Welcome to Ascelia Pharma's Capital Market Day 2020. I am Magnus Corfitzen, CEO of Ascelia Pharma. I'm excited to share our progress with you. We will also talk about how we are on the path to realize the tremendous potential in our company. Today, at our Capital Markets Day, you will get a status on Mangoral development. We will also do a deep dive on the commercial opportunity where we've made significant progress lately. We will share with you a pre-recorded presentation here that had been filmed in front of a live internal audience. Later today, we will host a live Q&A session where we look forward to engaging further with you. Ascelia Pharma is dedicated to improve the life of people with rare cancer or cancer-related conditions. We do this by developing our two unique drug candidates, Mangoral and Oncoral.
Both of them are based on solid scientific understanding and a clear opportunity to make a significant and positive contribution to the people in need. We are well-positioned to succeed. In Ascelia Pharma, we've built a strong and experienced team to lead the development and the commercialization. Equally important, we have established relationships with the world-leading doctors and other important partners and stakeholders to ensure cutting-edge expertise and capabilities to bring our products to the patient in need. Part of our capabilities is also a solid financial position to fund our growth. We're fully funded for the Mangoral phase III program. Right now, we are in a transformative period of Ascelia Pharma. We're in the final phase of clinical development of Mangoral, and we are in the process of becoming a commercial stage specialty pharma companies within the next very few years. Our platform for growth is very strong.
In addition to Mangoral, there's significant potential in Oncoral, and we expect to move into phase II development next year. As Ascelia Pharma grows, we will further expand our pipeline. We will do so provided the financing is in place and we have products with a strong fit to our strategy and capabilities. This is a strong platform for generating substantial short and long-term shareholder value. As we communicated in our press release this morning, we have increased the estimate of Mangoral's addressable market to $500 million-$600 million annually, which is significantly higher than our previous market estimate. We've done this based on extensive work led by our Chief Commercial Officer, Julie, and she will talk more about it in her presentation. What is important is that you understand the new estimate is based on the same patient group as previously.
What we're doing now is we're using new real-world procedure data and additional payer and expert input for the pricing and access. There is tremendous opportunity for creating value in Ascelia Pharma. In order for us to win, it is important to focus, and right now these focus areas are excellence in Mangoral development. We have a highly experienced team working with world-class experts, and they are on track for delivering as previously communicated. Laying the foundation for a huge commercial success of Mangoral. As you will hear today, we're working hard on our preparations to ensure that once we have the regulatory approval, we can move quickly and effectively to make Mangoral available to patients in need. Oncoral plays a smaller role today, but we will soon share the phase II development plan with you.
I'm personally very excited about the work we're doing there, and I hope you'll be too. Let's leave that for another day when we are ready to share it. The transformative phase of Ascelia Pharma also involves expanding our team to add the right skills and bandwidth as we need it. Obviously, to get ready for the U.S. launch of Mangoral, we will be building a U.S. commercial and operational team. I'm very proud of the achievements of the team so far. To me, this is only the very beginning of an amazing journey. I hope you will enjoy the presentations today, and I look forward to engaging with you at our Q&A session at 2:00 P.M. Central European Time this afternoon. Thank you.
I'm Julie Brogren, Chief Commercial Officer at Ascelia Pharma. I'm proud and I'm excited to be here today to talk to you about the commercial opportunity of Mangoral. I'm proud because Mangoral has the potential to truly improve the health and life of people living with an unmet need in oncology. I'm excited because Mangoral, because of this, represents a significant commercial opportunity for Ascelia Pharma. Today, I'll be sharing key highlights on the market opportunity and our progress on the journey to market. Firstly, further market data and analysis has led us to upgrade our estimate of the addressable market for Mangoral to be between $500 million and $600 million U.S. in our key markets. Secondly, decision-makers understand the value of Mangoral. Thirdly, our preparations towards launch are progressing as planned, and we continue to see a strong case for launching on our own in the U.S.
The market potential for Mangoral is based on a well-defined patient population. These are patients who have suspected liver cancer or metastases. Liver metastases are common in many cancer types and are often the cause of mortality. The gold standard for accurate and early detection of liver metastases is liver MRI, adding a drug agent that enhances the image quality, a contrast agent. Patients who have severe kidney impairment are at risk of developing severe adverse events if they are exposed to the currently available contrast agents. This is the target population for Mangoral. Mangoral is not associated with the risk of this side effect. The addressable market for Mangoral was previously estimated to be between $350 million and $500 million in our key markets, the U.S., the EU, and Japan.
