Alligator Bioscience AB (publ)

Welcome to Alligator Bioscience's interim report call for the third 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 is our CEO, Søren Reinhardt, and our CFO, Johan Gillius. They will walk you through the events of the third quarter, after which they will be happy to take any questions that you may have. These questions can either be put into the Q&A function of this call or you can email them to ir.alligatorbioscience.com. As you know, Alligator is a publicly listed company, and today's presentation may include forward-looking statements. Please refer to the disclaimer on this slide, which applies to the full presentation. With that, over to you, Søren.

Thank you, Greta, and welcome to this third quarter earnings call from Alligator Bioscience. It's a pleasure having you all on board. Let's move to the next slide Greta. So key events during the quarter. You are hopefully all aware that in July Alligator announced that we would discontinue our independent development of Metazelumab and refocus the company on Adegato's financial interest in HLX22. We'll spend some time on HLX22 later in today's call. The reasoning behind the discontinuation of Metazelumab development was discussed at the Q2 call and is also elaborated in the Q3 report as you can find on our homepage. Also in July, we raised or announced a rights issue of approximately 125 million SEIK and a bridge loan of 19. And then we also announced that the first patient was dosed in an investigator-initiated study in early breast cancer. In August, we held an extraordinary general meeting. And in September, we announced that the outcome of the rights issue was subscribed onto the guaranteed level of 58.8 million before issue cost and bridge loan being repaid. And then we also announced that we had extended the loan maturity on our outstanding debt to Fenia Capital until June 30th, 2007. And then also a number of warrants were issued to Fenja Capital. As a consequence of the refocusing of Alligator towards the financial interest of Metasalamab, we are reducing the headcount and we'll talk about that in a second. But in October, it was also announced that in a planned leadership transition, I will step down as CEO by the end of the year. And instead, and I'm happy to restate that, Johan will take over the role as CEO, continuing taking good care of the company's interests and thereby also of the shareholders' interest. If we take the next slide, let's talk a little bit about where we are in the refocused alligator. We will now focus on ensuring the financial interest in the acid called HLX22, which is a HER2 antibody, a differentiated HER2 antibody that is in a number of clinical trials in China and globally, most prominently a phase three study in gastric and gastroesophageal junction cancer. The product is developed and owned by Shanghai Henleus Biotech, a big global Chinese company. Alligator owns approximately, or not approximately, Alligator owns 35% of the royalty and fees interest of ABCLONE. And I'll come a little bit back to that. Altogether, these numbers gives an effective royalty rate for Alligator of up to 1.75% of the net sales of HLX22. And Alligator will not incur any development costs. Pivoting the company towards these interests, of course, requires less resources. That's why we have decided to wind down operations and reduce the organization accordingly. Those activities already started in July. I've already said that we have discontinued the development of Metasalomab. we have given notice to all employees who will leave gradually over the coming month. And the operation costs that includes these wind down costs will be reduced to be in full effect around Q2 next year. So what will happen with that? We will run an organization minimally staffed, primarily by Johan, an appropriately sized board that will of course also help out as boards always do. We are working hard to digest Mr. Salimab and hopefully maintain some long-term value of that asset in the company to the benefit of the investors. And likewise, we are working to maintain future rights in other of our assets, for instance, the ALG ABV527 that we are co-developing with Aptivo in the US, and also some of our antibody technologies that are currently being assessed by potential partners under evaluation and option agreements. If we take the next slide, Greta, let's just spend a little bit more time on HLX22. For deeper detail and a full overview of ongoing clinical trials with the molecule, please refer to the quarterly report, the Q3 report, which, as I said before, you can find on our homepage. So as I said, the antibody is a novel HER2 monoclonal antibody. It's targeting other epitopes and some of the already marketed antibodies and have increased efficiency in inducing HER2 internalization. The antibody was originally discovered in a collaboration between a now fully owned alligator subsidiary at the therapeutics from Stockholm and EPCLONE and under those agreements, Alligator then have a 35% ownership of Abclone's revenue from head news, both in terms of milestone payments and most importantly, any future royalties. Abclone have themselves disclosed part of that royalty scheme, the