Good morning, and welcome to the Molecular Partners Fourth Quarter and Full Year 2024 Results Call. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Seth Lewis, Senior Vice President, Investor Relations and Strategy. Please go ahead.

Thanks, Drew, and welcome, everybody, to the Molecular Partners Year-End Results and 2024 Highlights Call. My name is Seth Lewis, and I'm joined today by members of our senior leadership team, including Patrick Amstutz, Chief Executive Officer; Robert Hendriks, SVP of Finance; Philippe Legenne, Chief Medical Officer; and Michael Stumpp, Executive Vice President of Projects and Head of the DLL3 radio program. The team will make some prepared remarks, and then we will open the call for your questions. If you haven't had a chance to see the press release issued yesterday after market close, you can find it on our website. www.molecularpartners.com where you can also access a copy of today's presentation. Today's call is being recorded and will be available for replay. Before we begin, I'd like to remind you that management will be making forward-looking statements about the future development of certain programs. These statements reflect the current estimates of Molecular Partners and are subject to change. For the most up-to-date information, please visit our website, www.molecularpartners.com. With that, I'll turn the call over to Patrick Amstutz. Patrick, please go ahead.

Thanks, Seth, for the intro and kicking off the call. And please, again go to our website and wrap the presentation, and we will be referring to a slide number that we are on and the slide number that I will kick off with is Slide #5. Warm welcome from my side. Great to have you all on this call. Before diving into the highlights '24, we did put on the 20 years Molecular Partners logo because it is our 20 years anniversary and it coincides with being 10 years listed on the Swiss and then later on the U.S. Stock Exchange. And it has been 20 years of a quest to make [drug that matter] (ph) for patients. And we have never gone away from that, and this has really brought us where we are. And if we look back, it has not been a straight line. It is hard work for specific results. And twice, we actually reached clinical top with the wet AMD drug, abicipar, and with the COVID drug ensovibep and I think the call today is really to highlight where we are and how we're lining up our new programs to be in a position to have more of such readouts in the future. So let us look at the highlights 2024. And what we have done, it was a year of execution to get our programs closer to that clinical readout. Let me start with the radio DARPin franchise, where we have DLL3 targeting 712. That is our lead compound passing all IND-enabling studies and ready to go into the clinics and Michael will be talking about that. We also selected a new target. And I mean, if we say selected the target, it also means that we have data. We now just took…

It's Slide #5.

Okay. Thanks for that. So on Slide #5. Let me quickly start with what is missing on this slide. and what is less important. The one line that is missing is the Novartis collaboration. So you remember, three years ago, we entered into a collaboration with Novartis on two targets. And we made DARPin against those two targets and moved them into research. Over the years, they did not progress that fast. The results were there, but I think both Novartis and Molecular Partners and they not see the strategic interest in the target. This happens and maybe an explanation is all those research targets that we're moving. We never talk about before it is a candidate for exactly this reason because often, you don't move the target forward. In this case, because it was the Novartis collaboration, they were there and Novartis now after three years, that was the research term decided not to move forward. We agree with that. We would also not move forward. So that line is missing. There is no technological setback. It was just not the right targets in the right time. They might come back. But as of now, this is not where we or Novartis would invest. The other one that we are not actively moving forward is 621, a nice molecule in HSCT. So stem cell transplant, he said that is not our focus interest success of 533 and also the success of the radio franchise is much more relevant and important. So that is one that we can sort of put on hold and up for partnering. Now where are we focusing? This is 533 and the radio franchise. And I will hand over to Philippe later, our Chief Medic, to talk about 533 in AML and all the progress and Michael Stumpp will be walking you through the radio work on 712 and the latest from mesothelin and our collaboration with Orano Med. So before we go there, I'll hand over to Robert to give us the overview of the financial situation. Over to you, Robert.

