Ascelia Pharma AB (publ)

Thank you and welcome everyone to the webcast for Acelia Pharma's Q2 report for 2025. On this call we will be making a number of forward-looking statements. On today's call we will start with recent key events and then head into our portfolio update before we move to financials and priorities ahead. After the presentation we will open up for questions as usual. At the Senior Pharma, we identify, develop, and commercialize novel drugs that address unmet medical needs within rare cancer conditions. We have two drugs in our pipeline. OrbeGlance is in the registration phase, as we have successfully completed the pivotal phase three clinical study known as SPARQL, and we're preparing the NDA submission, which will be submitted soon. OrbeGlance has orphan drug designation from the FDA and is targeting an addressable market opportunity of $800 million. Oncoral is ready to start phase two clinical development for the treatment of gastric cancer based on encouraging results in phase one and a high level of unmet medical need. Our company is headquartered in Malmö in Sweden and we're listed on Nasdex.com. The second quarter of 2025 was focused on finalizing the Oreglands NDA submission following our meeting with the FDA in Q1. I'd like to briefly mention some of the key highlights. The interest in Orvi glands in the scientific and medical community continues. And in April, we announced acceptance of a poster presentation at the eSport conference about the burden of disease for the Orvi glands target patient population. We also announced an Orvi glands publication in investigative radiology. This publication is a phase two clinical study where we have used a reader evaluation setup similar to the one we've used in our phase three study. where all the glans is evaluated alongside unenhanced and gadolinium-based contrast agents. In connection with the rights issue we did last year, we issued the TO1 warrants. The exercise period was in the first half of April this year, and there was strong interest, and 96% of the warrants were utilized, and the gross proceeds for the company was approximately 43 million Swedish kronor. Furthermore, we held the annual meeting in May as usual, and the bulletin has been communicated. Last week, we announced that the FDA submission file is essentially complete, and the final electronic configuration known as publishing is expected to be completed in a few weeks, after which the FDA NDA will be submitted to the FDA. So we're pursuing some important value creating opportunities with OverGlance. One part is the timely submission and approval of OverGlance for the optimal label. We've met milestones here in terms of completing the OrbitGlands clinical study report in early Q4 last year. We also had a meeting with the FDA in Q1 and we are submitting the NDA for filing for approval in a few weeks. The second objective is to progress OrbitGlands for commercialization. And the activities is to continue to advance our launch readiness activities, including manufacturing and supply chain things and working with the medical community. The other part is entering into a commercialization partnership, and that activity is ongoing. I'm happy with the progress we're making in Acelia Pharma and the efforts made by our team to ensure we will meet our objectives and create value to shareholders. Now we will be moving into the portfolio section of our presentation, and we'll start with Overglance. We're very excited about Overglance, and here's why. OrbeGlance is addressing a well-defined unmet medical need for a subgroup of people living with cancer. This is an $800 million global market opportunity, and OrbeGlance is a first-in-class product to target this, and it has orphan drug designation from the FDA. We have strong data from nine clinical studies, including strong Phase III data, and the manufacturing has been upscale to commercial scale. As mentioned, we are a few weeks from submitting the OrbeGlance new drug application to the FDA, and look forward to the process towards approval. Now we'll go further into the OverGlance opportunity, and I'd like to hand it over to Andreas.

Thank you, Magnus. Yeah, so OverGlance is a first-in-class liver MRI contrast agent, which addresses a very specific medical need for which there are no good alternatives available today. Adequate visualization of liver tumors and metastasis is critical for making the right treatment decisions. And contrast-enhanced MRI is the gold standard procedure for examination of patients with suspected or known tumors or metastases. 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 outcomes. Both the European and US regulatory authorities have for that reason issued warning for the use of gadolinium-based contrast agents in this group of patients. And 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 a risk for that their cancer is not managed in the best possible way. We envision that Orviglance, which is based on manganese, will address this unmet medical need and in the future become an efficacious non-gadolinium contrast agent for liver cancer patients with impaired kidney function. We have completed a comprehensive clinical program, including a total of 286 patients and healthy volunteers across nine clinical studies. which consistently have demonstrated positive efficacy and safety of organ glands. The pivotal study in the development program, the phase three SPARTA study, clearly demonstrated the superior visualization of focal liver lesions in the target population of patients with severe kidney impairment and an adverse event profile consistent with what we observed in the other studies. In summary, We are now going to submit the NDA for overglance to the FDA. The NDA file, which in addition to the clinical data just mentioned, also includes non-clinical and CMC, so chemistry and manufacturing data, has been completed. And after the final step in making the file ready for submission, we are looking very much forward to the submission in early September. So with that, I will hand it over to Julie.

