Good morning. I'm Olav Hellebø, CEO with BerGenBio. I welcome you to this webcast. With me here is Øystein Soug, who's the CEO of Oncoinvent, and Tore Kvam, who's the CFO of Oncoinvent. Øystein and I, we will tag team here through the presentation, and Tore will help us managing the questions. Feel free to send questions throughout the presentation, and we will be answering them at the end of the presentation. First, a disclaimer. This is for both BerGenBio and Oncoinvent. I will let you read that in peace and quiet. I'd like to start with the rationale for the transaction. Øystein will have an introduction to Oncoinvent, which is obviously particularly important for the BerGenBio shareholders to understand more about what they're going to be part of going forward.
I'll come back and do a brief overview of the transaction details, and then we do Q&A. Great. This is now the merger between BerGenBio and Oncoinvent, which is in itself, I think, a great transaction. What is even better is that we've been able to have a fully underwritten rights issue of $130 million stock that will happen when the merger is completed. That really gives us an opportunity for Oncoinvent to be fully funded for the next couple of years, so into 2027. What we wanted to achieve here is for BerGenBio's capital and listing to really have a big impact. I think what we've done here is to enhance Oncoinvent's ability to execute on the strategy that they have and advance the life-changing treatments that they have in their pipeline.
The rights issue and the merger will provide NOK 175 million to Oncoinvent. That, as I mentioned, provides a cash runway into 2027. There are significant, meaningful value inflection points, milestones in that time period. It is an all-share transaction. The BerGenBio shareholders will receive 25% and Oncoinvent 75% of this merged company. Technically, BerGenBio will be the surviving entity, but it will be then renamed Oncoinvent. Oncoinvent will be the name going forward when this is all fully completed. The rights issue will be carried out after completion of the merger, and all existing shareholders of both companies will have equal opportunity to participate in that. The merger is supported by both boards and key shareholders on both sides. Hadean and Link on the Oncoinvent side and Mateus on the BerGenBio side are supporting this transaction.
Let me talk a little bit about BerGenBio's review process. If you remember, back in February, we announced the discontinuation of our non-small cell lung cancer study and initiation of a strategic review process. What we were looking for in this process was to explore what's the best option for the BerGenBio shareholders. We were looking for a partner where the free cash that we announced recently, $40-$45 million, would make a real difference to the company that we ended up partnering with. If the company needed a lot more money than that, and the $40-$45 million doesn't really make a difference, then that wouldn't be a good fit. Obviously, we needed a technology that we really believe in. We needed a company with a credible management team and a board.
We wanted them to be in a promising segment of the biotech sector. Biotech, as you know, has been really tough the last few years. The sectors that have been doing well in oncology are radiopharma and ADCs. Outside oncology, probably targeted neurology has been a hot sector. There are a few others, but we're really looking for a hot area within the biotech sector, which will be positive when it comes to future fundraisers, future deals, partnerships, etc. The merger with Oncoinvent, together with this capital raise, is clearly the preferred option in our view for the BerGenBio shareholders. We believe the valuation is very attractive. Personally, I think Oncoinvent is undervalued. Getting 25% of the combined value here, I think, is a great valuation and is attractive for BerGenBio shareholders.
We like that it's a public company because it makes the valuation also much easier for us rather than a private company, where it's much more of a discussion. We know what the market value is the company at. The new company will be well capitalized into 2027. We really think there's a really attractive upside here going forward with the pipeline from Oncoinvent. On the right-hand side, you see kind of an overview of the process. Just to convince you that this has been a long process to get where we are. We started with a long list of 50 companies. We honed that down to 20 companies that we wanted to have further discussions with. We met 18 of them. We invited the seven kind of winners into a phase I discussion. Out of that, we received bids from four companies.
Out of the four, we invited two companies further into a phase two, where we asked for improved bids. In the end of that process that has been going on since February, we chose Oncoinvent. We are very happy that we were able to agree on terms and we were able to get the capital increase also through as fully underwritten. I am going to hand over the word to Øystein to go through Oncoinvent, and I will come back and discuss the transaction details afterwards. Thank you.
