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

No, I think it's a relevant question. And I think the -- we set an activity level that make sure that we have sufficient financial runway. We make high-value activities that create value for Orviglance in the company, and I think that should hopefully put us in a good negotiation position in relation to partnerships. We have another one here. It's not possible to get the full report -- clinical study report sooner than Q4 and accelerate the FDA dialogue NDA submission. I think that's for you, Andreas.

Yes. Well, no, we need the time to do a proper analysis. You should remember that this is the key document, if you like, in the NDA. So it has to be high quality, as Magnus mentioned, we don't want to compromise on that. And we are working together with our vendor and statisticians to make this right. It takes time. And so this is the plan we have.

Yes. Here's another one. Blue Earth Diagnostics was acquired in 2019 for USD 450 million. Are you seeing interest from larger companies and such kind of deals. Anything you can comment on in regarding to that, Julie?

Yes. I think we agree that Blue Earth Diagnostics and that case is interesting because as mentioned here, it's an attractive deal, USD 450 million. And it's within the field of innovative radiology. And so that profile of partner is also a relevant profile of partner for us. So that would be a good deal.

Yes. Would certainly. So another one here for you, Andreas. Have you looked to see if the product can be used in other use cases as well, not just for the primary like visualization of focal liver lesions in patients with severe renal disease.

Interesting question. Now we are focusing on the primary or the primary indication here, which is visualization of focal liver lesions in this target population. What happens beyond that, we have no plans for, but I agree there are some opportunities that we would be interested in looking closer at when we have the time and resources to do that.

Yes. So -- and then we also have -- maybe this is related to the scope for adjacent usage in the core market.

I'm not sure I understand, yes, what else can it be used for. Yes. I mean it is a liver-specific product. So it can be used for liver imaging purposes, MRI. What you are looking for, maybe that could be something else than focal liver lesions, but this is also something that we, of course, continuously have a dialogue with our KOLs in the business, to learn more, what opportunities are -- sorry, opportunities are...

I think maybe to add, the SPARKLE study includes patients with severe renal impairment. But we also know from speaking to experts that there are other patients where it may be medically advisable to use gadolinium. So you could say, within the scope of the -- this initial you can say, approval, there may be opportunities there. But of course, that's all based on the dialogue with the FDA.

Yes. And then staying a little bit in this question related to the competitive landscape, how is it changing? And are there any emerging technologies like nanoparticles or ultrasound contrast agents, et cetera.

Yes. Should I start?

Yes, you can start.

Let's go.

Yes. Yes, markets are changing. The key thing is that an MRI is the sort of the gold standard still, and we expect that to continue for liver imaging and other imaging procedures. So One, the main important thing about the market dynamics at the moment is that because of these concerns related to gadolinium, both for patients with severe renal impairment but also because we know that gadolinium is retained in the brain and other body parts and did contaminate our water, there is scrutiny into what this means for us and any of us and for the environment. So there's a drive towards alternatives with less gadolinium or without gadolinium. So we are excited to be first-in-class with a liver-specific non-gadolinium agent. What we see for other types of use, we also received questions about AI and so forth. Typically, it evolves with this clinical practice. So for example, AI would further improve Orviglance or imaging or any other MRI imaging. So oftentimes, these market dynamics sort of evolve together. So for now, I don't see anything sort of significantly impacting our market opportunity. On the contrary, there is a push towards alternatives to gadolinium.

Yes. And I think commenting specifically on the question in relation to ultrasound, contrast agents. There are ultrasound, contrast agents that have been available for long time. And when you look at the -- you would say, the reported effectiveness of those procedures according to the American College of Radiology, the liver appropriateness scoring is much higher. In fact, the contrast-enhanced MR is the highest scoring element there. So I think it's not -- I think there are lots of dynamics. I think there are lots of opportunities. I think for the patients that we're targeting and potentially other -- as commented on the questions here, I think Orviglance is a very strong fit, delivers on the unmet medical lead for those patients, and that's what we're dedicated to bring Orviglance to them. So another question here, any preferred profile of a commercial launch partner, Julie, what are you thinking?

Yes, first and foremost, the right partner is the partner where there's neutral value for the partner and to Ascelia and where Orviglance is a meaningful contribution to their value and their strategy. And there are different ways of creating this shared value. It means, first and foremost, there are some synergies in their strategy in their commercial operations. So these could be synergies, for example, from already having a commercial team working with hospitals. It could be synergies in terms of already commercializing an innovative diagnostic or it could be synergies in other ways, working with small patient population or a high-value product, you could say, for radiology or for oncology or nephrology. So there are many angles into how there could be synergies that could create value for a partner and for Ascelia. And that's a good thing for us. So the right partner is the one with a mutual value and a good match to Orviglance.

Yes. And sort of a follow-up question sort of to this. So if you can expand on the dialogue with prospective partners, which may have been on hold during the past period and how that dialogue may accelerate now with your Phase III success and clearing away any of the reader variability challenges. Do we expect this dialogue to lead to partnering before a new financing round is necessary?

It is true, as we talked about, it's an ongoing process and the right timing is when a partner is ready but also when there's most value for us and also when some risk has been reduced. So there's no doubt that some of these dialogues have been sort of a little bit waiting for the headline results. So it's a good time to -- you can say, continue those ongoing dialogues. And so yes, it's a different situation now that we have the Phase III data. No doubt about that. I can't comment exactly on when it will happen because that will be the right timing for our value.

And that leads us into our next question for you, Andreas, in terms of how do you see the risk of achieving, getting an FDA approval?

