Ascelia Pharma AB (publ)

Thank you and welcome everyone to the webcast for Aselia Farmer's Q3 report for 2024. On this call we will be making forward-looking statements. On today's call we will start with recent key events and then head into our portfolio update before moving to financials and priorities ahead. After the presentation we will open up for questions. At Aselia Farmer we identify, develop and commercialize novel drugs that address unmet medical needs within rare cancer conditions. We have two drugs in our pipeline. Orviglans is in registration phase as we have successfully completed the pivotal phase 3 clinical study SPARQL and we're preparing the NDA submission. Orviglans has orphan drug designation from the FDA and is targeting an addressable market opportunity of 800 million dollars. Oncrol is ready to start phase 2 in the treatment of gastric cancer based on encouraging results in phase 1 and a high level of unmet medical needs. Aselia Farmer is based in Malmö, Sweden and we are listed on Nasdaq Stockholm. So communications in Q3 were dominated by the rights issue that has now been completed. The rights issue was fully subscribed to 105 million Swedish kronor and as part of this transaction we repaid half the convertible loan to Fenja Capital so it is now at 7.5 million. Since the end of Q3 there have been a number of activities that we have reported. The phase 3 primary endpoint result from SPARQL have been accepted as a cutting edge or late breaker oral presentation at the RSNA which is the largest radiology conference in the world. SPARQL results have also been presented as a late breaking abstract at kidney week 2024 which is a large nephrology conference in the US. This is important as the target indication for Orvi glands include people with severe renal disease who regularly see a nephrologist to manage their kidney disease. We're pleased that Marianna Kok has been elected to the board of directors at Aselia Farmer which happened at an extraordinary general meeting on October 30. Marianna has a long experience from the board of directors at Aselia Farmer in executive roles and including work within drug development regulatory affairs and commercialization. Yesterday we announced the completion of the full study report for SPARQL which reinforces the successful outcome of the pivotal phase 3 study. Andreas will talk about this in a few minutes. We're very excited about Orvi glands and here is why. Orvi glands is addressing a well-defined unmet medical need for a group of people living with cancer. This is an 800 million dollar global market opportunity and Orvi glands is a first in class product to target this and has often dropped designation from the FDA. We have strong data from nine clinical studies and manufacturing has been upscale to commercial scale. With the strong phase 3 data Orvi glands has now been advanced to regulatory phase and we are preparing for an NDA submission. We're pursuing some important value creation opportunities with Orvi glands. The first objective is a timely submission and approval of Orvi glands with the optimal label. The key steps on the way are completion of the SPARQL clinical study report here in early Q4 which is now in place with our announcement last night. The next milestone is the conclusions from the pre-submission meeting with the FDA which is expected in Q1 and submission of the formal application of the NDA to the FDA in the middle of next year. The second key objective is to progress Orvi glands for commercialization. The key activities here are to continue to advance our launch readiness by ensuring manufacturing and supply chain is ready for launch as well as working with medical experts including key opinion leaders, payers, patient advocacy groups and other key stakeholders. The other part of that is to entering into a commercialization partnership which is also a process that we are continuing our efforts in. I'm very happy with the progress we're making in Asilio Pharma and the efforts made by our team to ensure we will meet our objectives and create value for shareholders. We will now start the portfolio section of our presentation with Orvi glands and I'd like to hand over to Andreas to continue the presentation.