Thank you, Olav. Also, thank you for the opportunity to cooperate with you and your team during this process. Obviously, we are very happy to be chosen as part of the solution after your strategic review because these transactions, both the M&A and the subsequent fundraising that we are now doing, really make a difference, as you say, and enable Oncoinvent to execute on our strategy, reach really significant milestones, clinical milestones, and create value for our shareholders. Oncoinvent today has good shareholders, specialist investors within the biopharma space. BerGenBio brings a very solid shareholder base into this transaction as well. I expect many of you, BerGenBio shareholders, to be on the webcast today. Our aim is to keep you, and we will work hard to deserve your trust in the future.
Now, for the next 20 minutes or so, I will give you an introduction to Oncoinvent. I will tailor this presentation to those of you who have not heard the story before. At 11:00 A.M., we will do, or I will do the same presentation on Oncoinvent in Norwegian. You will know we are an oncology company. We are treating peritoneal metastasis or peritoneal carcinomatosis, in other words, cancer that has originated or spread to the abdominal cavity, or bukhulen in Norwegian. We are a radiopharmaceutical company. Our product is called Radspherin, which we believe is a smarter, less complex, and less risky approach to radiopharmaceuticals. We are in phase 2 in ovarian cancer, with also data that I will show you a little bit later from both phase 1/2A trials in ovarian cancer and colorectal cancer that are highly compelling.
We also believe that the market is large. We have very limited competition. Very importantly, in this space, we have control over our own manufacturing, which has been very important up until today in the company. Also, some of you will remember Algeta, which was sold to Bayer for NOK 18 billion about 10 years ago. We have recycled quite a few of the people from the senior management team of Algeta into Oncoinvent. There is a proven track record of bringing radiopharmaceuticals to the market and to an exit in Oncoinvent. Now, the problem we are solving, peritoneal metastasis, is it's not really an indication, but it's a state of disease that occurs in many different types of cancers, the two biggest ones being colorectal cancer and ovarian cancer. There is really nothing for these patients except surgery.
There's some chemo being used, but it's not very effective. It is a big surgery. It takes many hours. The abdomen is open of the patient, and the abdominal wall is scraped for cancer. The surgeon looks for visible signs of cancer within the small intestines and the other organs that are in the peritoneum. No matter how good that surgery is, there's going to be micrometastases or single cancer cells left in the peritoneum, which in most cases will go back and cause progression of the cancer and in many cases also the death of the patient. Our promise with Radspherin is to eradicate these micrometastases and thereby prolong the life of the patient. The insight that led to this invention back in the days was the fact that the peritoneum is a closed compartment. It is a sac in which these organs are located.
The idea was that if you can create a product which stays in the peritoneum and causes a depot effect and does not escape the peritoneum, you can dose pretty hard and kill the cancer effectively. Also, with the same with Xofigo, the Algeta product, we know that if you put alpha radiation on the cancer, the cancer is going to die. That is not a speculation. That is something that has been proven. A special place in our strategy is ovarian cancer. The main reason for that is that the ovarian cancer patients, they almost exclusively get metastases to the peritoneum. They do not get metastases to other organs. It is a good model for us to prove that Radspherin works. Also, because this is a leading cause of death of ovarian cancer patients, it is important to get local control of the cancer in the peritoneum.
It is recognized as an important way of prolonging the life of the patients. The FDA also agrees with us. They gave us fast track for ovarian cancer, which means that this is an unsolved area where the FDA believes that we can be part of the solution. Colorectal cancer is also a large indication when it comes to peritoneal metastases, but it is a little bit different. It is a little bit more complex. Two-thirds of the patients will have peritoneal metastases, one-third peritoneal metastases only. In many cases, other types of metastases to the peritoneum, for example, to the liver and the lung, are easily treated today. Since there is nothing really except for surgery for the peritoneal patients, getting peritoneal metastases through the mix can be a bit of a death sentence to these patients.
