Please go ahead.
Thank you very much and good morning, everyone. Very pleased to be here today, although I've got a strong cold, so I do apologize for some of the tones of my voice. Very pleased to be with you to update you on our progress of the last quarter. Slide two, please, which is a forward-looking statement. Slide three shows Fredrik that together with me will go through this Q3 report presentation. Let's go to slide four. I thought it would be, you know, important to recap very quickly what has been done over the last 18 months. Since March 2020, when I joined Oasmia, I've been focusing all my efforts together with my colleagues to transform the business. We've been taking a number of important steps to get the company ready for the future.
That means, first, streamlining our activities to focus on growth opportunities. Two, strengthening our balance sheet and getting the best value from our standing. Three, and this is very important, building our in-house capabilities to make us a partner of choice in oncology. Of course, the last bit is also very important, and we've been able to reduce the risk by sorting out many of the problems we have inherited, and most recently, settling outstanding legal issues. Slide five, please. This is our mission statement, which really sums up where the business is now heading, building a diversified pipeline focused on hard-to-treat and late-stage cancers using different mechanisms of action. Slide six. Right. All this hard work, you know, will now enable us to look ahead rather than backwards. Going forward, you know, we have two areas for future growth.
First, oncology R&D built around our wholly-owned development stage assets like Cantrixil and Docetaxel micellar, which will start to drive value as they progress through the clinical development stages. We are working hard to add innovative new programs that will give us a diversified oncology pipeline through M&A and in-licensing. Second, this is what I would call the business line. This is the maximization of our existing assets, Apealea, with our commercial partner, and we anticipate revenues that will start to flow in 2022, generating certainly cash for future reinvestment in our company. At the same time, we continue to refocusing on the underlying science for our proprietary drug delivery technology to optimize its potential in cancer. Right. Slide 7 now.
Which really emphasize and outline the progress that we have done during the Q3 of this year. Well, we have continued to build a first-rate team with the skills to take innovative new products from early stage development through business development and late stage partnering. We've made the final move in outsourcing the commercialization of Apealea, signing a license agreement with a Swiss company called FarmaMondo to commercialize the product in Russia and Commonwealth of Independent States called CIS. With regard to Inceptua, which is, as you know, the Elevar chosen commercial partner for Apealea in Europe. Clearly, Inceptua is planning to launch in Europe to start with Germany and the U.K. because those countries are free pricings, therefore we need to maximize this opportunity.
Inceptua is telling us that those launches will start during H1 next year, therefore generating revenues for us as well. At the same time, we are watching closely the Elevar plan in the U.S. market regarding the clinical development. I have to say that Elevar continues to evaluate the best clinical and regulatory pathway to deliver the maximum impact for the patients, for the clinicians, and we will update you when we learn more from Elevar on the finalizations of those plans. In our growing pipeline of therapy for hard-to-treat cancer, we held our first scientific advisory board meeting of key opinion leaders to guide the preparation for the Cantrixil phase II initiation.
At the same time, we have started to negotiate complex drug supply agreements, and the timetable for the start of that study has moved back slightly to reflect those. I will come back to that once I have more certainty on the finalization of the agreement with regard to the manufacturing. Docetaxel micellar phase I B is on track to be completed late 2022. That means the enrollment with our three sites that are now open. As I mentioned earlier, we are accelerating our work on adding new products, working with leading investment banks on licensing and M&A. Finally, we've been able to reduce our business risk. This is very important. Most recently, we have announced a global settlement of several outstanding legal disputes that we have inherited. Slide eight, please.
Over the past year and a half, we have completely transformed the team that will take us into the future, bringing in senior level executives with first-rate experience in our industry. In particular, we've been able to recruit people with the capability and experience that have in order to build and develop a diversified oncology pipeline. This is important. We have now, you know, industry leaders with us that are coming from Roche, Eli Lilly, Novartis, GSK, Genentech, and other, you know, first-rate companies. As I mentioned earlier, this quarter, we welcome Kia Bengtsson as our Head of Clinical Development, who is joining us from Nanexa, and who previously worked at AstraZeneca and Ipsen.
