Alligator Bioscience AB (publ)

Welcome to Alligator Bioscience's interim report call for the second quarter of 2026. My name is Greta Hög. I am the IR and Communications Manager at Alligator and I will be introducing today's call. With me today is our CEO Søren Weinholt and our CFO Johan Gillius. They will walk you through the latest developments at the company, after which they will be happy to answer any questions you may have. You may either submit these questions in the Q&A function of this chat, or you may email them to ir.alligatorbioscience.com. As you know, Alligator Bioscience is a publicly listed company, and I would like to note that today's presentation may include forward-looking statements. Please refer to the disclaimer on this side and to the next slide for the whole presentation. And with this, I would like to turn the call over to you, Sara.

Thank you, Greta. And once again, welcome to this Alligator earnings call, Q2 2026. We have some Wi-Fi issues here at the Medican Village in Lund. So I will already now apologize if the line is unstable or there any other sort of technological fallout during today's meeting. With that out of the way, let's go to the next slide, Greta. Thank you. So a couple of key updates from the company. In April, we saw data from Itazelumab Investigate initiated study presented at the Congress of American Association of Cancer Research and at that meeting also our the molecule called HLX22, which is developed by Henleus and partly derived from HLX22 that we'll talk more about later today. Data on that was also presented. Then in May, Henleus reported that HLX22 had announced follow-up data beyond the 39 months in gastric cancer, something that the aggregator also reported. And later in June, the company also reported that all patients or that the first patients had been dosed in all of the phase three regions on the ongoing study with HLA-22 in gastric and gastrointestinal junction cancer, two important milestones for HLX22. Why is that important? A number of significant events reported from alligator after the quarter in in July we reported that we will refocus on our financial interest in HLX22 and that we will discontinue independent development of metersalimab and that the remaining operations of the company will be wound down and we'll of course spend some time on that in today's call with the aim of giving the explanation why we have taken this decision and also convey to you the potential financial upside of our interest in HLX22. Also in July, we announced the rights issue of units to approximately 225 million, with an abridged loan of 19 million to secure the continued operation of the company. And I can tell you, as you probably saw earlier today, that today's extraordinary general meeting approved that that rights issue and at the same time also approved a share capital reduction. So if we take the next slide, we will spend some time on discussing the the pivot in strategy at Alligator, and of course also answer any questions that you may have towards the end of the call. As you are well aware, we have developed Metazalomab in first-line metastatic pancreatic cancer, a disease that currently is being treated with chemotherapies in first line. The development rationale for mitocelumab and OPTIMIZE-1 study that we have been reporting data on and discussed here several times was to combine mitocelumab with chemotherapy in first line. And as you all know, we have shown some pretty encouraging data in that setting. Now, in parallel with Alligator developing mitosalumab, a number of companies have been developing a new frog class of small molecules, or orally available molecules, tablet-based molecules targeting a mutation in pancreatic cancer called KRAS. It's approximately 90% of the patients with KRAS that has this this mutation to drive their disease. We have known that these drugs would come. We have known that they had some level of efficacy in second line. We've also seen glimpse of of data in first line during the year, and the hypothesis has been that even though these drugs are being developed, there would still be a clinical rationale for a combination of mesothelioma and chemotherapy. If we change to the next slide, I think what has happened... Next slide, please. What has happened actually since... The beginning of June and until now is that we have seen the latest data from these molecules. They have been taking the clinical community in this indication by surprise, how efficacious they are and how many patients they actually provide benefits for. If we just focus on the left-hand side of the slide here, First, we saw the paradigm changing phase three data from the molecule that called Direxonazib from Revolution Medicine. We saw them presented at ASCO in the beginning of June in patients in second line, extending their life more than double than what had been seen with chemo alone. Therefore, setting a new regime for KRAS inhibitors in second line. significant medical achievement and significantly good news for patients suffering from pancreatic cancer. What we have then seen since then, latest at ESMO GI, so another medical conference in Munich, early July, was then another set