Good morning. My name is Namir Hassan, the CEO of Zelluna, and I'm delighted to present to you today our first quarter business update and financial results. Can I have the next slide, please? This is our disclaimer slide. Next slide, please. The contents of the presentation today is we'll highlight the key events over the first quarter. We will go through the Zelluna TCR-NK technology and pipeline, provide a financial update, and then summarize at the end. Can I have the next slide, please? Next slide, please. I wanted to start with this: a symbolic and momentous occasion for the company, Zelluna being the first-ever cell therapy company to be listed on the Oslo Stock Exchange with our bell ceremony on the 4th of March. This is symbolic for two reasons.
This is a milestone in the development of our TCR-NK technology and advancing this technology to patients. The second is, as you can see, that virtually all of the company are represented here, a breadth of deep expertise, really people that have walked the path for similar therapies and have developed the insights and bring that to our journey and helping to de-risk our pathway towards patients. Can I have the next slide, please? This was made possible by the successful transaction and business combination, which was completed on the 3rd of March together with a private placement. We have also successfully, over this period, integrated operationally the business with the two legal entities, Zelluna ASA and Zelluna Immunotherapy. May I have the next slide, please?
One of the major announcements that we had made over the course of this period is a significant milestone that's been reached, and that's around manufacturing. With any cell therapy, which is the type of therapy that we are developing, manufacturing represents the highest risk activity in the lead-up to a clinical study. With this announcement, we have demonstrated an ability to successfully develop, scale, and automate our proprietary manufacturing process for our novel TCR-NK therapies, and therefore substantially de-risked our path to the clinic. Importantly, the proprietary manufacturing process is also applicable to any product emerging from the pipeline. In essence, it serves the entire platform. We've also demonstrated, very crucially, that the process is able to deliver hundreds of doses from a single batch.
This is one of the areas that is hindering current approved cell therapies, notably the scaling of these therapies. What we have shown here and demonstrated is that we are able to generate hundreds of doses from a single batch and therefore addressing one of the key limitations of current cell therapies. May I have the next slide, please? Just to visually illustrate this, what we are intending to do is to take a donor blood material from a healthy donor and produce, through our manufacturing process, as you can see with this illustration, hundreds of cryopreserved doses that can then be deployed to clinical sites and frozen and used at the point of need for late-stage cancer patients.
What this demonstrates is the scaling-out ability of such a therapeutic, which is incredibly important when aiming to address solid cancers, since solid cancers represent the largest cancer burden globally, and therefore there is an enormously high unmet medical need, and hence scaling of a therapy for solid cancers becomes crucial. May I have the next slide, please? As we had presented, as we initially announced the combination with the milestones that we would be envisioning ahead, what you can see from this slide is that in 2025, we have been able to lock manufacturing.
Looking ahead, what we aim to do over the second half is really advance closer and closer to the clinic through completing preclinical, generating a further batch of material to the standard of GMP that we then would use for a clinical trial and also submit a clinical trial application over that period. Looking ahead, our plan would then be to generate initial clinical data in 2026, which will be incredibly important and a potential value inflection catalyst, particularly for a cell therapy where human data becomes incredibly important and small data sets can really catalyze immense value. May I have the next slide, please? Just to illustrate that point, what we have also seen in this period is a real dynamic business activity within the space, the cell therapy space.
Most recently, a deal announced between a small organization, a company developing in vivo CAR-T cell therapies, EzoBiotech, acquired by AstraZeneca. The deal was triggered on the basis of data from a single patient. The total deal value is approximately $1 billion, with approximately half of that upfront and half of that in downstream milestones. What this illustrates, further illustrates, is the real value of small human data sets with cell therapies, in this case, one patient triggering a substantial deal. Prior to that, in November, we had also seen Roche acquiring Poseidon, Poseidon being an early-phase company developing off-the-shelf CAR-Ts, again, early clinical phase one data with a total deal value of approximately $1.5 billion, further illustrating the triggering of incredibly high-value deals on the basis of small human patient data sets.
Zelluna are leveraging these deals in dialogue and ongoing business development activities as we look to generating human data next year. May I have the next slide, please? I'll spend a bit of time now providing some further context and also going through the technology and the advances that we have made. Again, to put the Zelluna platform and our mission in context, the challenge as we see it is that over 9 million deaths occur globally from solid tumors. That's globally where we have seen immense burden there and a high unmet medical need. Over 83% of patients with late-stage cancer, unfortunately, will die from their disease. This is a huge challenge. Solid tumors represent a huge challenge. The context is that there have been some successful treatments for certain types of solid cancers.