Johanna Rostin as our head of clinical development, who has an extensive experience from Sobi, Pharmacia and Biovitrum, regulatory. I have also to say that I'm sorry to say that Peter Selin has decided to leave Oasmia. Peter will remain in his role while we have already initiated the search for a successor as head of business development and M&A. Very grateful to him for his contribution to our company. Slide nine, please. There were a number of developments around Apealea in the last quarter. Our global license partner, Elevar Therapeutics, has sub-licensed their product to Inceptua in Europe, I think I mentioned that, including the Nordics. Inceptua is a well-established European pharmaceutical company focused on rare diseases and specialty products. Then they have a special capability in market access in the hospital segments.
That's the reason why we are confident that the launch that is foreseen for H1 2022 in Germany and in the U.K. will be successful. In September, we completed the out-licensing of Apealea globally with an agreement with FarmaMondo, the Swiss-based company for Russia and CIS. That was a territory where Elevar did not acquire the rights from us. On the clinical development side in the U.S., it is absolutely certain that Elevar is committed to make it a success. Clearly there will be some adjustment in the timelines of the regulatory and clinical development plan for Apealea in the U.S. We will let you know once we get some information from Elevar, when final decisions will be made on how best to proceed in order to reduce the time to market.
That is absolutely essential goal that Elevar has in mind. Right. Let's move to slide 10. With regard to Cantrixil, we've made some good progress with regard to this first acquisition of our string of pearls strategy. This small molecule has a very potent cytotoxicity against specific ovarian cancer stem cells and ovarian somatic cancer cells that are resistant to current standard chemotherapies. We have appointed a first-class expert advisory board, including key opinion leaders on a global scale, such as Professor Jim Coward, who is our Principal Investigator from Australia. They met for the first time in September to give us guidance on the structure and on the design of the phase II program, and we will be consulting them regularly throughout this process. This is obviously a multiple stage process.
We've been also starting to work and renegotiate with different suppliers for the drug needed for the trial. This is quite a complex operation that does involve several parties. To manufacture Cantrixil, you need a couple of suppliers. We also here, we are trying to reduce the time to market. We're trying to simplify as well and at the same time secure an excellent manufacturing chain because as you know very well, without any product, there is no business. We are also planning next year to initiate the interactions with the regulatory bodies in order to validate our design of our phase II. I think this is extremely important for us. You know, without proper validation, you run into the fog. This is exactly what we want to avoid.
We want to drive in a very clear sky. Let's move to slide 11, please. This is docetaxel micellar. There is good progress made by our Swiss partner, SAKK, with regard to the progress in terms of enrollment. This study is now underway at major hospitals in Switzerland. The goal is to recruit 18 chemotherapy-naive patients. The target of completing the enrollment of this study is on track to be expected by the end of 2022. Right. Next slide. Slide 12, relates to our project with Karolinska Institutet. This project is to explore the full potential of XR-17, the drug solubilization technology platform. We are really on track to report the results of this first stage.
This is mainly an individual work in this stage in order to have a better understanding of the cellular mechanisms. It is, as I said, nearly completed. I will be happy to report that next time we speak. Slide 13. Becoming an attractive partner for innovative oncology assets and companies require a number of things. The work we have done over the past 18 months has had a clear goal, which means to put in place all the internal pieces that will make us a compelling development partner for innovative oncology assets and companies. We now have expert capabilities from early stage development through commercial partnering. Obviously, with the help of specialist banks, we are able to focus on the final piece of this puzzle.
That piece is building a diversified cancer portfolio with multiple mechanisms of action and offering multiple shots on goal to increase chains of success. Let me go through a little bit more into details on this on the slide 14. We're working hard on business development and licensing to deliver on the potential of our string of pearls strategy to build that critical mass. We are seen more and more as an attractive partner for promising assets, leverage our, excuse me, our internal development, regulatory, and partnering skills. We are seeking to in-license oncology products from pre-clinical to late phase III. I have to say, excuse me, that we have performed around 8 full due diligence on a number of target oncology companies and/or assets with several projects ongoing.
