Thank you very much, Dulcie. Welcome to Orphazyme's interim results call and webcast for the financial period ending June 30th, 2020. I'm Anders Vadsholt, Chief Financial Officer of Orphazyme, and I'm joined on the call today by Kim Stratton, our Chief Executive Officer. The slides for the call are available on our website in the Investors section under Events and Presentations. Please note that the Q&A will take place at the end of the presentation via conference call. If you would like to ask a question, please dial in using the details provided in our press release this morning. The next slide to the disclaimer. Before we begin, I would like to remind you that during the call, we'll be making certain forward-looking statements.
Various remarks that we make during the call about the company's future expectations, plans, and prospects constitute forward-looking statements. The forward-looking statements are subject to a number of risks, uncertainties and assumptions. New risk factors and uncertainties may emerge from time to time, and it is not possible to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business, or to the extent which any factor or combination of factors may cause actual results to differ materially from those contained in or implied by any forward-looking statements.
In light of these risks, uncertainties, and assumptions, the forward-looking events and circumstances may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. In addition, any forward-looking statements represent our view as of today and should not be relied upon as representing our views of any subsequent date. While we may elect to update these forward-looking statements in the future, we specifically disclaim any obligation to do so, even if our view changes. I'll now hand over the call to Kim to provide a business update before I return to you with more details on the financial results.
Thanks, Anders. Hello, everybody. Thanks for joining us today. We really look forward to showing you what we've been up to over the last six months. We think we've made significant progress on the key priorities that we laid out to you at the beginning of the year. In terms of the pipeline, we continued to advance arimoclomol in NPC and other indications, and in particular in building out the commercial organization, very much in anticipation of a potential approval and launch of arimoclomol in NPC. At the turn of the year, we reported positive data from the open label extension study in NPC, and this has continued to show a sustained effect of arimoclomol in reducing disease progression over the two-year period. We also announced the start of the Early Access Program in the U.S., which is now making good progress.
It has actually had some initial delays due to COVID. Now we're actually taking on patients each week. We've got 15 sites that have actually enrolled, and seven patients are now approved. It's been a major achievement for the entire team. As you can imagine, all of this has actually had to be set up remotely. Another great achievement for the team was also the submission of the rolling NDA to the FDA, and we completed this mid-July. We're now another step closer to a potential approval in the new treatment option for patients with NPC. Based on this progress and in anticipation of the potential approval, we're now preparing for commercialization, first in the U.S.
We've really built there a highly specialized commercial sales organization team or go-to-market team, and we've tried to look for those people that have significant expertise in the rare and the ultra rare disease space. I'll speak more later about how we're preparing for the commercial readiness. As many of you know, we see arimoclomol as essentially a pipeline in a product. We're expanding its potential use beyond NPC. With that in mind, we reported the phase II data in the first half, demonstrating marked improvements in key clinical markers in patients with Gaucher disease. This is the second of our studies to show a positive clinical effect of arimoclomol in lysosomal storage diseases and gives us further confidence in arimoclomol as a potential treatment for patients with lysosomal storage and neurodegenerative diseases.
We were really pleased to receive the Fast Track designation in the U.S. for arimoclomol in amyotrophic lateral sclerosis or ALS. As a reminder, we have the registrational trials ongoing both in ALS and also in sporadic inclusion body myositis. We expect the top-line results for both of these studies during the first half of 2021. We continue to remain focused on exploring the potential of Heat Shock Proteins and lysosomal biology beyond NPC, and we were really proud to join The Michael J. Fox Foundation Parkinson's Disease Research Tools Consortium. It's a group of industry leaders and disease experts, and we can share our expertise and build on our commitment to finding a potential solution for this devastating disease.
