Earnings Call: Q2 2021

Aug 19, 2021

Ladies and gentlemen, welcome to the Acelia Pharma Audiocast with Teleconference Q2 2021. Today, I am pleased to present CEO, Magnus Korfertsen CFO, Christian Borwass CMO, Karl Bautmaar and CCO, Julie Walrus Brogren. For the first part of this call, all participants are in listen only mode And afterwards, there will be a question and answer session. Speakers, please begin. Thank you. Welcome, everyone, to the webcast for Cilius Palmer's Q2 report in 2021. We have the management team here with me, and we look forward to updating Now please turn to Page 2. We will be making certain forward looking statements on this call, so please pay attention to this. Now please turn to patient number 3. A senior 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. Orbeglance, formerly known as Mangrove, is an ongoing Phase III clinical trial. It will be the only product targeting an addressable market of $500,000,000 to We expect to start the clinical study later this year. We have a strong and experienced team headquartered in Malmo, Sweden with a strong track record in late stage drug development and commercialization. We have a solid financial position to reach Important milestones. Now please turn to Page number 4. Assunio Pharma is in a transformative phase as we're moving from late stage development Commercial stage. Our lead program OrbitGlance is expected to be launched in the U. S. In the second half of twenty twenty three and the preparations are ongoing. In the same time frame, we expect that the Phase II VANQUAL will be nearing completion. As part of our strategy, we might expand our portfolio with additional drugs that fit our oral oncology strategy and where we can make significant benefit for patients. This is an exciting time for our Zealand pharma, and we see tremendous value Now please turn to Page number 5. In Q2, we continued to make progress. In April, we held an extraordinary general assembly to approve the share issuance to raise SEK 200,000,000 to strengthen our balance sheet. The activities in the quarter were very operational. So despite a thin flow of press releases, significant progress was made in many areas. In August, after the close of Q2, we had several news releases, which I'll go through in the next slides. Now please turn to Slide 6. On August 10, we announced the conditional approval of the brand name Orbe Glass for our oral manganese product candidate formerly known as Mangoral. This includes the approval is a lengthy process involving a surprising amount of Including risk of interchangeability with other product names. The BRAINHEM is approved by both the FDA for U. S. And EMA for Europe. We will use Overglance going forward, which is particularly important when building the brand and awareness in the broader medical community. Now please turn to Page 7. On August 13, we announced the acceptance of our old paper presentation at the RSNA 2021 in Chicago, the largest radiology conference in the world. The top line results were presented in December 2020 and includes a head to head comparison between OrbitGlance and the liver specific Galilean agent MultiHands. Top line results already announced showed that oral organs was as effective for visualization of focal liver lesions as multi hands, with 2 out of 3 readers having higher scores for OBLIGLANS. It also showed OBLIGLANS provide Improved efficacy compared to unenhanced MRI using the same endpoint as is being used in SPARCL. This demonstrate the value of all claims And will support our interaction and communication towards patients, healthcare professionals, regulatory authorities and payers. Now please turn to Page number 8. Yesterday, we sent out a press release relating to Spark's completion timeline. As everyone knows, COVID-nineteen continues to affect societies and in particular, healthcare systems. This applies also to most clinical trials and also to Spakle. We see a clear effect on enrollment in a given country when the infection rates Hi. As previously communicated, we have taken measures. We have increased the number of sites as well as operational measures such as home and nurse home visits or safety follow-up. We're making good progress with the enrollment curves, but nevertheless, We continue to see an effect of COVID-nineteen. After reviewing the enrollment curves together with the Board of Directors, We have decided that it's more likely that the enrollment will be completed in first half twenty twenty two and hence send out the press release. We're disappointed with this change and I can assure you that the entire team is working as hard and as creatively as we can to complete the study as fast as possible. Now please turn to Page 9. Now we'll go into more depth on our pipeline, and I'd like to hand the word over to our Chief Medical Officer, Caudelmar. Thank you, Magnus. Let's go to the next slide. Yes. So oral glass is a novel oral contrast agent for liver MRI, which addresses a very The contrast agents available today are all based on gadlenium, a heavy method. Yardenium should not be given to patients with poor kidney function since it is excreted through the kidneys and slow elimination can cause serious side effects. In the future, this unmet need can be met by OrbiGlance. This specific target population is approximately 4% of all patients requiring a liver MRI, which corresponds to an addressable market of USD 500,000,000 to USD 600,000,000 annual in the major markets. The right side of the slide shows how OrbiGlandse works in a patient with colorectal cancer. The left picture shows an unenhanced MRI scan without the contrast agent, standard procedure today in our target population. The right scan