Hello, and welcome to Alligator Bioscience's second quarter 2024 interim report call. My name is Greta Eklund. I'm the Investor Relations and Communications Manager at Alligator, and I will be introducing today's call. With me are our CEO, Søren Bregenholt, our CFO, Marie Svensson, and our CMO, Sumeet Ambarkhane. They will walk you through the latest developments from Q2 2024, and the upcoming news flow, after which they will be happy to answer any questions you may have. Now, before we begin, I would like to share a quick reminder that during today's call, management may make forward-looking statements that involve known and unknown risks, uncertainties, and other important factors that beyond the company's control, that could cause the company's actual results, performance, or achievements to be materially different from the expected results, performance, or achievements expressed or implied by such forward-looking statements.
These statements are subject to risks and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statements. Actual results and the timing of certain events may differ materially from the results or timing predicted or implied by such forward-looking statements, and reported results should not be considered as an indication of future performance. Please note that these forward-looking statements made during this call speak only as of today's date, and the company undertakes no obligation to update them to reflect subsequent events or circumstances other than to the extent required by law. This call is being webcast and will also be made available through the investor relations section of our website. With the formalities out of the way, I would now like to turn the call over to Søren.
Thank you, Greta. I'm Søren Bregenholt, I'm the CEO of Alligator Bioscience. Welcome to our second quarter earnings report of 2024. And if we go to the next slide, I'm pleased to go over some of the main achievements that Alligator has seen in the second quarter. First of all, the mitazalimab phase II data in first-line pancreatic cancer continues to deliver new data, and we recently announced outstanding 18 months follow-up data for mitazalimab. Not only did the median overall survival increase to 14.9 months, which is substantially better than the 11.1 months reported for FOLFIRINOX monotherapy, but importantly, we also reached 36% 18-month survival rate, meaning that 36% of the patients were alive at this important time point.
This rate is almost double that of, of data reported for FOLFIRINOX monotherapy. Sumeet, our CMO, will comment on the result in greater detail shortly. The top-line data from this phase II study was published in the Lancet Oncology, the world's leading journal on clinical oncology. This publication naturally validates the significance and the importance of the data, and the entire Alligator team and our investigators are very proud to have been selected by this world-leading clinical oncology research journal to present our groundbreaking data.
In addition to the Lancet Oncology, we also presented at several key conferences this quarter, AACR in April, ASCO in June, as well as the European Society for Medical Oncology on their GI-related or gastrointestinal cancer conference, earlier or late June this year, all highlighting the further validation of mitazalimab phase II data. Based on these phase II data, Alligator has received a surge in the demand from physicians who want to conduct trials on mitazalimab in their own centers across a number of relevant indications. Recently, one such trial was initiated at the prestigious Moores Cancer Center in San Diego. This phase I study in locally advanced pancreatic cancer is financed by the US National Cancer Institute.
We believe that these investigator-initiated trials are a great way to generate additional data for mitazalimab at limited or no cost for Alligator, and to raise the profile of mitazalimab and Alligator internationally. We will continue to evaluate and engage in these trials as appropriate for the development of mitazalimab. On the partnering front, Alligator announced that Orion Corporation, now a long-term partner for Alligator, had selected the lead bispecific antibodies from the company's second-tier development program, and that Orion was exercising its option to develop these molecules under the existing 2021 research collaboration and research agreement. The exercise of this development option is, of course, an important validation of Alligator's technology and our approach to generate bispecific antibodies, and also triggered a milestone payment to Alligator.
Further on financing, we conducted a capital raise of SEK 80 million Swedish krona, which extended our cash runway well into Q1 2024, allowing us to continue our investments in key strategic areas and enhancing our maneuverability in negotiating the best possible licensing deal for mitazalimab, but we will go into the details later in today's call. Last but not least, we are also looking forward to welcoming Johan Giléus, who will join as Chief Financial Officer starting August 12 this year. Johan brings valuable experience in leading financing, strategy, and operations across a number of companies, including overseeing a large phase III clinical trial and out-licensing in Japan on the same molecule. He will continue to bring energy and strong knowledge and experience to the company. So those were the highlights for the second quarter. Next slide, please.
