Hello, and welcome to the Alligator Bioscience Q3 report for 2022. Throughout the call, all participants will be in listen-only mode, and afterwards, there will be a question and answer session. Today, I'm pleased to present the CEO, Søren Bregenholt, the CFO, Marie Svensson. Before that, a quick reminder from IR and Communications Management, Greta Eklund. Please go ahead.
Thank you. Next slide, please. During today's call, management may make forward-looking statements, which by their nature 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 result, 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 timings predicted or implied by such forward-looking statements. 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 webcasted and will also be made available through the company's website. With the formalities out of the way, over to you, Søren.
Thank you, Greta. Good afternoon. My name is Søren Bregenholt, and I'm the CEO of Alligator Bioscience. It's a pleasure having you here on this Q3 call. Slide three, let's recap our 2022 objectives and the achievements in the company so far. I'm pleased to say that the last six months have been extremely busy for Alligator and that we have achieved outstanding results moving our pipeline forward. First of all, the recruitment of the mitazalimab phase II study in first-line pancreatic cancer has accelerated dramatically over summer with a strong ramp-up in the interest on the medical community for this treatment and our decision to open new sites across Europe.
This is the reason why we have updated the timeline for the full phase two read out to occur in Q1 2024, which is nine months earlier than initially expected. Importantly, the interim data of the trial are still expected by the end of this year, 2022. Our second clinical program, ATOR-1017, has also made impressive progress. Completing phase I at both 600 mg and 900 mg, with safety confirmed and some promising signs of efficacy and validation of the mechanism of action of this second-generation 4-1BB agonist. With this study being complete and with this data at hand, we have now initiated the continued search for a partner to take this great molecule forward into the phase two clinic together with Alligator.
ALG.APV-527, another 4-1BB molecule, which is partnered with Aptevo, also made huge progress during the quarter, especially with the IND clearance that we received from the U.S. FDA, allowing us to initiate clinical trials in solid tumors at sites in the U.S. in collaboration with Aptevo, our partner. The announcements that we have made over the last nine months has also allowed us to increase our presence at medical conferences, and we are receiving increasing interest from the medical and scientific community and potential future partners from our assets. Last but not least, the team at Alligator has continued to expand with high caliber additions. We have previously discussed our Chief Medical Officer, Sumeet Ambarkhane. In addition to that, we have appointed two new board members, Staffan Encrantz and Denise Goode, to the board of directors.
On slide four, you can see the progress we have made with our pipeline, with three assets and four indications expected by the clinic by end 2023. On slide five, we take a closer look at the OPTIMIZE-1 phase II trial with mitazalimab, our lead asset. As previously mentioned, mitazalimab is in first-line pancreatic cancer in combination with chemotherapy, and we feel it is important to remind you of the key elements and step of this phase two clinical trial. Following the successful dose escalation phase, which we communicated in Q1, we have moved to the dose expansion in up to 60 patients. This phase includes a futility efficacy analysis in 23 patients, and we are on track to get this data by the end of the year.
This interim data will provide us with a clear response as to whether what proportion of the treated patients with mitazalimab at 900 micrograms per kilogram in addition to chemotherapy FOLFIRINOX will respond to the therapy. If we go to slide six, you will see that this interim is a very important event for the company because based on these data and the efficacy demonstrated by mitazalimab, the study could potentially be converted into the basis of a potential approval of mitazalimab, which could dramatically accelerate the clinical development of that asset. Indeed, as highlighted here on slide six, we see three immediate scenarios. The worst-case scenario would be to demonstrate an objective response rate below 30%.
We believe this is highly unlikely, though, since FOLFIRINOX has demonstrated an objective response rate of this magnitude in the past, and we see no reason why mitazalimab would make chemotherapy worse. The base case scenario would be, if we generate an ORR in the range of 30 to approximately 50%, we would continue the trial as is and report the data in Q1 2024 as previously discussed. However, should mitazalimab in combination with FOLFIRINOX demonstrate an objective response around 50% or more, then we could be in the very enviable situation of being able to discuss with the regulators and potentially expand the OPTIMIZE-1 study to becoming a trial to form the basis of an accelerated approval.
This could potentially mean an approval of a BLA around 2026 or even as early as in the end of 2025, depending on the speed of recruitment and approval in that scenario. Should the base case scenario materialize, though we are glad to report today that the recruitment has gone much faster than expected, and that we will be able to report top-line data from OPTIMIZE-1 in Q1 2024, nine months earlier than initially expected. I believe this is a strong endorsement, not only to the quality of the work conducted by the Alligator team, but also to the strong interest in mitazalimab that it generates among the clinical centers and the expert treating patients affected by pancreatic cancer. Without further ado, please let me hand over to Marie Svensson, our CFO, who will walk you through the financials.
Marie, over to you.
