Ladies and gentlemen, welcome to the Ascelia Pharma audio cast with teleconference for quarter 2021. Today, I'm pleased to present CEO Magnus Corfitzen, CFO Kristian Borbos, CMO Carl Bjartmar, and CCO Julie Waras Brogren. For the first part of this call, all participants are in listen-only mode, and afterwards, there will be a question and answer session. Speakers, please begin.
Thank you, operator, and welcome everyone to the webcast for Ascelia's first quarter report for 2022. I'm Magnus Corfitzen, and I'm looking forward to updating you on our progress in this report. Now please turn to Page 2. We will be making certain forward-looking statements on this call, so please pay attention to this before we turn to Page 3. Ascelia Pharma is dedicated to improve the life of people living with cancer by offering better treatment options. In particular, we focus on rare cancer conditions that are underserved. Our business model is to identify, develop, and commercialize novel drugs that address unmet medical needs within orphan oncology. We have two drugs in clinical development. Our lead program, Orviglance, is in an ongoing Phase III clinical study.
It will be the only product targeting an addressable market of $500 million-$600 million annually. Oncoral is ready to start Phase II in the treatment of gastric cancer based on encouraging results in Phase I. We are based in Malmö, in Sweden, and we are listed on Nasdaq Stockholm. We have a solid balance sheet and are funded into second half 2023, including completion of the Orviglance Phase III program. Now please turn to Page Number 4. Ascelia Pharma is in a transformative Phase as we are moving from late-stage development into commercial stage. We will soon start to generate revenue from our commercial operations in the U.S. when Orviglance has been launched.
As part of our strategy, we expect to have expanded our portfolio by acquiring or in-licensing an additional drug that fit into our orphan oncology strategy and where we can make significant benefits for patients. In 2025, we expect to have established Orviglance as the market leader in this market. Oncoral in Phase getting into Phase III development, and having one or two more clinical-stage assets in the pipeline through acquisition or in-licensing. This is truly an exciting time for Ascelia Pharma, and we see tremendous value creation potential as we progress. Now please turn to Slide number 5. First quarter of 2022 was eventful, and we continued to make progress.
In February, we were informed that results of a comparison between Orviglance and the liver-specific gadolinium will be presented orally at the ESGAR conference end of May or early June this year. ESGAR is a conference for the European Society of Gastrointestinal and Abdominal Radiology. It's highly relevant for Orviglance. Our continuing activities in the pre-launch of Orviglance progress as planned. In March, we announced a very encouraging result from extensive market research on the U.S. market. As a result of the Russian invasion of Ukraine, we decided in early March to suspend clinical activity in all the Russian sites where we had a total of 13 hospitals involved. This unfortunately extended the timeline for the SPARKLE study, and our focus is on completing the study as soon as possible.
In the hepatic impairment study that we announced in March that the last patient had been enrolled, and yesterday we announced positive top-line results from the Food Effect Study. Later on in this quarterly update, Carl will have more information on our new studies. Now please turn to Page 6. Now we're moving into Orviglance update, and I'd like to hand the word over to our Chief Medical Officer, Carl Bjartmar.
Thank you, Magnus. We can move to Slide number 7. Orviglance is a novel oral contrast agent for liver MRI, which addresses a very specific unmet medical need. Liver metastases are common in oncology since many cancer types tend to develop metastases in the liver over time, and many times are the cause of mortality in these patients. The contrast agents available today are all based on gadolinium. The heavy metal gadolinium should not be given to patients with poor kidney function since it is excreted through the kidneys and slow elimination can cause serious side effects. In the future, this unmet need can be met by Orviglance. The right side of the Slide shows how Orviglance works in a patient with colorectal cancer. The left picture shows an unenhanced MRI scan without the contrast agent. The standard procedure today for our target population.
The right scan shows the same patient after administration of Orviglance. The liver has taken up Orviglance and appears bright. There's one dark area highlighted, and it's only visible after Orviglance enhancement. This is a metastasis which would not have been detected without the contrast agent. This illustrates the importance of a contrast agent in this case, since detected and localized, the metastasis may be removed with significantly improved prognosis for the patient. Now we have made good progress. The thorough Phase I and Phase II program has been completed with strong data providing clinical proof of concept. We are currently in Phase III. We should also mention that the development is validated and aided by an orphan drug designation from the FDA. Please move to Slide 8. As mentioned, the strong clinical one of these two studies with very consistent results.