shows the same patient after administration of OrbiGlynce. The liver has taken up OrbiGlynce and appears bright. There's one dark area highlighted that's only visible after Orbiter's enhancement. This is a metastasis, which would not have been detected without contrast agent. And this illustrates the importance of the contrast agent. In this case, since detected and localized, the metastasis may be removed with significantly improved prognosis for the patient. And we are making good progress despite the extended timelines caused by the COVID-nineteen pandemic that was mentioned earlier. We should also mention that the development is validated and aided by an orphan drug designation from the FDA. Move to the next Slide 11. Thank you. So our ongoing registration study, SPARCL, investigate efficacy and safety of orbital lines in the target population with focal ligulations and poor kidney function. As shown on the left, there's a strong clinical proof of concept through 6 individual Phase 1 or Phase 2 studies in very consistent results. And this data were confirmed by an independent reanalysis by blinded reader, which shows highly significant effect on endpoints that are also used in Sparkle. The primary endpoint Solution visualization based on the co primary parameter deletion delineation and lesion contrast compared to background, which were both highly significant in the Phase 2 program. The existing data also contains a direct comparison to gadolinium based the Liber Contra Stadium, which demonstrated similar effect on lesion visualization. As mentioned, these results have been selected to be presented at RSNA in November. On the right side of the slide shows the Phase 3 design. The study, which is a global study with 200 patients, Has been agreed with FDA and EMA, the strategy is to repeat and confirm the Phase 2 results using the same endpoints. And since there is no available conference agent for patients with impaired renal function, the comparator will be unenhanced MRI, which is currently the solid procedure in these Patients. It should also be mentioned here that the follow-up for each patient is very short compared to most clinical studies. And this simplifies the operational procedures And we will also have the final data relatively sooner than in typical Phase III study. Thank you. And I will now turn to my colleague, Jurgen. Thank you, Pat. On Slide 12, highlights from our commercial opportunity and preparations for launch. We estimate that the value of the addressable market for all the brands to be between $500,000,000 $600,000,000 in our key markets That is the U. S, Europe and Japan. This estimate is driven by solid market research into both the volume potential, I. E. Patients and procedures to patients and the pricing potential based on extensive input from market access and pricing experts. Secondly, our market research shows that decision makers Understand the unmet need for our target patient population and they understand the value that Microhealth can provide. Our preparations for launch progress as planned, for example, with the recent conditional approval of our brand name, Overglance. And we continue to see a strong case for building our own commercial operations in the U. S. In March this year, we opened our U. S. Legal entity and office in New Jersey, which marks any problems that in our launch preparations. Last year in December, a patent was granted in the U. S. For our 2nd generation product, which provides protection That's until 2014. On Slide 13. For the U. S, the attractiveness and clear path to market provides a strong case for commercializing overglance on our own, Building U. S. Commercial operations. The target patient population for ovarian has multiple health complications, Suspected liver metastases and poor kidney function. This means that decision makers for its use are centered around 2,000 radiologists who can be found at 400 hospitals. This means that a sales team of Around 20 FT feet feet feet feet feet feet feet feet feet feet feet feet feet Es can reach priority decision makers at launch. We now have our U. S. Office established, which represents an important step to engage more closely with key partners and the clinical community on the journey to make oral glands available to physicians and patients in the U. S. We already have strong relationships with leading radiologists among our Phase III clinical study As Spackle investigators, we also have partnered with specialists and organizations in manufacturing and in radiologists in the U. S. Building our own commercial team in the U. S. Allows us to create an attractive top line and retain profit and value in Acelia Pharma. For other markets, the EU and Japan represent the most attractive opportunities in size and value. In these markets, our strategy To maximize value of Overglance by working with partners with existing local expertise and relationships with decision makers. With this, I'll turn it to Karl on Slide 14. Thank you. So now we switch to our second Asset in clinical development, which is Oncorals. Please move to the next Slide 15. So the active substance of Oncorals is irinotecan, an established pancreatic cancer. And in Japan, it's also approved for gastric cancer. And today, the administration is intravenous Invusion, typically every 3rd week and typically high dose. So Oncrel is a novel oral formulation of Aurinotecan. It's a tablet for daily dosing that could offer a valuable treatment option for cancer patients in the future tomorrow. And there are several Potential advantages with an oral daily dosing, most important efficacy. It's well known that many cancer types have a suboptimal treatment outcome today. And an