Welcome to Ascelia Pharma Q2 2026 report presentation. For the first part of the conference, participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound key five on their telephone keypad. Now, I will hand the conference over to CEO Magnus Corfitzen, CFO Anton Hansson, and CSO Andreas Norlin. Please go ahead.
Thank you, and welcome everyone to the webcast for Ascelia Pharma's Q2 report for 2027. On this call, we will be making forward-looking statements. On today's call, we will start with an overview of Ascelia Pharma and recent key events, and then head into our portfolio update with an emphasis on the recent Complete Response Letter for Orviglance before moving to financials and priorities ahead. After the presentation, we will open up for questions. At Ascelia Pharma, we identify, develop, and commercialize novel drugs that address unmet medical needs within rare cancer conditions. We are based in Malmö, in Sweden, and we are listed on nasdaq.com. We have two drugs in our pipeline. Orviglance is a diagnostic drug, and we have submitted a New Drug Application to the FDA to obtain approval in the U.S.
We received a Complete Response Letter in early July, and will meet with the FDA on the 9th of September to find the path to approval. Oncoral is a patented tablet formulation of irinotecan with encouraging results in phase I and potential to treat a range of solid tumors. In April, we raised SEK 20 million in a directed share issue. In May, we had our annual general meeting, as usual. In June, Orviglance data was presented at the ESGAR Conference, the major European conference for gastrointestinal and abdominal radiology. At the end of the quarter, we filed a patent application regarding packaging and manufacturing, and thus further strengthened the IP position of Orviglance. After the end of the second quarter, we received a Complete Response Letter from the FDA regarding our New Drug Application submission for Orviglance.
This was unexpected, and we will talk more about it later in this call. We also announced that our Chief Financial Officer, Anton Hansson, will be leaving Ascelia Pharma and that we have implemented cost-reduction actions to improve our financial flexibility. I would like to thank Anton for his contributions at Ascelia and wish him best of luck going forward. We will start the portfolio section of our presentation with Orviglance. Despite the setback with the Complete Response Letter, we continue to be excited by Orviglance, and here is why. Orviglance is addressing a well-defined, unmet medical need for a subgroup of people living with cancer. This is an USD 800 million global addressable market opportunity, with Orviglance as a first-in-class product to target this, and the product has Orphan Drug Designation from the FDA.
We have commercial scale manufacturing in place, and we have strong data from nine clinical studies, including compelling phase III data. As mentioned, the Orviglance New Drug Application has been submitted to the FDA and undergone the review process. Unfortunately, the FDA sent a Complete Response Letter with some specific issues, but many areas of the New Drug Application were reviewed that didn't result in issues being raised. Our focus is on agreeing with the FDA on what is required to obtain approval for Orviglance. Orviglance is an attractive asset, and we will work with a partner who will drive the commercialization once the product is approved. Based on the NDA submission and the data, the unmet medical need that Orviglance addresses, the progress of the review process, including the audits conducted, we were expecting an approval of Orviglance in July.
In the Complete Response Letter, the FDA raised some issues that we will discuss with them at the Type A meeting in September and align so we can find an efficient path forward for Orviglance. We continue to be confident that the Orviglance New Drug Application is supported by substantial evidence of efficacy and safety for its intended patient population, which we think should support approval, and are committed to bringing Orviglance to patients. We'll now go into more details on the regulatory process, and I'd like to hand over to Andreas.
Thank you, Magnus. As Magnus just mentioned, receiving the Complete Response Letter was not the outcome we expected, given the interactions that we had with FDA throughout the development and the review process. The questions in the response letter relate primarily to aspects of the image read methodology, including the justification of the reread and interpretation of the results, together with comments on the product quality. Importantly, this gives us a focused set of issues to work through rather than a broad challenge to the overall program. Our team has moved quickly to analyze the FDA feedback and evaluate the most appropriate path forward, which we have outlined in the Type A meeting briefing package submitted to the FDA. We continue to believe strongly in the clinical value of the product and are fully committed to addressing the agency's questions in a collaborative manner.
Let me now briefly explain how we view these topics. First, I want to acknowledge that the FDA's conclusion differs from our own assessment of the data. The agency has requested additional clinical evidence, and we take that conclusion very seriously. At the same time, after extensive internal review and consultation with external experts, we continue to believe that there is a strong scientific rationale supporting the decisions that were made in the NDA application originally. Specifically, we believe that image reread was justified by the systematic bias of the image scoring that was identified. We also believe that the training of the new readers was appropriate, and that assessment of T1-weighted images represents a clinically relevant measure of efficacy for a T1 enhancing contrast agent, such as Orviglance. The discussion around T1 can sound highly technical, but the principle is actually quite simple.