This estimate was based on solid prevalence data and market research using epidemiology to estimate the patient population. It was also based on a survey among radiologists in the U.S., and on feedback from payers and reimbursement decision-makers in key markets. We now have more data, which has led to further validation of assumptions and an upgrade of this estimate. Today, we have announced an upgrade of the addressable market to be between $500 million and $600 million in key markets. This upgrade is based on our progress within a number of key areas. First of all, the target population is unchanged. However, we've obtained new data from actual recorded medical procedures, real-world data. This data gives us a solid understanding of patients eligible for Mangoral and the number of imaging procedures per patient per year.
We've also obtained additional insights from payers and reimbursement experts in our key markets. These insights have helped us advance our understanding of the value proposition of Mangoral to the healthcare system and of the pricing potential in each key market. This new real-world data and additional expert input has led us to upgrade our estimate of the addressable market, for which the main driver is an increase in the total number of procedures per year. This is a very attractive commercial opportunity. In line with industry practice, we'll not be sharing further details on these assumptions or data behind our estimate. Our objective is now to be positioned to obtain the best possible access for patients at a price that represents the value of Mangoral. We will now focus on completing the SPARKLE phase III study and obtaining regulatory approval. I look forward to realizing this potential for Mangoral.
I will now talk about the value that Mangoral provides to the healthcare system and what this means for our commercialization. When preparing for a launch, it's key to understand how Mangoral helps patients compared to other drugs in the landscape. If we look at the landscape of MRI contrast agents, all currently available options are based on the toxic heavy metal gadolinium, and they have black box warnings for patients with severe renal impairment. This is due to their risk of developing nephrogenic systemic fibrosis, or NSF. NSF is a multi-organ and potentially fatal disorder with no treatment options available. This risk exists for both contrast agents that are specific to liver imaging and all other contrast agents available today.
This means two things: that no contrast agent is currently advised for liver imaging in patients with severe kidney impairment, and it means that Mangoral has the potential to be the only safe and effective liver imaging contrast agent for these patients. Clinical practice confirms that physicians make decisions on liver MR imaging with the risk of NSF in mind. For example, a survey shows that NSF remains the most concerning aspect of gadolinium-based contrast agents in MR imaging. It also shows that for patients at risk, MRI without gadolinium-based contrast is a preferred option today, which is in accordance with current guidelines and recommendations from authorities. We have recently held advisory boards and interviews with 50 experts on pricing and reimbursement in key markets.
We've asked them to evaluate a number of parameters related to the currently available contrast agents and to the clinical profile of Mangoral. They clearly said that they are aware of the limitations of gadolinium-based contrast agents, and they agree that Mangoral has the potential to address these important unmet medical needs. They also provided valuable input on how we can best prepare for a dialogue with decision-makers to get strong outcomes on pricing and access for patients. In summary, Mangoral has a clear value proposition to patients, to physicians, and to the healthcare system. In fact, 85% of clinicians in a survey are likely or extremely likely to use Mangoral at launch. In my experience, this clear understanding is very uncommon several years before launch. This is because of three things. There is no contrast agent advised for these patients today.
Mangoral provides improved visualization compared to unenhanced MRI, which is the standard of care for this patient population today. Three, contrast-enhanced MRI can enable early detection, which in turn allows for early intervention and higher survival rates for these patients. To summarize, Mangoral has the potential to be the only safe and effective liver imaging contrast agent for our target patient population. I will now talk about our solid progress and plans for commercialization and the case for building our own commercialization in the U.S. Clear market priorities are key to success. The U.S. represents the most important commercial opportunity for Mangoral. This is because the number of patients, of the maturity of clinical practice, and the reimbursement system in the U.S. EU and Japan represent the next priority markets, and we are evaluating other potential markets.
