Ascelia Pharma AB (publ) (ACE) Earnings Call Transcript & Summary

Thank you, and welcome, everyone to the Ascelia Pharma Conference Call, where we will update you on the new agenda plan for SPARKLE conclusion. Earlier today, we sent out a press release. And here on this call, we will delve in to more depth. With me today on this call, I have Julie Brogren, Deputy CEO and Chief Commercial Officer; Andreas Norlin, Chief Scientific Officer; and Despina Georgiadou Hedin, Chief Financial Officer. I'll turn to Slide #2. During this presentation, we will be making a number of forward-looking statements, so please pay attention to the statement here. And now please move to Slide #3. Ascelia Pharma is dedicated to improve the life of people living with cancer by offering better treatment options. In particular, we focus on rare cancer conditions. Our business model is to identify, develop and commercialize novel drugs that address unmet medical needs within the open oncology area. We have 2 clinical development programs, Orviglance, which we'll show the center of attention to Ascelia using an ongoing Phase III clinical study. It will be the only promoting an addressable market of $500 million to $600 million annually. Oncoral is ready to start Phase II in the treatment of gastric cancer based on encouraging results in Phase I and a high level of unmet medical need. We're based on Malmö, Sweden and are listed on NASDAQ Stockholm. We have a strong balance sheet and are funded into Q4 2023, including completion at the Orviglance Phase III program. Now please turn to Page 4. As we have communicated earlier today, Orviglance has -- and previously, Orviglance demonstrated strong data in the clinical Phase I and II studies. We have completed a thorough analysis of Orviglance data base, in particular on the study started in '04, while incorporating new internal and external that which has resulted in a various effect level. The consequence of this is that we came across the 6.0 study this a substantial limitation than previously expected. These results on efficacy have been discussed with the FDA in the context of reducing the size of the SPARKLE. Based on those discussions, we have decided to reduce the patient enrollment target of responding to 80 patients. This means we expect SPARKLE patient enrollment by February, March 2023 and some part of it in mid- '23. We also want to emphasize that this is not based on any data from the SPARKLE study itself as we don't know the data yet. That is blinded. Now please turn to Page #5. Original SPARKLE design has created the best information available at this. These include a Phase I/II studies as well as data and neutral. Although the data available at time was still is encouraging. It was conservative assumptions for the statistical test to create a comfortable margin to be likely to achieve the positive statistically significant results in this. In particular, uncertainties related to source level, some of which we have done on with food effect inclusion of primary benefit patients our earliest that had metastasis patients as well as changes in MRI, instrumentation and imaging sequences and inter-reader variability we factored into our assumptions. The feasibility analysis we conducted in the pre-COVID setting, with potential but this has now suppose to show a total in the roll period of 9 to 12 months in a conservative estimate and hence supporting making conserved assumptions in the absence of some of this. Our new data is creating new evidence. It's partly based on the reread of the study at Karolinska using a similar 3 radiologists reading setup on all the available images from that study and a similar scoring of the image, the same scale as since and that becomes a much more accurate predictor for proven SPARKLE. Measured is not in context, the effect level in this study was 2 to 3x the effect level that we had conservatively assumed in SPARKLE. In fact, for the leasing visualization endpoint, which is the primary endpoint in SPARKLE, the key value in this were 3 readers was less than 0.09 in all of those patients. This is typically regarded as a highly activity significant result, and it's a Phase III endpoint in only 20 patients. This supports an encouraging efficacy profile of all events. For the other important assumptions in this part of study other internal and external data which is available now to assess a data-driven change in the structure unexpected efficacy. So in conclusion, the new data we thoroughly analyzed, including with support from external international experts and still with conservative assumptions to support a successful outcome of SPARKLE with substantially fewer patients than previously time. This is presented to the FDA. Based on the discussion and the feedback, we have decided to stop enrollment of 80 patients in SPARKLE, which is expected in February or March next year. Now please turn to Page #6. Although SPARKLE is not completed yet, I'd like to share the key challenges we faced during the SPARKLE trial and that we have updated you on unfortunate regimes. When I speak to colleagues in drug development, and share similar stories in clinical development. It has been a significantly more difficult to royalties SPARKLE than initially planned. We knew it was an orphan condition, and SPARKLE is a very large orphan drug study. And it's also complicated to recruit only a small subset of patients who undergo procedures. So we're looking only for the patients with severe real impairment undergoing a liver MRI. It's not easy for our investigators to be and right to meet the patients at a time in the patient diagnosis treatment so that we are able to join SPARKLE. This is a major difference compared to routine