Thank you operator, welcome everyone to the webcast for Ascelia Pharma's Q1 report in 2023. We look forward to updating you on our progress in this quarter. Now please turn to slide number two. We will be making certain forward-looking statements on this call, so please pay attention to this. Ascelia Pharma is dedicated to improving the lives of people living with cancer by offering better treatment options. In particular, we focus on rare cancer conditions. Our business model is to identify, develop, and commercialize novel drugs that address unmet medical needs within oncology. We have two drugs in clinical development. Orviglance has completed patient enrollment in a global phase III clinical study. Headline results are expected in the middle of this year. Orviglance has Orphan Drug Designation from the FDA and is targeting an addressable market opportunity of $800 million.
Oncoral is ready to start phase II in the treatment of gastric cancer based on encouraging results in phase I and a high level of unmet medical need. Our company is based in Malmö in Sweden, and we are listed on Nasdaq Stockholm. The first quarter of 2023 was eventful, and we continued to make solid progress, in particular with SPARKLE, phase III clinical study for Orviglance. In February, we announced that the enrollment target was met, and in early March, we could announce that 85 patients had completed SPARKLE. As we guided in December last year, we expect to have the headline results during the middle of 2023, this year. Following the completion of the patient enrollment, we provided an investor update on our plans to bring Orviglance to the market on March 14th.
In March, we could announce that Oncoral has received a notice of allowance for a third patent in the U.S. The first quarter also included the tragic and unexpected passing of our board member, René Spogárd. René played an important role in the development of Ascelia Pharma, and we are very grateful for his contributions during the six years he was a member of our board of directors. We'll go into more depth on our pipeline, and I'd like to hand over the word to our Chief Scientific Officer, Andreas Norlin.
Thank you, Magnus. Orviglance is a novel oral contrast agent for magnetic resonance imaging, MRI, of the liver, which addresses a very specific unmet medical need. Liver metastases are common in patients with a variety of cancer types, such as colorectal cancer, metastatic breast cancer, and gastric cancer. The liver metastases are developed over time and are often the primary cause of mortality. Being able to visualize and detect metastases are therefore crucial when making treatment decisions for patients with metastasizing cancers. Today, contrast enhanced MRI is the gold standard for examination of patients with suspected or known liver metastases, and all available contrast agents are based on the heavy metal gadolinium.
Gadolinium works well as MRI contrast agents, but in patients with severe kidney impairment, use of gadolinium-based contrast agents has been associated with an increased risk of severe side effects, a condition called nephrogenic systemic fibrosis, which sometimes even 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 poor kidney function may not get the best MRI procedure and risk to not get the optimal management and treatment of their cancer. We envision that Orviglance will address this unmet medical need and become an efficacious non-gadolinium contrast agent for cancer patients with impaired kidney function in the future. The clinical development program for Orviglance consists of nine studies.
Eight studies have been reported with consistent and strong evidence for a positive efficacy safety profile of Orviglance. In early March, we completed enrollment of patients to SPARKLE, the pivotal phase III study. We are moving ahead according to plans with readout of headline results in mid-2023. In total, 286 subjects will contribute to the overall clinical evaluation of Orviglance. To validate the results from individual studies, two additional evaluations, rereads of liver images from the first six studies have been carried out. One reread included all the patients from the phase I and phase II program, plus patients from a compassionate use program. The second reread was an evaluation of a phase II study that compared Orviglance against a liver-specific gadolinium contrast agent.
The results from these rereads confirmed with high statistical significance that MRI with Orviglance improved visualization of liver lesions compared to unenhanced MRI, and that Orviglance had a comparable efficacy as the gadolinium contrast agent. In the second reread study, the one comparing Orviglance with gadolinium contrast I just mentioned, we used the same method for evaluation of lesion visualization as is used in SPARKLE. This is important as the success of SPARKLE is determined by this endpoint, and the new reread allowed us to update our prior knowledge and assumptions for what is needed to demonstrate a clinically meaningful effect in this pivotal study. Visualization is measured by two different parameters: border delineation, how sharp the border between the normal tissue and the lesion is in an image, and the lesion contrast. How big difference in brightness between the lesion and the surrounding normal tissue is.
