Alligator Bioscience AB (publ)

So hello and welcome to Alligator Biosciences interim report call for the second quarter of 2025. My name is Keita Hög. I'm the IR and 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 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 the investor relations section of our website. Now, with the formalities out of the way, I would like to turn the call over to you, Sara.

Thank you, Greta. And once again, welcome to Alligator's Q2 2025 earnings call. It's a pleasure being with you again. Could we have the first slide of the session, Greta, to sum up some of the key updates from the quarter? I think it's important to first and foremost mention that we have advanced Mr. Saldemar our lead acid according to plans. During the quarter, we have been granted a so-called pediatric waiver from EMA, the European Medicines Agency. And more importantly, the EMA has also, as part of our scientific advice process with the EMA, endorsed both the phase three protocol and the phase three dose. And likewise, in an interaction during Q2, FDA also confirmed 900 micrograms as the recommended Phase III dose. If we take a broader look at the regulatory advice that we have received on this assailant map, both in terms of Phase III protocol, Phase III dose, CMC and also the non-clinical Phase III readiness of mitocelumab. There is a very high degree of alignment between what we've heard from European agencies, EMA, Paul Ehrlich in Germany and FDA. And this, of course, forms the basis of a single global Phase III development program for mitocelumab, which is very important. To facilitate this, we have also manufactured GMP material with an updated process to support both the Phase III study, but also the commercial supply of the molecule. And that process is very nicely developed, been validated to its current use, and the drug supply for the Phase III study has been secured. Further, on mitosalumab, we've had the pleasure to discuss new biomarker data at ASCO, the American Society of Clinical Oncology Conference in Chicago, and also a couple of weeks ago in Barcelona at a European meeting. This biomarker data importantly supports future patient selection strategies. It validates the mechanism of action and immune activation of metazelumab, and this together with the clinical trial data that we have released earlier continues to strengthen the case of metazelumab as a relevant first-line medication in metastatic pancreatic cancer. Together, this data has also strengthened the academic interest in the molecule. And as we alluded to in the Q2 report, we have a number of proposals for so-called investigator-initiated clinical trials. that we are evaluating and we will engage in a number of selected trials during the second half of 2025 to explore further and strengthen further the mechanistic understanding of metacetamol, both in pancreatic cancer, but definitely also in an effort to increase the strength of the molecule in other indications. If we look at the more finance business development side of things, we raised 61 million SEK in our TO12, which is a clear sign of continued shareholder support. Our partnering discussions about Metasalomab and also a few of our other assets have continued both at ASCO and BIO and following that. And then importantly, in alignment with our cost reduction program, we have now reduced the burn rate substantially below what we have seen in previous years, where we have supported both OptimizeONE and the CMC development and manufacturing. And we are now expecting a burn rate in the range of 20 to 25 million SEG per quarter. And then, of course, our outlicensed product, HLX 2022, has received often designation in Europe and have also initiated a second phase two study in HER2-positive breast cancer. So all in all, a lot of positive developments in alligator during Q2 2025. So if we could have the next slide, Greta. So just to remind you that metazolamab is our phase three ready lead acid. So just discussed strong clinical data, strong safety data, strong biomarker data, and generally phase three ready. We're also developing ATOR4066, which is a second generation, or third generation actually, CD40 by specific antibody. And I'm pleased to share with you that the data from itazolamab has really generated the increased interest in this molecule and interest that led to a number of advanced discussions, both at ASCO and also at BIO. And then in the partner programs, we already discussed HLX 2022, which is now starting a global phase three study in gastric cancers. So still a pipeline focused on mitosalumab, but with a number of strategic options to provide and support long-term shareholder value in the company. So the next slide, please. This is really just to remind ourselves that metacelumab actually does make a significant change in first-line metastatic pancreatic cancer. Not only do we change or add approximately four months to the median overall survival in this very hard-to-treat cancer, but importantly, when we compare to folferinox, the chemotherapy backbone that these patients are treated with, we see significant increases in the survival rates at 18 and 24 months. So that if you get mitosalumab in combination with the chemotherapy, your chance of