Thank you Magnus. Orvi glands is a first in class liver MRI contrast agent which addresses a very specific unmet medical need for which there are no good alternatives available today. Treatment of liver cancer and liver metastasis is an important challenge within oncology. Adequate visualization of liver tumors and metastasis is critical for making the right treatment decisions. Contrast enhanced MRI is the gold standard procedure for examination of patients with suspected or known tumors or metastasis. The most used contrast agents 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 NSF, nephrogenic systemic fibrosis, which may even 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 MRI without contrast, which will result in liver images of suboptimal quality with the risk for that their cancer is not managed in the best possible way. We will address this unmet medical need and in the future become an efficacious non gadolinium contrast agent for liver MRI in patients with impaired kidney function. In May we shared the positive results from the Sparkleface 3 study. We found that overglance enhanced liver MRI were superior to unenhanced MRIs. All three readers of the images reported strong, statistically significant results. We also noted that the common side effects were related to the gastrointestinal tract, which aligns with findings from previous studies on overglance. We have now finished the full study report for Sparkle and I'd like to share some of the key data and conclusions. First, let's have a look at the primary endpoints. The enhancement of focal liver lesion visualization assessed through two co-primary variables, border delineation and lesion contrast. These were rated on a scale of one to four by three independent readers. The mean scores for each patient aggregated across all readers are displayed in these bar charts. In the upper panel are the border delineation and in the lower panel you can see the lesion contrast. The height of the each bar indicates the percentage of all patients receiving that score. Blue bars represent unenhanced imaging results, while orange bars show the combined evaluation of unenhanced and overglance enhanced images. For unenhanced images, scores predominantly range from 2.1 to 3. In contrast to the combined assessment, the combined assessment revealed a shift towards scores of three to four, clearly indicating improved lesion visualization with overglance. The statistical evaluation compared overglance enhanced scores with unenhanced scores within patients and the mean pad differences along with their 95% confidence intervals are presented here. Notably, all mean pad differences are positive, indicating that overglance MRI is superior to unenhanced images for visualizing focal level lesions. The analysis yielded a p-value of less than 0.01 for both variables across all readers, underscoring the significant advantage of combined MRI. To further validate our findings, subgroup analysis were conducted and in every subgroup combined MRI was preferred over unenhanced MRI. The study also included various secondary efficacy analysis and safety evaluations. The secondary endpoints aimed to assess different aspects of overglance performance, reinforcing the primary conclusion that overglance enhances lesion visualization. Among the secondary endpoints, we observed that overglance increased the detection of lesions measured as the proportion of patients with at least one additional lesion identified compared to unenhanced. Additionally, overglance improved the ability to detect and measure smaller lesions, with the mean size of the smallest lesion being on average 2 millimeter smaller with overglance compared to unenhanced imaging. The results from other secondary endpoints consistently demonstrate that the superiority of overglance over unenhanced MRI with no analysis favoring unenhanced MRI. These endpoints include a quantitative assessment of signal intensity in the images, recommendations for the next step in treatment and reader confidence in detecting and localizing lesions. Importantly, the performance of overglance alone was similar to when both overglance enhanced and unenhanced images were evaluated together. The primary safety analysis indicated that no serious adverse drug reactions were observed and more than 80 percent of reported reactions were mild and short-lived, primarily related to the gastrointestinal tract, including nausea, diarrhea, and vomiting. The safety results from this vulnerable patient population were consistent with previous studies. With SPARQL, we have completed the clinical development. The comprehensive clinical program includes a total of 286 patients and healthy volunteers in nine clinical studies. Taken together, these studies have consistently demonstrated positive efficacy and safety of overglance. With the Phase 3 SPARQL study, confirming the superior visualization of focal level lesions in the target population of patients with severe kidney impairment and an average of adverse event profile consistent with what were observed in the other studies, we are moving ahead with the submission of the marketing approval application, the NDA for overglance. We are on track to submit the NDA for overglance by mid-2025. Having completed the full study report for SPARQL, we are now focusing on finalizing our pre-NDA interaction with the FDA by the first quarter of next year. This step is crucial for laying the groundwork for our NDA submission and review, ensuring alignment with FDA and to facilitate a smooth review process. After submission, we expect the standard 10-month review period from the FDA. So in summary, the strong results from the SPARQL study show that overglance provides superior imaging compared to unenhanced MRI, allowing us to move forward into the registration phase of overglance. So now I will hand over to Julie.