Here you can see an example. To the far left is an unenhanced image of the liver with a barely visible lesion inside the white circle. To the right of that is an image of the same liver section taken after administration of Orviglance. The lesion inside the orange circle is much easier to see now, with both a sharper delineation and greater contrast between lesion and surrounding tissue. In clinical studies, including SPARKLE, the evaluation of the visualization of lesions are carried out by three independent blinded radiologists or readers. Each reader scores border delineation and lesion contrast for all the observed lesions in all images from all patients. For each of the three readers, the difference in the scores between en-enhanced and unenhanced images are then evaluated through statistical testing.
The primary endpoint is met if two out of the three readers scores both border delineation and lesion contrast for Orviglance MRI higher than unenhanced MRI with statistical significance. By use of this evaluation method in the re-read study, we could demonstrate that with only 20 patients with liver metastasis, Orviglance was superior to unenhanced MRI with a significance level of 0.009. Based on this, and also when accounting for differences between the re-read study and SPARKLE, including the more heterogenic patient population in SPARKLE, dose differences, as well as the fact that hardware and software of modern MR equipments are different now than when the phase II study was conducted, we are optimistic that we can see an equally good improvement of visualization when we get the headline results from SPARKLE in the middle of 2023.
With that, I hand over to Julie, our Deputy CEO and Chief Commercial Officer.
Thank you, Andreas. The addressable market for Orviglance has a global value of $800 million annually. This includes our previous estimate of $500 million-$600 million in the U.S., Europe and Japan, and it includes other attractive global markets. Our addressable market is based on a well-defined patient population, supported by real-world data, i.e., realized procedures in cancer patients with poor kidney function who also have abdominal imaging procedures. The addressable market is also based on payer research supporting an attractive pricing. Building our own commercial team in the U.S. allows us to create an attractive top line and retain value in Ascelia Pharma. For other markets, starting with the E.U. and Japan, our strategy is to maximize the value of Orviglance by working with existing partners with existing capabilities. The U.S. is the largest commercial opportunity.
In the U.S. alone, our real-world data shows that 100,000 abdominal imaging procedures are performed in patients that fall under the black box warning for gadolinium contrast agents, which is about 4% of the cancer population. In terms of pricing, we have extensive input from market access and pricing experts, where we have tested different pricing levels and collected insights on the evidence needed to support access and reimbursement. We have investigated pricing and access benchmarks of other innovative diagnostic drugs in the U.S. For the U.S., the attractiveness and clear path to market provide a strong case for commercializing Orviglance on our own by building a U.S. commercial team. The target patient population for Orviglance has multiple health complications, suspected liver metastasis and poor kidney function.
This means that decision-makers for use are centered around 2,000 radiologists, most of whom can be found at around 400 hospital groups. Therefore, a focused team of around 40 FTEs can reach priority decision-makers at launch. The team will be supported by a lean office and operations team, where selected capabilities will be outsourced based on learnings from similar emerging pharma U.S. launches. Our global manufacturing partner, Cambrex, is also in the U.S., and our supply chain preparations are on track. Our current focus is to gradually build our footprint and relationships with key stakeholders in the U.S. This includes a number of leading radiologists and Key Opinion Leaders, of which some are among our phase III clinical study site investigators. 90% of healthcare professionals in the U.S. are concerned by issues related to gadolinium contrast agents, including NSF.
In fact, 16% of these 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. The insights confirm the concerns with gadolinium in clinical practice and the unmet need for Orviglance. Beyond the risk of NSF in kidney-impaired patients, gadolinium is well known to be retained in the brain and tissue in all patients. 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. It's difficult to remove in our sewage systems, it's discharged into the environment and into our drinking water. There's an urgency from regulators, medical bodies, and governments to find a viable alternative to the growing use of toxic gadolinium.
An alternative that is neither associated with the short and long-term safety concerns, nor with the unknown effects of gadolinium in our environment and drinking water. In short, the momentum for an alternative to gadolinium is getting better and better. The industry is responding. Recent dynamics tell us that the direction of the large gadolinium manufacturers innovation is focused on smaller doses of gadolinium and there's even an early-stage manganese full body contrast agents in phase I. We are excited that we have a head start and that Orviglance is expected to be a first-in-class to lead a gadolinium-free future. To round off the commercial update today, the value proposition of Orviglance is recognized by key stakeholders. We have a well-defined patient population, solid data from phase I and phase II, showing efficacy in lesion visualization compared to unenhanced MRI.
