Welcome to Ascelia Pharma Q2 2023 report presentation. During the questions and answers session, participants are able to ask questions by dialing star 5 on their telephone keypad. I will hand the conference over to CEO Magnus Corfitzen. Please go ahead.
Thank you, and welcome everyone to the webcast for Ascelia Pharma's Q2 report of 2023. I'm Magnus Corfitzen, CEO of Ascelia Pharma, and with me today, I have Julie Waras Brogren, Deputy CEO and Chief Commercial Officer, Déspina Georgiadou Hedin, Chief Financial Officer, and Andreas Norlin, Chief Scientific Officer. We'll go through the quarterly presentation and then open up for questions from the audience. We will be making forward-looking statements on this call, so please pay attention to this. 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 has completed patient enrollment in a global phase III clinical study.
Orviglance also has orphan drug designation from the FDA and is targeting an addressable market opportunity of $800 million. Oncoral is ready to start phase II in the treatment of gastric cancer, based on encouraging results in phase I and a high level of unmet medical need. Our company is based in Malmö, in Sweden, and we are listed on Nasdaq Stockholm. External events in the second quarter of 2023 was focused on presentation of Orviglance in the scientific community. In June, Orviglance data from the hepatic impairment study was presented at both the European Society of Gastrointestinal and Abdominal Radiology, the ESGAR annual meeting, as well as the European Association for the Study of the Liver Congress, EASL. At the ESGAR conference, we also hosted a Q&A session with two experts in liver imaging. This recording is available on our website.
After the close of the quarter, we reported that a new reading of all the SPARKLE images is necessary before a conclusion of efficacy can be made, because of a high level of intra-reader inconsistency by 2 of the 3 readers. It is both surprising and disappointing that a re-evaluation is needed in order to reach a conclusion of Orviglance efficacy in the SPARKLE study. In our design of the SPARKLE evaluation, we have followed FDA guidance to have a subset of patients whose images are evaluated twice by the same reader. This is a quality control setup to measure consistency of reader scoring of the images. If the readers are inconsistent, these 2 scorings of the same image by the same reader will be significantly different. This is high intra-reader variability. Unfortunately, this is what happened with 2 of the readers in the image evaluation process.
Our Chief Scientific Officer, Andreas Norlin, will go into more detail later in this presentation. What this means for Ascelia is that we need to do a re-evaluation of the SPARKLE images, and we will consult with the FDA during this process. I'd like to emphasize that we have all the data and all the images from the SPARKLE study, which is what we need. This means that we do not need to enroll more patients or do another clinical study. The issue we have is that the evaluation phase, the reading of the SPARKLE images, was not done with acceptable quality. The image re-evaluation is our only priority, and our ambition is that our current cash should be sufficient to reach the re-evaluation results.
We've taken cost-saving initiatives and deprioritized all other activities to complete the re-evaluation as fast as possible and extend financial runway by as much as possible. In mid-September, we will present a timeline and financial runway. Now, I'd like to hand over the word to our Chief Scientific Officer, Andreas Norlin.
Thank you, Magnus. I'd like to start with a reminder of how efficacy of Orviglance is evaluated in the SPARKLE study. The evaluation of primary endpoint is carried out by three independent blinded radiologists or readers, and the liver lesions, that can be of different types, are scored in two ways: border delineation, which is a measurement of how sharp the lesion border is seen against the background, and lesion contrast, the difference in brightness between lesion and background. Each reader scores both border delineation and lesion contrast for all the observed lesions in all images from all patients. For each of the three readers, the difference in scores for border delineation and lesion contrast between enhanced and unenhanced images are then evaluated through statistical testing.
The primary endpoint of the study is met if two out of three reader scores both border delineation and lesion contrast for Orviglance MRI higher than unenhanced MRI with statistical significance. You already have heard, a new reading of all the SPARKLE imaging, images is necessary before a conclusion of efficacy can be made, because of a high level of intra-reader inconsistency or variability by two of the three readers in the efficacy evaluation. The high level of intra-reader variability was seen in all image series, also in the unenhanced images. This is a very important piece of information that I would like to emphasize, because we have received a lot of questions about this. The intra-reader variability is not a consequence of that Orviglance is not working. What has happened is that our method of measurement has not worked as it should, and we cannot conclude anything.
When measuring effects in clinical trials, it's naturally critical that the method of measurement is reliable. That is, that you can trust that you get a true measurement of the effect of your drug. FDA's guidance for ensuring this in studies with imaging endpoints, is to examine how much individual readers vary their evaluation of the same set of images at two different time points. This is exactly what we have done in SPARKLE, and how we have detected this problem. About a quarter of all patients in SPARKLE were fully evaluated twice by the three readers. The scores for border delineation and lesion contrast in the first and the second evaluation were then statistically tested, and we could see the high variability in two of the readers' scores.