So partnering our phase III-ready asset, mitazalimab, is our key priority. We are pursuing our partnering activities and discussions to find the optimal global partner, and I'm happy to announce that these dialogues with the global pharmaceutical companies are progressing very well. We are continuing to prepare mitazalimab for phase III. We stay laser, laser-focused on advancing mitazalimab to patients with pancreatic cancer as soon as possible. With that, I would now like to hand over to our Chief Medical Officer, Sumeet, for some more details around OPTIMIZE-1. Sumeet, over to you.
Thank you. Thanks, Søren. Next slide, please. Right. So, most of you may be familiar with our ongoing OPTIMIZE-1 study and the impressive tumor shrinkage we have reported in the trial with the mitazalimab plus modified FOLFIRINOX combination, which is exactly what we see in this waterfall plot. This is basically an indicator of how much was the reduction in the tumor for the individual patient during their trial treatment. Particularly important to note is the vast majority of the patients that benefited from this treatment, that their tumors shrunk. And also the number of patients who had an objective response, either a partial or a complete response, seen in the green shades on this chart.
As well as the three last patients where there was 100% disappearance of all of their tumor target lesions. This is really an impressive outcome for this very difficult-to-treat patient population and in a disease so aggressive as pancreatic cancer. Next slide. I mean, I hope you have noted the most recent data that we released from the OPTIMIZE-1 study at the end of June, only a few days ago, that demonstrated substantial overall survival benefit and a truly unprecedented duration of response with mitazalimab and modified FOLFIRINOX combination as a first-line treatment for metastatic pancreatic cancer.
These latest data are summarized on this slide, also in the context with the standard of care therapies, such as gemcitabine plus albumin-bound paclitaxel, FOLFIRINOX, as well as NALIRIFOX, the most recently approved treatment. And clearly, the results from the OPTIMIZE-1 study appear favorable compared to any of these other therapies, not just in terms of the objective response, but importantly, in terms of the substantially longer duration of response and its extension into overall survival. Particularly notable at the 18-month time point, where we see that the percentage of surviving patients was doubled in the OPTIMIZE-1 study compared to the historically reported data from the FOLFIRINOX trial.
This is an important point to note because, the 18-month time point is, unfortunately not the one which most of the patients with pancreatic cancer see, and, therefore, this doubling of, survival rate at this landmark is, really an impressive outcome. These are also very mature data with the 18-month overall follow-up duration across the efficacy population, and they also provide an additional validation, of the potential that mitazalimab has, in this very aggressive disease. And of course, they also form the basis, for our planning, for the randomized, phase III study. Next slide. So, here we have an overview of, how our, fully owned programs are progressing. This gives a very good sense of our robust immuno-oncology pipeline, with substantial clinical as well as commercial potential.
Our next generation mono, as well as bispecific antibodies, address key immune activation pathways, such as CD40 and 4-1BB, and they are designed with features that make them complementary to existing anti-cancer treatments. We believe that this puts our antibodies in a unique position as a part of the combination therapies for future that can help patients with hard-to-treat cancers. If you look at the pipeline, there are several inflection points coming up. As already mentioned by Søren, we are stepping up our efforts to enter into an agreement with an optimum biopharmaceutical partner that is best suited to take mitazalimab through its confirmatory development, and then onto the market as soon as possible. So we are foreseeing that the phase III trial will start in the first half of 2025.
Next is our new Neo-X-Prime, first-in-class bispecific CD40 agonistic antibody, which we call ATOR-4066. This is a very exciting molecule that continues to demonstrate significant potential during its current preclinical phase of development, and that further supports Alligator's commitment to continue advancing this molecule towards the clinic. It also demonstrates that Alligator's pipeline and the CD40 program extends well beyond mitazalimab, so something really to look forward to. And last but not least from our pipeline point of view are our programs targeting 4-1BB. We are assessing options for taking the monospecific 4-1BB molecule, ATOR-1017, to phase II development as a combination treatment.
We are also expecting for the other program, ALG.APV-527, which is a bispecific 4-1BB antibody, that the phase I study will be completed in the coming months. This is a program that we are co-developing with our partner company, Aptevo Therapeutics, and we are hoping that the data will be available in the second half of this year. With that, let's turn to Marie Svensson to review our financial results for the quarter. Marie, over to you.
