Alligator Bioscience AB (publ)

Hello and welcome to Alligator Biosciences second quarter 2024 interim report call. My name is Greta Eklund. I'm the Investor Relations and Communications Manager at Alligator and I will be introducing today's call. With me are our CEO Søren Weyenholt, our CFO Marie Svemsson and our CMO Sumitam Barkhane. They will walk you through the latest developments from Q2 2024 and the upcoming news flow, after which they will be happy to answer any questions you may have. Now, before we begin, I would like to share a quick reminder 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 Søren.

Thank you, Greta. I'm Søren Breinholt. I'm the CEO of Alligator Bioscience. Welcome to our second quarterly earnings report of 2024. And if we go to the next slide, I'm pleased to go over some of the main achievements that Alligator has seen in the second quarter. First of all, the mitosalumab phase two data in first-line pancreatic cancer continues to deliver new data. And we recently announced outstanding 18 months follow-up data for mitosalumab. Not only did the median overall survival increase to 14.9 months, which is substantially better than the 11.1 months reported for Folfarinox monotherapy, but importantly, we also reached 36% 18-month survival rate, meaning that 36% of the patients were alive at this important time point. This rate is almost double that of data reported for Folfarinox monotherapy, and Sumit, our CMO, will comment on the result in greater detail shortly. The top-line data from this Phase II study was published in The Lancet Oncology, the world's leading journal on clinical oncology. And this publication naturally validates the significance and the importance of the data. And the entire Alligator team and our investigators are very proud to have been selected by this world-leading clinical oncology research journal to present our groundbreaking data. In addition to the Lancet oncology, we also presented at several key conferences this quarter, AACR in April, ASCO in June, as well as the European Society for Medical Oncology on their GI-related gastrointestinal cancer conference earlier, or late June this year, all highlighting the further validation of mitosalumab phase 2 data. Based on these phase 2 data, Alligator has received a surge in the demand from physicians who want to conduct trials on mitosalumab in their own centers across a number of relevant indications. Recently, one such trial was initiated at the prestigious Moore Cancer Center in San Diego. This phase one study in locally advanced pancreatic cancer is financed by the U.S. National Cancer Institute. We believe that these investigated initiated trials are a great way to generate additional data for mitocelumab at limited or no cost for alligator and to raise the profile of mitocelumab and alligator internationally. And we will continue to evaluate and engage in these trials as appropriate for the development of mitocelumab. On the repartnering front, Alligator announced that Orion Corporation, now a long-term partner for Alligator, had selected the lead bispecific antibodies from the company's second development program, and that Orion was exercising its option to develop these molecules under the existing 2021 research collaboration and research agreement. The exercise of this development option is of course an important validation of alligators' technology and our approach to generate biospecific antibodies and also trigger the milestone payment to alligators. Further on financing, we conducted a capital raise of 80 million Swedish kronor, which extended our cash run way well into Q1 2024, allowing us to continue our investments in key strategic areas and enhancing our manoeuvrability in negotiating the best possible licensing deal for Mitter-Salomon. Marie will go into the details later in today's call. And last but not least, we're also looking forward to welcoming Johan Gileus, who will join as Chief Finance Officer starting August 12th this year. Johan brings valuable experience in leading financing strategy and operations across a number of companies, including overseeing a last phase three clinical trial and out licensing in Japan on the same molecule. continue to bring energy and strong knowledge and experience to the company. So those were the highlights for the second quarter. Next slide, please. So partnering our phase three ready as admitted our key priority, we are pursuing our partnering activities and discussions to find the optimal global partner. And I'm happy to announce that these Dialogues with the global pharmaceutical companies are progressing very well. We are continuing to prepare metacelumab for phase three. And we stay laser focused on advancing metacelumab to patients with pancreatic cancer as soon as possible. With that, I would now like to hand over to our Chief Medical Officer, Sumit, for some more details around OptimizeONE. Sumit, over to you.