Thank you, Andreas. The addressable market for overglance has a global value of $800 million annually. The US represents almost half of this. This market for overglance addresses the unmet need for a well-defined patient population, cancer patients who need imaging of their liver 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. Our focused, ambitious launch strategy and plans built on advanced market insights are in place to support this partnering strategy and the launch. As mentioned, the 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 people with cancer undergoing abdominal imaging. The well-defined patient population with this clear unmet need also drives an attractive value and pricing opportunity. And we have extensive input from market access and pricing experts with whom we have tested different pricing levels and collected insights on the evidence needed to support access and reimbursement. And we have investigated pricing and access benchmarks of other innovative diagnostic drugs in the US. 90% of healthcare professionals are concerned with issues related to gadolinium contrast agents, including the severe side effects associated with our target patient population NSF. In fact, 16% of providers have experienced cases of NSF in patients exposed to gadolinium. These insights come from market research with 270 US healthcare professionals and answers from radiologists, nephrologists and oncologists. And the insights confirm the concerns with gadolinium in clinical practice and the unmet need for overgans. When speaking to experts, whether in radiology or nephrology, they confirm that an alternative to gadolinium for our target patient population would address concerns of today with the potential to become a valuable addition to their clinical practice. In clinical practice, this need is indeed 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 being either without a contrast agent, i.e. an inferior image quality, or by being half dose gadolinium. These are around 80% of the patients. Or by being a full dose gadolinium with the awareness that gadolinium is not recommended for these patients due to the black box warning. In addition, we're both excited and optimistic that almost all physicians tell us that they would like to use overgans when it's available on the market. Beyond the risk of NSF in kidney impaired patients, gadolinium is well known to be retained in the brain and in other tissue in all patients. And scrutiny over the possible safety effects is a key concern of regulatory and medical bodies. It's also well known that gadolinium is excreted in the kidneys, via the kidneys in urine, and because it's difficult to remove in our sewage systems, it is discharged into the environment and into our drinking water. There's an urgency 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. In short, the momentum is getting better and better. And the industry is responding. 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 liver specific like overgans. We're excited that we have a head start and that overgans 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 overgans is to launch with commercialization partners and our dialogue with these potential partners is progressing. This supports our objective to secure the optimal balance between future revenues and investment required. The strategy also allows us to leverage commercial capabilities already established by a partner. The focus of Aselia is to continue the dialogue with potential partners and reach an attractive agreement for the commercialization of overgans. We're also working to ensure that overgans and a partner is ready to launch upon approval. We're excited to announce recently that the headline data from SPACR, the phase three study for overgans, was accepted in the late breaking or cutting edge categories for key conferences. RSNA for physiology and kidney weak for nephrology. Our efforts to publish SPACR data and to build relationships in the medical community continue as we progress the NDA and our commercialization with partners. In summary overgans addresses a well-defined unmet need and represents an attractive commercial opportunity. Our focus is to ensure that overgans is ready for launch with a partner and our efforts to help patients to launch overgans, to help patients and to launch overgans are well recognized by experts and partners in the industry. And with this I will hand over to Andreas to talk about Encore.

Thank you Julie. So yeah let's talk about Encore, the other asset in our development portfolio. Encore is a daily tablet formulation of Areno-Tekin, a well-established intravenous chemotherapeutic agent. 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 one study which demonstrated a promising safety profile and an uptake of the drug after oral dosing consistent with the daily dosing concept. We are now planning to take Encore into clinical phase two. The objective is to generate clinical proof of efficacy data in metastatic gastric cancer in combination with Lonserv, another oral cancer treatment approved for gastric cancer. Animal data has demonstrated a synergistic effect of Areno-Tekin when combined with Lonserv, which makes this combination very interesting. The plan phase two study is designed to study Encore plus Lonserv against Lonserv alone. The study will randomize approximately 100 patients and involves a clinical collaboration with Taiho Oncology, the developer and marketeer of Lonserv, who will provide clinical advice and Lonserv for the study. Areno-Tekin is a well-established chemotherapy with recognized antitumor effects in solid tumors. Our strategy is to start Encore 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 Encore in other solid tumor indications where a daily dosing tablet formulation can demonstrate an attractive efficacy and safety profile. Areno-Tekin as an IV formulation is already approved in the study. We are also working on the development of Lonserv for colorectal and pancreatic cancer and in addition, Areno-Tekin is clinically demonstrated and recognized in guidelines for other cancer types. We are assessing these opportunities as part of our ongoing strategic planning for Encore. Back to Julie again.

