Ascelia Pharma AB (publ)

Thank you, and welcome everyone to the Q1 report for 2024. On this call, we will be making forward-looking statements. On today's call, we will start with the Celia Fama highlights and recent key events. This will be followed by a portfolio update before moving to financials and priorities ahead. As mentioned, after the presentation, we will open up for questions. At Ascelia Pharma, we identify, develop, and commercialize novel drugs that address unmet medical needs within rare cancer conditions. We have two drugs in our pipeline. Orbiglans has now been advanced to the registration phase, as we have successfully completed the pivotal phase three clinical study. Orbiglans has offered drug designation from the FDA and is targeting an addressable market opportunity of $800 million. Oncoral is ready to start phase two in the treatment of gastric cancer. based on encouraging results in phase one and a high level of unmet medical need. We're based in Malmö in Sweden and are listed on nasdaqs.com since 2019. In Q1, we made solid progress, which has been followed by a busy period after the close of the quarter. In the first quarter, the nomination committee was appointed, and the Oregon Review article was published in Investigative Radiology. This is one of the highest impact radiology medical journals. In February, we announced the financing of up to 35 million Swedish kronor, which extend our financial runway to Q2 2025, if fully utilized. After the closing of the first quarter, we have announced a number of events. In the first half of April, we announced the completion of SPARQL image reading by the independent readers and narrowing the timeline for the results to the first half of May. We also drew the second and final 15 million second tranche of the formal financing. On 2nd of May, we announced the strong headline result from the SPARCO study, making this study highly successful. We will talk a lot more about this on this call. A few days after the results, we had the annual general meeting, which was followed by the investor update, bringing all the grants to patients. Orbeglans met the primary endpoint in SPACO, making this study a success. It not only met the primary endpoint, it met it with a substantial margin. All three out of three readers met the endpoint. The success criteria was two out of three. All three readers evaluated Orbeglans to be superior and to unenhanced MRI, and the statistical test had p-values lower than 0.001, all readers on the primary endpoint. This is much lower than the customary threshold for p-value success. The conclusions are solid, and the variability levels were acceptable. This is the most significant milestone in a CVM farm's history, and a huge step forward towards making OrbitLand available to patients. Once again, I'd like to thank patients, investigators, and everyone else who have contributed to making SPARQL a success. We are very excited about Orbiglans, and here's why. Orbiglans is addressing a well-defined unmet medical need for a subgroup of patients living with cancer. This is an $800 million global market opportunity, and Orbiglans is the first in class product to target this. We have strong data from nine clinical studies, and manufacturing has been upscaled to commercial scale. With the strong phase three data, Overglance has now been advanced to the regulatory phase. We focus on three key objectives to create even more value to shareholders. The first objective is a timely submission and approval of Overglance with the optimal label. The key steps on the way are completion of the SPARCA clinical study report, which we expect in early Q4. It's also a key milestone with the conclusion from the pre-submission meeting that we plan to have with the FDA, and we expect to have the conclusion from the meeting in Q1 next year. The feedback from the FDA will be used to finalize the NEA submission, and that is expected to be filed in the middle of next year. The second objective is to progress all the plans for commercialization for patients in need. There are two key tracks. One is to continue to advance the launch readiness by ensuring manufacturing and supply chains is ready for launch, as well as working with medical experts, key opinion leaders, payers, patient advocacy groups, and other key stakeholders. The other track here is entering into commercialization partnerships to make sure that there is an infrastructure in place following approval to make sure all the guys can get to all patients. third objective is to develop the potential in the pipeline we're excited about on crawl and the planet phase 2 study where we will evaluate in on crawl in combination with lumpsurf in our pipeline we also have a second generation overland program that we would like to advance very limited activities ongoing right now in our third track here and we look forward to accelerating these activities once financing is available all in all there is tremendous potential in acelia to create value for shareholders With this, I conclude the highlights and recent key events, and we will now move into the portfolio phase. We start the portfolio section with our presentation on Oroglance, and I'd like to hand over to Andreas to continue the presentation.

