Sareum Holdings (LSE:SAR) Q2 2025 Earnings Call

0:00 usual disclaimer that goes with all of these presentations we will be talking about future forward-looking events within this presentation and in the discussion so please be aware of the disclaimer that goes with it so a quick overview of where we are you know about the company as being a clinical stage small molecule drug company with deep expertise in kinase inhibitors and uh most notably of course in the tick to check one field where we will spend most of the time today but uh happily uh we're now back involved in the check one side having uh regained control of sra737 uh shortly after the period we're discussing ended um we are well funded now uh we closed in the period with cash at 4.1 with a further 1.07 million raised in early March.

1:04 So the pipeline now looks like this. This of course is different from recent years in that Check One is included within our pipeline for the first time in my living memory. And on please Tim. So highlights from the period. Most notably, of course, we completed and announced the completion of the phase one study for SDC 1801. John will discuss that, of course, in a little more detail. We've been able, because of the funds raised during this last year, to start looking more actively at 1802 again.

1:50 and of course with the return of 737 we now have a cancer drug which has already been in the clinic for phase one two studies both as a single agent and in combination and during the period when it was last sub-licensed an IND was opened in the US so there is now for the first time the ability to to conduct trials in the States. The financials I've just summarized, although it's worth noting that in addition to the post-period end placing, we also had an R&D tax credit. So the total income during this first quarter has been 1.3 million approximately into the company. So moving on from there.

2:47 and we'll start looking at the Proprietary Programme. So very briefly in summary, the phase one data have demonstrated that we do have a highly selective molecule in AT01, which is a differentiator against competitors. And one thing which leads us to believe that we do indeed have potential for a best-in-class molecule. We can see that there is potential for this in many autoimmune disorders. We've spoken previously about psoriasis, but that's one of several molecules in the autoimmune, conditions in the autoimmune field where we believe that AG01 could well be applicable.

3:45 And the and the positive results from phase one has led us to believe that we have a very strong story and we are undertaking this extended top study to provide hopefully a licensee with a ready for phase two compound. With that, I'm going to pass over to John who will go into more detail through the program. Thank you, Stephen. Yeah, so SDC 1801 is a, as you know, clinical stage dual TIK2 JAK1 inhibitor. The phase one trial dosing of the volunteers in Australia completed in June 24.

4:31 We received the unblinded data in Q3 of 24 and the results were very positive. High blood exposure was achieved and there were no serious adverse events due to SDC 1801. In fact, the adverse event profile was very similar between treated and placebo groups. All adverse events that were noted were mild or moderate. There were no clinically significant effects on blood components or serum creatinine, and I'll come later to why we see that as being very significant. We also saw a significant dose dependent reduction in biomarkers of TIK2 and JAK1. So in our preclinical models, we had demonstrated the mechanistic proof of concept, seen dose-dependent efficacy in models of psoriasis and rheumatoid arthritis.

5:23 We demonstrated that SDC1801 potently blocks TIK2 and JAK1 signaling in human whole blood assays with no measurable inhibition of JAK2. And the good safety pharmacology and toxicology that we observed in the preclinical studies translated into the clinic and we found that the human pharmacokinetics were suitable for once daily oral dosing so we really were very positive from the results that arose from that phase one trial this is a cartoon just to show you why we think dual tic-2-jac-1 inhibition is optimal for the suppression of a number of cytokines linked to several autoimmune diseases If you look at the cartoon, it's really demonstrating the cytokine receptors.

6:14 When a molecule binds to the cytokine receptor, so to the interferon receptor, for example, interferon gamma binds to the interferon gamma receptor, it uses JAK1 and JAK2 to transmit the signal downstream. Now blocking some of these JAKs is beneficial because it blocks cytokines that are associated with autoimmune and inflammatory diseases. Blocking certain JAKs such as JAK2 you'll see on the left of this molecule has negative effects because JAK2 is very much involved in erythropoietin and thrombopoietin signaling and inhibiting JAK2 can lead to a number of haematology toxic side effects so we very much want to avoid JAK2 we see that in contrast to the selective TIK2 inhibitors so TIK2 and TAK279 by also inhibiting JAK1 another range of cytokines are inhibited which could have positive effects in diseases And just to demonstrate that, we've got some data here from clinical studies using a dual TIK2 JAK1 inhibitor, brecocitinib, versus single TIK2 or dual JAK1 inhibition in clinical studies. Slight caveat, you know, it's always somewhat,

