Yes. Now the clock is 12:00 P.M., today's event is with Magnus Corfitzon, the CEO of Ascelia Pharma. The topic of today is actually the Q1 report that the company released this morning. I would like to welcome the audience as well. As always, you're more than welcome to post your questions during the presentation, and you do that below the screen. You see a small box where you can put your questions in, and then I will forward them to Magnus. With that said, welcome everybody, and welcome to you, Magnus.
Thank you.
Please, go ahead.
Yeah. Thank you, Claus, great to be back and give all of you an update here on the Q1 report for 2023. As mentioned, we released it earlier this morning. We also had a webcast that you can access on our website, which is a sort of more extensive update. What I've done here, for this conversation here is that I've sort of taken some of the key slides from the Q1 presentation, and we'll go through here. As mentioned, I will be making a number of forward-looking statements, pay attention to this. Just to remind everybody also welcoming those that are new to Ascelia, what we're doing in Ascelia Pharma.
Our mission is to improve the life of people living with cancer by offering better treatment options. And our business model how to do that is to identify, develop, and commercialize novel drugs, novel pharmaceuticals that address unmet medical needs in rare cancer conditions, patient populations where the cure and drugs that are out there are just not doing the job well enough. What we have in the pipeline today is two drugs. We have Orviglance, which is our lead program, and which is what we will discuss mostly today. We have completed the Phase 3 enrollment, so all the patients are in the study. Now, we are evaluating the images. We have some expert-external experts that are doing that, and we will report the result of the study sometime during the middle of this year.
The product has what is known as an Orphan Drug Designation from the FDA, meaning that it addresses a small population, a rare condition, and also that it's a serious condition for these patients. That orphan designation grants us market exclusivity and a number of other benefits. We also have Oncoral, which is a tablet formulation, patented tablet formulation of irinotecan, which is a well-known, widely used and very potent chemotherapeutic agent. We have formulated it in tablets and have a number of patents for that. We think giving daily doses improve sort of the safety and the efficacy of that molecule. We're very excited about that as well, but it's less developed. Our company is based in Malmö in southern Sweden.
We have an office in New Jersey, and we're traded on Nasdaq Stockholm in Stockholm. Highlights for the quarter, was a very eventful quarter. We had, finally the completion of patient enrollment. We had an enrollment target of 80 patients. We completed 80 patients, end of February, and then we decided to sort of wind down the patient enrollment. 5 additional patients were kind of in the flow, had been, promised to participate in the study, so we obviously included them. In, in, you would say early March, we concluded that 85% patients had, completed the study. All of these patients, all of their images will be, evaluated in the study and both for safety and efficacy, and everything.
Following the patient completion, which has taken longer than expected due to COVID and other reasons, but we have provided an update on the commercial insights. In parallel with the clinical study, we have worked on launch preparations, and we have learned even more about the market and the commercial opportunity and some of that we shared with everyone on the March 14, the investor update day. Later in March, we got the third patent for Oncoral, our tablet, irinotecan formulation. That was good to further strengthen the intellectual property there.
, a very, I would say, eventful quarter and unfortunately also with the tragic and unexpected passing of René Spogárd, who was on our board for 6 years. Since you could say the closing of the quarter until now, there's been no significant events there. Again, major milestone with achieving the last patient enrolled. Now we are on the way to get the headline results sometime during the summer. Just before we embark on the Q&A, but just on the finance of the q1 we continue to, you could say, prioritize our capital expenditures in a disciplined manner, ending the quarter with 111 million SEK.
That will allow us to, with the planned budgeted spending that we have, allow us into runway into Q4. If we cut back on some activities, we can extend the runway until the 2nd quarter of 2024. I mean obviously always good to have more cash as opposed to less cash, but we are in a comfortable situation, especially considering that we will have the headline results from the Phase 3 study in the middle of the year. When we look at the Q1 expenses, I mean, the vast majority of our expenses are, is R&D related to also, in particular the Phase 3 study.
And the activity level was a bit higher this quarter compared to a year ago. Setting the scene for this year, we had three key objectives, right? The first one was to complete the patient enrollment. We did that in Q1. The next one is getting the results from the trial, seeing whether Orviglance work as we hope and expect. That will we will have the results and be able to communicate that in, at some time during the middle of the year. Then a sort of an ongoing, but gradually increasing in intensity and activity level, is preparing the launch.
Preparing the launch is, you could say everything from supply chain activities, distribution, practical parts of that, as well as engaging with the radiology community, nephrology community, patient community, payers, everything that is related to making a very successful launch. We have a very experienced team on board to lead those activities. Those are the priorities for this year. You would say what we are super excited about, all of us here in the company, is that we have Orviglance. Orviglance will be a first-in-class product, orphan status, for an addressable market of opportunity of $800 million. A very, very sizable opportunity for us.
