Good morning, everybody, and welcome to today's event with Ascelia Pharma. With me today, I have the Deputy CEO and CFO, Julia Brogren. The focus for today's event is, of course, the recently published Q1 report. It came out Friday, and also focused on events after closing of the quarter. As always, we will record this event, and both HCA Capital and Ascelia Pharma will publish the event after editing later today. If you have any questions, then please post them just below the video window here, and I will forward them to Julia when she has done her presentation. Welcome, everybody, and let's start. Julia, welcome.
Thank you, Klaus. It is good to be here and give you an update on our Q1. I'll, of course, do just a quick overview. Ascelia, it includes some forward-looking statements, so please pay attention to this. Just the highlights of Ascelia. We are based in Malmö, listed on Nasdaq in Stockholm. We have two assets in our clinical pipeline. One is in registration phase. It's an orphan diagnostic drug addressing an $800 million US market annually. That's Orviglance. I'll speak mostly about Orviglance today. We have an Oncoral phase two ready asset. It's a daily formulation of a well-known chemotherapy, irinotecan. We have a clinical collaboration with Taiho Oncology and an opportunity to start in gastric cancer, but also expand into other solid tumors. As mentioned, I will speak mostly about Orviglance today. Just a little bit on the highlights in Q1.
We have continued accessing experts at conferences with our data on Orviglance, mostly from SPARKLE. We have had three presentations accepted at EASL. That was actually last week. We have also announced the positive outcome from our planned FDA meeting in Q1. We have achieved a very successful outcome from our warrant series T01 exercise, and I'll get back to that as well. After the closing of the period, mainly an interesting publication is one that a poster at a conference called ISPOR, which is mainly for payers and policymakers. That is a poster about real-world data on our target patient population. I'll talk a little bit more about that as well later. There is also a publication on one of our phase two studies, the reread about an earlier study with the same methodology as the SPARKLE study in Investigative Radiology published here after the period.
A little bit more about Orviglance. It's a well-defined opportunity addressing an unmet need for liver imaging in cancer patients who also have severely impaired kidney function. We address a global market opportunity of $800 million annually. We have completed clinical development with nine studies, including very strong phase three studies. We are on track with commercial stage scale manufacturing. We have now advanced Orviglance to the registration phase. That means that we are preparing the NDA submission for the FDA. That was the highlight. Just a little bit on our focus areas and where we are. We have two key priorities. The first one is advancing Orviglance to approval. That includes the full study report we completed last year. It includes the outcome from a planned FDA meeting. We achieved that in Q1 this year.
It includes the NDA submission mid this year. Our other key priority is to secure partnering and commercial readiness for Orviglance. Our strategy is to launch with a partner with established capabilities to bring Orviglance to market. A little bit more about the unmet need for Orviglance. Managing cancer in the liver is a cornerstone in cancer care. Cancer in the liver is actually represented by 10% primary liver cancer and 90% liver metastases. In many cancer types, the liver is often the first site of metastasis and often the cause of the patient's death. It is very important to detect and manage and follow up on cancer in the liver, metastases, and primary liver cancer. The gold standard for this is an MRI.
When you do an MRI today, typically you enhance the image with what is called a contrast agent. These contrast agents, broadly available today, are based on gadolinium. That is a toxic heavy metal. About 10-15 years ago, a link was discovered between gadolinium and a very severe side effect called nephrogenic systemic fibrosis. That specifically impacted patients who had severely impaired kidney function. That is because gadolinium is excreted through the kidneys. These patients saw, you could say, a higher degree of retained gadolinium in the body and an impact on multiple organs, also potentially death. Orviglance is a manganese-based liver-specific contrast agent. It is taken up by the healthy liver cells, and then it enhances the image quality for a radiologist when following up or detecting and visualizing lesions in the liver.
That is not associated with any of these side effects for these patients. As mentioned, we've completed clinical development, but just to dive a little bit into the phase three study, which is, of course, very important, we have showed a very strong superiority in visualization of focal liver lesions. That is the primary endpoint compared to unenhanced MRI, a picture without a contrast agent. We scored significantly higher for all the three readers. That is the way you do it. You have three radiologists scoring the images. You can see here on the right side on the scale from one to four, all readers scored Orviglance and combined images much better than the unenhanced images. We also had results from secondary endpoints supporting the primary analysis. No surprises in terms of safety.
