Ascelia Pharma AB (publ) ($ACE)

Welcome to Ascelia Pharma Q1 2026 Report Presentation. [Operator Instructions] Now I will hand the conference over to CEO, Magnus Corfitzen; CFO, Anton Hansson; and CFO, Andreas Norlin. Please go ahead.

Welcome, everyone, to the webcast for Ascelia Pharma's Q1 report for 2026. On this call, we will be making forward-looking statements. On today's call, we will start with an overview of Ascelia Pharma and recent key events, and then we'll head into the portfolio update before moving to financials and priorities ahead. After the presentation, we will open up for questions. At Ascelia Pharma, we identify, develop and commercialize novel drugs that address unmet medical needs within rare cancer conditions. Our company is based in Malmo, Sweden, and we are listed on NASDAQ Stockholm. We have 2 drugs in our pipeline. Orviglance is a diagnostic drug that is now under FDA review with a PDUFA date of 3rd of July 2026. We will spend the majority of this call talking about Orviglance. Oncoral is a patented tablet formulation of irinotecan with encouraging results in Phase I and potential to treat a range of solid tumors. On the progress of the first quarter this year, we -- at the European Society for Gastrointestinal and Abdominal Radiology Conference, also sho focused on our 2 key strategic goals, Orviglance approval and Orviglance partnering. Happy to say that we're on track on both of them. For the approval, the sub milestones is the submission of the NDA on September 3 last year. And in mid-November last year, the FDA set the PDUFA date of 3rd of July 2026. This is the date -- the PDUFA date is the date where the FDA expects to make a decision on the approval of the Orviglance new drug application. Our NDA activities, including the interactions with the FDA are progressing well, and we continue to be on track for the approval. The second objective is to progress Orviglance to commercialization. This is a 2-stringed approach. One is to continue to advance the launch readiness by ensuring manufacturing and supply chain is ready for launch as well as working with medical experts and key opinion leaders, payers and other key stakeholders to ensure the product will have a successful launch whenever that happens with the partner. And that is the other track that is to enter into a deal with a partner who will lead and drive the commercialization. I'm proud of the team and the progress we are making on these importUFA date is coming up in less than 2 months. Orviglance is an attractive asset that can help patients, and we will work with a partner to drive the commercialization. Let's talk about how Orviglance can help patients. Cancer in the liver is a significant challenge in cancer care. Many different cancer types metastasize to the liver, meaning they start in one organ and spread to the liver. This accounts for roughly 90% of cancer in the liver in the U.S. and Europe. The remaining 10% of cancer in the liver is when the cancer originates and starts in the liver. The liver is often the first organ where the cancer spreads to and also often the cause of death. That is why cancer in the liver is a major issue in cancer care. And therefore, it is important to perform high-quality medical imaging to determine if the cancer has spread to the liver and how the cancer in the liver is responding to therapy or for surgical planning. The best way to do this is with liver MRI and to use a gadolinium-based contrast agent. For most patients, this works well. However, for patients with severe renal disease, they are at risk of a potentially fatal gadolinium-induced side effect known as nephrogenic systemic fibrosis. Regulatory agencies have requested black box warning on gadolini relevant procedures in the Orviglance target population every year in the U.S. Because of their disease and comorbidities, these patients are mostly treated at the major medical centers and 75% of these imaging procedures are made at the 400 largest medical accounts. Based on market research, pricing benchmark for high-value diagnostic drugs can be at $3,000 to $4,500 per dose. Orviglance is addressing a well-recognized medical need. As mentioned previously, Orviglance is targeting patients with severe renal disease because of the gadolinium-associated risks. The medical community is well aware of this, and our market research demonstrates that more than 90% of health care professionals are concerned about gadolinium-associated risk and a number of them have also experienced nephrogenic systemic fibrosis in patients. Orviglance is targeting patients with severe renal impairment, which is the highest risk population defined by the black box warning. But there are also other concerns with gadolinium. Every gadolinium injection, there is also a deposition of gadolinium in tissue in the body, including in the brain. The consequences of this continues to be evaluated in the scientific community, including long-term effects of the deposition. Another issue is the gadolinium accumulation in our water supply. After the gadolinium contrast injection, the gadolinium is excreted in the urine, which goes into our sewer system. Filtration systems are unable to remove the gadolinium and as a consequence, gadolinium content in drinking water has increased over the last decades. These are important drivers for the future of MRI. Ascelia is leading the change with Orviglance being based on manganese and under FDA review. If and when approved, it will be the only manganese product on the market. The gadolinium manufacturers recognize the gadolinium challenges. GE Healthcare is developing an injectable manganese agent. They have completed a Phase I study and has recently started a Phase II/III study. We consider this a positive development with increased focus on manganese agents. And based on what we know, these 2 products are complementary to each other. The other gadolinium manufacturers have developed gadolinium products with lower doses of gadolinium to reduce the impact. These underlying developments support the need for products such as Orviglance, and we believe the timing for bringing Orviglance to the market is good. We have a clearly stated strategic goal of entering into a partnership with a company that will lead the commercialization of Orviglance. Orviglance represents an attractive commercial opportunity, and we are making good progress in our partnering dialogues. Now we'll transition to the scientific and regulatory section. And Andreas, please go ahead.