oral daily dosing may improve efficacy through favorable pharmacokinetic and pharmacodynamic profile based on a more Constant therapeutic plasma levels of the active substance. And there are both non clinical and clinical data supporting this concept. And I'll come back to that. Then there is tolerability or safety. Intervenience dosing of chemotherapy is frequently associated with severe side effects, typically gastrointestinal and hematologic. An oral daily dosing has The potential for improved tolerability by avoiding high plasma levels and by offering dosing flexibility. And in addition, there's convenience and cost. It's more convenient and cost effective to take tablet at home than going into the hospital and prepare for an intravenous administration. Move to Slide 16, please. So the concept of frequent low dose administration is called metronomic dosing. And the picture to the left illustrates The simulation model comparing levels of the active substance SN38 after irinotecan IV Dosing every 3rd week, that's a gray line and oral oncoral dose daily, that's the orange 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. And approximately 1 third of the side effects observed after intravenous dosing are reported as severe or even life threatening That's grade 3 or 4. Metronomic dosing may not only reduce the peak related toxicity, but also bring the possibility to adjust the dosing Quickly, if adverse events should occur. And our own Oncroll Phase 1 results show that Oncroll was well tolerated overall and importantly, the hematologic activity or stable disease even in patients that previously progressed or got worse on irinotecan given intravenously. Move to next Slide 17. And this is an example of improved outcome, 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 a dosing every 3rd week, High dose to 32% with weekly dosing with a slightly lower dose. So this is, if you will, a proof of principle. Move to the next Slide 18. So we are now preparing the Phase 2. The objective of the Phase 2 study are several. First, to establish clinical proof of concept in metastatic gastric cancer. And gastric cancer is chosen partly because of strategic reasons. There is a potential for an orphan drug designation in gastric cancer and the clinical guidelines and clinical data support efficacy of our Inotecan in gastric cancer. And subsequently, there is potential for label expansion into other solid tumor indications as well. Other objectives is to generate compelling Phase II data for further development, potentially with a partner. The study is randomized, controlled, multicenter, multinational study comparing Oncoron top of standard of care with standard of care alone. The primary endpoint is typical for Phase 2 study in oncology, progressive free survival. And then we have the usual battery of secondary endpoint Response rate, PK, safety and overall survival. And this will include approximately 100 patients, and we anticipate to start Second half of this year, 2021 and continue into 2024. So we can go to the next slide. And here I'll turn over to Gastric cancer is today a $3,000,000,000 market. Every year more than a 1,000,000 people are diagnosed with gastric cancer. In the U. S. And Europe, gastric cancer is an orphan disease with around 110,000 patients diagnosed at 1,000,000. Around 60,000 of these received drug treatment and progressed to advanced stage disease. Gastric cancer is more common in Asian populations where more than 500,000 patients are diagnosed every year. We can move to Slide 20. We see opportunities for expansion into other implications where a daily tablet formulation can demonstrate an attractive efficacy and safety profile. Irenotricin in an IV formulation is already approved in colorectal and pancreatic cancer. In addition, Irenotricin It's clinically demonstrated in many other common cancer types and it's recognized in the NCCN guidelines for many cancer types. We will assess these opportunities for other indications as our Phase 2 study progresses and as part of our ongoing strategic task With this, we can move to Slide 21. Thank you, Yulif. And please Now switch to Page 22. So development in earnings for the quarter as well as for H1 competitive corresponding periods Last year is the same as we discussed on recent calls. The increased loss year over year is as expected and reflects the increased R and D activity related to a Phase 3 clinical program, oral glans as well as the Phase 2 preparations for Oncora. We now turn to Page 23. So the key message on the liquidity position It is that we stand with a solid cash balance, which was amplified by the capital raise we did in the spring. So with SEK 319 1,000,000 in the bank, we have financing well into 2023. The cat position will primarily be used for Orbegast ongoing Phase III study as well as pre commercial activities and also for on cross Phase 2 clinical study, which is about to start. With that, I leave the word over to Magnus. Yes. Thank you, Christian. Please move to Slide number 24. So I'd like to end this quarterly update with a focus on the rest of the year. Obviously, the clinical development of orbital lens is our key priority. Despite COVID-nineteen impact, we have continued to make Successful progress and working with investigators and consultants to make the study a success. And we are adapting to the circumstances to ensure that patients, Medical staff, employees and everybody else are safe. We expect to complete enrollment as previously communicated in first half next year. We continue our preparations for OrbitGlench commercialization and have many activities ongoing to enable us to detail and implement the value maximizing strategy. Launch