Common adverse events were very consistent with previous studies, and no serious drug reactions were observed. That really was the conclusion of our full clinical program. Orviglance has been studied in almost 300 patients, and we have orphan designation for Orviglance, which means that this is a solid clinical program for an orphan drug in nine studies in total, as mentioned. Now moving into Q1 this year, a very important milestone in bringing Orviglance through the approval process with the FDA was to have a meeting. It's standard to have a meeting before you submit the NDA. In that meeting, we present the plan for the submission, how to analyze and present the data, the statistical analysis plan, documentation for manufacturing, and the structure of the NDA.
The feedback from the FDA was very clear and concrete, and it means that we can now move ahead within the plan to submit the NDA mid this year. We have now in Q1 actually specified that mid this year will likely be the first half of August. Originally, we had defined mid year to be the six weeks before 1st July and the six weeks after. We are still within the window of our guidance here. This is just a matter of putting the documents together, and we wanted to take this extra time to make sure we really incorporate the feedback from the FDA to the highest quality. We are on track with all the elements to submit the NDA as planned this year. Now into the commercial potential.
Orviglance addresses an $800 million market annually, and almost half of that is in the U.S. This is a very focused launch for radiologists and nephrologists also who work with these patients who have severely impaired kidney function and also have confirmed or suspected cancer in the liver. We have a lot of plans in place to support the launch, and our strategy is to launch with a commercialization partner who has established capabilities. We do that to optimize for Ascelia the balance between the investment required and the return on that investment. Just in the U.S. alone, to dig a little bit into that, we have identified 100,000 procedures annually that could potentially be Orviglance procedures. That is the proportion of abdominal imaging procedures in the U.S. that are performed in patients with severe renal impairment. They fall under the black box warning.
This estimate is based on real-world data, epidemiology, and so forth. That data also helps us understand where the patients are, and we can see that 400 accounts, i.e., providers, hospitals in the U.S. actually represent 75% of the market potential. We have talked to, throughout the years, payers and policymakers and experts in reimbursement and coverage. We continue to confirm that the pricing estimate is quite attractive, $3,000-$4,500 per dose. A very attractive opportunity in the U.S. represents almost half of the overall opportunity for Orviglance. If we look at real-world practice and clinical practice around this black box warning, physicians are well aware of the concerns with gadolinium. 90% of them are concerned with different elements, not least NSF.
Many physicians have actually experienced NSF, although the black box warnings have been in place now for many years. That is one part. The unmet need is well known in clinical practice. There are other reasons why this is a really good time to come to market with an alternative to gadolinium. One is that it is well known that gadolinium is retained in the brain and other organs. Different organizations, both the guidelines committees and the FDA, want to look into what could be the long-term implications of gadolinium retention. This has been studied for years and continues to be scrutinized. We also know that gadolinium contaminates our water because it is excreted through the kidneys into urine at the hospitals and into our sewage systems, and it is very hard to clean out of the environment. There is some research going into this as well.
Good momentum for a future with less gadolinium, without gadolinium. The different players in the industry are reacting to this. The big players have launched half-dose gadolinium agents, although there is no evidence actually that NSF risk is associated with the dose size. There is another company working on a manganese agent like ours, but this is an IV agent, so intravenous, which means that it purposes a full body imaging procedure, not a liver imaging procedure like ours. Another quite interesting point recently is actually that almost all gadolinium today is exported from China. When we look at these big players, you can find online various reports and articles describing how they navigate around the risks of supply and also the price increases over the years of gadolinium from China. Partnering is our strategy, optimal balance between investment required and future revenues.
It means we can also leverage the infrastructure capabilities of a partner who is already commercializing other assets. Our job is to find the right partner, set up the right deal with this partner, and then also make sure that Orviglance is ready for launch from a manufacturing perspective and those sort of longer-time investments needed to be fully on track for a launch. These dialogues with partners are progressing well. We continue to have that as our strategy and look forward to working with a future partner. I mentioned the recognition in the scientific community. In total, recently, after our phase three data, Orviglance has been presented at major conferences so far with four oral presentations and four abstract presentations. We are out there talking about Orviglance.
It's also an opportunity to connect with these experts, of course, not least our own, you can say, experts who are presenting this to their peers. The recent one is, well, the two recent ones is the ESGAR conference last week, European Society of Gastrointestinal and Abdominal Radiology annual meeting. This is really where the experts around abdominal imaging are meeting. A very important meeting, and the presentations went very well. Also, last week was the ISPO conference. ISPO is a conference where payers, policymakers, patient associations, advocates, and so forth, they go and look mainly at real-world data, but other kinds of data and new knowledge in this space.