Thank you, Magnus. So before I talk about the NDA process, just a few words about the development program of Orviglance. So we have an extensive clinical development program, including a total of 286 patients and healthy volunteers across 9 clinical studies. Together, these studies have shown a strong, consistent positive benefit risk profile, supporting the intended use in patients in need of a liver MRI and severe renal impairment. The Phase III study, SPARKLE, demonstrated that visualization of focal liver lesions measured by the co-primary efficacy variables, border delineation and lesion contrast clearly improved with Orviglance compared to unenhanced imaging with a high degree of statistical significance. We could also see that more lesions, especially smaller ones, could be detected in the liver with Orviglance than without. So to summarize, we've built a strong and compelling data package supporting the use of Orviglance in a patient population with a clearly defined and significant unmet medical need. Based on that, we successfully submitted our NDA in September last year. And since then, the review has progressed as expected with a target date for FDA's final decision on 3rd of July. Because Orviglance has orphan drug designation for its intended population, we expect to benefit from 7 years of regulatory exclusivity following approval. In addition, we filed new patent applications that could extend protection well into the 2040s, further enhancing the long-term commercial opportunity for the product. Overall, we are really pleased with where we are and are very much looking forward to the final stretch leading up to FDA's expected final decision on July 3. While our primary focus right now is on securing a successful approval and partnering for Orviglance, we also have Oncoral in our portfolio. That program remains an important asset, and we are looking forward to reinitiation when the timing is right. I'd like to say a few words about that opportunity as well. Oncoral is a tablet formulation of irinotecan, a well-established intravenous chemotherapeutic agent. A tablet formulation enables a frequent daily low-dose dosing regimen that could offer potential advantages on both efficacy and safety compared to the infrequent high-dose intravenous administration that is used today. The opportunity of improving efficacy and safety by administration of daily low doses, also called metronomic dosing has been demonstrated for irinotecan and other chemotherapeutic agents. In our Phase I studies with Oncoral, we have seen encouraging results that suggest that oral daily administration of irinotecan could offer meaningful benefits to patients. Importantly, the Oncoral studies have demonstrated an acceptable safety profile and that the uptake of the drug after oral administration is well suited for a metronomic dosing approach. This supports the continued development of Oncoral as a daily oral formulation of irinotecan. Our plan is to bring Oncoral into clinical Phase II in gastric cancer. Animal data has demonstrated a synergistic effect of irinotecan when combined with LONSURF, another oral cancer treatment already approved for gastric cancer, which makes this all-oral combination very interesting. The plan is to demonstrate clinical proof of concept for the combination of Oncoral and LONSURF in gastric cancer. And we start there, and this is today a SEK 3 billion market. irinotecan is a well-established chemotherapy with recognized antitumor effects in many types of solid tumors. Therefore, we see opportunities for developing Oncoral in other indications, too, where daily dosing could positively impact the efficacy and safety outcomes for the patients. And we are assessing these opportunities as part of our ongoing strategic planning for Oncoral. So let's move on to an update of the financials. Anton?