Thank you, Patrick. I hope you can all hear you well. Good morning, good afternoon to everyone on the call. I'd like to run you briefly through the key figures of last year and the guidance for the year '25. My name is Robert Hendriks, I'm the SVP of Finance here at MP. The numbers that I will present are stated in million Swiss Francs. More detail can be found in the press release, as well as in the appendix to this presentation. Yesterday, we also published our full Annual Report in the 20-F. So plenty opportunity to dive into more detail. The entire presentation is also available on the website. Moving now to Slide #7 on the key figures. There are a few numbers that I'd like to highlight here. First of all, the revenue number 5 and 7. As Patrick has just mentioned, this is exclusively coming in both of these years from the Novartis collaboration. In '24, we recognized the last part of the upfront that we had received back in 2022, and there is no more revenue to be coming from this collaboration. So that's on revenue, then the operating expenses at CHF66 million, well within the guidance that we gave, that was CHF65 million to CHF70 million. Just a high-level breakdown without too much detail around 40 -- 74% of these costs are R&D-related. So pushing the products through the pipeline there. The overall costs have been fairly stable over the years. The third number, just to highlight, if you look at the overview is the net financial result. Clearly, we benefited from high interest rates on our U.S. dollar-denominated deposits. This number is clearly volatile by design. And this year, I think we, as I said, benefited from the FX rate, the interest rates…

Thanks very much, Robert. Good morning, good afternoon, everyone. I hope you can also hear me well. I'm really very happy and proud about the progress and all the achievements. The various teams have made in the year 2024. And let me, first of all, already acknowledge our collaboration partner, Orano Med, who is making all of this possible. I'll speak a bit more in detail later. And 2025 is really the year with the first clinical data from the radio DARPin and Lead. And that's why I'm so excited to be here. Things are moving forward. and that's quickly look back, but also then let's look a bit forward together. So moving on to Slide 10. I'm pretty sure you have heard about the DARPin before. So the big blue picture there, that's where we put a lot of effort into understanding what's the ideal properties of the radiopharmaceutical. It involves some protein engineering, but it also certainly involves the linker chelator. And of course, we also do half-life extenders. Most importantly, however, for the patient's benefit, is the alpha-emitting therapeutic isotopes. So that's the 212 version of Lead which has proven clinical efficacy, thanks to our collaborators from Orano Med gives release to a lot of high energy immediately within a very short time and sell the on-the-go double-strand DNA damage. And because it has a relatively short half-life, it also seems to have an ideal waste management and the safety profile so far so good, of course, we need to explore further in patients. So all-in-all, we think that the DARPins are the ideal partner for Lead, and that's what we are going to establish in the future. So moving on to Slide 11, let's quickly have a closer look at why Orano Med is really one…

Can you hear me?

Yes. We can hear you now.

So again, thanks, Micky first. And I am very happy to share an update on the progress of our 533-DARPIn, which we are developing in AML. On Slide 19, basically, let's remember, it's important to remember that AML is a very challenging disease, because of the heterogeneity of the cell population, as well as the difficulty to kill the leukemic stem cells, which tend to persist despite treatments and they drive the recurrence. So we have designed 533 as the first TETRA specific T cell engager that recognizes AML blast and the LSC, leukemic stem cells through their co-expression of either CD33, CD123 or CD70 and cure them when they express at least two of the three TAA simultaneously. By doing that, this multi-specific approach has the potential to open the therapeutic index and particularly kills the leukemic stem cells more effectively than a single simple targeting -- single targeting agent would do. Moving to Slide 20. So this slide describes the clinical journey that we have studied 2 years ago. When I reported last year, we were still in the blue left part of the schematic. We are now reporting on the orange middle one, and we will be initiating soon a new amendment corresponding to the green. In the initial dose escalation cohorts on the left blue we were able to understand the manageable safety profile of the drug up to cohort seven and obtain signals of efficacy, however, too low and not durable enough. Then what we did is we identified with a group of international experts that we had, in fact too much loss of exposure likely due to the multi-target antigen sync. Let's remember, we are talking three antigens, two to three. And so at that time, we initiated the first amendment to accelerate the…

Thanks, Philippe, for these very nice explanations and also showing us how we have worked through some challenging settings and findings to give especially 333, the best chance to succeed and help these patients. Let's have a look at what we can expect in '25. I will start on the radio side. And I think there, as Michael pointed out, we are really excited by the perspective to share that the first clinical data of 712, the Radio DLL3 program. We do start with imaging, as he explained that it's a Phase 0 approach, and then we can do dosimetry and have them clinical results in efficacy and safety in 2026. Let me just take a minute here because in most instances, your Phase 0 imaging is maybe not that relevant. This is different here. We will have the understanding of how much of the drug will be in the tumor and how much will be on the healthy organs. And for those who are less familiar in the story, the one organ, we're really zooming into and excited to then see results is to keep me because most of these approaches have high kidney absorption. So we'll be, first and foremost, looking for a tumor to kidney ratio and should that be positive in the dose symmetry that is an exciting moment to move the program forward. So the imaging holds real value for molecular partners and the whole radio DARPin pipeline. [Mazo] (ph) will go forward, and we will update that at and we will definitely not stand still but add additional programs that are some folioed by us, others likely also moved forward by Orano Med. Moving to Slide 33, as we just heard from Philippe, we are now at this moment where we can test maybe…

We will now begin the question-and-answer session. [Operator Instructions] The first question comes from Jonathan Chang with Leerink Partners. Please go ahead.