Yes. Well, again, repeating myself, we have actually reduced the most prominent risk here by having this very encouraging Phase III data. And again, I want to underscore that they are compelling because we have seen highly significant results for all 3 readers. And that is a very, very good position to start with when you go into the negotiation with the FDA. So I would say that with good data, we have the same kind of risk profile that anyone else would have this. I cannot say -- there are no specific risks more than the general one.

Yes. And I think it's fair to say, I mean, we have -- it's an orphan drug. We have orphan drug designation from the FDA. We completed 9 different clinical studies. We have tested in patients with impaired liver function and had a good outcome of that. We adjusted a full effect, and we have dose, different dose-ranging studies and very clear and compelling efficacy data. We have manufacturing and we have everything in place. So we're very confident in terms of getting the FDA approval and excited to move forward on this one. So a question here. Congrats to the Phase III results. And this is for you, Julie. I think if you sell a new pill that is supposed to be better, you get instant access to all the world through drugstores, pharmacies. Maybe there are a couple of iterations on the way. But if you sell a new med tech product, you need to win each hospital. Where in between these 2, there's a product like Orviglance and when it comes to commercialization. So firstly, it is more like in the medtech camp or in the drug pharmaceutical camp...

Yes. So Orviglance is a diagnostic drug. So regulated as a drug and also treated as a drug by payers. And I think this is an interesting case when you think about pharmaceutical launches on the one extreme, you may have a product that is -- can be widely used and can be distributed through pharmacies. And then some may and could be for a broader patient population and then some are for smaller well-defined patient population. That usually comes with also a very high unmet need, with less competition, and also a significant value for the patients and the payers because of this unmet need. So in essence, Orviglance is in the segment with a small, well-defined patient population, with a high unmet need. It also means that the value per patient for Ascelia is high and is higher, typically and then broadly used drugs where you're addressing a broader patient population and have the higher volume. So there is typically a bit of a trade-off. And that being said, not that it is our focus, but broad launches to pharmacies in a competitive space, also very, very, very expensive, and it's a higher investment in the launch than typically it is for a small focused launch to a well-defined patient population. And that is our business model and our focus and our capabilities, high value, well-defined unmet need and a good understanding of the stakeholders who make the decision.

Yes. Thanks, Julie. So what looks to be the final question here unless somebody add more, but are there any potential competitors developing manganese-based contracts with the broader scope/indication? How do you plan to protect the market share of Orviglance in the future? So maybe, Julie, you can start on that also elaborating into how we protect the Orviglance franchise.

Yes. So the best way to protect your franchise is always to have a product that adds value to patients and to physicians and to do that well. That will ultimately create, you can say, the preference for your product. But if you look at the alternatives to Orviglance, we know today that a patient who has severe renal impairment today and needs liver imaging typically receive an unenhanced MRI. So we want to be better than an unenhanced MRI, and that's what our data is showing. We know some patients receive half a dose MRI and so forth. So the alternative in terms of supporting our patients could be the trade-off of the risk, and that is our strategy to provide a better alternative to both gadolinium contrast agent at risk or non-enhanced MRI. Now we know that there is, as I mentioned, a drive towards less gadolinium or gadolinium free agents. So there are some -- a product launched, which is a half dose gadolinium agent. But it's not, you could say, in that sense, a competitor to Orviglance because it is a full body IV contrast agent. So it is not a liver-specific contrast agent. We also know that other of the gadolinium manufacturers are active in an early-stage manganese-based contrast agent. And again, these are not, you could say, a liver-specific agent. And so they are not again an alternative in that sense to Orviglance where we are really focusing on the liver imaging need for patients. So the best way to build value and to keep our market share, so to say, is to do it well and to serve an unmet need. We also have a second-generation compound Orviglance, which is a patent-protected effervescent tablet, and that is an opportunity to, you can say, expand and extend our franchise in the future. But now we need to focus on getting Orviglance right. And in parallel, we'll also be working on what the right strategy is for our second-generation compound.

Yes. And then just to complement what you said, we have an FDA orphan drug designation, which gives us 7 years of regulatory exclusivity in the U.S., which will give us certainly a benefit. And we are, Orviglance is now completed Phase III and the other agents we are aware of are in the Phase I stage. So way ahead of the competition and with the orphan protection. So I think we are in a great place here. One more question has come up. What is the risk that potential partners want to see sort of the full clinical study report before concluding negotiations.

You could say, in a negotiation, there's always something ahead of you. So it depends on the timing. There's also the FDA approval, does the launch and so forth. So you can construct a deal in a way where certain things are contingent on the next step, and it's typical to also face a deal and the different milestones in the deal accordingly. So the key thing is, as all potential partners know in the industry is that we have positive Phase III headline data. And the full study report is merely sort of the tables and details supporting those headline data. So I don't personally see a risk in that sense for that part. I think it's more about the right deal with the right milestones.

Yes. Yes, I would agree with that. It's -- the clinical study report is about having the right dialogue with the FDA, and they needed to be able to make their assessment and their analysis in the presubmission meeting. I think for a partner, they will look at, you would say, the data that is available. And now we have the primary endpoint available. Andreas, you presented on the safety, which is consistent with what we have seen previously, which we are really happy with and no serious adverse drug reactions and so forth. So I think we have -- the most important data is already there, [indiscernible] we start, you would say, finalizing the study report, we will have more and more details. So I think that's not necessarily a trigger point for an industry partnership deal. So that was the final question. Thank you so much for all the questions and the interest we've been happy to answer your questions, and we look forward to continued good dialogue with our shareholder and stakeholder community. So last week, we had a major, major milestone, the biggest in the life of Ascelia, very strong Phase III data. Now we are progressing towards the NDA submission next -- middle of next year. And in parallel, we are working on preparing the launch readiness and making sure that the drug will get out to patients once it's approved and look at the partnerships. So thank you so much for your time. Have a great day.

Thank you.