Thanks, Sumeet. Next slide, please. Going over the financial figures, net sales for the second quarter 2024 amounted to SEK 7.6 million, down from SEK 17.4 million in the prior year period, and comprised primarily to the collaboration agreement with Orion Corporation. Operating expense mainly pertained the cost of the ongoing clinical trials for mitazalimab and 527, as well as phase III enabling activities for mitazalimab. Operating loss for the quarter resulted in SEK 47.4 million, a decrease from SEK 63.7 million in prior year period, mainly due to lesser number of patients on treatment in the OPTIMIZE-1 study. The cash flow from operations amounted to -SEK 46.9 million, compared to -SEK 61.1 million last year.
Cash flow for financing activities amounted to SEK 75.6 million in the quarter, resulting in the total cash flow for the quarter amounting to SEK 37.4 million. The bridge loan from our main owners in Q1 was converted in the rights issue in April. The rights issue brought in SEK 107 million, and the credit facility from Fenja Capital added additional SEK 50 million in the period before transaction costs. In the figure down to the right, you can see how expenses were distributed between our projects in Q2, and not surprisingly, still, OPTIMIZE-1 is the major part of our efforts. 35% of the resources have been focused on the mitazalimab project. R&D collaborations amount to 19%, comprising of investments in 527 , and to some extent, MacroGenics collaboration.
10% of our efforts invested in our next generation CD40 agonist, ATOR-4066, moving the candidate towards the clinic. Next slide, please. Regarding financing, we have extended our cash runway meaningfully, but try to keep the dilution of our shareholders to a minimum. This is why we secured a loan facility with a Danish asset manager, Fenja Capital. This agreement is divided into two tranches. The first tranche comprised of SEK 50 million, of which SEK 12 million is in convertible bonds, which represents the only potential dilutive portion of the financing, and SEK 38 million in straight debt. The second tranche amounts to SEK 30 million in straight debt, all of which providing financial and strategic flexibility and ensuring cash liquidity to the first quarter of 2025. Next slide, please.
If we look at Alligator's operating cost on a rolling twelve-month basis, we note a slight decrease as the patient recruitment peak is behind us in OPTIMIZE-1 study, as well as other expenses for phase III enabling activities. On June thirtieth, the cash position was SEK 78 million. In order to support the continued development of our key assets, the company is continuously working on opportunities for partnerships, collaborations, out-licensing deals, loans, and equity financing to be able to bring our drug candidates forward, and through that, secure long-term financial benefits for the company and our shareholders.... And with that, I will turn the call back to Søren.
Thank you, Marie. Next slide, please. So with the 18 months survival follow-up data that we have discussed today, we have formed the basis of a very, very strong product. It's also important to mention that we recently, i.e., earlier this week, completed or announced the completion of recruitment in the 450 microgram backfill cohort of the OPTIMIZE-1 study. As you may recall, this additional patient cohort was recruited as a request from the US FDA to be able to make OPTIMIZE-1 a phase III enabling study. And of course, this important milestone and its very early completion reflects not only the dedication, but also the professionalism of the entire Alligator team. So a big thank you there.
As you can see, we have other important milestones coming up in the second half of the year. We expect to announce top-line data from the phase I study with the bispecific molecule called ALG.APV-527, that we are co-developing with Aptevo. We are also engaging in a continued dialogue with the regulatory authorities, both in the U.S. and in the European Union. Of course, we are working hard on, as I mentioned before, as Marie just mentioned, and as Sumeet also emphasized, we are working hard on finding the right and optimal partner to take mitazalimab into phase III and onto the market in first-line pancreatic cancer. For that, we need to start a phase III study, and currently scheduled for the first half of 2025.
And with that, if I could have the next slide, let's just look at the long-term prospects for Alligator. We have worked hard the last couple of years to exploit our platform in partnerships with Orion, MacroGenics, Aptevo, while at the same time being sure that we could bring mitazalimab to the data that we have discussed today, and advance our next generation CD40 bispecific molecule, such as ATOR-4066. In 2025, we will initiate a phase III study to be able to bring mitazalimab to first-line pancreatic cancer patients as soon as possible. We will go beyond CD40 and take our 4-1BB molecules, primarily ALG. APV-527, into the next stage of clinical development, and we will continue to deliver on partnerships, as just mentioned.