Thank you. Thanks, Sorin. Next slide, please. Right. So most of you may be familiar with our ongoing OPTIMIZE-1 study and the impressive tumor shrinkage we have reported in the trial with the metazolamab plus modified folfirinox combination, which is exactly what we see in this waterfall plot. This is basically an indicator of how much was the reduction in the tumor for the individual patient during their trial treatment. Particularly important to note is the vast majority of the patients that benefited from this treatment, that their tumors shrunk, and also the number of patients who had an objective response, either a partial or a complete response seen in the green shades on this chart, as well as the three last patients where there was 100% disappearance of all of their tumor target lesions. This is really an impressive outcome for this very difficult to treat patient population and in a disease so aggressive as pancreatic cancer. Next slide. So, I mean, I hope you have noted the most recent data that we released from the OPTIMIZE-1 study at the end of June, only a few days ago, that demonstrated substantial overall survival benefit and a truly unprecedented duration of response with metazolamab and modified Folfirinox combination as a first-line treatment for metastatic pancreatic cancer. These latest data are summarized on this slide, also in the context with the standard of care therapies, such as gemcitabine plus albumin-bound placlitaxel, folfirinox, as well as nalurifox, the most recently approved treatment. And clearly, the results from the OPTIMIZE-1 study appear favorable compared to any of these other therapies. not just in terms of the objective response, but importantly, in terms of the substantially longer duration of response and its extension into overall survival, particularly notable at the 18-month time point where we see that the percentage of surviving patients was doubled in the OPTIMIZE-1 study compared to the historically reported data from the FOLFIRINOX trial. This is an important point to note because the 18-month time point is unfortunately not the one which most of the patients with pancreatic cancer see. And therefore, this doubling of survival rate at this landmark is really an impressive outcome. These are also very mature data with the 18-month overall follow-up duration across the efficacy population. And they also provide an additional validation of the potential that mitazolamab has in this very aggressive disease. And of course, they also form the basis for our planning for the randomized phase three study. Next slide. So here we have an overview of how our fully owned programs are progressing. uh this gives a very good sense of our robust immuno-oncology pipeline with substantial clinical as well as commercial potential our next generation mono as well as bispecific antibodies address key immune activation pathways such as cd40 and 41bb and they're designed with features that make them complementary to existing anti-cancer treatments we believe that this puts our antibodies in a unique position as a part of the combination therapies for future that can help patients with hard to treat cancers. If you look at the pipeline, there are several infection points coming up. As already mentioned by Soren, we are stepping up our efforts to enter into an agreement with an optimum by a pharmaceutical partner that is best suited to take metazolamab through its confirmatory development and then onto the market as soon as possible. So we are foreseeing that the phase three trial will start in the first half of 2025. Next is our NeuX Prime first-in-class bispecific CD40 agonistic antibody, which we call ATOR4066. This is a very exciting molecule that continues to demonstrate significant potential during its current preclinical phase of development. And that further supports Alligator's commitment to continue advancing this molecule towards the clinic. It also demonstrates that Alligator's pipeline and the CD40 program extends well beyond metazolamab. So something really to look forward to. And last but not least, from our pipeline point of view, are our programs targeting 4-1-BB? We are assessing options for taking the monospecific 4-1-BB molecule 8 or 1017 to phase 2 development as a combination treatment. And we are also expecting for the other program, ALGA-PV527, which is a bispecific 4-1-BB antibody, that the phase one study will be completed in the coming months. This is a program that we are co-developing with our partner company, Aptivo Therapeutics, and we are hoping that the data will be available in the second half of this year. So with that, let's turn to Marie Svensson to review our financial results for the quarter. Marie, over to you.