being alive 18 months after diagnosis is double that of chemo alone and up to three times at 24 months. So really strong data. And why do we believe that this translates into phase three success? I think this is also important to emphasize. We previously showed that this comes statistically significant by end-of-trial comparison. We published those data earlier in the year. Very importantly, the patient population that we use in this study is very, very similar, if not exactly similar, to what you can expect in a global phase III study. Median overall survival is going to be the primary endpoint in that phase III study, and we've shown significant a significant delta from chemotherapy there. And then you remember we have this treatment schedule where we give a primal dose of mesosalumab, and that is a treatment schedule that we are taking with us into phase three. Hence, all the parameters that I mentioned go well for a positive outcome of the phase three study. If we take the next slide, I just wanted to maybe talk a little bit about some of the biomarker data that we discussed at ASCO earlier in the summer here, early June. It's, of course, always important to find, first of all, markers that correlate or relate your mechanism of action and your clinical outcome very well. And then if you can even find biomarkers where you can start to preselect patients based on a certain, for instance, a gene signature. So, if we look at this slide here, if we just look at the middle, the way that mitosalumab works, and we discussed this at several quarterly calls, is threefold. First of all, Misacelumab starts to degrade the stroma in the tumor, making the tumor more permeable to chemotherapy, to subsequent the Misacelumab and also to T-cell infiltration. And then Misacelumab strengthens the immune system to activate and educate T-cells to eventually kill the tumor cells and and provide the patients with a clinical benefit. So one very important step in actually proving this hypothesis is to go back in the tumor of patients from the clinical study and do comparison in their tumors before treatment and after treatment. And some of the data that we presented at ASCO, you can see on the right side here, and without getting too technical, what this actually show is that in a number of patients that did respond to metazolamab had a durable clinical benefit. We could see that when you compared tumor biopsies before the start of treatment and around the time of response, that was very, very strong indication of a positive activation of both the dendritic cells, the macrophages, and also the T-cells. So this fits very, very well with that specific mechanism of mesothelioma to activate the molylite and T-cell mediated immune system. What we have on the left-hand side here is a piece of work that is very important, and we may be able to select patients on that in the future of metazolumab development, where we show that patients with a certain gene signature that is exactly associated with with the fibrosis of the connective tissues in the tumor that patients with a certain gene signature here respond significantly better than patients that do not have this gene signature. So that's the patient indicated by the green line here in this Kaplan-Meier plot versus the patients in red here that don't have the signature. So a very important piece of data that, again, confirms the mechanism of action of mitosalimab and also provide some sort of strategic guidance on a patient stratification strategy in the future. So very important two pieces of data here. And we have more biomarker data than we expect to be able to publish in scientific journals within the coming period. So, I will leave you with this piece of data, Mr. Saddam, and just remind you that we also at the ESMO meeting in Barcelona a couple of weeks ago presented the data showing a very clear dose ratio. relation between the 450 and the 900 microgram dose cohorts, showing that the 900 microgram was significantly better than the 450, hence leading to FDA and EMA's endorsement of 900 as the clinical dose or as the dose for phase three. But also importantly, this data underscores the fact that you have actually, when you have a dose effect of something, also like mitosalimab in this case, of course, also means that there is a direct contribution of the drug to the clinical results you see. So, a summary of the regulatory status on this slide, just to remind ourselves and repeat that during Q2, FDA endorsed the 900 microgram phase III dose and that EMEA importantly gave us input on the phase three protocol dose and the phase three readiness of metazolumab that was in line with what we've seen from FDA. And then we can remind ourselves that from the phase three started, we now have 900 microgram agreed as the Phase III dose. We have a study design protocol that is acceptable for Phase III and subsequent registrational applications in both agencies. And the non-clinical program is adequate also for Phase III and subsequent applications. And on CMC, we have agreement with analytical method specifications, comparability strategy, et cetera, for the Phase III material. and these data and this strategy is adequate for BLA and M&A submission when we get to that point. Okay, enough