Physicians tell us in market research that they are likely to or definitely will use Orviglance for the target patients at launch. We have encouraging feedback from Key Opinion Leaders and SPARKLE investigators, both when it comes to the unmet need and when it comes to the experience with Orviglance images. This gives us solid confidence in the commercial potential of Orviglance and helps us prepare an ambitious and focused launch. With this, I will hand it over to Déspina, our CFO. No, to Andreas, sorry. On Oncoral.
Thank you, Julie. We will now continue with Oncoral, the 2nd asset in our development portfolio. The active substance of Oncoral is irinotecan, a well-established chemotherapy which has been used for many years in cancer treatment. It is approved for colorectal cancer and pancreatic cancer, and is also included in U.S. and European cancer treatment guidelines for treatment of other cancers. In Japan, it is approved for gastric cancer. Today, the administration is intravenous bolus infusion, typically every 3rd week and typically at a high dose. Oncoral is a novel tablet formulation of irinotecan, based on a drug delivery technology designed to overcome issues with absorption of the drug from the GI tract. The tablet formulation enables more frequent daily dosing that could offer several potential advantages on both efficacy and safety.
It is well known that many cancer types have suboptimal treatment outcomes today, oral daily dosing may improve efficacy through a favorable pharmacokinetic and pharmacodynamic profile with more constant drug exposure at therapeutic plasma levels of the active substance. There are both non-clinical and clinical data supporting these concepts. Intravenous dosing of chemotherapy is frequently associated with severe and dose-limiting side effects, typically gastrointestinal and hematological side effects. An oral daily dosing has the potential for improved tolerability by avoiding high plasma levels and by offering dosing flexibility. We are preparing for taking Oncoral into clinical phase II, the objective is to generate a clinical proof of efficacy in metastatic gastric cancer. The strategic reasons for choosing gastric cancer are several. First, gastric cancer is a severe cancer form with a high unmet need and a potential for Orphan Drug Designation in USA and E.U.
The clinical guidelines and clinical data support efficacy of irinotecan in gastric cancer. Lastly, as shown in the figure, there is data from gastric cancer animal models indicating a synergistic effect of irinotecan when combined with Lonsurf. Lonsurf is another oral chemotherapy developed by Taiho Oncology and approved for monotherapy treatment of metastatic gastric cancer in 2019. An all-oral combination of Oncoral and Lonsurf could potentially provide a more potent treatment alternative for this group of patients. The planned study is therefore a randomized controlled multicenter, multinational study comparing Oncoral combined with Lonsurf against Lonsurf alone. Proof of concept will be demonstrated by the assessment of progression-free survival, which is a typical endpoint for phase II studies in oncology. The study will randomize approximately 100 patients and involves a clinical collaboration with Taiho Oncology, who will provide Lonsurf for the study.
The necessary regulatory approvals have been obtained. We are looking forward to starting the study. The start date has not yet been communicated as we are prioritizing the successful completion of the Orviglance development program before we can allocate the needed internal resources to ensure an effective study conduct.
Now back to Julie, I believe.
Thank you, Andreas. Irinotecan is a well-established chemotherapy with recognized antitumor effect in solid tumors. Our strategy, as Andreas explained, is to start Oncoral development in gastric cancer, which is today a $3 billion market. For these patients, there's a high unmet need for improving outcomes and the 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 many other cancer types. We are assessing these opportunities as part of our ongoing strategic plans for Oncoral. With this, I will hand over to our CFO, Déspina.
Thank you, Julie. The key message on the liquidity position is that we continue to stand with a solid balance sheet. With SEK 111 million in the bank, we have financing into Q4 of 2023 with our planned activities. Financial runway can potentially be extended into Q2 2024. The cash position will primarily be used for Orviglance clinical phase III study and DA preparation, as well as pre-commercial activities. Here we see the development in earnings. The key takeaway for the quarter compared to the corresponding period last year is that an increased loss year-over-year, which is as expected and reflects the increased R&D activity related to the clinical phase III Orviglance program in the preparation, commercial preparation, as well as phase II preparations for Oncoral. With that, I leave over the word to Magnus.