clinical practice where the enrollment criteria on use of the drug is very different. SPARKLE was started immediately before the COVID pandemic hit Europe, U.S. in 2020. The study never really go on the participating sites speaking in meeting to an overload of COVID patients and we're able to recruit patients at SPARKLE as well as renaissance. To complicate manage further, our 0 experienced liquidity issues as we announced back then. During the west, we initiated a process to select a new CRO, which was on running stock towards the end of 2020. Just in time, the next program we've lever down in the winter of 2020-2021. COVID has continued to play a significant role in SPARKLE and many other studies. The day is less direct in terms of overloaded patients in hospital. But one of the key consequences have been that many hospital back staff, including SPARKLE sites, means that they are unable to be in enrolling patients. One of our main key factors was to open more sites in Russia and transforming the route for COVID patients. During 2021, we added a large number of hospitals and beginning of March 2022, we suspended all 13 Russian sites due to invasion of Ukraine. As you all know, this has been an unprecedented and challenging period. We look forward to completing the SPARKLE enrollments adverse. Now please turn to Page #7. Close to completing the SPARKLE enrollment, and we're seeing an uptick in the trend as well as having sites that have been unable to enroll that are now finding patients. Technically, we have 48 active sites, but only 20 patients have enrolled so far. Some of the sites have been recently opened, but some of them period actually took a period of time. As of the end of last week we have 58 patients completed, and the pool of patients identified and whom they surely joined SPARKLE is significantly larger than we've seen previously. One of our patient recruitment initiative is to work with the patient organization for potentially eligible patients to backhaul through social media. Last week, the first patient for this initiative was considered although not involved, so not part of the 58. We hope for more soon. We've been frequently asked about the status of the enrollment and our quality has been to announce referring the last patient. We understand this has been trying on investors patience and we have changed this policy for the remainder to announce the number of patients after the last trading of each month, so you can follow the progress on a regular basis. Now please turn to Slide #8. Today, we've completed 8 studies with Orviglance. SPARKLE will be #9. The results have been shown a consistent strong patient safety profile. The Phase II data trial analyzed to be digitally as we have with the study, which showed 33% more lesions detected and highly significant results on lesion visualization. In the Orviglance study comparing Orviglance to a liver-specific gadolinium we discover very high when evaluating Orviglance, both in evaluating market, but also very specifically. As you may recall, these patients have novel at the inside extremely low risk for existing approach. Recently, we completed the food effect studies which show that patients had a good liver enhancement, both on -- and I think before Orviglance administration and also be having a light meal prior to Orviglance administration. This will hopefully make it more -- even more attractive to patients in practice. We are ultimately completed the study in patients with primary degrees of the liver disease demonstrated the overall patient enhancement in liver MRI in all categories for treatment. Importantly, start that even in patients with severe liver impairment, strategy, no excretion operation in the kidney. Everything goes to delivery and the buyer, which further support that Orviglance is a product and the target of pace. Now please turn to Page #9. I'd also like to update you on a couple of other aspects of incomes. As customary in many trials, Data Safety Monitoring Board would review the safety profile of the drug in a certain number of patients have been involved to for unexpected safety side effects. In SPARKLE, this review was still about 30 patients have been enrolled. The conclusion was that the trial had no serious adverse events, and the most frequently noted side effect with nausea, which is higher patient for the trial. This profile is consistent with earlier studies. Biologically children are now small adults and therefore, a special program is needed to obtain approval. For the FDA arm is wave due to the open drug designation, and it's not targeting a pediatric disease. For Europe, we have agreed with the EMA to a clinical study -- and study is to be conducted after the -- any adult indication. The manufacturing is highly important for both the regulatory process and the commercialization. We're manufacturing at commercial scale and have decided a point beginning to the end. Our activities in factoring support the time line for regulatory activities. Now please turn to Page #10. I'd like to end with our 2 key milestones ahead. We expect the patient enrollment to be in February and March next year. This will allow us to generate the top line results around mid- '23 when all the data have been evaluated and probably you would say quality from statistical analysis complete. We are highly encouraged by the strong efficacy seen in the new statistical analysis of the existing data. Our confidence in a successful study is strong, and we highly value the constructive data to the FDA. The entire Ascelia team works very hard to compete SPARKLE despite substantial structural sector challenge during the COVID pandemic and beyond. That's it, and we're happy to answer questions.