Thank you, Andreas. So I will now move on to an update of our financials. And in Q1, our operating results amounted to a loss of SEK 17 million, and the costs are lower in the quarter compared to Q1 2025 due to the completion of the NDA. At the end of March, we had SEK 34 million in liquid assets. And as Magnus mentioned earlier, after the quarter ended, we successfully completed a directed share issue, raising SEK 20 million before costs in April, and we have now extended our cash runway into 2027. And to summarize, we have significant value creation opportunities ahead. With Orviglance, we are bringing a first-in-class diagnostic drug to market, addressing an SEK 800 million market for patients with high unmet need. And our 2 key objectives remain. The first, timely approval of Orviglance with the optimal label. And here, in early September, we submitted the NDA and then FDA accepted the Orviglance NDA for review in mid-November. And based on a standard 10-month review process, we can expect an approval early July 2026. Our second objective is to progress Orviglance for commercialization for patients in need by entering into a partnering agreement for the launch. These efforts continue to advance. So overall, we continue to progress in Q1 and are well positioned to deliver on our key milestones. And we look forward to continuing our journey with these opportunities for growing Ascelia Pharma. That concludes our quarterly presentation. Now we'd like to open up for questions.

[Operator Instructions] The next question comes from Maria Karlsson Osipova from DNB Carnegie.

I have 2 short questions. present. And of course, obviously, all eyes on the PDUFA date. And in the report, you state that you're working actively to answer all of the FDA supplementary questions. And I mean, in previous calls and reports, you have described this as -- and it is a standard back and forth process with the agency. So basically, my question is, has the nature of volume of the questions changed somehow as you're now entering the final stretch? And if you could maybe characterize the types of areas that the agency is now focused on.

Yes. Thank you for that question. I think the simple answer is that we have received questions across the board, and that is, of course, what you expect. FDA are reviewing all sections, efficacy, safety, CMC, nonclinical, and we have received questions all over. At the end of the review period, you enter the negotiation or discussion about the label, and that is what we expect also here at the end. But everything has been flowing nicely so far.

That's good to hear. And another short one. I mean, if the FDA approves this on July 3, what happens on July 4? -- or, I mean, I think it's Friday. So what happens on July 6 then? Can you walk us through like the process? What are they like the coming 90 days or so? What's already in place and what still depends on the potential partner maybe?

Yes. So you could say, at least as I understand it, we get an approval letter, which probably hang up, have a sort of a copy on the wall, to celebrate. I think that's obviously a major transformative milestone. There are some, say, administrative things for setting everything in place. But you could say the next step is getting ready for launch and all the activities that goes into that. And as we've said, we want to work with a partner who will drive the commercialization. We have done a lot of work to prepare that. So we have some road maps and blueprints and a lot of market insights that is going to help the partner get moving fast. So I think that's -- we will work with the partner to make sure everything is lined up for the launch.

The next question comes from Fredrik Thor from Redeye.

I have a follow-up question to Maria regarding the approval date in July. Are there any one-off costs related to the approval process that will -- or not one-off, but costs that will -- are related to the approval process that will -- that you won't have any more after approval. So basically, will the cost development be in a specific way after the approval? Or will it be quite stable cost development after the approval -- potential approval?

Yes. Well, thank you for the question. It's -- we're not providing sort of specific cost guidance. I think, obviously, responding to questions and requests is both, you could say, internal Ascelia team and external experts. And so obviously, it's not for free to be in this process. On the other hand, we also envision other activities after the approval. So I think at this point, we're not sort of expecting major significant changes in our cost structure.

There are no more phone questions at this time. So I hand the conference back to the speakers for any written questions and closing comments.

Yes. There's a question here on whether it's a partnering strategy to complete the negotiations after a positive PDUFA feedback. So I think the overall strategy that we have is to line up for partnering. We have completed the clinical development. We have finalized the NDA, and we're now running the FDA review process. And as we said, we are on track for approval, which I think I'm very proud of the team that can meet these very challenging milestones. And I think that's a great achievement so far. I think that those achievements also generate value and create a good dynamic in the partnering conversations. The partners are, you would say, focused on preparing what would their commercial team look like and the commercial opportunity, what's required and I would say, significantly less on the scientific part because the FDA is basically doing the diligence on that part. So I think that is creating some good dynamics. Whether we sign an agreement before the FDA decision or after, it's hard to tell. Obviously, from a partner perspective, you can -- you have lower risk after the approval. But on the other hand, you could kind of structure the deal in a way that where you take out some of the risk on the FDA decision. But I think it could be either/or. Time will tell where we end up. There are no more questions. So thank you all for joining our Q1 call. And we are, as mentioned, on track for FDA approval and on our partnering process. So a very exciting 2026 for Ascelia Pharma, and we look forward to updating you on our progress as the year goes on.