Of course, as you know, it's always a matter of fit from a science and from a finance perspective. We are confident that one of them will materialize relatively soon. I will now hand it over to our CFO, Fredrik Järrsten, to share with you some of the recent legal updates. Fredrik, the floor is yours.
Thank you, François. On page 15, we, as François mentioned, one key development announced after the end of Q3 was settling the inherited range of complex legal disputes. This global settlement addresses all disputes with MGC Capital, former board members of Oasmia, as well as members of former management. The settlement results in a negative cash flow impact of SEK 24.5 million, but with a positive effect on earnings of SEK 32.5 million. This will be accounted for in the Q4. You can also conclude that with the settlement, debt of SEK 80 million plus interest, as well as a receivable of SEK 40 million plus interest in relation to MGC, is settled. With that, we will strengthen the balance sheet and our financial position and eliminating borrowings.
Most importantly, as set out by our chairman, this settlement enables Oasmia to now really focus on delivering our strategy going forward. I think we can continue with page 16, which is the few key numbers I can give you as a snapshot of our performance in Q3. This quarter, we had net sales of 11.9 million SEK to Elevar, and that relates to sales of semi-finished drug products from our inventory. Those products can either be used for clinical studies or commercial supply. We had operating costs amounted to 26 million in the quarter, which is a further reduction since Q2, where we had 32 million in operating costs. This confirms the annualized cost savings of more than 100 million SEK since the year 2020.
Our operating loss for the quarter was SEK -29.6 million, which is an improvement compared to Q3 last year, where we had SEK -35.1 million. The improvement is attributable to lower costs as well as higher net sales. The operating cash flow, roughly equivalent to the cash burn in Q3, was SEK -26.8 million. Per month, that is an average of SEK 9 million, and that is now below our target cash burn, as we have previously indicated of SEK 10-12 million per month. Finally, the cash balance was at SEK 150 million at the end of the quarter. Now that's still a solid cash position. Considering our present run rate, that's enough for the coming 12 months. Obviously, for the long run and for potential business development projects, we are continuously evaluating different financing scenarios.
With that, François, back to you.
Thank you, Fredrik. Let's move to our final slide 17. Looking ahead, there are a number of potential catalysts to support and drive value in 2022 and beyond, including, well, continued M&A and licensing in to build out our pipeline. Our sustained progress of the preparation of the Cantrixil phase II and the completion of the Docetaxel micellar phase Ib. Third, the improvement of our understanding of the potential of XR-17 through the Karolinska Institutet program. Fourth, the initial revenue and cash flow from Apealea and potential for partnering by Elevar in particular, in China. F inally, our divestment or partnering agreement for our animal health business. This concludes my presentation, and we'll be delighted to open up to Q&A now. Operator, the floor is yours.
Thank you. Ladies and gentlemen, if you do wish to ask a question, please press zero one on your telephone keypad now to register. Once again, it's zero one on your telephone keypad to register for a question. There will be a brief pause while any questions are being registered. The first question comes from the line of Joseph Hedden from Rx Securities. Please go ahead. Your line is open.
Good morning. Thanks for taking my questions. Just the first one, I guess I'm looking for what your interpretation of Elevar's current position is. They're looking for, you know, the best clinical and regulatory path forward. But they previously announced, you know, the loose designs of a couple of trials that they thought could serve to support the NDA. What's your understanding of why they've now reassessed? Because presumably they've been through some kind of a commercial due diligence procedure before announcing that. Do you think that this is, you know, gonna cause just a slight modification of trial design maybe, or are we talking different indications? What's your take?
