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

Welcome to Alligator Bioscience's Fourth Quarter and Full Year 2023 Earnings Call. I'm Greta Eklund. I'm the Investor Relations and Communications Manager at Alligator and I will be introducing today's call. With me today are CEO, Søren Bregenholt; CFO Marie Svensson; and CMO, Sumeet Ambarkhane. They will walk you through the latest developments from the last quarter of 2023 and the upcoming news flow, after which they will be happy to answer any questions you may have. Before we begin today's call, I would like to share a quick reminder with our listeners that during today's call, management may make forward-looking statements that 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 the expected results, 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 timing predicted or implied by such forward-looking statements, and reported results should not be considered as an indication of future performance. Please note that these forward-looking statements made during this call speak only as of today's date, and the company undertakes no obligation to update them to reflect subsequent events or circumstances, other than to the extent required by law. This call is being webcast and is also available through the Investor Relations website. With the formalities out of the way, I would like to turn the call over to Søren.

Thank you, Greta, and good afternoon, and good morning, and welcome to Alligator Bioscience Fourth Quarter and Full Year 2023 Call. As Greta said, my name is Søren Bregenholt, and I'm the CEO of Alligator Bioscience. So if we could jump to the next slide and start straight off with the highly positive top line results from our OPTIMIZE-1 Phase II study where we are assessing the safety and efficacy of our lead asset, mitazalimab in first-line metastatic pancreatic cancer in combination with the standard of care modified FOLFIRINOX. I'm happy to report that the study was positive and met its primary end point with a so-called confirmed objective response rate of 40.4%. Also here, you can see that the unconfirmed response rate was around 51%. And thus, very much in line with the 52% unconfirmed response rate we reported when we read out the futility analysis from this study in January 2023. And thus, reflecting the data homogeneity in this study. Probably more important than the objective response rate, we are also very happy to respond -- or to report a median overall survival of 14.3 months of the study, far surpassing the benchmark of standard of care alone. And also, that more than 50% of the patients were still in the study and 1/3 still on treatment when data was cut off in November 2023. We also reported a quite extraordinary durability of response in this study of 12.5 months, which is already now twice of that can be expected from chemotherapy alone. So these data in itself speaks for the immune stimulatory potential of mitazalimab and definitely also its potential as a future therapy in metastatic pancreatic cancer. During the last quarter, we have had discussions with the U.S. Food and Drug Administration based on these data. And I'm happy to say that the agency has confirmed that OPTIMIZE-1 trial is Phase III enabling thus surpassing or circumventing Alligator's necessity to perform a so-called Phase IIb study, but that we can move straight from OPTIMIZE-1 and into a confirmatory pivotal Phase III trial. Thereby, we have established a clear path of approval for mitazalimab in pancreatic cancer, and we are fully committed to drive mitazalimab forward towards such a Phase III study, which we believe can begin in the first half of next year. Now what does this mean for Alligator as a company? It means that we have intensified our dialogue with the global pharma companies and big biotech about a commercial license for mitazalimab, and I'm happy to report that these discussions are moving forward as planned. We, of course, also remain fully committed to advancing our proprietary and partner programs, such as 527, ATOR-4066 and I'll talk more about that later in today's call. Now unfortunately, we have also been able to announce or been forced to announce a restructuring plan in Alligator, as always, an unfortunate thing. However, together with also our newly announced capital raise, this will allow us to continue to invest in our key strategic assets. It will give us an extended runway providing us with a financial maneuverability, allowing us to negotiate the best possible deal for mitazalimab with a partner that can bring mitazalimab to the patients as fast as possible, benefiting both patients and Alligator's investors and other shareholders -- other stakeholders. So if we can go to the next slide. I just want to mention that over the last year, we have provided a number of updates on and news on mitazalimab in first-line metastatic pancreatic cancer, all the way from the first interim analysis in January, to second interim analysis in June. And we have reported 2 orphan drug designations for mitazalimab, both in the U.S. and in Europe. And as promised, we also released Phase II data earlier in this first quarter. Not only are the data very encouraging, but this ability to deliver on our milestones with high-quality data and in a timely fashion also reflects the dedication, the skill level and the hard work of the very experienced and talented team we have at Alligator Bioscience. So a huge congratulations and thank you to the entire team here at Alligator. So with these words, I will need -- hand over to Sumeet, our Chief Medical Officer, who will provide some more details on the top line analysis of mitazalimab and also bring the perspective of the current treatment landscape in pancreatic cancer to you. So over to you, Sumeet.

