Oncopeptides AB (publ) (ONCO) Earnings Call Transcript & Summary

Welcome to the Oncopeptides Q2 conference call. [Operator Instructions] Today, I'm pleased to present CEO, Marty J. Duvall. Please go ahead with your meeting.

Good morning, everyone, and thanks for joining us for this operational update for Oncopeptides that's specifically focused on our second quarter. I'm joined today by Jakob Lindberg, our Chief Scientific Officer; and Anders Martin-Löf, our Chief Financial Officer. So on Slide 2, you'll see forward-looking statements, and please refer to that and where to look for appropriate balance and disclaimers. So moving on to Slide 4. Just want to say that I'm really humbled and excited about being part of Oncopeptides and this being my first call. Really excited about the company and the prospects going forward. Please know my focus is building value and building value through bringing differentiated products to oncology patients. So focuses on the patients. My background, you may have seen from the website, executive leadership experience in public and private companies, really focused on the oncology space. It's really where my passion and desire lie. So you can see from the list of companies there have had the opportunity to create some value across a number of different biotech through eventual acquisition. But what's really been humbling for me and has driven me is bringing the products to patients. So starting with Taxotere back in my Sanofi and Aventis days, launching that product for a range of indications in the U.S., Europe and Asia, launching Abraxane in China. Other products for hematologic malignancies, and both solid tumors and benign malignancies. So worked in a wide range of products, biologics, small molecules, gene therapy, supportive care and really excited about the platform that we have at Oncopeptides and our peptide drug conjugate. So moving to Slide 5. I thought I'd talk a little bit about the transformation of the company and a couple of different transformations, a few that are ongoing. First and foremost, the transition of CEO. I'm so pleased that we continue to greatly benefit from the contributions of Jakob Lindberg, who is fully engaged as our Chief Scientific Officer, moving back to his passion, which is the science of the company. So we have the CEO transformation. We also have the transformation of the company from a Swedish biotech to a global company. So very exciting as we work to bring our product to patients around the world. And then, of course, the transformation of being an R&D organization to a fully integrated commercial company. So our growth strategy, as indicated here on this slide, in discovery and IND generation, it's about organic growth. You know about melflufen and the clinical development program and a couple of other products that we have that are moving rapidly towards the clinic. There are some other things we're doing to build a very strong pipeline, and we look forward to sharing those in future calls. In the middle column, it's about the clinical development, the portfolio development and specifically, the life cycle management of melflufen. Jakob will take us through the number of trials that we currently have ongoing which includes, of course, the exciting readout that we've had recently on the HORIZON trial, which has resulted in our accelerated filing to the FDA. So it's another area of growth for us. And then the investment in launch and geographic expansion. So you know from previous calls, we made the decision that we are going to launch melflufen in the U.S. We'll do that on our own. We're currently making some decisions around Europe. And then also thinking about Japan and how we'll pull that into the mix in terms of our investment. So again, our investment and growth strategy will involve trade-offs between this pipeline, the development and the geographic footprint and certainly excited about each and every one of those opportunities. On Slide 6, just to highlight what drew me to Oncopeptides is this fantastic platform, this peptide drug conjugate. And then specifically, the hope and promise that is delivered by the HORIZON data and also our early Phase I data to patients with resistant refractory multiple myeloma and the total idea about targeting aminopeptidases and then rapidly releasing alkylating agents in the tumor cell provides this fantastic benefit-risk profile. And for decades, we've tried on the biotech side to target aminopeptidases. They were identified quite a while ago as a viable oncology target, and we're happy to say our product does just that. And you'll see from some of the information, some new science that we've recently submitted to the ASH meeting for further elucidating that profile and really have learned some very interesting things regarding the expression of these aminopeptidases being higher, of course, in the myeloma cells, but also higher in patients that have relapsed/refractory disease versus newly diagnosed. So clearly, as 1 KOL recently mentioned at an advisory board, this is not your daddy's melphalan, and we're really excited about melflufen and the prospects for melflufen. So turning to Slide 7, real nice summary here of our second quarter and what's been in the headlines from an Oncopeptides perspective. So kind of looking at each of those, we think about the risk reduction in the business, it's important to the value creation. So first of all, expanding the leadership team and bringing in new expertise, we think that speaks to a decreased risk in execution. As I mentioned with Jakob fully enrolled and shifting his attention back to the science, myself coming in, thinking about not only the science but the commercialization on a global scale, the execution risk has decreased. Our very successful fundraising that took place in the quarter reduces the financial risk. So we're now investing appropriately in the business. So we've reduced that risk. We've recently announced the takeover of a preclinical lab. So from a pipeline and portfolio perspective, we're expanding our capabilities there and decreasing any risk that we're a 1-product company. Certainly with the outstanding results that we'll talk about on the HORIZON Phase II trial in triple class refractory multiple myeloma patients, we decreased the clinical risk from a