Alligator Bioscience AB (publ)

Hello, and welcome to Alligator Biosciences Interim Report Call for the first quarter of 2025. My name is Greta Hög. I am Communications Manager at Alligator, and I will be introducing today's call. With me today are our CEO, Søren Weinholt, and our CFO, Johan Gilius. They will walk you through the latest developments from the quarter 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 with you 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 timings 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 our investor relations section of the website. With the formalities out of the way, I would now like to turn the call over to Saram.

Thank you Greta and once again welcome to Alligator Bioscience Q1 2025 call. If I could have the first slide please. So Q1 has been another busy quarter for alligator bioscience. We have made significant progress with our lead candidate, metazetamab, in first-line metastatic pancreatic cancer. We have announced 24 months follow-up data, again showing a encouraging survival rate for mesosalimab now at around 30% at 24 months, which is outstanding for this disease. In addition, in February, we announced also top-line data from a backfill cohort that was done based on feedback or guidance from the FDA to further characterize the Phase 3 dose. And we are happy to be able to announce that all the data from this cohort is fully in support of 900 microgram as the recommended phase 3 dose. During the first quarter and in the end of last quarter, the fourth quarter of 24, we've had a series of successful regulatory interactions, both on manufacturing, on clinical design, that together minimize the program risk of metastatomab and points towards a clear registrational approval for the drug in first-line metastatic pancreatic cancer. In February, we also completed a rights issue raising 153 million SEK in gross, and we are now coming up for an exercise period of our CO12 war insurance that will fall more towards the end of the webcast. As we'll talk about in the next slide, we have also conducted a cost reduction program that started in the fourth quarter last year, and we are happy to announce that we are ahead of plan with this program that will be concluded by Q2 2025, hence positioning the company well to maintain a low general OPEX in the coming quarters to pursue our strategic objectives. So if we have the next slide, please. We are talking about the current focus of Alligator going forward. The cost reduction program that we initiated in the fourth quarter last year will allow us to be laser focused on getting Mr. Sallum up towards our strategic objectives, namely starting a phase three clinical program together with a strategic partner towards the end of this year and also invest limited in the follow-up candidate 4066. Our optimized cost structure allows us to pursue these goals following warrant programs that Johan will talk about towards the end of today's talk. Now let's move to the next slide, an overview over... Sorry, I was ahead of myself here, so please let me take this opportunity now, talking about a laser-focused organization, to introduce and welcome our new Chief Medical Officer tomorrow. Tom comes with a long-term experience from oncology drug development from pharma, including positions at Roche. Tom has been working with the company for quite a period in a consultancy role, and it was only natural that Tom stepped up to CMO when this position became vacant during Q1. So a warm welcome to Tom from Alligator's management and board. Now let's move to the pipeline slide here, just to re-emphasize that our focus is on metacetamab, our phase III radiacid, and first-line metastatic pancreatic cancer, and that we're developing 4066 as a follow-up candidate to this drug. We have a co-developed program with Activo in the U.S. I'm not going to spend so much time on this molecule today, just re-emphasize the fact that we have concluded the dose escalation of the first in-man study, and that the companies are currently evaluating our next development steps with this molecule. Furthermore, we have HLX22, which is outlicensed to a Chinese company, Henlews. There's been quite a number of progress and news surrounding this program in the Q1. As late as yesterday, we announced that Henlews have started the Phase 2 study in HER2-positive breast cancer patients, and earlier in the quarter, we announced that the company has initiated or at least been allowed to initiate a Phase III study in HER2-positive gastric cancers. And I want to remind all of us that this molecule is partly owned by Alligator through a sublicense via Abclone, and that Alligator is eligible for 35% of future royalty income from this molecule. Now let's move to the next slide, Greta. and just remind ourselves about Misosalimab, our first line metastatic pancreatic cancer drug. We started the phase two clinical development of this molecule in the third quarter of 2021. Now, almost four years later, we have Three and a half feet now announced 24 months follow-up data showing that mitosalumab in combination with first-line chemotherapy leads to a 24-month survival rate of approximately 30%. which is a tripling of what we can expect with a historical comparator for Feirinox in its own, and also significantly and nominally better than Ibsen's latest approved drug, Olivide, in the so-called Nelnery-Fox combination. So combined with the very manageable safety profile of mitosalumab, the strong overall survival data and these long-term survival data, we still maintain our view that metazolamab is a potentially practice-changing drug in the first-line treatment of metastatic pancreatic cancer. And as I said in the beginning, the recent data from the 450 microgram cohort that we announced in February strongly support that 900 microgram is the recommended phase three dose. These data together with the regulatory progress that I will talk about in just a second and the therapeutic window of the molecule continues to drive big pharma interest in mesothelioma and I'm sure that many of you listening in today are very much interested in how these discussions are progressing. We are going into more focused discussions with a set of global pharma companies and also a set of large global biotech companies. And we maintain our view that metazolumab is very, very likely that we make an agreement with metazolumab during 2025. One of the things that are of course worrying on a global scale is the current trade wars and financial uncertainty going on based on the current US administration. So far we have not seen this reflected in our discussions with potential partners. We believe that the underlying fundamentals of the pharmaceutical industry with a need to continue to replenish the eight-stage pipeline are intact, and we believe that Mr. Salimab fits perfectly for a number of companies that have, what can we say, goals and needs in their phase three pipelines, together with a need and a wish to enter into solid tumors or even gastrointestinal tumors like the ones treated by Mr. Salimab. If I could have the next slide, Greta. I just want to reemphasize that we are moving forward. with Mr. Salomab that we have agreed the phase three protocol now both with FDA and the German authorities. We still have had a formal discussion with the FDA scheduled for June this year. The trial is a standard phase three registrational trial. Mr. Salomab plus chemotherapy, randomized one-to-one versus chemotherapy in approximately 570 patients with an opportunity for an early readout based on an interim analysis approximately two and a half years after initiation of the trial. As we have announced previously, we have initiated manufacturing of material for this trial based on positive outcome of our dialogues with both US and European authorities around the manufacturing status of the molecule. And basically there are, as I said, an EMA scientific advice plan for end of June and also a type D meeting with the FDA to formally approve 900 microgram as the recommended phase three dose. And if I could have the next slide. I will hand over the word to Johan to take you through the financials and some background info on the upcoming warrants. Johan, the floor is yours.