Last, but by no means least, we successfully strengthened our balance sheet earlier on in the year with a directed share issue and private placement, raising approximately DKK 745 million or $110 million, and also expanding our shareholder base. Next slide. If you go to slide five, arimoclomol for the potential treatment of orphan neurodegenerative diseases. Let me take a moment to remind you of our product, arimoclomol. I believe this could be a potential game changer for neurodegenerative diseases. It's a first-in-class or has the potential to be the first-in-class Heat Shock Protein amplifier. As you know, Heat Shock Proteins are part of the heat shock response. It's the body's natural, normal defense to acute stress within the cell. It's a small molecule and it crosses the blood-brain barrier, and this is important for us to really address the neurodegenerative diseases.
It comes in a convenient capsule form. It's easy to open and to take. This is really important. A lot of our patients actually have difficulties with swallowing. Being able to add the granules to food or to put down a nasogastric tube is really important. So far, we've had more than 500 individuals exposed to arimoclomol, and it has an acceptable safety profile. In slide six, you'll see the pipeline and the product potential here. I won't spend a lot of time here, but I do want to draw your attention to this pipeline and product potential and where we are in development. As you can see, the NDA has been submitted in the U.S., and we're still on track to submit the MAA for Europe in the second half of this year.
We're also, as I've already mentioned, online to have the top-line results for ALS and IBM in the first half of next year. We've now got orphan drug and Fast Track designation for all three of the lead programs. This also gives us more optionality with what to do with the Rare Pediatric Disease Priority Review Voucher. In terms of slide seven, the product and the pipeline potential. Here, you see the first indication, and I've showed you this slide before, really starting off with the first indication of ultra-orphan NPC. There are approximately about 1,800 patients in the U.S. and Europe. This is really the focus for now, is to get arimoclomol onto the market and to find as many patients as we possibly can.
Lining up after that for the next horizon, you see that we've got about 100,000 patients when you combine your ALS, IBM, and NPC. Again, really looking there at the next horizon and across to Gaucher and Gaucher Parkinson's disease or GBA-deficient Parkinson's disease, where you then move to yet another horizon and magnitude for patient potential. As I said, our focus for today is really NPC. That's the lead indication. If you go to slide eight, just a couple of moments. It really is a devastating disease, particularly if your child is actually diagnosed with NPC at a young age. They usually have a very poor outlook. They don't usually make their 20s, and it usually progresses very quickly. For those with a less aggressive phenotype, those patients will make it into their adults, and about half the patients are children, half adults.
No approved treatment in the U.S. today. miglustat, as you know, is used off-label in the U.S. for a majority of the patients. In Europe, it's the vast majority of patients that are actually on miglustat. Yet there is still a really high unmet medical need for these new medicines. We believe that arimoclomol has potential to address this unmet medical need. Again, I talked about the numbers of patients in the U.S. and EU, approximately 1,800, of which we know that about 1,100 are diagnosed. These patients are mostly managed in these highly specialized centers, both in the U.S. but also definitely across Europe.
In terms of enabling the patient access in the U.S., if you go to the next slide, you'll see there our kind of key focus there behind market readiness, making sure that the organization is ready, making sure that we're doing the relevant stakeholder education, also working on patient access and patient support initiatives. It's absolutely key for these very rare conditions. Not to speak too much on each point, I think in market readiness, now that we have the NDA submitted, now it's really all about the kind of payer research, the payer value communications and messaging that we're working on. Also making sure that we've got the right partnerships with specialty pharmacy, because this is absolutely key also for the patient support during the whole process of getting onto product.
All of our stakeholder medical education proceeds, albeit virtually, but all of our advisory groups and steering committees all progress as planned. The team is almost fully recruited. I think we've just made the last offer to the last MSL coming on board. Again, a really highly experienced team there. As I mentioned, a lot of the efforts now really on the early access programs. As I've already mentioned, about 15 sites on board, seven patients to date. Now that a lot of the sites are actually reopening, we're getting more and more patients being booked in each week. This is absolutely critical for these patients. In terms of the EU and rest of world, our focus now from a regulatory point of view is really to get that MAA submission submitted in the second half of this year.