For the U.S., the attractiveness and clear path to market provides a strong case for commercializing on our own, i.e., building a U.S. commercial affiliate. For other markets, the value of Mangoral can be maximized by working with a partner with existing local relationships and expertise. Let me tell you more about this. In our most important market, the U.S., we already have strong relationships with leading radiologists among SPARKLE clinical study investigators. We've also partnered with specialists and organizations within manufacturing and radiology. The case for commercializing in the U.S. by building our own affiliate is strong. We can reach priority physicians at launch with a sales force of around 20 FTEs. These will work closely with a cross-functional support team. For logistics and distribution, we will work with third parties with existing operations.
Building our own commercial team allows us to create an attractive top line and to retain profit in Ascelia. We have mapped decision-makers in the U.S. With regards to reimbursement, data shows that 70% of Mangoral's target patient population is covered under the Medicare and Medicaid programs. The use of Mangoral will mainly be at a reachable number of hospitals and clinics. 750 hospitals and clinics handle around 75% of MRI procedures. 400 of these serve 75% of patients with kidney impairment. Radiologists are the most important decision-makers on liver imaging contrast agents. Data shows that around 2,000 radiologists perform regular MRI imaging in patients with kidney impairment. Beyond the U.S., the EU and Japan provide the most attractive and addressable market opportunities for Mangoral.
Our current assessment is that the optimal launch in the EU and Japan and other markets will be to work with partners who have strong local capabilities and relationships with decision-makers in reimbursement, pricing, and clinical practice. My last topic for today is an update on our progress and plans for commercialization. Our preparations for a strong launch are on track. This year, our focus has been on building global capabilities and building a blueprint for commercialization. We have advanced our plans, our strategies, and our priorities based on solid market research. We've also reached supply chain readiness with our first commercial scale manufacturing of Mangoral, which we announced in September. We have worked closely with key stakeholders within the medical community, including investigators in our SPARKLE phase III study.
Next year, our focus will be on preparing and launching a U.S. organization and on advancing our partnerships in other markets. We will continue our collaboration with the medical community, and we will develop evidence to support the value and pricing for reimbursement decisions. In 2022, our focus will be on preparing for launch execution within commercial and supply chain operations. It will be to educate physicians more broadly on our clinical data and to reach patients as quickly as possible upon regulatory approval. We expect this towards the end of 2022 or early 2023. We know what it takes to reach patients with poor kidney function in need of a safe and effective liver imaging option. We know what it takes to launch Mangoral successfully. The preparations are advancing well and according to our plans.
It's been a pleasure to update you today on the market opportunity and commercial preparations for Mangoral. In summary, based on additional data and insights on patient numbers and pricing, we have today upgraded our estimate of the addressable market potential for Mangoral to be between $500 million and $600 million in our key markets. Decision-makers understand the value of Mangoral, and our preparations for launch are progressing well, and we continue to have a strong case for building our own U.S. commercial team. I look forward to updating you as our commercial preparations advance. Thank you.
I will now provide some updates and some more details on the clinical development program of Mangoral, our lead candidate. One important cornerstone with this program is that we are addressing a clear and significant unmet medical need. Let's start with liver metastasis, which is a major challenge within oncology or cancer care, and it's the most common malignant liver lesion. The reason is that many different cancer types tend to develop metastasis in the liver over time, and most commonly colorectal cancer, but also breast cancer, gastric cancer, and lung cancer. This metastasis in the liver is often the cause of death for these patients, not necessarily the primary tumor. Therefore, it's very important with early and accurate detection of liver metastasis. The recommended method there is contrast-enhanced MRI or magnetic resonance imaging using a contrast agent or an imaging drug.
This is used at several stages of the patient journey. It's early at diagnosis or detection of the lesions, is then for the planning of the treatment of the patient, and then subsequently for the follow-up of the patient, which could go on for many, many years. The currently available contrast agents on the market are based on gadolinium, which is a heavy metal. Patients with impaired kidney function should not receive gadolinium, and the reason is the risk of serious, potentially deadly side effects. Therefore, the regulatory agencies, thus including FDA in the U.S., but also EMA and the Japanese regulators, have implemented warnings and restrictions. Basically, these patients lack a contrast agent today. The standard of care for these patients is an MRI without the contrast agent. Again, this is the very specific unmet need that we are addressing with Mangoral.
