Earnings Call: Q2 2020

Aug 20, 2020

Thank you, operator, and welcome, everyone, to the webcast for Celia Thomas' Q2 report in 2020. Mentioned, I have the full technical team here with me, and we look forward to updating you on our progress in the quarterly report. Now please turn to slide number two. We will be making, certain forward looking statements on this call, so please pay attention to this before moving on to slide number three. Cancer is a major health burden for mankind, with millions of people being diagnosed and treated every year. Annually, more than one hundred and fifty billion dollars is being spent on therapies, making this one of the largest segments of the pharmaceutical market. Within this huge market, orphan drugs used to treat patients for rare cancer indications is an important high growth segment, and this is the focus area of a ciliatoma. Within this orphan oncology area, we focus on drugs that address an unmet medical need, and also have a clear development path and an attractive commercial opportunity. This is the case for both Mangro and Oncrow in our clinical development pipeline. We have a very strong and experienced team based in Malmo, Sweden, with a strong track record in late stage drug development and commercialization. We are well financed to execute our strategy. Now please move to slide number four. For Xelafarma, 2020 is the year of clinical development focus and preparing for commercialization. In February, we announced the first patient had been enrolled in SPARCL, our registration enabling global phase three study for mangrove. In April, Onco patent was granted in Japan. This is an important milestone as Japan is the second largest market in the world for Onco. In May, in the midst of the COVID nineteen pandemic, we recruited the first patient in the hepatic impairment study for Macro. And at the June, we issued shares to a number of strong institutional investors in order for us to invest more aggressively in the prelaunch activities and thus further improve our ability to create shareholder value. Now please turn to Slide number five. We have a strong pipeline with a very substantial potential. Our lead program, MAGRO, is a novel diagnostic drug in a global registration enabling Phase III program called SPARCLE, and it has FDA orphan drug designation. It's targeting an addressable market of $350 to $500,000,000 on an annual basis, which is not served by any other product currently. And Mangro has already completed six phase one and two studies. Study is ongoing, the SPARTAL study is ongoing, and we expect to complete it in the second half of twenty twenty one. As communicated during this quarter, there's been some impact from COVID-nineteen, which is why the completion is expected to be delayed compared to our earlier expectation. Our other program is being prepared for Phase II. It's Oncoral, which is a novel tablet formulation of a chemotherapeutic drug, irinotecan, and is being developed for the treatment of patients with advanced gastric cancer. It has completed Phase I development with very encouraging data. Now please move to slide number six. So here, I'd like to give the word to our chief medical officer, Karl Jatner, for more in-depth on our pipeline. Thank you, Magnus. So I will now provide some more details on the clinical development of these two candidates. So we have Nagra, the contrast agent for MRI explanations of liver, and Oncoral, the novel tablet formulation of arenautecam for gastric cancer. Please go to slide number seven. So the contrast agents that are available today for liver Maria are all based on galvania, the heavy metal, which is dosed intravenously. So in most patients, galvania can be used. The problem is that gadolinium based imaging drugs are not safe in all patients. And specifically, they should not be used in patients with poor kidney function. Since gadolinium is is excreted to the kidneys, a slow elimination can cause some serious side effects. And for that reason, the regulatory authorities, for example, in The US and the European regulators, have implemented restrictions for patients with impaired renal function. So that is very, very specific unmet need, And this is illustrated on on the slide. So today, patients with normal kidney function, and that's most patients, can receive gadolinium based imaging drugs. However, patients with severely reduced kidney function lack an imaging drug today. In the future, this unmet need can be met by Mangrave. This specific target population is approximately four percent of all patients requiring a liver MRI, and that is approximately two hundred and eighty thousand patients per year in the major markets, and that's US, Europe, and Japan. And it meets meets the criteria for an orphan indication. And it it's important to note here that, nigraol is the only liver specific contrast agent in clinical development, so we're way ahead of any competition. Please go to next slide, number eight. So the pivotal phase three study SPARQL investigates the efficacy and safety of mangrove in the target population with focal liver lesions and poor kidney function. And the study is expected to be completed next year. And as shown on the left, there is a strong clinical proof of concept through six individuals, phase one or phase two studies, and with very consistent results. This data were confirmed by an independent reanalysis by a blinded reader, which showed highly significant effects on the parameters that is also used in our pivotal phase three study. And this is shown on the right side of the slide, which illustrates the phase three design, the sparkling design. And the study, which is a global study with approximately 200 patients, has been agreed with FDA and EMA. And the strategy here is to repeat and confirm the phase two results