Now it's really about, again, developing the market access plan specifically for Germany. Again, really focusing on the lead markets there. Likewise, with advisory boards, we have our first European advisory board next week, where we're conducting payer panels as well to understand how to approach this in Europe, the pricing in Europe. We're defining the supply chain, and likewise, we're really exploring the EAPs. I think as I've mentioned to you before, we've submitted a protocol to the ANSM in France, and that will be the lead EAP there. Likewise, we're also looking at EAPs in Germany and also in Italy. An awful lot happening across both the U.S. and also the European footprint there. With that, I'm going to hand back over to you, Anders, to talk about the financial results.
Thank you, Kim. Looking at slide 12, you can see the summary of our financial position at the end of June 2020. As you would expect, our costs have increased compared to the same period in 2019 due to investments in our ongoing late-stage clinical trial program and preparation to support potential launches in NPC if approved. Operating loss increased to DKK 246 million in the first half of this year, compared to DKK 165 million in the first half of last year. There are two key components in the operating cost, R&D and G&A. R&D spend was DKK 167 million for the first six months of this year, up DKK 25.3 million compared to the same period last year.
This increase was mainly due to the initiation of three clinical pharmacology registrational trials in the first half of 2020, and an increase in employee costs as the number of full-time employees in R&D rose from 60 in the prior period to 77 at the end of June. General administrative expenses were DKK 78.6 million for the first six months of 2020, up DKK 55.3 million compared to the same period of 2019. G&A consists of two main cost centers, pre-launch activities and administrative activities. Pre-launch expenses represented DKK 40.4 million of these and were mainly due to the escalation of our commercial launch readiness activities, including the strengthening of our U.S. and Switzerland-based commercial team of 12 additional FTEs and an increase in medical affairs activities, particularly in NPC, as we further engage in communication and education programs.
Administrative expenses of DKK 14.9 million represented the remaining amount and were due to the cost associated with legal, investor relation, external assistance, and share-based payment expenses, plus the addition of 10 additional administrative, finance, and legal full-time employees to support our growing organization. Net loss widened from DKK 251 million in the first half of this year compared to DKK 164 million in the first half of 2019. Net loss per share was DKK 9.88 per share, compared to DKK 8.20 per share in the first half of 2019. We finished the first half with cash of DKK 610 million, which is approximately equivalent to $92 million, compared to DKK 124 million at the end of last year. This increase was due to the share offering completed earlier this year, which raised approximately DKK 745 million or equivalent to $110 million in gross proceeds.
We go to slide 13. That's the outlook. In terms of outlook for the rest of the year, we maintain our anticipated guidance as published at the time of our annual report late February this year, and expect an operating loss in the range of DKK 500 million-DKK 550 million, and to have a cash position of more than DKK 300 million, or approximately $45 million at the end of 2020. This takes into account the increasing spend on launch preparation activities in the second half of 2020 and costs associated with the ongoing clinical development activities. That concludes the financial section. With that, I will hand over to Kim to wrap up.
Thanks, Anders. Okay, just a couple of concluding remarks from myself. I think you can see that we've had a really busy start to the year, but I think what you can also see is it's going to be a continuingly very busy next 12 months ahead of us, too. Lots of really important milestones and landmarks for the company. As I said recently, we've just completed the rolling NDA submission for arimoclomol. We're waiting for the 60-day feedback. We remain on track to submit the MAA in Europe for NPC in the second half of this year. We are absolutely continuing to execute the ongoing studies and really putting a lot of focus behind ALS and IBM to keep them on track and to have that top-line data readout in the first half of next year.
The final recap for today, if I go to slide 16, Sarah, is that absolutely on track to realize the potential near-term approval and launch of arimoclomol in NPC. On track for the two trial readouts in ALS and IBM in the first half of next year. Continuing to really build up and make sure that we're launch-ready in both U.S. and market access-ready, particularly in EU. Keeping that kind of deep scientific expertise in our research group and making sure that we carry on with a strong financial position as we did in February, but also going forward. With that, thank you so much for joining us, and I believe, Dulcie, I can hand back to you for potential questions.