Thank you, Andreas. About the commercial potential for OverGlands. The addressable market for OverGlands has a global value of 800 million US dollars annually. The US represents almost half of this. This market opportunity for OverGlands 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 the investment required. Our focused, ambitious launch strategy and plans are built on advanced market insights and are in place to support this partnering strategy and support the launch. As mentioned, the US is the largest commercial opportunity for overgrams. 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 around 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 a clear unmet need also drives an attractive pricing opportunity. And we have extensive input from market access and pricing experts with whom we've tested different pricing levels and collected insights on the evidence needed to support access and reimbursement. And we've investigated pricing and access benchmarks of other innovative diagnostic drugs in the US. 90% of healthcare professionals are concerned about issues with gadolinium contrast agents. This includes the severe side effect 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 these insights confirm the concerns with gadolinium in clinical practice and the unmet need for overgrams. When speaking to experts, whether in radiology or nephrology, they confirmed that an alternative to gadolinium for our target patient population would address concerns of today with the potential to become a very valuable addition to their clinical practice. And beyond the risk of NSF in kidney impaired patients, gadolinium is well known to be retained in the brain and 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 via the kidneys in urine. Because it's difficult to remove in our syringe system, it's 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 concerns for patients and for the environment. 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 contrast agent, which is not liver specific like overglands. So in short, the momentum for an alternative to gadolinium is getting better and better. We are excited that we have a head start and that gadolinium 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 OverGlance is to launch with commercialization partners and our dialogue with potential partners continue to progress. This supports our objective to secure the optimal balance between future revenues and the investment required. The strategy also allows us to leverage commercial capabilities already established by a partner. And our dialogue with these potential partners for successful launch of OverGlance is ongoing and continues to progress. We're also working in parallel to ensure that OverGlance and a partner is ready to launch on approval. For example, we want to ensure that manufacturing is ready for the first product launch. We are excited to see the successful acceptances of SPARQL data for presentation at major scientific conferences. In total, four oral presentations and five abstract presentations have been accepted at major conferences thus far, underscoring the interest in overglams in the medical and scientific community. As Maunus mentioned, we also announced the publication of a scientific article in Investigative Radiology. This publication presents the outcomes of a phase two study previously conducted at Karolinska Institute, utilizing the same independent reader methodology and approach as our phase three study with Orvik Lens. The results are consistent with our other studies and show superior visualization and a greater number of detected focal liver lesions with overglans compared to unenhanced. It also shows that overglans and the gadolinium agent used in the study performed similarly in the visualization and detection of lesions. So with this, I will pass it over to Andreas to talk about on graph.

Thank you, Julie. Yeah, let's talk about Oncoral, the other assets in our development portfolio. Oncoral is a daily tablet formulation of arenotecan, a well-established intravenous chemotherapeutic agent. And 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 for taking Oncoral into clinical phase two. And the objective is to generate clinical proof of efficacy data in metastatic gastric cancer in combination with long-serve, another oral cancer treatment approved for gastric cancer. And animal data has demonstrated a synergistic effect of arenotecan when combined with long-serve, which makes this combination very interesting. The planned phase two study is designed to study Oncoral Plus Lonserve against Lonserve alone. And the study will randomize approximately 100 patients and involves a clinical collaboration with Taiho Oncology, the developer and marketeer of Lonserve, who will provide clinical advice and Lonserve for the study. Agrinotecan is a well-established chemotherapy with recognized anti-tumor effect in solid tumors. Our strategy is to start on growth development in gastric cancer, which is today a $3 billion market. For these patients, there is a high unmet medical need for improving outcomes, and there is an opportunity for an orphan indication. We also see opportunities for developing Oncoral in other solid tumor indications where a daily dose in tablet formulation can demonstrate an attractive efficacy and safety profile. And Irinotecan as an IV formulation is already approved in colorectal and pancreatic cancer. And in addition, Irinotecan 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 Oncoral. So back to Julie again.

