Good morning, everyone, and welcome to Zelluna's second quarter 2026 webcast presentation. We are delighted to give you an update on Zelluna's progress, and after the presentation, there will be a Q&A session. You may post your question during the presentation, and questions are most welcome. I will not take you through the disclaimer slide. I am happy to hand the word over to Namir Hassan, CEO of Zelluna. Please go ahead, Namir. You might be muted, Namir.
Good morning, and welcome to our Q2 results. Thank you, Geir, for the introduction. The agenda for today is that we will take you through our key events in Q2 2026, the TCR-NK technology and pipeline, our lead and the first-in-human clinical trial, financial update, and a summary and outlook. If I can have the next slide, please. The second quarter and the period immediately following it have been defining for Zelluna. We set out on a number of ambitious targets and objectives. I am delighted that the team have been able to deliver against all of them. Most importantly, we have taken our lead into the clinic, where we have dosed the first patient with ZI-MA4-1.
We have generated the first clinical data on our platform. I am delighted to say, as we announced earlier in the week, that an expert committee has reviewed the safety data and has deemed that to be favorable and recommended continued enrollment onto the study as planned. This is a very exciting moment to have begun to generate data on our novel platform. In parallel, we have also activated the second clinical site, The Royal Marsden. We have strengthened our financial position. We continue to build on our international profile, having been accepted to present at a number of international conferences, including ESMO 2026 later this year. So a really defining moment for Zelluna, and I am incredibly proud of what the team have achieved. If I can have the next slide, please.
As mentioned, we generated the first clinical data on the platform over the period of Q2 and immediately following that period, and the initial safety observations have been favorable. The patient had received all three planned doses, that is on days one, four, and eight, and had been followed through a protocol-defined safety observation period. What we have found for the first time, for the first experience with the platform, with our lead program, is that it was well-tolerated with no dose-limiting toxicities or serious adverse events. The initial safety observations, in essence, have been very encouraging. This is the first evaluation of the platform and the safety committee, which is comprised of experts in the field, supported and recommended continued enrollment, which would mean the next two patients to be treated at the first dose level, Dose Level 1.
This constitutes our first clinical data as we had guided previously that we are expecting initial clinical data to emerge around this time. This constitutes the first and very important clinical data. It is one patient, nonetheless, but it is our initial safety signal, and it looks to be favorable. If I can have the next slide, please. If we take a look and continue to monitor the activities in the field, we continue to monitor the patterns of transactions, whereby we are seeing large companies really showing increasing appetite in platform technologies that are being developed around the off-the-shelf cell therapy arena. Most recently, in amongst the flurry of transactions that we have seen over the last year or two, the most recent one has been Kelonia, just in the last few months, being acquired by Eli Lilly. Kelonia developing an in vivo CAR-T platform.
Again, importantly, what is very important with these transactions, aside from demonstrating the appetite in off-the-shelf cell therapies, scalable cell therapies, is that the transactions are based on data generated on a few patients, relatively few patients. The trigger for the transactions seems to be encouraging early safety and biological activity, and some demonstration potentially of efficacy, which really can materially change the value of a platform. Of course, we are moving now into this arena, becoming a clinical stage company, beginning to generate the first data on our own off-the-shelf cell therapy platform. As we see here, significant strategic investment continues across these types of next-generation cell therapies, and the appetite continues to be demonstrated for these types of platforms. Zelluna has entered the clinical data generation phase.
We have begun to generate that data, the initial data being safety, and we will continue to build on that data to allow the clinical picture to mature for the platform. If I can have the next slide, please. As we think about the key milestones that we have gone through, and the milestones ahead, in Q1, we selected a clinical CRO to partner for running the study ZIMA-101. We had our CTA approved by the U.K. authorities. In parallel to that, we are developing our pipeline and had a collaboration announced that enables AI engineering, artificial intelligence engineering of our T cell receptor, as we had done with our lead program successfully. So adopting the same program of engineering, but for a different T cell receptor, a different target, one called KKLC1, which allows us to expand on the cancer indications that we can go after.