We presented data from real-world evidence, data we have where we follow these patients, the target patient population for Orviglance, and we can see how many imaging procedures they have and the overall cost of care and so forth. You can find the key data points actually in the press release where we announced that this data was accepted at the conference. That was about Orviglance. Now I'm going to dig a little bit into the financials briefly, not least our successful warrant exercise that brought SEK 43 million in April. That was a 96% subscription rate. We're very pleased to see this support from our existing and likely some new investors. This brings our cash runway to at least the end of this year.
We had an agreement with Fenya that we would pay back half of the net proceeds towards our loan. So we have paid back SEK 20 million, the entire loan. Then we have a convertible loan remaining, and that needs repayment end of this year unless they convert. Of course, we will preserve the cash for other things. Of course, this runway also excludes financing from partnering. The cost in Q1 were consistent more or less with Q4, and the focus is on the NDA preparations in terms of cost. At the end of Q1, we had SEK 57 million in the bank. That excludes the financing from warrants, which came in in April. As mentioned, we have a cash runway to at least the end of this year.
Just to wrap up, key priorities, submit the NDA so we can move forward to approval and establish the partnering agreement so Orviglance can be prepared for launch to be available to patients after approval. Klaus, that was the introduction.
Yes. Thanks a lot, Julie, for a thorough presentation. With that, we will open up for questions. There's a couple of questions coming in here, so we will dive into them. Let's start up with the regulatory process. You got really positive feedback, as you mentioned, and you also took us through an updated timeline for NDA submission. Do you see any challenges before you file, or are there any challenges at all?
We have worked hard to align with FDA during the development process. That's another reason why we have this meeting that is very typical to have before you submit.
That is one key way of, you can say, mitigating risks. The other part is, of course, that we have very solid data from our phase three study. Also, throughout the clinical program, it is very consistent. There is always a lot of effort into minimizing risk and so forth. We are working hard, and we are confident with the NDA file we have. There are always questions. Of course, we prepare in the background to sort of outline what questions might the FDA ask, not necessarily that it should have been in the NDA or there is an issue, but it is a way of clarifying the path forward with the FDA. Of course, you negotiate the label, and that is typically towards the end. You have your optimal label, and then you find out how you can agree with the FDA to obtain that.
We do not expect any unforeseen challenges. Of course, the FDA is the FDA. Now, there are also some concerns from a resource perspective, but we have not experienced that. The key is to mitigate risk along the way, and we have a solid plan for that. Of course, it is hard work to go through a review process with the FDA, and we are prepared for that.
Yeah. Let us just, because I think you mentioned it before, if not today then at earlier events, you have prepared for the last couple of years, your side of the equation, both in terms of manufacturing, what strategy to pursue, and so on. One thing we are still waiting for is, of course, besides the positive feedback from FDA, hopefully, a partnership deal.
Do you think you are able to, and this is maybe a difficult question to answer, do you expect or do you see any benefits in a partnership before you file, or do you see a better upside if you file during the process or after the process?
As you said, those scenarios have different pros and cons. The further we take the asset, the more value we keep, right? So we de-risk it. In any case, we are so far now that we will have most of the knowledge for quite some time. It would be good, of course, if a partner is involved, especially in preparing the launch and in making sure the partner fully owns the asset and the data. Now we are the ones with most knowledge about the data and the NDA. We are in a good position to submit the NDA.
It has pros and cons when to sign a partnering agreement. It also depends a little bit on what type of partner it is. Some have more focus on their commercial arm, and I could say, "We'll let you handle the NDA and then give you higher potential payments or milestones for that." Others will be saying, "We would like to be involved in the review." I think I completely understand the questions, and we get many questions. It is very understandable. I think, on the other hand, it is probably not to anyone's benefit that we sort of leave out options or guide in a way that would not allow us to have the best possible outcome of this process. That is our focus. We are working extremely hard to succeed with that, and that is our goal. We look forward to, when timing is right, communicate that.
It's not like we should not expect the door is closed as soon as you file in terms of partnership because we want to see more evidence. This is maybe a stupid question, but just to elaborate a little on the process in looking for a partner, I know you have some really good comments on that one.
From our quarterly call Friday, yeah. I think just to say, in terms of data, you mentioned data. We have a very strong data package, and we've now discussed it with the FDA. We don't believe there's a high risk that we don't have enough data or data solid enough for an approval ability.
No, I was thinking more about the partner. Yeah. You have a different upfront or different package compared to if you take it to final approval. I think we understand that.
It's not like the window is closed when you enter into this NDA filing process. You're still able to announce a partner and find partners in that window. Isn't that true?
