Welcome to Ascelia Pharma Q1 2024 Report Presentation. For the first part of the conference participants will be in listen-only mode. During the questions and answers session participants are able to ask questions by dialing pound key five on their telephone keypad. Now I will hand the conference over to CEO Magnus Corfitzen, CSO Andreas Norlin, and Deputy CEO Julie Waras Brogren. Please go ahead.
Thank you, and welcome everyone to the Q1 report for 2024. On this call we will be making forward-looking statements. On today's call we will start with Ascelia Pharma highlights and recent key events. This will be followed by a portfolio update before moving to financials and priorities ahead. As mentioned, after the presentation we will open up for questions. At Ascelia Pharma we identify, develop, and commercialize novel drugs that address unmet medical needs within rare cancer conditions. We have two drugs in our pipeline. Orviglance has now been advanced to the registration phase as we have successfully completed the pivotal phase 3 clinical study. Orviglance has orphan drug designation from the FDA and is targeting an addressable market opportunity of $800 million.
Oncoral is ready to start phase 2 in the treatment of gastric cancer based on encouraging results in phase 1 and a high level of unmet medical need. We are based in Malmö in Sweden and are listed on Nasdaq Stockholm since 2019. In Q1 we made solid progress which has been followed by a busy period after the close of the quarter. In the first quarter the nomination committee was appointed and the Orviglance review article was published in Investigative Radiology. This is one of the highest impact radiology medical journals. In February we announced the financing of up to SEK 35 million which extend our financial runway to Q2 2025 if fully utilized. After the closing of the first quarter we have announced a number of events.
In the first half of April we announced the completion of SPARKLE image reading by the independent readers and narrowing the timeline for the results to the first half of May. We also drew the second and final SEK 15 million tranche of the Formue Nord note financing. On 2nd of May we announced the strong headline result from the SPARKLE study making this study highly successful. We will talk a lot more about this on this call. A few days after the results we had the annual general meeting which was followed by the investor update bringing Orviglance to patients. Orviglance met the primary endpoint in SPARKLE making this study a success. It not only met the primary endpoint it met it with a substantial margin. All three out of three readers met the endpoint. The success criteria was two out of three.
All three readers evaluated Orviglance to be superior and to enhance the MRI and the statistical tests had p-values lower than 0.001 for all readers on the primary endpoint. This is much lower than the customary threshold for p-value success. The conclusions are solid and the variability levels were acceptable. This is the most significant milestone in Ascelia Pharma's history and a huge step forward towards making Orviglance available to patients. Once again I'd like to thank patients, investigators, and everyone else who have contributed to making SPARKLE a success. We are very excited about Orviglance and here's why. Orviglance is addressing a well-defined unmet medical need for a subgroup of patients living with cancer. This is an $800 million global market opportunity and Orviglance is a first-in-class product to target this. We have strong data from nine clinical studies and manufacturing has been upscaled to commercial scale.
With the strong phase 3 data Orviglance has now been advanced to the regulatory phase. We focus on three key objectives to create even more value to shareholders. The first objective is a timely submission and approval of Orviglance with the optimal label. The key steps on the way are completion of the SPARKLE clinical study report which we expect in early Q4. It's also a key milestone with the conclusions from the pre-submission meeting that we plan to have with the FDA and we expect to have the conclusion from the meeting in Q1 next year. The feedback from the FDA will be used to finalize the NDA submission and that is expected to be filed in the middle of next year. The second objective is to progress Orviglance for commercialization for patients in need. There are two key tracks.
One is to continue to advance the launch readiness by ensuring manufacturing and supply chains is ready for launch as well as working with medical experts, key opinion leaders, payers, patient advocacy groups, and other key stakeholders. The other track here is entering into commercialization partnerships to make sure that there is an infrastructure in place following approval to make sure Orviglance can get to all patients. The third objective is to develop the potential in the pipeline. We're excited about Oncoral and the planned phase 2 study where we will evaluate Oncoral in combination with Lonsurf. In our pipeline we also have a second generation Orviglance program that we would like to advance. Very limited activities are ongoing right now in our third track here and we look forward to accelerating these activities once financing is available.
All in all there is tremendous potential in Ascelia to create value for shareholders. With this I conclude the highlights and recent key events and we will now move into the portfolio phase. We start the portfolio section with our presentation on Orviglance and I'd like to hand over to Andreas to continue the presentation.