Q2, as I mentioned, has been defining, and the period immediately afterwards, where we had activated both our clinical sites, The Christie being our lead site, where our first patient was treated, and The Royal Marsden. The first patient has been treated. We generated our initial clinical data on the platform and enrollment continues as a consequence of the recommendation of our expert safety committee. We are expecting further clinical data to be emerging as we follow up on the patient and as we continue to enroll additional patients onto the study. In terms of our pipeline, we expect to generate an in vitro data package on our next program towards the end of this year.
As we are maturing and generating our clinical data, as we have seen with the transactions and the nature of the transactions and the patterns of those transactions, we are really moving into a potentially exciting phase with the program and with the company. If I can have the next slide, please. As we normally do, let's take a moment to reflect on the nature of the platform and the moment that we are in at this stage, having gone through Q2. We believe we are building on four pillars. The first is that we think we have a game-changing platform. It's a novel cell therapy platform, highly differentiated. Despite that differentiation, each component, we believe, is validated, and therefore, we think the path has been de-risked.
We have moved into the clinic, which of course, de-risks the regulatory pathway up until that point, and we are now at an exciting phase. We have a concept patent that protects, we think, the entire therapeutic fields, which could hold huge value if we begin to demonstrate favorable clinical data, the first of which has been safety, as we continue to build that clinical picture to understand anti-tumor activity. So there could be huge value unlocked as a consequence of the concept patent. Of course, under that or building from that concept patent, we have layers of protection, including individual products, as well as the manufacturing process. It's an exciting time as we have been building over the last years to get to this point, where we are expecting some potential near-term clinical value inflection points, as we just described, with the clinical sites activated and the first clinical data emerging.
All of this in the context of a field where early clinical data is particularly meaningful. We have seen that with transactions. We have seen that with the data that constitutes approvals. So early clinical data can potentially be meaningful if we are able to demonstrate that the biology, the preclinical biology that we have demonstrated and published, is able to be translated into the clinic. If I can have the next slide, please. We think it's always important to come back to what the problem is. What is the problem that we are aiming to address? We know solid tumors constitute the largest tumor burden. Over 90% of total cancer burden is a result of solid tumors, a collection of different types of tumors, lung cancer, prostate cancer, pancreatic cancer, ovarian cancer, and so on and so forth.
One of the major challenges with solid tumors is that they are made up of different cancer cells. They are not all the same, and that's shown in this diagram here. What we have seen over the last decades, where there has clearly been some progress, is that while some patients may initially respond, the cancer more often than not returns. That's because many, if not most, treatments target a single antigen, a single type of cancer characteristic that's presented within that tumor, which leaves the rest of the cancers to flourish. New therapies, we believe, need to be both targeted. They need to make it to the tumors, find their way to the tumors, so that you don't get the overall toxicity in a patient. But whilst being targeted, we also believe they need to be broad in the recognition of cancer.
They need to be able to recognize the different flavors of cancer. That is what we have been building at Zelluna. On the next slide, what you can see here is that we have been building on this idea, this targeted and broad therapeutic paradigm or model, where we have brought together two, what we think are validated components. The first component is a GPS, a homing device, if you like. It is the T cell receptor. This is a scaffold that naturally exists. We engineer it to recognize cancers even better. It is a scaffold that the immune system uses to recognize disease cells, including cancers, and it does that effectively. In fact, it is a validated approach. We have approved therapies targeting solid cancers that use the T cell receptor as a targeting agent, Tecelra and KIMMTRAK being those two.
We have a validated GPS, the T cell receptor, aimed at targeting solid tumors, and we bring that together with natural killer cells. These are naturally- occurring cells. They are the most efficient killers in our body. It is also a validated cell type where we have seen in clinical development really favorable responses, both in terms of safety profile and in terms of high degree of killing with natural killer cells. The challenge with natural killer cells is that they do not always find their way to solid tumors, and that is why we bring it together with the T cell receptor, the homing device. Together, we think we are able to bring the targeting into solid tumors with the T cell receptor and also the breadth of activity against the tumor with natural killer cells that are able to recognize different flavors of cancers.
