Hello, and welcome to the Alligator Bioscience audiocast for teleconference Q1 2022. Throughout the call, all participants will be in a listen-only mode, and afterwards there will be a question and answer session. Today, I'm pleased to present CEO, Søren Bregenholt. Please begin your meeting.
Thank you. Welcome to this interim report call from Alligator Bioscience. My name is Søren Bregenholt, the CEO of Alligator Bioscience. With me today, I have our Chief Financial Officer, Marie Svensson. Before we get into the actual call, if we could have the disclaimer, I wanna remind you that during this call, there will be forward-looking statements both on the financial performance and the actual project performance of the company. If we go to slide number 3, I just wanted to highlight some of the priorities that we and some of the milestones that Alligator achieved during 2021, allowing us to go into 2022 in a strong position. First of all, we initiated phase II clinical development with our lead asset mitazalimab in first-line pancreatic cancer patients in combination with FOLFIRINOX chemotherapy.
For our phase I asset ATOR-1017, we reported positive biomarker data and safety data and the intention to move forward to phase II. We presented several collaborations during the year, including key collaborations with MacroGenics and Orion Corporation from Finland. The company approximately raised SEK 340 million to advance both our clinical programs and our preclinical portfolio. We were able to advance our technology platform, Neo-X-Prime. During last year, we also recruited a new Chief Medical Officer who started with Alligator on February 1st. Let's get into the highlights for this first quarter of 2022.
We have recently reported the successful completion of the phase I-B safety cohorts in OPTIMIZE-1 with mitazalimab, confirming the safety and tolerability of the molecule at the highest tested dose, 900 mg/kg in combination with FOLFIRINOX, the most efficient chemotherapy currently used in pancreatic cancer patients. This has allowed us to continue the trial at 900 mg/kg and at the highest tested dose in the phase I-B. The part two of the phase II of the program is now enrolling patients at 900 mg/kg , and we still expect to be able to report interim efficacy readout towards the end of the year.
For ATOR-1017, we have completed the 600 mg dose cohort in the phase I study during this quarter and with no significant safety concerns reported. We have commenced the enrollment of patients at the highest planned dose at 900 mg and expect to report the full data from the trial at ASCO later in the year. On the people side, we have the pleasure of welcoming Professor Gregory Beatty from University of Pennsylvania as a scientific advisor to Alligator. We have also initiated a sponsored research agreement with Dr. Beatty's laboratory to study and analyze biomarkers in OPTIMIZE-1 phase II clinical trial. As I said, as of February 1st, we welcome Sumeet Ambarkhane as our new Chief Medical Officer.
Sumeet comes with in-depth experience in medical science and clinical development, regulatory submissions and project registrations, skills that will significantly enhance Alligator's ability to successfully develop mitazalimab and our other preclinical and clinical assets. If we go to the next slide. As I just said, mitazalimab is initially being developed in pancreatic cancer, a disease that will affect approximately one in every 75 individuals in the industrialized world. The five-year survival rate is between 3%-9%, even in patients being treated with chemotherapy. The disease is resistant to many standard therapies, and therefore new therapies and approaches are greatly needed. There is, in other words, a significant medical need.
Taking a closer look at mitazalimab, which is a CD40 agonist, currently being developed in first-line pancreatic cancer in combination with FOLFIRINOX. We completed, as I said, the 400 microgram per kilogram safety cohort in January, went straight on to fully recruit the 900 mg/kg safety cohort, which we completed in March, leading the data review committee to deem 900 mg as safe and tolerable and as the future phase II dose of the study. We have initiated and dosed the first patient on that dose level during March. We expect, again, interim efficacy readout from the study in Q4 2022. Just to reiterate the point that our collaboration with Dr. Beatty is to study biomarkers in OPTIMIZE-1.
Secondly, we are running a phase I investigator-initiated trial at the University Medical Center of Rotterdam, combining mitazalimab with a dendritic cell vaccine. That study is recruiting as planned. Building further on our CD40 biology expertise and our internal capabilities to discover and develop the bispecific antibodies, I'm happy to announce that we have successfully advanced ATOR-4066, which is a Neo-X-Prime, so-called Neo-X-Prime molecule that dual targets both CD40 and the tumor-associated antigen CEA. The molecule is in late-stage preclinical development. It has met all the design criteria that we set up for the molecule, and we aspire to initiate IND-enabling preclinical development during the second part of 2022 as the first Neo-X-Prime molecule heading towards development.
As previously stated, we see a significant growth opportunity in the Neo-X-Prime platform building on our CD40 expertise, and 4066 is the first lead molecule using this technology. 1017 is another third-generation agonistic antibody targeting the T-cell molecule 4-1BB. The molecule is in late-stage phase I clinical development. We reported the completion of the 600 mg dose cohort during this quarter. No safety concerns were reported. We so far have seen stable disease as the best reported tumor response, and we have commenced the enrollment at the 900 mg dose and expect to provide data from the study at ASCO in June later in this year.
I want to update you on our fourth pipeline asset, ALG.APV-527 or just 527 for short, which is a bispecific third generation 4-1BB antibody targeting both 4-1BB and the tumor-associated antigen 5T4. 527 is co-developed with U.S.-based Aptevo and is IND-ready. We expect to file an IND application with the U.S. FDA during this year, and we also expect to start phase I clinical trials in the last part of the year. Just to remind you of the rest of the portfolio, we continue to make progress in our research and licensing collaboration with Orion Corporation from Finland on so far undisclosed bispecific programs. We also continue to make progress on our collaboration with U.S.-based MacroGenics on a novel Neo-X-Prime molecule.
