Hello, and welcome to the Allagazos BioScience Q3 Report 2021. 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 Julie Silber, Senior Director of Investor Relations. Please go ahead with your meeting.
Thank you. Hello, and welcome to Alligator Biosciences' Q3 2021 Interim Call. This is Julie Silber, Senior Director of Communications and Investor Relations, and I will be introducing today's call. On the call with me today is CEO, Soren Breggenhold And CFO, Marie Svensson. After a brief company statement by management, we will open up the call for Q and A.
Slide 2, please. Before we begin, I would like to share a quick reminder with our listeners that during today's call, Management may make forward looking statements that involve known and unknown risks, uncertainties and other important factors beyond the company's control that could cause the company's actual results, performance or achievements to be materially different from that expected results, to performance and 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 for circumstances other to the extent required by law.
This call is being webcast and will also be made available through the Investor Relations website. With these formalities out of the way, I would like to turn the call now over to Soren. Soren, you can begin.
Thank you, Julie. Good afternoon, and welcome to Alligator's Bioscience 3rd quarter call. I'm Soren Breinhardt, the CEO of Alligator Bioscience. So Slide 3, please. Q3 was my 1st full quarter as CEO of Alligator Bioscience, and I I would like to express my gratitude and thanks to not only the Alligator staff, but also our investors and other stakeholders For the opportunity to get up to speed and for the continued support during this transitional phase of the company.
Annegata has a dedicated, competent and ambitious staff that shares the goal with me to make difference for patients suffering from hard We started off the Q3 making great strides with a renewed aspiration and strategies to develop our game changing therapies through Phase 2 clinical development for proof of concept and potentially beyond. We are currently refocusing our company behind our key assets to be sure that we execute on our clinical trials to generate value in these key assets. Alligator has a robust and diversified best in class pipeline of 2nd generation agonistic antibodies that we develop for the treatment of hard to treat cancers. And we also have a cutting edge technology, which is reflected within our Generation, the platform NeoX Prime, and we believe this pipeline provides the company with a number of value drivers in the short, mid- and long term. Slide 3 shows the highlights for the quarter, and I will give you in the coming slides more detail on these Q3 accomplishments.
Slide 4, please. As I just said, we remain focused To invest and advance our key assets, mitralazimab and 10.17, we continue to believe that we are well positioned for future growth and value creation. Our antibodies address key immune activation pathways and are designed with optimal efficacy safety profiles, Key features that make them complementary to existing cancer therapies. And we therefore believe that our antibodies have a new position As part of tomorrow's combination therapies, thereby helping patients with hard to treat cancers, like, for instance, pancreatic cancer. During the quarter, we announced a key milestone for mitasalumab as we dosed the first patient in OPTIMIZE 1.
OPTIMIZE 1 is a Phase 2 clinical trial where we evaluate sarsalumab in combination with Fofiranox, standard of care chemotherapy In first line, it's a static pancreatic cancer. This is definitely a major milestone for Alligator to be able to take nipracelumab, our CD40 with antibody into Phase II. OPTIMIZE-one is an open label multicenter study that will enroll up to 67 Patients at clinical sites in Belgium and France. And the trial reinforces our commitment to developing tumor directed immuno oncology drugs in solid tumors like pancreatic cancer. We expect to read out interim safety data in Q1 2022, And we expect to provide an interim figures you made out from the trial in Q4 also 2022.
Slide 5, please. To give you a brief update on our second asset, 1017, which is a 4.1BB 2nd generation agonistic antibody. In June, we reported the reassuring mechanism of action Safety data from the ongoing Phase 1 study, we are in the process of or we continue to dose escalate In this trial, we find the optimal Phase II dose, and we expect to report data from the Phase I trial during Q1 2022. Slide 6, please. I would also like to provide a short update on our candidate drug, ALT APV-five twenty seven of GUS-five twenty seven, which is a bispecific antibody targeting both 4 1BP And the tumor associated with antigen 5 T4.
This molecule is co developed with our partner at Tivo Therapeutics in the U. S. And we are preparing for clinical trials, Phase 1, and expect to hand in file an IND application with the U. S. FDA during the Q4 of 2021.