Mangoral is not only advancing the liver imaging, but it is at the same time addressing the unmet need. Mangoral is an oral manganese-based liver-specific contrast agent, and we are specifically targeting the patient with severe renal insufficiency because these patients are at risk using the currently available contrast agents. This unmet need is also validated with the orphan drug designation that we have from the FDA. Importantly, our SPARKLE, our phase III study, is now ongoing. The scans to the right illustrates how Mangoral works. To the left, you have an unenhanced liver MRI without the contrast agent. To the right, you have the same patient after administration of Mangoral. This is a Mangoral-enhanced liver MRI, and the liver has taken up Mangoral, and the liver appears bright.
However, there's one dark structure on the scan that's not visible without a contrast agent, which is indicated by the red ring. This is a liver metastasis. This illustrates the importance of using a contrast agent, because now being detected, this metastasis can also be removed, and that would significantly improve the prognosis for this patient, the chances of survival. This slide illustrates the positioning of Mangoral. Today, patients with normal kidney function can receive gadolinium or gadolinium imaging drugs. However, patients with poor kidney function don't have an imaging drug today. In the future, tomorrow, Mangoral can address this medical need and fill this empty space. Importantly, we are not competing. Mangoral is not competing against gadolinium, but filling an empty space for these specific patients.
We estimate that roughly 4% of patients that require a liver MRI would fulfill the criteria for severely reduced renal function, and would then be addressed by Mangoral. Mangoral aims to be the standard of care for liver MRI imaging in these patients. Importantly, we are the only liver-specific imaging drug in clinical development today. We are way ahead of any potential competition. I mentioned that our phase III study, SPARKLE, is ongoing. We already have a very strong clinical proof of concept through six different phase I and phase II studies with very consistent results both for efficacy and for safety. These results were confirmed and repeated by an independent reanalysis by an independent radiologist and expert reader. These results showed highly significant results on very important and typical imaging endpoints.
In addition, 33% more lesions were detected with Mangoral as compared to without Mangoral. The strategy for the phase III development, as you see to the right on the slide here, is to repeat and verify, confirm this data in a larger study. For the primary endpoint, we're using lesion visualization, which had very significant results in the phase II program. Its lesion visualization co-primary endpoint is lesion delineation, sharpness of border, and conspicuity, which is contrast compared to background. Given the phase II data here, we believe that we have very good chances to have a successful study. This is a global study, up to 200 patients, and importantly, the study design has been agreed and discussed with both FDA and EMA.
We're comparing against unenhanced MRI, which is standard of care for these patients today, not another contrast agent, which also increases the chances for success. The follow-up is relatively short for each patient. It's just a few days, which means that we will have the final study result relatively sooner than a conventional phase III study. It's a global study, and the patients are recruited at approximately 40-50 clinical sites, and some of them are listed on this slide here, and you can note that these are top institutions. That means that we also will have the leading expert and the leading opinion leaders involved in the program already now. We're building a strong relationship with these opinion leaders, and we have a very strong support from them for this program. We already now are creating awareness about Mangoral through this large clinical study.
We believe that the participation of these experts on these sites validates the unmet medical need that we are addressing with Mangoral. Finally, just a few words about the timeline. We have made very good progress in spite of the challenges associated with the COVID-19. The phase I and phase II are finalized. Early this year, we recruited the first patient in our phase III study, SPARKLE. We anticipate that the final results will be available second half of 2021, that's next year. We're aiming for filing early 2022, we are ready for the market late 2022 or early 2023. The preparation for the market, we will hear more about during the next presentation today. Thereby, I thank you for the attention.
A quick note on CRA. We're a publicly traded global strategy consulting company with our headquarters in Boston, Massachusetts, and multiple offices across the U.S. and in Europe, too. Within CRA, there are more than 220 consultants dedicated to the life science industry, making it one of our largest practices. CRA has a wide variety of experience conducting engagements with both major life science companies, as well as with smaller companies that might be bringing their very first product to market.
From your perspective, what are the most important factors for successful drug commercialization in the U.S.?
It's a great question. First, I'd say that a company needs to have a solid understanding of their product and what makes it unique among the competition. Second would be developing an in-depth understanding of their customers. Third would be to develop a pricing and market access strategy which is closely aligned with their product's value. As we get closer to launch, it's critical that there's alignment between the account teams that call on the access decision makers and the salesforce that calls on the prescribers. All of these things need to be monitored closely, and any surprises might require modifications to the commercialization plan.