Thanks Sumit. Next slide, please. Going over the financial figures, net sales for the second quarter 24 amounted to 7.6 million SEK, down from 17.4 in the prior year period and comprised primarily to the collaboration agreement with Orion Corporation. Operating expense mainly pertained to the cost of the ongoing clinical trials for mitazolamab and 527, as well as phase 3 enabling activities for mitazolamab. Operating loss for the quarter resulted in 47.4 million SEK, a decrease from 63.7 million in prior year period, mainly due to lesser number of patients on treatment in the OPTIMIZE-1 study. The cash flow from operations amounted to minus 46.9 million compared to minus 61.1 million last year. Cash flow for financing activities amounted to 75.6 million in the quarter, resulting in the total cash flow for the quarter amounting to 37.4 million SEK. The bridge loan from our main owners in Q1 was converted in the right issue in April. The right issue brought in 107 million SEK and the credit facility from Fenja Capital added additional 50 million SEK in the period before transaction costs. In the figure down to the right you can see how expenses were distributed between our projects in Q2 and not surprisingly Still, Optimize One is the major part of our efforts. 35% of the resources have been focused on the Mitazalema project. R&D collaborations amount to 19%, comprising of investments in 527, and to some extent, macrogenics collaboration. 10% of our efforts invested in our next generation CD40 agonist 804066, moving the candidate towards the clinic. Next slide, please. Regarding financing, we have extended our cash runway meaningfully, but try to keep the dilution of our shareholders to a minimum. This is why we secured a loan facility with the Danish asset manager, Fenja Capital. This agreement is divided into two tranches. The first tranche comprised of 50 million, of which 12 million is in convertible bonds, which represents the only potentially dilutive portion of the financing, and 38 million in straight debt. The second tranche amounts to 30 million in straight debt, all of which providing financial and strategic flexibility and ensuring cash liquidity to the first quarter of 2025. Next slide, please. If we look at the alligators operating cost on a rule in 12 months basis, we notice slight decrease as the patient recruitment peak is behind us in OPTIMIZE 1 study, as well as other expenses for Phase 3 enabling activities. On June the 30th, the cash position was 78 million. 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 be able to bring our drug candidates forward and through that secure long term financial benefits for the company and our shareholders. And with that, I will turn the call back to Søren.

Thank you, Marie. Next slide, please. So, with the 18 months survival follow-up data that we have discussed today, we have formed the basis of a very, very strong broader. It's also important to mention that we recently, i.e. earlier this week, announced the completion of recruitment in the 450 microgram backfill cohort of the OPTIMIZE ONE study. As you may recall, this additional patient cohort was recruited as a request from the US FDA to be able to make OPTIMIZE-1 a phase three enabling study. And of course, this important milestone and its very early completion reflects not only the dedication, but also the professionalism of the entire Alligator team. So a big thank you there. As you can see, we have other important milestones coming up in the second half of the year. We expect to announce top line data from the phase one study with the bispecific molecule called 527 that we are co-developing with Aptivo. And then we are also engaging in continued dialogue with the regulatory authorities, both in the US and in the European Union. And then, of course, we are working hard on, as I mentioned before, as Marie just mentioned, and as Sumit also emphasized, we are working hard on finding the right and optimal partner to take metazetumab into phase three and onto the market in first-line pancreatic cancer. And for that, we need to start a phase three study and currently scheduled for the first half of 2025 and with that if i could have the next slide let's just look at the at the long-term prospects for for alligator we have worked hard the last couple of years to exploit our platform in partnerships with orion macrogenics, Aptivo, while at the same time being sure that we could bring mitocelumab to the data that we have discussed today and advance our next generation CD40 by specific molecule such as 4066. In 2025, we will initiate a phase 3 study to be able to bring mitocelumab to first-time pancreatic cancer patients as soon as possible. We will go beyond CD40 and take our 4,1-BP molecules, primarily 5,2,7, into the next stage of clinical development, and we will continue to deliver on partnerships, as just mentioned. Beyond 2025, we will continue to expand both our proprietary and our partner pipeline to ensure that we can continue to deliver shareholder value and patient values in the years to come. And hopefully in the period before 2030, we will see Misesalumab approved and on the market generating the first positive cash flow, sustainable cash flow in Alligator. With those words, I want to thank you for your attention and turn over to the Q&A. If we could have the next slide, please. So let me see if we have some questions here. The first question is from Richard Romanius from Red Eye. How important are the 18-month OS and 12-month PFS numbers for Optimize One? Number one, that's for you to meet and how do they impact the partnering discussion? So if you could just