When you add peritoneal metastases to the mix, the expected life of the patient is cut in half, and the five-year overall survival is reduced from 53% to 19% if the patient gets peritoneal metastases exclusively or in addition to other metastases. Clearly, a leading cause of death also in colorectal cancer. Now, as I mentioned, our denominator of our product is Radspherin. It is a milk-like solution, approximately a quarter of a liter that we inject into the peritoneum of the patient after surgery through an indwelling catheter. The product itself is a microparticle, which has an alpha emitter radium-224 integrated in the salt of the surface of the microparticle. It is radioactive. It kills cancers. It will be active in the peritoneum for approximately a month.
Seventy-five percent of the radiation, 75% of the energy will be released during the first week, which we think is a good idea for treating cancer because you get a solid jolt in the beginning of the treatment, and then it sort of quickly dies out. Half-life is 3.6 days. Shelf life is eight days, which means that we can do centralized manufacturing and produce this in Norway and ship it to our sites in Europe and also in the US. We do not necessarily need to have many factories producing Radspherin. We can do it from one site. Now, some of you may know radioactive treatments from before, and some of you will not. I will give you a short repetition for those of you who do not. There are three types of radioactive emissions: alpha, beta, and gamma. We are using alpha.
Alpha radiation is helium nuclei, actually, that are emitted from radioactive atoms. They're pretty large, and they have very high energy but very short range. Typically, they will only travel 2-10 cell diameters or 0.1 millimeter in tissue, but they're very, very forceful. Getting it close to the cancer will kill the cancer. The way it kills is by a double-stranded DNA break, which the cell cannot repair, and it will therefore die. That's the simple and mechanistic action that alpha radiation has on cancer. How does it work? As I mentioned, we deliver it through an indwelling catheter into the peritoneum of the patient, usually on day two after surgery. The patient is still in hospital. The peritoneum is then filled with this fluid.
Radiation will kill cancer cells that are in the peritoneal fluid, on the peritoneal walls, or elsewhere in small metastases in the peritoneum. You might ask, if you're killing all the cancers, why aren't you harming the healthy tissue as well? The answer to that question is that it lies in the range of the alpha because alpha, as I mentioned, is very, very short. The organs that are located inside the peritoneum, like the small intestines, are covered by a membrane which is thicker than the range of the alpha. The alpha particle just bumps into the membrane of the organs, and nothing really happens. Of course, single cells and micrometastases, they are not covered by a membrane, so they will be killed by the alpha. This is a snapshot of our clinical development plan.
As you will see, we have ongoing trials in ovarian and colorectal cancer. There is also a colorectal cancer phase 2 with a dotted line here, which is ready to go but is put on hold until a later point in time. Right now, we have a laser sharp focus on ovarian cancer. Earlier this year, we released data in ovarian cancer. That is not the final data, but it is interim data. It is 18 months in a 24-month trial of 10 patients in ovarian cancer. It is a single-arm trial, so we do not have a control arm, but we are measuring versus historical control, which means patients that are getting standard of care, similar patients that get the standard of care and not our treatment.
We see that there is a pretty clear separation between the Radspherin group and the historical control, 10% versus 40%, which, of course, we are obviously very, very happy with. It is a small trial, but the data goes in the right direction. We also just two weeks ago released data in our colorectal cancer trial. This is a phase one/two trial. That is the final data. For these patients, it is 18 months final data in 36 patients. It is a bigger trial. Here we also see a very clear separation, 28% versus 50%, again, historical control that we are comparing against. Clearly, an outcome that exceeds expectations. I also think that when you measure these two trials together, you see that the magnitude of effect is similar. It goes in the right direction, goes in the same direction.