Hi guys. Thanks for taking my questions. First question on MP0712. Can you provide more color on where you are in the IND submission process and preparations for study initiation. And how should we be thinking about the initial clinical data by year-end? And then second question, can discuss why you think mesothelin is a good target for radio DARPin? Thank you.

Micky are you on because I think that goes directly to your area of expertise.

Yes, I can start and then please continue. So thanks, Jonathan, for the question. I love to sit down with you in more detail and go over, but just give you the top-line. So as I said, late last year, we started '25 with the GMP manufacturing that has moved forward really nicely. Of course, there are a lot of technical challenges to be overcome, including logistics. Q2 the next quarter will be the submissions, maybe there are several ones to the FDA. And that's where hopefully then in Q3, we can open the first part of the program, the imaging part. And in the later part of the year, so not exactly sure where we will be, we will then have the first therapeutic doses. If FDA agrees to our proposal to start close to therapeutic dose rates, we should see something made in the first two dose cohorts. And as you know, probably tumor shrinkage and then also the duration of it will probably take a bit of time. So early '26 will be then the clinical data on the therapeutic part submission in Q2 anticipated. Your -- I believe third question, mesothelin, why is it a good target? Excellent question. Of course, we are hoping it will be a good target. There is certainly a high medical need in the ovarian cancer patients and mesothelin expression is very high there. Whether it will be perfect for an alpha emitter and our molecule, we need to establish. It looks good preclinically. But whether it will then work that depends to the on future data, there are a number of programs also using other modalities. But I hope with the alpha radiation of that, we can tackle these to ourselves. Maybe over to you, Patrick, anything to add from your side?

Yes. No. And we often get the question on mesothelin because it let's say, in public, it's a bad target because others have failed on it and are not moving. I think as what we do is we go back and we triangulate the data and it's also in a phrase we use internally, we like to work on clinically validated problems. And in this case, as you said, Michael, ovarian is immune, more silent. So you don't have that much effect you often have chemo resistance, so -- and also not the highest response rate for ADCs then Meso was in principally a good target for the shedding and the high level of free target made it a very difficult approach for radiotherapy because you don't want to be binding shed target being in the body everywhere and having an on target of tumor effect. So this is the hypothesis that ovarian will be radio-sensitive when delivering an alpha via mesothelin the target very difficult for peptides to do, so we don't expect anyone from the peptide field to be able to crack that one. So it is DARPin unique and differentiated, and that's the thesis that we will have to prove. If it works, the good thing is I do think we are very differentiated versus other radio approaches.

Understood. Thanks for taking my questions.

Thanks. The next question comes from Richard Vosser with JPMorgan. Please go ahead.

Hi, thanks for taking my question. I wondered if could just explore learnings taken from the Novartis programs before they were discontinued, what you could take there? And also whether there were any issues with the DARPin hitting the target? Or was this as you said, just the targets don't work or they've been deemphasized. And then a second question just on -- you mentioned the key for 712 is the kidney ratio to target ratio. So what could be -- if you could help us with a good level on that ratio that we should be looking for when we see the data? And you'll be looking for? Thanks a lot.

Thanks, Richard. I'll start off with the Novartis one, and then I'll hand over to Michael. And I think when -- and we started this three years ago, and that was really our first step into radio. And we learned a lot by sharing and learning what profile makes good radio therapeutic. So tumor to kidney and Michael will come to that half-life. And this is all also gauge to which isotope you need and you apply. And there Novartis is obviously lutetium and more recently, Actinium, while we are going towards lead for different reasons. The learnings, I mean, I can't be too detail oriented here. But -- the one thing we all agree in this field is you have to test many candidates meaning many different sequences to find the optimal tumor to kidney ratio. And you need to have the right models up and running and different models will give you different insights. And it was very helpful to compare notes on the models, how to run the models, how to use the models and at the same time, find what can you learn what can you not learn from these models. And I think you have to understand this field is still in the early days. And for the DLL3 molecule, I think we were in iteration 7 or 8. So that's the seventh generation that we have. With Novartis, just given the broad pipeline they have and the way they operate, we think never made it by on Level 3. So it was maybe not that fast cycling I do think and I'm fair to say, I've said that on stage that -- that was also learning for Novartis, and that was one reason they acquired Mariana to have [Poplabs] (ph) faster to be able…

