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 to the extent required by law.
This call is being webcast and will also be made available through the company's website. With the formalities out of the way, over to management.
Thank you, Greta, and good afternoon and welcome to Alligator's Q4 and full year earnings call. I'm Søren Bregenholt. I'm the CEO of Alligator Bioscience, and with me I have Marie Svensson, our Chief Financial Officer. Slide three, please. Let's get straight into the highlights of 2022, and I want to begin with the outstanding Phase II interim data that we provided from OPTIMIZE-1, evaluating our lead candidate, mitazalimab, in combination with FOLFIRINOX in first-line pancreatic cancer. These results that we put out on January 2, 2022 demonstrated an objective response rate of 52% in this hard-to-treat cancer, which exceeded even our internal expectations.
These data are a good omen for the continued development of mitazalimab in pancreatic cancer. Indeed, the data that we are going to put out mid-year 2023, where we plan to put out additional objective response data and also progression-free survival data from a part of the study cohort. We believe that these data will provide the best opportunity and best background to initiate dialogue with regulators on how to best and fastest develop mitazalimab within pancreatic cancer and also start discussing the best approval pathway for the molecule. We also saw a faster than expected recruitment in the trial during the year, which means that we will now be able to provide full top-line data from the trial Q1 2024, which is a full nine months earlier than originally announced to the market.
It's really been a great year for OPTIMIZE-1, our lead clinical trial in first-line metastatic pancreatic cancer, and we'll be going into more detail of that trial and the implications in just a moment. Briefly on our other achievements for the year include the expansion of our 2021 research agreement and license agreement with Orion, the successful conclusion of our ATOR-1017 phase I trial, which laid the foundation for the further clinical development of that molecule, something we anticipate to do with a partner. We are also expecting the imminent start of the clinical development of ALG.APV-527 in the U.S., a molecule that we are developing jointly with Aptevo Therapeutics.
During the year, we also strengthened Alligator senior leadership with the appointment of Sumeet Ambarkhane as our new Chief Medical Officer. We welcome two new Board Members to Alligator, Staffan Encrantz and Denise Goode. We also identified our contribution to the scientific community with our participation in several scientific congresses and the publication of high-quality scientific papers in peer-reviewed journals. We are continuing to deliver great value to our stakeholders, and we are meeting and sometimes even exceeding our promises in terms of our progression in the clinic and in building our company. We remain well-positioned for future value creation and growth. Let's take slide number four. We are building a diversified best-in-class pipeline of second-generation agonistic antibodies, providing new options for patients with hard-to-treat cancers using our cutting-edge technologies with quite a number of value drivers.
Our antibodies address key needs in immune activation pathways and are designed with key features that make them complementary to existing cancer therapies. We believe that this gives our antibody a unique position as part of tomorrow's combination therapies, helping patients with harder-to-treat cancer. Looking ahead into 2023, we are preparing to initiate OPTIMIZE-2, which will be evaluating mitazalimab in a yet undisclosed indication. We're using the learnings from OPTIMIZE-1 to de-risk this second trial and to enhance its design. We will also initiate IND-enabling activities with our Neo-X-Prime bispecific CD40 agonist 4066, for which we see medical opportunities across multiple cancers. I also want to mention here the long-standing research collaboration and licensing agreement we are building with Orion, MacroGenics, Aptevo Therapeutics, and Helmius.
During the last quarter of 2022, Helmius received IND approval for a phase II clinical trial for AC101 that I mentioned on our January 2, 2022 announcement, our research collaboration with Orion. These co-partnerships provide external validation of our technology platforms and de-risk development of our product candidates through the sharing of knowledge and resources. They can also provide significant revenue streams for Alligator in the form of milestone payments, royalties in the event of further development and commercialization of these assets. On slide five, let's take a closer look at the OPTIMIZE-1 trial in which we are further assessing the efficacy and safety of our lead asset mitazalimab in combination with standard of care chemotherapy FOLFIRINOX. This is for the treatment of first-line metastatic pancreatic cancer.
