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

Good morning and welcome to today's event with Ascelia Pharma. With me today, I have the Deputy CEO, Julie Waras Brogren. And topic for today is actually Commercialization and Partnering, a very interesting topic and also interesting for Ascelia, of course, they're entering into these discussions right now. As always, I would like to welcome the audience and you are more than welcome to post your questions and I will follow during Julie's presentation. And we already received a couple of good questions, so please keep on posting. And as always, we will also record this event and we'll publish it soon after it's edited and Ascelia Pharma and Julie will do the same on their side. So by that said, I hope everyone will have a good event. And Julie, welcome to you.

Thank you, Claus. It's good to be here. I'm looking forward to this session on commercialization and partnering with Ascelia and focus on our leaders at Orviglance. So I'll be making some forward-looking statements, so please pay attention to this slide. In Ascelia, we are focused on identifying, developing and commercializing novel drug that can help people with rare cancer conditions. We have two assets in our pipeline. One is Orviglance, it's in registration phase, meaning that we are preparing for the submission to regulatory authorities. It's a first-in-class diagnostic drug that can help a very specific patient population with a clear unmet need. We have an orphan drug designation for this patient population, and we can address market potential of USD 800 million annually. And again, we have successfully completed our clinical development and the Phase III study and we are now preparing the next steps. This is the product, I will focus on today. We also have Oncoral in our pipeline. And that's a Phase II ready asset to treat solid tumor cancer types. It's a daily formulation of a well-known chemotherapy irinotecan, and we have a clinical collaboration with Taiho Oncology. We are ready to start a Phase II study in gastric cancer and have the potential to also expand into other indications. And we're based in Malmo and listed on NASDAQ in Stockholm. So I will focus on Orviglance today and where we are in the next steps, in particular, on the commercial and partnering side. To summarize the Orviglance opportunity. We are addressing a well-defined unmet need for liver imaging in cancer patients who also have severely impaired kidney function. I will come back to this. And again, this patient population and this unmet need represents an addressable market of $800 million annually. We have completed the clinical development with nine studies and very strong data, both in efficacy and safety throughout, including in our pivotal Phase III study. We have commercial scale manufacturing, and we are now advancing Orviglance into the regulatory filing and approval phase. Our strategy is to commercialize with the partner. So just to go back to the unmet need for Orviglance. So managing cancer in the liver is a cornerstone in cancer care, both because some patients have primary liver cancer but many other cancer types also develop into cancer in the liver, so metastasis. That's, for example, colorectal cancer, where 70% of the patients still develop liver metastases and other cancer sites. So making sure that we can detect early and we can treat and we can follow up on these liver metastasis is very important across many cancer types and for many patients. The standard of care is to have an MRI. And typically, an MRI imaging, a procedure is done with a contrast agent, which makes the image enhanced or stronger, so it's easier for the doctor to detect these cancer -- focal liver lesions, as we call it, cancer in the liver. But for patients who also have severe kidney impairment, there's a risk if they are exposed to these currently available contrast agents. And that's because they're based on a toxic heavy metal, gadolinium. And a link was discovered some 15 years ago between these gadolinium contrast agents and, in particular, severe side effect called nephrogenic systemic fibrosis. So the regulatory authorities, FDA put in black box warnings for all these gadolinium contrast agents for this patient population. Now Orviglance is based on manganese. It is specifically for liver imaging, so it's taken up by the healthy liver cells. And with this, we have the opportunity to become the preferred imaging option for the patients who need liver imaging and have severe kidney impairment. So a well-defined unmet need for a patient population that today will typically receive an unenhanced MRI. And we have completed our clinical development for this indication, and that includes nine studies with consistent positive efficacy and safety data and not least our Phase III data, which we presented early May where we demonstrated a strong improvement of the visualization of these liver lesions, focal liver lesions with Orviglance when compared to unenhanced. We met the primary endpoint, and that means that we can now move to the next step, which is the regulatory process. We are focused on the FDA for the next step, and we can use all the progress so far in clinical, nonclinical and CMC. And that all needs to be prepared in a submission to the FDA. The steps underway here is that we will first receive the full study report in early Q4 this year from the Phase III study that sort of the details the drilling down of the headline results. Then it's a standard to have an interaction with the FDA before submission. So it's a pre-submission meeting, and we will have the conclusions from this pre-submission meeting in Q1 next year. Our plan is then that we can submit the NDA by mid-next year, mid-2025. And all the preparations are on track for this time line.