Thank you, Magnus. Orviglance is a first-in-class liver MRI contrast agent which addresses a very specific unmet medical need where there are no good alternatives available today. Cancer in the liver is a major problem in cancer treatment and most cancers in the liver are metastasis where the tumor originates in another organ and spreads to the liver. Contrast-enhanced MRI is the gold standard procedure for examination of patients with suspected or known liver lesions including metastasis. The most used contrast agents available are all based on the heavy metal gadolinium. In patients with severe kidney impairment use of gadolinium-based contrast agents has been associated with an increased risk of a very severe side effect called nephrogenic systemic fibrosis which even may have lethal outcome. Both the European and U.S. regulatory authorities have for that reason issued warnings for the use of gadolinium-based contrast agents in this group of patients.
The consequence is that patients with impaired kidney function typically will get an unenhanced MRI which will result in liver images of suboptimal quality with a risk for that the cancer is not managed in the best possible way. We envision that Orviglance which is based on manganese will address this unmet medical need in the future and become an efficacious non-gadolinium contrast agent for cancer patients with impaired kidney function. We have now obtained highly encouraging headline data from the SPARKLE phase 3 study clearly demonstrating strong superior enhancement of visualization of focal liver lesions with Orviglance compared to unenhanced MRI as evidenced by p-values lower than 0.001. The strength of the data is emphasized by the fact that all three independent readers who evaluated the efficacy in the study confirmed superiority of Orviglance.
For the study to be successful, at least two of the three readers needed to observe a statistically significant improvement. With this in mind, the unanimous reporting of a highly significant effect makes the conclusion that Orviglance MRI is superior to unenhanced MRI very strong. Importantly, in the light of the issues with the intrareader variability reported last year, the analysis of the data also showed an acceptable level of variability for all readers, making the analysis strong and conclusive. Common adverse events, primarily mild to moderate nausea, were in line with previous phase 1 and 2 studies with Orviglance, and no serious adverse drug reactions were observed. With SPARKLE, we have a comprehensive package of clinical studies with consistent positive efficacy and safety data that will be used for the submission of the new drug application NDA file for regulatory approval by the U.S. FDA.
A total of 286 patients and healthy volunteers in nine clinical studies will be included in the NDA file. We are aiming to submit a high-quality NDA to the FDA as soon as possible. Our goal is to secure approval for an optimal label offering a new choice for patients who can't use gadolinium-based contrast agents for liver imaging today. With our comprehensive data package in hand, which includes the clinical data as well as non-clinical and chemistry and manufacturing data, we are now intensifying our preparations of the NDA file. Focus is to ensure that every aspect of Orviglance is thoroughly documented and presented, reflecting our anticipation of successful review by the U.S. FDA. We are on track to submit the NDA for Orviglance by mid-2025 and following the submission we anticipate a standard 10-month review process by the FDA.
On the way towards the NDA submission we are looking forward to key milestones such as the delivery of the full study SPARKLE report in early Q4 this year and the completion of the pre-NDA meeting with FDA by Q1 2025. The pre-NDA meeting is a critical project in its own right with the purpose to lay out the groundwork for the NDA submission. This ensures that we are on the same page as the FDA and will facilitate a seamless review process when we file the NDA. To wrap it up with the strong headline data from SPARKLE demonstrating superior imaging with Orviglance compared to unenhanced MRI we are now advancing Orviglance into the registration phase. With that I will hand over to Julie.
Thank you, Andreas. So the addressable market for Orviglance has a global value of $800 million annually. The U.S. represents almost half of this. This market opportunity for Orviglance addresses the unmet need for a well-defined patient population: cancer patients who need liver imaging and who also have severely impaired kidney function. Our strategy for commercialization is to launch through partners. This strategy supports our ambition to secure the optimal balance between future revenues and investment required and it allows us to leverage commercial capabilities already established by a partner. Our focused ambitious launch strategy and plans build on advanced market insights and these are in place to support this partnering strategy and to support the launch. As mentioned U.S. is the largest commercial opportunity. In the U.S. alone our real-world data i.e.
Data from realized procedures in our target patient population show that every year 100,000 abdominal imaging procedures are performed in 50,000 patients that fall under the black box warning for gadolinium contrast agents. This is about 4% of cancer patients that undergo abdominal imaging. The well-defined patient population with a clear unmet need also drives an attractive pricing opportunity, and we have extensive input from market access and pricing experts with whom we've tested different price levels and collected insights on the evidence needed to support access and reimbursement at launch, and we have also investigated pricing and access benchmarks for other innovative diagnostic drugs in the US. 90% of healthcare professionals are concerned with the issues related to gadolinium contrast agents including nephrogenic systemic fibrosis or NSF as Andreas mentioned. In fact, 16% of providers have experienced gadolinium-induced NSF.