Could you tell me more about developing the product?
The first step in developing a product is understanding the product positioning. This entails understanding how the product compares to currently available options and where it can provide the most value in the treatment pathway. There are multiple ways a product can establish a niche. For example, does the product work best in a specific patient subpopulation or in patients with intolerance for certain medications or classes of medications? Once the positioning has been determined, the next step is to understand how to socialize the product benefits through brand messaging. With prescribers, these messages usually focus on showing the clinical benefits that differentiate the product. Within the access decision maker space, though, the messages are a bit more diverse, because the group of stakeholders is diverse as well and include managed care organizations, hospitals, and even imaging centers.
The U.S. healthcare market is known for its complexity. How do you define a customer in this complex landscape?
Defining the customer begins with first understanding the patient's journey. Each disease area is unique and shows variances in its customers and access decision maker dynamics. In studying the patient journey, it's necessary to understand all the key decision makers and the types of decisions that they make as well. Understanding the decisions and different types of customers along the customer journey allows us to identify key influence points where the unique value of the product can be turned into a competitive advantage. A savvy manufacturer might use these influence points to form the foundation of the customer engagement strategy, where the advantages are delivered as tailored messages that speak to the key questions in the key decision maker's mind.
How does a company go about establishing a pricing and market access strategy in the U.S.?
The U.S. is a free pricing market, which means that manufacturers are allowed to choose their price. This puts the responsibility on the manufacturer to find a price that will provide the desired market access for patients. Market access is a combination of clinical value, the price, and ultimately the restrictions that are placed on the product by access decision makers. To develop a sound pricing and market access strategy, we pair our understanding of how the money flows between the stakeholders with the value offered by the product. This provides us with guidance on how we can communicate the product's value to each stakeholder, given their motivations and their needs associated with the product. An additional tool we might use sometimes is a contracting strategy in order to adjust the product economics within a particular type of stakeholder.
Where should a company be two to three years prior to launch?
Ideally, at that point, the commercial team owns an overview of the product positioning options within the current marketplace and has a solid understanding of the niche filled by their product. Also, the key decision makers along the patient journey, such as the payers, the providers, the patients, the caretakers, should be mapped out, and they should have a solid understanding of the financial flows between these decision makers. In other words, they should really have a thorough lay of the land. In terms of next steps for a manufacturer, they are likely finding ways to penetrate into these niches through key influence points and developing a value story for the most important access decision makers.
Welcome to Ascelia Pharma's Capital Markets Day 2020. We look forward to updating you on Mangoral's market opportunity and our commercial preparations. This morning, we released presentations from members of the executive management team and an independent U.S. commercialization expert. We hope you found the presentations interesting, and if you haven't had time to look at them yet, they will remain accessible on our website. With me now in this Q&A session, I have the executive management team. We also have Charlotte Stjerngren, who will moderate this session. Before getting into the Q&As, just want to do a brief recap of the messages that we sent today. Mangoral is in phase III development, and in parallel with that, we're doing a lot of commercial preparation. This morning, we sent out a press release upgrading the addressable market estimate to $500 million-$600 million annually.
We've done this based on extensive commercial preparation work, and Julie has presented that in her presentations, which are on the website. With that said, we continue to make progress, and we expect to launch Mangoral in the U.S. in the fourth quarter of 2022 or first half of 2023, which is consistent with our previous guidance. That was sort of the key message, and now I'd like to hand the word over to you, Charlotte.
Thank you, Magnus. Now we're having the Q&A. Feel free to ask any questions, either via telephone or if you send an email to mw@ascelia.com. We have the whole management team here, as Magnus said, but we also have CFO Kristian Borbos for questions. I'll start off with you, Julie. You were the star of the day today here with all the research you have done. You gave an update on the market. Could you elaborate on the changes? The patient population hasn't changed, but the other two parts.
Exactly.
Thank you. Yes. As you said, our target patient population is the same, but we have new real world data based on actual medical procedures and number of patients and the medical procedures per patient. That's one part. We also have additional insights from experts in pricing, reimbursement, and market access in our key markets, where we've talked to around 50 experts. That has led us to upgrade our estimate today. The main driver of the estimate is the number of imaging procedures in our target patient population. With regards to pricing, there are no major changes to our previous estimates. That's where we are now, and it's exciting to see these upgraded numbers. Just one more note is that it does not include the market growth from now on to launch.