Yeah. Thank you, Déspina. I'd like to end this quarterly update with our focus on key milestones for this year and the opportunities ahead of us. We set three key priorities for 2023. The first was completion of patient enrollment in SPARKLE, which we achieved in the first quarter. The next important milestone is to generate the headline results from SPARKLE. This is based on an independent radiologist evaluation of all the images, whereafter the statistical analysis can be made, as Andreas described. We are on track for communicating during the middle of this year. The pre-launch activities for Orviglance became even more important as we are on the verge of reporting headline results during middle of this year of the SPARKLE study, and these activities will continue. 2023 will be a transformative year for Ascelia Pharma. We're well-positioned for substantial value creation.
Orviglance is a first-in-class orphan drug targeting a global adjustable market opportunity of $800 million. The headline result will come during middle of 2023. We had strong data in a similar evaluation in a 20-patient phase II study, as Andreas described, and this makes us very optimistic for the SPARKLE result. In addition to Orviglance, there we have Oncoral, which has an attractive potential in gastric cancer as well as other solid tumor types. This was our final slide. We'd be happy to take any questions.
If you wish to ask a question, please dial star five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial star five again on your telephone keypad. The next question comes from Johan Unnérus from Redeye. Please go ahead.
Thank you for taking my question, view. One thing, aspect is the U.S. team and the commercialization. Should we expect you to step up the effort once you have the headline results?
Yeah. Thank you, Johan. The question is in terms of we will increase, we could say, cost level in terms of the pre-launch? Was that the question?
Yes, indeed. Thank you.
Yeah. We will continue our preparations, and We will increase over time the pre-launch and later launch cost and that will go up. We will do it in a sort of milestone gated manner. We want to make sure that obviously we have good data on track for approval and also making sure that we have the funding in place before we make the investments. We are well aware of, you could say, the financial constraints that the current balance sheet provides us with, but we are very optimistic on a positive outcome and a positive development of the company.
At this stage you will continue to engage with KOLs and perhaps some of these targeted centers?
Yeah, absolutely. We've been doing that quite extensively. We have, you could say, both direct interaction, but also a lot of activities in relation to various conferences. We had some activity both at, you could say, at various conferences here in the spring, EASL and ESGAR. But also participation at conferences where we may not have a presentation. So this is very much ongoing.
Yes. Can you guide us in any way as to the timelines once you have the headline results? Is it realistic with the submission in early 2024?
We have not yet communicated the timeline for the NDA submission. We want to have the data in place before we communicate on that. We expect during the middle of this year to have the headline results. We are on track for that. We have also communicated that we expect the clinical study report towards the end of the year. The clinical study report is important to have the pre-submission meeting with the FDA, which is an important meeting that you have before you finalize the NDA file and submit it to the FDA. You want to basically have the dialogue and make sure that we are thinking along the same lines as the agency.
And the clinical study report, as mentioned, is needed for having the meeting with the FDA. That is, you could say, a step further, along.
I.
So we-
Take-
We'll provide guidance when we have the results.
Yeah. You can take the view that you will have the aim and you're expected to have everything ready for a full engagement with the FDA by the end of 2023.
That is, let's say, your analysis and I cannot comment on that.
Yeah. Finally, earlier during the call, you reminded us that the reassessment to reduce the number of patients, one input was that it was enough with 20 patients, diagnosed patients. In the SPARKLE study, you also include suspected patients, which is important. Is that something that could be a challenge? Of course, you need more patients if you include also suspected patients.
That's a good point. What we did in the early phase study, as you say, we had, patients had to have an identified metastasis to be part of that study. What we have in SPARKLE is, the, you know, to ensure we get the broadest possible label within the orphan condition, which is known or suspected. We also want to use Orviglance for patients who, there's no prior knowledge of liver metastasis or other liver lesions. That is why. We have assumed, obviously there needs to be a suspicion as defined in the protocol that there is a liver lesion. We have also included in the statistical analysis that there may be, you know, a certain fraction of patients will have no lesion.
That should be taken into account in our, you could say, sample size calculation.
Excellent. That was all for me. Thank you.
Yeah. Thank you, Johan.
As a reminder, if you wish to ask a question, please dial star five on your telephone keypad. I hand the conference back to the speakers for any closing comments.
Thank you everyone for listening in to our Q1 update here in 2023. As mentioned, we are on track for reporting headline results during the middle of this year, and working hard to ensure that we get there on time and we as mentioned, on track. Thank you and have a great day.