Well, thank you for the question. I mean, clearly, you know, Elevar has reshuffled their clinical and management team quite recently. They have been revisiting the whole clinical plan in order to try to speed up the development piece of the trials in order to, you know, make it available for patients as soon as possible in the U.S. You know, at this point in time, I cannot disclose anything. Elevar will come back to us with regard to the final plan. The overarching goal is to reduce the time to market, to make sure that those plans can be executed quickly, and that's important. Then they will have also some regulatory advice as well down the road to validate those plans.
Okay, thanks. That's great. You commented, François, on the European launch for Inceptua, and it's good news that they've communicated to you that obviously they are looking to launch in the first market, the U.K. and Germany, which the ones we always expect drugs to launch first. Can we take that as there have been positive reimbursement decisions in those countries?
Yes. I mean, obviously, you know that these markets are free pricing in the hospital sector, at least to a large extent. That's the reason why they want to start with those key markets. There will be others followed in Europe, such as Italy and Spain, and then others as well. Clearly, negotiation with regard to pricing and reimbursement will occur. You know, the marketing authorization holder will be in their hands in December. So obviously, the formal part of those negotiations can start right afterwards. It's an excellent sign for the company for Oasmia to see finally, you know, a launch of Apealea in Europe.
Okay. Thank you. Just lastly on Cantrixil, you mentioned that you're still negotiating supply and it's a slightly complex process. The good news that you've started the scientific advisory board and
Trial design. Could you give any kind of projection on when you expect that a trial could start given those two items are still in flux?
Yeah. I mean, the rate limiting factor is the manufacturing piece. Why? Because Cantrixil is, you know, a molecule that with its features and particularities and clearly the supply chain should be properly arranged. It is not that easy. But you know, I will communicate that once I have more certainty and final agreement with the suppliers. You know, to manufacture properly Cantrixil, you need to have two or three suppliers. Okay? Obviously, with the tech transfer timeframe, you know, here and there, you know, you can imagine that some delay may occur. This is exactly what I want to avoid.
I am revisiting the whole strategy with regard to the manufacturing in order to simplify it, have a global well-known leader in manufacturing in order to reduce the risk of any delay and also failure. I will communicate that once I have full certainty on that.
Okay, thanks. Just to clarify, it's not possible to use the previous supplier, the previous process was inadequate?
When we acquire-
Australia if not.
Yeah, yeah. We of course, you know, we have been in touch with that supplier, which is a small-scale supplier. Again, you know, they cannot do drug substance up to drug production. You need to have other steps made by other suppliers. This is exactly what I want to avoid, you know. I want to have a lean and mean manufacturing chain that is solid, that is reliable, and that's the reason why we are talking to major players.
Okay. That's understood. Thanks, François.
You're welcome.
Thank you. Our next question comes from the line of Thomas Nielsen from Analyst Guidon. Please go ahead. Your line is open.
Okay. Hello, François and Fredrik. I have two questions.
Morning.
First, with regard to sales development in the markets where Apealea has already been launched, did you have any comments there?
Well, I think I said a number of times that when we wanted to launch Apealea in the Nordics, we were hit very quickly by the COVID. Therefore, the launch in the Nordics has been put on hold. Now the Inceptua is revisiting the matter of the Nordic launch. You know, Inceptua will communicate at the right time their progress with regard to Nordics. But clearly the goal is mid-year.
Okay. Thank you for that. My final question is, given your current cash position and the level of your operating results, do you foresee any funding requirements for Oasmia in the coming 18 months?
Okay. Fredrik, you want to address this one?
Yes. Clearly as I mentioned, I mean, the cash position we have at the end of the quarter and looking at the run rates, you know, that's enough for coming 12 months. But obviously, you know, looking beyond and looking for the long-term aspect as well as business development projects, I mean, we are evaluating financing options. I can't give you any more details on that, obviously.
Okay. I understand, Fredrik. Thank you very much. Thank you.
Thank you. Our next question comes from the line of Clas Pallen from Erik Penser Bank. Please go ahead. Your line is open.