Thank you, Søren. Next slide, please. So as a quick reminder, in OPTIMIZE-1 study in pancreatic cancer, we have been evaluating mitazalimab in combination with modified FOLFIRINOX as the first-line therapy for metastatic pancreatic cancer patients. The primary endpoint in the study is objective response rate measured as per RECIST 1.1 criteria. And the secondary end points are duration of response, progression-free survival, overall survival, safety, pharmacokinetics and pharmacodynamics. An important point to note here is the way mitazalimab is administered in the OPTIMIZE-1 study. So instead of administering both the modified FOLFIRINOX chemotherapy and mitazalimab at the very beginning together, the first treatment that is given to the patients is just mitazalimab and thereafter, modified FOLFIRINOX as a chemotherapy is administered. And we did this so that mitazalimab dose could first activate the immune system. And that basically prepares the ground for the modified FOLFIRINOX chemotherapy to then penetrate the tumor as profoundly as possible, which then translates into a profound response as well as the duration of response and allows for the maximum efficacy of this entire combination treatment. Next slide, please. So as we mentioned earlier, the OPTIMIZE-1 study met its primary endpoint with a confirmed objective response rate of 40.4% in the 57 efficacy evaluable patients. And the disease control rate was almost 79%, which indicates a very meaningful clinical benefit to a large majority of the patients who were enrolled and treated in the study. The median duration of response was extremely long amounting to 12.5 months, much longer than what has been reported with any other therapies so far. The median progression-free survival was 7.7 months, and the median overall survival was 14.3 months. The data can be regarded as robust and very mature, especially because of the median follow-up or observation time was 12.7 months, so well over 1 year. And not to forget is that mitazalimab, together with modified FOLFIRINOX as a chemotherapy demonstrated a very well-manageable safety profile. The profile is largely consistent with FOLFIRINOX chemotherapy, and there are no signs of additive toxicity that happened because of mitazalimab. Next slide. Now let's try to put these results of the OPTIMIZE-1 primary analysis into context, with those with the wider treatment landscape known for pancreatic cancer, especially in the frontline. So we can see that the 40.4% response rate of mitazalimab and modified FOLFIRINOX compares favorably to the standard of care FOLFIRINOX, which is 31%. The results also indicate a promising long-term effect of the mitazalimab-modified FOLFIRINOX combination treatment with an unprecedented duration of response of 12.5 months compared to 5.9 months demonstrated by FOLFIRINOX and 7.3 months demonstrated by the more recently published results from the NALIRIFOX chemotherapy from the NAPOLI 3 randomized Phase III trial. Median overall survival was 14.3 months at the time of this analysis. And we expect that to improve because the large majority of the patients are alive and either in the treatment or in the follow-up part of the trial. And so therefore, the median survival that we have reported in this analysis also compares favorably to the 11.1 months that has been demonstrated by both FOLFIRINOX and the NALIRIFOX chemotherapies. So with that, I would like to turn it back to Søren.

Thank you, Sumeet, for this overview of the data from the OPTIMIZE-1 study with mitazalimab in first-line metastatic pancreatic cancer. So if we can have the next slide, this is just to remind you and give you an overview of our fully owned and partnered pipeline. On a common theme of the drugs that we are developing in Alligator is that they need to be developed with an aim of having a significant efficacy, but at the same time also be safe and tolerable, thus enabling combination with almost any kind of standard of care, be that checkpoint inhibitors or in the case of metastatic pancreatic cancer, chemotherapy. And I think we have achieved that very successfully with mitazalimab where we combine with FOLFIRINOX the most -- one of the most severe chemotherapy regimens that are used in frontline therapy today. And as we have mentioned in other casts -- webcasts, patients are being treated with mitazalimab and chemotherapy for now up to almost 2 years. And that is, of course, a testament to the safety and tolerability profile of these molecules. We continue investing in getting mitazalimab ready for Phase III clinical development in first half of 2025. This entails continued manufacturing development. It entails finalizing OPTIMIZE-1. We have still a number of patients on the study and of course, also getting the regulatory dialogue about the final Phase III design ready, all this while we are engaging with global pharma about a commercial license to the molecule. As you may recall, we also have an IND on mitazalimab in urothelial cancer. This study is ready to go. Regards -- regarding timing, we have decided to hold that back a little bit, while we are negotiating a deal for mitazalimab, as it doesn't make any sense to start a second Phase II study at this current point in time. Also on the CD40 franchise I'm happy to share with you that our Neo-X-Prime platform, so this next-generation bispecific CD40 agonist molecules, there the front runner, 4066, continues to show very strong translational data. And we are fully committed to bringing this molecule forward towards the first in human trials to the best of our financial abilities. Then lastly, 527, our bispecific 4-1BB molecule that we are developing with Aptevo, currently in a Phase I dose escalation study on -- in U.S. sites, we expect to be able to announce the first set of data from that molecule during the first half of this year. And finally, although not on this slide, I can update you that our collaboration with Orion is running if not as planned, then somewhat ahead of plan, which is always a good thing. So all in all, we continue to progress our key strategic assets in Alligator Bioscience. And with those words, let's turn over to you, Marie, our Chief Financial Officer, to review the financial results for the quarter and the full year. Marie?