using similar endpoints. So the primary endpoint is lesion visualization, and that's based on co primary parameters, lesion delineation, and lesion contrast compared to background. Since there's no available contrast agent for patients with impaired renal function, the comparator will be unenhanced MRI, which is currently the standard procedure for these patients. There is therefore no randomization, but each patient serve at its own control and designed that has advantages when it comes to sample size and statistics. Finally, the follow-up for each patient is very short, as you can see on the slide, compared to most clinical studies. We will therefore have the finalized study relatively sooner than a typical study of a similar size. Now I'm going to switch over to Oncirall, our second candidate in clinical development. Please go to slide nine. Yes. So in the in the same way as we have a strong clinical proof of concept for mangrove, there's also a strong clinical proof of concept for areinotecan, which is the active ingredient of Oncoron. Arinotecan is a well established chemotherapy, which is currently given intravenously. As a novel oral formulation, ochorone has several potential advantages. First, the convenience of oral administration. The drug can be taken at home instead of intravenously in the hospital. And second, the well known side effects associated with intravenous dosing and high plasma levels. For example, nausea can be avoided. The daily oral dosing of Oncoron makes lower but still therapeutic plasma levels of the drug. And third, chemotherapy is often a combination of drugs, and Oncoron provides the possibility for an all tablet or oral chemotherapy combination together with another established oral chemotherapy. For example, casitabine or TESS one zero two. For Oncoral, the intended indication is gastric cancer, a severe cancer form with significant unmet needs. Gastric cancer is a rare orphan indication, which provides several potential advantages from a drug development perspective. And once approved and on the market, the label expression can be considered. And here, we are, as mentioned, currently preparing for the phase two study. With that, I want to hand over to our commercial officers, Julie. Thank you, Karl. Please move to page 11. So on our commercial preparation for MicroRel this year, we have advanced our strategies that includes defining our prelaunch plans and position for it going ahead. We've developed our positioning and targeting for L'Engraal, and we've selected further pricing and market access insights in key markets. For the remaining part of the year, our focus will be on progressing our go to market blueprint. That includes defining and developing a blueprint for a US operation run by ACilia and also a plan for partnering in the rest of the world. We'll also be advancing our market sizing and rollout priorities, and we will kick off the more externally oriented dialogues with payers and clinical decision makers. Next year, our focus will be on expanding these external activities and prepare to also launch, as mentioned, towards the '2 or early 'twenty three. Moving to page 12, an update on our outlook for the optimal market launch strategy. We believe there's a strong case for developing our own US commercial organization. A team of 10 to 20 FTEs can reach the target health care professionals you using MRI and contrast agents. These are typically radiologists, and they would be in larger hospitals with nephrology units, or they would be at independent MRI clinics. This US capability will include commercial functions, but also a support team. And we believe the best setup is to partner with local, organization to optimize logistics and distribution. For the rest of the world, our assumption and plans are that we would have leverage the up the market potential by finding partners. First of all, we will define the the markets with the highest potential, and we will use the synergies that we have from our global data and US operations in these markets. But we'll find an ideal partner who has synergies in each individual market. So that's the end of the commercial update. Thank you, Lee. Now turn to page 14. If we look at the operating results for both the second quarter and the first half, we have an increased operating loss compared to last year. This is logic and expected and reflects the continued progress and spend on the clinical development program for Mandrel as well as ramping up on our commercial and manufacturing preparations. If you now turn to page 15 and our liquidity position, the key message here is that we continue to stand with a strong liquidity position. By the June, we had 145,000,000 kroner in cash, This cash position was further amplified with the direct share issuance that we completed at the June, where we raised 99,000,000 kroner. We are very pleased with the participation in the share issuance from highly reputable institutional investors, including those, the existing long term shareholders, AP Sol and Harris Bank and Fonders, as well as a new group of investors, institutional, including HealthInvest Partners, Lancet, and Home Trusting for New Union and Just Invest Capital Management. We see this strong investor risk as a further validation of our attractive growth pipeline, and we will continue to work hard to demonstrate the value to all our shareholders. The funds obtained in the sharing shares are important as we progress macro and prepare for the market launch. Accounting wise, the proceeds from the sharing issuance was received in the July, I. Just after the accounting period. With with proceeds, the cash position in the July was 239,000,000 quarter, again, underlying the strong cash position. With that, I leave the word over to Magnus. Yeah. Thank you, Christian. And please move