We believe that that supports the two data sets support each other because it's the same mechanism of action. No matter what the origin of the cancer is, it should work in the same way. You would expect to see results that are more or less similar. We do that. We think that sort of strengthens the rationale and confirms the mode of action of Radspherin. The idea behind Radspherin or the invention of Radspherin was that it was going to be safe. When we take a look at the safety profile of the first 68 patients that were treated, we can conclude that it's well tolerated and safe to use. There were 38 serious adverse events reported, of which only two were seen to be possibly related to Radspherin.
One of these adverse events was actually a catheter falling out at the time of injection, which is related but still not related to the drug itself. Also importantly, the invention here, the idea was to keep the radioactivity within the peritoneum. We see that we do that. There is very little radioactivity observed outside of the peritoneum. Whatever is absorbed by other organs is very, very low level. This being alpha and having a very short range, it is also easy to handle. There is very little radiation that we can detect in blood and urine. As opposed to beta treatments where the patients may need to spend a few days in isolation because of the radioactivity, this is not the case with alpha radiation.
It's easy to use and easy to handle for hospital staff, which is a practical thing which is going to be important when at the market. Now, taking a look at catalysts coming forward, as Olav mentioned, there is interesting data coming. The one here on top is the data that we just released, 18 months data, 36 patients in colorectal cancer. Next up is phase one ovarian cancer. This final 24-month data, 10 patients, which is going to come towards the end of 2025. Most importantly, the biggest data point in our future is the interim data on the phase two trial in ovarian cancer in late 2026.
What we are looking at then in this randomized trial where we have two arms to compare, we will look at the patients that have been in the trial for nine months or more at the end of 2026. For us in Oncoinvent, probably the most important result of the transactions that we have been doing with BerGenBio or in the process of doing with BerGenBio right now is the fact that we are financed to this data point, which is going to be a major catalyst and is a major de-risking of the case of Oncoinvent. Really looking forward to that data point in the second half of 2026. Now, briefly about the structure of this phase two trial. We picked out the patient population, which do not really have many alternatives.
The first thing we did was a safety run-in of six patients before we went into the randomized cohort of 90 patients. Randomized means that patients are being picked whether they get drug or not, two-to-one Radspherin versus control arm. The primary endpoints, what we're actually trying to measure here is PFS and peritoneal PFS. PFS stands for progression-free survival, essentially measuring the time to recurrence of the patients. As I mentioned, in ovarian cancer, the overall PFS and the peritoneal PFS should be the same because they do not get metastases to other organs. At the moment, we have six study sites actively enrolling patients into the trial in Norway, Spain, Belgium, U.K., and the U.S. This trial is on track. All the six hospitals are actively recruiting. The safety cohort with six patients was completed in March.
Recruitment into the randomized part of the trial has progressed at a steady rate since early May, with approximately one patient included per week. A total of eight patients have been randomized by the end of June. That means in addition to those eight, the six in the safety cohort, there are 14 out of 96 patients that have been recruited by the end of June. During the summer, we will double the number of hospitals that are recruiting in this trial from 6 to 12. Obviously, we believe that will speed up the recruitment rate. In addition to that, we are planning to do some changes to the protocol, meaning some changes to the acceptable patient population in the trial during the second half of this year, which will strengthen recruitment further.
Usually when you plan a clinical trial, everything is perfect on paper. But as soon as you start recruiting, there's always a few tweaks that you want to do in order to adjust the patient population a little bit and thereby strengthen the recruitment. Now, taking a look at how this product candidate will perform once in the market, we believe that it's a pretty large market out there. If you just look at ovarian and colorectal cancer in the U.S. and Europe, we believe there are some 65,000 patients eligible for this treatment. That is not counting in the other geographies and also not calling in big indications like gastric cancer, for example. It's a big market. We also believe that the competition is extremely limited here. Nobody's trying to do exactly what we are doing with alpha radiation in the peritoneum.
Also trying to solve the problem of peritoneal metastases, we're not seeing too much going on. Chemo is being used, but it does not have much effect. Clearly, there are a few biotechs having innovative approaches, but largely seen as an untapped market for us. I think even more importantly, the strategic advantage here is that essentially what we are doing is improving the quality of the surgery. Surgery is going to be a mainstay for these patients going forward. It is a pretty bulky cancer. It needs to be debulked with surgery. We will improve the surgery. We are not really that worried about good treatments that come before surgery or after surgery. The need for surgery is going to be there, and the need for us is going to be there. That is a good strategic advantage.