Please, ladies and gentlemen, we will now begin the question- and- answer session. If you wish to ask a question, please press star and one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press the hash key. Once again, if you wish to ask a question, please press star and one. We got questions on the line. The first question comes from the line of Thomas Bowers from Danske Bank. Your line is open. Please ask your question.
Yes, great. Thank you very much. A couple of questions here from me. Just on, you can say the planned or potential ADR U.S. listing. You did raise money earlier this year to cover NPC filing and launch and also the IBM and ADR studies. I'm just wondering if this could imply some accelerated plans for Parkinson's and/or potentially also the Gaucher indications. Well, those two indications sort of leads me to ask on what are you seeing here? That's also, of course, some IP questions here with the core patent and all that. If you decide to go after Parkinson's and Gaucher at some point in time here, would that be with the arimoclomol, or should we maybe be looking at some of the many NME you also have the pipeline?
Third question, just on the QT prolongation, can you just add some color on, first of all, the preclinical signals in relations to anything you may see in the ongoing NPC trial? Anything that we should be focusing on in regards to the fact that you're using higher doses in IBM and ALS? Any color you can provide here, that'd be helpful. Just take a small fourth question here. Just on the NPC, have you started any interactions with private payers or Medicaid? Any color on pricing discussions compared to what you also have communicated in regards to your proposed price level for super ultra-orphan drug? Thank you.
Okay. Thomas, I hope I've got the list there so you'll correct me. Maybe I kick off Anders and then I hand over to you from the financing question. I think if I tackle maybe the Gaucher Parkinson's topic as a whole. We were really encouraged by the positive clinical endpoints that we saw in the phase II study, specifically around the reduction in size of both liver and spleen. With that now, we've got a series of calls with various key opinion leaders. We've had some, we are progressing with others to really understand where is the higher medical need, which we know is around that kind of neurological Gaucher umbrella. Where is the higher medical need and how best to approach it from a pivotal and registrational point of view. That's kind of where we are.
As you know, there is an overlap between the kind of Gaucher and Parkinson's. There are Gaucher Parkinson's patients. It's really trying to understand what's the best way forward for Gaucher at this stage. Still work in progress, Thomas, and when we have a clearer pathway, we'll lay that out for you. In terms of the high doses of ALS and IBM, really it was encouraged to us when we were putting the trial and when we were having discussions with the agencies to go up to the 400 three times a day. We know from the Gaucher phase II as well, that that also indicated a higher efficacy with the 400 or with the higher dose. I think nothing really to report there other than to say we'll see what happens. We've got obviously NPC, which is 200 three times a day, weight adjusted.
We'll be able to see and compare when we've got both the results out. The other question around the NPC payer pricing discussions. They're really progressing well, lots of insights. They appreciate that NPC is an ultra-orphan disease. They appreciate that when we go after the pricing, we're looking at pricing of just purely NPC until we have any other indications or we potentially have as a first indication on the table is NPC. They appreciate these patients are very rare.
They appreciate that these patients are very sick. We've actually showed them the outline of arimoclomol in terms of the product and the messages and the results. They like the profile of arimoclomol in this. They really like the fact that it's oral, really low burden to the treatment, but also in terms of knock-on costs also to the health system. With that, I think you had a financing question right at the beginning, so maybe I'll hand over to Anders for you to answer that for Thomas.
Thank you, Kim. Yeah. Thomas, as previously disclosed, we have confidentially filed a registration statement to the SEC for potential U.S. IPO to list American depositary shares. We cannot comment any further at this point, we'll get back to you at the appropriate time. This is just as a biotech company, we need to have all options open, this is one of those, and this one needed to be disclosed. Now it has been communicated. We are in the planning phase, nothing has been decided yet.