is now planned for the second half twenty twenty three. Another important activity is our preparations for the alcohol Phase 2 program, which we expect to start later this year. This was our final slide, and we'd be happy to take any questions. Thank Our first question comes from the line of Sten Westerberg from Axi Analysis. Please go ahead. Your line is now open. Yes. Hello. Good morning. Thank you for taking my question. First of all, given the In Clinical Research, are you taking any particular measures to secure the quality of the clinical data that is Generated in the SPARCL study. And I also wonder, given the time line that you now are providing us, It appears to me that it will take more than 2 years to recruit 200 patients To the SPARQL study, is that a good reflection of the general situation in Clinical research or are there any particular features of your study which may further Complicated the recruitment to this study. Thank you. Okay. Thank you, Stan. So I'll start with the first part or sorry, the second part of your question. And I think you alluded to the 2 year recruitment time. And I think, yeah, this is something this pandemic situation, which is very challenging, affects not only our program, but All clinical research in general for various reasons. And that's easy to imagine. And then So this is a general thing. And then your question is, if our is there some specific issues with Our study of our population. And I mean, there's one thing that we could mention here that our patient population, we have No suspected liver lesions, typically cancer diagnosis or cancer diagnosis and in addition to that, severely reduced kidney fracture. They are Sometimes more vulnerable than others patients in clinical research. And that could make them more Hesitant to come to the hospital for clinical visits because they are simply afraid of Getting infected and we've seen examples of that. Now what we so that's something that we have identified and we Seeing that, but what we're doing to mitigate that particular one is and I think it was mentioned by Magnus earlier here also that we are In implementing home care services and visits. So in other words, to try to reduce the required visits at the hospital. So We come to them instead of the other way around. We are trying to work around these specific issues, but that's sort of one issue that We have identified. And then your second or your first part of the question, I didn't really understand that. It was Something about quality of the clinical data. So can you please just elaborate on that, so clarify the question? Yes. I've seen some reports about possible impact on the Quality of clinical research given the current difficulties with the COVID infection. So my The quality of the clinical data which is generated in the SPARCL study in light Of the COVID-nineteen situation? Right. So I think that could apply 2 typical clinical studies where you follow a patient long time and they are not able to come to the regular visits, there will be sort of Missing data. We don't have that problem with our study and that's because It's an imaging study. So basically and it's a very short follow-up, as we mentioned. And as you know, the sort of patient basically comes in and you do The imaging procedures and the teleconference areas within one visit and then we have the follow-up visits. So and we have very thorough Quality controls and quality criteria. And so that part, I'm not really And we do for the patients we have recruited and treated so far, we have an ongoing quality Quality control system, so we haven't identified anything on that part. And also just to add a comment here. So for the primary endpoints, that is based on the images That are being taken when the patient is in hospital at the visit, right? So they are sent to a central database. So you would say the risk of missing follow-up visits is to the extent it applies, then that is related to safety. And again, we don't see that as a particular concern. It's fair question though, Stan, but I don't think it's a price to this time. Yes. And just to add in terms of also the first release and now as As you all know, we started the study last year and especially last spring was a very Volatile period of time. We saw and there the getting new sites on board and finalizing the contract with the hospitals Took a lot longer because they basically were put on the back burner. We expected that, but maybe it took a little longer for the Administrative part of that process to get going than we had hoped for. So now we see things are operating better. And also in terms of if you look at various new sources, unfortunately, one of the Other consequences of COVID is that the rates of cancer diagnosis are going down. It ought to be sort of a positive piece of news, but most likely it's related to the fact that patients are not being diagnosed as well as they should be and as They are during normal times. So that's also a factor. But again, we see things improving quite significantly Even in areas with COVID, societies and health care systems are learning to cope with the fact that COVID is here to stay purple. Okay. Thank you, Mark. I'll get back in line. Johan Unilever of Redeye. Please go ahead. Your line is now open. Thank you. Thank you for taking my question. Just some Practical follow-up questions. Firstly, to just increase the level of understanding at least on my part, Is there any particular part of the process that's more exposed During this COVID, is it the general checkup and diagnostics that have made it more difficult? Or is it the follow-up Imaging that has made it more difficult or just making the patients willing to participate A