Thank you, Søren. Next slide, yes. Thank you. Going over the financial figures. Net sales for the fourth quarter '23 amounted to SEK 11.7 million, down from SEK 20.1 million the prior year period. Sales for the period as well as last year pertain to the collaboration and license agreement with Orion that Søren mentioned. Operating loss for the quarter resulted in negative SEK 69.8 million, an increase from SEK 53.3 million prior year period. Cash flow for the quarter amounted to minus SEK 7.1 million compared to minus SEK 49.8 million in the prior year period. The cash flow in Q4 was positively affected by a divestment of short-term interest placement made in Q3. For the full year period, January to December '23, net sales amounted to SEK 58.1 million, up from SEK 35.7 million in the prior year period. Operating loss for the full year resulted in SEK 249 million, an increase from SEK 193 million in loss prior year period. Cash flow for the full year period was SEK 30.2 million -- minus SEK 30.2 million compared to SEK 180.9 million for the same period last year. The cash flow was positively affected in '23 by the right issue carried out in June. Revenue in the quarterly and full year periods for '23 was a result of the research and license agreement I mentioned before with Orion, where we have 2 development program running in 2023. Operating expense for both periods was mainly due to the cost of the ongoing clinical trial and Phase III-enabling activities for mitazalimab but also the Phase I study with 527 running in the U.S. as well as the development of our next Neo-X-Prime candidate 48 -- or 4066. In the figure down to the left, you can see how expenses were distributed between our projects in Q4. And not surprisingly, 50% of our resources have been focused on mitazalimab project. An important point I would like to bring to your attention is the focus of financial resources behind our R&D efforts, while Alligator dedicated around 70% of its operational expenses in 2020 and '21, this level was significantly increased in '22, reaching 81% and our efforts have continued leading us up to dedicate 85% as of December 31, '23. Next slide, please. If we look at Alligator's operating cost on a rolling 12 months basis, we note an increase due to the number of patients staying on longer in our ongoing clinical trial with mitazalimab as well as the investment in Phase III-enabling activities. We received SEK 181 million in gross proceeds following the preferential rights issue in Q2. And on December 31, liquidity was SEK 66.1 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 as Søren mentioned before, we are increasing our efforts to identify the commercial best partner suited to assist us in taking mitazalimab through its next development steps and then on to the market as quickly and efficiently as possible. Yesterday, the company announced that we will carry out the right issue of SEK 150 million with an over-allotment issue up to an additional SEK 100 million. The company's major shareholders have entered into a bridge loan agreement with the company to secure efficient progress of mitazalimab towards Phase III and to enable continued progress of our other innovative drug candidates. With that, I will turn back the call to Søren.