These insights come from market research with 270 U.S. healthcare professionals and answers from radiologists, nephrologists, and oncologists, and these insights confirm the concerns with gadolinium in clinical practice and the unmet need for Orviglance. When speaking to experts whether in radiology or nephrology, they also confirm that an alternative to gadolinium for our target patient population would address concerns of today, supporting the potential for Orviglance to become a valuable addition to their clinical practice. In clinical practice, the unmet need for our target patient population is also well recognized. Physicians tell us that patients who need liver imaging and fall under the black box warning for gadolinium today receive MRIs that balance the trade-off between, on the one hand, being without a contrast agent, i.e., an inferior image quality, or by being a half dose gadolinium. These are around 80% of the patients in total.
Or by being with a full gadolinium dose with the awareness that gadolinium is not recommended for these patients due to the black box warning. All of these patients are potential Orviglance patients. Beyond the risk of NSF in kidney impaired patients, gadolinium is well known to be retained in the brain and other tissues in all patients, and scrutiny over the possible safety effects is a key concern of regulators and medical bodies. It is also well known that gadolinium is excreted via the kidneys in urine because it's difficult to remove in our sewage systems. This is discharged into the environment even into our drinking water. So there is an urgency from regulators and medical bodies to find a viable alternative to the growing use of toxic gadolinium.
An alternative that is not associated with these potential safety and environmental concerns for patients and for the environment with gadolinium. So in short the momentum for an alternative to gadolinium is getting better and better and the industry is responding to this. Recent developments from the large gadolinium manufacturers are focused on smaller doses of gadolinium and there's even an early stage injectable manganese-based contrast agent which is not like Orviglance because it's not liver specific. So we are excited that we have a head start and that Orviglance is expected to be a first-in-class to lead a future with less gadolinium and improved outcomes for our target patients. The go-to-market strategy for Orviglance is to launch with commercialization partners.
This supports our objectives to secure the optimal balance between future revenues and investment required, and as mentioned, it also allows us to leverage the commercial capabilities already established by a partner. So the focus of Ascelia is to continue the dialogue with potential partners and to ensure that Orviglance and their partner are ready to launch upon approval. So we are both excited and optimistic about our launch preparations and our partnering opportunities and also because almost all physicians tell us that they would like to use Orviglance when it is available on the market. So in summary, Orviglance addresses a well-defined unmet need and it represents an attractive commercial opportunity. Our focus is to ensure that Orviglance is ready for launch with a partner and all our efforts to help patients and to launch Orviglance are well recognized by experts and partners in the industry.
With this I will hand over to Andreas to talk about Oncoral.
Thank you, Julie. Yes, let's move on to Oncoral. So Oncoral is a daily tablet formulation of irinotecan, a well-established intravenous chemotherapy. A daily tablet formulation enables a frequent low-dose dosing regimen that could offer potential advantages on both efficacy and safety compared to the infrequent high-dose intravenous administration used today. We have completed a phase 1 study which demonstrated a promising safety profile and desired uptake of the drug after oral dosing consistent with the daily dosing concept. We are now planning for taking Oncoral into clinical phase 2. The objective is to generate clinical proof of efficacy data in metastatic gastric cancer in combination with Lonsurf, another oral cancer treatment approved for gastric cancer. Animal data has demonstrated a synergistic effect of irinotecan when combined with Lonsurf which makes this combination very interesting.
The planned phase 2 study is designed to study Oncoral plus Lonsurf against Lonsurf alone and the study will randomize approximately 100 patients and involves a clinical collaboration with Taiho Oncology who will provide clinical advice and Lonsurf for the study. We will initiate the Oncoral clinical work as soon as we have the financial resources to do so. Irinotecan is a well-established chemotherapy with recognized anti-tumor effect in solid tumors. Our strategy is to start Oncoral development in gastric cancer which is today a $3 billion market. For these patients there is a high unmet medical need for improving outcomes and there is an opportunity for an orphan indication. We also see opportunities for developing Oncoral in other solid tumor indications where a daily dosing tablet formulation can demonstrate an attractive efficacy and safety profile. Irinotecan as an IV formulation is already approved in colorectal and pancreatic cancer.
In addition, irinotecan is clinically demonstrated and recognized in guidelines for other cancer types. So we are assessing these opportunities as part of our ongoing strategic planning for Oncoral. So with that, back to Julie again.