OPTIMIZE-1 is a phase II single arm open label multicenter study performed at clinical sites in Belgium, Spain, and France with the aim to include up to 67 patients. As I already mentioned, 2022 was a very successful year for mitazalimab, with OPTIMIZE-1 phase Ib part being completed. This gave us our first safety readout, showed that mitazalimab at doses of 900 micrograms per kilogram in combination with FOLFIRINOX is safe and well-tolerated. The dose was chosen for phase II, and we then passed on the interim efficacy analysis with impressive 52% response rate. We have maintained a strong recruit pace in the trial, and we're recruiting the last patients now, and we expect the enrollment to be concluded during April this year.
The top-line data now due in Q1 2024, which I mentioned is a full nine months earlier than originally participated. Before that, though, we are expecting additional interim data in the middle of 2023. In particular, we are looking to further characterize progression-free survival as the study continues. If I can have slide 6, please. We have thought for some time that the mitazalimab could change the treatment paradigm for pancreatic cancer patients, and those latest interim efficacy data are giving us more reason to think so. Looking at the ORR chart on the left, you can see the orange 52% response rate we achieved with mitazalimab in combination with FOLFIRINOX.
To give that number some context, you see that the current standard of care, which is gemcitabine with nab-paclitaxel or standalone FOLFIRINOX, demonstrated ORRs of around 23 and 32% respectively in similar patient populations. That comparison showed that mitazalimab combined with chemotherapy could offer significant clinical benefit for pancreatic cancer patients over current treatment options. The next data set due in the middle of 2023 will further elaborate on progression-free survival and objective response rate in these patients. One point I would like to stress is how consistent ORR progression-free survival and also over all survival seems across trials in the pancreatic cancer indications and also seeing strong correlation between ORR and PFS.
With our 52% shown in the interim analysis, we are hopeful that the PFS that will be disclosed mid-2023 will be highly differentiating when compared to standard of care alone. With these 1 words, I will leave it over to Marie, our CFO, to take us through the financials. Next slide, please.
Thanks, Søren. I will begin with a review of our Q4 2022 financial results. Net sales for the Q4 amounted to SEK 20.1 million , up from SEK 5.2 million in the prior year. This is a result of the ongoing research and license agreement with Orion, and the expansion of that agreement, as Søren mentioned earlier. Operating result for the quarter ended at minus SEK 52.9 million , an increase from SEK 36.9 million in the prior year, and this is mainly due to the increased activity in the clinical trials with mitazalimab ATOR-1017, as well as preparation for the phase I study in the U.S. with 527.
Cash flow for the quarter amounted to SEK 49.8 million compared to SEK 198.8 million in the prior year. For the full year period, January to December 2022, net sales amounted to SEK 35.7 million, up from SEK 12.9 million in 2021. The increase is due to the revenue from the research and license agreement mentioned earlier. Operating result for the year ended at minus SEK 192.8 million, compared to minus SEK 141.6 million in previous year. Operating expenses during 12-month period consisted mainly of costs related to ongoing clinical studies and personnel costs.
Cash flow for the year amounted to negative SEK 180.9 million, compared to SEK 174 million for 2021. In the figure down to the left, you can see how expenses are distributed between our projects in Q4. In total, 89% of our operating cost is invested in driving our R&D projects forward. Next slide. Alligator's operating cost on rolling 12 months basis have increased due to our expanding clinical trial activity and the increased number of patients being enrolled into the study. At the end of December 2022, Alligator's cash at hand amounted to SEK 97.3 million. In order to support the continued development of our key assets, the company is continuously working on opportunities for partnership, out-licensing deals and equity financing. With that, I will turn back to you.
Thank you, Marie. We are now looking forward to a particular solid news flow over the next 12 months from Alligator's pipeline of best-in-class opportunities for patients with hard-to-treat cancers. We expect to start the phase I trial of 527, which is co-developed with Aptevo, during the Q1 . Mid-year, we expect to update you, as I've already said, on more interim data from the OPTIMIZE-1 trial. Also, during mid next year, mid-mid 2023, we expect to have an IND clearance for the OPTIMIZE-2 study with the FDA. Then in the second half of the year, we will engage with the regulatory authorities to discuss the possibility of an accelerated development and approval path for mitazalimab in pancreatic cancer.
