Earnings Call: Q4 2020

Feb 16, 2021

Thank you. Welcome everybody to the webcast for Silead Tharma's Q4 Report for 2020. I'm Magnus Korpersen, CEO of Silead Thammer. And with me here today on this call, I have the entire executive team. We look forward to updating you on our progress in the quarterly report. Now please turn to Page 2. We will be making certain forward looking statements on this call, so please pay attention to this before moving to Page number 3. Acelia Pharma is focused on improving the life of people with rare oncology related conditions by developing novel drugs to address unmet medical needs. We have 2 drugs in clinical development. Mangoral is in Phase III, and we expect to complete the study in the second half this year. It will be the only product targeting an addressable market of $500,000,000 to $600,000,000 annually. Oncroll is being prepared for Phase II in the treatment of gastric cancer based on encouraging results in Phase I. We have a very strong and experienced team headquartered in Malmo, Sweden, a strong track record in late stage drug development and commercialization. We have a solid financial position. In addition, we have built an extensive global network to help us bring our drug candidates to the patients who need it. Now please turn to Page 4. Acelia Pharma is in formative phase as we're moving from late stage development into commercial stage. Our lead program, Mangoral, is expected to be launched in the U. S. At the end of 'twenty two or first half 'twenty three, and we are highly engaged in the preparations. In the same time frame, we expect that the Phase 2 will be nearing completion. As part of our strategy, we might expand our portfolio with additional drug candidates that fit our orphan drug strategy and where we can make significant benefit for patients. As you can appreciate, this is a truly exciting time for our CELIAD Pharma, and we see tremendous value creation potential as we progress. Now please move to Slide number 5. Q4 has been a busy period. In October, we held a virtual Capital Markets Day with a focus on the attractive commercial opportunity of Mangroove. We have done and continue to do a lot of commercial preparations, And the findings led us to increase the addressable market to $500,000,000 to $600,000,000 annually in the U. S, Europe and Japan. In November, we announced the information from European Medicinal Agency that Magro is eligible for the centralized regulatory approval process. In December, we announced the result of a REACH study, which demonstrated that MANGLE was as effective a liver specific gadlinumab in terms of visualization of focal liver lesions. The same endpoint as in SPACLE, our global registration enabling Phase III study, which is ongoing. Karl will provide more information on this later on this call. Also in December, we announced that the U. S. Patent of SAD accepted our patent filing for a 2nd generation version of Mangoral. This patent will run to at least 2,040 and Julie will provide more information on this call as well. Shortly after the end of the quarter, in early January, We presented our plan for Oncroll Phase 2 development at the prominent group of leading oncologists who make up our advisory board. Now please turn to Page 6. We'll now go into more depth on our pipeline. I'd like to hand the word over to our Chief Medical Officer, Karl Gautmer. Thank you, Magnus. So I will now provide some more details on the clinical development of these two candidates. I will start with Mangoral, the contrast aided for liver MRIs. Please turn to Page 7, Slide 7. So contrast agents for liver MRI available today are all based on gadlinium, vezemetev, which is dosed intravenously. Galvanium based imaging drugs can be used in most patients, but should not be given to patients with poor kidney function since gadolinium is excreted through the kidneys and slow elimination can cause serious side effects. So for that reason, regulatory authorities, for example, FDA in the U. S, have implemented restrictions for patients with impaired renal function. So that is a very specific unmet medical need. And this context is illustrated on the slide. Today, patients with normal kidney function, As most patients can receive gadolinium based imaging drugs, however, patients with severely reduced kidney carcin lack an imaging drug today. In the future, tomorrow, this unmet need can be met by mangrove. This is a specific target population, And it's approximately 4% of all patients requiring a liver MRI. For these patients, Mangoral aims to be the standard of care. Importantly to note here is that Mangoral is the only liver specific contrast agent in clinical development. We are way ahead of any competition. Please go to Slide 8. Our ongoing pivotal Phase III study, SPARQL, investigates efficacy and safety of mangrove in target population with focal liver lesions and poor kidney function. And as mentioned, the study is expected to be completed this year. As shown on the left, there is a strong clinical proof of concept through 6 individual Phase 1 and 2 studies with very consistent results. So these data were confirmed by an independent reanalysis Blinded reader, which showed highly significant effects on endpoints that are also used in our pivotal Phase 3 study. The primary endpoint is lesion visualization based on the co primary parameters, lesion delineation and lesion contrast compared to background, which were both highly significant in the Phase II program. The existing data also