Thank you Sören. Let us start with a snapshot of our Q1 performance then. We have had still quite a lot of expenses in the quarter due to the fact that we are have the ongoing clinical trial, the phase two study with vitazolamab. Patients are still treated. And of course, that incurred cost and the benefit of the patients, of course, is striking them with still on the trial. We also are producing IMP, I study material for the phase three to be able to start the trial. the clinical trial towards the end of 2025, and that has also incurred cost over the quarter on top of the general OPEX and also the cost for the restructuring of the organization within Alligator. When it comes to the financial items, which is maybe not what we normally see, has a huge impact on a company like Alligator, we do have interest cost, of course, due to the loans that we have had during the quarter, but also there is a financial income, and now it becomes quite technical here. We have to record the TU12 and TU13 that we issued free of charge in connection with the rights issue in February at value, and then we record the financial debt for that, and that is also revalued on a quarterly basis. This has then incurred quite a significant financial income at the end of the quarter. Hence, we have a positive financial net. This last item that has a non-cash impact, so it will not actually have an impact on our future cash flow. The cash flow will come from any exercise of the TU12 and TU13 going forward. Going back to the people then, as you can see in the bottom line, then we are still 33 people that was engaged by or employed by aggregator towards the end of the quarter. Many of them have already done their last working day, but due to notice periods that they may have days and weeks in their second quarter as well to incur salaries and etc. By the end of the quarter, too, then we will only have the remaining alligator people within the company, then around 15 people. Next slide, please. What we then can see is that we have a trading effect of lower expenses than as predicted, but also that it will become even more evident the next quarter and the coming quarters. And as Søren mentioned before, we will have quite a low general OPEX in Q3 and onwards. When we have done more or less finalized the study with MITA in phase two, we have also concluded the manufacturing of the IMP then. Actually, as we speak, they are doing the final steps for the IMP manufacturing, and they will go into stability phase then up until it can be used towards the end of 2025. We have liquidated funds of 29 million at the end of the quarter. And we have, we are expecting them as outcome of the T12 and T13 that is in line with our plans, that also then we can use them for our financial flexibility to deliver on our current strategic objectives. And of course, as mentioned by Søren earlier, that we are looking to other avenues for getting cash into companies through partnerships etc. Next slide please. I'd like to take this opportunity just to remind everyone on the call about the TU12 standard that will come in to be exercised in mid-May. Next week then, on the 28th, it will be the last day of the pricing period. And as you may recall, the price will be set, the VWAP, 70% of the VWAP for that particular period on 11th to 28th of April. We will announce that maybe after the close of the trading on 28th or early in the morning and thereafter. And then it will then be an exercise period from the 5th of May throughout to the 19th of May. And please be aware that your bank may have different deadlines here, so make sure to reach out to your bank to make sure that you can act on this, either by subscribing or also trade if you want to buy or sell TU12 Stealth. Last day of trading is 15th of May then. And towards the end of May then we will both announce the outcome and also have the proceeds to the company then. and there will be some time lag before these subscribed shares also can be converted to actual shares. At the bottom then, we have this reverse split that has made it a little bit some complexity to understand what is what are the rights worth of that and how much will that trickle into new shares then. But if you take the easy one, that if you have 1,000 warrants to your 12, that's equivalent to one new share at the subscription price or exercise price. And then this will then be what will be the cash inflow to the company. And if the 19.6 million equivalent shares that we can then maximize, maximum share, Easier than in connection with U12 and if you just use a proxy like for Kronos then the maximum inflow to the company will be then 80 million roughly. With that in said, I think I will hand over to you Søren for the final remarks before we go over to questions and answers.