Yes, thank you, Andreas. So, to the financials and outlook. In Q1 our operating result was a loss, i.e., cost of SEK 16.7 million. This is a slightly increased loss compared to Q4 2023 and was driven by the completion of the SPARKLE reevaluation as well as NDA preparation activities. At the end of March 2024 we had SEK 27 million in the bank. This includes the first tranche of the Formue Nord financing announced in February. In April we drew the remaining SEK 15 million of this loan financing. With the full financing in place we have a cash runway into Q2 2025 covering the completion of time-critical activities for the NDA. To wrap up our update today we have substantial value creation opportunities ahead for Ascelia Pharma and for both of our orphan oncology assets in clinical development.
We focus on three key objectives to create even more value to shareholders. With Orviglance we're bringing to market a first-in-class diagnostic drug addressing an $800 million market for patients with a high unmet need. The first objective for Orviglance is a timely submission and approval with the optimal label. The key steps on the way are to complete the SPARKLE clinical study report in early Q4, to reach conclusions from the pre-submission meeting with the FDA in Q1 next year and to submit the NDA in the middle of next year. The second objective is to progress Orviglance for commercialization for patients in need. The key activities are to continue advancing launch readiness by ensuring that Orviglance manufacturing and supply chain is ready for launch and by working with medical experts, KOLs, payers, and patient groups and other stakeholders who are instrumental for the adoption of Orviglance at launch.
Our other track is to continue the dialogue and to enter into commercialization partnerships for Orviglance. The third objective is to develop the potential in the pipeline. We are excited about Oncoral and the planned phase 2 study where we will evaluate it in combination with Lonsurf. In our pipeline we also have a second generation Orviglance program that we would like to advance. Very limited activities and resources are allocated to these pipeline opportunities and we look forward to accelerating these once financing is available. All in all the strong headline results from SPARKLE announced earlier this month mark the completion of the clinical development for Orviglance and reinforce our confidence in the regulatory and commercial path ahead for Orviglance. We look very much forward to executing on the opportunities ahead for Orviglance and for Ascelia Pharma in 2024 and beyond. This concludes our update today.
We'll hand it back to the operators.
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And does.
There are no phone questions at this time so I hand the conference back to the speakers for any written questions and closing comments.
Yep. Thank you, everyone. We have received some questions here and you are invited also to ask questions here on this portal here. So the first question is has the company been approached by any parties expressing interest in making a bid for the entire company or specifically for Orviglance? I think briefly speaking we cannot really comment on that. What we have said is that our strategy is to find commercialization partners and obviously at the point in time where there is any firm announcement that our material then we will not make those announcements. So we cannot comment on the activity level or the dialogue level at any point in time. Another question is GE Healthcare a potential partner for taking Orviglance to the market? Maybe, Julie, you can comment on a specific company but obviously it's general comments we can make.
Yeah, I agree we wouldn't comment on a specific company, but of course the actors in radiology diagnostic drugs, the gadolinium manufacturers, are of course partners that potentially could see value in adding Orviglance to their portfolio among other potential profile of companies, yeah.
There is another question here. Do you have any thoughts on the possibility of requesting a priority review from the FDA? And this is, you could say, a dual question. Part of it is regulatory, and another one is commercialization. Maybe Julie, you can provide an answer here.
Sure. So priority review, that's something we can consider when we submit the NDA, and then the FDA would decide whether or not to grant this. A priority review means that the review timeline, the standard review, is reduced from 10 months to 6 months. So in the scenario of a 6-month review timeline, what we need to consider before we apply for this is that we are absolutely sure we are ready to both answer the questions from the FDA with high quality during the review, but also that we are ready with a full launch upon that approval. So that's something we don't need to decide right now.
Yeah. Just to complement, that's also something that will be a dialogue with most likely a potential partner in terms of their launch readiness as Julie alludes to. Another question here is could you provide any further insights or narrower estimates regarding your price of $3,000-$4,500 per Orviglance dose in the US? Julie, that's one for you.
Yeah, so this pricing is based on, as I mentioned, tests with different types of payers in the U.S. and so that's how you end up with a range. Essentially we now have the full data, in the future we'll have the label, and those are the elements that we need to narrow down on the more precise pricing. At the end of the day it's going to be about finding the optimal balance between the volume we can address within the label and the price and value per dose. So the right time to narrow that is a little later in the process but the key is I think that so far with all the data we have and the target product profile is that the feedback is that we can obtain a very attractive price.