Thank you Andreas. We are moving to financing. In September, we completed our rights issue financing. With this rights issue, we raised the full maximum financing of 105 million Swedish kronor before cost. A minimum of 70 million Swedish kronor had been secured through investment commitments and guarantees. None of these guarantee commitments were executed and the guarantees were paid in cash. Of the full financing, 7.5 million Swedish kronor of convertibles to Fenja capital had been amortized as part of the rights issue. We also have the opportunity to raise proceeds of up to 70 million Swedish kronor in April 2025 from potential execution of the Warren series TO1. The financing secures resources for completing our NDA submission to the FDA mid next year, including the key milestones on the way. The proceeds will also be used to obtain a partnering agreement for the commercialization of Overglance and to secure that Overglance is ready for launch by approval. With the fully subscribed rights issue, we now have a cash runway to late 2025, well beyond the NDA submission. In Q3, our operating results was a lost IE cost of 17.8 million kronor. This is a slightly increased loss compared to Q2 this year, driven by our cost for the NDA preparations. At the end of September this year, we had 96 million kronor in the bank. With the full financing in place, as mentioned, our cash runway extends to late 2025, well beyond the NDA submission mid 2025. This runway excludes potential payments from a commercialization partner, as well as the potential financing from exercising of the Warren series of up to 70 million Swedish kronor. It also excludes the repayment of the remaining 27.5 million in loans to Finja. So to wrap up for today, we have substantial value creation opportunities ahead for Overglance and for Aselia Pharma. With Overglance, we're bringing to market a -in-class diagnostic drug, addressing an 800 million dollar US market for patients with a high unmet need. We have two key objectives. The one is the timely submission and approval of Overglance with the optimal label. The key steps on this way are the completion of the SPARQL clinical study report, which was announced last night. And we're also on track for the pre-submission meeting with the FDA with conclusions available in Q1 2025. And we plan to submit the NDA in the middle of next year 2025. Our other key objective is to progress Overglance for commercialization for patients in need by entering into the partnering agreement and for the launch by securing that a partner and Overglance are ready when Overglance is approved. All in all, the strong headline results from SPARQL mark the completion of clinical development for Overglance and reinforce our confidence in the regulatory and commercial path ahead for Overglance. We look very much forward to executing on these opportunities ahead, both for Overglance and for Aselia Pharma into 2025 and beyond. With this, we have completed the presentation.

So back to the question. If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Johan Undris from Redeye. Please go ahead.

Thank you for taking our questions and congratulations on the progress made. The first question then is to perhaps give a bit more meat on the process up to the pre admission meetings. When can we expect photo date for the next time of interaction with the FDA?

So you're asking about the process for the pre-NDA meeting. Did I understand that correctly?

Yes.

Yes. So we are preparing for that and we are expecting to have the feedback from that process and the meeting in Q1 next year. And that the information or outcome of that meeting will then guide us to the NDA submission in mid 2025. So we are in the midst of preparing this. It's a quite lengthy process to get it all right. But it's very important we do it diligently.

Great. And this will by the sort of end of Q1, that will also include the minutes from the meetings just for classification as well.

Yes. So in Q1, we will have the final outcome minutes from the meeting.

Yes. And the OPEX run rate has been slightly higher due to some of the presumably some external resources related to the NDA, the clinical protocol process. And should we expect some external resources also during the pre-submission meeting and during the time up to submission?