Yes. Thanks, Richard. And also here next time we meet, let us take the time and sit together, say, look at the piece of paper the laptop screen. I think the challenge is in animal model is relatively perfect so you can control everything, you can give a number. And preclinically, you've probably seen this before, we like to go above one, so ideally 2:1, tumor to kidney. And then, of course, sometimes there is a question which time point do we integrate over many time points. So animal models relatively easy. In patients. We need to learn clinically whether there is exactly the same translation. In the end, it boils down to the therapeutic dose we can deliver. So ideally, we have, as Patrick said, more of the uptake in the tumors, but I'm pretty sure it depends on the tumor size, the blood profusion. Whereas the kidney will be probably relatively similar from patient to patient. So if we can deliver a therapeutically relevant dose to the tumors and we're speaking in the order of one hundred [indiscernible] per dose and the kidney stay below the safety line that is at the moment accepted, so several grades. But it's exactly one of the questions. We don't know for sure whether the kidneys for [Alzheimer to like] (ph) that have the same limit. So we will have the discussion with the FDA, will propose our dose escalation rationale and I'm pretty sure it will be similar to preclinical data, but I would not look for a specific number because two dosing patients are very different. So on average, I hope it's above the kidney value, but maybe in the end, it's about therapeutic window.

Excellent. Thank you.

The next question comes from Mike Nedelcovych with TD Cowen. Please go ahead.

I have two. When it comes to DLL3 in radiotherapy, do you know you mentioned the kidneys, which I believe is nonspecific off tumor uptake. Do we know -- are there any on-target off-tumor DLL-3 expressing organs we should be concerned about when we see the first imaging or dosimetry data. That's my first question. And then my second question is on the switch DARPin platform. This is very unique and very promising. How do you think about partnering in terms of the scope and scale? Would you be pursuing a partner for an individual molecule or more kind of platform-wide? Thank you.

Maybe Philippe, take the first question on DLL3 and I'll be happy to talk a bit on the platform or candidate partnering.

Yes. So thanks, Mike. I reason is a clean target. That's why there is so much excitement about it. I would want to say. And experts are very excited, in fact, based on the recent accumulation of experience which has conveyed on the antibody on the ADCs or on the radiopharma approaches. So there is a body of experience, which is still early, but rapidly shaping. And I think for what we know from the programs is that we -- pituitary gland is the only place, which is -- has some level or many level of DLL3 expression. All the rest is clean. And when we looked at the tarlatamab experience, for example, they did not have any specific safety profile. And of course, we checked on the pituitary gland, and there hasn't been any adverse event that makes think that would be an issue. But of course, technically, if I could say there is a little expression there outside of the tumor. So that's really the one that will watch. Although, again we are not very worried because if there hadn't been a problem, we would have seen it already. So that's a very clear target, and we are confident. Obviously, and as we are preparing our protocol, obviously, what are the adverse events of special interest, and that this is short for us, but also for the others.

And maybe just to add because there is a big hype on DLL3. So I think on the target, people totally agree that, that is call it validated and a very good target to go after. And we just had dinner with a PI that is in many trials. And for me, what was reassuring to here is that the different modalities, and we're talking T cell engagers, ADCs and radiotherapy that he also said there is a need for all of them. None of them will cure as of now. And the sequence and how we can actually develop them is was very excited for him, and he actually sees a big place for the radiotherapy there. Even a bit in an earlier line to help the others move forward. But thanks for the question. I'll take also the partnering one. And the question is great. I mean some partners like to work on a candidate. These are either companies that have a specific need, let's say, your -- just take this as an example, you are in breast cancer and then you want a breast cancer target and candidate for the pipeline and ideally then we have a candidate there. You sort of are the missing piece in the puzzle. As you don't know and kind of in which part you fit well, that is sort of an opportunistic one. You obviously look what do we have, which candidates do we have and where would they fit? That is one part of the partnering versus the other. The big pharmas obviously take long shots. They see that they want to fill their pipeline over time. And often, they say okay, your targets are a nice showcase, but can you do these? And both discussions are valuable. Obviously, if you have to start from scratch, that's in 18 months, 30 yes. Two to 4 years of research and development, as we just saw with the Novartis collaboration. Usually, they come with a good upfront because there is high risk, so you have to also commit something there. Versus a candidate that is ready to be in the clinic within the next 18 months that is exciting. At the same time, it has that puzzle piece has to fit, and we don't know sometimes where it fits. So both we are looking at -- we're looking into both. Discussions are ongoing, and we will see how they develop from here.