Liver MRI relies on multiple imaging sequences, each contributing different and complementary information. T1 is the sequence where Orviglance is designed to work. T2 and diffusion-weighted imaging remain important parts of the examination, but they provide different types of diagnostic information. Based on this, we believe there is a strong scientific rationale for evaluating lesion visualization using T1-weighted images when assessing the effect of a T1-enhancing contrast agent. At the same time, we recognize that the FDA has taken a different view, and we remain committed to maintaining an open and constructive dialogue with the agency as we work toward the most appropriate path forward. Regarding product quality, we have aligned with the FDA's recommendations and implemented the requested actions related to product specifications. Let me conclude by putting this into perspective.
The FDA inspections carried out during the review were completed without critical findings for the NDA, and the product quality observations have been addressed in alignment with the agency's recommendations. This is highly reassuring for the continued dialogue with FDA. The remaining discussion is centered on the interpretation of the clinical imaging data, and the upcoming Type A meeting provides an important opportunity to align with FDA on the path forward. While we are disappointed by the outcome of the review, our confidence in Orviglance remains unchanged, and we continue to believe that the totality of the imaging efficacy and safety data supports approval, and we remain fully committed to bringing Orviglance to patients. Magnus.
Yeah. Thank you, Andreas. I'd like to round off the Orviglance part of the presentation with some important milestones ahead. As just described, we have the Type A meeting with the FDA on September 9, and minutes from this meeting will be available no later than 30 days after the meeting. We will provide an update once we get the minutes. The commercial opportunity for Orviglance is attractive, with a global addressable opportunity of $800 million, and almost half of that in the U.S. We have market exclusivity through the Orphan Drug Designation, and has expanded the IP position through several patent filings. The potential partners for Orviglance have confirmed continued interest in Orviglance after the receipt of the Complete Response Letter, and getting clarity on the path ahead is important for getting the partnership agreement in place. The Complete Response Letter was unexpected.
We think the Orviglance data package should support approval and are committed to working with the FDA to obtain approval, as well as securing a partnership with a larger company to drive commercialization and ensure patients who will benefit from Orviglance. Now we move to Oncoral. Please go ahead, Andreas.
Yes. Thank you again. While our primary focus right now is, of course, on securing a successful approval and partnering for Orviglance, we also have Oncoral in our portfolio. That program remains an important asset, and we are looking forward to reinitiation when the timing is right. Let's spend a few minutes on Oncoral now. Oncoral is designed to transform the delivery of irinotecan, a well-established chemotherapy that today is administered intravenously at a relatively high dose every few weeks. By enabling daily oral dosing, Oncoral has the potential to provide more sustained drug exposure, improving both efficacy and tolerability while offering a more convenient treatment option for patients. What makes Oncoral particularly interesting is that it is not simply an oral version of irinotecan. The oral formulation enables a fundamentally different treatment paradigm.
Conventional irinotecan is administered as an intermittent high-dose therapy, resulting in high peak drug concentrations, followed by extended periods with little or no exposure. In contrast, Oncoral is designed for daily low-dose administration, providing a more sustained exposure profile over time. Importantly, this sustained exposure may do more than simply kill tumor cells directly. A growing body of evidence suggests that metronomic chemotherapy, so daily dosing, can also influence the tumor microenvironment through mechanisms such as angiogenic activity and immune modulation. As a result, Oncoral has the potential to combine the well-established anti-tumor activity of irinotecan with additional biological effects that are difficult to achieve using conventional high-dose intermittent treatment. Taken together, we believe Oncoral represents an opportunity not just to improve the delivery of irinotecan, but potentially to expand the therapeutic potential of the drug. We increasingly view Oncoral as more than an oral irinotecan formulation.
It is a platform for optimizing how irinotecan is dosed. The emergence of FDA's Project Optimus reflects a broader shift in oncology from pursuing the highest tolerable dose toward identifying the dose that delivers the best balance of efficacy, safety, and long-term treatment benefit. Oncoral is inherently designed around that concept. By developing sustained daily dosing by Oncoral, we aim to unlock the therapeutic potential of irinotecan in a way that may improve tolerability while maintaining or potentially enhancing efficacy. Our phase I data provides early validation of this approach, demonstrating a pharmacokinetic profile suitable for metronomic dosing, together with encouraging safety observations. Our current plan is to bring Oncoral into clinical phase II in gastric cancer. Animal data has demonstrated a synergistic effect of irinotecan when combined with LONSURF, another oral cancer treatment already approved for gastric cancer, which makes this all-oral combination very interesting.
As we look ahead, it is important to remember that Oncoral is built on irinotecan, a well-established and widely used drug in oncology. Gastric cancer is our lead indication and represents a significant commercial opportunity in its own right. But the real strategic value lies in the potential applicability of the Oncoral dosing concept across multiple tumor types where irinotecan is already clinically validated. We are actively evaluating these opportunities as part of our development strategy and believe we have only begun to explore the full potential of the program. In short, we are not just developing a new formulation of irinotecan, we are developing a new way of using irinotecan with the potential to create value across multiple cancer indications. Let's move on to the update of the financials, Anton.
