Alligator Bioscience AB (publ)

Hello and welcome to Alligator Biosciences first quarter 2024 earnings call. My name is Greta Eklund and I am the Investor Relations and Communications Manager and I will be introducing today's call. With me are CEO Søren Reinholt and CFO Marie Svensson. They will walk you through the latest developments from Q1 2024 and the upcoming news flow, after which they will be happy to answer any questions that you might have. Before we begin, I would like to share a quick reminder with our listeners that during today's call, management may make forward-looking statements that involve known and unknown risks, uncertainties, and other important factors beyond the company's control that could cause the company's actual results, performance, or achievements to be materially different from the expected results, performance, or achievements expressed or implied by such forward-looking statements. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statements. Actual results and the timing of certain events may differ materially from the results or timing predicted or implied by such forward-looking statements, and reported results should not be considered as an indication of future performance. Please note that these forward-looking statements made during this call speak only as of today's date and the company undertakes no obligation to update them to reflect subsequent events or circumstances other than to the extent required by law. This call is being webcast and will also be made available through the investor relations section of our website. With the formalities out of the way, I would now like to turn the call over to Sara.

Thank you Greta. Good afternoon and good morning everyone and welcome to Alligator Bioscience first quarter 2024 earnings call. As Greta mentioned, I'm Søren Breinholt and I'm the CEO of Alligator Bioscience. I'm very pleased to share with you that Alligator continues to make strong progress on all fronts. We are bolstering our mid-stage clinical pipeline while we're also making progress on our earlier programs. Preparation for the phase 3 evaluation of our lead acid, metazolamab, in first-line metastatic pancreatic cancer are underway, and we are looking forward to building on the very positive results from Optimize-1. You remember the top-line results from the phase 2 study, which we reported January 29, demonstrated that metazolamab, in combination with standard-of-care chemotherapy, Folfirinox, provided significant survival benefits over standard-of-care alone. a fact that we are going to discuss in more detail during today's call. This quarter, we also reported positive interim phase one data from the dose escalation study with ALG-APV527 in solid tumors. This is a molecule we are co-developing with Aptivo out of Seattle. We received the first US patent for NeoXprime platform by specific antibody ATOR4066. And recently, our partner Orion selected the lead candidate in our second collaboration program and exercising their development option, which triggered a milestone payment to Alligator. On the financial front, we recently conducted a capital raise, extending our cash runway and applying or adding maneuverability in in our efforts to negotiate the best possible deal for me to sell them up we remain financially disciplined and which allow us to continue to invest in our key assets both proprietary and partner program next slide please So, on January 29, we announced positive top-line data from the OPTIMIZE-1 study, which is a Phase 2 study assessing the safety and efficacy of our CD40 monoclonal antibody, metacetamab, in combination with standard-of-care chemotherapy modified for ephirinox in first-line metastatic pancreatic cancer. First of all, the study achieved its primary endpoint with an objective response rate of 40.4% and an unconfirmed objective response rate well above 50% in the 57 evaluable patients. This compares very favorably with the objective response rate of around 30% reported in a similar patient population treated with the chemotherapy backbone alone, thus demonstrating the profound clinical benefits of metazolumab over standard of care. We also observed a highly durable response with immediate overall survival of 14.3 months with over 50% of the patients still being alive at the time of analysis and an unprecedented durability of response of 12.5 months together demonstrating the extended survival benefit over standard of care. Both the durability of response and the survival rate will mature further with the ongoing treatment and follow up. And we'll talk a little bit more about the time scale for that in a minute. So we are planning to report 18 months survival follow up from these patients, the full phase two population in the middle of this year. And we can see from the data read out already now that mitocelumab is well underway to potentially changing the treatment paradigm in first line pancreatic cancer. And we believe, as I said, based on the fact that more than half of the patients were alive at the last readout, that the survival data that will present mid-year will have improved significantly. Now go to the next slide. As we are laser-focused on advancing mitocelumab to the next stage of development, which is naturally, in alligators' view, a randomized pivotal phase III trial, we've had discussions with the US Food and Drug Administration to ensure the development path for mitocelumab. The FDA has confirmed that OPTIMIZE 1 is a phase 3 enabling studies which allow Alligator to move directly from OPTIMIZE 1 into a pivotal trial. In addition, the FDA has provided the guidance on the dose characterization in accordance with their Project Optimus and requested Alligator to add additionally 15 patients on the lower dose in OPTIMIZE 1. I'm happy to announce that we've already enrolled the first patients in this backfill cohort of OPTIMIZE1 and expect to have this cohort fully enrolled in the early parts of Q3. We are continuing our partnering activities, both with due diligence and with negotiations, in our effort to find the best possible global partner to take metazolumab through Phase III regulatory approval, bring it to the patients for their benefit and hopefully also for commercial success. And we are on track to initiate such a Phase III study in 2025 together with a partner. Could I have the next slide, please? So an important point to note about the planned phase three evaluation is whereas the primary endpoint in the phase two study, as you can see here on the left of the slide, was overall objective response rate, the agreed endpoint with the regulators on the phase three study will be overall survival. You can see the chart on the right that the 14.3-month overall survival reported so far compares very favorably with the 11.1-month obtained for both the classical Folfirinox and the new Nelnerinox chemotherapy in first-line metastatic pancreatic cancer. And maybe this is a good time to remind ourselves that Onivite, the novel component of the nirinox regime, was recently approved based on a 1.9 month difference in overall survival in comparison to gemcitabine-packaged taxel. Therefore, we believe that more than three months survival benefit that we've already now seen with mitocelumab is not only believed to be clinically meaningful, but also approvable by the regulators. And finally, when we look at this slide, we can see from the middle chart that the durability of response of 12.5 months compares extremely favorable with approximately seven or six or seven months that you see with a chemotherapy backbone and together with the data that we recently announced on the on the pharmacodynamic activity of mitosalumab these data will support the continued clinical development of mitosalumab in first-line metastatic pancreatic cancer Next slide please. So here we have a full overview over our prepared proprietary programs. Metazalumab, we just discussed in phase two and on its way into phase three in metastatic pancreatic cancer. Importantly, the next generation CD40 agonist based on our NeoXprime platform, the first of which is called 4066, in early preclinical development. We see this as a significant growth opportunity for the company as we go forward. And when we look at the 401 part of our portfolio, our collaboration with Aptivo recently resulted in solid interim or intermediate phase one data from the dose escalation trial in 5T4 positive solid tumors. And if we take the next slide, we can continue on 527. So in March, we announced the positive interim data from the study. So this is a third generation tumor directed for 1BB agonist. And we are evaluating the molecule in tumors that express 5T4. This acid was developed using Alligator's internal libraries combining with Aptivo's by a specific platform, and preclinical studies have highlighted that the differentiated design of this molecule minimizes systemic immune activation while maximizing intumor immune activation, thus allowing for highly efficacious tumor-specific responses as demonstrated by potent activity in a range of preclinical models. So the interim data from the phase one study showed that the treatment has been well tolerated. So far, the dose escalation is really reaching the top cohorts, the top dose levels, and biomarker analysis have indicated that the expression of both targets for 1Bb and 5T4 in the tumors, which underlines the potential of the molecule to treat multiple indications that are 5T4 specific. Of particular interest, we saw clinical signs of early activity in patients with heavily pretreated breast cancer. These patients demonstrated measurable levels of drug in circulation and reproducible elevation of serum pharmacodynamic markers, which together suggested that the drug is biologically active. Alligator and Aptivo have currently enrolled more than half of the patients and we are on track for the final readout of top line data from this study in the second half of the year. Now let's go to the next slide. So as I just mentioned a few slides ago, the third generation bispecific CD40 agonist is really what we believe will drive long-term value for Alligator. And we are, I'm happy to announce, continuing to make great progress with 4066. This quarter we strengthened the IP protection of the molecule with the first US patent for 4066, which of course is vital to the commercial development of any molecule. And we expect to strengthen the protection around the molecule with more patents, both in the US and in other regions of the world. At the end of the quarter, we presented the key preclinical data at the ACR meeting, suggesting an even more specific and efficacious activation of CD40, further opening the way for an even more targeted therapeutic approach with 4066 that really supports the continued development of the molecule in clinical trials, which we will continue to work towards. Now, can I have the next slide, please? We also announced good news on our collaboration with Orion. This collaboration is now running on its third year. The common aim here is to develop a specific antibody leveraging alligators, antibody cloning and screening technologies together with our proprietary bispecific Ruby format against the target of strategic interest for Orion. We have been working on two programs and now recently Orion exercised the development option for the second program triggering a milestone for Alligator. We will continue to work with Orion and support their efforts to bring these molecules further into human clinical trials and eventually to provide novel treatment opportunities for people with hard to treat cancers. And with these words, I will leave the word to Marie, our Chief Financial Officer. Marie, please take it away.

