Alligator Bioscience AB (publ)

Hello and welcome to Alligator Biosciences second quarter 2024 interim report call. My name is Kerta 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 Beinholt, our CFO Meryl Svansson and our CMO Sumit Ambarcane. 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 that 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 Sade.

Thank you Greta. I'm Sade Breinhardt, 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 Mises-Salomar phase two data and first line pancreatic cancer continues to deliver new data and we recently announced outstanding 18 months follow-up data for Mises-Salomar. Not only did the median overall survival increase to 14.9 months, which is substantially better than the 11.1 month reported for for Faryonox 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 for Faryonox monotherapy and Sumit, our CMO, will comment on the result in a greater detail shortly. The top nine data from this phase two study was published in the Landsat 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 Landsat 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 or gastrointestinal cancer conference earlier late June this year, all highlighting the further validation of M. salomap phase two data. Based on these phase two data, Alligator has received a surge in the demand from physicians who want to conduct trials on M. salomap 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 US National Cancer Institute. We believe that these investigated initiated trials are a great way to generate additional data for M. salomap at limited or no cost for Alligator and to raise the profile of M. salomap and Alligator internationally. And we will continue to evaluate and engage in these trials as appropriate for the development of M. salomap. 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 Alligator's technology and our approach to generate bispecific antibodies and also trigger the milestone payment to Alligator. Further on financing, we conducted a race 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 maneuverability in negotiating the best possible licensing deal for M. salomap. Marie will go into the details later in today's call. And last but not least, we are 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 3 clinical trial and out licensing in Japan on the same molecule. Johan will 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 3 ready as it is 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 M. salomap for phase 3 and we stay later focused on advancing M. salomap 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 Optimize ONE. Sumit, over to you.

Thank you. Thanks, Søren. Next slide please. Right, so most of you may be familiar with our ongoing Optimize ONE study and the impressive tumor shrinkage we have reported in the trial with the M. salomap plus modified fulphurinox 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 intracerebral tumor. So this is 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 ONE 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 M. salomap and modified fulphurinox combination as a first line treatment for metastatic cancer. So this is a very important study for 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 plactotaxo, fulphurinox as well as nalirifox, the most recently approved treatment. And clearly the results from the Optimize ONE 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 ONE study compared to the historically reported data from the fulphurinox 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 mitazalimab 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. This gives a very good sense of our robust immunoncology 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 -1-BB 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 Sorin, we are stepping up our efforts to enter into an agreement with an optimum biopharmaceutical partner that is best suited to take mitazalimab through its conformity 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 25. Next is our new X prime first in class bispecific CD40 agonistic antibody which we call ATOR-4066. This is a very exciting molecule that continues to demonstrate significant potential during its current preclinical phase of development and that further supports alligators commitment to continue advancing this molecule towards the clinic. It also demonstrates that that alligator's pipeline and the CD40 program extends well beyond mitazalimab. So something really to look forward to. And last but not least from our pipeline point of view are our programs targeting 4-1BB. We are assessing options for taking the mono specific 4-1BB molecule ATOR-1017 to phase two development as a combination treatment and we are also expecting for the other program ALGAPV527 which is a bispecific 4-1BB 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 Swenson 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 the cost of the ongoing clinical trials for mitasalimab and 527 as well as phase three enabling activities for mitasalimab. 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 one 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 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 percent of the resources have been focused on the mitasalimab project. R&D collaborations amount to 19 percent comprising of investments in 527 and to some extent microgenics collaboration. 10 percent of our efforts invested in our next generation CD40 agonist A24066 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 potential 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 alligator's operating cost on a rolling 12 months basis we note a slight decrease as the patient recruitment peak is behind us in Optimize One study as well as other expenses for phase three 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 Sørdem.

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 quarter. It's also important to mention that we recently i.e. earlier this week completed or 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 One a phase three enabling study and of course this important milestone and its very early completion reflects not only the dedication but 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 on finding the right and optimal partner to take M. tessatum up 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 long-term prospects 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 M. tessatum up to the data that we have discussed today and then we will advance our next generation CD40 bispecific molecule such as 4066. In 2025 we will initiate a phase three study to be able to bring M. tessatum up to first line pancreatic cancer patients as soon as possible. We will go beyond CD40 and take our 41BB molecules primarily 527 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 M. tessatum up approved and on the market generating the first positive cash flow and 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 from Redeye. How important are the 18 month OS and 12 month PFS numbers for Optimize One? Number one that's used and how do they impact the partnering discussion? So if you could just from a medical perspective comment on the OS and 12 month PFS data.

Yeah these are extremely important data. First of all because 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 infection at the 12 month landmark is like three times of what was reported with the data from historically reported for Phyranox 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 3 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 Mitazalimab, which not only means that a lot of patients have been able to stay much longer on the treatment, but also 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 Mitazalimab is almost phase 3 ready in partnering discussion slash business development. It's clear first and foremost that 18 months 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 with alligator, but it has certainly also driven a couple of potential new partners into the discussion. So, so both of this is very important that the data hold true, that they are truly differentiated from what has been seen before. And the fact that we have established a clear path to approval with the FDA, of course, takes away a significant uncertainty in the program and therefore. Will has positively influenced the dialogue with potential partners. And then a thought question here from Richard, what what more activities are needed before you can send in a phase 3 application? So I think we are working. We are working on a number of activities preparing that we are now at a place where the phase 3 manufacturing process has been the development has been finalized. The next step for alligator is to push the bottom for for manufacturing that that molecule. We are currently in dialogue with European and US authorities about about about further CMC activities and what's needed there. We are talking to potential clinical research organizations to to help with the trial and so meet you can probably leave it a little bit to some of the activities that are ongoing to fine tune the actual phase 3 trial based on the input, not only from the FDA, but from a number of key opinion leaders that that we've had recently.