It is targeted and broad, and that is what we think is really essential to be able to deal with and treat diverse solid tumors. If I can have the next slide. It is also a scalable and off-the-shelf approach. Just to touch on manufacturing, as we have communicated previously, what we have been able to do, thanks to the CMC team, is to be able to generate a process and develop a process where we can generate hundreds of vials from a single batch, freeze those down as we have done with our first batch, and allow them to be used immediately at the point of need. This is the paradigm that we are following. What that means is that we are really able to reduce the cost per dose.
What we are expecting, as we have done with the first patient, is to treat the patient with multiple doses, and then potentially patients can be redosed again if necessary to drive even further responses or to increase durability of responses. That is all made feasible on account of a scalable platform that we have developed together with our partners. This is another advantage of the approach. It is a scalable off-the-shelf approach, reducing cost of goods, and also therefore making it more feasible when thinking about reimbursement down the line. If I can have the next slide, please. A snapshot of our pipeline. We are now a clinical stage company, so the lead program moves into the clinic, and we are generating our first data.
As mentioned, we have behind that our KKLC1 program, which is going through engineering and a path to understanding the outcome of the engineering process as driven by artificial intelligence. Behind that, we have another target, PRAME, which we have a TCR against. The idea, the strategy behind the pipeline really is to have a blend of targets that are either clinically- validated, MAGE-A4 is a clinically- validated target, I will come onto that in a moment, or pre-clinically- validated targets that are really attractive when it comes to the nature of cancers that we can potentially address. You can see the array of cancers that we can address in the indications column, and they are all cancers with really high unmet medical need. The regulatory pathway that we have established with the lead program, we believe is one that we can apply across all programs.
The strategy we have applied there when it comes to preclinical and manufacturing strategy is one that we can adopt to the entire platform. We think overall that continues to de-risk the concept and the development path really for all pipeline programs. If I can have the next slide, please. Just focusing on our lead and the first-in-human study. Of course, this is a very exciting program for the company. If I can have the next slide, please. To remind ourselves of the validity of the target, MAGE-A4 is the target for our lead, is expressed across multiple solid cancers, really representing a high unmet medical need with over 50,000 potentially treatable patients, according to our analysis and also according to others that are targeting MAGE with other formats.
On that note, what we have seen with other clinical programs that are targeting MAGE-A4, all of which have been T cell programs, is that we have seen clinical responses demonstrated, and those have been demonstrated across multiple solid tumors. What that tells us is that by targeting MAGE-A4, you certainly stand the chance to shrink tumors across multiple solid cancers. In essence, it validates the target and its ability to be able to then shrink tumors across a range of cancer types. What we have also seen, on account of some of that data, is one approved MAGE-A4 therapy. It is a T cell-based therapy that is targeting synovial sarcoma, which is one of the indications in our study. Though it is limited by scalability and durability, and that is on account of using autologous T cells.
We are the only company that has a MAGE-A4 targeting TCR-NK product with the advantages that we believe a natural killer cell brings over a T cell in the ability to attack diverse tumors, but also in the nature of being off-the-shelf and scalable. We are building on the data that we have seen in clinical development with an off-the-shelf MAGE-A4 cell therapy. If I can have the next slide. We believe it is a very strong starting target to demonstrate the ability of the platform. What we do with the product is we are combining TCR recognition with natural NK cell biology, and I have talked through the merits of the platform, which is reproduced here.
But just to say, on this slide, the T cell receptor itself has also been artificially intelligently engineered, and that was a successful engineering process, in order to enable higher affinity, in essence, to be able to detect cancers more potently, in a better way and stronger. That is what the outcome of the engineering of the TCR had enabled, and we are using the same engineering process with our pipeline program. That is an important point, because it also is another differentiating element of our platform in engineering the T cell receptor. If I can have the next slide, please. This is to give a snapshot of our two activated leading investigators, and U.K. leading sites, The Christie and The Royal Marsden. For our study, The Christie is the lead site, and Professor Fiona Thistlethwaite is the lead investigator.