How do you look at bottom line growth? Do you have a figure for that?
If we look at volume and prices from the insights we have, I think we are working on estimates between 5% and 4% annually in market growth.
4%-5%.
Four to five, right.
Four to five. Initial first question to you as well, Carl. COVID-19 is everywhere. How has that affected your study, SPARKLE?
Yeah, it's a fair question given the current situation, and it has affected the timelines already. We communicated that earlier this year. I think as for anyone in the industry, we have to adapt to the current situation so that the clinical research can continue. It does. We have to learn. For example, in addition to the regular precautions in society, many of the meetings that we have and interaction with the hospitals, for example, that were previously face-to-face, can now be done virtually and online. We are all learning. I think in our case, importantly, the patients are still there. The medical need is still there. In particular, our study design, I think, is less susceptible for disruptions because as I mentioned in my presentation, the follow-up for each patient is very short, only five days. That's very unique.
I think we are in a very good position here. Having said that, this is our estimate today. Should things change, we will communicate that, but I don't see that.
You feel confident in the timeline you have now?
I do, yeah. I do.
Great. Kristian, the question to you can understand what it is. You had SEK 240 million in cash last time you communicated. How long will that last?
The current cash position will take us into 2022, and that is important because we expect to have phase III data in the second half of 2021. The current cash position takes us beyond this critical clinical milestone, and that's very important.
What happens next? I guess it doesn't cover the commercialization that Julie has talked about in the U.S. What do you do then?
Yeah. Our game plan is to commercialize by ourselves in the U.S. and also build an own organization. That will require additional financing. Assuming we have positive phase III data, then we think it's clearly feasible to obtain financing at that stage.
Once you have the data, then you're in an even better position.
Yes
Of course. Magnus, you seem to have a great team in place here.
Yeah.
What's your job?
Well, my most important job is having the right team. I've done well on that. Not just the people who are on the stage here today, but everybody in Ascelia Pharma is doing a great job. Also all the advisors and people we work with, and the doctors in the studies. I think that's really the most important thing, because as you can see, we have, as Julie presented, we have an attractive market. We have an attractive clinical trial design that Carl and his team are moving on full speed with, and we have a good cash position. We are in a good position. Probably, you would say the challenge is as we grow, how can we continue to recruit very good people that can join our high-performing team? I think that's probably my biggest challenge right now.
Yeah. That was one of my questions, actually. What is the biggest risk in this?
Yeah.
You're not worried about the study, you're more worried about recruiting the right people.
I agree. As Carl mentioned, we have very good data from phase I and phase II. We have similar endpoints in our phase III. I think we're working with some of the best radiologists in the world in the study. I think we're in good shape there. I think it's more continue to attract great people to the team.
Let's see if we have any questions from the telephone conference. Is there anyone there? Operator, please.
Ladies and gentlemen, if you have a question for the room, please press five star on your telephone keypad now. That was five star. We will just have a brief pause while questions are being registered.
While we have that pause, I guess we can continue with questions in the room. Carl, I'll start with you. You have a vast experience from previous studies. You told us you're confident with the timeline. How certain are you about a positive outcome in SPARKLE?
Yeah. One thing I learned, my experience there is you can never take anything for granted. There's never 100% security that you will succeed. However, having said that, I could say that in our case, given, as you mentioned, the phase I data, phase II data we have, and I described in my presentation. Given the study design, given that we are comparing to unenhanced MRI, not another contrast agent, for example. I think the chances are unusually good with our study and our program, compared to many other programs I've been involved with. Again, there's never a guarantee, but I think in our case, we have very good chances.
I happen to know you were involved in Wilson, so I guess that is a.
That was also a good case.
That was a good case.
Also.
You've recruited the good people.
I go for the best.
You go for the best. Did we have any questions from the telephone conference?
At this moment, there are no questions. We can repeat it and say, you need to press five star on your telephone keypad to get in the queue to ask a question.
Good. Julie, again, this $500 million-$600 million, and it's going to grow with 45%. Can you say anything about the division between the regions that you're targeting, the U.S., the EU, and Japan?
