Welcome to Ascelia Pharma Q4 report for 2022. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answer session, participants are able to ask questions by dialing star five on their telephone keypad. Now, I will hand the conference over to CEO Magnus Corfitzen, CFO Déspina Georgiadou Hedin, CSO Andreas Norlin, and Deputy CEO and CCO Julie Waras Brogren. Please go ahead.
Welcome everyone to the webcast for Ascelia Pharma Q4 report in 2022. Since our last call, we look forward to updating you on the progress and since our last call, we have changed the setup of the conference call. Hopefully we should have a better sound quality than what we had in our previous conference call. Next slide. We will be making certain forward-looking statements, so please pay attention to this. Next. Ascelia Pharma is dedicated to improve the life of people living with cancer by offering better treatment options. In particular, we focus on rare cancer conditions. Our business model is to identify, develop, and commercialize novel drugs that address unmet medical needs within orphan oncology. We have two drugs in clinical development.
Orviglance is in an ongoing phase III clinical study that we hope to complete soon. It will be the only product targeting an addressable market of $500 million-$600 million annually. Oncoral is ready to start phase II for the treatment of gastric cancer based on encouraging results in phase I and a high level of unmet medical need. We're based in Malmö, Sweden, and are listed on Nasdaq Stockholm. We have a solid balance sheet and are funded into Q4 this year, including completion of the Orviglance phase III program. The fourth quarter of 2022 was eventful. We continued to make progress. Importantly, we decided to complete the SPARKLE study with less patients than initially planned.
We'll talk more about this later today. The reason is, as we explained at the time, is that new very strong data on Orviglance efficacy show a 2x-3x higher effect level than what was initially assumed when we designed SPARKLE. After constructive dialogue with the FDA, Ascelia decided to reduce the enrollment target for the SPARKLE study to 80 patients. In the quarter, we also announced the expansion of the leadership team to seven members in Ascelia Pharma. This is a logical step in ensuring the organization is best positioned for the scale up and increased complexity with the important milestones ahead of us as we bring Orviglance to the market.
At RSNA, the major annual radiology conference in Chicago, we presented data from the food effect clinical study demonstrating strong liver enhancement with Orviglance, both following a light meal and in fasting condition. At the end of the quarter, 65 patients had a completed SPARKLE. In the update we provided at the end of January, 71 patients had completed SPARKLE, which is in line with our expectation to reach 80 patients in February or March 2023. We'll go into more depth on our pipeline, and I'd like to hand the word over 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 detecting metastases is therefore crucial for when making treatment decisions for cancers. Today, contrast enhanced MRI is the gold standard procedure for examination of patients with suspected or known liver metastases. The contrast agents available are all based on a heavy metal gadolinium, and gadolinium is excreted through the kidneys. If the patients has impaired kidney function, the excretion of gadolinium will be slower than normal.
This is associated with an increased risk of severe side effects. 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. We envision that Orviglance will address this medical need and become a well-functioning non-gadolinium contrast agent for patients with impaired kidney function in the future. To give an example of how Orviglance works, here you can see real images from a patient with colorectal cancer in one of our phase II studies. The left-hand image shows an unenhanced MRI scan without the contrast agent. Standard procedure today for our target population. The right scan shows the same patient after administration of Orviglance. The liver has taken up Orviglance and appears bright in the image.
There is one dark area highlighted with an orange circle here that is only visible after Orviglance enhancements. This is a metastasis, which would not have been detected without the contrast agent. This illustrates the importance of a contrast agent. In this case, since detected and localized, the metastasis may be removed with significantly improved prognosis for the patients. We have made good progress in the development of Orviglance. The early phase program has been completed with strong data providing clinical proof of concept, and we are currently approaching the end of phase III, the phase III program. There is a strong clinical proof of concept through six individual phase I or II studies with very consistent results. These data were confirmed by an independent re-analysis by a blinded reader which showed highly significant effects on endpoints that are also used in the ongoing phase III study.