a medical perspective comment on the os and 12 months pfs data yeah these are these are extremely important data first of all because they indicate or they indicate sort of a very mature data set But equally important to note is they confirm and even further sort of strengthen the signal that we had observed in our primary analysis that was released in January. When we have been in discussion with experts in the field, the feedback that we got is the 18 month time point is often not even discussed because so far none of the data points have been that encouraging. Whereas this is the first time where we are able to report data that are very encouraging and we are reporting sort of a doubling of the survival rate at this 18 month time point. So very similar is the 12 month PFS rate. where the proportion of patients which are free of progression at the 12-month landmark is like three times of what was reported with the data from the historically reported Folfidinox trial. So these are very important data points, and they will definitely have a role to play in our activities and everything that we will do.

Yeah. Thank you, Sumit. And also to you following up, a follow-up question from Richard is, will these data influence the phase three design as superiority in these measures should influence the likelihood of obtaining approval?

I would say very much so. First of all, they further boost our sort of confidence in the drug and in this combination. and highlight the immune contribution that comes from metazolamab, which not only means that a lot of patients have been able to stay much longer on the treatment, but also that that with the longer follow up, you see more and more sort of differential outcome, basically, that we will need to treat these patients until progression. And it is going to be very important to observe and follow up for a sufficiently long period of time that will enable demonstration of superiority in a randomized trial.

Thank you. And then Richard asks, and I'm going to collapse these questions into one, saying that how important are these data and the fact that Mr. Salomap is almost phase three ready in partnering discussion slash business development? It's clear first and foremost that the 18-month data that we released a couple of weeks ago have raised a few eyebrows, so to speak, both in the scientific community and clinical community, as Sumit mentioned, but also with potential partners, both partners that were already engaged in discussions and diligence with Alligator, but it has certainly also driven a couple of potential new partners into the discussion. so both of this is is very important that the data hold true that they are truly differentiated from from what has been seen before and the fact that we have established a clear path to approval with with the fda of course takes away a significant uncertainty in the program and and therefore has positively influenced the dialogue with potential partners. And then a fourth question here from Richard, what more activities are needed before you can send in a phase three application? So I think we are working on a number of activities preparing that. We are now at a place where the phase three manufacturing process, the development has been finalized. The next step for Alligator is to push the bottom for for manufacturing that molecule. We are currently in dialogue with European and US authorities about further CMC activities and what's needed there. We are talking to potential clinical research organizations to help with the trial. And Sumit, you can probably allude a little bit to some of the activities that are ongoing to fine tune the actual phase three trial based on the input not only from the FDA, but from a number of key opinion leaders that we've had recently.

Yeah, absolutely. I mean, so again, the 18 month data will contribute further to to before we finalize our sort of design and approach for the phase three trial. We are getting excellent input from the experts in the field in terms of details such as the patient population, the sort of assessments to be done in the context of a phase three trial and the strategy of analysis for the trial to maximize the chances of success eventually. Additionally, we are obviously also undertaking several interactions with authorities worldwide that will be not only sort of useful, but also critical in terms of getting their buy-in to the design, to the protocol before embarking on the operational execution of a phase three trial. So we are undertaking everything that is typically done

as a startup part for for a phase three trial yeah and and and i think i can add that in addition to to the patient to the to the physicians uh requesting iits to expand meters use and in other indications we also seen quite a number of of pancreatic cancer physicians reaching out to alligator, wishing to participate in the phase three trial, which I believe is a positive sign. And then the last question from Richard here, and that goes to you, Marie. Is an average cash burn of around 40 million SEK per quarter a reasonable estimate for the next three quarters?