[Operator Instructions] And our first question comes from Lars Hevreng from Danske bank.

Yes. It was a poor line, but did I correctly hear that the reason for the cut in the target from 280 patients. Is that the data from any particular trial? Or what's the reason, basically?

Yes. Thank you for the question. So I hope you hear better now. So the reason was that we -- when we did the re-read with the same re-read study, we did the study. The efficacy data was very strong. And that we have obviously been testing very, very with all our capacity internally and externally to make sure that was a credible result. We don't want to change -- reduce the size of the study. I guess it's fully warranted. So we don't want to compromise, say, likelihood of success. So that is, I would say, a key data point for reducing the size. The data that has become a year, 1.5 years, both internal and external data that helped us reduce some of the uncertainties that was involved in the initial sizing of the SPARKLE program.

So the statistical hypothesis for the primary efficacy endpoint, that's the same?

Yes.

Okay. And what makes you confident in terms of the consumption of the trial this new enrollment target?

What we're seeing as mentioned in the trend, we see more sites actually being and recruiting. And we -- there's also -- there's always, let's say, a pool of patients that are hopefully about to end the study. And that pool of patients is largely than -- significantly larger than we've seen before. We have good dialogue with more and more investigators and also it's complicated for radiologists in a routine clinical practice and even in the academic center to conduct either responsible for doing a clinical trial in radiology. That's one of the things we've learned because it's -- they're usually having patients coming in, doing a scan and then out, not seeing them again. Here, this requires them to have a dialogue with the patient consent the patient and inform them about the trial. And when they do the trial, they need to do a lot more a blood sampling and other tests and assessments, which is just a very different work. So once a site has recruited the first patient, they have learned how to do this. They can -- and that is very important as we've seen in terms of getting more patients into the trial. So the first patient is always -- has been a big hurdle for many of the sites. So that makes us confident that we can bring the patient population or the enrollment to 80 patients in February, March next year.

The next question comes from Sten Westerberg from Analysguiden.

You're referring to new statistical analysis on data on the image reading methodology that you're making use of it. Is this published data?

Yes. Andreas, do you want to answer?

Yes. Yes. So this is Andreas Norlin, Chief Scientific Officer. The data is partially published. We have presented it at the RSM May -- in June '21. Not all of the data was presented there. We have done additional analysis after that. And as Magnus mentioned before, we have done this very thoroughly because we really wanted to be sure that this is something that we can be confident in. So the answer is -- the short answer is partially published.

And the data you're referring to, is this data on Orviglance or some other contrast agents?

It's Orviglance.

Okay. Second question. Since you had quite a few recruiting centers for more than a year and so far achieved assignment of 58 patients. The question arises to what extent the recruitment pace is a sign of the scarcity of these patients with kidney disease and liver damages?

Julie, do you want to talk about that.

Yes. Thank you for this question. So overall, our content commercial potential is unchanged, and a lot of the dialogue with these investigators helps us in our oral activities. But the thing is that we had trial recruitment is quite different from clinical practice. Actually, there is some data showing that, for example, only 1 out of 20 eligible patients are actually recruited into a relevant clinical studies. . And we note that population, and they have multiple complications, so they are actual bigger hospitals, which is a good thing for us commercially. But the big hospitals typically are quite focused on the clinical practice in the community rather than more research-based activities. So overall, this doesn't change our confidence in the commercial potential of Orviglance.

Okay. Will the finish of the SPARKLE study in any way accelerate your cash burn during the start of next year?

No. I mean, we still maintain the guidance that we have funding on to Q4 next year.

Okay. Final question, sorry, if I have a lot of questions. But a final question, if there are any other changes? I mean, you're maintaining the statistical power now at 80 patients. But are there any other changes to the protocol of the SPARKLE study?

No. It's nothing.

Okay. That concludes my questions.

Yes. That's great. Thank you for the question, Sten.

[Operator Instructions] The next question comes from Johan Unnerus from Redeye.

Mainly a clarification. So we should understand the reason for this change as the foundation is the data from an earlier study and you used the method or the review which is aligned to the SPARKLE study. So the main change is that you use the same approach to review these existing data?

Yes. That's absolutely correct, Johan. So it's the same reading nation because it's we've not used that specific 3 reader setup, which is also more expensive, but we've not used that in the earlier states. Now we have that for one of the studies and that demonstrates a very strong efficacy.