Julie, if I may just ask a couple of questions here coming from the audience. So it's not only good headline data, it's actually very strong data compared to the primary end target. Can you just very briefly, for newcomers to the case, explain what was the primary end point? I know you didn't receive the full report. We can see here on the slide, you will receive that later this year. But just to summarize with the three readers and what you actually got back? Yes, this one.

Yes. So thank you. The primary endpoint is asking is the image with Orviglance better than the image with an unenhanced MRI or with one MRI you can combine. So the unenhanced versus Orviglance and combined that's at a little detail. But essentially, is the image better with Orviglance than without a contrast agent. The way to test that is that you ask three independent readers to look at all the images. And they have to determine whether it's better based on 2 sub, you can say, end points. One is, what is the delineation. So the broader of the lesion, how sharp is that? And then also, what is the contrast difference between the background and the lesion. So how strong is the difference between the contrast and the lesion on the unenhanced versus with Orviglance. And -- so that is the endpoint. And to be successful, two out of the three readers need to agree that both the border and the contrast to the background is better with Orviglance than without. And we succeeded that for all three readers and not least with a very, very high statistical significance, which means if we repeated this study many, many, many times, we would receive the same results. So it's very strong data and absolutely what we could have hoped for in the best possible scenario.

Thanks a lot. And then if you just change to the other slide, just to take another one quick. So when you file -- when you do your submission next year, does it make sense, because that's a question in the chat as well, does it make sense to do that with a potential partner? You haven't announced anything yet or doesn't it make sense at all? What is your experience from the industry?

The objective is us to have the optimal label at -- in the fastest possible time. And so we have the background with all the data, the interactions with the FDA, and we are working also very closely with experts in this field to make sure we understand how we get the best possible label. Of course, in the scenario, which is the plan where we have a partner, it would, of course, be optimal to involve the partner in this process. But it also depends on the profile of the partner. Some have a strong development background. Some are more focused on the commercial arm. So I think it depends a lot on the type of partner and the timing of the partnership. But from where we come from, we have the data and the insights and the experts to help us obtain the optimal label in the fastest possible time.

Yes. So to address that, for the audience, it's not like you don't process strong in-house competencies to file this. This is not the case at all. You can do it with or without and it doesn't really make a big difference, but it's always good, of course, to have good advisers close to you. Isn't that true, Julie?

That is -- you're absolutely right. The key is to really understand your data and the input from the FDA and work with advisers and experts to have a high-quality submission and to be prepared for those dialogues with the FDA, and that is what we are doing now. Yes. And other thing is to make sure in parallel that Orviglance is ready for the launch for a partner. And some of these things are part of the submission, you can say. You, one way -- and that's why it's key to us to say that we have commercial scale manufacturing on track, because it can take a long time, and we want to make sure at the time of approval that Orviglance can be launched by a partner.

Yes. And that's where, I'm interesting. I don't know if we're getting back to that later. But to have your own manufacturing and also be able to scale it is really a competitive edge instead of letting the partner building up and then the launch, that would delay the timeline a lot. Isn't that true, Julie?

Well, that is very true. So we are working with third parties who have established and qualified manufacturing sites of this. So it's a third-party. But we are fully on track and you are absolutely right, it can take years to switch from one manufacturer to another. And we see that from big pharmas and small pharmas, delays in manufacturing can impact, as we know, commercial uptake and also the delay of launch. So it's really a key for us that we have a fully compliant, high-quality, scalable manufacturing for the launch, and we are on track with that.