In Q1 2024, we expect to deliver top-line data from the OPTIMIZE-1 trial. We at Alligator remain deeply committed to delivering on our ambition to develop meaningful therapies for patients with hard-to-treat cancers through our continued focus on our key clinical programs. The Alligator team is dedicated and capable of providing true benefits for patients, thereby creating true value for the company shareholders. I continue to look forward to keeping you updated on our development on this exciting journey. On behalf of myself, Alligator's management, the board of directors, I would like to take this opportunity to extend our sincere thanks to all of you, to our staff on their achievement. I also want to thank you valued shareholders for your continued confidence in the company. We will move on to the Q&A session.
We've had a number of questions, coming in, through the chat. The way that we will do this is that I will read out the questions and for some of them provide the answers. Maybe you will answer some of them.
Yep.
The first question here, there's quite a number of questions on OPTIMIZE-1. The first question here is from Richard Ramanius at Redeye, Richard asked us to tell more about how OPTIMIZE-1 can be expanded into a trial that could lead to an accelerated approval. How large would it be, what would be the endpoints? That's a very interesting question and something that we are working diligently on. At Alligator, we believe that progression-free survival and median overall survival are expected to be the endpoints that such a trial should aim for. It's too early to elaborate on how that trial or how OPTIMIZE-1 could be expanded to support a potential accelerated approval.
That's exactly the key matter of the discussions we will have with the FDA and also the European regulators during the second half of 2023. On the same line, to ensure that Alligator or likely our partner have the best options to advance into pivotal development as soon as possible, we are initiating activities to pre-prepare Lisa for that, the pivotal development. That's an important point to make. A question here from our analyst at Kempen. Will you be able to provide a 1-year progression-free survival, overall survival rate during the update at mid-2023? How many patients do you anticipate will have enough follow-up to report PFS on that time? The first patients on 900 micrograms per kilogram were enrolled in OPTIMIZE-1 early 2022.
Yes, there will be a 12-month follow-up data in that mid-2023 interim data. We estimate to be able to provide meaningful follow-up data, including PFS, from approximately 30 patients at that mid-year point. A follow-up question on PFS is what is the PFS bar that you are looking for that would provide your confidence that you can go for pivotal development? Also a very important question. Based on the approximate six and a half month PFS reported for FOLFIRINOX standalone, we expect to be able to provide 30 months.
Mm-hmm
Three months on top of that. To approximately 9.5 months. We would be happy to see such an outcome from OPTIMIZE-1. We have another question on OPTIMIZE-1. How is recruitment going? As we previously announced, we managed to recruit faster than initially guided, and we have just announced that our readout now will be Q1 2024 rather than the end of that year. I'm happy to convey that the treating physicians in the trial are happily or diligently at least enrolling patients into the study, and we very much appreciate that, which allows us to be on track for that, the Q1 readout. We have another question here that had probably been covered already.
What interim data will you present mid-2023? As I said, that readout will include an objective response rate from quite a number of the patients and then a meaningful progression-free survival and durability of response data from approximately 30 patients. Let's shift. We have a question here also from Richard at Redeye. When will the phase I trial in 527 start, and do you intend to do the phase I together with Aptevo, or you're looking for a partner to finance the trial? Dosing of the first patient is imminent, and we, as I just said, expect to do that during Q1. We look forward to update the market on that.
Without taking your thunder, Marie, the trial is fully loaded in Alligator's budget in 2023.
Yes
... 2024.
Yeah.
As we previously communicated and you just mentioned, your part here, we are looking for a partner to help us with that trial.
Mm-hmm
We are ready and capable of completing the trial as planned.
Yeah.
Good. Another question again about the 4-1BB pipeline. When could you find a partner for 1017, and would you prefer to out-license both 1017 and 527 to the same partner? We are in dialogue with several interested partners both on 1017 and 527. As I previously said, it's always difficult to guide on timing of these deals, but we're working hard on it and we'll update when data is available. Whether we want to out-license 1017 and 527 to the same partner, that's not really a priority for Alligator and not really a concern. We will do the deals that makes the most sense when they become available.
Marie, there is a question for you here.
Mm-hmm.
What is your budget for 2023, and will your operating expenses be similar to those of 2022?
Mm-hmm. Yes, the operating expense for 2023 will largely be similar to 2022. OPTIMIZE-1 is recruiting according to plan, and the patients are staying in the study, which is a good thing. Based on the strong interim data, we're also allocating resources to prepare mitazalimab for phase III to ensure fastest possible development of the molecule.