Here's another question. So please discuss who are the key biopharma players that are relevant for consideration as potential partners for Orviglance and also sharing some of their current activities in the relevant space for diagnostic liver med product and deal history. In general terms please describe your ongoing partnering discussions, status, aims, and partnering outlook for 2024/2025. So a lot of things to cover. Julie will you start?
Yeah, I'll start. In terms of the ongoing partnering discussions, as the question also alludes to, that is an ongoing process. We have an understanding of the different profiles which is a question here I'll answer and then how does such a process evolve? First of all we now have the headline data so we are in a position to sort of, you can say, ramp up on intensify some of these discussions. So in terms of the process I think that's a key thing that we can move from all the current data and all the strategies we have to now have reduced the risk significantly with positive headline data and also having a plan for the NDA. So there are some steps in the process that are instrumental for these partnering discussions.
The other question is around who are the key players and is there a deal history? The key players that could be interested in a product like Orviglance are players where there's some kind of synergy in the commercial operations or strategy and where Orviglance is a meaningful contribution to their strategy. Some of these synergies could be that they are distributing or they are commercializing to radiology departments for sure at hospitals or independent radiology clinics. Those are of course among these the gadolinium manufacturers but there could be other companies that are currently commercializing drugs within radiology. Another angle to the synergies is that Orviglance is a high-value drug for a well-defined small population.
So a partner that understands the value and the mechanics in commercializing, you can say, a high-value smaller volume drug is another area of synergies and of course also a profile of players. And then again there are other sort of similar types of synergies. For example, a partner who has a portfolio within nephrology, so experts in kidney diseases, would also be a partner where Orviglance could contribute to their portfolio. But I think, yeah, I think that was enough about this. I don't know, Magnus, if you had something to add here in terms of the deal history. There's been some mentionings but and we know that some of the large radiology players have been active in M&A and investments and commercialization agreements on an ongoing basis. But I don't think maybe that it's in our place to map out the deal history here.
Yeah, I think definitely transactions happening and especially in terms of later stage transactions that have been successful. I think if we're thinking about sort of specialized diagnostic drugs, maybe just a couple of questions or examples like Blue Earth that was acquired by Bracco for around $450 million a couple of years ago. We also had Progenics being acquired by Lantheus. I think that's probably a, if I recall right, but that's probably just out of memory, but like a $300 million transaction and that drug is approaching blockbuster status for Lantheus today. There are some very attractive transactions being made in this space for specialty diagnostic drugs that address a clear unmet medical need.
So I think there are great opportunities and as Julie said and has presented also in our various investor updates, this is a focused commercial launch which means that it's not a huge team that is required to make it to successfully penetrate the majority of the U.S. market. And that opens up to the categories you mentioned in terms of the radiology companies but also other companies within oncology, nephrology, etc. So I think that's it gives us some broad range of opportunities with companies that could be potentially very good fits to Orviglance. So we're very excited about this and you could say with the phase 3 data that's a good component of having a partnership discussion. Yep. Another question here is once financing is available that we mentioned from repeatedly.
So this could be understood by skeptics as if you expect to run another finance tranche, but it seems more likely that you would generate the required income from partnering. Please comment. So I can have a stab at this. I think our plan is to make sure that we meet the most successful value inflection points. Looking back a bit, it has been to complete the SPARKLE study. It has now been completed. We have very successful data. Going forward is the NDA process and the partnering that is sort of key activities, and it would not, given the current balance sheet, would not be prudent to initiate phase 2 of Oncoral or move forward in a big way with second-generation Orviglance.
So we refer to this because it's an opportunity to invest where we think the return is going to be very attractive but we are very conscious of managing the balance sheet and the cost and therefore we say this is an opportunity. We will invest in it once the money is available. We have also stated that we are looking at various sources of capital and keep all options open, if you will. I think we would expect with this kind of phase 3 data that a partnership deal would bring in cash to the company. That could be a financial driver or it could be financial markets. We don't rule anything out. We're not saying we want to do one thing or the other except that we have clearly stated that we want to bring in commercial partners for Orviglance.
Hopefully that clarifies any uncertainty in terms of financing. This was the final question. So thank you everybody for joining the Q1 2024 for Ascelia. We are very excited about the data and the result of the SPARKLE study. It has taken a bit longer than originally anticipated but we are here at the end. We have very, very strong phase 3 data and are excited about moving the asset forward towards patients in the regulatory phase and also ensuring launch readiness in terms of supply and stakeholder engagement and finding commercialization partners. So with that I'd like to thank everybody for participating and have a wonderful day.
Thank you.
Thank you.