Thank you, Julie. Please carry on.

Yes. So let's talk a little bit about the commercial opportunities. With Orviglance, we can address an $800 million U.S. market -- the global market and half of this is in the U.S. As mentioned, this is specifically for this well-defined patient population. They are very vulnerable and they have a clear unmet need. Our strategy is to launch with partners. And if we look a little bit on the background for this strategy, what we want to achieve is to create this revenue stream in the future after launch with a limited investment required from Ascelia. Working with a partner also means that we can leverage their established commercialization capabilities and scale. So it means that we can really maximize the value of the asset or the data and the launch efforts for -- to create this attractive uptake and successful uptake at launch. So what we are working on in two tracks on the commercial side is to establish these partnerships or this partnership and, as mentioned, to make sure that Orviglance is ready for this launch, because that is a key part of the value for partner. So that's the focus areas in parallel with the regulatory work for the NDA submissions. So a little bit about, how is Orviglance valuable for a partner? Why is this an attractive opportunity? So a couple of things. One is, it is, at this point, you could call it a de-risked asset. We have completed development, we have strong efficacy and safety results and we expect that this leads to the FDA approval based on our dialogue with the FDA and based on the outcomes from our studies. There's a clearly an high unmet need and also because these patients are very vulnerable, again, back to also the small patient population, the orphan drug designation, there is a high value per patient, and I'll come back to this a little bit. It also means that we have a clear value proposition for all the stakeholders for -- and decision makers for the payers, for the physicians and for the patients. And we have substantive market research and expert advice and input to going into this analysis, substantiating the value for these decisions. It's also a fairly focused launch for our partner. So we can see that 75% of the market potential in these vulnerable patients can be found at, for example, 400 hospital groups in the U.S. So it's a well defined, you can say, commercial investment that you need to put into capture most of the market value and opportunity for this launch. So that means we can go in to talking about what are the potential partner profiles? So the relevant capabilities in such a partner would be, for example, that it's a hospital product. So they would have, what we call, a hospital footprint, a commercial team, working with the leading hospitals in the U.S. So that will typically be at least one of our focus areas. But they could come from many therapeutical areas, because this is a product used in radiology, but we know that the doctors taking care of patients with poor kidney function, the nephrologists, but also, of course, the ones treating cancer, oncologists, are also well aware of how contrast agents are used and all well aware of this patient population and their needs. It could -- so that there are many therapeutic areas. It could also be a partner working with the, we call them, specialty pharmas, but really focused on well-defined commercial opportunities, taking them from late-stage development into markets, so they are focused on more of the sort of the commercialization and not so much the development. Another characteristic of the partner is someone who also appreciates that this is a product with a high value per patient, which means that with the orphan drug designation and so forth that it's not so much a matter of the number of sales reps you have, but it's about understanding how Orviglance is valuable to the health care system, so the payers and working with key opinion leaders and so forth. So we call that sort of the high value, you could say, orphan drug profile. Another thing that -- a couple of other things that we believe are very important for the success of Orviglance is, of course, that we share the strategy and we share the success. So we want to help this partner, of course, be successful with Orviglance.

So, Julie, with this strong back of a value proposition for a partner, you got the data, you've got orphan drug designation, you got your production in place and you can scale it, but you -- but what kind of deal will you look into? I know right now, you cannot mention any names. You have outlined here what kind of partners you look into, you cannot name -- of course, you cannot mention anything about ongoing discussions. But are you looking for a pure royalty partnership and of course, it depends on the type of partner, you find? Are you looking more into some milestones that could be sales milestones combined with royalty?

Yes. A typical partnership in this -- for the standup asset would include a future royalty stream, so we get a share of sales, but also that we received some payments for the milestones. So that could be the FDA submission, the FDA approval, launch or a certain volume or value of launch. And it would typically also include an upfront cash payment to us.

Does it change the picture that you actually worked a lot, as you mentioned this launch readiness and maybe you can elaborate a little on that. I mentioned some of the things before. But one thing you also possess is a very strong key opinion leader community. Does this change the whole perspective? And could you please dwell a little bit with the launch readiness?