Thank you, Marie. If I could have the next and possibly last slide. Yes. So with this data from mitazalimab and the prospect of a commercial licensing deal for the molecule in pancreatic cancer and beyond, management and Board believes that Alligator is well-posed to deliver on our long-term strategy. And our long-term strategy is really to ensure that the data from the OPTIMIZE-1 study does not only validate mitazalimab as a relevant drug candidate, it also validates for the first time, CD40 as a relevant drug target potentially in quite a broad spectrum of oncology indications, either as a stand-alone molecule or in combination with standard of care. And Alligator is uniquely positioned to leverage this data by our next-generation platform called Neo-X-Prime, where we combine our ability to discover, generate and develop bispecific antibodies on our Ruby technology. We combine this with our in-depth knowledge about CD40 and our standing IP estate and portfolio to develop these Neo-X-Prime molecules, which we believe will make a significant difference across a number of oncology indications in the years to come. So the long-term goal for mitazalimab is really to broaden our proprietary and partner clinical pipeline with our own 3 mid-stage assets by -- clinical assets by 2030. And have an additional 5 partnered assets by 2030. Also, in the clinic -- we already have a couple of these in the clinic right now. And then we believe that we can generate revenue based on mitazalimab's approval in mitazalimab and potentially beyond. And to get us to that, we are going to deliver on a number of key inflection points. First of all, getting the data out that we got early Q1, enter into a strategic collaboration and initiate Phase III in the disease. Beyond mitazalimab, we have to deliver on our 527 Phase I study together with Aptevo, a molecule that we see a lot of value and optionality in. And then, of course, we need to deliver on our existing partnerships and ensure that we -- that our technologies are strong enough and attractive enough to be able to enter new collaborations. And we believe that the data with mitazalimab and the promise of Neo-X-Prime will allow us to enter into such collaborations, in the years to come. So with this data, I will conclude that we have in 2023, delivered a number of milestones in our collaboration with Orion. We have taken 527 into the clinic and progressed that trial according to plan. And we have been able, during the year to drive mitazalimab to a very successful data readout in January, while at the same time, secured orphan drug designation for the molecule in both Europe and in the U.S. And with this positive sentiment to the organization and this positive outlook for the future, I will now hand it over to the Q&A. So thank you very much.

Okay. And as for the Q&A, I will be the master of ceremony. And we have a couple of questions here from Luisa Morgado from Kempen. And the first one goes to you, Sumeet. Could you remind us when you will provide further data on the Phase II study with mita in pancreatic cancer. And when we can expect to see more survival data from the study?

Thanks for the question. So basically, the data that we have reported in this primary analysis, we are submitting that data to the upcoming key scientific conferences such as ACR and ASCO and we will wait for getting to know basically the assignment of our data, and we hope that we will be able to present more details of the data in those scientific conferences. To the second part of the question regarding additional or longer follow-up data for survival. We will be aiming to have it available approximately around the mid of the year. The details are not yet completely available, but that is our plan to have a follow-up of the analysis approximately 6 months after the previous one.

Okay. Thank you, Sumeet. And another question from Luisa. So what expectations or benchmarks are you trying to surpass with OPTIMIZE-1 data?

That is an interesting question because, again, as we reported, the study met its primary endpoint in the form of objective response rate. And looking at the other key end points such as durability of the response and overall survival, we have already surpassed the existing standard of care, and particularly the duration of response is much longer than what has been reported with any standard of care or even experimental therapy that has been evaluated in frontline. So we have surpassed the benchmarks. And I think the key purpose of this trial has been to demonstrate a strong proof of efficacy for this combination, together with a manageable safety profile. And the study has been successful in establishing that strong proof of data, thereby enabling subsequent development because what is much more meaningful and sort of the thing that has to be done as a next step is a randomized Phase III trial. So the most important outcome of these data are they are strong, robust data and they're enabling the conduct for a randomized Phase III for which we are preparing at the moment.

And we stay a little bit with you, Sumeet. We have a question from one of our investors identifying himself as Patrick B. And it goes like this: Since over half of the patients are still on treatment, can you comment on what the overall survival is for patients who did not discontinue treatment versus patients who discontinued treatment? That's a tricky one, I guess. And what happens to patients with discontinued treatment, what therapy did they receive in the second line?

Yes. The first part of the question is indeed a complex one. We have not performed that kind of analysis to look at survival of patients who discontinued versus who did not discontinue. That is something that we will probably take into account as far as our analysis approach is concerned. That is a bit unusual. However, we will look into that and see if any meaningful interpretation can be drawn out of that? And the second part of the question, can you repeat that, Søren?

Yes, I can. What happened to the patient who discontinued treatment, what second-line therapy did they receive?

