Molecular Partners AG(MOLN) - 2022 Q4 - Annual Report

Executive Summary Molecular Partners highlights 2022 achievements, including clinical advancements and a strong financial position with cash runway into 2026 Overall Highlights and Outlook Molecular Partners highlights 2022 achievements, including MP0533 Phase 1, Radio DARPin Platform progress, and a strong financial position with cash into 2026 - Initiated Phase 1 study of MP0533, a novel tri-specific T-cell engager for the treatment of acute myeloid leukemia (AML) and high risk myelodysplastic syndrome (MDS)[5] - Established Radio DARPin Therapy (RDT) Platform, formally selecting tumor-associated protein Delta-like ligand 3 (DLL3) as a first target[5] - Signed a non-binding letter of intent with Novartis in early January 2023 to negotiate a Research Framework Agreement focused on emerging infectious global health threats[5] - Net cash inflow from operating activities of CHF 118.6 million in 2022[5] - Ongoing strong financial position with CHF 249.1 million in cash and short-term deposits as of December 31, 2022, anticipated to support operations into 2026[5] - Full year 2023 operating expense guidance of CHF 70-80 million, reflecting ambition to further broaden the pipeline in oncology and virology[5] Research & Development Highlights Molecular Partners advanced its oncology and Radio DARPin platforms, halted ensovibep, and regained abicipar rights, pursuing new infectious disease collaborations Oncology Oncology pipeline advanced with MP0317 showing tumor-localized CD40 activation and MP0533 initiating Phase 1 for AML/MDS MP0317 MP0317 Phase 1 interim results showed tumor-localized CD40 activation, good tolerability, with dose escalation recruitment completing H1 2023 - Presented interim results from ongoing Phase 1 trial of MP0317 in November 2022, demonstrating first clinical observation of tumor-localized CD40 activation[7] - MP0317 was safe and well tolerated with no dose-limiting CD40-related systemic toxicities[7] - Patient recruitment in the dose escalation portion of the Phase 1 trial is expected to be completed in the first half of 2023[7] MP0533 MP0533 Phase 1 study for AML/MDS initiated in January 2023, with preclinical data showing preferential cancer cell killing - First patient dosed in Phase 1 study of MP0533 in January 2023; initial clinical results expected by Q4 2023[8] - Preclinical results showed MP0533 can induce preferential killing of cells expressing two or three tumor-associated antigens (TAAs) compared to cells expressing a single TAA, reducing damage to healthy cells[8] - MP0533 was demonstrated to activate T-cells and destroy AML cells, including leukemic stem cells (LSCs), while sparing hematopoietic stem cells[8] Radio DARPin Therapy Platform Radio DARPin Therapy Platform advanced by reducing kidney uptake, with DLL3 selected as the first therapeutic target - Progressed Radio DARPin Therapy Platform by reducing kidney uptake of DARPin radio conjugates to overcome nephrotoxicity[9] - Selected tumor-associated protein Delta-like ligand 3 (DLL3) as the first target of a DARPin-based therapeutic candidate[9] Virology Ensovibep clinical development halted due to lack of efficacy, but a new research agreement with Novartis for infectious threats was signed - Clinical development of ensovibep was halted in 2022 due to a lack of neutralization activity against omicron subvariants[11] - Novartis submitted a request to withdraw ensovibep's EUA from the FDA, effective January 25, 2023[12] - Signed a non-binding letter of intent with Novartis in January 2023 to negotiate a Research Framework Agreement focused on pandemic preparedness and fighting emerging infectious global health threats[12] Ophthalmology Molecular Partners regained abicipar rights for nAMD and DME after positive Phase 3 studies and is evaluating business opportunities - Regained global development and commercial rights to abicipar for nAMD and DME in November 2021[13] - Abicipar completed two positive Phase 3 studies (CEDAR and SEQUOIA) supporting the non-inferior efficacy of its quarterly dosing regimen[13] Corporate Governance and ESG Molecular Partners implemented leadership changes and advanced ESG initiatives, establishing Board-level oversight and promoting diversity and inclusion Leadership Changes Molecular Partners announced leadership changes, including CEO's new board role, key promotions, a new General Counsel, and CFO's departure - CEO Patrick Amstutz was elected as President of the Swiss Biotech Association Board of Directors, effective May 3, 2022[15] - Alexander Zürcher was promoted to Chief Operating Officer, and Renate Gloggner to EVP People and Community, both effective July 1, 2022[16] - Michael Pitzner was appointed General Counsel and Senior Vice President of Legal, effective November 1, 2022[17] - CFO Andreas Emmenegger departed the company as of December 31, 2022, after more than 15 years[19] ESG Initiatives Molecular Partners published 2022 ESG priorities, established Board-level oversight, and created an ESG Circle to integrate sustainability and DEI - Published environmental, social and governance (ESG) priorities and progress in 2022[20] - Formally established corporate sustainability responsibility