Thank you, Magnus. Oroglance is a first-in-class liver MRI contrast agent, which addresses a very specific medical need. where there are no good alternatives available today. Cancer in the liver is a major problem in cancer treatment, and most cancers in the liver are metastasis, where the tumor originates in another organ and spreads to the liver. Contrast-enhanced MRI is the gold standard procedure for examination of patients with suspected or known liver lesions, including metastasis. The most used contrast agents available are all based on the heavy metal gadolinium. In patients with severe kidney impairment, use of gadolinium-based contrast agents has been associated with an increased risk of a very severe side effect called nephrogenic systemic fibrosis, which even may have lethal outcome. Both the European and US regulatory authorities have, for that reason, issued warnings for the use of gadolinium-based contrast agents in this group of patients. The consequence is that patients with impaired kidney function typically will get an unenhanced MRI which will result in liver images of suboptimal quality with a risk for that the cancer is not managed in the best possible way. We envision that Orviglans, which is based on manganese, will address this unmet medical need in the future and become an efficacious non-gadolinium contrast agent for cancer patients with impaired kidney function. We have now obtained highly encouraging headline data from the SPARQL phase 3 study, clearly demonstrating strong superior enhancement of visualization of focal liver lesions with orbiglans compared to unenhanced MRI, as evidenced by p-values lower than 0.001. The strength of the data is emphasized by the fact that all three independent readers who evaluated the efficacy in the study confirmed superiority of orbiglans. For the study to be successful, at least two of the three readers needed to observe a statistically significant improvement. With this in mind, the unanimous reporting of a highly significant effect makes the conclusion that orbit-balanced MRI is superior to unenhanced MRI very strong. Importantly, in the light of the issues with the intra-reader variability reported last year, the analysis of the data also showed an acceptable level of variability for all readers, making the analysis strong and conclusive. Common adverse events, primarily mild to moderate nausea, were in line with previous phase one and two studies with Orbitmance, and no serious adverse drug reactions were observed. With SPARQL, we have a comprehensive package of clinical studies with consistent positive efficacy and safety data that will be used for the submission of the new drug application, NDA, filed for regulatory approval by the US FDA. A total of 286 patients and healthy volunteers in nine clinical studies will be included in the NDA file. We are aiming to submit a high quality NDA to the FDA as soon as possible. Our goal is to secure approval for an optimal label, offering a new choice for patients who can't use gadolinium-based contrast agents for liver imaging today. With our comprehensive data package in hand, which includes the clinical data as well as non-clinical and chemistry and manufacturing data, we are now intensifying our preparations of the NDA file. Focus is to ensure that every aspect of OrbeGlance is thoroughly documented and presented, reflecting our anticipation of successful review by the US FDA. We are on track to submit the NDA for OrbeGlance by mid-2025. And following the submission, we anticipate a standard 10-month review process by the FDA. On the way towards the NDA submission, we are looking forward to key milestones such as the delivery of the full study SPARQL report in early Q4 this year and the completion of the pre-NDA meeting with FDA by Q1 2025. The pre-NDA meeting is a critical project in its own right with a purpose to lay out the groundwork for the NDA submission. This ensures that we are on the same page as the FDA and will facilitate a seamless review process when we file the NDA. To wrap it up, with the strong headline data from SPARQL demonstrating superior imaging with OrviGlance compared to unenhanced MRI, we are now advancing OrviGlance into the registration phase. With that, I will hand over to Julie.