of data from this molecule now in first line, again, blowing chemotherapy almost out of the water. And at the same conference, we also saw data from a more specific molecule from Revolution Medicine called Saldoranosib combined with Folfirinox in first line. And these data showed that these patients, almost 100% of the patients were actually benefiting clinically from this. So what this means for alligator, what it means for patients with pancreatic cancer, is that this new class of drug will drive a paradigm change in the standard of care, both in first line, but initially in second line we expect direct ownership to be approved already this year in the U.S. at least, and then in three to four years, probably a similar change in first line, either to Revolution Medicine's drugs or via those drugs, or via some of the other players that are now starting Phase III studies in first line with KRAS inhibitors. So a significant change expected. in the standard of care in the treatment of metastatic pancreatic cancer, both in first and second line. That, of course, have a number of implications for a company like Alligator or anybody else developing drugs. In the indication, first of all, the industry itself refocuses towards this new drug class and those companies that are partnering in the disease, their focus is of course also changing towards agents that are either KRAS inhibitors or complementary to KRAS inhibitors and away from drugs that primarily have data in the chemo setting. If we then talk specifically what this means for alligator. It's very clear from our dialogues with our key opinion leaders, so leading physicians treating patients with metastatic pancreatic cancer, both in Europe, in US and also in Asia, there is a clear indication or a clear conclusion that standard of care also in first line will change away from the current chemotherapy backbone towards a KRAS inhibitor-based backbone. So, of course, a significant change there. That also means that the commercial rationale for developing metaxalimab in combination with fulferinox as we were preparing to start a phase III for, that commercial rationale do no longer exist. hence the rationale for the registration will start in this population is no longer relevant. We don't want to spend with it. It's not prudent or rational to spend money on developing a drug in a population that will not exist once the drug is ready to get approved. So here the The prudent business decision is, of course, to discontinue registrational development for mitocelumab in combination with chemo. We still believe that a combination of mitocelumab and a KRAS inhibitor remains both scientifically and also most likely clinically relevant. We believe that some of the Some of the longer-term effects we see with mitocelumab will be highly relevant in combination with the KRAS inhibitor, whether in combination with chemotherapy or alone. The fact is that the next step in that development will be potentially a Phase I study followed by a randomized Phase IIb study, i.e. a clinical undertaking on par with what we have done with metacelumab in OPTIMIZE 1. And unfortunately, with our available cash, with our current market cap, we do not see this as an undertaking that Alligator can do without a partner. And as we do not have a partner, and I do believe that it will take some time before the industry has refocused itself toward combination strategies with KRAS inhibitors, we took the decision to discontinue all further independent development of metacetamol, i.e. discontinue the preparation for the Phase III study. We have a number of IITs, Investigator Initiated Trials, so remember these trials that bear no cost for Alligator. We have a couple of those ongoing, plus a randomized Phase II study in the planning. We are reviewing those opportunities and the cost benefit of these programs, but our primary focus, as you can see, the next bullet point here is to preserve the royalty potential of HLX22 within the company and only invest in these all those free opportunities if we have secured a financial cushion allowing us to do that. So we will start winding down remaining operations. We will reduce the organization and the cost base. We have started that already and will continue working that in the coming period. And then we will, of course, continue to seek to divest metazolamab as a broader immune oncology acid within the coming month. And the press release of a couple of weeks ago have already created some incoming interest from companies of metastatic pancreatic cancer. And that is, of course, discussions that we will engage in as we go along. So, external factors has eroded the commercial rationale for continuing to develop metacelumab in combination with funferinox. We have decided that we are not able financially to pursue what needs to be done for development of salimab in combination with the RAS inhibitor. Therefore, we have continued all further independent development. We are reviewing ongoing IITs, refocusing on preserving the royalty potential of HLX22 in the company, and then wind down remaining operations and organizations to reduce the cost base in the company.

Can I have the next slide, please?