upper tier. And when you merge these two numbers, it gives a royalty rate up to 1.75 effectively for alligator. I know some of you might want to have more insights into the specific dynamics and potential royalty ladder here. Alligator is not allowed to. disclose these information as these are part of an agreement between Henleus and ABQLM. So 35% and up to 1.75% is the level of detail that we can comfortably share and legally share, by the way. Then we have estimated an annual royalty and just to make sure that everybody gets this right. Alligator do not have specific insights into how Henleus will price or market HLX22. We don't have access to any non-public information. The market has not yet made specific detailed analysis of HLX22 sales available. So what I will share with you now is Alligator's own sort of assumptions, and we are not in a position to share these in any detail in writing. But what we can do is, of course, we can spend some time reviewing the facts that in gastric cancer and gastrointestinal cancer, there is approximately 1.1, maybe 1.2 million cases annually. Of these, the metastatic diagnosis range is somewhere between 40 and 50, giving us a combined number of patients of around 450 to 70,000 patients annually. And if you then add the rate of patients that are actually HER2 positive, i.e. the target that the antibody addresses, then we are at around 110,000. to maybe a little bit more addressable patients on an annual scale. How does AS relate into the royalty rates that we are describing here? Addigator is working with a number of different assumptions about pricing and blended global pricing and all that of course comes out to the readout of the data from the Phase 3 study that we are all equally expecting. We see two scenarios here for us. One that is based on a set of data that is positive, but maybe not as fantastically positive as the Phase 2. Here we are working with a low scenario with a a relatively modest rate of adoption in market share somewhere in the teens, so somewhere between 10 and 20 percent, and a blended global price, which is sort of remarkable or sort of comparable to monoclonal antibodies, and that will give a sort of a revenue to alligator that hits around the bottom of the bracket here. And you can do your backwards calculation what that would mean in peak sales. And then on the other hand, we are working with a scenario where the data is still not as good as in the phase two study, but are significantly better than competition. And this market, based on this scenario, where you see a higher market penetration globally, you'd see a higher price up to 50% of higher than what you see in the low scenario. And in that scenario, you will reach approximately the middle of that bracket that we describe here. And then I also have to remind you that this Phase 3 is not the only shot of gold. The company is currently in other Phase 3 studies in breast cancer, and the company has also recently registered Phase 2 studies in other indications on clinicaltrials.gov. but has not yet announced the first patient dose, and there's also a number of other Phase 2 studies going. So we have a relatively high level of confidence that the combined market potential of HLX22 will land us comfortably in this racket here between 150 and 450 million SEK on an annual basis. And just to sort of assertion that the system works, we have over the years received payments from Henleus via ABCLONE and we have a good and constructive dialogue with ABCLONE So sort of the business mechanics behind this agreement are in place and functional. Can I have the next slide, Greta? Yeah, this was maybe a better slide to have discussed the gastric cancer indications on. You have some of the specifics here. We still believe that the top line data from the Phase 3 study are due in second half of next year. It may be before, it may be later, but this is a good estimate as we see it now. And the company has not been clear on their launch plans for the molecule. And again, we take a sort of a company or not a company, an industry sort of standard approach to this and say from the first top line data to the potential loss, it may be somewhere between 18 and 24 months, potentially shorter. But let's err on the side of caution here. And that will then result in the first royalty revenue to Alligator the year after that. And with those words, I will hand the floor to Johan.

Thank you, Søren. So a little bit about the financials now for Q3 2026 then. I mean, we still have an operating cost level that is higher than we would have going forward. And that's mainly due to that we still incur costs for closing down the OPTIMIZE-1 study, which is now in the very, very final stages. But there is also quite a lot of costs that we had ramped up during the spring to be able to start the phase three, including CMC. costs and other costs for the Phase 3 that we are now closing down and that of course has a trading effect both in this quarter and the quarters to come then. And there's also some financial items then that I don't want to bore you with due to the rights issue and the TU15s and warrants and such that we need to disclose and report in a certain way then.