shareholder perspective. And finally, with our submission to the FDA for accelerated approval, we believe that the regulatory risk also has diminished. So we're building momentum. We're executing against our milestones and commitments, and we believe we're poised to deliver to our stakeholders, first and foremost, to the patients that need our drug, and second of all, to the shareholders and to you that are helping to support our business. So shifting over to Slide 8. We've talked about the market opportunity here, the focus just on our first launch market, the U.S. market. And connecting that market opportunity to the clinical development program. We see that HORIZON with an anticipated label in the triple class refractory patients, in orange, helps us to address unmet need for over 20,000 patients with triple refractory disease. And then we have that very unique subsegment where -- of extramedullary disease, where we saw particularly interesting results and differentiating results, we believe, from the HORIZON trial when we compare it to other data sets, where we can help patients who are at high-risk because of the advancement of their disease. So in the OCEAN study with that head-to-head comparison to pomalidomide, there are other patients or newer patient populations as we expand our label to patients who may be double refractory. And then, of course, combination use, which we see as pretty much a standard in earlier lines of disease. We're addressing that with the ANCHOR trial and the LIGHTHOUSE trial. So we believe and have the ambition that melflufen can impact many, many patients who are on their journey to fighting resistant refractory multiple myeloma. And we'll continue to build on our label, build on the clinical development program to be able to address the unique needs of those patients. So flipping over to Slide 9. As we laid the groundwork to launch our product, we have launched the disease awareness and education program. And our focus there is paving the way for a new class of drug. And that's what we believe we have in melflufen. So you see in the headline, we want to get to the root of resistance. We believe our product does that and does that uniquely. The science is talking about or speaking to the possibility of clonal evolution being a key driver in resistance and some of the activities of our drug uniquely addressing that, that perhaps changes the history of the disease for patients. This triple class refractory multiple myeloma patient population is growing as an outcome of that clonal evolution. And we certainly are positioning this drug, leveraging the success we're seeing in the marketplace with the antibody drug conjugates, and positioning our unique peptide drug conjugate platform as something that will be new and exciting and help address some of those unmet needs. So flipping forward to Slide 10. Really excited about the FDA process that we alluded to. So as you're all aware, we did submit to the FDA in late June, a day prior to my arrival. So real gift to be able to walk into an organization having that behind us and a real testament to the team, to the Oncopeptides team that I joined for what they've been able to accomplish in making that happen. So we should hear imminently by the end of this week with respect to notification of file acceptance. We have our fingers crossed for that review process. And our eyes are set on priority review. So with the potential of priority review and a PDUFA date that would extend into February of 2021, of course, we've seen regulatory bodies in the FDA, in particular, act quickly on products that address high unmet need. So our internal bar for launch readiness is actually to be prepared to launch melflufen in the United States in the current calendar year. So I'll talk about how we're building a team to do just that. And on Slide 11, as part of speaking to that build process, we're putting together a team that's very passionate in our interest in making a difference for patients with high unmet need. And the bar we've set for ourselves is ensuring complete 100% access to melflufen. So building a customer-facing team that can meet the unique needs of the customer base, not only the traditional roles of the oncology account manager and medical science liaisons and area business directors, but also looking at some roles that can bring unique value to our customers in terms of key customer marketing role, nurse educators, and really putting some emphasis on national accounts and reimbursement to ensure that access. So really excited about that build process and the team that we're putting in place. Clearly, as we flip over to Slide 12, Oncopeptides is an organization that hasn't launched the drug. But certainly, we're very, very deep with respect to the people that we're bringing into the organization, who have significant accomplishments in successfully launching oncology drugs, both domestically here in the U.S. but as well as on the global stage. Calling out specifically, our President of North America, Joe Horvat, amongst his experience at Merck and BMS with U.S. and global commercial leadership position, 12 years of oncology experience. Dr. Paula O'Connor, really blessed to have a medical oncologists hematologists that has not only a deep experience as a key opinion leader in and of -- as a key opinion leader herself, but also 17 years of pharmaceutical and biotech experience in some very successful companies like Genentech, Medivation, Onyx and Clovis. So a total of 30 years of oncology experience. And Mohamed Ladha, who joined us as well with 17 years of pharmaceutical and biotech experience. You can see some of the companies that he has worked for and brings just a tremendous amount of horsepower to our team. And on the right-hand side of the slide, you can see as we put together roughly a field facing team of, we think, on the order of 50, will make us competitive in this space. The range of companies and talent that we've drawn from that -- we think is going to help put us on a successful launch trajectory. So really excited about this team coming together and look forward to being able to launch melflufen in the United States. With that, I'm going to turn it over to our Chief Scientific Officer, Jakob Lindberg, to talk about our platform and the science of melflufen.