Thank you. Hi there, and thanks for taking my questions. I would like to start off with a question about Cantrixil and the study design. I guess you're working with it. You need to interact with regulatory agencies to finalize it, I guess. Do you have some sort of a timeframe to share about when such interaction could happen? And also about this M&A activities you are working on, should we expect this is about assets rather than acquisition of companies? That was my questions.
Thank you, Clas, and good morning to you. With regard to Cantrixil and our interaction with the regulatory bodies such as MPA, EMA and FDA, that will occur H1 next year. As you know, this is the design is for intraperitoneal late stage ovarian cancer patients, second or third line. We envision classical this clinical design. I will share it with you once it will be validated by those bodies. Again, you know, it is so important to have the blessing of our regulatory authorities. This will happen H1 next year. Yeah. With regard to your second question, well, we have looked extensively at the Nordic market and both in terms of companies to acquire and or assets to licensing in.
Out of these eight new deals that I mentioned during my presentation, you know, obviously for obvious reasons, I cannot detail that much, but we're looking at both. It's ultimately, it's a matter of fit with our portfolio. It's a matter of balancing risk and return. It's a matter of financial consideration as well. So all those elements have to be right, you know, before we can materialize one deal. Usually, you know, we are looking at from preclinical up to phase II. This is our main window of operation. Beyond phase IIb, we believe that with a large phase III, usually we would need to have a partner.
For selected indication, rare diseases, you know, rare cancer indication, we may certainly envision to commercialize on our own at least in some selected markets in Europe. The overarching goal is really the fit with the portfolio using different mechanism of action. You know, why do we want to do this? Because we want to de-risk the portfolio. We cannot become a one-trick pony like some companies that you've seen in the Nordic sector that have experienced a number of failure in terms of program. I've been there before. I know exactly how it is. In my responsibility as a CEO, I know it takes time, and I know that there is some frustration around that.
The main thing is really to build a proper portfolio that is with different mechanism of action that reduce the risk of failure. Because of course, you know, if you have in your portfolio four or five compounds, you know, not four or five will make to the market. We all know that given the attrition rate in our industry. I have to say that, you know, look for Cantrixil, you know, this is a kind of a hidden gem. We acquire that product for a relatively small amount. There is a great deal of potential in IP, and we will be working on an IV formulation with our platform. It does open up a totally different field, you know, for Cantrixil, for instance.
We also know that for Cantrixil, we could also develop the compound in other indication than ovarian because of the nature of the mechanism of action and the molecule. You see.
Okay, great. A follow-up on other indication. Are you evaluating Cantrixil in preclinical models for other indication?
Yeah. To be honest, not yet. It's part of the plan next year. Clearly, the main focus this next year will be on developing in the phase II, going to the regulatory bodies, you know. As I said, make sure you have a proper supply chain, and at the same time, you know, trying to develop the formulation in IV. Because of course, you know, ovarian cancer is a very crowded market, as you know quite well. You have a number of new chemical entities on the market, such as PARP inhibitor. That does open a total new field of combination that we could basically try, you know. I'm very optimistic with Cantrixil. It's a super molecule.
I'm super glad to have the global rights. My immediate concern is to help patients that are very sick with this intraperitoneal administration. We will build up a global trial. We will have the U.S. involved, Australia, Europe, in order not to spend 10 years recruiting patients. You see?
Okay. Perfect. Thank you so much.
You're welcome.
Thank you. Once again, for any questions, hit 01 on your telephone keypad to register. Now our next question comes from the line of Frederick Hagen, as a private investor. Please go ahead, Frederick. Your line is open.
Thank you. Good morning.
Morning.
Thank you for all the hard work. Thanks for all the hard work you're putting into this.
You're welcome.
I want to ask about, you touched upon it briefly, but, the new indications for Apealea. Is it likely to come during, to be announced during 2022?
You are aware that for the new indication with Apealea, it is in the hands of Elevar. Elevar is now focusing on making sure that ovarian clinical plan in the US are secure. This is their primary focus. Of course, I cannot comment on anything else that relates to a new indication for Elevar.