We have the results in the middle of the year, as mentioned, and one of the additional reasons we went into in more detail on the Q1 call webcast earlier today, but in a 20-patient study, phase II study, we evaluated with three independent radiologists in the same way, same scales, everything. In 20 patients we met the endpoint. With 85, we should have a very good chance of being successful as well. In addition to Orviglance, we have Oncoral where we continue to be very excited about that potential. Have prioritized Orviglance development in terms of making sure we do that well before embarking a lot of resources on Oncoral right now. With that was kind of the executive summary of our Q1 report.
Happy to take any questions.
Right. That's it. Thanks a lot, Magnus, for giving us a quick update on what happened in Q1, a very busy quarter. Let's start out with Orviglance for obvious reasons. There's a question here from Stian, if you could be more precise when you talk about the middle of the year. If you could elaborate a little on that, Magnus.
Yeah. Yeah, no, so I, it's a good and fair question, I say as soon as possible. It is a when we provided the update in December last year and said we want to deliver the results in the middle of the year, want to complete a patient enrollment and then work on the data. I mean, we are on track for delivering sometimes. We cannot, unfortunately, be more specific. It is, you would say, you should not necessarily sort of set the alarm clock for July 1st. It is with some plus minus, if you will, right?
As and with other could say, other objectives we guide on, you would say, on a quarter, on a half-year basis. I mean, it's, there is some kind of flexibility around that. We are on track. We're doing the steps and it's, I can assure all of you that in the more impatient part of the people waiting for the data, right? The team, very experienced team that we have is working with the CROs. We have set up with the radiologists who are doing the evaluations and all the steps there to comply with the FDA guidelines and EMA guidelines for how to look at the images.
We do it as fast as we can, but, we don't wanna compromise on quality or creating risk in the evaluation process.
No. You mentioned before that you already in March finished more or less two-thirds of the readings. You also mentioned in our talk in the beginning that it's a blinded study. Well, you're close to target, but as you mentioned here, whether it's the 13th of June or the 7th of July is of course right now hard to say. Do , and that's probably a stupid question, but there's a question here. Do how far they are in the last batch, but you don't do that due to the blinded?
Yeah. I mean, I don't know how far they are in that. We have an overall timeline where we have the key steps is that we have the 3 independent radiologists, where 2 out of 3 needs to be have a statistical significant improvement of Orviglance. We can't have one of the radiologists being an outlier. They're working on that batch according to the timeline. Once they have reported all their evaluated all the livers with scores and comments and ratings and what have you, then we will actually have a 4th radiologist sort of linking the different lesions and evaluations between the radiologists, their internal readings to make sure that we are comparing apples to apples.
If for instance, if one patient has three lesions, three black spots, and the numbering is one, two, three, and maybe next time they start in the other direction and they do it like three, two, one. We need to make sure that obviously the what is number one, which is physiologically identical to the number three, and the second read is compared to each other. That also takes a lot of time. For each... We communicated that we had roughly two-third had already been completed, or read in March because we did that, sort of you could say on an ongoing basis. The last one-third are being evaluated now.
For each reader, they need to look at both the unenhanced, they need to look at the Orviglance enhanced, and then they need to look at the combined information with unenhanced and Orviglance in one go. They have 3, you would say, reading data points. There needs to be at least a 2-week interval between reading from the first data series to the next data series, and then 2 weeks in between that. It does unfortunately take a bit of time. It's. The 4th reader who will sort of link deletions will do that for all the 3 readers. It's also a lot of MRI images that that person needs to go through.
And-
Yeah. It is, it's progressing as planned. We are making sure that, even as we are approaching summertime that everything is ready and set up. People are not off on vacation, which will constantly... , we're doing it as fast as we can.
Thanks a lot for shedding some light on on the process, Magnus. Well, just another question regarding the study here. You mentioned that just before Christmas, 2022, that you changed the approach, the way you look at the images. You explained that for me once before of the data model. Could you shed a little light on this because you needed less patients...
Yeah
... in this new approach?
I mean, the approach and the evaluation is exactly the same as from the beginning. We three independent radiologists evaluating the same parameters in the same scales in the same way. That is completely unchanged. When we started SPARKLE, we had a number of data from the phase I and 2 studies, we would not have in any of those studies a setup where we used exactly the same metrics and the same scales on those metrics. We didn't have three radiologists evaluating any of those studies. It had been usually, and that is what you often do in early stage studies, you have the local radiologists looking at the image, but they have also let me say a lot of background knowledge.