Thanks, Søren. I will give a short review of the financial results for the first nine months in 2022. For the nine-month period, January- September, net sales amounted to SEK 15.6 million and pertains primarily to the collaboration and license agreement with Orion Corporation. Operating loss for the nine months resulted in SEK 140.3 million. Operating expenses during the first nine months consist mainly of external costs related to finalized phase one clinical study with ATOR-1017, and increased activity in our clinical phase II study with mitazalimab. In total, SEK 100.3 million. Personnel costs from the same period amounted to SEK 49.7 million.
In the figure down to the left, we show how expenses are distributed between our projects, and in total, 83% of our operating cost is invested in driving our R&D projects forward. Cash flow for the first nine months amounted to -SEK 131 million and relates mainly to the cost of our operating activities. Next slide eight. Expenses have increased as we have two programs running in clinical trials, and with that, an increased number of patients enrolled, which is reflected in the diagram to the left, showing total expenses on a rolling 12-month basis. At the end of September 2022, Alligator's cash at hand amounted to SEK 147.4 million. In order to support the continued development of our key assets, the company is continuously working on opportunities for partnerships, out licensing these and equity options.
With that, I turn back to Søren.
Thank you, Marie. If we go to slide nine, just a reminder of upcoming news flow over the next 24 months. Foreseeable news flow, at least what we expect, our ALG.APV-527 program to initiate phase I clinical development together with Aptevo towards the end of the year. Very importantly, as we already discussed, by the end of the year, we will read out efficacy data from OPTIMIZE-1 phase II study in pancreatic cancer. As discussed, that is a pivotal point for Alligator. We expect to start a second phase II study with mitazalimab in the second half of 2023, and by Q1 2024, we expect to read out top-line data from mitazalimab in pancreatic cancer.
Upcoming news flow, I will thank you for listening and open the call for questions.
Thank you. If you do wish to ask a question, please press zero one on your telephone keypads. If you wish to withdraw your question, you may do so by pressing zero two to cancel. Our first question comes from the line of Richard Ramanius of Redeye. Please go ahead.
Hello, good afternoon. Okay. I want to start with the financial question. How long would you say that your run rate is with your current undertakings? With that, would that be Q3 2023?
Did I hear right? You asked-
I'm talking about the cash flows.
Run rate.
Yes.
Yeah, okay. Yes. You can see that in the report, we tell the market that we don't foresee that this cash would be sufficient for 12 months. But I would say something between nine-twelve months.
Since you're seeing a faster recruitment rate in OPTIMIZE-1, when do you think you could have the full recruitment of the entire study, assuming that you go on after the first interim readout to complete recruitment?
Thank you, Richard. That's of course an important question. We have not guided the market on that. I think so sometime April, May next year.
Could you describe what kind of interest you're seeing for the OPTIMIZE-1 study among, say, practitioners or in the biotech sector?
Yeah. First of all, if we take the physicians that are participating in the study, I think we have been very much encouraged by the recruitment rate that we've seen over summer and continue to see which we believe is of course driven by the merit of mitazalimab in combination with the huge unmet medical need in the indication. That interest and acceleration in recruitment rate is of course what has allowed us to cut a substantial amount of time out of the trial, making the trial overall less costly as it will run for a shorter time and give Alligator key data at the three quarters earlier than expected.
It's clear that there is a significant interest also in the pancreatic cancer community outside of the trial. We have a lot of good engagement with the KOLs both in Europe and in the US showing very strong interest in the data and strong interest in the trial and eagerly awaiting the data together with us in Q4. From a partner interest perspective, I think that's a very interesting question. Also, there is interest and also here everybody is looking with sharp eyes at the Q4 readout.
Regarding 527, can we expect any interim readouts next year?
That's a good question. This is a phase I dose escalation trial and it's an open label trial. We will include patients and when there are meaningful readouts from that study, we will of course update the market. Whether that will be in Q3 or Q4 is difficult to predict right now. As you know, with phase I clinical trial, with new experimental drugs, you start relatively low in dose and low in patient numbers. It will take some time for the trial to pick up in pace. Yes, we will update when we have meaningful data to share.
Okay. Makes sense. Last question. Could you describe where in the drug development process you are in the Orion collaboration?
Yeah. That's another good question. The agreement with Orion is based around Alligator exploiting our core technologies for discovering and engineering new bispecific antibodies. We were using that internally. We're doing that internally. Orion pays upfront. They pay all R&D costs. They pay milestones and royalties. It's discovery program, so I would say with the first program in mid- to late-stage discovery. Remember that Orion has two more options for new molecules and it's exciting to see whether they will execute those options during Q4.
Yeah, thanks. Those were my questions.
Thank you, Richard.
Just to remind everyone, if you would like to ask a question, please press zero one on your telephone keypads. We have no further questions at this time. Please go ahead, speakers.
Okay. Thank you. Thank you for listening.
Thank you.
Into this Alligator Q3 call. This ends the call. Thank you.