The phase III primary endpoint is lesion visualization based on the co-primary parameters lesion delineation and lesion contrast compared to background. As seen on the slide, both these were highly significant in the phase II studies. It was also noted that 33% more metastases were detected with Orviglance compared to our unenhanced MRI. These results justified entering phase III and it also provide valuable guidance on the design of the study. More recently, we have completed two new studies being part of phase III, the phase III program, both providing strong supportive data adding to our overall knowledge of Orviglance. The food effects study highlighted by Magnus in the beginning was presented at the U.S. Radiology Conference, RSNA. The results from our study show that intake of a light meal prior to Orviglance administration provides similar image MRI enhancement of the liver compared to fasting condition.
Further, the safety profile was similar to what has been observed before. We earlier also announced the completion of the study of Orviglance in patients with liver impairment. Importantly, no safety concerns were identified, and it was concluded Orviglance is well-tolerated in this group of patients. Overall, the data demonstrated the potential utility of Orviglance as MRI contrast, also in patients with hepatic impairment. We should also mention that the development program is validated and aided by an orphan drug designation from the FDA. In December, we announced a change in the number of patients planned to be enrolled in the phase III study. This change was based on an analysis of new data obtained from one of our phase II studies. We used the exact same method that we are going to use for analysis of the primary endpoint in SPARKLE.
three blinded independent radiologists scored how well the metastases are visualized on unenhanced images and images with contrast. The difference in score between unenhanced and contrast is the measurement of the effect. The results from the new analysis showed that the effect of Orviglance were highly significant also in this small study with only 20 patients, with a P value of less than 0.009. The size of the effect was two to three-fold larger than what was anticipated when SPARKLE was designed. Because the effect size is used when estimating how many patients are needed to demonstrate significance, this new finding led us to conclude that a markedly smaller number of patients might be necessary to demonstrate a significant effect in SPARKLE.
Changing the size of the study is obviously something that must be done cautiously, we therefore also applied conservative additional assumptions to account for factors that can negatively impact the contrast effect in the study and talked with external advisors before discussing this with the FDA. Based on the outcome of these discussions, we decided to reduce the number of patients to 80. At the end of January, we had completed 71 patients, we are aiming to complete enrollment in February or March. Our confidence in SPARKLE and commercial potential of Orviglance remains strong, as we now prepare for the next steps of Orviglance and Ascelia Pharma. With that, I will now hand over to Julie, our Deputy CEO and Chief Commercial Officer.
Thank you, Andreas. The addressable market for Orviglance represents $500 million-$600 million annually in our key markets, the U.S., Europe and Japan. This potential is based on the volume of liver MRI procedures for cancer patients with severe kidney disease, i.e., the patients falling under the boxed warning for gadolinium contrast agents. Our data includes real world data on realized procedures for these patients. We also have extensive input from market access and pricing experts, where we have tested different price levels and collected insights on the evidence needed to support access and reimbursement. Building our own commercial team for a U.S. launch allows us to create an attractive top line and build value in Ascelia. For other markets, starting with the EU and Japan, our strategy is to maximize the value of Orviglance by working with partners.
Market research with 270 US healthcare professionals explored the current clinical practice and unmet need for the target patient population of Orviglance. We have answers from radiologists, nephrologists, and oncologists. The results support the unmet need for Orviglance in the target patient population and are consistent with previous research. This slide shows one of the key findings and confirm that for patients with severely impaired kidney function or acute kidney injury, around 80% of healthcare professionals prefer today to perform an MRI without a contrast agent or sometimes with a partial dose of a gadolinium contrast agent. At the end of the survey, respondents were presented with a product profile of Orviglance. As a response, 84% answered that they are likely or definitely will use Orviglance for the target patient population after launch.
The result of the market research confirmed the commercial potential of Orviglance and help us prepare an ambitious and focused launch. For the U.S., the attractiveness and clear path to market provides a strong case for commercializing Orviglance led by Ascelia. The target patient population has multiple health complications, which means that decision-makers for its use are centered around 2,000 radiologists, and most of these can be found at around 400 hospital groups. Therefore, a focused team in an affiliate of around 40 FTEs can reach priority decision-makers at launch. We have our U.S. office, Ascelia Pharma Inc., established. That's an important step to engage with stakeholders for U.S. launch. Our global manufacturing partner, Cambrex, is also in New Jersey. We're gradually building our footprint and relationships with key stakeholders in the U.S. as part of our preparations for launch.