Also, quite importantly, this is an easy product to use. It's alpha. As I mentioned before, it doesn't really need a lot of safety setup in the hospital. It's a simple and quick administration. It's used only once. It's being used on the patient when the patient is still in hospital after surgery. We think that this product is going to slot in quite easily in the standard of care and the surgeons and oncologists. They don't really have to rethink how they treat the patients. They just add it on. Now, this slide is messy, and it's supposed to be messy. It's an overview of the radiopharmaceutical market. You will see here that there are three products with a red frame. Bayer has Xofigo, and Novartis has Lutathera and Pluvicto, which are the only few products on the market today of the modern radiopharmaceutical type.
Most of these products are radioligands. It is a radionuclide which is linked to a target-seeking molecule that is being administered through blood. They are usually quite complex. Clearly, they have great potential, but they also have great risk in development. Oncoinvent with Radspherin is different. As you can see in the upper left-hand corner here, we are a bit alone with radium-224, at least in peritoneal metastases. The reason for that is not that radium-224 is a bad isotope. It is actually a very good isotope, as I explained. It is just that it does not chelate. It does not link to target-seeking molecules, which means that it has to be used directly the way we are doing it. We are targeting by proximity, by putting the radioactivity right where the cancer is.
It is a much simpler, less risky way of using radiopharmaceutical technology. We believe that we are harnessing the advantages of radiopharmaceuticals without much of the risk. A few words about manufacturing. As I mentioned, we are doing this ourselves so far in a pilot plant in Newdalen in Oslo, where we are producing radium-224 from our raw material, which is thorium-228. Some of you may have heard about problems sourcing raw material in the radiopharmaceutical field. Thorium-228 is not one of those products that is hard to get hold of. It is easily available from several commercial sources. That is good. We are producing the radium in-house. We are also producing the microparticles in-house, and we are producing the final product in-house.
We have been using this facility since the early days in developing Radspherin and producing for phase one and phase two. As soon as we enter into phase three, we will need to also increase the size of production and use external production capacity as well. Part of the cash that is now coming into the company is going to be used to start those projects of increasing the production capacity externally, which is very important to secure the phase three of the company, of Radspherin. A few words about the team. The gentleman in the lower right-hand corner here is Eero Larsson and Eivind Bruvik. They are the inventors and the founders behind Algeta and also ArtBio, which is an alpha-based radiopharmaceutical company in Boston which these two gentlemen started.
As you can see here, almost half of the management team and half of the board have senior experience from Algeta. Ingrid Heldal-Næss from Hadean Ventures represents the biggest investor of the company, Hadean. She is also on the board. I should also mention that if you, the BerGenBio shareholders, approve him, Olav Hellebø will also join the new board in August. That sums up my introduction to the company. As I mentioned, I will do the same presentation in Norwegian in half an hour. I will give the word back to Olav, who will say a few words about the transactions.
Thank you for that. Great. Before I go into the transaction details, I just wanted to mention that at BerGenBio, we did due diligence, obviously, on Oncoinvent's technology, including external experts, including key opinion leaders.
We believe what you just told us, okay? Here are some key details on the merger. It gives Oncoinvent or the merged entity an opportunity to uplift to the Oslo Børs Euronext, which has a number of advantages in terms of liquidity, also access to capital, and obviously a much broader shareholder base. In BerGenBio, we have 10,000 great shareholders, and we hope they will stay with us also in the future. I discussed the exchange ratio, 25-75. I think that's a great value for BerGenBio. I mentioned before, personally, I believe that Oncoinvent would be a very different valuation if they were somewhere else than Norway, in the U.S. or even in the U.K. I think we're getting a really good value here. The merger values BerGenBio at NOK 65 million.