Thank you Johan. So and some of your comments reminded me to just make a few additional comments to optimize one. Currently, as Johan said, we have, and I think it was in the slide, We have five patients that are still being treated on 900 micrograms per kilogram. These patients have been on treatment for now more than two years. The longest of these patients have or will next week cross three years of active treatment with metazolamab, which is also a reflection of the drug's efficacy and safety profile. Mr. Salimab is life-saving medication for these patients, and the company is of course committed to maintain and continue to provide Mr. Salimab for these patients. But we are in the process, and this also goes for the 450 microgram cohort, where there are 9 patients still on block. we are in a process of reducing the readouts from these patients, so we drag down the overall cash burn in the optimized MoM study. So if we look at the milestones that we foresee for 2025, which is this slide, as I already said, we have two important Phase 3 enabling regulatory meetings in Q2. All have been in the plans since last year, and we are on track with these meetings. And then we still believe that The trial or the program is still on track for Phase 3 initiation in this year, and it's clear that we are working hard with our discussions with potential partners to be able to start that trial during this year. As you know, we have other assets in the pipeline, 4066, we are not allocating cash to drive this molecule forward at any speed. That is something that we will do once we have have non-dilutive income for a meter deal and the same goes for the phase one acid 527. Here we are not allocating any cash to that molecule in the coming quarters. So with that, could we have the final slide? Yeah. We have now time for a Q&A, and I know that we have received a couple of questions here. And Johan, if you are ready, then the first one goes to you. This is from Chiara at Kempten, who would like to understand how far the cash runway is.

I will say it this way. With the prudent assumption for the TU12 and TU13 that will be upcoming now in May and September, we expect to have cash until the end of 2025.

and to achieve our strategic objectives. That's right. Then Kiara also has another question. I was curious to know about how partnership discussions for Mr. Salomar is going. And I think I'll take that one. We are discussing now, focused with a number of, as I said, global pharma, big biotechs, and we expect that these discussions will continue to move forward in the coming weeks and months. We are encouraged about the feedback we hear, both on the molecule, which is alum of the data that we see in the trial, and also, this is a little bit of an internal comment, but to the quality of the material in the data room. Then we have a series of questions from Richard from Red Eye, and I think a couple of those are for me. Can you comment on the Phase III design with potential for accelerated approval? Yeah, I already mentioned it's a one-to-one randomization of META plus Folfarinox versus Folfarinox in, of course, a blind study. but it's a non-placebo-controlled study, which is a good thing for alligator and a partner as it reduces operational complexity. And yes, there is an opportunity for, I would not call it accelerated approval, because it is the same endpoint, namely overall survival, but we have an early interim analysis that is event-driven that gives an opportunity for the drug to be approved as early as 2030. And the next question, have you updated the trial design? Not lately, but of course we have assessed quite a number of various designs before addressing this with the regulators. Then Richard has a question on 527. What is the status and are we still incurring costs? We still own half of the molecule together with Aptivo, the US-based company that we are that we are collaborating with. We are currently assessing the clinical data from the dose escalation study and are assessing next step for the molecule, including the opportunity to partner 527 with a third party. And right now, we are not allocating significant cost to this molecule. And then the last question from Richard here is, when could HLX22 be on the market and start generating royalties? And I think that's an excellent question, but it's significantly difficult to answer. Henley Rose has just received the FDA IND approval for a Phase III study. Let's say that that can start sometimes this year, then we can add approximately three, four years on that. So I think again, we will probably talk about something 20, 30 or maybe a little bit later than that. And with that, there are no more incoming questions. So I think we will... end the call here and once again thank you for your participation and your interest in in alligator and have a good afternoon thank you have a good afternoon thank you