at a Board level, with the Finance and Audit Committee leading oversight of all ESG policies[21] - Created an ESG Circle of key internal stakeholders to ensure continued progress across key priorities, including human capital management and Diversity, Equity and Inclusion (DEI)[21][22] Financial Performance and Outlook Molecular Partners reported a CHF 117.8 million net profit in 2022, projecting CHF 70-80 million operating expenses for 2023 with cash into 2026 Full Year 2022 Financial Highlights Molecular Partners achieved a CHF 117.8 million net profit in 2022, driven by increased revenues, maintaining a strong cash position and debt-free balance sheet Key Financials (CHF million, except per share, FTE data) | Key Financials (CHF million, except per share, FTE data) | FY 2022 | FY 2021 | Change | | :--- | :--- | :--- | :--- | | Total revenues and other income | 189.6 | 9.8 | 179.8 | | R&D expenses | (50.7) | (55.7) | 5.0 | | SG&A expenses | (22.3) | (17.5) | (4.8) | | Operating result | 116.6 | (63.4) | 180.0 | | Net finance result | 1.2 | (0.4) | 1.6 | | Net result | 117.8 | (63.8) | 181.6 | | Basic net result per share (in CHF) | 3.63 | (2.06) | 5.69 | | Diluted net result per share (in CHF) | 3.54 | (2.06) | 5.60 | | Net cash from (used in) operating activities | 118.6 | (91.0) | 209.5 | | Cash & cash equivalents (incl. short-term time deposits) | 249.1 | 132.8 | 116.3 | | Total shareholders' equity | 235.2 | 107.3 | 127.9 | | Number of total FTE | 175.3 | 163.2 | 12.1 | - Total revenues and other income increased significantly to CHF 189.6 million in 2022 (from CHF 9.8 million in 2021), leading to an operating profit of CHF 116.6 million (vs. operating loss of CHF 63.4 million in 2021)[23] - Net profit for 2022 was CHF 117.8 million (vs. net loss of CHF 63.8 million in 2021)[23] - Net cash from operating activities was CHF 118.6 million in 2022 (vs. net cash used of CHF 91.0 million in 2021)[24] - Cash and short-term deposits stood at CHF 249.1 million as of December 31, 2022, an increase of CHF 116.3 million from year-end 2021[24] - The Company's balance sheet continued to be debt-free in 2022, and FTEs increased by 7% year-on-year to 175.3[25] 2023 Business and Financial Outlook Molecular Partners plans continued investment in clinical assets, with MP0533 results in Q4 2023, and projects CHF 70-80 million operating expenses with cash into 2026 - Anticipates initial clinical results of the Phase 1 trial for MP0533 in AML in Q4 2023[5][28] - Expects completion of patient recruitment in the dose escalation of MP0317 Phase 1 trial in H1 2023[5][28] - Full year 2023 operating expenses are expected to be CHF 70-80 million (at constant exchange rates)[5][30] - Based on the cash position as of December 31, 2022, the cash runway is expected to reach into 2026, excluding any potential receipts from R&D partners[5][25][30] Company Information and Disclosures This section provides details on company reports, upcoming events, an overview of Molecular Partners AG, forward-looking statement disclaimers, and contact information Documentation & Events Molecular Partners' 2022 annual reports will be available online, with a conference call on March 10, 2023, and a financial calendar for 2023 events - The Company's Annual Report on Form 20-F for the year ended December 31, 2022, and the annual report 2022 will be made available on www.molecularpartners.com after March 9, 2023[31] - A conference call and audio webcast for the full year 2022 results will be held on March 10, 14.00 CET (8.00 am EST)[32] Financial Calendar 2023 | Date | Event | | :--- | :--- | | April 4, 2023 | Annual General Meeting | | May 11, 2023 | Interim Management Statement Q1 2023 | | August 24, 2023 | Half-year results 2023 (unaudited) | | October 26, 2023 | Interim Management Statement Q3 2023 | About Molecular Partners AG Molecular Partners AG is a clinical-stage biotech company developing DARPin therapeutics, partnering with pharmaceutical companies across multiple therapeutic areas - Molecular Partners AG is a clinical-stage biotech company developing DARPin therapeutics, a new class of custom-built protein drugs[35] - The Company has formed partnerships with leading pharmaceutical companies to advance DARPin therapeutics in ophthalmology, oncology, and infectious disease[35] Forward-Looking Statements This section cautions that forward-looking statements involve risks and uncertainties that could cause actual results to differ materially - Any statements in this press release that do not describe historical facts may constitute forward-looking statements[36] - These statements involve risks and uncertainties that could cause actual results to differ materially from those reflected[37] - Key factors include plans to develop and commercialize product candidates, reliance on third-party partners, ongoing clinical trials, regulatory approvals, and the potential impact of the COVID-19 pandemic[37] Contact Information Contact details for investor relations and communications are provided for inquiries - Investor Relations contact: Seth Lewis, seth.lewis@molecularpartners.com, Tel: +1 781 420 2361[38] - Communications contact: Antonio Ligi, antonio.ligi@molecularpartners.com, Tel: +41 79 723 36 81[38]