What we wanted to do, we took one of the Phase II studies where patients had normal kidney function and looked at the comparison with gadolinium. We have announced that and presented at conferences that we looked, you could say at least comparable to a liver-specific gadolinium, which is very positive. In that study, we also saw a statistically significant improvement over on the next in only 20 patients. When we see that result, if we got that level of significance in the Phase 3, we would consider it very successful. With 200 patients, and then on top of that, having the study during COVID and a rare patient condition, it took way longer to enroll than we anticipated. We utilized that information.
If we had had that information from the very beginning, we would never have designed a 200-patient study. Basically, this is new stuff, new information, important new information that came, became available during the course of SPARKLE, and that's why we had the dialogue with the FDA and said, "We think 200 is overpowering the study. We think a smaller sample size is a lot more prudent because we cannot, you could say, unduly delay approval of this product and access for patients to this product when they are in need and options are so approved." Based on the FDA feedback then we decided to reduce the sample size to 80 patients, and now we have 85. We're not changing anything in what we measure.
If we have a successful outcome here, we strongly believe that this is sufficient for approval. It's simply that this 3 reader evaluation with on the exact same in the exact same manner, that data was not available when we started SPARKLE.
Thanks a lot, Magnus. Well, then let's dive a little into the future. If we assume that you get a positive readout, how does the timeline looks for Orv- sorry if I see you then? Could you elaborate a little on that, Magnus?
Yeah. We will come with a sort of more specific e-NDA timeline once we have the data. We think that is the most prudent thing to do.
Okay.
What we have said is that we expect sometime during this summer, in the middle of the year, whatever we say, to have the headline results. We have also informed in, I think it was in February or early March, that we expect the full Clinical Study Report to be available towards the end of the year. That full Clinical Study Report is kind of finalization of all the data, everything with the study, and that is needed to have the pre-submission meeting with the FDA. Before sending in this huge data file and database of all patients and so forth, it's very wise to have a meeting with the FDA to say, "These are the results.
This is how we are presenting it in the NDA submission. This is how we've structured it. , listen to if they have any thoughts. if they have any perspectives on that, then we can incorporate that into the submission and have a more streamlined approval process. but we need obviously to have the full results from SPARKLE before we can have that dialogue with the FDA.
Of course.
Hopefully as soon as possible after that meeting with the FDA, we can have submit the file.
Now you have prioritized, and you mentioned that in some of your earlier interviews, to focus 100% on Orviglance.
Yeah
... are we very close to get the readout? Could you shed some light on Oncoral, and how you're going to prioritize that, or is that still a little too early?
Yeah, I think it's a great question and I'm eager to get going on Oncoral. I really believe in that product. We want to make sure that we have, you would say, the appropriate funding to get that study started. We will not, you could say, jeopardize the runway, which also means that we need to have a different stronger balance sheet before we initiate that study. Now we have in the process of completing, we're doing the reporting and all the finalization and study reports. There's still a lot of work with SPARKLE, even though we're not looking for more patients.
We will have the good deal of the staffing in place in the not too distant future in terms of getting the Oncoral study going. Lot to get that study going, and I think we have good interest from oncologists and we have the clinical collaboration with Taiho Oncology, where we continue to be in dialogue with them. Yeah, I think that's a great opportunity as well.
Yeah. Thanks a lot. If we dive a little into how you're going to take Orviglance to the market, and you mentioned that, and one of your colleagues did that in another event with us a month ago. You have a two-tier strategy. In U.S. you would like to carry it out more or less yourself-
Mm-hmm
... for like an emerging biotech company, strategy. Then for the rest of the world, you're looking into partnerships. Could you shed some light on the U.S. strategy, Magnus?
Yeah
... to introduce the case?
It's always... I mean, partnerships I think are great, and we want to pursue partnership, but we also see the U.S. commercial opportunity for Orviglance as being, you could say, very unique and very attractive for an emerging pharma company such as ours. Our very detailed market research shows that these patients, 75% of the patient population for Orviglance go into 400 clinical or hospital groups in the U.S., which means that it's very concentrated. It's around 2,000 doctors doing 75% of the patients. That is an, you would say, commercial reach that we can build with around 40 people at launch, obviously starting prioritizing the highest volume centers and then moving down the chain. By doing that, it's obviously a larger investment. On the other hand, we keep the value in Ascelia.
If we were to do a partnership in U.S., we would share more of the, you could say, more of the upside, give away some of the upside. That's why we think that is a very attractive opportunity for us, and we'll pursue that. There are also attractive markets outside U.S., and we want to pursue those, but through a partner.
Mm-hmm.