Both sites are really world-renowned, recognized for early-phase trials, recognized for their cell therapy experience, and really a strong and long track record in this space. Both sites are activated and are now recruiting. Our first patient was recruited at the lead site at The Christie, and now as we have cleared the first safety assessment, both sites will be looking to recruit for the next two slots on that first dose level. If I can have the next slide, please. Maybe to remind ourselves of the expected mechanism in patients and then to go on to look at what we think success would look like from the initial phase of the clinical study. The expected mechanism really is as defined by the platform and the hypothesis and the scientific data that really supports the platform.
That is that by adding the T cell receptor, an engineered T cell receptor that recognizes MAGE-A4 onto natural killer cells, that when we infuse the product into patients and they get the three injections on day one, four, and eight, we expect that the cells to then move and traffic towards the tumors within that patients. We are treating late-stage cancer patients, and so they will have multiple tumor sites. So we expect the cells to traffic to those tumors. The T cell receptor targeting MAGE-A4, which is a pattern on cancers across different indications, in this case, demonstrating the cancer cells in red, presenting that pattern. Once in the tumor, then the natural killer cells are also able to recognize the different patterns on any of the other tumor types.
The idea is we are targeting into the tumor via the T cell receptor, and then we are allowing the natural killer cells' natural killing ability to then really kill the cancers in the surrounding area and really diminish the tumor. That is the hypothesis. In trying to understand if that hypothesis is reading out into patients, then I would say in the next slide, this is what we would be looking at to really understand the performance of the therapy. In the first instance, we will be wanting to understand safety, of course. Safety is a key parameter. It is our main objective for the phase I study, and it is increasingly becoming a key differentiator in next-generation cell therapies. With the initial autologous CAR-T therapies, this is where a single batch is generated for a single patient.
And also with the emerging in vivo CAR-T approaches, what we have seen is association of severe toxicities, including cytokine release syndrome and neurotoxicity. Sometimes that has required extensive hospitalization and intensive monitoring. Of course, one can imagine this limits and has limited broader patient access to some of these therapies. Safety is really important feature. So it's really vital for us, and indeed, it's our primary objective to demonstrate that the platform can be delivered to patients in a safe way with reduced incidence of severe toxicities, that would also allow repeat dosing and outpatient treatment, meaning patients can come in, get treated, and go home. This would support broader access and improved patient experience. Safety could certainly be an important differentiator, we believe, for the TCR-NK platform, and now it's supported by encouraging initial observations.
It's observations from a single patient, so that's important to remember. Nonetheless, it's encouraging to see the favorable safety profile emerging for the lead, and by extension, for the platform. That's an important element to understand. Next slide shows some other elements that are also important to understand. Before, actually, I come onto that, just to take us through the patient journey, just to spend a moment now that we have gone through that journey with a patient to give you a sense of what the patient really goes through in their journey. So from treatment to clinical data generation. Initially, the patient is prepared with what's called a lymphodepletion regimen for a few days. T he patient then receives the treatment with ZI-MA4-1 doses on day one, four, and eight.
We then have a safety observation period, which is a standard observation period, typically of about 28 days. The safety committee, made up of independent experts in the field that know cell therapy, understand cell therapy, understand the translational and clinical aspects of cell therapy, review the totality of the data, and then make a judgment on whether to continue or not. We're delighted to have announced earlier this week that the committee had recommended to continue enrollment. So we have a favorable initial safety observation from this patient. Well-tolerated, no dose-limiting toxicities. Of course, the first clinical data generated from the platform. Alongside that, this is very important. What we do is we have a number of and a suite of analyses that continues. That's looking at tumor response by imaging and clinical assessments. It's also looking at tumor biology.
This is analyzing biopsies and looking to see what's happening in biopsies. If you remember, what we're expecting is that the NK cells traffic into tumors, so we're really keen to see the makeup of biopsies, if we can detect our natural killer cells in there and any other cell type. Cell kinetics, so the changes in the circulating cells over time, the changes in the trafficking of natural killer cells, for example, in the bloodstream over time. Also immune biology, any immunological changes in the blood. All of this builds a picture of what is happening with each individual patient. Each treated patient really builds evidence across safety, biology, and clinical activity. Now that we have treated the first patient, of course, we're activating these studies in order to build that clinical picture.