Slide 7, please. During Q3, we announced the conclusion of our collaboration with Skandian Oncology. We reported from the trial positive results of the ability of metacelumab to Enhanced chemotherapy treatment even in chemotherapy resistant tumor cell lines, Data that further supports the effort to assess the efficacy of betasalumab in combination with chemotherapy Like for Thorinorx as we are exactly doing in OPTIMIZE-one, the Phase II study that I described previously. In August Slide 8, please. In August, we entered into a research and And collaboration and licensing agreement with Finnish BioPharma Company, Orion Corporation, to discover novel bispecific antibodies against the undisclosed immune oncology targets.
The agreement covers, in addition to the initial project and options for 2 additional projects. And under the agreement, Alligator Bioscience will imply our proprietary face display technologies as well as our proprietary ruby bispecific format. During the initial research period of the collaboration, Alligator will receive upfront payments, research support payments. And additionally, as part of the agreement, Alligator Bioscience is eligible Development, improvement, sales milestones and royalties. The milestones and fees sum up to a total of €169,000,000 in addition to the royalties.
Then before we go into the financials, I'm also proud to report that at the end of September this year, Alligator was awarded the prize for the best small Capital Annual Report by FRR, NASDAQ Stockholm, Sweden's Financial Analytics Association and the Sweden's Communication Association. And this is, of course, a testimony not only to the diligence and professionally as more a financial team, but the dedication shared by the entire team at Air Liquide. And with that, I think it's very appropriate that I let Marie review our financial results. Marie, over to you.
Thank you, Soren. Now move to Slide 9. I will begin with a review of for our Q3 2021 financial results. Net sales for the 3rd quarter amounted to SEK3.3 million from CRO sales in prior year period. This is a result of the research and license agreement we mentioned already with Orion and BioArctic.
Operating loss for the quarter resulted in SEK 30 SEK 7,700,000, a slight increase from SEK 30,600,000 in prior year period. This is due to a slight increase in personnel costs, but mainly to the ongoing clinical trial for mitaxalimumabenatorteenseventeen. Cash flow for the quarter amounted to negative SEK 30,400,000 compared to negative SEK 32,700,000 in the prior year period. For the 9 months period, January to September, net sales amounted to SEK 7,400,000, up from SEK 4,400,000. The increase is due to the revenue from the research and license agreement.
Operating loss for the 9 months resulted in SEK 100 and SEK 4,700,000, a slightly down increase from SEK 110,200,000 in the prior year period. Operating expenses during the 1st 9 months consists mainly of external costs related to the ongoing Phase 1 clinical study with 10.17 and starting the clinical Phase 2 studies with metasalumab in total around SEK 62,000,000. Personnel costs for the same period amounted to SEK 42,000,000. Cash flow for the 1st 9 months amounted to negative SEK 24,000,000 compared to SEK 42,600,000 in the prior year period. This year, the main inflow of cash was coming from the right region beginning of 2021 and in 2020 from divesting of corporate bonds and interest funds.
Move on to Slide
10.
As previously announced, in in the Q2 2020, Allegheny took a strategic decision to focus the company's resources on the projects that have the prospect of generating greatest value, our clinical program. The reduction in costs came into full effect in the Q3 2020, which is reflected in the diagram to the left, showing total expenses on a rolling 12 month basis. In the Q3 2021, The company expenses increased slightly as we now are running 2 clinical programs, mitasalumab in Phase 2 and 8 to 10 17 in Phase 1. At the end of September 2021, Alligator's cash at hand amounted to SEK 79,000,000. In order to support the continued development of our key assets, the company is continuously working on opportunities for partnerships, outsizing in deals and equity finances.
In beginning of October, The company announced the fully guaranteed right issue to be completed in November 2021, amounting to SEK 257,000,000 before transaction costs. With this right issue, the company's financial resources are sufficient for the planned activities for the upcoming 12 months. And now I hand over to back to you, Dusser.