Thank you very much, Marty. So please go to Slide #15. Thank you. So before I start, I just want to say thank you to -- for Marty, for joining us and how happy I am that Marty has joined. It means, as Marty said, that we both have strengthened actually our R&D capabilities in being able that the old organization can focus on what it was really built for as well as strengthening the whole commercial aspects of the organization with Marty's excellent background here. So we are really building for a successful launch and so far, so good. Looking at Slide 15, I just want to highlight what we have experienced with this molecule because, frankly speaking, some of these findings has been serendipitous. We didn't expect or know this from the beginning, but it has been -- become a truly differentiated product. And as you know, we have an aminopeptidase-targeting domain and a toxic payload. And this has given us an increased potency of the toxic payload itself. So we have increased the efficacy and the activity of a known efficacious class, the alkylator. We have also seen how this potency increase increases with the degree of malignancy, how aggressive the disease is. We have also found that the construct in itself actually circumvents several of the key resistance development mechanisms in patients. One of them is the transport proteins because -- and it's -- that might sound like very technical. But fundamentally, this molecule or candidate does not rely on transport proteins like most alkylators do. And that is a key way of the disease to fight off the alkylator. The second one is that we circumvent key pathways for what is called programmed cell death. That is how a cancer cell dies. And it turns out and we published this at the European Hematology Association meeting, we don't share the same programmed cell death cascades as other alkylators, which fundamentally means that we function as a separate class. That is why we say now that we have a first-in-class compound because we do not act as other alkylating agents. We have also seen that the aminopeptidase targeting enables additional beneficial effects, and we see it both in terms of the metastatic process as well as the blood vessel formation process, the angiogenesis process. And both of those are very important for tumor to be successful in being aggressive. And when a tumor is successful, it's bad for the patient. So this is a really interesting class of drugs. And just to be honest, we didn't know all of this from the beginning. We have discovered this along the way. And we're very fortunate that Joachim Gullbo, our founder, actually synthesized this molecule almost 20 years ago now. Let's go to the next slide, Slide #16. Marty alluded to this, but aminopeptidases are an excellent cancer target. This has been known for 30 years as we started to map up the proteasome, but they're very tricky to target because of their intracellular nature. And they are particularly interesting for multiple myeloma because they are key components of what we call the protein homeostasis machinery. That is the machinery that the degrades proteins into amino acids and recycles them. And this is exactly the system that proteasome inhibitors, that is always -- already an established class in myeloma attacks. And we attack this target system as well by addressing the aminopeptidases. We have also found along the way, as I mentioned, that aminopeptidases are not only overexpressed in cancer as such, but they actually increase in expression levels, the more aggressive the cancer is. So in some way, it's a target system that acts like a Trojan horse: it opens up a vulnerability in the cancer that we exploit. And thirdly, which is very much the same thing, as the cancer increases its mutational burden, which is also associated with poor clinical outcome, once again, aminopeptidases expression goes up, and we exploit that to the advantage of this drug. If we go to the next slide, Slide #17. We know already, and we have shown this slide that this is the peptide [ vertical ] negate system, targeting aminopeptidases actually shows activity across a plethora of cancers, both in the liquid space as well as in solid tumors. And of course, we want to try to see what this platform actually can find across other tumor forms as well. To do this, on Slide #18, we are generating many new peptide drug conjugates. And when we do that, we basically define them across 4 dimensions. We changed the toxic payload. It doesn't need to be an alkylators. We can work with tubulin inhibitors or other classes of drugs. We can auto direct the reactivity of the payload. We can change how far the payload goes once it has been released inside the cell or if it just stays locally. That is what changed per -- membrane permeability means. And we can also modify the aminopeptidase targeting piece to basically target specific aminopeptidases rather than the whole class of targets. And we have some very interesting results here, and we're going to continue this journey. But of course, our aim is to have a second-generation compounds out at some time point so that we actually follow through to not make melflufen just a single PDC drug. We think there's so much more to find here, based on all the findings that we have done the last few years. Going to Slide #19, we can then see roughly what we're up with. And of course, we know melflufen. We have talked a lot about it, and we're going to talk more about it today. But then we have OPD5, which is our first new peptide drug conjugate, which is specifically tailored for bone marrow transplantation. And we hope to initiate trials either later this year, that is late this year or early next year. COVID has put some -- introduced some delays, but only minor. And then, of course, we have what we call the second-generation PDCs. Here exemplified by OPS2, but it might also be another compound. That will take a bit longer before we enter the clinic, but we hope to be able to do it -- during 2021 at the earliest. Next slide, please. Marty mentioned this, but on Slide 20, we have our full development program. And once again, there's a lot of detail here. So if you have specific questions regarding time lines or results, please do not hesitate to ask questions at the end of this webcast. But right now, our development program is back on track after a small delay in some trials due to COVID-19. We have recently reported that the PORT trial and the light-chain amyloidosis trials has been initiated with first patient in, and we're going to talk more about them today. But otherwise, the clinical trial program is making strides. When it comes to OCEAN, our big pivotal trial, we have already reported that we reached a milestone of 450 patients and we are on target when it comes to the number of events to actually be able to have results for you first half of next year. Going to the