So just to reiterate these points, the principal value driver Alligator now is our financial interest in HLX22 and we'll talk more about what that entails in just a second. It's a molecule that is being developed, owned and funded, controlled by Shanghai Helios Biotech. Alligator has a royalty state in the molecule that when you do all the All the calculation sums up to 1.75% of the net sales of HLX22. And that is without any development cost or other cost to Alligator. We are reducing the cost base. I already told you that we are discontinuing in develop independent development, including the phase three preparation. We are starting to reduce the organization to the minimum that is required to oversee the HLX22 program. and abide to the legal obligations we have as a listed company. And then we are, of course, immediately starting to have started to review the cost base to save as much cost as possible as soon as possible. You know, we had a number of other assets with the Saloma 4066, a bi-specific antibody. 527, a co-development with a Marriott or Seattle-based Apptivo. We will, of course, review the strategic opportunities of those assets and are pursuing opportunity to divest these as soon as possible to further minimize any cost even though the cost associated with these assets is minimal, so more to secure any potential long-term upside for Alligator and its investors.

Next slide, please.

So, if we look at AHLX22 again, just to re-emphasize the point that this is now the main value driver of Alligator and sort of the main part of the investment hypothesis in Alligator. It's a novel HER2 specific monoclonal antibody. It's differentiated from other HER2 antibodies that it increases the so-called internalization of HER2 significantly over what drugs are already there. And the current treatment regime together with the tracetuzumab and chemotherapy is being first and foremost explored in gastric cancer, and I'll come back to that. The molecule originates from a discovery collaboration between alligators subsidiary at the therapeutics and the Korean ab clone and the molecule is now outlicensed to developed and controlled by Chinese Henleus. And if you really want to dig into the details, you can see that it actually got an INN name recently. So the molecule is HLA-22, but also Yeah, so let's, um, let's stay with the HLX22. How are alligators commercial interest in this? We own. We are, uh, own 35% of air clones revenue from and without, um. disclosing the specifics of that deal that amounts to up to 1.75% royalty on the net sale that is going to be funded to Alligator. We estimate that this will give or amount to a royalty income on an annual basis to Alligator between 150 and 400 and and 50 million SEK a year or between 15 and 45 million dollars. As I've said before in these meetings, there's a lot of numbers floating around in, out there. This is alligator's estimate. This is based on our estimates of a drug like HPX22. Other companies might have other estimates. commenting on. If we take the next slide, when do we see this come in? What timelines do we see for gastric cancer and gastrointestinal junction cancer? First of all, we see that based on available data in public databases and industry standards that we expect the first phase three data to come out the second half of next year. It might be earlier. Based on that, we see a launch of the molecule sometimes in 2029. It may be earlier. It may be later. And based on a 2029 launch, We expect to see the first royalty revenue in Alligator in 2030. what we have seen with the molecule, or what the head use have seen with the molecule and announced of the molecule is that the Phase 2 study showed an 80% reduction in the risk of progression of death versus standard treatment in this gastric cancer indication. That data was now announced at ASCO last year, and as I said, in May this year, Henleus reported follow-on data beyond 39 months of that study indicating continued extension of the progression-free survival of these patients. So we really expect this drug to be potentially practice changing in this indication. Moreover, Henleus is developing the drug in HER2-positive breast cancer in two Phase 2-3 studies, one in recurrent and one breast cancer, and one in so-called neoadjuvant. And the neoadjuvant setting is also expected to start shortly. long-progressed phase III study in gastric cancer and gastrointestinal junction cancer and breast cancer coming up as a second indication. So if we take the next slide, Greta. Yeah, I think for now we will hold here and head it over to your hand.