7:45 well, not dangerous, but you just need to be aware when you're comparing between clinical studies that these are different groups of patients. Different protocols are used in the clinic, for example. But I think this data does show quite nicely that brepacitinib gave the best readout in a psoriasis trial. We're looking at PASI 75, that's psoriasis area and severity index. So we're looking at reductions in psoriasis symptoms in patients. And the dual TIK2 JAK1 inhibitor appears to be more effective than the selective TIK2 inhibitors or the dual JAK1, JAK2 inhibitor baracitinib. so looking at the human pharmacokinetic profile of 1801 we saw a half-life of around 17 to 20 hours that confirms the suitability of the molecule for once daily oral dosing in MAD cohort D so this is the highest dose group in the MAD experiment we saw that plasma exposure of 1801 was equivalent to brepacitinib at 100 mgs so I'll come on to why that might be important later on.

9:01 Just going back to our data, the exposure of 1801 exceeded the human whole blood interferon alpha and IL12 IC50s throughout the entire dosing period. So that means that we are achieving a concentration of drug in the blood that reduces interferon alpha and IL12 signaling by at least 50% for the entire dosing period. we didn't see any changes in haematology or serum creatinine after 10 days of dosing now in contrast brepacitinib that's the molecule i just described on the previous slide giving the best results in the psoriasis trial brepacitinib at 100 mgs caused increased serum creatinine and reductions in reticulocytes and neutrophils reticulocytes are in mature red blood cells and neutrophils are an important part of a white blood cell system so you don't really want to be reducing those those components of the of the blood cells so the data i showed you on the previous slide with prepositinib that was using prep over 30 milligrams going higher leads to these side effects and i think that's why prepositinib is limited to typical use of 30 to 45 milligrams in the clinic so switching back to 1801 we've got a very strong set of biomarker data

10:32 ip10 interferon gamma induced protein 10 which is a marker of jack one and interferon gamma signaling we've seen dose dependent reductions in ip10 levels in the mad cohorts uh crp c reactive protein a general marker of inflammation and again downstream of jack one and in this case io6 signaling we saw dose dependent reductions in crp levels in the mad cohorts and then in an ex vivo challenge so this is where we're sampling blood from the volunteers in the clinical trial we're taking that blood and treating it with interferon alpha challenging it with interferon alpha and They remind me of these subjects have taken our molecule.

11:19 We saw dose dependent reductions of phosphostat three and phosphostat five cells. So when interferon alpha binds to its receptor, it uses tick two and Jack one to phosphorylate stat 3 and stat 5 that's what the p on phosphostat 3 phosphostat 5 means so this is direct evidence that we have target engagement with our molecule on the targets that we wanted to hit and we observed that effect in two different cell types of the immune system t cells and monocytes so our differentiation versus prepositinib and this leads on to our theories around best-in-class potential for this molecule prepositinib is the most advanced dual tic-2-jap-1 inhibitor in the clinic it's currently undergoing phase three trials as i mentioned earlier it's typically used in the clinic at 30 to 45 mgs once daily qd is once daily going above 30 milligrams in their phase 1 trial they observed increased serum creatinine levels and that was due to the inhibition of OCT2 a renal transporter kidney transporter brepacitinib inhibits OCT2 1801 has much greater selectivity versus OCT2 so we don't see any effects on serum creatinine levels when we dose with 1801

12:52 giving exposures equivalent to 100 mg of brepacitinib. So greater than threefold the clinical dose of brepacitinib, we're not seeing this effect. Likewise, at greater than 30 mg of brepacitinib, reductions in neutrophils, those white blood cells and reticular sites, the immature red blood cells are observed with brepacitinib.