Despite some initial responses where we have seen those treatments shrink tumors, most of the tumors return due to cancer escape. That is one of the key challenges that the field is facing. What we bring as a differentiated approach is that we have built a platform that brings together clinically validated components. It is a novel platform, but it is built on clinically validated components. It is a de-risked concept and path. It is designed to overcome the challenges that we are facing when treated solid cancers. Can I have the next slide, please? We are in the field of cell therapy because we believe that cell therapies and cell therapies have been proven to be the only types of therapy that have cured cancer patients. We have nine approvals in this space, mainly in liquid cancer.
With those approvals, what has been demonstrated is the validity of the cell therapy approach. That's very exciting. Now, despite that success, there remain two major challenges. The first is that solid cancers remain very difficult to treat. In the nine approvals that we have seen to date, the majority of those have been with blood cancers. The second major challenge, as I alluded to earlier, is that scaling the cell therapy treatments has been a limitation. All of the nine approvals involve a complex manufacturing process where a batch of material is manufactured for every single patient, therefore limiting the scalability of this type of approach. At Zelluna, what we've been building over the last years and where we have got to today is a platform where we aim to take the curative potential of cell therapies to solid tumors at a global scale.
May I have the next slide, please? We believe this is the right moment for Zelluna. We believe we have a game-changing platform, a world-leading cell therapy platform, highly differentiated. We are virtually the only company that are adopting this approach. While it is novel and highly differentiated, we believe it is de-risked in its concept and path. It brings together validated components, and we have a highly experienced team that has walked the journey of these types of therapies before and therefore brings the insights to operational execution. We think ultimately the therapies will transform treatments of solid cancer at a global scale. The second thing is, in an unprecedented fashion, we have an IP position that allows the potential opportunity to land-grab the entire therapeutic space.
I will come back to this point, a highly important point that potentially has enormous value that can be unlocked at the moment that we demonstrate the platform can drive responses in patients, which we aim to do next year. The third is that we have a near-term clinical inflection. Our lead program is advancing towards the clinic. We have a de-risked pathway to clinical entry, our latest announcement around manufacturing, as I described earlier. We have regulatory feedback that further has de-risked the pathway. Therefore, we expect a near-term value inflection where we generate human data next year in the context of high-value data from few patients. The final point here, to re-emphasize the point I just made, small clinical data sets within the cell therapy space drive high value.
This can be seen from the example of approvals where we have had approvals in this space with data from less than 100 patients. This can also be seen from a business development perspective where we have had high-value deals triggered on the basis of very few patients, in some cases, one single patient, as we saw with the EzoBiotech AstraZeneca deal. May I have the next slide, please? As a reminder of the concept and our approach, there are two major components to the approach. The first is what's called a T cell receptor. This is what we use to guide the cells that we engineer. The T cell receptor is a proven guidance system where we have seen that such a receptor or therapies based on such a receptor are able to effectively target solid cancers. There are two T cell receptor-based therapies approved for solid cancers.
It provides validity for using the T cell receptor as a targeting mechanism to target solid cancers. We insert that T cell receptor, the guidance system, into what are called natural killer cells. Natural killer cells occur naturally in the human body. By definition, they are perhaps the most efficient killers that we have in our immune system. We introduce the guidance system, T cell receptors, to natural killer cells. The advantage of natural killer cells are a few. The first is natural killer cells have multiple ways of recognizing cancer. We bring this ability to our therapeutic. The second is that natural killer cells, with over decades of clinical data, have demonstrated to be safe.
The third is that natural killer cells can be used in an off-the-shelf fashion, meaning that a single batch of natural killer cells from a healthy donor can be used across multiple patients with multiple doses without causing any toxicity concerns. We bring these two things together. Both are validated. We have seen clinical data demonstrating the ability of both elements. We bring those together in our novel TCR-NK format. Whilst it is a highly differentiated, unique approach, it is built on validated components, and we are aiming at solid cancers. May I have the next slide, please? I wanted to come back to this point where we believe we have an unprecedented position when it comes to IP. One of the layers of IP, we have multiple layers. One of those, crucially, is our position where there is the potential to land-grab the entire therapeutic space.