contains a direct comparison to get lenient based liver contract agent, which showed similar effect on lesion visualization. And I will come back to that study. The right side of the slide illustrates the Phase III design. The study, which is a global study with 200 patients, It's been agreed with FDA and AIMA. As mentioned, the strategy is to repeat and confirm the Phase II results using the same endpoints. Since there is no available contract data for patients with impaired renal function, the comparator will be unenhanced MRI, which is currently the start of the procedure for these patients. And finally, the follow-up for each patient is very short Compared to most clinical studies, this simplifies the operational procedure and will also have a finalized study relatively sooner than a typical study on similar slides. Go to next Slide 9, please. So as mentioned, we recently released the results of a blinded reread study using the same endpoints and evaluation criteria as the ongoing Phase III study, SPARCL. This was an independent study where Mangoral was compared both directly against the gadolinium contrast agent, but also against MRI without the contrast enhancement. And the key outcome was that Mangoral was as effective as gadolinium for visualization of FUKA LIVELYESHAN, where 2 out of 3 independent readers even reported higher scores of Mangoral. In addition, Mangoral MRI provided Crude diagnostic efficacy compared to MRI without a contrast agent. So this data will not only strengthen the data package to the regulatory authorities. It also supports our expectations of a positive outcome in the SPARCLU study. So I will now Turn over to the commercial outlook. Margar? Julien? Thank you, Karl. We are now on Slide 10. I will share key highlights on the market opportunity for Langral and on our progress preparing for commercialization. First, in connection with our Capital Markets Day in October, we communicated an upgrade of our estimate of the addressable market for Magro to be between SEK 500,000,000 and SEK 600,000,000 in our key markets. Secondly, decision makers understand the value that Mangrove provides And our preparations for launch progressed as planned, and we continue to see a strong case for building our own team in the U. S. Lastly, in December, as Magnus mentioned, a patent was granted in the U. S. For our 2nd generation Mangrove, which provides patent protection until 2,040. Please move to Slide 11. As mentioned, the addressable market for Mangoral represents EUR 500,000,000 to EUR 600,000,000 annually covering the U. S, EU and Japan. This value is driven by a well defined patient population. These are patients who have suspected liver cancer or metastasis Our data on patients and procedures come from actual recorded medical procedures, real world data, which gives us a solid understanding of patients eligible for Mangra and the number of imaging procedures for each patient Per year. In terms of pricing and access, our analysis is based on extensive insights from payer and reimbursement experts in key markets. This gives us a solid understanding of the value proposition that Mangoral provides to the health care system and the pricing potential in each market. For these patients And these procedures, there is no competing drugs. As Karl talked about, the alternative Sumangral is an unenhanced MRI, which as Karl showed, does not provide an adequate image quality. Please move to Slide 12. For the U. S, the attractiveness and clear path to market provides a strong case for commercializing Mangrove on our own, I. E, building a U. S. Commercial affiliate. We already have strong relationships with key radiologists among our Phase III clinical study investigators. And we also have partners among specialists and organizations within manufacturing and radiology. The target patient population for Mangoral has multiple health complications. Therefore, the decision to use a contrast agent It's centered around 2,000 radiologists who can be found at 400 hospitals. Building our own team in the U. S. Allows us to create an attractive top line and retain profit and value in Acelia. For other markets, the EU and Japan, we believe the most attractive opportunities are the next priority for my grower launch. In these markets, our strategy is to maximize the value by working with partners with existing local expertise and relationships with decision makers. Please move to Slide 13. In December 2020, we announced that the U. S. Patent Office issued a new patent covering our 2nd generation formulation of mengra. This 2nd generation formulation provides patent protection until 2,040 in the U. S. A global patent application for our 2nd generation Mangram was also filed, And decisions will follow in each market according to their national procedures. The 2nd generation formulation provides further value to the Macron franchise. This was an efervizant tablet where the 1st generation is 2 separate stick packs that are to be dissolved in water. The Fabercent tablet formulation will further improve ease of use for patients and health care professionals. So we can turn to Slide 14 and go back to Karl and Ankuraz. Thank you, Uli. So I will now provide some more details on the Ankuraz program. We Slide 15. The active substance of Oncroll is irinotecan, and irinotecan is an This chemotherapy with well documented anticancer effects is currently used in several solid cancer indications, and it is 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 3rd week and typically