to slide number 17. So our priorities for the rest of the year is to continue our progress in our ongoing clinical programs. Our team is working very hard on this, and I have great confidence in them to deliver. We're also preparing for commercialization, and we have many activities ongoing that will enable us to, say, further elaborate our value maximizing strategy for Mengril. A lot of work is ongoing, as mentioned, and we expect to be able to update you further as we progress. Another important activity, as Colin mentioned, is to complete the design of plan for the Oncoral Phase II program, which could pave the way for potentially starting the Phase II study next year. So moving on to slide number 18, summarizing of ciliopamma. We are advancing orphan oncology, where we focus on the unmet needs with a clear development, pathway and market opportunity. We have strongly, strong balance sheet to to fund our activities with Mangro, the only product targeting a 350 to $500,000,000, addressable market with, no competing drugs and getting results next year. Oncrol, ready to start, phase two next year, as a novel oral chemotherapeutic agent for for gastric cancer. Very strong, data in the phase one program, which bodes well for the future. This concludes our call our presentation on the call, and we'd be happy to take any questions. Thank you. As you wish to withdraw your question, you may do so by zero two to cancel. Ask your loss having Thanks. Yes. Do you hear me? Yes. Yep. We hear you, Lars. Yeah. Thanks. Can you just remind me about the, I mean, the the the enrollment into the SPARKL trial in in brief, the the comparison for patient tube who who will do a scan outside a a clinical trial environment and and within this trial. Just remind us, please, the differences in in the procedure, the number of visits, etcetera, in in in in very practical terms. Okay. So, your question is about the differences in clinical practice and in in a clinical trial setting, if I understand correctly. Yeah. Then then what's the, you know, the the additional guidance, so to say, so so we just understand, you know, is is this a big effort, so to say, from from from the patient to participate? Yeah. The the short there is and this, of course, depends on, you know, the individual cases, the individual patients, and and the workup to before they do the scan. But but, basically, in in our studies, you you need a screening visit when the patient comes in and and you assess if the patient is eligible. But after that, you know, the procedure is very much close to the clinical practice. You do an unenhanced scan, and you do an enhanced scan with with the contrast agent and that's the clinical practice today. And then we have a few follow-up visits after that. But but in that context, they are relatively few and compared to definitely compared to to most other commercial studies. And as you could see on the slide here, I believe that, you know, the follow-up is is, you know, five days plus minus, two days. So it's it's it's a relatively short, follow-up. And and to the extent there are follow ups in in in clinical practice, I mean, that there are sometimes. So so, I mean, to answer your your question, there are some more visits, a little more burden, but it's very minor, I would believe. Okay. And and again, the the number of participating centers, I guess, it that's gonna be a difference, of course, from number of patients presented. But in in rough terms, what's your current assessment of of number of centers that you would like to have participating in the trial? Yeah. We have roughly we're aiming for roughly, 35 centers, and that's what we have from the beginning. Having said that, you know, in order to to meet the timelines for enrollment and completing the study, it could be that we will adjust and add on the new sites, and that depends on on recruitment. And that's that's a normal procedure. You always do that. You monitor your recruitment rate, and then if needed, you can open up more centers, more sites. But it's it's certified, and there may be more centers as we go. And and I I fully agree with that. And I think just to add on to that, being sort of a global, phase three program, this is also know, we're getting very close to commercialization. So with that in mind, we're also thinking of, let's say, important, opinion leaders that will influence, you know, will have an important say in the market to include them, not necessarily because of added enrollment speed, but but just to make them champions and and and, give them more experience with our product so they can endorse it once the product becomes commercially available. So so that's another factor for considering the number of sites. Okay. And and and and if if you would target, so let's say, a new center today, when what's the time frame for for that trial center to I mean, typically to to enroll the first patient? Yeah. If you that that depends on how you start and when you start, but but, usually, to start from scratch, you need it's a regulatory procedure and paperwork for for you need a a big approval and and regulatory approval for that site. But in in general, you're talking about two to three months perhaps, and that that that varies. So you need a contract with with with the site, and and that could take, you know, sometimes longer. We'll talking about month here. Okay. Yeah. Okay. Thank you. Sure. My fault. Thank you. Just as a reminder, tapping keypad. Okay. There appears to be no further questions. So I'll hand back speakers for a lots. Well, thank you, everybody, and we look forward to to continue our operational progress and and updating you on that as as as we move forward. So well, in these very exciting times for for our company. So thank you very much for for listening in, and have a great day.