Yeah, absolutely. I mean, so again, the 18 month data will contribute further to do before we finalize our sort of design and approach for for the phase 3 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 phase 3 trial and the strategy of analysis for for the trial to to maximize the chances of success eventually. Additionally, we are obviously also undertaking several interactions with 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 to the protocol before embarking on the operational execution of a phase 3 trial. So we are I mean, we are undertaking everything that is typically done as a startup part for for a phase 3 trial.

Yeah, and I think I can add that in addition to to the patients to the to the physicians requesting IITs to expand meet issues and in other indications, we also seen quite a number of of pancreatic cancer physicians reaching out to alligator, wishing to participate in in in the phase 3 trial, which I believe is 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 SEC per quarter a reasonable estimate for the next three quarters?

Yeah, I would say some 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 from Kempen. 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 whether you will share such data at all? So, Sumit, maybe you can give us a little bit of background. Why are we 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 story, but more look into dose characterization.

Yeah, absolutely. And just as a quick reminder, I mean, optimized one 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 whereas our discussion with the FDA and 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 the expectation is concerned. And what we have promised to them is to look at the data from from these patients for approximately over a six month time frame, essentially focusing on the basics, such as the response. And the idea here is to to make sure that there are 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 with with 900 as the dose, because that's where we have maximum data and strong evidence as far as the activity and safety of Metazolimab 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 with regulatory agencies?

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

thank you. And I just want to reemphasize that the phase one started with Metazolimab was done at doses twice as high as as the 900 microgram phase two cohort. And and that the regulator regulators neither in in the US or in in in European countries have have requested further dose finding in in in the form of a of a randomized phase two beast for instance. And the company's position is that we believe based on the current data that 900 micrograms will be the phase three dose. And then a question here, I assume that's also from from Louisa. How are partnership discussions progressing? I would say they're progressing fine as as expected. We have, as I said, seen a number of new outreach is 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 to be more specific, specific than that. These negotiations are under CDA. They are have the have the characteristics of of diligence. And and we think that that two three is still a realistic landing zone for a for a deal on on with the seven in first night and metastatic pancreatic cancer. So. So what another question from Louisa coming off on and from this, what are your strategy strategy scenarios regarding the two cello maps development plan, depending of course on whether you secure a partner before of cash runway, et cetera. Yeah, so I think this is a very central question and we can answer it in in in two ways. If we look at the at Mithrasalumab in in pancreatic cancer, the main development hypothesis is or the main development scenario is to develop Mithrasalumab on top of of for phyrinox as we are doing as we are assessing in optimized one. We believe based on on what we see with with the Ipsons on divide and then Larry Fox regime there that that the meter for phyrinox combo is significantly differentiated. And there is a significant long term medical benefit for the clinical benefit for the patients to achieve there. And they're also for a significant market opportunity. Whether and how to include a Naline Fox arm in in in the phase three development or phase two B development is something that we are discussing as we are also of course looking at potentially expanding Mithrasalumab to be combined with the Gemsidobine in an opportunity to capture the full phase one or the full first line pancreatic cancer. And then of course depending on a partner we would like to see Mithrasalumab being developed beyond pancreatic cancer. Hence the different IITs that we have been discussing earlier today. There are opportunities in other GI cancers such as colorectal cancer, bilirotract cancer. And of course there is an opportunity also to expand Mithrasalumab to be combined with the full first line pancreatic cancer. And then we have to look at alternative scenarios on how we can as a company bring Mithrasalumab into phase one. And then the last question from Luisa and that is for you Sumit. Could you please remind us what would phase three 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 Mithrasalumab modified folferinox combination versus modified folferinox 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 five to seven hundred patients. I mean, all of us know the magnitude of the NAPOLI 3 trial and we will have overall survival as the primary endpoint. We will also try to build in possibilities for early like readouts that will have an early approvable potential. We will also be sort of data driven. So we are working on this and I think, 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 Boyle, 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 novel bispecific antibodies in immune oncology. 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, Sumit. 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 Eptivo announced the dosing of the fifth cohort?

Yeah, so the phase one study, which is in dose escalation 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 the cohorts and the patients that have been treated so far on this program. In the upcoming scientific meetings, such as the ESMO meeting in the in early fall. So there are data readouts coming out from the five to seven program over by specific form BV molecule.

Thank you. And then a final question from Patrick on the CFO chains. 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 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 12. So as Alligator is is continuing to expand its its operations, its ambitions, hopefully also in the future, the operations and definitely its investor base from being primarily Scandinavian and European to be more global. We 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 to bring to bring Johan on board Alligator. And we took that and that also coincided beautifully with the Marie's wish to to taper down her work efforts or work hours a little bit and hence the shift in in CFO 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 for listening in on today's call.