On the next slide, what we have here is how we would see it and how we would see success from the initial phase of the study. The context of this is that we are treating really heavily pre-treated patients. These patients would have had multiple lines of therapy and would have progressed as a consequence of those, and more often than not, will have no other options available to them. So they will have had advanced late-stage disease, and would be a difficult-to-treat population in general. But the early indicators of success. Initially, as I mentioned, safety is very important to demonstrate. We have now our initial favorable safety observations from the first patient, which is very encouraging. Next, of course, will be to understand proof of mechanism in patients.
That is to understand whether the TCR-NKs are reaching and engaging tumors, and that will be through the analysis that I described in my last slide. Also to really understand any immunological responses in general in the patients pre- and post-treatment. Then, of course, what we are aiming for are efficacy signals. So that is signals demonstrating that the TCR-NKs can shrink tumors, and those will be ultimately determined through imaging. Our expectation is that we would need to go up the doses in order to really identify the optimal dose, to be able to unlock the strongest clinical responses. At the moment, we have begun with the lowest dose level. It is a dose escalation, and so our expectation is that we may need to go to a higher dose level in order to really unlock the strongest clinical responses.
But that clinical picture continues to build. I can have the next slide, please. I would like to hand over to Geir Christian, our CFO, to provide the financial update. Thanks, Geir.
Thanks, Namir . In addition to the substantial operational progress that the company has made over the quarter, I am happy to say that also on the financial side, we have made significant progress. I am happy to give you a finance update. First, the key financials. The cash position at the end of the quarter was NOK 86 million. Our cash runway, we expected that to take us into the third quarter of 2027. The operating profit, that is the loss in the second quarter was NOK 20 million, and year- to- date for the first half it was NOK 40 million. These figures, you can also find them similar in the profit before tax, NOK 20 million and NOK 40 million for the second quarter and the first half, respectively.
Also great to see the strong support we received from existing shareholders and also complemented by new shareholders in the private placement and the retail offering we successfully completed in June. We raised gross proceeds of NOK 58 million through the issuance of 3.1 million shares at the price of NOK 18.50 per share. We are also very pleased to see support from The Research Council of Norway. We were granted NOK 16 million under the IPN scheme, following our application this spring. This scheme supports research-driven innovation projects in Norwegian industry, and it will support our ongoing phase I clinical study. Over to the accounts. Here you can see the quarterly accounts for the second quarter compared to the second quarter last year, and also the year-to-date figures compared to last year's figures.
I will not go through the details, but I will focus on the key points here, which is that the payroll expenses, that is excluding share-based compensation and adjustment for government grants, were lower in the second quarter this year compared to the second quarter last year, and it also goes for the first half. This is due to a lower number of people in the company, as you also can see at the bottom of the table. The key costs are of course related to our R&D program, and the main contributor to the cost in this year is the preparation for the start-up of the clinical trial. Whilst in 2025 it was mostly related to the CMC activities. Other operating expenses, you can see also there is a substantial decrease in these costs, and these reflects business combination costs that were incurred in 2025.
On this slide, you will see key financials on a quarter-by-quarter basis. This is for information purposes, and I do not plan to go through this slide. On this slide, you can see the cash flow we have incurred on a quarterly basis. These are negative figures. You can see here that from the second quarter last year, we have been able to reduce the cash outflow that is related to a lower organization and also focusing entirely on the TCR-NK program. Ending up with then NOK 20 million of negative operating cash flow in the second quarter this year. With those words, I am happy to hand over to you again, Namir, for our summary and outlook section.
Thanks a lot, Geir. If I can have the next slide just to summarize. As we have been through, we have what we believe is a platform that has components with validated biology. Cell therapy itself is a clinically-validated modality with nine approvals. The platform that we have combines two what we believe are validated components, the T cell receptor, which recognizes and targets solid tumors. We have seen therapies approved in solid tumors that use T cell receptors, including one for the target that is relevant to our lead, MAGE-A4, and NK cells have demonstrated strong safety and potency in clinical studies, and we are now building our own clinical data, the first of which demonstrates safety for that first patient on our TCR-NK platform.