13:13 We saw no effect on neutrophils or reticular sites at doses equivalent to 100 mg of brepacitinib. molecule has a greater half-life in humans approximately 17 to 20 hours versus prepositing at six to eight hours and we saw an ideal pk profile for JAK inhibition so average concentration is important for JAK inhibitors rather than the maximum and the minimum concentrations these are the peak to trough ratios and we see excellent sustained average concentrations with 1801 it's driven by the long half-life and we see that as a distinct advantage so as steven's mentioned what we're doing at the moment is preparing the molecule for phase two studies and this has necessitated a resynthesis of the drug substance and this has had some knock-on effects on our toxicology studies which i'll explain in a little moment we're also working on optimizing the formulation so we used capsules in the phase one study this is advantageous relative to many phase one studies which use solution solutions of the molecule to dose their subjects we were using capsules straight away in phase one but there's some work needed to be done to improve those formulation to improve the absorption of the molecule and also to prepare capsule sizes consistent with

14:44 the expected phase two doses So our 16 weeks toxicology studies are scheduled to commence in May 2025 and we'd expect them to complete in the fourth quarter of this year. This is a delay relative to what we told you at the IMC meeting in December and this has really been driven by a need to resynthesize the drug. A couple of reasons for that. We were planning to use the GNP material that we had left over from the phase one trial and then when we did a risk assessment we saw that that potentially that's a very clean batch of drug and we could run into difficulties if any subsequent batches of drug have a let's say a dirtier side effect profile so if they had impurities in subsequent batches that were not present in our tox batch that would mean that our toxicology studies were of no use they would be defunct so we made the decision to prepare a fresh batch of material to take forward into these tox studies batches of drug used in tox studies tend to be dirtier than those that you're going to take forward into human trials we've also decided that we're going to increase the doses used in the tox studies because we're not seeing particularly large effects in the tox studies and sometimes the regulators really want to see some maximum toxicity so we're going to increase the levels

16:16 of exposure that we get in the toxicology studies okay if I move on to the next slide so that concludes 1801 I'll just talk briefly on 1802 as Stephen said we have begun to ramp up the translational and the pre-clinical studies around 1802 using the funds from the recent share subscriptions The development of 1801 has given us an experience that will certainly feed through to aid the development of 1802 and we've got a strong patent position around 1802 covering not only cancer but also some immune disorders as well so we're confident about 1802 we're going to push forward very strongly now with accelerated studies.

17:13 So I'm going to talk now about CHECK1 and SRA737, a selective CHECK1 kinase inhibitor suitable for once daily oral administration, which has completed a couple of phase one to trials already. Just to say with the given change in control, we now control the program and have an increased slice of the economic benefits up to 63.5%. So it has gone up to 63.5%. The molecule was originally developed by ourselves in collaboration with several Cancer Research UK funded organisations. Successfully completed two phase 1-2 trials with the original licensed partner Sierra Oncology.

17:58 It was subsequently licensed to a private US biopharma company and the license was returned to CPF for Cancer Pioneer Fund in Q1 of 25. we've now negotiated with cpf to take over the program pushed our economic interest up to 63 and a half percent from 27 and a half percent and we're currently reviewing the licensing and development options to take the program forward for some very compelling clinical development path supported by preclinical models with synergistic anti-tumor activity and a strong mechanistic rationale what i'm showing you here is a model in mice it's called a syngeneic model so these are mice with a functional immune system and they have a small cell lung cancer that's the sclc a mouse small cell lung cancer so what we're demonstrating here is that combining an anti-pdl1 this is the immunotherapy that has revolutionized cancer treatment over the last 10 years or so combining anti-pdl1 antibodies with sra737 and low-dose gemcitabine has a pronounced effect on the volume of the tumors in fact 80 percent of the mice in

19:29 this study have sustained complete responses to tumors that entirely disappeared you'll see if you i won't go through it all but the lines above the um triple combination basically show you the effects of 737 by itself low dose gem by itself the antibody by itself and then various combinations you can see it's only when you bring the three things together that you get these uh really profound reductions in tumor volumes also we saw the effects on the innate immune signaling so things like sting and interferon are um drastically altered by this triple combination also important to say we saw similar effects in a colorectal cancer model and then moving on to um a model in combination with PARP inhibitor so PARP inhibitors have also found a large market in particularly treatment of ovarian cancer and starting to show some effects in prostate cancer as well but PARP inhibitor resistance is an emerging unmet clinical need and we have some data that we're showing here that shows that combination of 737 with a PARP inhibitor is well tolerated but also has pronounced anti-tumor activity in a model of high-grade serous ovarian cancer in this case which has developed resistance to the PARP inhibitor by itself so again you can see combination of 737 with the PARP inhibitor