This includes a number of leading radiologists, of which some are among our phase III clinical study investigators. With this, I'm handing it back over to Andreas.
Thank you, Julie. We will now move on to Oncoral, our second asset. The active substance of Oncoral is irinotecan, an established chemotherapy with well-documented anticancer effects. It is currently approved for colorectal cancer and pancreatic cancer. In Japan, it is also approved for gastric cancer. Today, the administration is intravenous bolus infusion, typically every third week and typically at a high dose. Oncoral is a novel tablet formulation of irinotecan. A tablet formulation enables more frequent daily dosing that could offer several potential advantages. Most important, efficacy. It is well known that many cancer types have suboptimal treatment outcomes today. An oral daily dosing may improve efficacy through a favorable pharmacokinetic and pharmacodynamic profile based on more constant exposure, a therapeutic plasma level of the active substance. Yeah. There are both non-clinical and clinical data supporting this concept. There is tolerability or safety.
Intravenous dosing of chemotherapy is frequently associated with severe side effects, typically gastrointestinal and hematological. An oral daily dosing has the potential for improved tolerability by avoiding high plasma levels and by offering dosing flexibility. The concept of frequent low-dose administration is called metronomic dosing. The figure to the left illustrates a simulation model comparing levels of the active substance, or active metabolites SN-38 after irinotecan IV dosing every third week, the gray line, and oral Oncoral dosed daily, the orange line. Over a three-week cycle, the exposure or area under the curve is comparable, although the high concentration peaks associated with toxicity are avoided by daily dosing. Approximately 1/3 of the side effects observed after intravenous dosing are reported as severe or even life-threatening, grade three or four.
Metronomic dosing may not only reduce the peak-related toxicity but also brings the possibility to adjust dosing quickly if adverse events should occur. Our own Oncoral phase I results show that Oncoral was well-tolerated overall and importantly, the hematological toxicities were mild to moderate, grade one or grade two. In addition, our phase I data with Oncoral indicated activity or stable disease, even in patients that previously progressed on irinotecan given intravenously. This is an example of improved outcome, in this case, overall survival with more frequent dosing. These are patients with metastatic breast cancer, where overall survival was improved from 20% with dosing every third week to 32% with weekly dosing. This is, if you will, a proof of principle for metronomic dosing. We are preparing for phase II.
The objective of the phase II study is to generate a clinical proof of efficacy in metastatic gastric cancer. The strategic reasons to choose gastric cancer are several. First, the clinical guidelines and clinical data support efficacy of irinotecan in gastric cancer. Second, gastric cancer is a severe cancer form with a high unmet need and a potential for orphan drug designation. Subsequently, there is potential for label expansion into other solid tumors as well. Finally, as shown in the figure, there is data from gastric cancer animal models suggesting a synergistic effect of irinotecan if combined with LONSURF. LONSURF is another oral chemotherapy which was approved for metastatic gastric cancer in 2019.
This all oral combination could potentially provide a more potent treatment alternative for these patients. The planned study is therefore a randomized controlled multicenter multinational study comparing Oncoral on top of LONSURF with LONSURF alone. The primary endpoint is typical for phase II study in oncology, progression-free survival. A battery of secondary endpoints are also planned for, including response rates, PK safety, and overall survival. The study will randomize approximately 100 patients and involves a clinical collaboration with Taiho Oncology, the manufacturer of LONSURF. The necessary regulatory approvals have been obtained, and we are looking forward to start the study. In order to focus all our internal resources on the lead program, Orviglance, we are waiting with the study start for now. As soon as the internal bandwidth is secured, and ensuring effective study conduct, the study will kick off.
With that, I will hand over to Julie again.