We have two completely out-licensed molecules, AC101 or HLX22, targeting HER2, which is in phase II development with our partner, Henlius. We have so far undisclosed bispecific program with U.S.-based Biotheus. With these words, I will hand the word to you, Marie, to take us through the financials.
Yes. Thank you.
We should now be on slide number 11.
Yes, that's correct. Thanks. I will give a review of our first quarter 2022 financial results. The net sales for the quarter amounted to SEK 5.4 million, up from SEK 0.6 million the prior year. This is a result of revenue from our collaboration and license agreement with Orion Corporation. Operating expenses during the first quarter consist mainly of external costs related to phase I clinical study with ATOR-1017 and phase II study with mitazalimab. SEK 30.1 million, SEK 7.7 million the prior year. The increase relates mainly to mitazalimab phase II study OPTIMIZE-1, where the external cost increased with SEK 11 million versus the same period last year from SEK 3.5 million - SEK 14.5 million for the quarter.
The number of personnel and thereby the connected personnel cost went up from SEK 13.3 million in Q1 to SEK 15.4 million in Q1 2022. In total, operating loss for the quarter resulted in SEK 43 million, a 30% decrease from SEK 32.5 million in the prior year period. This is mainly due to the, as earlier mentioned, increased activity in the ongoing phase II study with mitazalimab and the external cost connected to that. Cash flow for the quarter amounted to SEK -43.8 million, down from SEK 40.4 million in the prior year period. Alligator's cash at the end of the period amounted to SEK 234 million, down from SEK 278 million at year-end. Then we take the next slide.
In 2020, Alligator Bioscience took a strategic decision to focus the company's resources on the projects that have the prospect of generating greatest value, our clinical programs. The reduction in cost came into full effect in the third quarter of 2020, but has during 2022 gone up as the clinical activity has increased, which is reflected in the diagram to the left, showing total expenses on a rolling twelve-month basis. In order to support the continued development of our key assets, the company is continuously working on opportunities for partnerships, out-licensing deals, and equity financing. At the end of 2021, the company completed the rights issue amounting to SEK 257 million before transactional costs. With this rights issue, the company's financial resources are sufficient for our planned activities for the upcoming 12 months.
With that, I hand back to you, Søren, or is it in Q&A slide now?
I think we are ready for Q&A.
Yeah.
Thank you. If you do wish to ask a question, please press zero one on your telephone keypad. If you wish to withdraw your question, you may do so by pressing zero two to cancel. We have a question from the line of Richard Ramanius from Redeye. Please go ahead.
Okay. Hi. I had the first question concerning mitazalimab and the clinical study design. You said that you will have your first readout in the fourth quarter. If I understood it correctly, it would be from a limited number of patients. Will you then make the decision whether to include the rest based on that data? That would mean, you know, a sort of de-risking of the program. How do you put this in relation to the second development in a second indication?
Thank you, Richard. That's good questions, both of them. The interim analysis that we will perform in Q4, as you say, is likely on a number or a limited number of patients or at least a fraction of the entire patient population. The analysis is also a form of futility analysis as per the protocol. That futility statistic defines a number that we have to pass to continue the trial as a futility exercise normally does. We will, of course, continue. We will not pause the study. We will continue to recruit patients past that futility point or until that futility point is reached.
Although the patients that we recruit in the one or two months after that futility analysis will not be included in that. Of course, the decision to continue the trial will depend on a positive outcome of the futility analysis. That was to number one. Definitely we have announced, and we have the intention to initiate a second phase II trial with mitazalimab. We have not announced the indication and will not do so today. OPTIMIZE-1 is in pancreatic cancer patients.
These tumors are characterized by a dense stroma with relatively many dendritic cells and relatively few T-cells as so-called cold tumor, which is a good place to start starting mitazalimab as mitazalimab's primary target is on dendritic cells. We believe that in combination with chemotherapy, mitazalimab will be able to kickstart immunity intratumorally here and lead to a clinical response. To hedge that biological risk, we will start a second phase II study, but that will be in a more immune-prone or inflamed tumor type, a so-called hot tumor, so that we mitigate that biological risk that is associated with pancreatic cancer.
Okay. That makes sense. I had a second question mainly relating to business development, and I was thinking about your 4-1BB assets.
ATOR-1017 and 5T4, ALG.APV-527. What's the prospects? Or can you share anything with us there?
I can share a view on the strategic intent from the company. You're absolutely right. We have a number of assets I presented to you before here. It's an integrated part of the biotech companies that you license out or partner as part of your portfolio. Alligator is in the process of dialogue with certain companies to take a look at and potentially license several molecules across our portfolio.
I see. Could you say anything about an interest in Aptevo in buying out their part?
In Aptevo buying out the half that we own or
Yes.
Somebody, a third party buys out. We have not been in discussions with Aptevo on acquiring the full rights to the molecule. As partners, we are committed to take the molecule into phase I, and as partners, we are committed to consider any realistic partner inquiry that is coming from third parties.
Okay, thanks. Those were my questions.
You're welcome.
Just as a final reminder, if you do wish to ask a question, please press zero one on your telephone keypad. There seems to be no further questions, so I'll hand it back to the speakers.
Thank you. Thank you for your participation, and thank you for the questions. This will close the meeting. Thank you.
This concludes our conference call. Thank you all for attending. You may now disconnect your line.