Some variation is expected and acceptable, but when the difference between the first and second evaluation is too large, as we have now observed, we must conclude that the reader is too inconsistent in his or her scoring. It is then not possible to know which result is true, and the results cannot be utilized to support a regulatory review process. It is, of course, very unfortunate, but a new read of images can be done so that we can make a proper evaluation of the efficacy of Orviglance. As Magnus mentioned in the beginning, we have all the images. All data is collected. No more patients are necessary to enroll. We have initiated the first activities and are working on the detailed plan to make sure we get the efficacy data as soon as possible. Let's quickly also remind us why we are developing Orviglance.
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. The liver metastases are developed over time and are often the primary cause of mortality. Being able to visualize and detect metastases is therefore crucial when making treatment decisions for patients with metastasizing cancers. Today, contrast enhanced MRI is the gold standard procedure for examination of patients with suspected or known liver metastases. The contrast agents available today are all based on the heavy metal gadolinium, which works well as an MRI contrast agent. In patients with severe kidney impairment, use of gadolinium-based contrast agents has been associated with an increased risk of severe side effects, a condition called nephrogenic systemic fibrosis.
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, with the consequence that patients with impaired kidney function may not get the best MRI procedure and risk to not get the optimal management and treatment of their cancer. We envision that Orviglance will address this unmet medical need in the future and become an efficacious non-gadolinium contrast agent for cancer patients with impaired kidney function. To summarize, our confidence in Orviglance remains because we see that the high and well-defined unmet need for liver imaging in patients with poor kidney function is still there. There is a global addressable market opportunity of around $800 million, and Orviglance has demonstrated consistent positive efficacy and safety in the eight phase I and II studies that we have completed.
This has not changed, and we remain equally hopeful as before that the phase III study will have a positive outcome. SPARKLE is the ninth and last clinical study in the Orviglance development program. All patients needed have been enrolled. The adverse event reporting in SPARKLE show that the common adverse events were in line with what we have seen before. We are currently planning the reevaluation of the images so that we can conclude on efficacy of Orviglance, and then continue the process of bringing Orviglance to the patients in need of a non-gadolinium liver contrast agent. I will now hand over to Julie Waras Brogren, our Chief Commercial Officer and Deputy CEO.
Thank you, Andreas. The addressable market for Orviglance has a global value of $800 million annually. The U.S. represents almost half of this. Our addressable market is based on a well-defined patient population, supported by real world data. That is realized procedures in cancer patients with poor kidney function who have abdominal imaging procedures. The well-defined patient population with a clear unmet need also drives an attractive pricing opportunity. As mentioned, the U.S. is the largest commercial opportunity. In the U.S. alone, real world data shows that 100,000 abdominal imaging procedures are performed for 50,000 patients that fall under the black box warning for gadolinium contrast agents. This is about 4% of the cancer patient population.
In terms of pricing, we have extensive input from market access and pricing experts, with whom we've tested different pricing levels and collected insights on the evidence needed to support access and reimbursement. We have investigated pricing and access benchmarks of other innovative diagnostic drugs in the US. 90% of healthcare professionals are concerned by issues related to gadolinium contrast agents, including NSF, as Andreas described. In fact, 16% of providers have experienced gadolinium-induced NSF. These insights come from market research with 270 US healthcare professionals, and answers from radiologists, nephrologists, and oncologists. The insights confirm the concerns with gadolinium in clinical practice and the unmet need for Orviglance.
Beyond the risk of NSF in kidney-impaired patients, gadolinium is well known to be retained in the brain and tissue in all patients. Scrutiny over the possible safety effects is a key concern of regulatory and medical bodies. It is also well known that gadolinium is excreted via the kidneys in urine. Because it's difficult to remove in our sewage systems, it's discharged into the environment and into our drinking water. There's an urgency from regulators and medical bodies to find a viable alternative to the growing use of toxic gadolinium. An alternative that is neither associated with the short and long-term safety concerns of gadolinium for patients, nor the unknown effects of gadolinium in our environment and drinking water. In short, the momentum for an alternative to gadolinium is getting better and better. The industry is responding.
Recent dynamics tell us that innovation from the large gadolinium manufacturers is focused on smaller doses of gadolinium, and there's even an early-stage manganese-based full contrast agent. We are excited that we have a head start, and that Orviglance is expected to be the first in class to lead a gadolinium-free future. With that, I will hand over to Andreas again to talk about Oncoral.
