Merck might have said about that rollout?

A:Scientific rationale is there, it's also been known for a while that there is cross protection to gonorrhea, but it's far from complete, meaning that there is definitely a need for more precision vaccine that would give a broader protection. Yes, we have not discussed it with our collaborator.

Q:Review of Unclear Management Responses

A:Management's response regarding the UK meningitis vaccine repurposing lacked clarity, particularly in relation to what their partners at Merck might have said about the rollout.

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Earnings Word Cloud

The most frequently occurring keywords in this quarter's earning call

EVAX Transcript

Evaxion A/S (EVAX) Q3 2025 Earnings Call Transcript

Positive11-6

The earnings call highlights positive financial performance with a cash runway extended to 2027 and revenue from MSD. Significant progress in R&D, particularly in oncology and infectious diseases, enhances the company's growth prospects. While there are potential risks in partnerships and production, the overall sentiment is positive, supported by optimistic guidance and ongoing partnership discussions. The Q&A section reveals strong interest in the company's pipeline and technology, further boosting confidence. Despite some uncertainties, the overall outlook is positive, suggesting a potential stock price increase of 2% to 8%.

Evaxion A/S (EVAX) Q2 2025 Earnings Call Transcript

Unknown8-19

The earnings call presents a mixed outlook. Positive aspects include a solid cash position and business development pipeline, along with reduced losses. However, challenging financial markets, increased regulatory uncertainty, and dependency on partnerships pose significant risks. The Q&A session highlighted management's avoidance of specifics, adding uncertainty. Overall, the potential for partnerships and the Merck collaboration are positive, but the risks and uncertainties balance out, leading to a neutral sentiment.

Evaxion Biotech A/S (NASDAQ:EVAX) Q1 2025 Earnings Call Transcript

Positive5-28

The earnings call summary presents a positive outlook with anticipated revenue growth, improved margins, and a return to profitability. The Q&A session revealed confidence in the company's vaccine pipeline, despite competitive and regulatory challenges. The strategic focus on precision vaccines and partnerships like with MSD supports optimism. While supply chain and economic risks exist, the overall sentiment leans positive due to strong operational metrics and future milestones.

Evaxion A/S (EVAX) Q1 2025 Earnings Call Transcript

Unknown5-27

The earnings call indicates a stable financial position with potential upside from the MSD partnership and future deals. However, regulatory uncertainty, market competition, and dependency on partnerships pose significant risks. The Q&A section revealed some concerns regarding the management's clarity on scientific and strategic questions. Given these mixed signals and the absence of a clear market cap, the stock is likely to remain neutral, with movements within the -2% to 2% range over the next two weeks.

EVAX Report

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