Beyond 2025, we will continue to expand both our proprietary and our partnered pipeline to ensure that we can continue to deliver shareholder value and patient values in the years to come. Hopefully, in the period before 2030, we will see mitazalimab approved and on the market, generating the first positive cash flow, and sustainable cash flow in Alligator. With those words, I want to thank you for your attention and turn over to the Q&A. If we could have the next slide, please. So let me see if we have some questions here. The first question is from Richard Ramanius from Redeye. "How important are the 18-month OS and 12-month PFS numbers for OPTIMIZE-1?"
Number one, that's for you, Sumeet, and how do they impact the partnering discussion? So if you could just, from a medical perspective, comment on the OS and 12-month PFS data.
Yeah. These are extremely important data. First of all, because they indicate sort of a very mature dataset. But equally important to note is they confirm and even further sort of strengthen the signal that we had observed in our primary analysis that was released in January. When we have been, you know, in discussion with experts in the field, the feedback that we got is the 18-month time point is often not even discussed because so far none of the data points have been that encouraging. Whereas this is the first time where we are able to report data that are very encouraging, and we are reporting sort of a doubling of the survival rate at this 18-month time point.
So, very similar is the 12-month PFS rate, where the proportion of patients which are free of progression at the 12-month landmark is like 3 times of what was reported with the data from the historically reported FOLFIRINOX trial. So, these are very important data points, and they will definitely have a role to play in our activities and everything that we will do.
Yeah. Thank you, Sumeet. And also to you, following up, a follow-up question from Richard is: "Will these data influence the phase three design as superiority in these measures should influence the likelihood of obtaining approval?"
... I would say very much so. First of all, they further boost our sort of confidence in the drug and in this combination, and highlight the immune contribution that comes from mitazalimab. Which not only means that a lot of patients have been able to stay much longer on the treatment, but also that with the longer follow-up, you see more and more sort of differential outcome, basically. That we will need to treat these patients until progression, and it is gonna be very important to observe and follow up for a sufficiently long period of time. That will enable demonstration of superiority in a randomized trial.
Thank you. Then Richard asks, and I'm gonna collapse these questions into one. Saying that, "How important are these data and the fact that mitazalimab is almost phase three-ready in partnering discussions/business development?" It's clear, first and foremost, that the 18-month data that we released a couple of weeks ago have raised a few eyebrows, so to speak, both in the scientific community and clinical community, as Sumeet mentioned, but also with potential partners. Both partners that were already engaged in discussions and diligence with Alligator, but it has certainly also driven a couple of potential new partners into the discussion.
So both of this is very important that the data hold true, that they are truly differentiated from what has been seen before, and the fact that we have established a clear path to approval with the FDA of course takes away a significant uncertainty in the program, and therefore has positively influenced the dialogue with potential partners. And then a fourth question here from Richard: "What more activities are needed before you can send in a phase III application?" So I think we are working on a number of activities preparing that. We are now at a place where the phase III manufacturing process have been the development has been finalized.
The next step for Alligator is to push the button for manufacturing that molecule. We are currently in dialogue with European and US authorities about further CMC activities and what's needed there. We are talking to potential clinical research organizations to help with the trial. And Sumeet, you can probably allude a little bit to some of the activities that are ongoing to fine-tune the actual phase three trial, based on the input, not only from the FDA, but from a number of key opinion leaders that we've had recently.
Yeah, absolutely. I mean, so again, the 18-month data will contribute further to before we finalize our sort of design and approach for the phase III trial. We are getting excellent input from the experts in the field in terms of details, such as the patient population, the sort of assessments to be done in the context of a phase III trial, and the strategy of analysis for the trial to maximize the chances of success eventually. Additionally, we are obviously also undertaking several interactions with authorities worldwide that will be not only sort of useful, but also critical in terms of getting their buy-in to the design, to the protocol, before embarking on the operational execution of a phase III trial. So, we are...
I mean, we are undertaking everything that is typically done, as a startup part for a phase three trial.
Yeah, and I think I can add that in addition to the physicians requesting IITs to expand mitazalimab's use in other indications, we're also seeing quite a number of pancreatic cancer physicians reaching out to Alligator, wishing to participate in the phase three trial, which I believe is a positive sign. And then, the last question from Richard here, and that goes to you, Marie.