Yeah, I would say something between 40, 45, perhaps. So that's a good estimate.

Yeah. Thank you, Marie. And then we have a number of questions here from Louisa from Kelton. And the first one goes like this regarding the dose optimization cohort. So that's the 450 microgram cohort that we have just announced the enrollment of. Could you remind us how many patients are in that cohort and when can we expect data from that cohort and whether you will share such data at all? So Sumit, maybe you can give us a little bit of background why we're doing this, what are the analysis that we are going to take, because we're not going to look at clinical efficacy to the same extent as we are doing for the main study, but more look into dose characterization.

Yeah, absolutely. And just as a quick reminder, I mean, OPTIMIZE-1 started as a dose escalation trial where the starting dose with the chemotherapy combination was the 450 micrograms per kilo. And thereafter the trial proceeded to the 900 micrograms per kilo dose level, which became the recommended phase two dose. Whereas our interaction and therefore the majority of the patients in the trial, they were treated with this higher dose of 900 micrograms per kilo. Whereas our discussion with the FDA end of last year, we got an advice from FDA to enroll a few more patients because only five patients were treated until then with the lower dose. And this number was kind of insufficient in their view to complete the dose characterization. So they asked us to treat approximately 15 to 20 more patients, which we did via amending the protocol. And this is how we call this as the backfill cohort with the lower dose level. So that cohort is sort of completing the need for dose characterization as far as FDA's expectation is concerned. what we have promised to them is to look at the data from these patients for approximately over a six month timeframe, essentially focusing on the basics such as the response. And the idea here is to make sure that there are, I mean, no sort of major differences in efficacy and safety. And we believe that this will complete the characterization that FDA is expecting from this program. And with that, we are hopeful to proceed with 900 as the dose, because that's where we have maximum data and strong evidence as far as the activity and safety of metazolamab is concerned.

Thank you, Sumit. And then a follow-up question, a logical one, I would say. So what's the potential impact of the data in the discussions with regulatory agencies?

yeah i mean so so basically from a scientific point of view we will compile the data do extensive sort of correlations uh uh and and make sure that we are fulfilling the requirements from from the regulatory authorities before we can conclude and and importantly to justify the selection of uh of the dose uh before we embark on a phase three trial So this is an important undertaking and a kind of commitment that we have made to the authorities. And this will only help basically in initiating a phase three trial with metazolamab at early as possible. Yeah.

Thank you. And I just want to re-emphasize that the Phase 1 study with Metasalimab was done at doses twice as high as the 900 microgram Phase 2 cohort, and that the regulators, neither in the US or in in European countries have requested further dose finding in the form of a randomized phase 2b study, for instance. And the company's position is that we believe, based on the current data, that 900 micrograms will be the phase 3 dose. And then a question here, I assume that's also from Luisa. How are partnership discussions progressing? I would say they are progressing fine as expected. We have, as I said, seen a number of new outreaches to Alligator based on the recent 18-month data. We are discussing with a number of global pharmaceutical companies Less than 10, more than one. I'm not going to be more specific than that. These negotiations are under CDA. They have the characteristics of diligence. And we think that Q3 is still a realistic landing zone for a deal on Mr. Salimab. in first-line metastatic pancreatic cancer. So, another question from Luisa, coming from this, what are your strategy scenarios regarding Metasalomab's development plan, depending, of course, on whether you secure a partner before of cash one way, etc. Yeah, so I think this is a very central question and we can answer it in two ways. If we look at mitosalumab in pancreatic cancer, The main development hypothesis is, or the main development scenario, is to develop metastalomab on top of folferinox, as we are doing, as we are assessing in OPTIMIZE-1. We believe, based on what we see with Ibsen's Onivite and the Nelleri FOX, regime there that the meter for furinose combo is significantly differentiated and there is a significant long-term medical benefit for the clinical benefit for the patients to achieve there and there also for a significant market opportunity. Whether and how to include a Nelnery fox arm in the Phase III development or Phase IIb development is something that we are discussing, as we are also, of course, looking at potentially expanding to be combined with the gemcitabine in an opportunity to capture the full phase one or the full first line pancreatic cancer, the full first time pancreatic cancer market potential. And then, of course, depending on a partner, we would like to see mitosalumab being developed beyond pancreatic cancer. Hence, the different IRTs that we have been discussing earlier today. There are opportunities in other GI cancers, such as colorectal cancer, biliary tract cancer. And, of course, there is an opportunity also to expand mitosalumab into other indications in combination with PD-1. And then you can say that if we're not able to find a partner, then we have to look at alternative scenarios on how we can, as a company, bring Metasalom up into phase three alone. But the main hypothesis is now that the current Partnering discussions will lead to a deal that is optimal for the development of metazalumab going forward. And then the last question from Luisa, and that is for you, Sumit. Could you please remind us what would the phase 3 trial look like? Number of patients, primary and secondary endpoint, cost of running the full trial, duration, etc.? ?