Thank you Sören. A couple of slides regarding the financials for the Q2. We have general operating expenses as expected, and they are also then mainly around the operations that we have in the loaned office. But we also have had some costs for the CMC costs, the clinical costs for the now discontinued phase three during the first and now in particular the second quarter that we now have discontinued. What we also then you need to notice that we have not made any provisions for the cost that will come when as a part of the wind down of metasalamab etc. and then that will be made in the Q3 or maybe Q4 depending on the different requirements and the cash flow for those provisions will then be primarily during Q3 and Q4 2026 but can also then flow over to 27. So let's move over to the next slide please Greta. And as we then have expected, we did quite a lot of wind downs when we did the the restructuring 24 would have had an impact on 25 numbers. And we were then expecting that we will come into general operating expenses between 15 and 20 million. And I guess we're now trending below that estimate. But on top of that, of course, you need to add the CMC in clinical cost for the phase three preparation that I just mentioned. At the end of June, we had 16.6 million in cash, and then we raised the bridge financing here in July to be able to cover costs and other things for the quarter that we're currently in, and that will be a part of the repayment. Part of the rights issue will be the repayment of the bridge. So with that in mind, let us move over to the rights issue that will come here shortly. Next slide, please. So, a couple of key aspects then. We have announced the terms. The terms will be that you will have five unit rights for each share that you own, and you need one unit right then to scribe for one unit. And one unit will then include two ordinary shares and one warrant of the series TU15, another one for the series TU16 then. Both of them are given to you free of charge then. The price for the subscription of the unit will be SEK 4 öre per unit, which corresponds to 2 öre per ordinary share. If all of the units are subscribed, there will be 3 billion more units into the company, equivalent to 6 billion shares. and some of the key dates that you need to be aware of. We will find the prospectus next Monday and the record date for owning the shares is 2nd of September next week. And then there is a subscription period that goes from the 4th to the 18th of September. Please be aware that some of the banks have shorter deadlines than the 18th of September. So you might need to subscribe prior to the 18th of September. You can then either buy or sell your unit rights then during the period 4th of September to the 15th of September. And a little bit less than a week after that, we will have the announcement of the outcome of the rights issued on 22nd of September is tentative date. And the use of proceeds would be like following then we will, as I mentioned, they repay the loans. We will then preserve the future royalty potential of HLX22 as mentioned by Søren then, and we will have a very lean organization once the wind down is completed. There will be a very, very lean organization to maintain the obligations as a listed company primarily. And of course, there are costs that are associated with the wind down, primarily when it comes to CMC and clinical costs, and also then the organization in general, the people that unfortunately need to leave the company, but also the other costs that we have obligations to settle them. And with the fully subscribed rights issue, we believe that we can have the money until the commercialization of the HLX22 as mentioned by Søren just recently. But of course the runway will be dependent on the outcome of the rights issued. In the meantime, in the short-term perspective, we'll look through some of the short-term strategic options for MITASALA, but we're not prepared to do any major investments to see if we can actually then do this. It has to be at a very low cost spent for us, as it's important to preserve the cash for HLX22. So with that in mind, Søren, I will hand over to you again.