next slide to then talk about the key events in quarter 2, right? And Marty alluded to that, too, we actually significantly reduced the clinical risk of this entity because we fully reported the HORIZON data. And as you know, the IRC data turned out to be a very good data set. And since the IRC data, the independent review committee data, also was in line with what investigator assessed, it also speaks to the quality of the data set, very small deviations. And actually, the deviations were to the benefit of the IRC data, which is highly unusual. And as you know, we submitted this data set to the FDA on June 30, and we're going to come back a little bit more about this data set now. Going to Slide 22. This slide kind of summarizes in 1 way, the clinical benefit that we provide to patients. This includes all the patients that responded to therapy with melflufen, that were triple class refractory, i.e., patients without remaining treatment options. And you can see that they -- we could keep the disease at bay for 8.5 months. That's a very, very good number. You can also see from this slide, where each bar is 1 patient, that actually melflufen is a bit of a different compound to some extent, it takes longer for the response to appear. And that is -- how you can see that is to look at primarily the blue bar, but also the light green bars because they are not classified as a response at that time point. From a clinical point of view, it doesn't matter that it takes a bit of time. But it sort of shows when you look at, for example, such a number as duration of response, it becomes falsely low in a comparison. Because this is the true clinical utility here. The second driver behind that the response takes a little bit longer time is that we had an extraordinary amount of patients with extramedullary disease or metastatic myeloma. And it takes time to verify response in these patients because you need to do fairly advanced imaging procedures, and you don't do that every week or every month even. So it takes a bit longer to verify that the respond actually has occurred. And since these patients fantastically not responded in this trial with melflufen and dexamethasone, this actually, once again, which was a fantastic result, but it makes this so-called swimmer lane plot a bit more tricky to interpret. Going to the next slide, Slide 23. We just want to show a straight up comparison between the melflufen data set, the data set with Xpovio or selinexor and the data set with belantamab or BLENREP. If you look at the overall response rate and clinical benefit rates, you can see, which is a measure of tumor burden reduction, you can see that these 3 drugs are fairly close to each other. The difference is not big. When it comes to duration of response or median PFS for responders, you start to see some significant differences. And you can see how melflufen, we have actually progression-free time of 8.5 months for responders, while Xpovio has 4 months. That's a difference of almost a factor of 2, a significant difference. For BLENREP, this is not reached, but it is fairly close to the 8.5 months. It's not significantly above that. So it is nothing indicates today that belantamab would have different numbers that are significant outliers to this. We, obviously, have to wait for the final result. And then I just want to highlight the share of patients with extramedullary disease, with EMD. And you can see here that we have 42%, while Xpovio had 22% and BLENREP 20%. This is the most -- the biggest hard-to-treat patient population in myeloma, with the most explicit unmet medical need. And this in itself shows that our patients were more ill on paper than any of the other populations actually because normally, nothing works for these patients. And despite that we have so many EMD patients, our results hold up. That speaks to the quality of the drug as well as the responses that we see. The final point is about toxicities. All of these drugs have expected hematologic toxicities. And melflufen has that absolutely, too. When it comes to non-hematologic toxicities, however, there are some clear differentiating factors. And as you can see, all of these drugs have infections. It's unfortunately something that happens for myeloma patients. But apart from infections, our table is empty with melflufen. While with Xpovio and BLENREP, the lists are fairly long and complicated. That is why both these drugs got so-called REMS programs associated with their approvals. We have to see if we get one, but it's not something we expect, but we don't know. But this is a clear benefit. And then when you look at both efficacy and safety, we have a very good profile, and that is why we are so confident going into this launch. Finally, just ending with the 2 trials. So going to Slide 24 that we have just recently initiated the first patient in. The first study is the so-called PORT. What is PORT? Well, this has very much to do with making sure that every patient can get access to the drug. So right now in all our trials, we have used what is called a central access point with melflufen. That is so-called [ port catheter ] or a midline or PICC line. We just want to show that you can give and administer this drug also in the peripheral venous catheter. There is no data to suggest that we can't, but we just need to show it with empirical data, and that is what this trial is about. So those patients that prefer a peripheral venous catheter over the central access point. And some clinics also prefer that over central access point. So it's just to make sure that we break down every potential barrier to use this drug for the benefit of the patient. Going to Slide #25, we then talk about light chain amyloidosis, and this is not a cancer. So the question is, why are we here? And we have talked about this before. That is because myeloma drugs are the drugs that are used for these patients. It's a very, very tough disease with a median overall survival of 3.5 years, which is not long. And it's actually because you have pieces of antibodies that precipitates in the blood. Precipitates means it fall out like a bit of a -- it's almost like a high viscosity slurry. And of course, that high viscosity slurry ends up where the blood goes primarily. So it forms layers and amyloid plaque in organs with high perfusion, such as heart, liver, [ CNS ]. And this is what the patient dies from, most commonly from cardiovascular failure. The only treatment is then to bring down the antibody production. Myeloma drugs are used. We have very good preclinical evidence that we have a good drug here that we provided at the American Society of Hematology Meeting in December, and we're looking forward to see the results. With this, I leave the word to Anders Martin-Löf, our Chief Financial Officer. And please note that there will be a Q&A at the end if you have any further questions.

