Hello, and welcome to the BioArctic Q2 Report 2020. Throughout the call, all participants will be in listen-only mode, so there's no need to mute your own individual lines, and also there'll be a question-and-answer session. Just to remind you, this conference call is being recorded. Today, I am pleased to present CEO Gunilla Osswald and CFO Jan Mattsson. Please begin your meeting.
Thank you so much, and welcome to BioArctic's interim report for the first half of 2020. I'm Gunilla Osswald, and I'm the CEO of BioArctic, and I will share the presentation here today with our CFO, Jan Mattsson. The first half of 2020 has been very good for BioArctic in spite of the tough situation around us with the COVID-19 pandemic. With a strong cash position and an expanded project portfolio, we are progressing the business in a good way, and that's thanks to our great personnel and our great partners. Next slide, please. BioArctic is listed on Nasdaq Stockholm Mid Cap, and this is our disclaimer. Next slide, please. BioArctic is a unique Swedish biopharma company with the aim of improving lives for patients with CNS disorders. When I say that it's a unique company, I mean that based on these four areas combined.
The first one is that we focus on R&D of innovative treatments for CNS diseases with high unmet medical needs like Alzheimer's disease and Parkinson's disease. These diseases affect large patient populations and their relatives, and it also implies large costs for the society. Today, on the market, there are only some domestic treatments available, and we work on disease-modifying treatment, affecting the underlying disease and slowing down the disease progression. The second area is that we have a great organization with very experienced and engaged coworkers, and important fruitful collaborations with universities and our strategic partners, Eisai in Alzheimer's disease and AbbVie in Parkinson's disease. The third area is that we have an attractive and well-balanced project portfolio, with projects spanning all the way from discovery to phase three.
We have partnered projects that are already generating revenues by milestones, where our strategic partners carry the cost for the clinical studies, and we have the earlier fully owned projects with substantial marketing and outlining potential. The fourth area is that we are a well-financed company with a strong cash position, with more than SEK 1 billion in the bank, which is quite unusual for a biotech company. And we have also valuable collaboration agreements with big pharma like Eisai and AbbVie, totaling a value of up to SEK 9.6 billion, plus royalties, if we come all the way to the market. The solid financial situation is of great benefit at these challenging times that we have around us, so we can continue to focus on progressing our projects in a good way.
I think BioArctic is a dynamic and very exciting company with a huge potential. Next slide, please. The highlights for the second quarter of 2020. I'm pleased to say that our operations have continued to progress according to plan in spite of the COVID-19 pandemic, which I think is a strong achievement. BAN2401 is progressing well. Our partner, Eisai, is very committed, and I'm impressed with how they are driving BAN2401 in a broad way, supporting Alzheimer's patients. The Clarity AD phase 3 confirmatory trial has expanded with more countries and more sites, and we are so happy to see that Sweden is also included now, and we have already several Swedish patients on board. Eisai is preparing for a new phase 3 program called AHEAD 3-45 in even earlier stages of the disease, and I'll come back to that.
Our discovery stage programs are also progressing very well, and we have initiated a new research collaboration with Professor Lars Nilsson and University of Oslo regarding APOE. APOE is the most common genetic risk factor for Alzheimer's disease, and one of our discovery programs have a mechanism of action, which is linked to APOE. We are happy about the collaboration with Professor Lars Nilsson, who is an expert in this area. We come to Parkinson's disease and ABBV-0805, where our partner, AbbVie, has decided to stop recruitment for the phase I multiple-ascending dose study of ABBV-0805 in Parkinson's disease patients. Phase I is continuing with a single-ascending dose study. A detailed plan to accelerate the project into phase II in Parkinson's disease patients is currently being prepared by AbbVie.
And of course, this will take some time, but I'm really happy to see AbbVie's commitment to ABBV-0805, and they - that they are already now preparing for the possibility to enter into the next clinical stage. And simultaneously, this will also reduce the risk of delays. So I think we've had a really good first half of this year and quarter. Then next slide, please. BioArctic has an attractive and well-balanced portfolio. We have organized our operations in five focus areas: Alzheimer's disease, Parkinson's disease, other CNS disorders, the blood-brain barrier technology platform, and diagnostics.... I think the portfolio is balanced in three different ways. The first one is that we have several projects in different areas, all focusing on CNS disorders.
The second one is that we have projects spanning from discovery phase all the way to phase 3, and the third one is that we have a combination of fully financed partner projects and innovative, fully owned projects with great potential. Our strategic partners, they finance the expensive clinical programs in Alzheimer's disease and Parkinson's disease, whereas BioArctic, we finance the less expensive preclinical phases and increase the value before further partnering. Next slide, please. We have two long-standing successful partnerships, Eisai in Alzheimer's disease since 2005, and Eisai are very committed to dementia, and they have an industry-leading pipeline where BAN2401 is among the leaders. We have so far received EUR 63 million in our collaboration with Eisai, and the total aggregated value of milestones and research collaboration fees is up to EUR 221 million.