The second line, most of the patients received the second-line therapy, which is again a good result of the trial because that means that despite the strong FOLFIRINOX chemotherapy, they were able to receive subsequent therapy, and in most of the patients who received the subsequent therapy, this was either single-agent Gemcitabine or Gemcitabine in combination with another chemotherapeutic or an investigational agent, but that has been the most commonly administered second-line therapy in these patients.

Okay. And we stay a little bit with the OPTIMIZE-1 study here. Can we expect to see full data presented at ASCO this year? I think you've already answered that Sumeet that we are aiming for that.

We are hoping for that, yes.

Yes, let me just find -- I'm trying to group things a little bit here. Let's go to expectations for -- no, we have one more here, and this is from Richard from Redeye you have communicated that you need to enroll 15 additional patients in OPTIMIZE-1 on the 450-microgram dose, how does that affect cost and timeline of the project? And I think I will take that answer. So first of all, that is correct. As most listeners are probably aware the Food and Drug Administration has, over the last couple of years, spent quite a lot of effort and emphasis on getting companies to perform proper dose finding also in immuno-oncology, which has led many companies to take maybe a sidestep in the development program and -- of their molecules, and forcing, so to speak, companies to do randomized Phase IIb studies prior to initiating Phase III to get a full picture on the right therapeutical dose. In our discussions with the FDA and based on the very thorough work on dose selection in the Phase I study with mitazalimab, it was clear that regulators did not request a second Phase IIb -- or a second Phase II study, but merely asked the company to backfill the cohort on the lowest, 450-microgram dose to get certainty about the clinical pharmacology in -- at this dose. We, as a company, heavily accepted that proposal as it reduces cost, time to market and also patients a lot of stress to backfill this cohort. And of course, that is 15 additional patients into the study. It will incur some cost. But on timelines, it will not have much of an impact as we will do this as we continue to prepare mitazalimab for Phase III. We don't foresee this to have any impact on the conclusions of OPTIMIZE-1 and that the data that we have read out in the top line now, we are convinced will be the final readout of the study. Sumeet, do you want to comment on that?

I think no additional comments. I think you summarized it well. I think this is an essential step from a development point of view, it has been introduced relatively recently. And we are glad that FDA has been very supportive of our data, of our approach and the difference that this treatment is making in the lives of patients, and they endorsed basically the Phase III study can start with these additional number of patients. So I think that's a very positive outcome of the interaction and especially with the fact that there is no need to perform a new trial to randomize and evaluate 2 different doses. And I think that is very helpful and supportive of the program.

Yes. Good. And I'm sorry to keep you in the side there, Marie, but there's quite a number of questions on mitazalimab and the continued development. So I have 2 questions -- last questions about Phase III design. This one is also from Patrick B, could you walk us through the different in-treatment paradigms in the U.S. versus Europe? And how common is the use of modified FOLFIRINOX in the U.S. And is it mostly the same modified FOLFIRINOX regimen that is used in the U.S. and Europe?

Yes. Very important question. With respect to the differences in the pattern of use across different countries and geographies, there are certain differences and variations, let's call them variations rather than major differences because it is a well-known fact that FOLFIRINOX is associated essentially with better outcomes compared to Gemcitabine-Abraxane or the Gem, nab-paclitaxel as a standard of care in metastatic pancreatic cancer patients. Whereas depending on whether it is an academic institute or it is a smaller practicing institute, there can be differences. I think in a large scale, we can easily say that FOLFIRINOX is becoming more the standard of care, especially with the more recent data from the NAPOLI 3 that was published and that evaluated a regimen called as NALIRIFOX, which is very, very similar to the FOLFIRINOX regimen. And that clearly showed a statistically superior overall survival with this regimen compared to the Gemcitabine-paclitaxel combination. So therefore, FOLFIRINOX can certainly be regarded as the standard of care and despite the variation, it will very soon become the most commonly sort of given regimen to patients in frontline. And the second part of the question was the modified FOLFIRINOX itself versus FOLFIRINOX. So this difference comes from a couple of changes that have been done to the original FOLFIRINOX regimen, and that essentially resulted into better tolerability of this regimen, and most importantly, with almost unchanged efficacy results. So modified FOLFIRINOX is safer, but as effective as the full-dose FOLFIRINOX and that is why the choice of combination or the choice of chemotherapy that we have made in our optimized program is modified FOLFIRINOX, and that's what we intend to continue.