Yes, absolutely. I mean, there are a lot of partners that sort of, for example, those who are called specialty pharma, or so to say, that are very focused on their commercial arm. They take assets when they are very de-risked, and then their focus is to bring them to market. That's their core capabilities. They would say, "We want to leave it to you to make sure that it's approved." That doesn't mean we wouldn't enter an agreement before approval, of course, if we can. I mean, the NDA submission as such, I would say, is not a carved-in-stone sort of date where it has to be before.
No, but the best thing is to continue working on it. I think we talked about recently the process of that is, of course, that you have those, of course, a screening that is, of course, past us now, but you continue on working, building those relationships and have a very solid data room and address questions and discuss with the different experts on the partner side. I think we've discussed at another meeting, the two of us, that that process is ongoing and going well.
Good, Julie. Just to drill a little on the partnerships because I know a lot of investors are waiting for that. Of course, you look forward to present it as well. Can you share some information about how would you like a good deal to look like in terms of milestones, royalties? Yeah. Elaborate a little on that, Julie.
I think a good deal is not far from what we see as a standard in the market. It's a combination of future revenue with milestones and future revenue from royalties, but also some upfront and some cash, more related to the near-term milestones. A combination of those things would be the right thing for Ascelia. Within that, at the end of the day, it's about determining the NPV, the value of the deal, and what's the right combination. We expect it to be a good combination of what we generally see in these kinds of things, knowing that we have taken this asset quite far. We're not talking about a phase one program, and that should also lead us to some really interesting future revenues from royalties because it's quite a de-risked asset, so to say. Good.
There is a question more here about partnerships going a little on what we just talked about. As the financial runway only runs to the end of this year, how does Ascelia Pharma plan to ensure financial sustainability beyond this period, especially if there are delays in the FDA approval or challenges in securing commercialization partnerships for Orviglance? That is a quite good question and addresses some of the things we just spoke of. Could you elaborate a little on that, please?
Yeah. First of all, as I said, to at least 2025. If you add sort of the SEK 20 million-plus that remains from the warrants exercise to our SEK 57 million, then you can see that we have quite a solid amount of cash at the moment. Should things take a little longer, then, of course, costs also come more slowly.
If the timelines change, typically, costs also stretch out, and that gives a longer runway. I mentioned that, for example, if it's attractive for Finnair to convert, then the SEK 7.5 million would not be paid back end of the year. Their conversion price is SEK 3.38. We are sort of above that now. I'm not saying they should convert. It's up to them. Right now, we are in a fair solid position with regards to the convertible. Of course, as this question also relates to that, we aim to have financing from partnering. Of course, should things be different, we have our plan A& plan A and plan AAA, and they are to have a partner and submit the NDA. Every company, Ascelia, like any other company, needs to have alternative, you could say, mitigation plans.
There are different financing models. Of course, one is equity, but there are actually other financing models with sort of also equity towards future royalties, towards future revenue, and things like that. When we have an asset this far and this close to market, there are actually some quite interesting opportunities for financing beyond the standard equity financing. Loans that bring you forward, equity towards royalty and so forth, or future revenue. We have a plan, but the main AB&C plan is that we have a partner.
Thanks a lot, Julie. I think you addressed it very well. There is a question coming in here on, we are close to finishing for today. Why are you sending in the FDA application in August?
I don't really know what this guy means by that, but you can say you have planned so far to file mid-2025, and on your Q1 report, you are more precise about when you will send it in so we can well address it like that. Okay, he's asking, why not earlier? Why not earlier?
Okay. We communicated mid this year, and that's a milestone we've had for quite some time, actually, from our phase three data headline. Then we had the meeting with the FDA, and we've just so it's within the guidance, early August.
We just want to make sure that the feedback we have from the FDA, that we take our time to double-check that we really have incorporated that to the highest high-quality standards of the FDA so we avoid spending time or later on having to rework some ways that the data is presented or something in the statistical analysis and so forth. I mean, we see this as within the guidance we have, and we are very comfortable with this timeline. It also means now that we are close, so we are counting down, you can say, day by day. That also reduces the risks of any further delays. Yeah. I think we should add the question, if we are not on summer vacation, not at that time. I think that's a good tip. Yeah. You never know.
No, by that said, thanks a lot, Julie, for, first of all, a thorough presentation of where you are right now. Thanks a lot to the audience for all the great questions. By that said, I will close today's session and hope all of you get a really nice Monday. Thanks a lot to you, Julie, for today.
Thank you, Klaus.