Thank you, Andreas. In Q2, our operating results amounted to a loss of SEK 12 million, and the costs are lower in the quarter compared to Q2 2025 due to completion of the NDA. If we move to the liquidity, at the end of June, we had a cash position of SEK 38 million. In April, we completed a directed share issue, raising SEK 20 million before costs. Following the Complete Response Letter, we implemented cost-saving measures and have now extended our cash runway into Q2 2027. I will now hand over to Magnus again.
Yeah. Thank you, Anton. We have some important milestones ahead. On 9th of September, we will meet with the FDA to align on the path forward for Orviglance. The potential partners have continued interest in Orviglance, and getting clarity on the path ahead is important for getting a partnership agreement in place. We have managed our finances carefully, as always, and through cost reduction initiatives, we have extended the cash runway into Q2 2027. We are not where we hoped to be at this point, but we have a clear plan, clear inflection points, and there continues to be an attractive opportunity for Orviglance, and we are committed to bringing Orviglance to the patients who need it. Thank you for listening to our Q2 update. Operator, we would now like to open up for questions.
If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Georg Tigalonov-Bjerke from ABG Sundal Collier. Please go ahead.
Thank you. Hi, Georg here from ABG. I am wondering regarding this Complete Response Letter, obviously very important these days, but to what extent has the design of T1 versus T2-weighted MRI and the read had been a significant topic in partner discussions as of the Complete Response Letter. I am also wondering if you are able to provide any flavor on what you are hearing from your industry contacts regarding this afterwards. Thank you.
Yeah, maybe I can start on the partnering, and then Andreas can talk about the T1 and T2. On the partnering, as we've said, we have an ongoing process. We have been having a lot of dialogue with a number of companies. Everybody were expecting an approval, and this is a, how do you say it, a bump on the road in that dialogue. We are meeting with the FDA to get clarity on the path ahead, and that information is going to be important for the partners. There's still a process, but timeline has obviously shifted a little bit because everybody wants to understand what is it, how can we resolve these issues, which I think is important. I think it's a very natural process. I'm happy that the potential partners who have invested time and energy resources into evaluating the asset continue to be interested.
Andreas, do you want to talk about T1, T2?
Yeah, absolutely. I think the question was if we have had any interactions around this with the agency through the development or the review. As we have said, we are quite surprised by the response we received. That indicates that we have not had any questions about that. When we talk to our advisors, key opinion leaders in the field of radiology, it's quite clear that I tried to explain in the presentation that the different sequences are indeed complementary to each other. That means that you need them all as a radiologist. But when evaluating a T1 enhancing agent, it is the T1 sequence that is the scientifically most relevant sequence to look at, or the only relevant sequence to look at. I hope that was an answer to your question.
And just to clarify, sort of provide some context, the gadolinium products on the market today, they also enhance T1, and like all agents, they don't have effect on T2 or diffusion-weighted imaging. It's not, you would say, an unusual thing. After dosing with all the agents, when you look at the T2 and the diffusion weight, those images are similar between unenhanced and all the agents. It's not like we are making any changes to that. We're measuring where there's an expected difference based on the mechanism, and that's the T1.
Great. Thank you.
The next question comes from Fredrik Thor from Redeye. Please go ahead.
Yes. Hello, and thank you. One question was if they would accept a new re-read, but with all images. Would there be any difficulties in doing this from your perspective, or pretty straightforward, for example, when it comes to statistical power and so on?
In that scenario, no, there wouldn't be any issues. That's the short answer.
Yeah. We have the images.
Yes.
Everything is captured.
Yeah. Yes. It's straightforward.
Got it. Also a second point from that was about the risk of bias in the training and what is your interpretation of this and how can it be resolved? Do you see that it pose any risks if they are not accepting a re-read or, yeah, can it be solved in a way?
Our view is that we have full control over the read process, the training process, the blinding of the readers in the re-read were appropriate. This is one of the questions we need to clarify with the agency. What exactly is it that they have a concern about? But we know that we have done that you should do to prevent biases of all sorts.
I think that was also the need for re-read in medical imaging is not unusual. It's also in the public space that, for instance, some of the gadolinium agents have been approved where a re-read was important part of the submission. Obviously, no two cases are alike, but it's not something completely out of the ordinary.
Got it. Thank you. That's all from me.
Thanks, Fredrik.
There are no more phone questions at this time. I hand the conference back to the speakers for any written questions and closing comments.
Yep. There are no written questions as of today. Thank you everyone for joining the Q2 report for 2026. We look forward to updating you once we receive the minutes or if anything happens before then. Thank you and have a great day.