We've also, in the field, seen major deals driven by early clinical data, often with small patient data sets, that has continued with some further deals over the last months. There's really a signal there with increasing industry focus on scalable off-the-shelf approaches. This is exactly what we have been building over the last years. We're at an exciting time with Zelluna. We're now in first-in-human clinical development with the first clinical data emerging, which has been initially safety, which has been favorable for the first patient, and further clinical data expected to emerge through continued patient follow-up and enrollment for the study. In essence, we have a platform built on clinically-validated biology with exciting clinical data now beginning to emerge.
I'd like to then move on to the next slide and bring the presentation to a close and invite any questions from the audience.
Yes, we have received a few questions, and some of them are related to the clinical trial and the data that investors are looking for in going forward. This question, Namir, is related to when should investors expect to see the first efficacy data and also including the number of patients they can expect to see and the detail we intend to disclose.
Thanks, Geir. Great question. Of course, a very important one, important for the market and important for us. We're paying very close attention to the clinical picture that's emerging. Maybe I should start by saying that, remember, this is a dose- escalation study. We've started with our lowest dose, and then we'll move on to higher doses once we treat a cohort of three patients. So the clinical picture is expected to build with each patient. Our current plan in terms of a presentation of updated data is to be able to present those at international conferences. We have been accepted to present at a few international conferences later this year. We mentioned ESMO 2026 being one of those, and that forms a really appropriate forum to present data on the clinical side, both safety and potentially efficacy up until that point.
I wouldn't be expected, I think, to really speculate on a specific time point for efficacy data to emerge. But we're certainly planning to present the latest data at the conferences later this year. Now, in the interim, of course, as we've done with the safety committee recommendation to enroll additional patients, and announce that to the market. In the interim, if there are clinical data that emerge that warrant disclosure, of course, that's something that we will assess internally and act on. But the clinical picture will continue to emerge. We have a number of assessments that are planned for the first patient and of course, for all patients that will be enrolled onto the study. In terms of the pacing of patient recruitment, now that we have unlocked the cohort, we're aiming to treat the next two patients next with the two U.K. sites active.
We expect to be able to do that over the coming weeks and months. The next safety review by the safety committee will be when both of those additional patients, in other words, when three patients have been treated on that dose level, completing that dose level, and that's when the next safety review will take place in order to then allow enrollment onto the second dose level. So over the coming months, we should expect the first dose level certainly to be recruited against.
Thank you, Namir. There is also another question related to the phase I study. When do you estimate the entire phase I study to be completed?
So at the moment, the phase I really is split into two large categories. The first is to understand what the optimal dose might be, and that's the dose escalation part. Then the next part is the dose expansion part. I think what's important is really to get through the dose escalation phase and really identify the optimal dose to treat with our lead program. So we're expecting to get through that dose escalation phase certainly within the first half of next year to be able to then zone and hone in on an optimal dose. And that's our current plan.
Thanks, Namir. We also have a question related to the longer-term strategy. The question, can you elaborate on the longer-term strategy for the ZIMA-101 or the lead product should the upcoming data be favorable, including potential next steps for the program?
It is a very good question, and I think the focus for us right now is really to diligently generate clinical data. What we have seen is that if the clinical data demonstrates the science translating into the clinic, we have seen strategically that unlocks a number of options, and those options could be varied, and we are open to the opportunities. The options, as we have seen, could be as wide as a real M&A. It could be partnerships. The options really become unlocked when you focus and deliver on clinical data. I am really proud to say that the team have been able to deliver so far on all of our ambitious objectives, and that is our focus. As that is achieved, we will potentially see further strategic options opening up and opportunities opening up that can take a number of different flavors.
Thanks. I think we have a last question here. Could you provide any guidance on expected operating expenses for the full- year 2026? I am happy to answer that if you want.
Sure, Geir. Would you like? Thanks.
As you all have seen that we have guided that the cash position is expected to take us into the third quarter of next year. Over and above that, we don't give any guidance. I'm sorry to say that. Unless there is any further questions, I think we can close this second quarter webcast presentation. Many thanks to all of you for joining.
Brilliant. Thanks, everyone.