So we still have a lot left in the program, if the program continues to progress well. And if we come all the way to the market, we will get royalties, which could be a substantial value. It could be like blockbuster revenues for BioArctic without any cost for the clinical programs. And I think BioArctic has a great business model here. And also, I'm very excited about now Eisai also expanding the potential patient population for the future with the AHEAD study in asymptomatic subjects. If we then look at Parkinson's disease, we have a very successful collaboration with AbbVie since 2016. And in this collaboration, we have so far received $130 million, out of the total value of agreements of up to $755 million.
So also here, we have a possibility to still receive a lot, plus royalties if we come all the way to the market. And Eisai, as we have seen their work with Humira, have also said that they are looking into other indications as well for the project 0805. They will start with Parkinson's disease, but they're also looking into several other different indications, like multiple system atrophy and Lewy body dementia. So also this area could lead to substantial revenues for BioArctic. So two great collaborations that we have in both Alzheimer's disease and Parkinson's disease. Next slide, please. We start with Alzheimer's disease and BAN2401, which is the potential disease-modifying antibody for Alzheimer's disease, where we have presented positive phase II results, and this program is now in phase III.
There is a high medical need for Alzheimer's disease patients, and this is a huge population that is growing and growing. BAN2401 has a unique binding profile, and it's specially designed to selectively bind and eliminate the toxic aggregated forms of amyloid beta. BAN2401 has a clinical fingerprint, which is also unique and which was shown in the phase IIb study, which was performed in 856 early Alzheimer's disease patients. What really impressed me was that we had an early effect, and we saw a consistent effect on all three clinical scales. We saw a dramatic reduction of amyloid from the brain, and we saw an effect on several neurodegenerative biomarkers, and with a good safety profile. And thanks to this good safety profile, there is, we don't need to titrate BAN2401 in early Alzheimer's disease.
So the top dose could be, and can be given directly to the patient. I think that's one of the reasons for why we could show an early effect already at six months in this trial. Eisai has now three studies with BAN2401 on the way that I will present on the next slide, please. So our partner, Eisai, are strongly committed to BAN2401, and they are expanding the program. So there is now three clinical studies on the way. I'll start with the Clarity AD study, which is a phase III confirmatory study in early Alzheimer's disease patients, which means mild Alzheimer's disease patients and mild cognitive impairment subjects with Alzheimer pathology. This study is progressing really well, and according to Eisai, they expect the patient enrollment to be completed this year, and the 18-month results are expected in 2022.
The second clinical study, which is ongoing, is an open label extension study for the early Alzheimer's disease patients who were part of the phase IIb trial. This study is also progressing well, and this is an open study, which means that Eisai has the possibility to share pres-, data along the line when data are coming in this study. So we are, of course, looking forward to that. Then Eisai and Alzheimer's Clinical Trial Consortium are preparing for a new phase III program that is called AHEAD 3-45, and that is comprising of two sub-studies, A3 and A45, and that's expected to start this year, and it will include approximately 1,400 subjects who are at the preclinical asymptomatic stage. So at a very early stage of, on the process of, Alzheimer's disease.
These patients are cognitively unimpaired, but they have intermediate or elevated amyloid levels in the brain. The program is aimed to evaluate the therapeutic effect of BAN2401 on the progression of the disease. So we are looking forward to following the progress of this impressive program that Eisai is driving in Alzheimer's disease with BAN2401. Next slide, please. Then we come to Parkinson's disease and ABBV-0805, which is a potential disease-modifying antibody for Parkinson's disease, and here we have very strong preclinical results, and we are now in phase 1. Parkinson's disease is the second most common neurodegenerative disease, and no disease-modifying treatments are available here either, in the same situation as Alzheimer's disease, where there's only symptomatic treatments available, so a huge unmet medical need.
Oh, ABBV-0805 has a similar unique binding profile as BAN2401, and it's also specially designed and generated to be highly selective in binding and eliminating the toxic aggregated forms called protofibrils or oligomers. But here, the protein is alpha-synuclein instead of amyloid beta, which it is in Alzheimer's disease. This program is based on solid scientific grounds, and we have very encouraging preclinical data. Next slide, please. There has been great progress in the collaboration with AbbVie on the alpha-synuclein portfolio. AbbVie licensed the whole portfolio of our alpha-synuclein antibodies at the end of 2018 for all indications. And phase 1 is ongoing, and here the aim is to evaluate safety and tolerability of 0805. Our partner has decided to stop recruitment for the phase 1 multiple ascending dose study in Parkinson's disease patients, and the single ascending dose study is continuing.