Thanks.

The next question comes from [indiscernible] with Kempen. Please go ahead.

Hello team, this is Kiara from Kempen, thanks for taking my question and congratulations with the update. On 712, I was wondering, the Phase 0 and I will not run in parallel right. So did I understood correctly that the Phase I start is contingent upon good imaging data or am I wrong? Thank you.

Sorry. Thanks a lot for the question. It's a really good one because we are proposing to the FDA that it should not depend on each other. We want to do them in parallel. We have the required animal data to argue for the parallel start. But in the end, of course, we will listen and have to live with what FDA decides. So stay a bit with us ideally in parallel, but it's a regulatory question. So -- and if that is, I think we will probably keep them together just a few months apart because patients like to be treated and not just image so also for the patient, we keep them closely staggered.

Yes, of course. Thanks a lot. Really helpful.

And the last question today will come from Joris Zimmermann with Octavian. Please go ahead.

Hi, Patrick and team and thanks for the presentation and for the opportunity to ask questions. I have a short one, I guess, on just on the structure of your deal with Orano Med. If you could elaborate a little bit on how those different programs are split between the two companies? I mean you've nicely depicted that on Slide 12, I guess. Just to understand, so the later programs will be fully owned by you, and then there is two with opt-in, but who will take the commercial lead for those? And then also for three and four, is it correct that this will be mainly led by Orano Med?

Thanks for the question, and this is a good opportunity to quickly explain how the deal works. And I'll do a sort of recap of how this all came about. So we started the collaboration on NTA with Orano Med on the DLLS DARPin. And so that was sort of, call it, the honeymoon. And we have made very good progress on it. And then we said, okay, let's move forward. At that point in time, we did a deal with actually three targets or three products these were both 50-50. We got the first. The idea was they would take the second. And then the third, we would see how that develops. And I think we have underestimated the speed and productivity of what we were doing. And so what had happened is that we took the first, but then mesothelin came about and we had to approach them and say, Actually, we have a second and then there was an imbalance, we said, okay, then let's add a force that we get one and two, and they can have three and four in the 50-50, but commercial lead for one and two are with us. In the meantime, they were successful in their Phase II and did a massive deal with Sanofi, bringing in CHF 400 million for late-stage development and commercial supply -- so they have a clear mandate now to put that money to work, build the manufacturing site, build the last mile, built the logistics. So Sanofi is not doing that. That will be with Orano Med. And sort of I would say it is clear where their focus is. And so we were like, okay, we have one and two. You have three and four and you're focused at late stage, let's sit together…

Thanks very much. That makes a lot of sense. Maybe a very quick follow-up. You mentioned the high productivity. So how should we think of time lines and frequency of you and Orano Med disclosing the additional programs?

Yes, that’s a good question and that is like you never communicate too much what you’re doing in research because it is so risky. And if I will give you an update on our pipeline today in research and a year later, a lot has changed. That is always that we’re careful. But I think it’s fair to say that my guess is we’ll have two new targets that we will be talking about this year and also new, call them, technologies that we are testing. So it is not that we are waiting in radio and sitting there, but we’re also evolving our platform for a next generation as we go. So I think in all fairness, roughly two targets per year is likely a productivity that is fair. Pending the results of 712, obviously, we can ramp up more, their clinical data will be key. If that looks as we hope for, then let’s move forward and do more.

This concludes our question-and-answer session. I would like to turn the conference back over to Patrick Amstutz, CEO for any closing remarks.

Yes. No, thanks again, 20 years molecular partners, 20 years innovating and bringing drugs forward. I'm also proud on the timing. This is almost switch timing. We're right on the hour as we had planned. So also thanks and thanks for all the great questions. We're off to an exciting year. We'll keep you updated as we collect the data. We also work closely with you to give you the -- what you need to understand the data as we're doing that. And also I'll end with a big thanks to my team, treating physicians and especially the patients. See you all soon, and we're at many conferences going forward. So reach out and we'll be in contact.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.