The U.S. is by far our biggest opportunity. That's represented by the size of the patient population, the maturity of clinical practice in imaging, and also the market access and pricing opportunity in the U.S. We have Europe and Japan also, interesting markets based on the size of the population, again, in clinical practice and reimbursement. By far, U.S. is the most important opportunity.
You're planning to launch yourselves in the U.S. because that is the most important. Can you say anything about the EU and Japan? Why did you land in this decision? Might you change your mind?
I can open up with some comments and then hand over to Julie. To succeed, we need to be extremely focused, and we are a small company. If we succeed in the U.S., which is the biggest market, we think that's absolutely feasible. It will be hard work, but I think we will be successful. To succeed there will require everything we can do, and the best thing there then is to find partners to access patients in other geographies, such as Europe and Japan. Maybe you can
No, absolutely. As you say, to succeed in the U.S., it's going to take a lot of focus from us. In Europe and Japan, we see that a partner with existing operations, existing relationships and experience with decision-makers and pricing, reimbursement, and in clinical practice, it's going to help such a partner be successful. We believe that strategy will maximize the value for Ascelia also in those markets, while we focus on the U.S. and of course, help the partners we will have in time.
In terms of partners, what are the prerequisites for being a good partner to Ascelia in this?
I can start off. Julie can expand on that. I think when you do a partnership, it's absolutely critical that it's a profitable venture and a mutually enjoyable venture for both parties. I think that is the prerequisite. Maybe Julie, you want to expand on the capabilities of what we're looking for in a partner.
Yeah, I think it depends a little bit on the market. In Japan, there's also a process with local clinical data and local regulatory approval, where a partner also would have experience in that. Otherwise, it's really about existing relationships and experience with key decision-makers and the dynamics in each market. Hopefully it's someone who works in a related field, the therapeutic area, the decision-makers, or so forth. In Europe, again, also synergies in the, you could say, sales force and the medical support and so forth. I think it's important for a mutually, you could say, beneficial case for a partner and for us.
Carl, coming back to you. Today, you're upgrading the size of the market, but isn't it so that the prevalence of NSF has gone down? How do you get these two together? The market is growing, but NSF has been shrinking.
Right. NSF or nephrogenic systemic fibrosis, which is this very serious side effect of gadolinium that could happen in patients with poor kidney function. It is rare, first of all, and it's partly rare because of the restrictions that are on the market today. It is a rare condition. Having said that, still more than 3,000 cases were reported to the FDA only since 2006, and there are recent cases as well. It does exist, and importantly, the restrictions and warnings are still there for the currently available contrast agents. The unmet need for a safe alternative is there today, I would say.
I guess the prevalence has gone down because they are untreated, so they don't get gadolinium.
Well, exactly.
That's the problem, yeah.
You're right. That's what I said. It's a consequence of the warnings and the restrictions that are there.
They're left with nothing.
Yeah.
Instead.
Yeah. That's correct. Yeah.
It sounds so good. If I went into a clinic and they said, "You're going to have gadolinium," isn't it so that this could have other places of being used than in other patients than those without renal impairment?
Yeah, we're focusing on the patients with severe renal impairment, who are at this risk of this devastating side effect of the existing category of products. That's how we're developing. Carl, maybe you want to expand on? We're focusing on our development program.
It's partly a strategic decision because, focusing on this rare population, then you can develop this as an orphan drug. You can get an orphan drug designation from the regulators, and that gives you certain advantages when you do clinical development. For example, for a conventional drug, for a larger population, you're usually required to do two phase III studies, larger studies. If you have a rare indication or designation, then one study is sufficient, for example. A number of advantages doing that way and going that way. For example, if we were to compare to another contrast agent, which would be the case if we go for a broader indication, then that would be a completely different development program, a completely different study. It would take longer, for example.
I think this is in the best interest of our particular patient is to go this way, the patient in need.
For the patients in-
Yeah. Also to expand on that is that with the data we have, we understand that based on everything we know, that this is safe for this patient population, and we want to get our product on the market and be available to these patients as soon as possible. That is by executing on this strategy.
You said in your presentation that you're the only imaging drug in clinical development. Would you say, and that you're then way ahead of competition, why is that? Is it because the market is too small, or is it because Mangoral is so good?