We want to focus as a small company to be successful. If we are a bit more successful in U.S., that will have tremendous profitability implications for Ascelia. Instead of trying to do too many countries, too many regions, all at once, we may end up failing in all areas. If we succeed in U.S., we will create tremendous value from where we are today. That's really the focus. Then find good partners that can bring Orviglance to the patients, because patients all around the world will need Orviglance.
Yeah, because it's an unmet need.
Yeah.
It should be possible or it is possible to find a very interesting partner for the rest of the world.
Yeah. I share that perspective, I think what is really interesting is if you look at the last year or so, there's been increased focus on finding alternatives to the gadolinium products that are being used today. There's been sort of half dose products used that show, you could say, comparable efficacy. Then by having less gadolinium, there is kind of, you could say at least theoretically a safety benefit. I think that's, I think that's a good move. I think there are also some companies that are like us looking at manganese-based agents. One of the major players, GE HealthCare, has completed patient enrollment in a Phase I study. Different product, it's injectable, it's not liver specific.
I don't see that as a threat. It's more like a complement to.
Mm-hmm
... our liver specific agent. We are completing Phase 3, and they've just started the clinical journey. I think way ahead, we are leading globally to sort of build the position of we can do a more sustainable MRI industry in the future. Tons of gadolinium is used every year, injected into patients, going through the urine into our drinking sewage system and drinking water. I mean, we need to change that. That's not a long-term sustainable, you could say, situation. Using manganese would be way more sustainable. I think we are heading in the right direction.
I think we are playing very well on, you would say, with the overall drivers, not only sustainability, but also better treatment options so patients with cancer can stay alive and be some of them more can be cured. They need more medical imaging procedures, and especially the ones with kidney disease need a better option than they have today.
Thanks a lot, Magnus. There's a question about the uptake in the market, and both you and your colleagues have earlier mentioned that out of those $800 million in addressable market, U.S., Europe, and Japan is around $500 million-$600 million, and we talk US dollars.
Yeah.
as I think your colleague mentioned for me last time, that it's more or less half and half. Due to two prices in U.S. of course, where the population is of course larger in Japan, Europe together. If we look into these $250 million-$300 million in U.S. where you take your another strategy or you'd like to roll out product yourself, is it fair to say that it's unmet need, which you take it out as an emerging biotech company that within 3-5 years you will have 20%-25% market share?
We have not gotten on market share. This is I would say premature.
Mm.
I think when we look at the addressable market, that's based on each of these patients, each of these imaging procedures that are being performed today.
Yes.
We think with the expected safety and efficacy that we hope to demonstrate in SPARKLE, and we'll get into the label, that Orviglance should be the product of choice for this patient. It would be patients undergoing an imaging procedure, having a severe renal disease so that the all other imaging options would most likely lead to a less good outcome in terms of risk safety, risk benefit profile, right? It's not sort of competing... What is in the $800 million is not, you could say, going beyond what we intend to have the approval for. We will not obviously promote outside the label, et cetera. That is really the core, the patients with severe renal disease.
No, it's just to understand the uptake, of course. Is it, is it more like a hockey stick penetration, or is it more like a S curve? Maybe it's a little too early, as you mentioned before. But yeah, that's.
Yeah. I mean, you always want to have the hockey stick, right?
Yeah. You want.
Especially depending on how you draw it. That is also why the pre-launch activities that we're doing now, our engagement with the key opinion leaders, the ones that are involved in writing the guidelines, with the payers, with the patient advocacy groups to understand what is their perspective, how can we help them and communicate with them in the best possible way. By aligning as much as we can with stakeholders before the launch, we've set it up very. Ideally, when you launch a product, and not only a pharmaceutical, but any kind of product, you want people to wait for the product to come, right?
Yeah.
You want them to be ready to take it, whenever you come. I think Steve Jobs did a amazing job with the product launches that they did. People were looking very much forward to the presentations about the new product. Everybody was very excited and all the gossip about what would come next.
Mm-hmm
... and then people would line up in queues to buy the product. I mean, pharmaceuticals is a very different industry, and it's a very different way of commercializing and selling. It's important it's the same point. We want to make sure that the key stakeholders, that the decision makers understand the value Orviglance provides and why this would be, in our perspective, the product of choice for this patient population.
Thanks a lot there, Magnus. Time is running here. I don't know if the audience have further questions for Magnus. It doesn't seem like there is any other questions, Magnus. Well, first of all, I would like to thank you for a really great presentation and great Q&A afterwards. Yeah, we hope to see you soon, hopefully within a couple of months. I would like to thank the audience as well for the good questions. With that said, everybody, enjoy your day. Thanks a lot.
Yeah. Thank you everyone.