And then while we talk about the chemotherapy backbone, there is a question here about NALIRINOX (sic) [ NALIRIFOX ], the new or the -- the modified FOLFIRINOX, what we want to call it, with Ipsen's molecule Onivyde. So in the NAPOLI 3 study NALIRINOX (sic) [ NALIRIFOX ] demonstrated 1.1 (sic) [ 11.1 ] month overall survival, the exact same as FOLFIRINOX in that original study. And the question goes, is there any chance that the FDA will ask you to conduct the mitazalimab Phase III study with NALIRINOX (sic) [ NALIRIFOX ] as a background therapy?

I think the chances of that are very slim or I would say, unlikely because the NALIRIFOX study or the NAPOLI 3 study demonstrated the superiority of that regimen versus Gem-Abraxane. So very likely NALIRIFOX will get approved and will come into clinical use. However, that does not necessarily replace it -- or replace FOLFIRINOX as the choice of chemotherapy. So I think it is to be seen whether NALIRIFOX because from the data that were reported from the NAPOLI 3 trial, the outcomes between FOLFIRINOX, historically reported and NALIRIFOX reported in the trial were exactly the same. And even though no difference in the decimal point as far as overall survival is concerned. So I think it is -- we don't believe that for the development of mitazalimab there will be a mandatory need to combine it with the NALIRIFOX. We can proceed with -- and that is also consistent with the advice that we have received from FDA that we can proceed with the Phase III study in combination with modified FOLFIRINOX.

And we would expect that the mechanism of action of mitazalimab will also add additional survival benefits on top of NALIRINOX (sic) [ NALIRIFOX ], correct?

Absolutely.

Yes. Then one last question on Phase III from [ Lars Harholt ], one of our analysts. Is there a risk that the larger Phase III mitazalimab study will come out much weaker than the Phase II being randomized larger and so on and so forth?

Yes. I mean talking about risk, basically, a Phase III study has a certain element of risk, and that element of risk will be there also for the mitazalimab's Phase III study head-to-head versus modified FOLFIRINOX. However, it is unlikely that the results will come much weaker than the currently reported Phase II trial, especially with the fact that the patient population that was enrolled in the OPTIMIZE-1 trial, very well represents the patients that are seen in day-to-day clinical practice. And particularly with the fact that no patients in the trial had received a prior chemotherapy and only a very small number of patients had a prior surgery, both of these factors indicating the fact that the patient population in OPTIMIZE-1 was actually that of a poor prognosis category. And despite that, we have reported excellent durability of response, plus survival extension in the context of what we know with the standard of care so far. So we don't believe that the results will be much weaker than what we are seeing so far.

Thank you, Sumeet. And then staying on mitazalimab here, a last round of questions, sort of a recurring theme for many of you, including Richard from RedEye and Luisa from Kempen. So could you expand on which characteristics would an ideal partner for mitazalimab have? And I will try to answer that. We believe that mitazalimab, with what we have shown in OPTIMIZE-1, both in terms of mechanism of action and also in terms of tolerability and safety profile that mitazalimab is worth combining with the standard of care across a number of indications, whether that is other GI tumors, with the same chemotherapy backbone or whether it's more immune inflamed tumors with a PD-1 chemo backbone. So the ideal partner for mitazalimab would be either a large global pharma with a broad interest in immuno-oncology in solid tumors, potentially a company with imminent patent cliff, and I think we could mention a couple of companies there. Alternatively, it would be a company with an established interest, either in pancreatic cancer, specifically or in -- broadly in GI tumors. And I think we could at least also mention a couple of companies there. And we need a partner that can move fast. We are, as I said, investing in bringing Alligator forward towards this pivotal trial in pancreatic cancer as soon as possible, and we need somebody who can jump on the molecule and with an execution speed and power that lives up to our ambition of bringing mitazalimab to pancreatic cancer patients as fast as possible. Then another pertinent question, of course, when do we hope to have a deal in place for mitazalimab? The sooner, the better, of course, we are working hard on it. And I've said this many times, we don't want to rush into an agreement. We want to take our time, our current or newly announced financing and restructuring plan allows some more financial maneuverability that will allow us to negotiate the right deal for mitazalimab and for Alligator. Okay. Now I think we should maybe switch gears a little bit away from mitazalimab and talk a little bit about the recent financing, Marie, and I think there's a couple of questions to you here. And the first one is from Richard, at Redeye, that's a very sort of straight on question here. Why did you not give any discount on the rights issue subscription price?