Yeah. It's maybe both. It's a very fair question, and I think there are probably several reasons for that. One is that this unmet need, the risks of gadolinium in this particular patient group hasn't been known for that long. It's only 10 years or so that this unmet need has been known. That's one reason. The other one I think is that this particular market, our market, has been underestimated. It was more, these are so few patients, so why bother about them? What we have done in Ascelia, and I think that's very unique, we have done a very thorough analysis of what is the real market here. We have defined the business case, basically, for this. Today is an example of that. There is a real case for our compound here, and there is a business case for that.
That's the second. The third one, I think, is that there has been a relatively recent interest and incentive for rare diseases or developing treatment for rare indications or rare conditions. That has been traditionally for treatments for drugs, but it also applies to diagnostics like Mangoral. I think we're taking advantage of that as well, but I think those are the three main explanations.
This orphan drug designation that you have in the U.S. is obviously very important then. Is there something similar in Europe, or how does that work? Do you know?
Yeah, there is a similar orphan drug concept in Europe. At present, we have the orphan drug designation from the FDA in U.S., which is the most important market, so that's a big achievement. In Europe, the legislation is somewhat different. As of now, we don't have it in Europe. We may get it or we may not get it. That depends on the future developments. It's not as critical for us in Europe. We're in good shape regardless of whether we get it or not.
Can you talk about when you get the phase III results from SPARKLE, you will go for U.S. first?
Yeah.
Can you say anything about any application to Europe?
Yeah, no, that's also very relevant and complex. It's a good question. It's a complex answer. You're right, we will focus first on the application to the U.S. We will, depending on the situation, if we have a partner on board, what is the strategy for Europe, that will determine what will be the filing date in Europe. When you do apply for a drug approval, you submit a massive amount of data and documentation to the authorities, and they will give you a lot of questions during the examination period. If you are answering questions from two agencies in parallel, you will get not only busy, but extremely busy. There are lots of considerations that we weigh in, but really the focus is on being successful in the U.S. If we are successful in the U.S. with Mangoral, that's going to be tremendous for us.
We also want to get to the patients in Europe and Japan and other countries. We think the most important thing is to succeed in U.S. and then make sure we can get out to the rest in wave number two.
Coming back to what Carl said about this is a fairly new market that you basically have developed in some way, you could say, or are about to develop.
Yeah.
Are you worried you will get competition now that it's even bigger than you said before?
We might. If we do, that's because we are successful, and people see there's a real unmet need that we are addressing. I think if and when we see competition coming forward, it's a sign that we have been successful. I think that's a good starting position. I think it may happen, but then again, the development timelines in drug development are so long, so that if somebody starts on a competing product with a similar profile, they will get to market maybe 10 years after our launch. I think it's a very unique situation, actually, to be in.
Is there anything else we could be worried about? There's so much technical development. Are you worried about something like that?
We're not worried, but we are aware of it. The two things is the software thing, and it's also the quality of the upgrade of the cameras that could create better qualities of the images. I don't see that as a negative thing because given the mechanism of action of Mangoral, I think it would be hard to add on to that. If you have better quality of the image, you can then add on Mangoral on top of that, it will only increase the quality of this. I don't see that as something negative, necessarily. I think there will still be a case for a contrast agent. That's what I'm saying.
I agree with that, and I think it might even be a positive, because when the software algorithms improve and they can see more and get more information out of a high-quality image, which we can provide with Mangoral, then it may even expand potentially in the future on the kind of information you can get from a liver MRI. It's not only something that is a risk on the downside, it's actually also an opportunity for doing something better for the patients in the future.
That's reassuring.
Yeah.
Do we have any more questions or any questions from the telephone conference? Operator, please.
At this moment, we don't have any questions, but we can remind again to say, if you press five star on your telephone keypad, you will get into the queue and be taken in order.
We don't have any. Magnus, I think I will leave over to you for any closing remarks.
Yeah. Thank you everybody for your attention and taking time to be here with us on our Capital Markets Day 2020. We hope you found the update that we've given interesting. I can assure you that we are working very hard and are very dedicated to moving our company forward, both Mangoral and Oncoral. We will look forward to updating you on the progress that we make as we move forward. Thank you.