Just to try to bring this into context or bring some granularity to this, a comparison can be made with another type of approach, a cell therapy, so-called CAR-T therapy. CAR-T therapy are another cellular therapy which are based on T cells, as shown on the right, guided by a CAR rather than a TCR. Now, we have had numerous successes with this type of therapy, predominantly in blood cancers, liquid cancers, and numerous approvals, as you can see in the product names on the right, across numerous companies. There is multi-billion revenue being generated on the basis of CAR-T therapy. One can then imagine if this approach was protected via a pioneering patent, then the aggregate value potential is enormous. We have multiple approvals, multiple products across multiple companies, and there are many other players in the field. Similarly, we have protection of the TCR-NK approach.
One can then put into context the potential value that can be unlocked, particularly as we demonstrate the potential ability of our lead asset to drive responses in solid tumor, which we aim to do next year. By extension, if we do that, we then demonstrate the platform potential, which is protected via this pioneering patent and can unlock immense value as compared to a CAR-T approach. May I have the next slide, please? Just to provide some data where we have compared our TCR-NK lead asset, which is shown on the right-hand side, with a benchmark TCR-T cell. This is a T cell that has a T cell receptor, both going after the same cancer-restricted target. What we're aiming to demonstrate, these are videos which I'll play in a moment.
What we're aiming to demonstrate is with our TCR-NK approach, we're able to eliminate diverse cancers. Diverse cancers, in this case, are represented by the red and the green cancer cells, so a variation of cancers. This is what we would expect in patients, diversity in the tumors of patients, which represents one of the major challenges to completely eliminate those tumors. On the left-hand side is the T cell. What we should see over the video is with the T cell that recognizes one of those cell types, the red cancer cells, it can only eliminate parts of the tumor, whereas the TCR-NK eliminates both cancer cells within this particular experiment, demonstrating that TCR-NK is able to address diversity of tumors, which we believe and has been demonstrated as being one of the major limitations to driving responses in solid tumors.
If I can ask both videos to be played, hopefully what you will see is the killing occurring in both situations. On the right, with our lead asset, we're eliminating both populations and also doing that at high speed since natural killer cells are perhaps the most efficient killers in the immune system and the human body. Maybe I'll play that one more time just to demonstrate that again. You can see that on the left, we have part of the population, the red cancer population, being killed, whereas on the right, we have both being killed and at very high speed. This is one of the major benefits that we believe the TCR-NK novel approach brings, which is the ability to address diverse cancers that exist in all solid tumor patients. May I have the next slide, please?
Our pipeline consists of a lead asset, what we call ZI-MA4-1, that's advancing well towards a clinical submission. We announced the manufacturing, a major milestone, which is a milestone not just for the program, but also for the entire platform, since any program potentially can be plugged into that manufacturing platform. Behind that, we have a couple of other programs, again, targeting solid tumors. Through our programs, we're able to potentially access a wide range of solid cancers. Many of them are ones with a high unmet medical need, where there is a dire need for new therapies to be able to drive durable responses at scale. That's what we're aiming to do. May I have the next slide, please? Outside of the TCR-NK platform, which is our focus, we also have been looking at the multi-click technology.
As a reminder, this is a platform consisting of a flexible core molecule that can be selectively coupled to several modules. We are exploring the merits of the technology and its potential value. With respect to the wrapping up of the UV1 program, the remaining two trials, LungVac and Dovac, have completed enrollment, and top-line results are expected sometime during 2025. May I have the next slide, please? I would like to hand over now to Hans to provide the financial update.
Thank you, Namir. Good morning. I'm Hans Vassgård Eid, CFO of the Zelluna Group. We can move to the next slide. Let me see in a second. Yeah.
When we look at the key financials for the first quarter, it's important to note that when we made this business combination that was closed on March 3, from a legal perspective, it was Zelluna ASA, formerly named Ultimovacs ASA, that was acquiring Zelluna Immunotherapy. From an accounting perspective, however, it's the subsidiary Zelluna Immunotherapy that is now the main operational entity in the group that is defined as the acquiring entity. The accounting perspective is different from the legal one. It's a set of criteria that is behind such a consideration, and the most important being that the value of Zelluna Immunotherapy was significantly higher than the acquirer, and also that a majority of the share was received by the former shareholders of Zelluna Immunotherapy. Up until the time of the transaction, early March 2025, all numbers related to Zelluna Immunotherapy alone.