No, previously you said 2021, so I thought maybe it was connected to one of the studies that the new indications. It's not that easy, I suppose.
I don't necessarily recall having said that, but.
Okay, one more question about the milestones. You said that it's likely to come during 2022. Is that you still consider it likely, or is it?
Fredrik, you want to take this one?
I think we will leave it uncommented. I think. Also, do you have any?
Well, I mean, clearly, you know, if Inceptua is launching in a number of European markets, you know, next year as they will, you can anticipate or guess that royalties will follow and potentially milestones as well.
Okay. Thank you very much. Last question about the Named Patient Program. Is there a lag between the sales and the royalties that we see at Oasmia?
The named patient program is managed by a company called Tanner. It is totally managed by Elevar. The named patient program is actually not really the focus of Elevar as well. Because by definition, you know, you can expect, you know, it's really ad hoc prescription to patients. You know, better focus on European launch.
Well, I'm just asking if there is sales, will it show at Oasmia result right away or are they holding the royalties for some time? I mean, do you understand what I mean?
Yeah. The Named Patient Program is a special program, you know, and it is on the request of physician. Elevar, you know, will certainly count those prescriptions and potentially that will be disclosed as well. We will come back to you once we have some more information on this. Again, you know, this is not the focus of Elevar.
I see. Okay. Thank you very much, and good luck.
You're welcome.
Next year.
Yes, absolutely.
Thank you. Our next question comes from the line of Tommy Olson as a private investor. Please go ahead. Your line is open.
Hello, guys. I just want to say that I was happy to see that you forecast a reduced burn rate from this quarter. That is positive news. However, I would like to get a comment that you revealed today that you will not move on with any development regarding XR-19, even though you actually achieved proof of concept.
Yeah. Yeah. That's unfortunate. You know, this is the fate of any research activity, you know. We have achieved a preclinical proof of concept combining two API into one, but then there is no utility in oncology. That's the problem. In oncology, you know, everything is measured in milligram per square meter. You see? You cannot have a fixed combination.
I understand. On the annual meeting last September, and also I think earlier that day on the conference call, that's when you said XR-19 would most likely be used outside oncology.
Sorry, what did you say at the end?
You said earlier in the conference call and live on the annual meeting in September last year that XR-19 would most likely be used outside of oncology.
Yes, which is correct. At the end of the day, you know, you want to focus your money on the project that will generate most of your revenues. That is an important aspect of our activities, you know. We want to spend the money where there will be some effective return. Now, to go beyond oncology would require extensive business development activities. We have just achieved in-house, you know, preclinical proof of concept. It's not unreasonable to stop XR-19 as it is and refocus on, for instance, you know, developing Cantrixil with XR-17/18 in order to produce an IV formulation. This is exactly where we will spend, where the buck will be generated, you know.
You have to make choices, you know, in a small company.
Okay. Thank you. In February, in an interview, you stated that you had great interest regarding Paccal Vet, and you have less than 10 companies interested, and several of these have gone into the data room, and you were confident that you could reveal something within 6-9 months and finish a deal. What is the situation now? Is any of those companies still in talks and in active discussions regarding Paccal Vet, or is Paccal Vet sort of back at square one?
We continue to explore that partnership and/or divestment opportunities. I cannot comment any further. This is certainly an activity that we are pursuing. I'll inform you once I have some more concrete results.
Okay. Yeah, I was just thinking that since you were so clear saying that you had several companies interested and you were confident you would finish something within 6-9 months that, you know, maybe that should be happening already or at least quite soon.
I cannot comment any further on this. Yeah.
Okay. There were a lot of discussions today in questions about Elevar, and a lot of things are in the hands of Elevar. In December last year, you had this big, joint presentation when you talked about the future for Apealea. At the time it seemed very clear, the future for Apealea and the strategy they had. They had already talked to several key opinion leaders, and they were very confident. Clearly something changed since. Also back then, they stated that they were in a deep discussions and expected to present partners for Latin America and China too. Ever since last, in all the presentations have shown that they are also in, you know, good negotiations with partners. On your last November's presentation for Latin America was removed.