high dose. Now Oncoral is a novel oral formulation of Arena Tecan. It is a tablet for daily dosing that could offer a valuable treatment option for cancer in the future tomorrow. There are several potential advantages of oral daily dosing, 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 even therapeutic plasma levels of the active substance. And there are both nonclinical and clinical data supporting this concept. Then there is tolerability or safety. Intravenous dosing of chemotherapy is frequently associated with severe side effects, for example, gastrointestinal and hematological side effects. And oral daily dosing has the potential for improved tolerability by avoiding high plasma levels and by offering dosing flexibility. In addition, there's convenience and cost. It's more convenient and cost effective to take a tablet at home than going into a hospital and prepare for intravenous administration. Please go to Slide 15. Yes. This is an example of improved from, in this case, overall survival with a more frequent dosing. These are patients with metastatic breast cancer Where overall survival was improved from 20% with dosing every 3rd week, irinotecan, intravenously high dose to 32% with weekly dosing with a slightly lower dose. So This is, if you will, a proof of principle. Go to the next Slide 17. So 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, SM38, after irinotecan intravenous dosing every 3rd week was a gray line And oral Encorel dosed daily is the yellow line. And over a 3 week cycle, the exposure or area under the curve is comparable, although the plasma peaks associated with toxicity are avoided by daily dosing. Approximately onethree of the side effects observed after intravenous dosing are reported as severe or even life threatening grade 3 or 4. Metronomic dosing may not only reduce peak related toxicity, but also brings the possibility to adjust the dosing quickly if adverse events should occur. Our own Oncroll Phase 1 results show that Oncroll was well tolerated overall and importantly the hematological toxicities In addition, our Phase 1 data with Ocoral indicated Activity or stable disease even in patients that previously progressed on Arena taking intravenously. That is encouraging. Can you go to the next slide, 17, please? 18, sorry. Yes. This program is supported by high profile advisory board. So we have Professor Tavanir from Barcelona, Spain, former President of ESMO Professor Adjani from US University of Texas, Professor von Katzur from Belgium, we have Professor Jeff Evans from the University of Glasgow. And here, there is a joint view that Oncron will be an important treatment option for cancer patients in the future. And go to the next Slide 19. Now we are preparing for the Phase II study. And the objectives of the Phase II study are several. 1st of all, to establish a clinical proof of concept in metastatic gastric cancer. Gastric cancer is chosen partly because of strategic reasons. There is potential for orphan drug designation in gastric cancer and the clinical guidelines, clinical data support efficacy of our renal tequine in gastric cancer. Subsequently, there is potential for label expansion into other solid tumor indications. Another objective is to generate compelling Phase 2 data for further development, potentially with a partner. The study is a randomized controlled multicenter multinational study comparing Oncorol on top of standard of care with standard of care alone. The primary endpoint is typical for a Phase 2 study in oncology progressive free survival. And there's a battery of secondary endpoints, response rate, PK safety and overall survival. This will include approximately 100 patients. We anticipate the study Start second half of this year, 2021, and the duration into 2024. Thank you. And then I turn to Julian, Slide 20. Yes. So again, to We iterate our position to pursue gastric cancer in our Phase II study. Gastric cancer represents An attractive opportunity because there's a large unmet medical need and because there's a value potential for axiliathama. Today, irinutikin is approved in colorectal cancer and pancreatic cancer. But in gastric cancer, Irinotecan is not improved. As Karl showed us the potential for improved patient outcomes with a daily dosing. Gastro cancer is the 3rd most frequent cause of death in cancer. It represents a $3,000,000,000 to $4,000,000,000 market today, and there's an opportunity for an orphan drug indication and value in the U. S. And Europe. In the future, there may be opportunities to expand Our indications into other areas, either colorectal or pancreatic or neuro indications. So with this, we'll move to Slide 21. Thank you, Udi. And then jumping directly to Page 22. So the development in earnings compared to the corresponding periods last year is the same as we have discussed in previous calls. Increased loss year over year, both for the quarter alone and for the full year, is as expected and reflects the continued progress and the Spend on the clinical development program for Mangrove. It also reflects that we are ramping up on our commercial preparations. We now turn to Page 23. The key message here is, as Joce said on previous calls, is that we continue to stand with a solid cash position. The cash position will take us into 2022 And consequently beyond the clinical milestone, the top line Phase III data from SPARCOR, our Phase III study, which we expect to present in the second half of this year. With that, I'll leave the word over to Daimus. On