A detailed plan to accelerate the project into phase II in Parkinson's disease patients is currently being prepared by AbbVie. I'm happy to see AbbVie's commitment to ABBV-0805, and also happy to see that they're already now preparing for the possibility to enter into the next clinical phase. And this will simultaneously reduce the risk of delays in the program. At BioArctic, we are responsible for delivering the follow-up antibodies in this continued collaboration with AbbVie. Our collaborations with AbbVie and Eisai are very successful, and I think it's important to have a great track record of successful partnering when you think about future partnering of our early projects, which I will talk more about on the next slide, please. Our early-stage portfolio continues to progress really well and according to plan, despite the COVID-19 pandemic situation.
Of course, we work a bit differently, but so far, we have managed to progress our early portfolio without any noticeable disturbances. Our largest area is Alzheimer's disease, where we have four fully owned disease-modifying antibody projects, and each project has a different mechanism of each other, from each other. One of the early projects has a mechanism of action which is linked to APOE, which is the most common genetic risk factor for Alzheimer's disease. And we have just communicated that we have initiated a research collaboration with Professor Lars Nilsson at University of Oslo. Our novel approach to APOE as a target, I think that's very exciting, and this is the first time we disclose anything about this, and we will reveal more at a later stage.
Our Parkinson's early program, together with AbbVie, is also progressing well, and so is also our new neurodegenerative program that I think has got a very good start. As you know, and have heard me say before, I'm very excited about our blood-brain barrier technology platform, where we have invested more, and we have expanded it, and it's also progressing really well. So I think that our whole portfolio have a really good progress. Next slide, please. And by that, I would like to hand over to Jan Mattsson for a financial summary.
Thank you, Gunilla. As BioArctic doesn't have any sales revenue yet, and as our business model is built on collaborations and partnerships, consequently, our financial outcome is dependent on milestone payments that incur on an irregular basis. And this is also why our numbers vary a lot between periods, and this could also be seen in this second quarterly report. Net revenues were SEK 7 million in the quarter, compared to 171 in the second quarter of last year. And this change is mainly related to the EUR 50 million milestone payment that we received from Eisai in the second quarter of 2019, as well as lower activity in the Parkinson program, according to plan. Project expenses increased from 8 to 16 in the quarter this year, and this is due to higher activity in our own projects compared to previous year.
Personnel expenses decreased from 21 million to 17, and this is primarily related to the one-time incentive payment that was conducted in the second quarter of 2019. Operating profit was -38, compared to 127 of last year. And our operating expenses for the full year of 2020 is expected to be in the range of SEK 160 million-SEK 190 million, and this is in line with last year's number and slightly lower than the previous guidance. The reason for this is higher efficiency in the Parkinson program. Next slide, please. Our cash remained high. Cash balance at the end of the quarter amounted to a bit more than SEK 1 billion, and the exact number was SEK 1.05 billion.
Operating cash flow amounted to SEK -20 in the quarter, compared to SEK +97 for the corresponding quarter of last year, and net results for the period was SEK -38, compared to SEK 100. To sum up, our BioArctic has a strong financial position, and we continue to invest with proven cost efficiency. Next slide, and over to you, Emela.
Thank you so much, Jan. So I will conclude today's presentation with upcoming news and some closing remarks. So next slide, please, and we are now on slide 16. The upcoming news flow is that we are expecting to see is that Eisai progressing the Leqembi clinical program for BAN2401, which I described, and we expect them to present more information at coming Alzheimer's disease congresses. The next Alzheimer's disease congress is AAIC at the end of July, which will be a completely virtual congress, and we are really looking forward to following all the advancements in the field. We are also looking forward to the start of the new phase 3 program, AHEAD 3-45, in preclinical asymptomatic Alzheimer's disease subjects, as I described.
In Parkinson's disease, we look forward to the continued phase 1 study being completed and AbbVie's preparation for the phase 2 program. I think we can conclude that we have had a good first half of 2020, and we are grateful for our strong cash position, so we can drive our expanded early project portfolio forward in a good way, with great possibilities of helping patients in the future. Next slide, please. I would like to end today's presentation and conclude that BioArctic is built on great science. We have great projects driven by great people, and everything we do is with patients in mind in order to help them to get better, better lives in the future. Next slide, please. By that, I say thank you so much for your attention, and we're happy to take questions.
Thank you. If you wish to ask a question, please dial zero one on your telephone keypads now to enter the queue. Once your name is announced, you can ask your question. If you find it's answered before it's your turn to speak, you can dial at zero two to cancel. So once again, that's zero one to ask a question or zero two if you need to cancel. Our first question comes from the line of Joseph Hedden at Rx Securities. Please go ahead, your line is open.
Hi there, Joseph Hedden here. Thanks for taking my questions. Good morning. Good news on ABBV-0805. Can you just give us an idea of when you expect further news from AbbVie on the phase 2 plan? And do you think that it's possible that phase 2 could start this year, for instance, or early next year? And could you perhaps give any details on any milestones associated with phase 2? Thanks.