This data were confirmed by an independent reanalysis by a blinded reader, which shows highly significant effects on endpoints that are also used in the ongoing Phase III study. The primary Phase III endpoint is lesion visualization based on the co-primary parameters lesion delineation and lesion contrast-to-background. As seen on the Slide, these were highly significant in the Phase II program. It was also noted that 33% more metastases were detected with Orviglance compared to unenhanced MRI. These results clearly justified entering Phase III, and it also provide valuable guidance on the design of the study. Please move to Slide 9. Our ongoing registration study, SPARKLE, investigates efficacy and safety of Orviglance in the target population with focal lesions and poor kidney function.
The study, which is a global study with 200 patients, involves some 50 sites in the U.S., Europe, and Latin America. Since there is no available contrast agent for patients with impaired renal function, the comparator will be unenhanced MRI, which is currently the standard procedure in these patients. This study design has been agreed with FDA and EMA, and the strategy is to repeat and confirm the Phase II results using the same endpoints, lesion border delineation and lesion contrast. It should also be mentioned that the follow-up for each patient is very short compared to most previous studies. This simplifies the operational procedure, and we will also have the final results relatively sooner than in a typical Phase III study. You now go to the next Slide, please. Slide 10. The Orviglance program also contains two supportive studies.
The food effects study addressed the effect of food intake on absorption and signal intensity of Orviglance in healthy volunteers in a crossover study design. Yesterday, we announced the results which showed that intake of a light meal prior to Orviglance administration provides a similar liver MRI enhancement compared to a fasting condition. This finding could potentially further improve the convenience and ease of Orviglance administration in clinical practice. In line with previous studies, the data also confirmed the robust Orviglance liver enhancement compared to an MRI image without a contrast agent unenhanced. The hepatic study evaluates how patients with different degrees of hepatic impairment tolerate Orviglance. This is of interest since Orviglance is selectively taken up and excreted by the liver.
The study was performed at the Texas Liver Institute in the U.S. in patients with mild, moderate, and severe hepatic impairment.
Thank you, Carl. On Slide 11. The addressable market for Orviglance represents $500 million-$600 million annually in our key markets, U.S., Europe, and Japan. This potential is based on the volume of MRI procedures for patients with cancer in the liver or suspected cancer in the liver and poor kidney function, i.e., the patients falling under the regulatory black box warning for gadolinium-based contrast agents. Our data includes real-world data on realized procedures for these patients. We also have extensive input from market access and pricing experts, where we have tested different price levels and collected insights on the evidence needed to support access and reimbursement.
Building our own commercial team in the U.S. allows us to create an attractive top line and retain the value in Ascelia. For other markets, starting with Europe and Japan, our strategy is to maximize the value by working with partners. We can turn to Slide 12. In March, we announced the results of our recent market research with 270 U.S. healthcare professionals. The market research explored the current clinical practice and unmet need for the target patient population of Orviglance, with answers from radiologists, nephrologists, and oncologists. The results support the unmet need for Orviglance target patient population and are consistent with previous market research.
This Slide shows one of the key findings and confirms that for patients with severely impaired kidney function or acute kidney injury, around 80% of healthcare professionals prefer today to perform an MRI without a contrast agent or using a partial dose of a gadolinium-based contrast agent. Please move to Slide 13. At the end of the market research survey, respondents were presented with the product profile of Orviglance. As a response, 84% answered that they are likely to or definitely will use Orviglance for the target patient population at launch. The results of the market research confirm the commercial potential of Orviglance and help us prepare an ambitious and focused launch.
Please move to Slide 14. For the U.S., the attractiveness and clear path to market provides a strong case for commercializing Orviglance on our own, i.e., building a U.S. commercial affiliate. The target patient population for Orviglance has multiple health complications, suspected liver metastases, and poor kidney function. This means that decision-makers for use are centered around 2,000 radiologists who can be found at around 400 hospital groups. Therefore, a focus team in an affiliate of around 40 FTEs can reach priority decision-makers at launch. We now have our U.S. office established, Ascelia Pharma Inc, which represents an important step to engage more closely with key partners in the clinical community on the journey to make Orviglance available to physicians and patients in the U.S. Our global manufacturing partner, Cambrex, is also in New Jersey.