study that may be perceived as more complicating the process. Okay. I'll try to address that one. Well, as I mentioned here, this exceptional situation has affected All clinical research for the last year and a half or so. And specifically, as I mentioned here, I think we have a very vulnerable patient population, Make them more hesitant to come into hospitals. So there's a barrier to visits and barrier to Joint clinical study. But in addition to that, there are various types of restrictions at the hospital. And that could be that there's a general burden of the hospital because they're just affected by the COVID situation. It could also be restrictions implemented By the management of the hospitals today or at the country level, for example. So they implement restrictions For clinical research, so certain types of clinical research or all clinical research are put on hold basically because they need to focus on The resources on the health care, general health care. So those are the kind of issues we are dealing with. Yeah, yeah. No, that was most helpful. So there is a little bit of Random involved, if you have a study in different states and counties, how what sort of Restrictions they implement. I mean, if you're very lucky, you get less exposed. And if you're somewhat unlucky, you get more exposed. That's correct. And that's also something we've seen now that it has fluctuated over globally over the last year and a half. So You have one period where one area is more effective and then you have another one. And you can take U. S. As an example, where we all thought and hoped Before the summer here that this was come to normalize, especially since there was a vaccination. So I think very few could foresee the developments we've seen just there recently over the last This week, there are new reports on currency in the U. S. Going in the wrong direction. We didn't expect this. And one thing we have done to mitigate that To open up new countries in new regions. We are in LatAm. We are in the North America. We are In Europe, we are in Russia, for example, just to sort of spread the study geographically. Thank you. And that probably brings us over to my second reflection of question that perhaps it would be a good idea to have Yes, the monthly update or send out some short update To let us know where you are without causing any increased uncertainty and overloading our information, A short update. Yes. Thanks, Johan. I think we continue with our communication strategy in terms of we do our analysis, we look at the curves and then See the progress that is being made. And then we have the overall communication on when we expect it to be completed. I think the risk is that If we're sending out a lot of different data points, then we I think there's a considerable risk that we get Opinions all across the board. And I think it's better to have us together with our CERO and assess the curves Look at the projections and use that estimate. And obviously, we're very disappointed that we had to extend the timeline of recruitment. But I think that's probably best for everybody. At least that's our policy. Yes. No, that's appreciated. And of course, it's a difficult trade off. Yes. Thank you. Thanks for the question. Thank you. Our next question comes from the line of Stijn Westerberg of AktaeAnalysis, please go ahead. Your line is now open. Thank you. I'll go for a second shot there. First of all, Is it possible for you to disclose the share of approximately the share of U. S. Patients In the finalization of the study, how many U. S. Patient will there be in the 200 cohort? And also second question, since this is an open label study, are you continuously Retrieving vessels from the patients that have been treated so far. Thank you. Yeah. So we will not share the proportion of U. S. Patients, not where we are now. And We will, of course, at the end of the study, we will disclose that and that will be topic. But we don't give You know the guidance or prognosis for that right now. So and the second question, if we learned anything, well, So does that refer to the data or to the study performance in general? I'm thinking of the adjudication work Done by the 3 radiologists that are looking at The MRIs, since it's an open label study, Are they continuously reporting outcome From the centers or is this being summoned up in a later stage? Yes. So they are continuously reading this and they do it in batches So, yes, X number of patients and then they do read and so on. And it's a very detailed analysis that they do and Detailed readout. We don't see that data until the end of the study. So that will be disclosed to us as sponsors. There's the numbers and the statistics around that at the end of the study. So what we have received is just anecdotal Feedback from the investigators and sites and because they can see the scans and sometimes they feedback. And that's all positive, what we would expect based on what we saw in Phase 2. But for the detail, The numbers and the exact readout for lesion visualization and the delineation, the certain scales there, that data data we don't see until the end of the study. Okay. Thank you so much. You're welcome. Thank you. We currently have no further audio questions. I'll hand back to the speakers for any final remarks. Yes. Thank you, everybody, for excuse me. Thank you everybody for taking part in this quarterly update. So we are making good progress, but Even despite of the extended recruitment timeline, but I can assure you, as mentioned earlier, we're working as hard as we can to get it Complete it sooner rather than later. And we will continue to update you on our progress. So thank you everyone. Have a good day.