Thank you, Marie. And if we could have Slide 11, Which is a recapitulation of Marie's comment that in the beginning of October, We decided to execute this fully guaranteed rights issue of shares with preferential rights from our existing shareholders of approximately €257,000,000 And if we then move to the next slide, which must be Slide Well, the intention of the company is to allocate these proceeds, the majority of the proceeds To continue to support our clinical development program of mitralazimab, expand and accelerate our program there, Our ongoing OPTIMIZE once started, but also expand the program to include a second generation for Mitacellar, a second indication for Mitacellar now, The exact nature of which is currently being analyzed. In addition, we will allocate the funds to complete the ongoing Phase 1 study with 10/17 and prepare for Phase 2. And lastly, we will invest Part of the proceeds in advancing other pipeline candidates like our new X Prime platform and molecules. So before we head into the Q and A, let me just summarize that at ADVOCATE that we are committed to deliver on our vision of developing meaningful therapies for patients with heart to treat cancer.
And we do this through a continued focus on our key clinical programs. I'm working with a dedicated team that provides to provide true benefits for the patients, thereby creating true value for these patients for the company's shareholders, including also our investors. With my first full quarter under the helm of this fantastic company, I continue to look forward to keeping you updated on Alligator's Developments on the exciting journey ahead of us. On behalf of myself and the Board of Directors, I would like to take this opportunity to extend a sincere thank you to our staff for their achievements. And I also want to thank you, Thank you, shareholders, for your continued confidence in the company.
And with those final words, I will turn the call Over to the operator to open it for Q and A. Thank you.
Thank And our first question comes from the line of Richard Ramonas from Redeye. Please go ahead. Your line is open.
Thank you for your presentation. I had 3 questions, 2 of them financial. So let's start with the first question. Do you expect a meaningful Full revenue going forward. And in connection to that, can you comment on any milestones from Henley's?
Yes. So If we expect meaningful income in the company, we certainly do. We think we have Three major opportunities in the midterm to generate income. Definitely, mitralazimab, Once we are able to generate meaningful proof of concept data on mitoserapine, we believe that, that is A prime candidate for a BG transaction, whether it will be mid or at the end of Phase That remains to be seen. We will once we have Complete the data from our 10/17 Phase 1 trial in Q1 next year.
We will assess our strategic options with that molecule, and one of them It's definitely to get a partnership with a appropriate pharmaceutical company to develop the current molecule and thereby also generate income for the company. And thirdly, We have high hopes in our new HexClient platform where we have Already a partnership with MacroGenics that is validating the platform and the opportunity to generate transactions, and we will to the opportunity there in the near and midterm to get The partnerships and related income into the compensation level. On your Second question. So Heleneus is a they entered into Phase 2. Under the current agreement, We will receive a part of the milestones that milestone payments at the completion of Phase 2 That the Korean company, AirPlone, will receive.
So that is a couple of years out in the future. Okay. Marie, do you have things to add here?
And I have some questions on the cost side of things. Do you expect costs to increase now that you will initiate clinical More advanced clinical programs. And also how did you calculate how much money to raise Now when you that you raised SEK 25,000,000, did you have any clinical milestones in mind that it should last till So speak, if you can cover with this, Marne.
Yes, of course. We would like to have some type of interim readout from nicazanumab, the Phase 2 study to so that's, of course, our main The goal is to have sufficient capital to fund the company's activities To that. And yes, there will be an increase as we are enrolling Patients in mitasalumab. And depending on how fast we can recruit patients, the cost can mode. In general, we say it costs SEK 1,800,000 per patient coming in the study.
That's normally over a couple of years.
Okay. And then I was curious about the mitasalumab trial. If I understand it correctly, the readout will be in objective response rate in the Q4 last year. Do you Will you continue the trial and watch over the survival or other mitigation measures as well?
Yes. So the trial will enroll a total of 67 patients, we expect complete enrollment to be our enrollment to be completed During 2023, we will, Of course, continuing to dose patients that show a response and either have And objective response are stating the least as we should be doing in a Phase II trial. So absolutely yes.
Okay. Thank you. Those were all my questions. Okay.
And as we have no more questions, Roche said, I hand back to our speakers.
Yes. But then we will thank you for listening, and let's conclude the call.
Thank you.
Thank you.
This does conclude our conference. Thank you all for attending. You may now disconnect.