We are gradually building our footprint and relationships with key stakeholders as part of our preparations for launch. This includes a number of leading radiologists that are also among our Phase III clinical studies investigators. Please move to Slide 15.
All right. Thank you, Julie. Now we switch to Oncoral, and we can move to Slide 16, please. Thank you. The active substance of Oncoral is irinotecan, an established chemotherapy with well-documented anti-cancer effects. It is currently used in several solid cancer indications, and it is approved for colorectal cancer and pancreatic cancer. In Japan, it is also approved for gastric cancer. Today, the administration is intravenous bolus infusion, typically every third week and typically high dose. Oncoral is a novel oral formulation of irinotecan. A tablet formulation enables more frequent daily dosing that could offer several potential advantages. Most importantly, efficacy. It's well known that many cancer types have suboptimal treatment outcomes today. An oral daily dosing may improve efficacy through a favorable pharmacokinetic and pharmacodynamic profile based on more constant therapeutic plasma levels of the active substance.
There are both non-clinical and clinical data supporting this concept. Another is tolerability or safety. Convenience dosing of chemotherapy is frequently associated with severe side effects, typically gastrointestinal and hematological. An oral daily dosing has the potential for improved tolerability by avoiding high plasma levels and by offering dosing flexibility. In addition, there is convenience and cost. It's more convenience and cost-effective to take tablet at home than going to the hospital and prepare for the intravenous administration. Move to the next Slide, please. 17. The concept of frequent low-dose administration is called metronomic dosing. The figure to the left illustrates the simulation model comparing levels of the active substance SN-38 after irinotecan intravenous dosing every third week. That's the gray line. Oral Oncoral dosed daily, the orange line.
Over a 3-week cycle, the exposure or area under the curve is comparable, although the plasma peaks associated with toxicity are avoided by daily dosing. Approximately one-third of the side effects observed after intravenous dosing are reported as severe or even life-threatening, grade three or four. Metronomic dosing may not only reduce peak-related toxicity, but also brings the possibility to adjust dosing quickly if adverse events should occur. Our own Oncoral Phase I study showed that Oncoral was well-tolerated overall, and importantly, the hematological toxicities were mild to moderate, grade one or grade two. In addition, our Phase I data with Oncoral indicate activity or stable disease even in patients that previously progressed on irinotecan given intravenously. Please go to Slide 18. This is an example of improved outcome, in this case, overall survival with more frequent dosing.
These are patients with metastatic breast cancer, where overall survival was improved from 20% with dosing every third week, high dose, to 32% with a weekly dosing with a slightly lower dose. This is, if you will, a proof of principles. Go to the next Slide, 19. Now we are preparing for Phase II, and the objective is to generate a clinical proof of concept of efficacy in metastatic gastric cancer. The strategic reasons to choose gastric cancer are several. First, the clinical guidelines and clinical data support efficacy of irinotecan in gastric cancer. Second, gastric cancer is a severe cancer form with a high unmet need and a potential for orphan drug designation. Subsequently, there is potential for label expansion into other solid tumor indications, and we'll get back to that.
Finally, as shown in the figure, there's data from gastric cancer animal models supporting a synergistic effect of irinotecan if combined with LONSURF. LONSURF is another oral chemotherapy, which was approved for metastatic gastric cancer in 2019. This all-oral combination could potentially provide a more potent treatment alternative for these patients. We'll move to the next Slide, 20. Thank you. The study is therefore a randomized, controlled, multicenter, multinational study comparing Oncoral on top of LONSURF with LONSURF alone. The primary endpoint is typical for Phase II studies in oncology, progression-free survival. Then there's a battery of secondary endpoints, response rate, PK, safety, and overall survival. This will include approximately 100 patients and involves a clinical collaboration with Taiho Oncology, manufacturer of LONSURF. We are enthusiastic to eventually start the study, and the necessary regulatory approvals are obtained.