Thank you Andreas. So to round off today, financials and outlook before your questions. In Q2, our operating result was a loss, i.e. cost of 23 million kroner. These costs are at a similar level compared to Q1 2025 with a continuous focus on the NDA submission preparations. At the end of June 2025, we had 60 million Swedish kronor in the bank. And we're very pleased, of course, with the successful T01 warrants exercise in April, which brought in 43 million in additional financing before costs at a subscription rate of approximately 96%. So after this warrants exercised, we repaid the 20 million Swedish kronor loan from Fenja. And our cash runway now is to at least the end of 2025. And that includes a reserve for potential repayment of this remaining seven and a half million convertible loan with Venya end of this year. This financial runway excludes any financing from partnering. To wrap up, we have substantial value creation opportunities ahead for Overgrams. and for Azalea Pharma. With OverGlands, we're bringing to market a first-in-class diagnostic drug addressing an $800 million market for patients with a high unmet need. And we have two objectives. One is a timely submission and approval of OverGlands with the optimal label. The key steps on the way are the completion of the SPARQL clinical study report, a milestone we achieved early November last year, which reinforced the successful study outcomes of the phase three studies, primary and secondary endpoints, and supports the NDA process. In March this year, we communicated positive outcomes from our meeting with the FDA in advance of our NDA submission. And we plan to submit the NDA by early September. Our other objective is to progress overglans for commercialization for patients in need by entering into a partnering agreement for the launch and by securing that a partner and OverGlance is ready for launch by approval. All in all, we have progressed well in the Q2 2025 with the continued preparations of the NDA submission for OverGlance and we continue to progress discussions with potential partners for the commercialization of OverGlance. And we look very much forward to executing on the opportunities ahead for Overglans and for Isilia Pharma in 2025 and beyond. And with this, we have completed our presentation. We're ready to take questions.

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. The next question comes from Johan Unneris from Red Eye. Please go ahead.

Yes, it's Johan Unneris from Red Eye. Thanks for taking our questions. The first one, could you provide perhaps a little bit more detail around the completion of the submission process, the electronic part of the, what does that involve?

Yeah, absolutely. Thank you. Hi there. Thanks for the question. Yeah, so the final step of the preparation of an NDA is to make sure that all the documents are in place where they should be. It's quite a complex set of documentation and FDA needs to find the right document where they are supposed to find it so that is what we call the publishing procedure to make sure that everything is in place. It's a quite technical and to be honest bit boring thing but very very important.

And you are obviously confident regarding the the framework for timing in the final stage, two to three weeks? Yes, we are. Very good. And perhaps also you can clarify what the next step in the FDA process, there will be sort of a submission, preliminary review of the filing as opposed to sort of some 60 days?

Yeah, so the process is the normal process by the FDA so that they will get the file and they will check it in, make sure it's all in good order. And then there is this initial step where they review and then there will be this day 74 communication where they say, yes, we will continue the review or not. So that's.

And yeah. Thanks and the next step would be the substantial review once that's clear and have you considered applying for a priority review?

We have not communicated anything about that and that is part of the submission if you want to do that or not but we haven't communicated anything.

So it will be that period will be sort of six to ten months then typically depending on yes and Also, of course, it's very important with the partner discussions that could be related to the filing process, of course. Is it possible to give any flavor if these discussions have sort of intensified now as you approach the finishing line?

No, we can't really comment on that. I mean, as we're saying, you know, dialogues are progressing. We're happy with the situation that we have, so I think we cannot really elaborate more than that.

Okay, and the admin cost to move over to the cost side seems to be very stable and under control, and perhaps you could provide a bit more of flavor on the R&D side, because at this stage it could involve some external resources and some

quarterly monthly variation i suppose yeah um i see your question um I mean, we are not commenting on spend moving ahead only on the runway, as you know, but you're right. Of course, you can see that there's a big part of the cost in this year so far that are R&D costs. And these are, of course, mainly related to the NDA preparations. Now, of course, there is still some preparation of answers and so forth. But yes, there are external costs associated with the NDA preparations.

Presumably, that's the main reason for temporary variation at this stage, the level of external resources required. I think that's pretty straightforward and all for us at this stage.

Thank you, Johan.

The next question comes from Maria Carlson-Ossipova from DNB Carnegie. Please go ahead. Maria Carlson- Hello.

Thank you for taking my question. It's a very bad thing to go second because Johan was very good with asking many of the things that I was wondering. But if we talk a little bit about Oncrel instead, because so much focus is on Orvi glands, which is obvious, but looking ahead,

how fast can you start with the preparations for that project once you do it is are we talking months are we talking half a year or years what are we talking about for on corral we haven't really it's a good question and thank you for that we haven't really communicated exactly how quickly we could uh you know get a study started i think there will be some uh and we mentioned that hinted at that earlier, that there is some work to get this study, you could say, back in full action. So a couple of years ago, because we were seeing extended timelines for organ glands completion, we sort of paused or halted the initiation of the clinical study from Accra. And I think that's kind of like a restart of the study in some way or form. So we haven't commented on that, It's not something that we can do in a few months after pushing the go button. It's longer than that, for sure.