Thank you, Andreas. So the addressable market for OrviGlance has a global value of $800 million annually. The US represents almost half of this. This market opportunity for Orviglans addresses the unmet need for a well-defined patient population. Cancer patients who need liver imaging and who also have severely impaired kidney function. Our strategy for commercialization is to launch through partners. This strategy supports our ambition to secure the optimal balance between future revenues and investment required. And it allows us to leverage commercial capabilities already established by a partner. Our focused ambitious launch strategy and plans built on advanced market insights. And these are in place to support this partnering strategy and to support the launch. As mentioned, US is the largest commercial opportunity. In the US alone, our real world data, i.e. data from realized procedures in our target patient population, show that every year 100,000 abdominal imaging procedures are performed in 50,000 patients that fall under the black box warning for gadolinium contrast agents. This is about 4% of cancer patients that undergo abdominal imaging. The well-defined patient population with a clear unmet need also drives an attractive pricing opportunity. And we have extensive input from market access and pricing experts with whom we tested different price levels and collected insights on the evidence needed to support access and reimbursement at launch. And we have also investigated pricing and access benchmarks for other innovative diagnostic drugs in the US. 90% of healthcare professionals are concerned with the issues related to gadolinium contrast agents, including nephrogenic systemic fibrosis, or NSF, as Andreas mentioned. In fact, 16% of providers have experienced gadolinium-induced NSF. These insights come from market research with 270 U.S. healthcare professionals and answers from radiologists, nephrologists, and oncologists. And these insights confirm the concerns with gadolinium in clinical practice and the unmet need for overglans. When speaking to experts, whether in radiology or nephrology, they also confirm that an alternative to gadolinium for our target patient population would address concerns of today, supporting the potential for overglands to become a valuable addition to their clinical practice. In clinical practice, the unmet need for our target patient population is also well recognized. Physicians tell us that patients who need liver imaging and fall under the black box warning for gadolinium today receive MRIs that balance the trade-off between, on the one hand, being without a contrast agent, i.e. an inferior image quality, or by being a half-dose gadolinium. These are around 80% of the patients in total. Or by being with a full gadolinium dose, with the awareness that gadolinium is not recommended for these patients due to the black box warning. All of these patients are potential over-glanced patients. Beyond the risk of NSF in kidney impaired patients, gadolinium is well known to be retained in the brain and other tissues in all patients. And scrutiny over the possible safety effects is a key concern of regulators and medical bodies. It is also well known that gadolinium is excreted via the kidneys in urine. Because it's difficult to remove in our sewage systems, this is discharged into the environment, even into our drinking water. So there is an urgency from regulators and medical bodies to find a viable alternative to the growing use of toxic gadolinium. An alternative that is not associated with these potential safety and environmental concerns for patients and for the environment with gadolinium. So in short, the momentum for an alternative to gadolinium is getting better and better. And the industry is responding to this. Recent developments from the large gadolinium manufacturers are focused on smaller doses of gadolinium. And there's even an early-stage injectable manganese-based contrast agent, which is not like overglans because it's not liver-specific. So we are excited that we have a head start and that overglans is expected to be a first-in-class to lead a future with less gadolinium and improved outcomes for our target patients. The go-to-market strategy for Overglams is to launch with commercialization partners. This supports our objectives to secure the optimal balance between future revenues and investment required. And as mentioned, it also allows us to leverage the commercial capabilities already established by a partner. So the focus of Aselia is to continue the dialogue with potential partners and to ensure that Orviglans and their partners are ready to launch upon approval. So we are both excited and optimistic about our launch preparations and our partnering opportunities, and also because almost all physicians tell us that they would like to use Orviglans when it is available on the market. So in summary, OverGlance addresses a well-defined unmet need and it represents an attractive commercial opportunity. Our focus is to ensure that OverGlance is ready for launch with a partner and all our efforts to help patients and to launch OverGlance are well recognized by experts and partners in the industry. With this, I will hand over to Andreas to talk about Oncoral.

Thank you, Julie. Yes, let's move on to Oncoral. So, Oncoral is a daily tablet formulation of arenotecan, a well-established intravenous chemotherapy. A daily tablet formulation enables a frequent low-dose dosing regimen that could offer potential advantages on both efficacy and safety compared to the infrequent high-dose intravenous administration used today. We have completed a phase 1 study which demonstrated a promising safety profile and desired uptake of the drug after oral dosing consistent with the daily dosing concept. We are now planning for taking Oncoral into clinical phase two. The objective is to generate clinical proof of efficacy data in metastatic gastric cancer in combination with Lonesurf, another oral cancer treatment approved for gastric cancer. Animal data has demonstrated a synergistic effect of arenotecan when combined with Lonesurf, which makes this combination very interesting. The planned phase two study is designed to study Oncoral plus Lonesurf against Lonesurf alone. And the study will randomize approximately 100 patients and involves a clinical collaboration with Taiho Oncology, who will provide clinical advice and long-serve for the study. We will initiate the oncology clinical work as soon as we have the financial resources to do so. Arenotecan is a well-established chemotherapy with recognized anti-tumor effect in solid tumors. Our strategy is to start on-crawl development in gastric cancer, which is today a $3 billion market. For these patients, there is a high medical need for improving outcomes, and there is an opportunity for an orphan indication. We also see opportunities for developing on-crawl in other solid tumor indications, where a daily dosing tablet formulation can demonstrate an attractive efficacy and safety profile. Arenotecan as an IV formulation is already approved in colorectal and pancreatic cancer. In addition, arenatigen is clinically demonstrated and recognized in guidelines for other cancer types. So we are assessing these opportunities as part of our ongoing strategic planning for Oncoron. So with that, back to Julie again.