However, for strategic reasons, in order to focus all our internal resources on the lead program, Orviglance, we are postponing the study start for now. As soon as internal bandwidth is secured, ensuring effective study conduct, the study will kick off, and we look forward to that. With that, I'll hand over to Julie again.
Thank you. To wrap up, Oncoral on Slide 21, we start Oncoral development in gastric cancer. This is today a $3 billion market. As Carl mentioned, these patients with gastric cancer, for them, there is a high unmet need for improving outcomes and 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 such as the NCCN guidelines for many cancer types. We are assessing these opportunities as we move ahead with the development of Oncoral. Please move on to Slide 22 to come back to Magnus, I think, question.
Thank you, Julie. Now we're on page 23. The key message here is that we continue to stand with a solid cash position. We have more than SEK 230 million in the bank, and we are financing the second half of 2023. The cash position would primarily be used for the Orviglance ongoing Phase III study as well as commercial preparations. We now turn to Page 24. In the first quarter, we saw a largely unchanged operating loss year-over-year. R&D costs declined somewhat due to timing effects on milestone payments for Orviglance Phase III study. This caused higher cost recognition in the first quarter last year compared to this quarter. On SG&A costs, the cost increase we saw this quarter compared to last year is explained by higher launch preparation costs this quarter year-over-year.
With that, I leave the word over to Magnus.
Yeah. Thank you. Please move to Slide number 25. I'd like to end this quarterly update with our focus on our key priorities. The clinical development of Orviglance in the SPARKLE study is our top priority. This is also the reason that Carl mentioned that we are postponing the initiation of patient enrollment in the Oncoral Phase II study. We believe and work our utmost to complete the SPARKLE enrollment this year. We continue our preparations for Orviglance commercialization and have many activities. Some of this has been presented recently and more will happen as we progress towards launch. We have a dedicated team for preparing for a successful launch of Orviglance. This was our final Slide. We'd be happy to take any questions.
Thank you. Ladies and gentlemen, if you have a question for the speakers, please press zero one on your telephone keypad. The first question comes from Ludvig Svensson from Erik Penser Bank. Please go ahead.
All right. Thank you, the Ascelia team, for taking my question. My first question to you announced in a report, obviously, that you're postponing the start of the Phase II trial with Oncoral. Can you elaborate a bit on this decision and also if it would have any impact on your collaboration with Taiho?
Thank you, Ludvig. No. To end with the last part of the question, we don't think this will have any impact on our collaboration with Taiho. We have a good dialogue with them and that is good. The reason is strategic, but it's also fairly simple. The most important activity we have right now is completion of the SPARKLE study. If we were to initiate the patient enrollment part of the Oncoral study, we would have to have people in the team who are today working on Orviglance Phase III spend some of their time on the Oncoral. We would take away resources from Oncoral Phase III. That is just not aligned with our key corporate objectives.
Understood.
It's nothing dramatic. It's mainly just to focus on the most important things for the company.
Yeah. Got it. Okay. My second question is if you could say something more about the patent application in connection to the food effect study and what possibilities this could bring.
As we mentioned, we have filed a patent application. What is interesting when you have an oral drug, then you always need to understand is there any effect if you are fasting or whether you have something to eat. What we tested in this study was the enhancement with unenhanced, so the patient was fasting, a light meal or full meal. As we announced, we didn't see any effects, any difference between the fasting and the light meal enhancement. We think this is important information because this will allow in a clinical setting a more convenient setup for these patients. Also, a number of the patients with severe renal disease, which is a target indication for Orviglance, they have diabetes.
For diabetics to be fasting for a long period of time is not convenient and not recommended. This is a very important result for use in the clinical practice. If the patent is granted, we do not know at this point, we just filed the application. We need to follow the rules and procedures for a patent. If it's granted, we can potentially have it in the label and that would strengthen our position versus potential competitors.
Yes. Perfect. Thank you for that answer, and that was everything for me. Thank you.
Yeah. Thank you for the question, Ludvig.
Thank you. The next question comes from Sten Westerberg from Analysguiden. Please go ahead.
Yeah. Thank you. My first question, given the exclusion of the Russian centers in the SPARKLE study, could you discuss any additional measures that you are taking in order to keep up the patient recruitments in the Phase III study? That would be my first question. Secondly, given the study design of a placebo-controlled study and in a patient population running certain risks, would you say that a positive outcome of the study merits you to apply for priority review by the FDA? Thank you.