Absolutely.
Mm-hmm.
Then could you say anything about what fund? There's a couple of questions about the financing here. One is, could you say anything about what financial options are available to raise more cash? We have previously discussed this call and others, and I think it's evident from the Q4 report that we are planning to refinance Alligator during the first half of 2023. We have strong cornerstone investors that have expressed their belief in the company and are strongly interested in continuing to support the company. We believe that refinancing the company will definitely be a strong possibility. There is another question here. When will the decision be made concerning a new admission, and will the admission be open to all share owners?
We will not guide you here on when, exactly, other than what I just said, and we are definitely working on a solution that will allow loyal shareholder to participate one way or another.
Exactly.
Good. Then we have, uh, back to, um, to Optimize-1 and mitazalimab, a question from Joseph Hedden. Can you say anything on the pipeline in first line pancreatic cancer beyond mitazalimab? Uh, definitely. I think one of the, one of the good things that has actually happened over the last couple of months is that, uh, a new chemotherapy has been, uh, not approved, but shown, uh, positive phase three data in pancreatic cancer, uh, increasing the response rate, uh, somewhat and, and showing also, uh, good effects on, uh, on survival. Uh, that's a, that's generally a Really a positive. It's, it's been a long time since we have new approvals in the space. We see this as, uh, not really disturbing, uh, our development path with mitazalimab.
We believe that mitazalimab will provide an added benefit to any chemotherapy and also in a potential new first-line regime like this. Other companies like AbbVie, Celgene are developing CD40 antibodies in first-line pancreatic cancer, either in combination with FOLFIRINOX or with gemcitabine/nab-paclitaxel. Data are out there. We see response rates that are a little bit around what we see with mitazalimab. It's difficult to compare these data directly as the trial populations are not exactly overlapping. Our perspective is that it's really good to have competition. It's great if our competitors show good data in the indication that will also keep validating mitazalimab.
We have another question here. Yes. That's also Joseph from Rx Securities on mitazalimab in or our competitors in pancreatic cancer. Apixigen, the question is like this: Apixigen failed in this indication with a chemo PD-1/CD40 combo after showing early positive data. What is it about mitazalimab that you think will lead to a different result? That's a good question. Let's take the first part of this question about the CD40/PD-1. The trial was actually so that Apixigen tested both chemo PD-1, chemo CD40, and then chemo PD-1/CD40, and they did so in patients treated with gemcitabine/paclitaxel. The trial showed actually that the triple combo were worse than the CD40, the chemo alone. That's.
The chemo and PD-1 alone. There's still sort of some uncertainty in the community, on the role of PD-1, which from a scientific point of view makes a lot of sense as the T-cell infiltration early on in these pancreatic cancer tumors are relatively scarce. Hence, not a lot of immune activating going on and no real role for PD-1/CD8. What is it about mitazalimab that we think will lead to a different results? A number of things. What we were able to confirm in also the data that we published here in January is that mitazalimab has a very manageable safety profile, meaning that we don't have some of the side effects that is seen with other CD40s.
That allows us to do three very important things. First of all, it let us combine with FOLFIRINOX. FOLFIRINOX is the toughest of the chemotherapies, both, but also the most efficacious. This means that the patients that are getting FOLFIRINOX are the patients that are the best, in the best physical fitness. Remember, they all have grade four pancreatic cancer, so metastasis, 75%-80% in the liver. These patients are definitely not physically very strong. The strongest of them are given FOLFIRINOX. These patients are also the ones you have to assume that have the best immune status. Most able to respond to an immune activator like mitazalimab. You have that aspect.
We are able to dose at higher doses to ensure that we get more antibody into the tumor, and we're also able to do dose at a higher frequency than our competitors. All those three things being combined. Combining with FOLFIRINOX with the biggest and highest efficacy sort of baseline and the most immune competent patients, giving a higher dose more frequently, we believe gives us a competitive edge over the other CD40 antibodies. Do we have more questions for now? That doesn't seem to be the question. I want to thank you, Marie.
Okay.
I want to thank you, listening in to this, Q4 full year report call, from Alligator Bioscience. Thank you and have a nice day.