Yeah, so it will be a global study, a randomized study of the metazolamab modified Folfirinox combination versus modified Folfirinox alone as the standard of care. And we haven't yet fully finalized the design, but it will be a large study ranging between like 500 to 700 patients. I mean, all of us know the magnitude of the NAPOLE-3 trial, and we will have overall survival as the primary endpoint. uh we will also try to build in possibilities for uh for early like readouts that has that will have uh an early approvable potential sort of data driven so so we are uh i mean working on this and uh I mean, of course, we do not have all the details to share as of now, but it will be an industry standard global randomized phase three trial in frontline pancreatic cancer.

Thank you, Sumit. Now we have a question from a shareholder here, Patrick Boily. On the Orion collaboration, the collaboration seems to be going well, but can you please provide us with more information as to what are the next steps? Yeah, so just as a reminder, Alligator and Orion has been collaborating on two programs, on the novel bispecific antibodies in immune oncology program, Orion has taken the development option on both molecules, one in 23 and the latest one here in this quarter. And now the responsibility for the preclinical and clinical development is with Orion. And as per contract, it's Orion's discretionary right to communicate the next steps. Alligator, as per contract, will remain silent on that. Let me see if there is another question here. And that goes to you, Submit. This is also from the aforementioned investor. on the molecule called 527. Could you provide us with an update as to where the phase one study stands and what are the next steps in the study as Abtivo announced the dosing of the fifth cohort?

Yeah. So the phase one study, which is in dose escalation, uh stage is progressing well and we are expecting the sort of completion of the dose escalation in the coming months importantly we are also aiming to be able to present the early data from from the cohorts and the patients that have been treated so far on this program uh in the upcoming scientific meetings such as uh the the esmo meeting uh in the in uh early fall so so so there are uh data readouts coming out from the five to seven program or by specific forum bb molecule thank you

And then a final question from Patrick on the CFO change. Marie has been with Alligator for almost four years and is staying with Alligator. So I was wondering what prompted that change. First of all, I want to once again thank Marie for her dedicated effort at Alligator. And I'm very, very pleased that that marie will will stay on and continue to contribute positively to the development of alligator even after august 12th so as alligator is is continuing to expand its its operation its its ambitions hopefully also the future operations and definitely its investor base from being primarily scandinavian and european to be more global, we thought it would be a positive move for Alligator to get a CFO with a stronger global experience and impact and And Johan Gileus represents that. And we had an opportunity to bring Johan on board Alligator, and we took that. And that also coincided beautifully with Marie's wish to taper down her her work efforts or work work hours a little bit and enhance the shift in in cfo and and the opportunity to to maintain marie as a part of the alligator team Let me see if there are any more questions from today's call. That doesn't seem to be the case. With that, I want to thank Marie. I want to thank Sumit and also Greta and also all of you for listening in on today's call.