On today's presentation, China is no longer on the list. What does this mean for potential partners in Latin America and China since nothing has happened since they stated that they expect the partners to be completed soon?
Yeah. This is again, you know, a question for Elevar. Elevar has not indicated to us that they have stopped, you know, looking for partners in both of these continents. I cannot comment any further. You know, I'm not speaking on behalf of Elevar here. Yeah. The partnerships are still on the radar screen. Absolutely. Yes.
Have you asked Elevar to together with you make some kind of new joint presentation due to the fact that you have also communicated to your shareholders about the partnering and the plans of Apealea going forward in the future? Have you talked to them about trying to clarify things for your shareholders as well?
Yes. That's a good point. Once the clinical plan will be able to be disclosed post review by the regulatory bodies, then I can certainly ask Elevar to do so and to present an update. I anticipate that during the course of next year that's certainly a good opportunity to update the whole market. Yes.
Okay. My final question involving Elevar would be, it's been a year since the Taiba deal was signed, and we haven't heard anything about this. Is there any progress going on there, or have they also decided that they wanna wait for the result for the upcoming studies before they approve anything in Saudi Arabia?
No, for Taiba, that's a different story. Submissions will occur fairly soon from Elevar/Taiba in the Middle East, namely Saudi Arabia. There is not, as far as I know, a waiting time linked to the U.S. study on that one. No, no. They will be using the European package.
Okay. That is positive news.
Yes.
You recently disclosed your new partnering with FarmaMondo. I have a couple of questions about the Russian market as well. You stated that you will have a product supply agreement or revenue model rather than a royalty deal. Can you say something about why you chose to go for that model and what does it mean for Oasmia?
Yeah, I mean, unfortunately, I cannot comment on these kind of questions which are very specific. What I can tell you is that the previous partner, it was not working very well. We have the luxury to find a real partner that wants to commercialize the drug. Now, let me tell you that, you know, sales cannot happen tomorrow. It cannot happen because there is the serialization process, you know, for the buyers in Russia. We expect to have initiation of commercialization late 2022. I cannot give you any more details on the business model for a reason that you will easily understand.
Okay.
There will be commercialization of Apealea in Russia as the opposite of the previous situation that I inherited.
Is there any risk that the usually lower price point in Russia will affect the ability to negotiate the right prices for Apealea in Europe? Do you have any expectations for Patisiran to be used in first line in Russia?
No. Russia is a totally different market. It's more or less a kind of a closed market. I have experience in this in my previous big pharma life. For Russia, you need to be put on the essential drug list, and once you are in it, I can tell you it's great because then you have a wide access to many hospitals in Russia. So that's the main thing that FarmaMondo will try to do. And then there would be potentially usage, not necessarily strict or sense or according to the labeling. But you know, you know that I cannot say that. This is up to the physician to decide, not up to the manufacturer.
The market dynamics in Russia are totally different compared to Europe, so there is no interaction at all.
Okay. If I switch back to Cantrixil for a second, you have previously mentioned the possibility with good data from the phase II that may be aimed for accelerated approval in the U.S. It's become kind of clear in the past year or so that FDA is getting more restricted with the accelerated approval. Has this changed or affected your opinion about the possibility to apply for an accelerated approval of the phase II and potentially save three to four years to reach the market compared to a phase III as well?
No, that's a good point. This is exactly what I'm looking at. We have an orphan drug designation, which is great because no other companies will get that nowadays. This has been extremely reduced. We have this great status. Remember, this is Cantrixil is for very sick and hard-to-treat patients, second-, third-, fourth-line, intraperitoneal. Clearly there is a high level of unmet medical need. The goal here is to design the study that is powered enough from a statistical standpoint in order to if the data is good to be submitted as it is to the regulatory body in the U.S., to the FDA. Of course, you know, we will meet with them before. You know that their advice is not binding.