Thank you, Jakob. If we then turn to Slide #27. You can see on the right-hand side that our operating loss increased to SEK 696 million for the first half of the year. And if you look at the orange bar, you see that, well, a big chunk of that increase is due to the R&D spending going up from SEK 239 million to SEK 441 million. And that, in turn, is driven by our quite extensive clinical program that generated cost of SEK 332 million for the first half. And as you can see on the right-hand side, the OCEAN trial was roughly half of that, where we increased the cost from SEK 110 million in the first half of last year to SEK 177 million this year. So this is -- this was also an increase during the second quarter, where we saw an increase of drug supply costs since we had to provide all sites with extra pomalidomide to be able to ensure that all patients would receive the drug in the age of COVID-19, where all transportation broke down. So that meant that we had an extra cost for that. And it also meant that we could not get returns from sites where we had pomalidomide. So we had to buy some extra during the second quarter. The VERIZON trial, that also increased from the first half of last year to this year. Here, we do not see a quarter-by-quarter increase. So SEK 35.7 million for the first half of the year. You also see for the first half that LIGHTHOUSE is now incurring significant costs, SEK 34.6 million in the first half versus SEK 2.7 million last year. We have not recruited the first patient yet, but we're planning to do that later this year. So we're in full preparation mode and are working on our protocol and all associated preparation. ANCHOR was flat, so no increase there. The other significant increase then is the marketing and sales costs that went from SEK 44 million last year to SEK 149 million this year. And this is, of course, driven by the buildup of our U.S. subsidiary that went from -- the total cost was SEK 16.8 million in the first half of last year and SEK 112 million this year. So here, we are growing rapidly quarter-by-quarter. We had roughly 50 employees towards the end of the second quarter, and that was more than double in the second half of the year. So that will continue to increase as we build up for our launch. The numbers for the first half also include some noncash costs. For example, the incentive programs contributed with a cost of SEK 26 million. We also have some currency exchange rate differences included in the operating loss, that was roughly SEK 30 million. And then we also have some increase in working capital that mean that the cash flow for this period was roughly SEK 100 million better than the operating loss. So burn rate of roughly SEK 100 million per month, and it has been fairly stable for the last 6 months. The cash position on paper was SEK 138 million. We did execute a very successful directed share issue in May, but that was concluded in 2 steps. The second step was done in the first few days in July, ramping up some SEK 673 million. Those SEK 673 million are not included in the cash position as of June 30 so a more correct statement of our position will be to include that. And so net pro forma, including that, we had SEK 1.611 billion in cash as of June 30. So fairly stable cash position. We're very happy with the new share issue, we're very happy to be able to get some new very well renounced. U.S. investors in the world. So all in all, we are, of course, increasing our costs as we should, when we build up for a launch, but we are in a very good position as of June 30. With that, I'll hand the word back to Marty to wrap up and go through the news flow for the rest of the year.