said today about mitosalimab. Let's just spend a little bit of time on HLX22. I understand that this is becoming hot topic discussing alligator. So the antibody itself is a monoclonal anti-HER2 monoclonal antibody that is differentiated from existing HER2 molecules based on its epitope. It's currently being developed by Shanghai Henios in a number of trials. The drug was originally developed by Aptlone in collaboration with Alligator. Hence, Alligator is entitled to 35% of Aptlone's revenue from their partnership with HLX22. There's been a lot of numbers floating around, estimates, especially by Apclone on what could the peak sales of HLX22 be. It's currently being developed in gastric cancers in phase three and also in HER2-positive breast cancer. Numbers have been as high as 10 billion US dollars has been mentioned. alligators without mentioning any numbers. Our estimations are a bit more conservative, but we think that this molecule provides or constitutes a potential significant long-term upside to the company. In terms of development timeline, as you understand, this is developed by Henlius and we have no reason to second guess development timelines that are being communicated by Henlius. Just to make that absolutely clear, in terms of our of our communication policy around this molecule. As I think I indicated several times, we are working this molecule, owning this molecule, access to this molecule at an arm's length. So we are going to report significant regulatory events such as often drug designations start of clinical trials so on and so forth but we are not going to communicate on or comment on on market estimates like the one you have on the screen here so let's go on with this i hand over the the word to your hand to take you through the q2 financials thank you sarin

Happy to be on this call. Focusing on the Q2 numbers, then we have incurred operational cost, more general operating cost, of course, but also then the clinical trial cost optimized one and the IMP production and for the phase three. All in all, that has incurred 34 million in cost for the Q2, but we have also then made a reversal of the the write-down relating to HLX22, hence why we're coming with operating profit of minus 22. I will come back to the HLX22 in the next slide. We have also another non-financial item, which is related to the TU12 and TU13, which were issued free of charge in connection with our units issue in February, and these are the revalued in particular the NTU 13 does still remain at the balance sheet end at fair market value and hence provide some non-cash financial items during the quarter. Also to be clear that we have, you know, as a part of the redundancy program that we launched in December, have now seen the remaining employees leaving the company during the Q2 and hence will also lower the cost going forward So please move over to the next slide, please Greta. So what you can see here on the graph that we all have a trailing effect on the operating cost going down, but as Søren mentioned before, we are aiming towards 20 to 25 per quarter in H2 2025 and onwards. And I think that is relating back to the optimized cost, optimized one, trial cost is wrapping up and the IMT has more or less been manufactured and there are some stability costs that will be during the second half then. We have a liquidity of around 24 million and we have then funds that we believe will come in from the TU13 together with the liquidity position that we have now that we have uh financial flexibility for the for the for the rest of the 2025 then and of course as we always say that we are looking into different venues then for financing including the tu13 but also other avenues of financing when it comes to hlx 2022 i think it's worth mentioning then that we have uh revalued the the asset and we have the done the reversal of the write-down And that has then come up to a number that with 12 million in, let's call it a write-up. This is also a limited bio, the fact what's the initial book value of the asset was. We believe there's more value to the asset on top of that, but that's according to the regulatory environment that we, under IFRS, et cetera, we are not allowed to do that, at least not as a first step here now. With that, let's move over to the next slide, please. So just as a starter then for TU13, this process will be very similar to the TU12. We will have a pricing period. In this case, we'll start at 14th of August and end 27th August. And we will then be able to communicate the price in around the 28th of August. And as also for the EU12 and link to the reversal of the share split that we did, we need to, you need to have 1,000 worries to sign up for one new share then. And that can then happen during the exercise period that starts 1st of September and ends around the 15th of September. And as noted here, there's a last day of trading if you want to buy or sell shares, or sorry, the TO13. And of course, some of the banks have different cutoff dates. So you please make sure that you're not are missing out on this opportunity. And we can hopefully then announce something around the 17th of September with the outcome of this exercise of the TO13. With that, I think I hand over to you, Søren. Yeah, thank you.