Okay, great. Maybe just to follow on the dosing and between the higher dosing and NPC dosing. What I was thinking was primarily in regards to the QT prolongation. I remember you, I think you said that you had a signal in the preclinical data and of course, you're now doing the QT prolongation compare also with the PK data which you are supposed to submit in connection with the mid-cycle review. I was just curious on if you've seen anything in the higher dose and anything that we should be aware of, any concerns, of course?
Thomas, nothing that stood out for us. Obviously, it's probably too early to speculate. We've got the QTc study that's ongoing, but nothing that we've sort of seen from any of the reported adverse events.
You had that same information prior to starting the 400 mg?
Sorry, say that again, Thomas.
You had all the preclinical data and signals for the lower dose and also were well aware of any potential issues before you started thinking about the 400 mg.
Exactly. That was all shared with the agencies and agreed with both the lead investigators and the agencies to go to the 400. Absolutely.
Okay, perfect. Great. Okay, great. Thank you very much.
Thanks, Thomas.
Your next question comes from the line of Anders Hedlund from Redeye. Your line is open. Please ask your question.
Hello, Kim. Hello, Anders. Thank you for taking my call. Can you hear me?
Yes, Anders. Yes we can hear you. Thanks.
Can you just give a sort of a recap, Kim, in Gaucher and potentially PD, what efforts are you undertaking currently? You said you're engaging with key opinion leaders and sort of regulatory interactions as well, or?
No regulatory actions at the moment, Anders. Just for the moment, it's purely working with the key opinion leaders with the results from the phase II and really deciding what is the best pathway forward here.
Right. Yeah. Another pipeline question. Can you remind us, is there a strategy in NPC ex-U.S. and the EU? Thank you.
Yes. As you know, once you have a U.S. marketing approval and also EU marketing approval, you can leverage those approvals in other geographies around the world. That's really what we're looking at at the moment, is very much looking at that footprint in the rest of the world and deciding what the priorities are. We're also, as you can imagine, Anders, we're a small company. We have limited resources, so we also have to make sure And our team are working super hard to deliver the priorities. It is a balancing act of potential opportunities rest of world, but also our ability to do it and also to maintain our current milestones and promises.
Yeah. Thank you. I guess the last question sort of on corporate level. Can you just confirm that the rollout of the commercial organization, is that overall on track, would you say, with regards to the circumstances in the world?
Yes. It's incredible that we've been able to hire the U.S. organization. Some of it was done pre-COVID, some of it has definitely been done after COVID, and we've still been able to get all of the team together and the team is on track. We really wanted to be launch ready by, we targeted the end of the year to try to make sure that everything was aligned. In fact, next week we do a first launch readiness challenge with external experts. To really start to make sure that we are aware of any gaps and, or where the gaps are, and make sure that we've got robust plans to make sure that everything's in order over the coming months.
Right.
The U.S. is really making good progress. As I mentioned earlier, all of the key aspects in terms of supply, also working with specialty pharmacies as you need to in ultra-rare, really understanding the payer landscape, which is absolutely key. Really trying to make sure, because it's not just about getting that prescription, it's really about getting the approval, and it's really about taking the burden off the physicians and off the patients in terms of access to the product. It's a really big thing in ultra-orphan.
Yeah. Right.
And I think i n Europe, we have our French GM. We needed a French GM in there now because of the sorting through the ATU protocol. They've got patients, about half a dozen patients lined up in France that really want to take part in an early access program. That's key. We've got the German and the other European GMs are joining either at the end of the year or beginning of next year. They're all lined up.
Okay. Right. Thank you, guys.
Once again, if you wish to ask a question, please press star and one. If there are no further question at this time, please continue.
Okay. Dulcie, if there are no further questions, I think that I just want to take one moment to just say to the Orphazyme team, to thank them for all of their hard work and commitment. It really has been a really strong first year, but tough in terms of workload. As always, any investors on the line, thank you so much for your continuing support. We really, really appreciate it. We don't take it for granted. Thanks, Dulcie, for moderating today. Thanks to you all again for joining us. Please do take care, and we speak to you soon. Bye now.