And the reference to the efficacy, of course, it's natural to them to compare with the Phase II results and this finding based on 20 patients suggest that you're in a position to go beyond that?

Yes. And you would say if we've had this data from the very beginning, there would have been no doubt that this is what we would have -- how we would have designed SPARKLE from the beginning. So that's how we've been doing it. We have had that in that from the beginning that we did. Now we have it and we have the dialogue with ESG after, let's say, crosschecking and challenging the data very intensely internally before having that FDA dialogue. And based on that dialogue, we decided to start enrollment of 80, which we think is will give us a very good opportunity to have a positive outcome at this time.

Excellent. And that brings us to the next question then because it was fairly recently, you still aimed at up to 200 by end of '22, even if that was, of course, challenging. But this review process time with the FDA, presumably, that's been taking quite a long time.

Yes. You're right, Johan. And as you know, when -- first of all, we spend a lot of time in both internally and externally to make sure the data was rock solid when the high level of efficacy. And then having with the FDA, as you are well aware, is not just selling an e-mail across. It's requesting a meeting and there are certain schedules and notice periods for that and improving in a full significant briefing package with a lot of documents and then having the meeting. And then once the meeting has been held, we need to wait for the final minutes because those are the ones that sort of determine the -- what I was referring. And that we got there originally and then we'll be able to make the decision to start the study at 80 patients.

And I mean, statistical significance in power, I mean, it's based on the efficacy and also the number. Are you -- should we understand this as being a sort of a similar significant that is based on 200, but now with the -- what looks like a stronger efficacy so you don't require as many patients?

Andreas?

Yes. Yes. I think, again, the simple and straight answer is yes. We basically don't think that we are changing the likelihood of showing a significant -- so because of the data there to be stronger than we initially assumed.

So the next point of patient update will come just before when you see that?

Yes.

Yes. Just to explain, so we are getting updates from the CRO who is having the data and once we have the information from the CRO, and that is quality checked then we will present it out in the first weeks, so everyone can sort of follow the enrollment and focus.

The next question comes from Sten Westerberg from Ananlysguiden.

Yes, if I may follow up question and what you're referring to as a 2 to 3x more efficient level for Orviglance in previous studies. It sounds like pretty dramatic improvement just by rereading historical data. Perhaps if you could dig somewhat more into the reason for why you suddenly to have more efficient readout from the substance.

Yes, good question. So the 2 to 3x higher effect that we have with this reread, refers to what we assume on emissions or made the calculation of the sample size for the SPARKLE study. And one of the big uncertainties that went into the calculation, the original calculations were that we had didn't know anything about in the reader variability. And that's the reason why you need to have 3 readers when you do kind of reread like SPARKLE. It's according to FDA guidelines. So that was 1 of the factors that we used even though the data that we had at the time was very encouraging and it shows significant effects to us the prototype just to make sure that we could deliver on the study. But with this new information we have from the reread, we have information about differences in readers and what that might mean. And with that, we are more confident to conclude that we can assume a higher effect than what we did originally. And it's important to emphasize that we still have some margin. We have also included quite conservative assumptions about the effect of those differences, the effect of a primary liver tumors than before.

Okay. It's a pretty bad line. Did you mentioned inter read variability?

Yes. So exactly. So we have -- the way you do this is you have 3 radiologists that independently of each other make an assessment of the images from the patients and compare pre and post contrast image quality, and there is a scoring system to do that. And then, of course, there may be differences between radiologists and how they score lesions. And that's the kind of uncertainty that we didn't have any information about from the beginning. But now we have that, and that is what we have implemented. And despite that, we believe that we have a more -- the efficacy is higher than earlier anticipated.

Okay. So just to understand this again, you're expecting less inter read variability from these 3 radiologists in the SPARKLE study, and that is the main reason why you dare to expand?

We understand the variability is much better. And in the original assumption, we had a -- we were very conservative there because we did not know how much the variability would be. But now we have a much better information on that and can take that into account. If there are still variabilities and there are still differences between readers, and that is as expected. And that is not the only reason. We also have other information that I also mentioned by Magnus and new information, both internal and external, about the other assumptions that are done into to this updated estimate.

Thank you. There are no more questions from telephone conference. I will hand over the word back to you, Magnus.

Yes. So thank you, everyone, for listening into our update, and thank you for all the questions. We apologize for the bad line. Hopefully, you've been able to hear most of it anyway. So -- but thank you, and have a good day.