Thank you Johan. Maybe there is one more slide. Yeah, so just to summarize what we have talked about today that HLX22 is now considered the primary value driver for alligator. Again, it's a drug that we have a participating interest in. We do not control or develop or fund any activities and we are only privy to otherwise public information on the drug. I think that's important to note and everything we put out here in terms of numbers, whether it's money or whether it's timelines are our best estimate based on available information and general industry practices and standards. But Global Phase III started in first line HER2-positive gastric cancers. All patients have been dosed in all participating regions. We expect top-line data or estimated top-line data to be available in the second half of next year. The accumulated financial interest of Alligator in the asset is up to 1.75% of the net sale and we believe that that will amount to somewhere between 150 and 450 million seek per year into alligator. We have announced and today got approved a rights issue of up to 125 million and as Johan said, fully subscribed that rights issue will take us all the way to the launch of HLX22. and also to ensure that we are reviewing and reducing the cost base to a minimum, allowing us to monitor HLX22 program and of course, abide to all our legal obligation as a publicly listed company. Mr. Salomap here says that it's offered for out licensing or divestment. I don't know if that's the right wording, but that's definitely something we are working structured on. We have other assets and technologies that we will retain for the time being and otherwise find strategic opportunities for these molecules. And we will continue to evaluate the ongoing investor initiated studies. I think the fair thing to say here is that there is both a financial component of that assessment. There is an ethical assessment of keeping people on drugs that they receive, but also not introducing new patients to drugs that may not be developed. And there's, of course, also a general clinical interest and rationale that needs to be reviewed when we are looking at that. But that's all things and processes that are underway. And again, we believe that the rights issue that has been announced today, that if we look at the pricing of that rights issue versus the potential financial upside in the HLX22 program is a very interesting financial opportunity. With that, I will turn to today's questions. As Greta said, you can either write them directly to our IR mail, and I know there's a few there already, or you can write them in the chat right here. So let me see what, if there is already a couple of questions to start out with. We have a couple up here. First, we have a question. Could you elaborate a little bit more on the gastric cancer indication, how many patients, so on and so forth? Yes, we can do that. We can include that in a slide going forward. There's probably also a little bit more data in in the Q2 report where you can look up the data, but if we put the two indications together, gastric cancer and gastric oesophageal junction cancer or GEJ, we see approximately 1 million, 1.1 million new cases a year with the mass majority being gastric cancer. That's probably 85-90% of the cases. Of those, approximately between 40, 45, 50% reached the metastatic state. So that's the state that is treated here. And of those patients, approximately between 20 and 30 patients are HER2 positive, meaning that we have approximately on a global scale, 100,000 patients that are eligible for treatment in the first line metastatic setting in these indications. The number of HER2 positive patients varies a little bit between various regions with East Asia having a higher abundance of HER2 positive patients. So that gives a relatively robust patient pool and without going too much into the pricing, we believe that that number of patients and this indication and the treatment timelines that we have seen from the phase two study at least votes for HLX22 being a blockbuster, if not a potential double blockbuster in gastric cancers alone. And I just gave you the royalty numbers, and then you can do the math yourself, but that should land us comfortably in the range that we have described on gastric cancers alone. I hope that answered that question sufficiently, otherwise you can seek more data in the Q2 report. Then a couple of questions from Red Eye here. Let's start from the bottom. How far will the rights issue take you? I think Johan already answered that and so did I. This question came before the meeting, so that's fair. Bring it up again. Fully subscribed. This rights issue brings us beyond the expected or estimated launch of HLX22, i.e. into positive royalty territory. A third question here. Are there no ways forward for mitocelumab? Yes, I think there will be. As I hope I relayed in my first part of the presentation here is we still believe that mitocelumab will be a very competent combination partner for, for instance, a KRAS inhibitor. There is ample preclinical data showing that the two molecules at least have additive effects both on top of number of patients responding and not the least the durability of response. So yes, we believe that that would be a a potential opportunity for metacetamab. We know that metacetamab also synergizes with PD-1s and probably all other immune oncology agents. So definitely that there should be a place for metacetamab. The current changes in the clinical landscape for metastatic pancreatic cancer and the refocusing of that part of the industry and our financial situation simply means that Alligator is not able to make the investment that it would take to prove that hypothesis in the required clinical study. And of course, we are doing our best efforts to ensure that somebody else will take up metacetamol and give it the chance that we believe that it deserves. A related question also from Adam from Red Eye is, what's the progress on the ongoing IITs? We have a number of IITs ongoing. As you know, we don't incur any cost on that. We supply the drug. We are reviewing that whether or not to continue with that. And some of the parts of that, Analysis is of course how many patients are enrolled in a study, what's the timeline until we get any data to drive any further development decisions, what are, even though the costs are not big, what are the costs, what are the ethical implications of enrolling patients in a study with a block that may or may not be developed further, so on and so forth, and that is something that we are going to to continue evaluating together with the principal investigators in the coming weeks and months. We have of course already been in contact with these physicians. But let me here re-emphasize that the primary objective and priority for the company and for management is to be able to maintain the HLX22 royalty interest within the company. And that is where we are focusing. And if there is financial cushion to explore, for instance, a randomized phase two study in billet retractors, we've discussed if that exists and only then will we consider doing that. I hope that is absolutely clear. I'm not sure if we have any other additional questions. I don't think we have.

No. No more has been received.

With the last chance, that doesn't seem to be the case, then I will thank you for your attention. a good day. There's more information on the rights issue on our website and there's more information on the HLX22 program in the quarterly report that is also available on our website. Thank you very much. Thank you.