21:01 led to four out of nine complete responses in this mouse model so big clinical opportunity there potential for phase 1b to a clinical trial of 737 with a PARP inhibitor in PARP inhibitor resistant or refractory patients so just to summarize 737 now it's a clinical stage development candidate has a defined check one inhibitor mechanism and a clear development plan demonstrates promising clinical activity it's well tolerated as a single agent and in combination with chemotherapy Strong clinical validation for its mechanism is ATR check one access access SRA 737 is competitively positioned within this DDR class It's a very good molecules got excellent drug like properties low drug drug interaction potential. So we think it's very eminently suited for combination with other with other clinical agents the data supports potentially rapid clinical development paths in anogenital cancers and additional clinical potential when combined with for example pdl1 or anti-pd1 antibodies PARP inhibition i showed you some data supporting that also we want inhibition there's some data that we put out on x recently or on linkedin that shows some potential

22:34 for combining with we won inhibitors so lots of potential opportunities for taking this molecule forward in the future i'm going to hand over there to tim to take you through the unaudited financial results for the period thank you john uh good morning everybody it's tim mitchell here

22:57 uh so i'll just take you through the results uh which you may have seen were uh announced today so these are the six months results to the period ending uh 31st of uh december 2024 um so comparing with the same period last year actually i'll first note that the um the results for the six months to December 2023 have been restated this was because there was a finance charge on the income statement for the 2023 figures which has since been settled by shares so that that charge has gone away that's essentially a contingency charge and that's gone so that's the reason for restating the results so you'll see that the operating expenses for the period to december 2024 are considerably lower than they were for the corresponding period to 2023 so this is mainly because of the reduced clinical trial costs um so there have been some uh trial costs uh that carried on into the um the end of last year so so the the follow-up of the biomarker studies for instance was uh that that was that was concluded during the last uh part of the year um and and then it all feeds through the yeah the so the tax credit is less because we we've had less clinical costs um it ended up in results uh in a loss after tax of just over one million uh compared to uh one and three quarter million

24:28 for the corresponding period last year uh then if we look at the uh the balance sheet um the investment in associate is essentially the cash left in the uh the the sra 737 check one partnership uh with the uh crt pioneer fund that that that money less some expenses um partner due to the handover will come back to us at some stage but I think the big difference compared to last year is our cash position so as a result of the share subscriptions we undertook during last year and of course topped up by a further 1 million or so from this year plus a little bit of a tax credit the cash position as of the end of December is just over 4 million pounds so we're well financed for our our current activities going forward and I think with there I will hand back to Stephen to talk about what's coming up for this year yes thank you Tim thank you John so during during the year let's just break it down into the three main programs for 1801 of course there is the submission of the academic paper to a peer-reviewed journal that's in progress but that will hopefully come shortly what happens after that of course just to remind

26:01 you is entirely out of our hands in the peer review process it can move quickly or it can take some time those of us who publish papers in our time will know the full range of timelines on that then of course we have the completion of synthesis and formulation for the new drug product that John has been talking about and launching the long-term tox trials Which as we've said we would expect to have competed in q4 in this year on 1802 Commencing the manufacturing of drug products for formal clinical trials That is again as John has said we were expecting to benefit from the process of development learnings from 1801 in that and from that look to initiate preclinical studies and in parallel look at target cancers for the clinical testing because of course for the cancer drug it's the norm is to go into phase one two studies in patients straight away lastly 737 great pleasure to talk about that again um complete the receipt of data which hasn't quite happened yet um we're expecting that that process is going well at the moment and then review the future options on the basis of the

27:34 material sent back to us and kol advice and indeed contacts with third parties who may have an interest in in licensing the drug from us so that that concludes the um uh the presentation and summary of the of the results uh i'm very happy to take take questions and we'll do that many of you have been kind enough to pre-submit questions um i will read them out and then as appropriate either answer or pastor john and tim for them to answer um i know that some of you have been submitting questions during the uh the slides uh deck i do hope that we will get to those as well um as the uh the hosts of the call said, we will go through all questions submitted and provide a list of written answers at some point in the near future. So first of all, question about 737, in taking over the license, was it by mutual agreement or did they approach Sarium?