Mm-hmm. Thank you, Søren. Next slide, please. Going over the financial figures, we start with the net sales for the first quarter, 24, that amounted to 6.97 million SEK, down from 9.59 in the prior year period, and that comprised primarily to the collaboration agreement with Orion Corporation. Operating loss for the quarter resulted in negative 59.64 million and decrease from 62.19 million SEC in the prior year period. Cash flow for the quarter amounted to negative 26.2 million SEC compared to negative 52.2 million SEC in the prior year period. The cash flow in the quarter was positively affected by the company taking up a bridge loan amounting to 58.8 million SEK. Operating expenses mainly pertain to the cost of the ongoing clinical trials for Mitazalema, BEN 527, as well as phase three enabling activities for Mitazalema. In February, Alligator announced a restructuring plan to reduce cost and allow the company to prioritize its preclinical and early stage assets. Construction plan was completed in March and the 1.9 million was reserved in the quarter as the cost for related to the personnel reductions. In the figure down to the right, you can see how expenses were distributed between our projects in Q1. And not surprisingly, 48% of our resources have been focused on the Mita Salema project. An important point I would like to bring to your attention is the focus of financial resources behind our R&D efforts. While Alligator dedicated around 70% of its operational expense to R&D in 2020 and 21, this level was significantly increased in 2022, reaching 81%, and our efforts have continued, leading us to dedicate 83% as March 23. 31st of 24. Next slide, please. Through our professional rights issue conducted in the first quarter 2024, we extended our cash runway, receiving 107.1 million before deduction of costs, of which 59.5 million relates to the set-off against the outstanding bridge loan. This additional financing allows Alligator to continue pursuing our goals, including the continuation of the Phase 2 development of mitocellular MAP in pancreatic cancer, the continued 527 Phase 1 study, and the ongoing development of our other pipeline candidates, including 804-266. Next slide, please. If we look at alligator operating costs on a rolling 12-month basis, we note a slight decrease as the patient recruitment peak is behind us in OPTIMIZE 1 study. Expenses in our ongoing clinical trials are still high due to the number of patients staying on longer in OPTIMIZE 1, but also due to the ongoing investment in various Phase 3 enabling activities for beta-salimab. On March 31st, liquidity was 40 million SEK. The result of the rights issue was announced on April 9th, with around 70% of the total issued subscribed. In order to support the continued development of our key assets, the company is continuously working on opportunities for partnerships, collaborations, out licensing deals, loans and equity financing to secure the financing of the operations. And with that, I will turn the call back to Søren.