Yeah, I understand. Thank you. And one very last one on the publishing process for the FDA. Are there any other remaining risks or potential delays that can happen? Because it's a very rigorous and very long, and as you mentioned, maybe not most fun process. Do you see any other risks that are potentially there?

I would say no. We are at the end of the preparation of the file. We are very pleased with the content and the quality of the file, and we have a very strong package. So at the moment, it is only, if I may say so, the publishing and this technical part to do. So no specific hurdles in our...

in the near future as we can see it yes thank you then we will be looking forward to following your press releases going forward that was all from me thank you very much thank you as a reminder if you wish to ask a question please dial pound key 5 on your telephone keypad

We've also received some questions here on the page, and then we'll get started on those. So one question here is, what would the combined upfront and milestone on approval for Orchid Lands have to be for you to feel comfortable in restarting the on-crop program? I think it's an excellent question, but it's also very difficult to give sort of a concrete answer. I think the governing principle that we have is, We want to make sure that we are not taking unnecessary financial risks. So that means that we would need to have an appropriately large upfront and milestone structure for us to restart the program. It's also important to keep in mind that it's not a massive one-off investment. It's a gradual investment program to get the on-crawl program started. So I think there would probably be good flexibility on moving that one forward. uh i think with the with the you would say upfront and milestones that we are hoping for another question is uh what is the regulatory strategy for eu japan and rest of world once the file is in the in for the us um what we said is that um the we are making the submission in the us uh that will come in in a few weeks um the rest of the world will be partner driven So that requires a partnership to be in place before we initiate those processes. We think we create the most value by being successful in the US, focusing all our efforts and resources on that. And if we succeed there, that's much more valuable than making some progress all over the world. So that's our strategy. Another question here is, has the current turbulent environment in the US biotech sector changes in the FDA, etc.? ?

impacted also your talk with potential commercialization partners um other increased cautionist among companies julie do you have a comment yes i think key is that the farmer players are in the industry for the longer time certainly also our potential partners so and the assessment of overglance doesn't fall into sort of a short-term evaluation about staff at the FDA and also so far not a lot of companies to our knowledge have directly been impacted so the reviewers and so forth at the FDA is still a priority to keep their timelines even speed them up according to the new administration or not new anymore so no we don't see really an impact in that sense because they're looking at the commercial potential in the longer time On the other hand, a lot of the most gadolinium is manufactured in China. So we can see that the gadolinium manufacturers have been impacted at least in terms of having to implement mitigation strategies for sourcing their gadolinium. So they have been busy with that, but the industry still has a lot of value potential and potential matches to their strategy for Overglance.

Do we have one more here? Yeah. A question here. If you were to sign a letter of intent with a potential partner, would you communicate this to the market?

Is that me?

Yeah.

I mean, we communicate, of course, when it has a material impact. And any other communication would have to be advantageous for us and for investors. So we can't really say that we would communicate things like that because there's a lot of uncertainty in a partnering deal until everything is signed. So that probably wouldn't make a lot of sense.

Yeah. A letter of intent is not a final agreement, so that would not be communicated. When we have a definitive agreement, that won't be communicated.

A company is not in the best negotiation position if any intermediate steps are communicated.

Then we have another one in Swiss. I will try and do my translation. simultaneously in English. It says if you submit your NDA in September, then it's expected that the FDA will give a PDUFA date in November. The question is whether we have discussed the priority review with the FDA and when the message would come out now or in connection with the PDUFA date.

Yeah, well, excuse me. We haven't communicated anything about priority review yet, as mentioned earlier. And this is something that you apply for if you want to do it in connection with a submission. But as long as we haven't communicated, I don't think we can say much more than that at this time. the PDUFA date will of course say something it will be commun PDUFA date will be communicated by the FDA yes and that will of course reveal if at the latest what the timelines are yeah another question here is if we can sort of elaborate on why we prioritize the partnership instead of building a direct commercial team in the us towards the approximately 400

hospital groups in the US that is the key target group. So I think that's one question. Julie, do you want to comment?

I can start. Yeah, so our ambition is to balance the optimal investment required with the value and the revenue for Auxilia. And when you launch a product, you of course have the cost of the sales force and the the medical team and the execution, but you also have to build a number of capabilities and IT systems and things in the background. And an existing pharma company, specialty pharma, would already have many of these capabilities in place. So we believe the best strategy for the launch is to work with an organization that has established capabilities for both the optimal overall cost, but also the optimal cost structure for Azalea Pharma compared to the revenue.