Slide 24. Thank you, Christian. I'd like to end this quarterly update with a focus with our focus on the 2021. The clinical development of Magro is highly important for us. This work continues full speed despite some COVID-nineteen impact as previously communicated, and we continue to work with investigators and consultants to make this study a success and are adapting to the circumstances to ensure patient, medical staff, employees and everybody else are safe. We continue our preparations for Mangoral commercialization have many activities ongoing to enable us to detail and implement the value maximizing strategy as outlined by Julie. Another important activity this year is our preparations for the ALCOLL Phase II study, which we expect and hope to start in the second half of this year. This was our final slide, and we'd be happy to take any questions. Thank you. We have a question from the line of Ludwig Sjansson from Redeye. Please go ahead. All right, Asilia Sjinge. Thank you for a nice Presentation. So my first question is related to the patent covering the new formulation of Mangoral. Could you elaborate on your strategy here on how you will use this asset to prolong exclusivity on the market? Thank you. Yes. We have not communicated our exact strategies, but this is really a Testimony of a successful life cycle management strategy. So of course, this is an opportunity to maximize the exclusivity on markets and Globally also some of the markets that may not be in the first priorities. That is what we have communicated so far. But we will Communicate further on the strategies for launching. It's a 2nd generation. And I think, thank you. Thank you, Uli. And my second question, and this might, of course, be hard for you to answer, but nevertheless, Of interest for investors, of course. But how is recruitment to the Sparkle trial progressing? Is the recruitment pace what you had expected? Obviously, any information would be helpful. Yes. And as you know, Lutz, we don't Provide details on this. We our strategy is to communicate 1st patient in And last patient in not details in between there. And the reason is that recruitment is never linear in a And if you give a certain number at a certain time point, there will be extrapolation and speculation, and that's not in NMR's interest. Having said that, and I think you expected that answer. But I'll try to answer. So we have a challenge with COVID, and everyone knows that. In spite of that, we're taking every measures we can To mitigate the impact on Sparkel, and we are in the process of opening sites. And as you may have seen on clinicaltrials.gov, We now have 20 sites open, and we are in the process of opening new sites. So we expect that To contribute to the recruitment. And as we are currently, we believe we are on track For finalizing the study this year, as we have communicated. And that's what I can say today, Should that change for any reason, and that could be COVID related, for example, that will be communicated. We are not there. We are not there. So we still expect to finalize this study this year. I hope that answered the question. It is a difficult question because we As I said, we don't communicate the details during the time. Absolutely. Thank you, Jorg. That sounds good. That was everything for me. Thank you for the presentation. Thank you, Ludwig. Thank you, Ludwig. Our next question comes from the line of Dan Achiuti from Parete Securities. Please go ahead. Thank you for taking my question and Thank you for the great presentation. I just have a question on the Phase 2 of Encorel and Kind of what kind of learnings could you take also from your kind of the U. S. Peer company, 10x, which is Advancing oral paclitaxel. What was surprising for me to see in these in several similar studies that PFS Actually, there is an improvement in progression free survival, but the improvement in overall survival is even better, which is Kind of the opposite of what you usually see. There is an effect on PFS, but maybe less than overall survival. And how this affects your Phase II design plans and maybe also beyond that? Yes. It's a good question. But the study is designed and The sample size and power is based on progression fee survival, but we're still Collecting overall survival and there is an adaptive element into the study. So we can sort of Switch endpoints, if you will, based on interim analysis, should we if you would wish to do that. I still think that progression free survival is the conventional and best suited primary endpoint for a Phase II study, Given the purpose of establishing a proof of concept in advanced gastric cancer. You can always argue here, But as I said, we're collecting both endpoints, of course, breast vis survival and overall survival. Okay. Thank you. And again, Ben, thanks for the question. And I think your point goes very well to into the to support the rationale that Karl explained some data on here, and there's a lot more available that more frequent dosing of anticancer agents is, in many cases, leading to better treatment outcomes. So again, that supports the rationale for farm growth. Thank you. There are no further questions at this time. Please go ahead, speakers. Yes. Thank you, everybody, for listening in. We're happy to update you on the Q4 of 2020. And we are super excited about 21, which will be yet another transformative year for Acelia Pharma as we progress towards making our drug candidates available for patients. So thank you everybody. Have a good day.