Yes, thank you and Præst. So to the financials and outlook. In Q1, our operating results was a loss, i.e. cost of 16.7 million kroner. This is a slightly increased loss compared to Q4 2023 and was driven by the completion of the SPARQL re-evaluation as well as NDA preparation activities. At the end of March 2024, we had 27 million kroner in the bank. This includes the first tranche of the FOMO Nord financing announced in February. In April, we drew the remaining 15 million of this loan financing. With the full financing in place, we have a cash runway into Q2 2025 covering the completion of time-critical activities for the NDA. To wrap up our update today, We have substantial value creation opportunities ahead for Acelia Pharma and for both of our open oncology assets in clinical development. We focus on three key objectives to create even more value to shareholders. With OrbiGlamS, we're bringing to market a first-in-class diagnostic drug addressing an $800 million market for patients with a high unmet need. The first objective for OrbiGlamS is a timely submission and approval with the optimal label. The key steps underway are to complete the SPARQL clinical study report in early Q4, to reach conclusions from the pre-submission meeting with the FDA in Q1 next year, and to submit the NDA in the middle of next year. The second objective is to progress all the plans for commercialization for patients in need. The key activities are to continue advancing launch readiness by ensuring that OverGlance manufacturing and supply chain is ready for launch, and by working with medical experts, KOLs, payers, and patient groups, and other stakeholders who are instrumental for the adoption of OverGlance at launch. Our other track is to continue the dialogue and to enter into commercialization partnerships for overglands. The third objective is to develop the potential in the pipeline. We are excited about UNCROAS and the planned phase two study, where we will evaluate it in combination with Lonserve. In our pipeline, we also have a second generation overglands program that we would like to advance. Very limited activities and resources are allocated to these pipeline opportunities. And we look forward to accelerating these once financing is available. All in all, the strong headline results from Sparky announced earlier this month marked the completion of the clinical development of OverGlass and reinforced our confidence in the regulatory and commercial path ahead for OverGlass. We look very much forward to executing on the opportunities ahead for Overglance and for Antilia Parma in 2024 and beyond. This concludes our update today. So, back to the operators.

If you wish to ask a question, please dial pound key 5 on your telephone keypad. To enter the queue, if you wish to withdraw your question, please dial pound key 6 on your telephone keypad. There are no phone questions at this time, so I hand the conference back to the speakers for any written questions and closing comments.

Thank you, everyone. We have received some questions here, and you are invited also to ask questions here on this portal here. So the first question is, has the company been approached by any parties expressing interest in making a bid for the entire company or specifically for all the clients? Briefly speaking, we cannot really comment on that. What we have said is that our strategy is to find commercialization partners. And obviously, at the point in time where there is any firm announcement that are material, then we will not make those announcements. We cannot comment on the activity level or dialogue level at any point in time. Another question is, is GE Healthcare a potential partner for taking OverGlance to the market? Maybe, Julie, you can comment on a specific company, but obviously, it's general comments we can make.

Yeah, I agree. We wouldn't comment on a specific company, but of course, the actors in radiology diagnostic drugs, the gadolinium manufacturers are, of course, partners that potentially could see value in adding OrbitGrants to their portfolio, among other potential profile of companies.

There is another question here. Do you have any thoughts on the possibility of requesting a product review from the FDA? And this is, you could say, a dual question. Part of it is regulatory, another one is commercialization. Maybe, Julie, you can provide an answer here.

Sure. So priority review, that's something we can consider when we submit the NDA. And then the FDA would decide whether or not to grant this. A priority review means that the review timeline, the standard review, is reduced from 10 months to six months. So in the scenario of a six-month review timeline, what we need to consider before we apply for this is that we are absolutely sure we are ready to both answer the questions from the FDA with high quality during the review, but also that we are ready with a full launch upon that approval. So that's something we don't need to to decide right now.

Yeah. And just to complement, that's also something that would be in dialogue with most likely a potential partner in terms of their launch readiness, as Julie alluded to. Another question here is, Could you provide any further insights or narrow estimates regarding your price of $3,000 to $4,500 per organ's dose in the U.S.? Julie, that's one for you.

Yeah, so this pricing is based on, as I mentioned, tests with different types of payers in the U.S. And so that's how you end up with a range. Essentially, we now have the full data. In the future, we'll have the label. And those are the elements that we need to narrow down on the more precise pricing. At the end of the day, it's going to be about finding the optimal balance between the volume we can address within the labels and the price and value per dose. The right time to narrow that is a little later in the process. But the key is, I think, that so far with all the data we have and the target product profile is that the feedback is that we can obtain a very attractive price.