Yes. No, absolutely, to your point, the more value we add to the asset or the more we decrease the risk, whether it's manufacturing readiness or it's the network with key opinion leaders, which is crucial for a launch or it's the evidence from -- to support access and reimbursement. All these elements represent value or derisking the assets that we add and the more we add, the better; the more we get, you could say, at the end of this deal; and of course, the more we make sure that the launch is successful. So you're right that, that is kind of part of the negotiation. Typically, that's why some companies wait with the partnering because then there's more in return for us. Obviously, when you partner earlier in development, even with -- before Phase III, then, of course, it's a different kind of deal compared to when you are, where we are now. And that's also why having now the Phase III data in hand has significantly increased this derisking and is a really good starting point for the next steps in talking to potential partners.

Good. So if we look into when you submit, Julie, you have, of course, different possibilities. But you mentioned, for me, in the talk we had last week, that is actually FDA who decides whether it's a priority review or standard review. And also, we talked a little about you can get a conditional approval, but you have to carry out further status. Could you elaborate a little on that? There's a couple of questions about that among the listeners.

Yes. So we've talked about priority review, which is an interesting option because the standard review time for the FDA is 10 months when you submit and if you have a priority review, it takes 6 months. Actually, there was the latest gadolinium product that was approved, was approved in a priority review. So in essence, what happens is that the company, so we would decide to request a priority review and then the FDA will grant this priority review or not. And to really benefit from a priority review, you want to make sure that you're ready to launch, you want to make sure that you're ready to respond to the questions from the FDA and the review process because, of course, otherwise, it will still take 10 months. And this could be an interesting upside, but I think it's important that, as you also said, linking to the orphan drug designation and so forth. One of the advantages of the orphan drug designation is that you have 7 years exclusivity in the market after the day of approval. So at the end of the day, what really impacts is how you make sure to have the optimal uptake from the day of approval. So you say in life science that the first 6 months of your launch determine the lifetime value of the asset. And you can look at a standard market data for launches that -- of course, there are some market access elements, but basically, that is a benchmark of the industry. So the key thing is to be ready and to make most of the launch. But there are some opportunities ahead of us and not least that we still enjoy the benefits of our orphan drug designation, which includes, of course, the design of our clinical program, Phase III study and these 7 years exclusivity. So you also mentioned some other things about an accelerated process and some...

Then you have to be -- if you get a conditional approval, you have to [indiscernible]

Yes. It's a little bit a different scenario from our situation, sometimes you companies decide to submit, for example, based on Phase II data, if that is deemed strong enough to start a discussion with the FDA. But then, of course, you carry a risk forward that the FDA will ask for more data, and we know companies, of course. It's not uncommon to do. But we are in a different situation. We have really strong Phase III data. So we believe we will have a full approval with that data. Typically, it's -- yes, it's more like sometimes if they want to see some other types of data, but when you have your approval, you have your approval, it's not uncommon that other companies. But it's typically different labels. With orphan drug designations, we have agreed on what data is required and that's our expectation that we have full approval based on that.

There's a question coming in here just about the key opinion leaders may reckon. We touched upon it briefly, but I can just read it for you here. So, will Ascelia retain responsibilities for KOL, key opinion leader identification and engagement to create stronger advocacy for Orviglance?

Right now, we have -- I mean, I can jump a few slides forward. We have a very strong network. These are some of them, leading experts in the U.S., and we discuss -- the data, we discuss, the unmet -- we will discuss the unmet need. What does the landscape look like in the -- for the gadolinium contrast agents and the black box warnings. So we have a strong network. Of course, when a partner comes on board, I expect a partner will want to own this network, but it's key for a partner that we already have these relationships.

Yes. So of course, you will be able to maintain it, but you already did this, you can say. So to answer the question, yes, you will be responsible for doing this. And yes, you will also be responsible for maintaining it, and of course, with the partner, the potential partner.