Usually, if you are a good citizen, you know, if you do what they want you to do, well, you have a decent chance to have it approved quite soon. We may have a post-commitment post-marketing approval, something similar like that. I am confident to try these routes, which is not a route that is blocked. No, there is still a possibility for such an indication, for such a product.
Because the IP formulation or administration is a little, you know, less common, could that affect and make it, you know, sufficient for AstraZeneca to have fewer patients in a phase II trial compared to a trial with a IV formulation?
Yeah. No, no, you're correct. However, we will be envisioning a global trial. We will have multiple centers all over the world. That's the only way to recruit fast. We have also the luxury to have most of the opinion leaders that are in favor of IP on our side. We know them. They are mostly in the U.S., a few in Europe, but mostly in the U.S., and they were with us on our advisory board. I mean, I'm confident that this Cantrixil IP would be a successful story. I'm absolutely confident. Again, you know, I cannot, you know, predict the outcome of this trial even if we haven't started yet.
I know that we are putting everything that we can to make it a success.
Okay. That's good to hear.
Yeah.
For Oasmia in the communications have changed their value drivers from XR partnering to XR enhancement instead, sort of shifting focus to XR-18 and the development for the future. I personally have thought of this as you will probably not have outlicensing deal on the XR-17 until you have sort of, you know, real success with XR-18. With XR-18, at least twice this year, you have sort of revised the timeframe for the XR-18 development. What can you say about the development of the timeframe for the XR-18 at the moment?
I think I mentioned that in the quarterly report. It is clearly mentioned that we are working; the target is next year. Next year is not the launch of XR-18; it is the progress in terms of pre-clinical to clinical development. This is one point. Two, well, you know, if we embark on a full development plan with a platform like XR-18 or whatever, you know, it will take years and years. Instead of trying to work as a big pharmaceutical company, you know, you see we're better off by using what we have, and that means Cantrixil. Cantrixil is a perfect. It's a small molecule. We know that molecule needs to be more solubilized. And we have this IV formulation, and we want to do the IV formulation.
This is what we are doing, and this is what we should be focusing on our effort. This is more short-term. It could deliver more value than any other program we could develop with those platform. You know, it does open up a full range of new combination for ovarian but also for other indication, lung, breast, to be further developed. It will take some time as well, but certainly less time than if we start all over from scratch. You see?
Yeah. Yeah. I'm all up, and I think you're doing the right thing. Just like you say, you need to be reciprocal, not be one-trick pony. I just think that my concern has been how to finance multiple studies at the same time while Apealea is only approved in Europe, not making enough cash sort of to make the run rate go. I think that's why so many people were hoping for for divesting the other assets or extra outright licensing deals to sort of get these upfront payments to pay for the entire process for the next 4-6 years.
No, that's fair. That's a fair comment. We are still working in this area in parallel. The main thing, the great thing is that finally actually some delay in terms of launching due to the Elevar situation. Finally, Inceptua will launch Apealea in Europe. That's absolutely great news. I know there is some delay, but still, you know. I mean, we are making it happen now.
Yeah. I'm just hoping they will surprise in a positive way with the sales.
We'll talk about that in our report.
Thank you for today, and thank you for answering all of my questions.
You're welcome. Thank you to you.
Thank you. As we have no more questions registered, I now hand back to our speakers for closing comments.
Thank you, operator. Thank you all for listening to this quarterly report. I think that we made some significant progress. I was hoping to be able to convince you on this and you know yes there were some delays in our development program but now we're catching up. Really we have great hopes with not only the development of Cantrixil, our M&A and licensing activities, but above all you know the launch of Apealea in Europe. You know, we still are one of the few companies in our sector able to launch a product that has been approved in Europe. You know, how many companies of our size are able to do so? Not so many. Remember that. Thank you all. Have a great day.
This now concludes our conference. Thank you all for attending. You may now disconnect.