28:49 Broadly speaking, this was, as you can imagine stimulated by the return of the license from the private US company which happened at the end of December last year. CPF is a fund which is looking to wind down at the moment and so they were very happy for us to step in and also for us to renegotiate the economics. I know that several of you have asked the related question which is what did we have to pay for this and the answer is nothing apart from of course the legal costs that always go with these things but this was a deal which was entirely mutually agreed by all parties.

29:38 So moving on perhaps John you could talk a bit about in more detail about the paper for 1801 yes so the paper 1801 is in progress i think it's we had to be very very careful that we've got our patent position fully sorted out before we submit that data because once that's published we have put the prior art out in the public domain and it would prevent us from patenting anything related to that data so i we're confident we've got our patent position in good shape and i hope to submit that paper for peer review shortly thank you there's been several questions here about um pr and and uh our market facing activities um uh just just to say that i i do intend that we should ramp up pr activities during the year and i in fact i am booked to give a presentation at one of the investor meetings in june i will i also intend that according to whichever is the the specific topic that one of us will on a more regular basis

31:11 interact with with the likes of edison or indeed imc uh in in recording interviews and uh and and making sure that everybody is is aware of progress uh so we are looking in this year to to be more active on the pr side there's also been questions about the appointment of over on as the as a new joint broker um the the reason uh for doing that is that um i had very um conscious that it's very important that we have a broker who is active in the secondary trading position as well as providing a good service for primary issuance and so i felt it was important that we were balanced between hybrid and and we introduced overall into the mix who do have a secondary trading position and i'm sure that we will see the benefit of that going forwards so other other questions that have come in just recently there's various questions again about the use of advisors for doing deals and we do of course have a roster of advisors who who are contracted to us most notably our nomad but for specific deals

32:44 we were certainly not shy to engage with financial advisors with specialist knowledge or specialist ability in addition to help us to get deals over the line we didn't if you may like to know we didn't involve external advisors for the 737 transaction but we may well do if the need arises for 1801 licensing or anything further than that there's a question about the work done by the private us company in the last year and we are not able to talk about that we are under very clear confidentiality restrictions suffice it to say that anything that they they have achieved

33:38 now forms part of our data pack that we can then exploit going forwards so i'll just add one thing actually that one thing we can say from the private us company they filed the the ind which we mentioned earlier before and actually there was a question of and so apologies for explaining that an ind is an investigational new drug so this is the uh the clearance by the regulatory authorities uh to undertake a clinical trial um so so you say that work was done by the private us company last year thank you jim um one or two questions around the uh the delay in the launch of the top study um i don't think we need to go into great detail about this because john's explained that very well i would say um but somebody is asking effectively why didn't we build up enough material to start already and the simple fact is that when you are synthesizing drugs this is done on a batch process so you have nothing or you have everything it doesn't come it's not drip fed I think the other thing just to say to that is it's always a balance of risk isn't it really so you know we could have we could have prepared 10 kilograms of material last year and kept eight kilograms in stock for any subsequent studies but of course that costs a lot of money

35:10 and we could have had a negative result from a clinical trial which would have rendered all that material useless so we're always trying to sort of balance the risk of what we do with the with the timelines versus the expense of doing certain things yes thank you going back to perhaps some of the pre-submitted questions this question here is considering the consideration being given to dual listing on nasdaq i think the answer to that is um nothing is ever ruled out but i'm also very conscious that um the grass is is uh uh actually not as not greener on the other side of the fence um there have been several stories uh in recent months of U.S.