Well, we gave a bit. It was at least 10%. But we believe that the stock is undervalued. It has been pressure on it because the financing situation. But with giving this excellent data and the upcoming events during the year that we can expect. This is a very interesting point for any investor to come in. And therefore, of course, we would like to not only invite new investors. We will also make sure that current investors that have been supporting the company for a long time also can join and take the opportunity to be with us on this interesting upcoming year.

Excellent, Marie. And another question about the foreseen cash burn in 2024. Can you talk a little bit about that?

Yes. As you understand, we would like to proceed and focus on getting mitazalimab on track and don't lose time for a partner. So that will be the foremost major activities. How far and how long time it will be before we have a partner, will of course, affect the burn rate for this coming year. But in general, I would say the burn rate will go down a bit because we have not the same amount of patients even if we still have a lot of patients in the study. But it's really difficult to say when and how long will we invest in mita before we have a partner on board.

Yes. I think the point is we will continue to invest in mita until we have a partner.

Yes, yes, yes...

Then there is a couple of questions about OPTIMIZE-2, which is the study in -- the potential study in urothelial carcinoma in combination with PD-1, and one of the questions here is when do you expect to start that study? I think that from a strategic perspective, and also a partnering perspective, OPTIMIZE-2 will not be started in the first half of this year. We don't think it's a prudent investment to start a second Phase II study in the middle of a business development process. Depending on who actually end up licensing mitazalimab, urothelial cancer may or may not be on strategy for that potential partner. Hence, there is a risk that such a study or such an investment will not add any value short term or long term to mitazalimab or Alligator Bioscience. Then there is a number of questions about our headcount reduction that we also -- and restructuring that we also announced yesterday. And I think if we sum up the questions here in the interest of time, Marie, can you briefly talk about how that affects our cost base going into 2024 and beyond?

Yes. As everyone knows in this kind of process, we are not sure when the negotiations is finalized, and therefore, it's a bit difficult to say when the saving will actually come in play. But if you just look at last year's cost for personnel, it was almost SEK 80 million, and for -- that's why we believe it's around SEK 20 million less at least towards end of '24 on a yearly basis and then continues in 2025.

Thank you. And I think it's important here that we also emphasize that this restructuring plan will not affect our ability to continue to move mitazalimab forward, as we talked about quite extensively today. It will not affect our ability to continue to invest in 527 and nor will it hinder us in moving 4066 forward. And I think with 4066, there is a last question here from Luisa at Kempen. When do you expect to be able to enter clinical development with 4066? I think that's a good question to end today's call with. So 4066 is the third generation bispecific CD40 agonist currently preclinical. We have very strong translational data. We've also been able to now add a global CDMO, establish the manufacturability of this molecule, and as long -- as soon as we have the financial flexibility, we are ready to start the full-scale IND-enabling activities and probably bringing 4066 into the first-in-human trial, the first quarter of 2026, so approximately 2 years from now. And then I see a last question here, your expectations regarding a license deal, royalty level range and upfront milestones? That's, of course, a difficult question to answer. You can say that what is the benchmark for royalties, and I don't want to stand here start negotiating with potential partners. But I think double-digit royalty for an end of Phase II, Phase III-ready molecule is absolutely within expectations. And then you can say we believe that mitazalimab has a top line sale of more than SEK 1 billion, closer to SEK 1.8 billion at peak sales in our current models and at least SEK 20 billion total sale over the first 10-year period, and -- over the exclusivity period. And we are sort of making our financial models based on that. Of course, the fact that we are not doing a Phase II, moving faster to the market will, of course, also increase the attractiveness and the value of the molecule and the value of Alligator share significantly, but I cannot stand here and come out with numbers on all fronts and early development milestones for mitazalimab. What I can say is that we expect that such a deal will allow Alligator to reinvest substantial funds into our clinical and preclinical pipeline and keeping us away from the -- from financing events in quite some time. Okay. We are now 5 to 3, and there are no more questions on the list. So with that, I want to thank you Marie and you, Sumeet, for your contributions today. It's always a pleasure hearing your perspective of -- on the company, and I want to thank all of you for listening in today, and we're looking forward to update you next time at our Q1 call. Thank you and have a nice day.

Thank you. Bye-bye.

Thank you.