So we are working with external resources, CROs that have the capacity to put everything together. It is a lot of documents and data that should be placed in the right place, so to say. So that is all in our current budgets and covered in the runway.

Yes. So what about the recent quarter? A good indication what the range could be during this period in 2025 or slight variations, I suppose?

Yes. We haven't specified the timing of the cost, but as Andreas said, the resources we need for the NDA submission and beyond to late next year are included in the current run rate. And as you saw, we had these 96 million end of September, so we haven't specified beyond that.

Yes. And on the secondary end points, which is newer from yesterday evening, that clarification looks positive. Is it possible to put that in context? Like the mean size of the smallest leason was 2 million smaller. The orbit glance, what was the compared with the average size of the smallest leason? Is it possible to give that sort of

numbers in front of me? But as I recorded the mean size for the unenhanced were around 17 or 20 millimeter. And then with orbit glance, you have a little bit smaller than that.

So 2 approximately that sort of range. And also in terms of the detections of new leases that were not detected by unenhanced, is it possible to give a reference to what the true numbers were in terms of, I suspect you wouldn't detect all the leases even with enhanced contrast?

No, the study is designed to measure lesions, number of lesions and the tape. And of course, we don't know that the truth, but as we have communicated in half of the patients, we could find at least one more lesions. So the proportion of patients were around 40 to 52% across the readers in which we found more lesions.

Yeah, that sounds good as well. And also in terms of interaction with potential partners, presumably these conferences are important. One of the conferences was staged just very recently and another one is coming up very soon. Is it something to be said about that? And if possible, any sort of sense of the level of interest from potential partners?

The partnering dialogues are progressing and of course, the partnering agreement also involves getting to know each other. So some of them are maybe at the conferences, but I think it's a little bit separate to that. Let's say it's an independent process. When we are at conferences, we always want to use the opportunities to meet the people we know or keep people we don't know yet, including physicians and other players in the industry. So it's always valuable with the key conferences, not least to be recognized with our science, which also creates some good awareness for us.

That's beautiful. And of course, even if it's not possible to give any feedback on the numbers and stages of discussions, you can confirm that there are ongoing discussions and interest.

Yeah, we can confirm that.

Yeah, and a final question from our part. It's useful with the sort of mapping up and providing some more feedback on the market opportunity out of this. Do you have a sense of how the number of early likely take up clinics, especially on the US market? Can you provide some sense on that side?

I think that's probably not really a measure that we would share or track at this stage. What we are focused on right now is getting the NDA through the process and making sure we have a strong commercialization partner that is able to drive the launch. I think that is really the key parameters. We have a good understanding of the market on a number of different parameters, a lot of the different stakeholders that's in our launch roadmap that we will be working with a partner on. So I think we are in really good shape. It's a lot of hard work ahead of us, and we're looking very much forward to those activities.

Yes, and presumably a potential partner wants to be well in place and prepare for the launch at the time of the future approval. And if an approval comes in sort of mid-26, for example, or maybe slightly later, presumably it would be interesting for a partner to be in place by at least the latest stage of 25 to start final thinking.

Yeah, I mean, obviously it would take even for a large partner, it would take some time to get ready for the launch. We don't have a specific perspective on the timing. I think we are in good shape and obviously having a good partnership is more important than getting one site too early. So I think the process is progressing well and we're having some dialogues that we think are very encouraging. So as we say, we have a strategic objective, finding a partner, and that is progressing as it should.

I look forward to 25. Thank you.

Thank you, Johan.

The next question comes from Ludwig Svensson from Carnegie Investment Bank. Please go ahead.

Yeah, hello, and thank you for taking my question.

So while

I understand that your target is a patient population for whom the full doses of gadolinium is not an option, it would still be interesting to hear if it's possible to put this data into context in terms of what would be expected for a gadolinium-based contrast agent, both regarding the primary and secondary endpoints.