Super. Thank you very much, Anders. And on Slide 28, we see those investments into the business translating into major events and news flow for the organization that are obviously of critical importance to us. So just to orient here by column by quarter. So green are accomplishments that we've completed; in orange, we focus on kind of regulatory and launch; in blue, data and clinical trial related. So reiteration of Q2, EHA update, really some outstanding data that we presented at that meeting, looking at the aminopeptidases elevation in myeloma, the elevation correlating with poor outcome. And then a real differentiated profile for melflufen, which is -- actually works better in those resistant refractory multiple myeloma overexpressing a patient. So real unique profile. We also showed some data on P53 independents, totally unique relative to any other alkylators out there. So that, among a host of other things. So outstanding updates on the product at EHA, the NDA submission accomplished at the end of the quarter. Looking at third quarter, as Jakob mentioned, we've had the first patient in and a couple of programs. We await the FDA feedback, and we'll communicate that information, of course, as soon as we get it. And we did not mention that we have launched an expanded access program. That protocol has been approved by the FDA. We're excited to be able to provide access to melflufen to patients in the United States while we wait for approval of the product. Looking forward then to Q4, we have the potential, if granted, priority review. And it moves quickly of accelerated approval and then launch. We will be launch-ready in Q4 of 2020 in the U.S. market. ASH will be an outstanding meeting for us. We have quite a range of both preclinical and clinical abstracts that have been submitted. We'll be able to provide an update on acceptance of that data in October. So certainly looking forward to a fantastic ASH meeting in December. And looking forward to the first half of 2021, it will be a big year for us at Oncopeptides, top line results of the OCEAN trial, the last patient in for ANCHOR, I should mention we'll have ANCHOR data at ASH. So I think that will be of high interest. We'll have that last patient in the BRIDGE trial and then further updates of data sets at EHA. So really excited about the next 12 months and the continuous news flow that we have. And with that, we'll conclude the planned portion here of the presentation and turn it back over to the operator for questions that you might have. So thank you very much.