Here's another question. So please discuss who are the key biopharma players that are relevant for consideration as potential partners for Orbit Labs, and also sharing some of their current activities in the relevant space for diagnostic LiverMed product and deal history. In general terms, please describe your ongoing partnering discussions, status, aims, and partnering outlook for 2425. So, a lot of things to cover.

Julie, would you like to start? Yeah, I'll start. ongoing partnering discussions. As the question also alludes to, that is an ongoing process. We have an understanding of the different profiles, which is a question here I'll answer, and then how does such a process evolve? First of all, we now have the headline data, so we are in a position to sort of, you can say, ramp up on, intensify some of these discussions in terms of of the the process i think that that's that's a key thing that we can move from all the current data and and all the strategies we have to now have reduced the risk significantly with positive headline data and also having a plan for the mga so there are some steps in the process that are instrumental for these partnering discussions and then the other question is around Who are the key players and is there a deal history? The key players that could be interested in a product like Overglance are players where there's some kind of synergy in the commercial operations or strategy, and where Overglance has a meaningful contribution to that strategy. So some of these synergies could be that they are distributing or they are commercializing to radiology departments for sure at hospitals or independent radiology clinics. So those are of course among the gadolinium manufacturers, but there could be other companies that are currently commercializing drugs within radiology. Another angle to the Synergies is that Overglance is a high-value drug for a well-defined small population. So a partner that understands the value and the mechanics in commercializing, you can say, a high-value, small-volume drug is another area of synergies and, of course, also a profile of players. And then, again, there are other sort of Similar types of synergies, for example, a partner who has a portfolio within nephrology, so experts in kidney diseases would also be a partner where all the glands could contribute to that portfolio. But I think that was enough about this. I don't know, Magnus, if you had something to add here. In terms of the deal history, there's been some mentionings, and we know that some of the large radiology players have been active in M&A and investment and commercialization agreements on a long-term basis, but I don't think maybe that it's in our place to map out the deal history here.

Yeah, I think definitely transactions happening and especially in terms of the later stage transactions that have been successful. And I think if we're thinking about sort of specialized diagnostic drugs, maybe just a couple of questions or examples like Blue Earth that was acquired by Braco for around $450 million. A couple of years ago, we also had Progenix being acquired by Lantheus. I think that's probably a, if I recall right, but that's probably just out of memory, but like $300 million transaction. And that drug is approaching blockbuster status for Lantheus today. So there are some very attractive transactions being made in this space for specialty diagnostic drugs that address a clear medical need. So I think there are great opportunities, and as Julie said and has presented also in our various investor updates, this is a focused commercial launch, which means that it's not a huge team that is required to successfully penetrate the majority of the U.S. market. And that opens up to the categories you mentioned in terms of the radiology companies, but also other companies within oncology, nephrology, et cetera. So I think that's it gives us a you know some broad range of opportunities with companies that could be potentially very good fits to to all accounts so we're very excited about this and uh uh you could say with the phase three data uh that's a good um good component of having a partnership discussion yeah another question is here is once financing is available uh that we mentioned from So this could be understood by skeptics as if you expect to run another finance launch, but it seems more likely that you would generate the required income from partnering. Please comment. So I can have a stab at this. I think our plan is to make sure that we meet the most successful value inflection points. Looking back at it, it has been to complete the SPARQL study. It has now been completed. We have very successful data. Going forward is the NDA process and the partnering that is sort of key activities. And it would not, given the current balance sheet, would not be prudent to initiate phase two of our crawl and move forward in a big way with second generation all the time. So we refer to this. Because it's an opportunity to invest where we think the return is going to be very attractive. But we are very conscious of managing the balance sheet and the cost. And therefore, we say, this is an opportunity. We will invest in it once the money is available. We have also stated that we are looking at various sources of capital. and keep all options open, if you will. I think we would expect with this kind of phase three data that a partnership deal would bring in cash to the company. That could be a financial driver or it could be financial markets. We don't rule anything out. We're not saying we want to do one thing or the other, except that we have clearly stated that we want to bring in commercial partners for all the clients. Hopefully, that clarifies any uncertainty in terms of financing. This was the final question. So thank you, everybody, for joining the Q1 2024 for Acelia. We are very excited about the data and the result of this part of the study. It is taking a bit longer than originally anticipated, but we are here at the end. We have very, very strong phase three data and are excited about moving the asset forward towards patients in the regulatory phase and also ensuring launch readiness in terms of supply and stakeholder engagement and finding commercialization partners. So with that, I'd like to thank everybody for participating and have a wonderful day.

Thank you.