Thank you, Julie. Yeah, so let's move on to Oncoral. The active substance of Oncoral is irinotecan, a well-established chemotherapy. It is approved for colorectal cancer and pancreatic cancer, and is also included in U.S. and European cancer treatment guidelines for treatment of other cancers. In Japan, it's 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, based on a drug delivery technology designed to overcome issues with absorption of the drug. A tablet formulation enables more frequent daily dosing that could offer several potential advantages on both efficacy and safety. 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, with more constant drug exposure at therapeutic plasma levels.
There are both non-clinical and clinical data supporting this concept. Intravenous dosing of chemotherapy is frequently associated with severe and dose-limiting side effects, typically gastrointestinal and hematological. Oral daily dosing has the potential for improved tolerability by avoiding high plasma levels and by offering dosing flexibility. We are planning for taking Oncoral into clinical phase II, and the objective is to generate a clinical proof of efficacy in metastatic gastric cancer. The strategic reasons to choose gastric cancer are several. First, gastric cancer is a severe cancer form with a high unmet need and a potential for orphan drug designation. Secondly, the clinical guidelines and clinical data support efficacy of irinotecan in gastric cancer. Lastly, as shown in the figure, there is data from gastric cancer animal models indicating a synergistic effect of irinotecan when combined with LONSURF.
LONSURF is another oral chemotherapy developed by Taiho Oncology, and approved for monotherapy treatment of metastatic gastric cancer in 2019. This all-oral combination of Oncoral and LONSURF could potentially provide a more potent treatment alternative for these patients. The planned studies are therefore a study comparing Oncoral combined with LONSURF against LONSURF alone. The study will randomize approximately 100 patients and involves a clinical collaboration with Taiho Oncology, who will provide LONSURF for the study. After an initial dose escalation part to establish the Oncoral dose in combination with LONSURF, the proof of concept will be demonstrated by the assessment of progression-free survival, which is a typical endpoint for a phase II study in oncology. A start date has not yet been communicated, as we are prioritizing the successful completion of the Orviglance development. Back to Julie again.
Thank you, Andreas. Irinotecan is a well-established chemotherapy, therapy with recognized anti-tumor effect in solid tumors. Our strategy is to start Oncoral development in gastric cancer, which is today a $3 billion market. For these patients, there's a high unmet need for improving outcomes and the 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 efficacy and safety profile.... Irinotecan as an IV formulation is already approved in colorectal and pancreatic cancer. In addition, Irinotecan is 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 over to our CFO, Déspina.
Thank you, Julie. At the end of June, we had SEK 1 million in the bank. Our mission is to complete the SPARKLE image re-evaluation with the current cash, therefore, we are reducing activity not related to the re-evaluation and have taken cost-saving initiatives. In mid-September, we will communicate the timeline for the re-evaluation and our financial runway. Here we see the development in earnings. The key takeaway for the quarter compared to the corresponding period last year is an increased loss, which is as expected. The expected loss reflects an increased R&D activity related to phase III clinical program for Orviglance, NDA preparation, commercial preparations, as well as the phase II preparation for Oncoral. With that, I leave over the word to Magnus.
Thank you, Déspina. That we still don't have a conclusion of Orviglance efficacy based on SPARKLE is extremely disappointing. There are patients out there in need of Orviglance, and we remain committed to making Orviglance available to them and address the $800 million market opportunity. We're working on the plan and the timelines for completing the re-evaluation of the SPARKLE images, and we will share it in our financial outlook in mid-September. I'd like to emphasize, as Andreas also said, that our work on the re-evaluation has, of course, already started. In addition to Orviglance, there's Oncoral, which has attractive potential in gastric cancer as well as other solid tumors.
In my ending here of our presentation, I'd like to make clear that we continue to have high confidence in Orviglance, also after experiencing the very unfortunate and unacceptably high level of intra-reader variability from the two readers, and look forward to moving the company forward. This was the end of our presentation, 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. There are no more questions at this time, so I hand the conference back to the speakers for written questions or closing comments.
Yeah. Thank you everyone for, for joining. We have, t here are no questions from the people who have dialed in or in the in the question lock here. Thank you for, for listening to the presentation. If there should be any follow-up questions later on, you are welcome to, to send us an, an email and, and we will respond to that. As I said, this is very, very unfortunate, but we continue to have confidence in Orviglance, and we are committed to getting the re-evaluation completed, and we are optimistic about the outcome of that. Thank you and have a good day.
This concludes today's call.