Alligator Bioscience AB (publ) (ATORX) Earnings Call Transcript & Summary

Before our webcast, a quick reminder for our listeners. 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 3, 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, demonstrated our 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 and, indeed, the data that we are going to put out midyear 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 '24, which is a full 9 months earlier than originally announced to the market. So 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 on 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 1017 Phase I trial, which laid the foundation for the further clinical development of that molecule, something we anticipate to do with a partner. And we are also expecting the imminent start of the clinical development of 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, and we welcome 2 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. And 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. And we remain well positioned for future value creation and growth. Now let's take Slide #4. 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 [indiscernible] drivers. Our antibodies address key needs in immune activation pathways and a design with key features that make them complementary to existing cancer therapies. And 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 derisk the second trial and to enhance the 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, AbClon and Henlius. During the last quarter of 2022, Henlius received IND approval for Phase II clinical trial for AC101 that I mentioned in our January 2 announcement, our research collaboration with Orion. These core partnerships provide excellent validation of our technology platforms and derisk 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 [indiscernible] further development and commoditized -- commercialization of these assets. Now on Slide 5. Let's take a closer look of 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. And 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 partly 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 [indiscernible]. The dose we have chosen for Phase II and we then passed on the interim efficacy analysis with impressive 52% response rate. We have maintained a strong recruitment in the trial, and we are 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 9 months earlier than originally [ anticipated ]. Before that, though, we are expecting additional interim data in the middle of 2023. And 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 mitazalimab could change the treatment paradigm for pancreatic cancer patients, and those latest interim efficacy data have given us more reason to think so. Looking at the ORR chart on the left, you can see that 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 paclitaxel or stand-alone FOLFIRINOX, demonstrated ORRs of around 23% and 32%, respectively, in similar patient populations. So that comparison show 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 '23 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 [ all survival ] across trials in the pancreatic cancer indications and also seeing strong correlation between ORR and PFS. And with our 52% shown in the interim analysis, we are hopeful that the PFS that will be disclosed mid-'23 will be highly differentiating when compared to standard of care alone. And with these words, I will leave it over to Marie, our CFO, to take us through the financials. So next slide, please.

Thanks, Søren. I will begin with a review of our fourth quarter 2022 financial results. Net sales for the fourth quarter 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 results for the quarter ended at minus SEK 52.9 million (sic) [ SEK 52.6 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 '22, net sales amounted to SEK 35.7 million, up from SEK 12.9 million in '21. The increase is due to the revenue from the research and license agreement mentioned earlier. Operating results for the year ended at minus SEK 192.8 million compared to minus SEK 141.6 million in the previous year. Operating expenses during 12 months 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 '21. In the figure down to the left, you can see how expenses are distributed between our projects in Q4, and total 89% of our operating cost is invested in driving our R&D projects forward. Next slide. Alligator's operating cost on a rolling 12-month 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. And with that, I will turn back to you, Søren.

Thank you, Marie. So 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 codeveloped with Aptevo during the first quarter. Midyear, we expect to update you, as I already said, on the -- on more interim data from the OPTIMIZE-1 trial. And also during mid-next year -- mid-2023, we expect to have an R&D clearance for the OPTIMIZE-2 study with the FDA. And 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. And then in Q1 2024, we expect to deliver top line data from the OPTIMIZE-1 trial. We are dedicated and remain deeply committed to delivering on our ambition to develop meaningful therapies for patients with hard-to-treat cancers through a 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's shareholders, and I continue to look forward to keeping you updated on our development on this exciting journey. So 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 staffs on their achievement, and I also want to thank you, valued shareholders, for your continued confidence in the company. And with that, we will move on to the Q&A session.

So we've had a number of questions coming in through the chat, and 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.

Yes.