Mm-hmm.
"Is an average cash burn of around DKK 40 million per quarter a reasonable estimate for the next three quarters?"
Yeah. I would say something between 40-45, perhaps. So, that's a good estimate.
Yeah. Thank you, Marie. And then, we have a number of questions here from Louisa, from, from Kempen, and the first one goes like this: "Regarding the dose optimization cohort," so that's the 450 microgram cohort that we have just announced the enrollment of, "could you remind us how many patients are in that cohort, and when can we expect data from that cohort, and whether you, whether you will share such data at all?" So, Sumeet, maybe you can give us a little bit of background, why we are doing this, what are the analysis that we are going to take? Because we're not going to look at clinical efficacy to the same extent as we are doing for the main study, but more look into dose characterization.
Yeah, absolutely. And just as a quick reminder, I mean, OPTIMIZE-1 started as a dose escalation trial, where the starting dose with the chemotherapy combination was the 450 micrograms per kilo. And thereafter, the trial proceeded to the 900 micrograms per kilo dose level, which became the recommended Phase II dose. Whereas our interaction and therefore the majority of the patients in the trial, they were treated with this higher dose of 900 micrograms per kilo. Whereas our discussion with the FDA end of last year, we got an advice from FDA to enroll a few more patients, because only five patients were treated until then with the lower dose, and this number was kind of insufficient in their view to complete the dose characterization.
So they asked us to treat approximately 15-20 more patients, which we did via amending the protocol, and this is how we call this as the backfill cohort with the lower dose level. So that cohort is sort of completing the need for dose characterization, as far as FDA's expectation is concerned. And what we have promised to them is to look at the data from these patients for approximately over a 6-month timeframe, essentially focusing on the basics such as the response. And the idea here is to make sure that there are, I mean, no sort of major differences in efficacy and safety. And we believe that this will complete the characterization that FDA is expecting from this program.
And with that, we are hopeful to proceed with 900 as the dose, because that's where we have maximum data, and strong evidence, as far as the activity and safety of mitazalimab is concerned.
Thank you, Sumeet. And then, a follow-up question, a logical one, I would say: "So what's the potential impact of the data in the discussions with the regulatory agencies?"
Yeah, I mean, so basically from a scientific point of view, we will compile the data, do extensive sort of correlations, and make sure that we are fulfilling the requirements from the regulatory authorities before we can conclude, and importantly, to justify the selection of the dose before we embark on a phase three trial. So this is an important undertaking and a kind of commitment that we have made to the authorities, and this will only help basically in initiating a phase three trial with mitazalimab as early as possible.
Yeah. Thank you. I just want to re-emphasize that the phase I study with mitazalimab was done at doses twice as high as the 900 microgram phase II cohort, and that the regulators, neither in the US or in European countries, have requested further dose finding in the form of a randomized phase IIb study, for instance. The company's position is that we believe, based on the current data, that 900 micrograms will be the phase III dose. Then, a question here, I assume that's also from Louisa: "How are partnership discussions progressing?" I would say they are progressing fine.
As expected, we have, as I said, seen a number of new outreaches to Alligator based on the recent 18-month data. We are discussing with a number of global pharmaceutical companies, less than 10, more than 1. I'm not going to be more specific than that. These negotiations are under CDA. They have the characteristics of a diligence, and we think that Q3 is still a realistic landing zone for a deal on mitazalimab in first-line metastatic pancreatic cancer. So what...
Another question from Louisa, coming off on then from this: "What are your strategy, strategy scenarios regarding mitazalimab's development plan, depending, of course, on whether you secure a partner before, of cash runway, et cetera?" Yeah, so I think this is a very central question, and we can answer it in two ways. If we look at mitazalimab in pancreatic cancer, the main development hypothesis is, or the main development scenario, is to develop mitazalimab on top of FOLFIRINOX, as we are doing or as we are assessing in OPTIMIZE-1. We believe, based on what we see with Ipsen's ONIVYDE, and then the NALIRIFOX, ...
regime there that the mFOLFIRINOX combo is significantly differentiated, and there is a significant long-term medical benefit for the, or clinical benefit for the patients to achieve there, and there also for a significant market opportunity. Whether or and how to include a NALIRIFOX arm in the phase III development or phase IIb development is something that we are discussing, as we are also, of course, looking at potentially expanding mitazalimab to be combined with the gemcitabine in an opportunity to capture the full phase I or the full first-line pancreatic cancer, the full first-line pancreatic cancer market potential.