From March 2025 and onwards, the full new Zelluna Group is included in the numbers. Moving to the next slide, we can have a look at the key financials from the first quarter. By the end of the quarter, the cash position was NOK 135 million, or corresponding to roughly $13 million, with the fully committed prior placement of NOK 51.7 million that was part of the closing of the business combination. The financial runway is expected to last through the second quarter of 2026, thereby capturing the key R&D catalyst for the TCR-NK technology. The EBIT, the operating profit for the first quarter, was minus NOK 29 million, and the profit before tax was more or less at the same level, minus NOK 28 million. Also, following the business combination, we have completed a reverse share split, whereby 10 old shares are converted into one new share.
If we move to the next slide, we can take a look at a more detailed P&L breakdown. If we look at the payroll expenses, we see that the regular payroll expenses were higher in the first quarter of 2025 compared to the same quarter last year. That is due to a higher number of employees in the group following the business combination. The personnel expenses for all employees in the new Zelluna Group were then included for one month from March and onwards. In the first quarter, we also had a different effect, where the share option costs of certain terminated employees or former employees were reversed due to the termination of these related options. That was minus NOK 3.8 million as an effect. That is important to note.
Looking at the external R&D expenses, we saw lower R&D costs in the first quarter of 2025 compared to the same period the previous year, NOK 13 million versus NOK 19 million. This is mainly driven by differences in CMC activities. Looking at other operating expenses, these expenses were higher in the first quarter of 2025 compared to the first quarter of 2024, driven by the inclusion of the full Zelluna Group from March. These numbers also include significant transaction costs related to the business combination. Moving on to the next slide, the operating cash flow in the first quarter of this year was approximately minus NOK 36 million. That's differing from the operating profit or EBIT, which was at minus NOK 28 million. This is primarily due to these share option expenses that are referred to that had no cash effect.
The cash flow in the first quarter of 2025 reflects then Zelluna Immunotherapy's cash flow, plus the cash flow for the full group from March, just to be clear on that. Whereas when you compare again with the historical numbers, it's only the subsidiary that are represented in the numbers. We expect the cash burn level to come down significantly prior to the initiation of clinical trial activities, as realization of operational synergies start having effect during 2025. With that, I would like to give the word back to Namir.
Thank you very much, Hans. Just to summarize, if I can have the next slide, please. As that comes up, we believe we're at a very exciting time, firmly focused on advancing our lead asset and looking ahead to preparations for a clinical study in order to test our lead in patients.
We're really driven and fueled by four elements, as I had mentioned earlier. The first is our differentiated and unique platform built on clinically validated components. The second is the real opportunity to landgrab an entire therapeutic field by validating the technology through demonstrating the potential of the lead asset with human data next year. We believe we potentially can unlock immense value. Thirdly, the approach that we're taking is really driving, and the momentum that we're building is really aimed at a near-term inflection. That is, as you can see here, generating human data next year.
Finally, the final fuel in our rocket, as it were, is we know that in this field, generating small amounts of human data can be incredibly transformative, transformative from the perspective of understanding the potential of the therapy and advancing to an approval, and transformative from the perspective of really catalyzing high-value deals in this space. This is the moment. This is the moment where we're building the momentum, preparing for really understanding the potential of a platform that we have been building and developing for a number of years. With that, I hope we have relayed our passion and excitement and our substantial advances over the last quarter. I would like to finally acknowledge the incredible team at Zelluna, without which really the advances would not be made possible. Highly experienced, walked the path before, and really efficient in operational execution.
Thank you very much, and we can now take any questions.
Thank you, Namir. We have at least a couple of questions. The first one being as follows: Due to the uncertainty of the future direction of the FDA, are you considering going for an approval of setting up trials in Europe instead?
That is a very good question and a very important question. Our current plans involve a parallel track where we are moving towards both the U.S. and Europe. We believe it is important to be in a position to act on any potential barriers that may emerge in the U.S. Given the development there, we also have a parallel track in Europe, which we are proceeding and advancing at the same pace. We have that track in order to de-risk. Yes, we are also advancing outside of the U.S.
Thank you, Namir.
We have a question on finance. What is the expected cash burn for the company in 2025? I'm happy to respond to that. As we have said during the presentation, our current guidance is that the financial runway, based on the current cash position, is through the second quarter of 2026. We're not giving more specific guidance than that. I can repeat what I just said, that we do expect the cash burn rate to come significantly down during 2025 before we initiate clinical trial activities. This will be as a consequence of capturing operational synergies. This will sort of gradually come into effect. For the first quarter and the second quarter, the cost level will be higher, and then we expect it to come down, in particular during the second half of this year. Okay. It seems that we have no further questions today.
That's it on the Q&A side, Namir.
Brilliant. With that, I'd like to close and thank you all for your attention.