Yes. I mean, we have some elements now. Of course, we want the data out from our Phase III study at some point at conferences and so forth. But managing all -- driving these relationships is part of the commercialization effort. So a partner will expect that they can take over these relationships.

Yes. Thanks a lot, Julie.

So I've skipped a couple of slides, but I think we are also getting towards the end. But I just want to mention like for the U.S., for example, we have very strong data supporting this commercial opportunity. And it includes both volume and the value. So in terms of volume, we have a look into real-world data from actual imaging procedures in the market. And we know that, that our specific label addresses the need of 100,000 abdominal imaging procedures per year. We can even see what hospitals these procedures are performed in and so forth. And that leads to this understanding of also the commercial effort needed 400 accounts drive most of the market opportunity. We've talked to payers, experts. We've tested the price, and we looked at benchmarks in terms of pricing that we -- concluding that we can reach a range of USD 3,000 to USD 4,500 per dose. Again, this is because it's a small, well-defined patient population with acute unmet need.

And you do 2 procedures per patient, isn't that true, Julie?

Yes, exactly. It's on average, it's around 2 procedures per patient, 2.2 to be precise. But typically, what happens is if you're screening for liver metastases or liver cancer, you may have one. But the patients who actually are in treatment, you can say, flow or undergoing treatment and you want to follow up, they can have many procedures. And these are very interesting patients because they are vulnerable. They have one or more cancer types and severe renal impairment. They can receive between 3 and 6, 7, 8 procedures per year. So there's a high variability and some very vulnerable patients that we can help. So just a few things to mention. We can also see that these patients today in clinical practice, we see it typically an unenhanced MRI or sometimes a half-dose MRI. So the unmet need is also sort of reflected in clinical practice. And when we ask physicians, presenting them with Orviglance and our intended, you can say, label, they are saying that they are very interested in using Orviglance at approval. So just to mention, of course, we're excited that the work we are doing is well recognized. And as mentioned, we're fully on track with the launch the NDA preparations and with making sure our partner is ready for launch. So I just want to round off with our milestones ahead. To repeat these. We have two focus areas. One is to advance Orviglance to approval. So that is to obtain a timely submission and approval of the optimal label for Orviglance. And we have these three milestones on the road, the full study report early Q4 this year, the conclusions from FDA pre-submission meeting, Q1 next year, and then the submission mid next year. And the other focus area is to secure partnering and commercialization readiness for this partner for this attractive commercial opportunity. And those are progressing according to our plans and progressing well.

Thanks a lot, Julie. So just a final question before we end today's event. Where do you see the biggest risk in terms of your filing or do you see any risk at all?

I think, we have a strong plan. Most importantly, we have completed the clinical program. We have very strong efficacy and safety data, and we can plan ahead. And then we're working on the partnering. So I think we have a very good understanding of potential risks, and we are managing these proactively as you do. Mostly, it's around us, you could say, assessing what are the potential questions from the FDA. Would they want to see this sub-patient population, would they want to see the data cut in a different way? And some of these questions can lead to a requirement for us to look back into the data and analyze it in a new way. And sometimes, there's a risk for companies. If you haven't predicted these questions that you can have a delay. But I think we have progressed really well, and we have a solid understanding. As you know, we've also had more time than we wanted to, to prepare this. So I think we are in a very good place, but those are some of the key elements that you really need to assess what could the questions be, so you avoid that they delay your approval process. And so I think we're in a good place. Anyone in the industry is exposed to, let's say, macro risks, but in terms of Orviglance's regulatory process and commercialization, we're in a good place, and we are proactively managing, you could say, our focus areas to make sure we address questions when they come.

Thanks a lot, Julie. Really good presentation. And by that said, I will end today's session. First of all, I will say thank you to all the good questions from the audience. And secondly, of course, Julie, you did a good presentation and thanks a lot for that. Hope to see you soon. And by that said, enjoy your day. Thanks a lot.

Thanks a lot. Enjoy your day. Bye.

Bye.