I remind you of the free cash that we announced, the NOK 40-45 million. If we decided to do an orderly wind down, it would mean NOK 40-45 million to be distributed to shareholders. It would not happen until about the end of the year because there is a long process for that to happen. We think this is a much better solution for our shareholders to do this merger. It is about 50% more value, and we do not have to wait till the end of the year. Oncoinvent is valued here at NOK 195.5 million, which was in line with the valuation when they listed in December. Obviously, this funding gives a great value because it takes this big question which is hanging over everybody these days and Oncoinvent as well. It just answers that question and reduces the risk a lot there.
The merger is supported by large shareholders on both sides. On the rights issue, the key details: it is a fully underwritten rights issue of NOK 130 million. Together with the NOK 45 million from us, that is NOK 175 million. It obviously is conditional on the successful completion of the merger, which we expect to be around the middle of September this year. It kicks off after that. On the timeline, some key dates here: around the 4th of August is the EGM to propose or to approve the merger for both Oncoinvent's board and BerGenBio's board and Oncoinvent shareholders and BerGenBio shareholders. That is a key date. As I mentioned, the large shareholders are already supporting this. In the middle of September, we expect to close the merger. After the merger is completed, the rights issue will be carried out and completed as discussed.
We're going to go to Q&A next. Before we do that, I'll leave you with a couple of kind of closing thoughts. I think this is a great combination. I think it's a good value for BerGenBio shareholders. We're going into the radiopharma area, which is a very hot segment in the pharmaceutical industry. The funding is secured, reducing risk. The data from Oncoinvent are promising, and there is a competent management and a competent board to deliver on that and to make reality of that promise. I think we are in a great place. Before we go to Q&A, I'd just like to give thanks to the management team from both companies as well as the boards that we've asked to do a lot of work over the last few weeks, in particular last weekend. Thank everyone for your hard work getting this in place.
With that, it's time to come and join me. And then we ask Tore to give us some softball questions, please.
The first question that gets us to Øystein. Are there any upcoming data or study results anticipated prior to the expected completion of the merger?
The easy answer to that question is no. The data points that we will have or the data point that we will have later in 2025 will come after the close of the transaction.
That's actually the only question that we have received so far. If there's anyone that has more questions, please submit them.
Feel free to submit questions. Happy to answer. At least to try.
Good. I mean, it doesn't seem like there are any more questions. I have a question for you.
What are the advantages for Oncoinvent to uplist on the stock exchange, obviously assuming that that will be approved?
Today we're listed on Euronext Growth, which is not a regulated marketplace. Of course, you can trade shares there, but some funds will have mandates that prevent them from being traded on Euronext Growth. I think, for example, if you have a Norwegian AXA Spire konto, you cannot buy companies from Euronext Growth. You need to be on a listed marketplace. Also, we know that on Euronext Growth, you cannot be included in the indices. Under certain circumstances, if the company is liquid and large enough, you will be included in the indices if you're listed on Oslo Børs. That's a big advantage. All this translates into more liquidity.
More liquidity is always good for companies, which will give a more fair pricing, and it will also make it easier to raise money in the future. Thank you.
Thank you. Any more questions, Tore coming through?
There is a second one for you, Olav. Thank you. Are you looking forward to joining the board of Oncoinvent, assuming that the EGM will approve after BerGenBio?
I am looking forward to joining the board of Oncoinvent. I am a believer in the Oncoinvent technology. If I wasn't, I wouldn't be standing here today proposing this. I think I'd love to be involved in that future. Part of my role on the board will be to have a special thought about the BerGenBio shareholders, which is 25% of the combined company, to make sure that we're taking care of our part or our shareholders throughout this.
Obviously, we'll be representing everyone, but I have a special eye out for the BerGenBio guys.
Good. I think we also need to remind people about the EGM or EGMs coming up in early August. Also, in late August, there's going to be a quarterly presentation, half-yearly presentation. We will say thank you for attending today and see you again in August. Thank you. Thank you.