Then, of course, depending on a partner, we would like to see mitazalimab being developed beyond pancreatic cancer, hence the different IITs that we are, have been discussing earlier today. There are opportunities in other GI cancers such as colorectal cancer, biliary tract cancer, and of course, there is an opportunity also to expand mitazalimab into other indications in combination with PD-1. Then you can say that if we, if Alligator, if we're not able to find a partner, then we have to look at alternative scenarios on how we can, as a company, bring mitazalimab into phase III alone.
But, but the main hypothesis is now that the current partnering discussions will lead to a, to a deal that, that is optimal for the development of mitazalimab going forward. And then the last question from Louisa, and, that is for you, Sumeet: "Could you please remind us what would the phase III trial look like, number of patients, primary and secondary endpoint, cost of running the full trial, duration, et cetera?"
Yeah, so it will be a global study, a randomized study of the mitazalimab, modified FOLFIRINOX combination versus, modified FOLFIRINOX alone as the standard of care. And we haven't yet fully finalized the design, but it will be a large study, ranging between, like, 500-700 patients. I mean, all of us know the magnitude of the NAPOLI-3 trial, and we will have overall survival as the primary endpoint. We will also try to build in possibilities for early, like, readouts that will have an early approvable potential. It will all be sort of data-driven. So we are, I mean, working on this, and I think...
I mean, of course, we do not have all the details to share as of now, but it will be, it will be an industry-standard, global randomized phase III trial, in frontline pancreatic cancer.
Thank you, Sumeet. Now we have a question from a shareholder here, Patrick Boily. "On the Orion collaboration, the collaboration seems to be going well, but can you please provide us with more information as to what are the next steps?" Yeah, so, so, just as a reminder, Alligator and Orion has been collaborating on, on two programs, on novel bispecific antibodies in immuno-oncology. Orion has taken the development option of, on both molecules, one in 2023 and the, and the latest one here in this quarter. And, now the responsibility for the preclinical and clinical development is with Orion, and, as per contract, it's, Orion's discretion to, or discretionary right, to, to communicate the next steps. Alligator, as per contract, will remain silent on, on that.
Let me see if there are. So another question here, and that goes to you, Sumeet. This is also from the aforementioned investor. "On the molecule called ALG.APV-527, could you provide us with an update as to where the phase I study stands, and what are the next steps within the study, as Aptevo announced the dosing of the fifth cohort?"
Yeah, so the phase I study, which is in dose escalation stage, is progressing well, and we are expecting the sort of completion of the dose escalation in the coming months. Importantly, we are also aiming to be able to present the early data from the cohorts and the patients that have been treated so far on this program, in the upcoming scientific meetings, such as the ESMO meeting, in early fall. So, there are data readouts coming out from the 5T4 program, our bispecific 4-1BB molecule.
Thank you. ... And then a final question from from Patrick on the CFO change. "Marie has been with Alligator for almost four years and is staying with Alligator. So I was wondering what prompted that change?" Yeah, first of all, I wanna once again thank Marie for for her dedicated effort at Alligator, and I'm very, very pleased that that Marie will will stay on and continue to contribute positively to the development of Alligator even after August twelfth. So as Alligator is continuing to expand its operation, its ambitions, hopefully also in the future, the operations and definitely its investor base from being primarily Scandinavian and European to be more global.
We thought it would be a positive move for Alligator to get a CFO with a stronger global experience and impact. And Johan Giléus represents that. And we had an opportunity to bring Johan on board Alligator, and we took that. And that also coincided beautifully with Marie's wish to taper down her work efforts or work hours a little bit, and hence the shift in CFO and the opportunity to maintain Marie as a part of the Alligator team. Let me see if there are any more questions from today's call. That doesn't seem to be the case. With that, I want to thank Marie.
I want to thank Sumeet and also Greta, and also all of you for listening in on today-