Thank you so much, Joseph. Good morning. So, of course, we are really pleased with the news about ABBV-0805. And I think a couple of comments, we should be aware that the phase one program is still ongoing with the single ascending dose studies. So I think that's really important to understand that that's still in progress. And we're really happy to hear that they are doing a detailed plan. And I think I wish it was next week, but I think we have to be realistic and see that this will take some time to do this in a proper way, to make sure that we have a really good program that can take 0805 further towards the patients in a good way. So I think that we should not expect this to start this year.
I think realistic is that we have to wait a bit further. So we will come back with more information when we have more information, but I think that we will just have to be a little bit patient. But I think we are in a really good hands. I really trust AbbVie of doing a solid piece of work here and put safety of the patients high up, and also the commitment to ABBV-0805 is really impressive. And with regarding milestones, you know that usually I'm not allowed to say so much about them, but what I can say is that we can expect milestones in a similar way as in normal development programs, which often is linked to different kind of stages start. I think we'll have to wait a bit for that as well.
Okay, great. Then just if I could a second, still on alpha-synuclein, we saw in April phase 2b prasinezumab results from Roche Prothena, and unfortunately, the study not meeting the primary endpoint, but apparently meeting secondaries. I know we haven't seen detailed data from those studies, but was there anything in the design of those from you looking at them, and we had some baseline data before, any learnings that perhaps you could take from that?
So I think that it's really important to follow what all competitors are doing, and we always learn from each other. I think that I don't know so much about the details more than what you just said. And I think that we really look forward to learn more about this. And I think it's really good news that secondary endpoints seem to have been positive. So and I think that our program, 0805, as you know, is differentiated versus this program, as we also have said before, where we have a more selective. We have this unique binding profile where we have designed our program to be highly selective for those harmful aggregated species of alpha-synuclein.
So this is a way which I think is very, very important when you look at different competitors, and this is where we differentiate. So I'm still very optimistic about 0805, and I—you should not read too much over from, I think, from that program. So I think that it would be very important to learn from what was done well and what could be done better next time. So I'm really, really looking forward to the phase 2 program that AbbVie is working on right now.
Okay, great. Thank you, Gunilla.
Thank you, Arthur.
Thank you. Once again, if there are any further questions, please dial zero one on your telephone keypads now. Okay, we've had one further question come through. That's from the line of Gergana Almquist of Redeye. Please go ahead. Your line is open.
Hello, Gunilla. I have a question about the new project with University of Oslo, the AD-1801. Could you elaborate there a little bit?
Okay. Hi, Gergana. Nice to hear you.
So I think we are really happy about the collaboration with Professor Lars Nilsson at University of Oslo, and he's very committed and very experienced in the area of, of course, Alzheimer's disease as such, but especially around APOE. And our program, AD1801, just as you said, has a mechanism of action which is linked to APOE. We have a novel approach to this target, and since we are actually revealing this information a little bit earlier than I had already previously planned, and we will come back with more information when we think the time is right, based on the patent processes and so forth. But what we can reveal right now is that AD1801 has a mechanism of action, which is linked with a new novel approach to APOE.
Okay. I have further questions about the pipeline as well, about the blood-brain barrier technology and the diagnostics. Could you update us there, anything new?
Yeah. So our blood-brain barrier technology platform, where you know that we have recruited top scientists, both from Roche in Basel and from Genentech, Denali in California. They are now in full swing, and we have also expanded the program further, and I think we have, as you know, very competitive, very encouraging results. And I really look forward to the opportunity of seeing how we can combine this new technology with our internal programs. And further on in the future, it could potentially be combined with, as you know, any other antibody for any other program that you would like to have better penetrated into the into the brain. So I think this program, I mean, it's still early. It has really, really encouraging results, and it has fantastic opportunities for the for the future.
Our diagnostic area is an area which we think is important to work on, since when you work on disease-modifying treatments, it's so important to be able to identify the patients at an early stage and to follow the disease progression. Therefore, it's really important to have good biomarkers and diagnostic tools. And we follow everything which is being done outside, and of course, that's being utilized in the best possible way in our programs and our partner programs. But we also are looking at utilizing our selective antibodies to see if they can also help with even better diagnostic tools. So I think, for our programs, a combination of our internal and all external available biomarkers could benefit those programs in the future.
Okay. Thank you very much.
Thank you, Gergana.
Thank you. Once again, if there are any further questions, please dial zero one on your telephone keypads now. Okay, there seem to be no further questions coming through at this time, so I'll hand back to our speakers for the closing comments.
Thank you so much for today and for great questions. I say thank you for your attention, and I wish you all a great summer and stay safe. Thank you. Bye.