So you are asking about if OrbeGlance is comparable to gadolinium-based contrast agents in terms of image enhancements, right? We have one study. Yeah, so we have one study. We have not used any comparator in the phase three study. I think that is important to remember because it is a vulnerable patient population, so we don't have data from that patient population to compare with, but we have one study, one of the phase two studies that included an arm of gadolinium-based contrast agents. It's a smaller study, but it still showed that the outcomes were comparable. So OrbeGlance is comparable to the multi-enhanced, which was the comparator dragging in that phase two study.

Right, perfect. And you said that you expect a 10-month review time for OrbeGlance. Does this mean that you do not see priority review as an option, or have you gotten any indications from the department?

We just concluded that the standard timeline is 10 months, and any changes to that we will communicate when we know more about it. But you're right, there is an option. Lastly, from you, yeah. Sorry.

Yeah, all right, makes sense. No problem. So when negotiating a potential licensing deal with a partner, what would you say are your priorities in terms of deal economics? How important is the size of an upfront payment compared to a high royalty rate, for example?

Well, I think that's, I understand the question, but it's not really possible for us to provide, you would say, much flavor. I think whenever you make a partnership, it's important that it's an attractive agreement for both parties. And if our partner is successful, they should be rewarded, and we should be rewarded. So I think that is really the balance we need to go for. And I'm sure we're going to find some way that is going to be good. And I think what would be fair would be have a traditional transaction type with upfront milestones and royalties, and then we'll see how that structures. I know it will probably not help your modeling, but I think that's really all we can say now.

All right, great. That was all for me. Thank you very much.

Thank you, Ullund.

As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad.

Yeah, we have received some questions here in the system here. So we have one question on the European market and launching in Europe about what steps and what could happen. Julie, you want to take that one?

Yes. Yes. Europe is a separate regulatory process, as we know, but a large part of the filing and the data, of course, from NFDA process is similar in Europe. In Europe, it's the same strategy to work with a partner, maybe the same, maybe someone else. So it's definitely part of our strategy, and we would like to make Overglow available in as many markets as possible. European is the second largest market opportunity. Yeah.

Yeah. We have another question here asking for some more light on our commercialization, how we are thinking about commercialization partners and the process, and what type of partners and so forth,

and

whether we're using an advisor or not.

Yeah. So one question has what the process and what kind of partners we're looking for. The process, I think we talked about, it's ongoing. We're fully ready. Of course, we have data room and so forth. In terms of types of partners, what is really attractive for Overglow is that it could be valuable to many types of partner companies. It could be someone who works in radiology, could also be someone who works in a related field. The most important is, for example, that this partner is promoting to hospitals, and also it's a partner who has the capabilities to launch a product with a high value. So it's a focused launch for smaller patients where the efforts are really in market access and medical affairs. But many types of partners, potential partners, have these capabilities. Yeah. We haven't commented further on the process and whether we are using help, but of course, this is a key goal. So we are doing everything we can to make sure that we have the broadest possible outreach and we have a high quality dialogue and process.

Then we have another question about, you would say, exclusivity for Overglow. We have had questions relating to the orphan drug market exclusivity of seven years from launch and something about 2040. Can you share some light on that?

Yes. So Overglow will be protected by the orphan drug designation in the US. That is seven years from approval. This is a regulatory exclusivity for that specific patient population and label. The patent we have that extends to 2040 is a patent we have for our second generation compound. So an effervescent tablet that otherwise would have a similar profile or use as Overglow. This effervescent tablet is a very interesting opportunity for, for example, life cycle management of Overglow. So we have both of those things. So Overglow in seven years, second generation patent to 2020. 40. 40. 40. Yes.

From 2020.

Yeah. Does it more?

Thank you. Well, thank you, everyone, for joining our Q3 quarterly report. Thank you for the questions and for the interest. And we continue our efforts to move Overglow forward and creating value in Asylia and developing the company for the future. So thank you and have a wonderful day.