Lots of interesting tidbits in Taimed's CEO Letter2020 Annual CEO Report
2021-03-05
Dear Fellow Shareholder,
All of us witnessed an unprecedented global pandemic in 2020 that raged across every continent as COVID-19 inflicted enormous social and economic disruption. A year ago, I was expecting Trogarzo® (ibalizumab-uiyk) sales in 2020 to grow 40% over 2019. With many parts of the U.S. in a lock-down for most of the year, however, the sales grew only 11% from USD$27.7 million to $30.7 million based on Theratechnologies’ financial report. This is only temporary. As the pandemic is brought under control in 2021 with the introduction of a number of powerful vaccines, I expect Trogarzo® sales growth to accelerate again in the next few years. In addition, Trogarzo® was officially launched in Germany in September following EU approval of the drug a year earlier, and many other significant EU and middle eastern countries will soon follow. This will no doubt further fuel Trogarzo® sales.
The recent approvals of competitor drug products Rukobia (fostemsavir) and Cabenuva (cabotegravir/rilpivirine) in some ways should benefit the promotion and adoption of Trogarzo®. Rukobia oral tablets, like Trogarzo®, is indicated for use in HIV patients with multi-drug resistance. Physicians frequently have difficulties constructing a treatment regimen to fully suppress MDR patients’ viral load for an extended period of time. With two fully potent options available, it is easier for physicians to address the drug resistance issues and construct an effective treatment regimen. In fact, Trogarzo® and Rukobia, at the FDA’s request, were used together in many of the study subjects in two separate phase 3 clinical trials a few years ago. Cabenuva monthly injectable, on the other hand, is indicated for use in HIV patients who are already virologically suppressed and therefore competes in a different patient category from Trogarzo®. However, the introduction of Cabenuva injectible will help with a paradigm shift from daily oral pills to long-acting injectables, which in turn will help with current adoption of Trogarzo® and TaiMed’s other HIV injectible pipleline products down the road.
In addition to the anticipated Trogarzo® sales growth, we want to boost profit margin by reducing manufacturing cost. For the last two years, we have been working diligently with Samsung Biologics Laboratories (SBL) to qualify Trogarzo® commercial manufacturing using 15,000L bioreactors at their site in Incheon, Korea. All the process performance qualification batches have been successfully executed and placed on stability studies. We anticipate filing a BLA amendment with the US and EU regulatory agencies for site approval in the third quarter of 2021. Once approved, those PPQ batches can be used for commercial sales, and because their expenses were already substantially booked, our cash outflow for Trogarzo® manufacturing in the next two years will be substantially reduced. Going forward, Trogarzo®’s gross profit margin will be dramatically higher with the employment of the 15,000L production scale compared to the current 2,000L scale. In addition to registering SBL for Trogarzo® manufacturing and testing, we are also qualifying our own QC laboratories and TFBS Bioscience in Taiwan for Trogarzo® testing as part of the upcoming BLA amendment filings. This will add additional flexibility as Trogarzo® continues to be launched in many parts of the world including U.S., Europe and Middle East.
With respect to TaiMed’s own manufacturing facility in Taiwan, I’m glad to report that it is fully ready for GMP/GLP manufacturing. All the facility GMP, equipment installation qualifications and operational and performance qualifications were completed in 2020. As of this writing, our 50+ hardworking employees in the plant are manufacturing TMB-380 batches for the upcoming toxicology and phase 2 clinical study supplies.
As a drug development pureplay, TaiMed continues to focus on its pipeline in virology, HIV in particular. We have a balanced portfolio with a number of promising antibodies in various stages of development. First, we have completed enrollment of the phase 3 label extension study for Trogarzo® IV push administration and expect to file a BLA with the US FDA in the third quarter in 2021. The administration of Trogarzo® by intravenous push shortens the time from 15 minutes, the usual length needed for I.V., to less than a minute, thus greatly improving the convenience for both the physician and the patient. The approval of the IV Push will trigger a milestone payment to TaiMed and, more importantly, will enhance Trogarzo®’s market penetration. Second, the phase 1 safety and pharmacology study of TMB-365, our next generation monoclonal antibody for the treatment and prevention of HIV, is well underway. The interim result from the first cohort of HIV-positive patients dosed with 400 mg of the drug shows better than expected efficacy in terms of receptor occupancy and pharmacokinetics. This is truly exciting. Our goal is to develop a long-acting injectable with monthly dosing, so that it can compete with Cabenuva in the earlier HIV patient categories, unlike Trogarzo®, which is limited to the MDR patients. Given the unique benefit of benign safety profile of antibody drugs, we believe TMB-365, if successfully developed, will be a game changer. The results from the second cohort of patients treated with 800 mg will be available in Q2 2021. Our manufacturing staff is planning to make the first 2000L GMP batch of TMB-365 in the second half of 2021 in TaiMed’s own facility for the purpose of supplying a planned phase 3 study in 2022.
TMB-370 and TMB-380 are two other promising antibodies for the treatment of HIV infection that we are also actively developing. TMB-370 is a bispecific antibody molecule that we licensed from Aaron Diamond AIDS Research Center and currently in a phase 1 clinical study in the U.S. The molecule combines ibalizumab, which binds on the CD4 receptor of the T cells, and another antibody that binds the virus to create a synergistic mechanism with a long-acting dosing regimen. TMB-380 is a highly potent, broadly-neutralizing monoclonal antibody VRC07-523LS licensed from the U.S. National Institute of Health (NIH) in 2019. Previous phase 1 studies conducted by the NIH demonstrated a superior safety and PK profile of this promising molecule with an efficacy lasting for several months following a single administration. The pairing of VRC07-523LS with either TMB-365 or TMB-370 can create a highly effective long-acting dosing regimen. As the treatment paradigm for HIV infection shifts towards long acting injectables in the future, as many predict, TaiMed is well positioned to compete in this space.
In 2020, we licensed a human antibody (2-7, TMB-200) from Columbia University for the treatment of Covid-19. In light of the quick emergence of several variants of the virus and the likelihood of continued viral mutation in the viral spike proteins, however, we have decided it is prudent to pursue antibody cocktails rather than a single antibody for treatment. Accordingly, we suspended internal development of 2-7 and made an equity investment in RenBio, who will continue the antibody cocktail development of 2-7 with another antibody of their choice for Covid-19 treatment.
At the end of 2020, TaiMed had TWD$1.2 billion cash at hand. Since the formation of the company in September 2007, our accumulated losses over the years have exceeded 50% of our raised capital. TaiMed’s net equity per-share is TWD$13.54 at 2020 yearend compared to $14.22 a year ago.
Our effort to turn a profit in 2020 was unexpectedly interrupted by the Covid-19 global pandemic, but this is only temporary. Vaccines and science have made a tremendous impact on the outlook for the world and we intend to follow suit. As Trogarzo® sales take off in 2021, coupled with accelerated timeline of developing our promising pipeline and the improvement in manufacturing efficiency, we are confident the outlook is brighter than ever. Thank you for your continued support in TaiMed Biologics.
Chairman & CEO
James Chang