Then a sort of follow-up question to this one is, in practical terms, what are the biggest obstacles for completing a partnership agreement? I can probably start on that. I think it's... A partnership agreement is obviously a large, complicated agreement, and it requires that the partners also finalize their plans for launching the product and potentially taking a role in the review process if they are having some input to that. So I think it's more the notion that it's a lot of documentation. We have completed the development. There's a lot of information for a potential partner to go through. We're very happy with what we have in terms of the NDA. very happy in terms of the the you could say the pre-launch activities and documentation we have for that and that's obviously something that a partner will will look at um yeah so um a question here is as we are preparing for a potential partner deal uh or some other form of financing, whether we are changing the quote valid on the stock. No, we've not done that. So a question here, if we can elaborate on how the burn rate will change after the NDA is submitted. The assumption from the person still asking the question is that it will decrease. Julie?

Yes. As you can see in our costs the first half of the year a big part is R&D cost and that's of course associated mainly with the NDA preparations and finalization of the file. Also using a lot of external help and some of these costs will of course go away but there's also cost associated with preparing a review. So we're not specifically commenting on our expenditure ahead but Yeah, there's both costs before and after, but as you can see, a main chunk before.

So the question here, we have previously communicated that the NDA submission was most likely in the first half of August and that this timeline already includes some buffer for unseen events. At the same time, you prescribed the pre-NDA meeting is very much aligned with your expectation with no real surprises. With that context, Could you give us some additional color on what actually drove the two, three week delay? Was it primarily technical details around the final NDA configuration or external consultant bottlenecks? Or was it more about internal prioritization?

Yeah, it's a question for me, I can hear. Yeah, well, I mean, There is always some, yeah, the work has to be done. And of course, we have been focused on getting the right quality and the content right. And there is always details that needs to be put in place. And, you know, so I think you have probably mentioned all potential or all pieces that have impacted the work here. But all in all, we have now the NDA file ready.

um with a good quality and we are at the end of the the publishing or we have started the publishing phase which is the last step before submission yeah we have another question here and more broadly perhaps companies also choose to adjust the exact timing of a filing not only for purely technical reasons but also to make sure there's full alignment with external stakeholders This could be around label discussion, commercial preparation, or ensuring that the submission package reflect the latest strategic considerations. Without asking you to comment on any potential partnering specifically, can you elaborate on whether such external alignment or commercial readiness discussions played a role in the timing of your NDA submission? Yeah, so that was a good question and a long buildup. I think a good plan always need to take into all stakeholders into account. And also we can't comment on partnering specifics. I mean, we're following the plan. I think I don't put too much into sort of the delay. I think it's a really significant undertaking to To submit an NDA, we're working with our team of advisors and consultants, and we're a small team here. I think I'm happy with how the team has worked to ensure we have a very high-quality package, and that is how the timeline ultimately ended up. I think our priority is to make sure that what we send to the FDA is the best possible package we can send, and that's what we focus on. as well as try to do it as quickly as possible. But having the right one is the most important parameter. There's a question here. I see that you write partnerships with an S. How many partners are you looking for? Would you prefer one global or several regional? It's a good question. I think the answer is that we want the right partners for OverGlance where this would have a good fit in their portfolio and they would invest significant resources into making OverGlance successful. And that would mean that investment would both be in the launch and commercialization of the product, but also obviously payments to Acelia to make sure we get our fair share of the value. So whether that's one global or whether it's a couple of, you would say, regional deals, I think we're flexible on that one. A question here is, given that you're preparing... It's the same.

This one.

Yeah. If you don't see yourself having the competence for direct launch, Have you considered working with a specialized marketing partner to reach the identified hospitals instead of relying solely on the full-scale commercialization partner? Julie, can you add some comments to that?

The partnerships can take different forms and shapes, of course. We all know it from industry, anything from acquisition licensing to models with organizations who have all the capabilities and you keep a higher share of the revenue because it's in this, as this question alludes to, more of an outsourced model. So there are different options. We want the best possible deal. So we're looking at everything, but we want, of course, the one that gives us the most value.

Another question here is, can the market expect a partnership agreement to be in place before we enter 2026? And I think that's, I can't really comment on that. If I say, yes, we will absolutely have something before 2026, I put myself in a corner in the negotiation. I don't want to do that. I want to get the right partnership and, you know, at the right time, whatever that is. And that depends on the specific conversation we're having with that specific company. So I think that's really the best answer, maybe not the most useful, but I think that's just sharing our objectives in terms of how we think about it.

I think that's it.

Because it's a similar translation. So that concludes the questions. Thank you all for listening in and for all the good questions that we have received here. We're very happy about being able to submit the NDA in a few weeks. It's a major milestone and a fantastic achievement, and we're looking forward to the review process and also on the progressing the partnership discussions and updating you whenever relevant milestones occur. So thank you very much and have a great day.