Okay. Yes. Thank you, Sten. Are you ready with the question or do you have additional?
Oh, that would be my two questions, please.
Okay. Thank you, Sten. I'll start with the first one. To compensate for the Russian site. Yes. As Mange mentioned, we had 13 sites there. The strategy there is to basically open up new sites to compensate for those. That's something that's been ongoing for some time now. What we do is we put, you know, additional pressure on the sites that are already open. In addition to that, we also see, you know, a slightly better environment now when it comes to the target that previously has had an impact on our recruitment. Improvement in the target situation, pressure on the sites that are already open.
In addition, we are opening new sites and primarily in countries where we already are, you know, active now. That's sort of the answer to the first question. The second question, can you clarify the question somewhat, then it's easier to respond.
Sure.
I assume it was since it was placebo or was this referring to the Oncoral study, separate?
Yeah. Yes, I'm thinking of your possibility of applying for a priority review, given the fact that the patients that you're treating don't have another option, which could be one criteria for earning a priority review by the FDA.
Yeah. We have not discussed priority review specifically with the FDA. What I can say is that we had some very good and constructive discussions with the FDA regarding this study in connection with the IND. Because if you open up a study and open up sites in the U.S., as you may know, you need an IND. To do that you need to submit your study design and have a discussion with the FDA. That discussion was, you know, very positive. However, priority review was not discussed specifically. It may come up in the future. I can't really respond to that right now.
Okay. Thank you for answering my questions.
Thank you. Ladies and gentlemen, let me remind you again. If you want to ask a question, please press zero one on your telephone keypad. Thank you. Once again, if you have any question for the speakers, please press zero one on your telephone keypad.
Yeah. We have received one question on email when we can expect top-line results from the SPARKLE study. We have not. I mean, what we have communicated is when we expect to have the last patient in the study, which is this year. Carl, maybe you can talk a little bit what happens after the last patient and before we have the top-line result, what needs to happen in between.
Yes. Assuming that we will have the last patient in, say, end of this year, and that's sort of our plan. Then there's a procedure. First of all, that's an important point here, the follow-up for each individual patient is uniquely short, right, in this study. It's only five days, and it could be as short as three days even. That means that once all patients are recruited within a week, we will have all patients out of the study. Then there is an operational procedure when you clean up the data and you collect the final data. We need to do the readout of the last MRI scans, for example. That's a procedure that takes a couple of months.
Once we have that, I'm talking about two-three months, we will be able to communicate the headline results. We will do that as soon as we have them, but that's the timeframe. We're talking about, in that case, you know, early 2023, depending on when we have the last patient into the study. After the headline results are communicated, then there's further analysis of the data and cleaning of the data. A couple of months later, we'll have this final study report, and that's the study report. That will be what we are, you know, submitting to the regulators for regulatory approval. That's sort of roughly the high-level procedure. I hope that's the question.
Just to clarify that, once we have the top line data and they are quality controlled, then we will announce the top line data. We will not wait until we have the final study report. We will follow the usual practices by our colleagues in the industry that the steps of communicating. We received another email question here. The question is if Oncoral is delayed or postponed to help Orviglance, what does that tell us of the status of the recent study enrollment in Orviglance? It's a good question. It actually in my perspective doesn't really say much. Because what we
The reason for postponement is we don't wanna take any resources away, any people working on the Orviglance study to get going on the Oncoral study. In our perspective, it's better to focus very diligently on the Orviglance, the SPARKLE study. When we initiate the Oncoral study, we want to have the full team ready to have momentum from the very beginning. As you can see, this is the prioritization that we have made. There's also a question relating to if we can be more specific on when we expect completion in the second half. I mean, this is the guidance that we have provided at this point, so we cannot specify any further than that.
I think that was the question we have received by email. Are there any further questions, operator, on the phone?
There are no further questions. You speakers, the floor is yours.
Okay. Thank you, everybody, for listening in to our first quarter report of 2022. We are working hard on our key objectives, making good progress. And we will keep you updated as we develop the company through this year and beyond. Have a great day.