35:58 companies which on paper should have been very successful failing dismally. So I think we will always be aware of it. We'll always look but we'll also be cautious before we leap in the Nasdaq direction. Just looking down the list Yes, so there's a question just coming on 1801 so is there a possibility that we go a

36:47 we take on the phase two if our shareholders are supportive and are we already in discussions with potential partners for SDC 1801 the answer to that is yes for both so we're we're pursuing essentially a dual path here so we're getting the compound ready for a subsequent phase two trial and then we'll take a view nearer the time as to what's the best deal for us and our shareholders as in whether to press ahead into a into a phase two trial if there's support from shareholders to fund that for that or is there a good offer from a potential partner for a licensing deal for SDC 1801 so the yeah the current strategy we're taking of taking essentially most of this year to get the compound phase two ready allows us to assess options for both licensing and raising money for a phase two but I think If there's a good license deal out there, I think that would be our priority Absolutely.

37:57 Yes There was another question about which country we're looking to test 1801 in Australia or England and why So if we were to do a phase 2 trial with 1801 and I think if anyone were to do a trial with 1801 it's likely it would be done in multiple territories and so you start to need to look in a much larger group of patients phase 2a probably each group would have something like 48 patients in it you might want to test a couple of doses and placebo so you're looking at you know 100 120 130 patients um you're likely to need to go to multiple territories to do that i certainly would have no issue whatsoever with conducting a trial in australia again um i wish i could say the same about the uk i mean we did have a very negative experience of mhra i think they're getting their act together to some extent but whether we'd want to test that again i i don't know but um likely multiple territories indeed so let's see Yes, there's a question here. Thank you. The question here is whether we are likely to take 737 into a clinical trial in the near future.

39:32 Again, as John just said, I think that's not our current intention, but if the opportunity were to arise and we have been approached by medics as well as by companies, then there may be an argument for it but if that were to be the case then we would certainly be informing you of that as an early stage because it's whilst we are currently funded for all the programs that we are currently planning 737 was an opportunistic acquisition and therefore a clinical trial with 737 would fall outside of that and we would need to come back to shareholders to raise funds to do that so you will know where that's changed but that's not the current

40:37 plan. I've got a related question here about actually conversations and this is going back to our dual strategy of exploring funding options for further trials versus license agreements so have you already had conversations with other farmer about on licensing SRA 737 how quickly could this happen so the answer is yes so so while the 737 program was essentially under option to a to the US biopharma compound last year we did have a number of inquiries about the program coming in which we had to we had essentially put on hold because the the the first refusal was with this US biopharma but as soon as we got the notice from this company that the program was going to come back to us I've been following up on all those previous inquiries and well we can't really say about the progress of those until something's happened but there are a number of inquiries which we are following up and of course now in the partnering meetings such as the BioEurope spring meeting that I was at last week we've got that 737 is very much in our shop window so we are we're looking to attract new licensed partners as well as the ones we've already been talking to yes thank you so I think that's probably we're rather answering groups from specific questions but as you can imagine there have

42:09 been several questions per topic So I think we have probably covered most things here. Stephen, if I may just jump in there and thank you for addressing all those questions from investors today. And of course, as the company has mentioned, we will review all questions submitted today and we'll publish those responses on the Invest and Meet company platform where appropriate. But Stephen, before we redirect investors to provide you with their feedback, which I know is particularly important to the company, if I may just ask you for a few closing comments. Yes, of course. Thank you for that. And in closing, I do want to thank you for sticking with us. I'm very, very aware that we're all aware as shareholders, as department officers, that this has not been a happy time with regard to the share price.

43:02 We are looking to improve shareholder value, of course, for everybody's benefit. and we are looking at all options in front of us to do that. So I do hope that we will be able to have a happier story when we next meet in an IMC. In the meantime, we do appreciate your feedback and I'll be very happy to answer questions directly or generally from shareholders. So thank you all. Stephen Tim and John thank you once again for updating investors today could I please ask investors not to close this session as you will now be automatically redirected to provide your feedback and although the board can better understand your views and expectations this will only take a few moments to complete and I'm sure will be greatly valued by the company on behalf of the management team of Sarium Holdings plc we would like to thank you for attending today's presentation and good afternoon