Thank you, Andreas. To wrap up, Oncoral. Irinotecan is a well-established chemotherapy with recognized antitumor effects in solid tumors. Our strategy is to start Oncoral's development in gastric cancer. This is today a $3 billion market. For these patients, there is a high unmet need for improving outcomes, and there's an opportunity for an orphan indication. We also see opportunities for developing Oncoral in other solid tumor indications, where a daily dosing tablet formulation can demonstrate an attractive safety and efficacy profile. Irinotecan as an IV formulation is already approved in both colorectal and pancreatic cancer, and it's 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 it 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 and with SEK 1 million in the bank. We have financing into Q4 of 2023. The cash position will primarily be used for Orviglance ongoing clinical phase III study as well as pre-commercial activities. Here we see the development in earnings. The key takeaway for the quarter and for the full year 2022 compared to the corresponding periods last year is that an increase year-over-year, which is as expected, and reflects the increased R&D activity related to this phase III clinical program for Orviglance commercial preparation, as well as phase II preparations for Oncoral. With that, I leave over the word to Magnus.
Thank you, Déspina. I'd like to end this quarterly update with our focus on key milestones for the year. The clinical development of Orviglance is our key priority. We expect to reach the 80 completed patients in SPARKLE in February or March this year. The next important milestone is to generate the headline results from SPARKLE by having the independent radiologist evaluate all the images. After the evaluation by the radiologist, there will be a thorough statistical analysis and quality checks before we have the results and are able to communicate it. We expect to announce the results somewhere in the middle of the year. The pre-launch activities for Orviglance become even more important as we are on the verge of completing the SPARKLE study, and this activity will continue and ramp up. This was our final slide, and 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. As a reminder, if you wish to ask a question, please dial star five on your telephone keypad. The next question comes from Sten Westerberg from Aktiespararen. Please go ahead.
Good morning. Thank you for taking my question. I wonder if you can, looking into 2023, if you can elaborate a bit on when will SPARKLE costs peak in your accounts?
I think it's a good relevant question. I think we have not made any guidance to that. I think obviously there will be some, you could say once we complete enrollment, we will close down the sites and reduce costs there. There will not be costs for patient pass-through. There will be costs for evaluating the images and, you could say the statistical analysis and quality check and validation. We haven't provided sort of a detailed estimate of you could say the ramp down of the cost of SPARKLE.
Okay.
What I also want to signal is that when we complete the last patient, it's not that, cost of SPARKLE will be zero.
That's helpful. My next question would be if you can elaborate a bit on R&D costs in the fourth quarter, if there are any particular events which are driving these costs to a record level, and how we should look on that going forward?
I think it's. There's nothing specific that we can, you could say, state that was an outlier. You could say the contract on R&D when you do a large clinical study is that you have certain running costs, and then you have certain milestone costs to incentivize the CRO and the consultants to meet the objectives, hopefully as soon as possible. The timing of those milestone payments can impact, you could say, cost per quarter.
Yeah. My last question before I go back into the line is, if it is possible to discern any impact from a stronger US dollar, in your profit and loss account?
What we have done, we have protection for the cost in various currencies. There we have a long time ago bought different currencies to minimize the currency risk for Ascelia. In essentially nothing is 100%, but that should minimize at least the currency impact, which has been with this, you could say the weak Swedish krona has been a very good decision for us to make that decision a long time ago.
Yeah. This year we had positive effect on that.
Yeah.
Sorry, can you repeat what you said there?
This year we had positive based on this. We have higher income based on that.
Yeah.
Okay. From currency hedges?
Yes.
Yeah.
Okay. Thank you so much.
Yeah.
Thank you.
That concludes my question.
Thank you, Sten.
As a reminder, if you wish to ask a question, please dial star five on your telephone keypad. There are no more questions at this time. I hand the conference back to the speakers for any closing comments.
Yeah. Thank you. Thank you everyone for listening in. We continue our efforts to complete SPARKLE and get to 80 completed patients as soon as possible. As mentioned, we expect and hope to be able to do that in February, March. We will provide you with an update as soon as we get to 80 patients. Thank you, have a very good day.