[Operator Instructions] Our first question comes from Philippa Gardner from Jefferies.

I have a couple of questions, if I could, please. So first of all, I just wanted to ask you about your pricing strategy for melflufen. And I guess what I'm wondering is given the expected order of events in terms of potential accelerated approval coming prior to OCEAN data, I guess, are you thinking about these events as mutually exclusive when it comes to thinking about the pricing? Or I guess if melflufen is to show superiority of pomalidomide and you price it prior to that data, would you miss an opportunity there to get a higher price? So just wanted to get your thoughts around your pricing strategy. My second question then is, do you plan to disclose the PDUFA date? Or will you just tell us whether it's a priority or standard review? And then my final question is just on the expanded access program. I was just wondering, have you already had a lot of interest from patients and/or physicians in compassionate use of melflufen?

Super. So I'll take the last question first on the expanded access program. So we're early days. We've approached a number of sites. And suffice it to say that there's very high interest in the expanded access program. Again, we just received FDA approval of that protocol within the past week. So we'll be able to provide more details on that program as we go forward. With respect to the PDUFA date, yes, depending on the details we hear from the agency with their communication towards the end of the week, we will work to be as explicit as we can relative to some of the planned dates and milestones of the review. So stay tuned on that one. Finally, relating to the pricing strategy of the drug, we certainly don't want to get into a pricing strategy discussion in advance of a couple of very important events for us. First and foremost, is kind of seeing what the eventual label that we reach is. Of course, we're going to be considering multiple geographies as we think forward. We will have -- we recently had the launch of belantamab and we'll be taking that into consideration. I think you're -- if I'm interpreting the question correctly, kind of thinking through patient population, the broader nature of the patient populations and the possibility of showing a differential advantage of pomalidomide, all of those things will enter into our assessment of melflufen and the price that we'll launch with. Suffice it to say that we believe we have a unique product, a differentiated and novel product that we think delivers quite a bit of value to patients and would price accordingly with respect to the competitive landscape and the opportunities there. So not a direct answer to your question, but hopefully, it touches on enough of the key points.

Could I perhaps just ask a follow-up to that, if you don't mind. I guess, if you were, for example, awarded a expanded review rather than a priority review, so that the approval would be closer to perhaps getting the OCEAN data, would you perhaps consider waiting for the OCEAN data before you launched?

So fundamentally, given our patient-focused nature as a company -- I mean we're in the business of helping patients and being patient friendly, we're trying to provide access as soon as we possibly can. So I appreciate the thinking around that as a consideration. But I guess my gut today would be that we wouldn't withhold access to the product based on that type of decision.

Our next question comes from Viktor Sundberg from ABG.

So my first question is, if we will see any effort from your side to apply for approval in Europe in parallel to your application in the U.S. as we have seen with example, with BLENREP from GSK and XPOVIO from Karyopharm. And could you give any more details on when or why you haven't already sent in an application in Europe?

Yes. Thanks for that question. So we are actively considering that and looking at the landscape. And suffice it to say, with a global KOL community and what we see relative to the competitive landscape in Europe, the opportunity does appear to present itself that we can move forward with an accelerated package for HORIZON. So we're under active consideration of that as a possibility and would be sure to inform everyone when we reach that strong conclusion. But our intent would be to do what we can to make the product as available as quickly as possible in Europe. And it does appear that some type of conditional or accelerated approval opportunity is a possibility. Jakob, I don't know if there's anything else that you'd want to contribute there?

I would just like to add 1 thing to Viktor's question and that is even large companies much larger than us cannot handle completely parallel application processes. So you need a 2- to 3-month delay between your first application in the geography and the second, which is normally then U.S. and then Europe. And we have submitted June 30, and you can add 2 to 3 months to that and then you more or less have a good time line for when such an application would be considered just to be able to manage it from an internal process point of view as well.

Okay. Great. And another question maybe on the perception of melflufen. Have you surveyed oncologists already ahead of your drug launch on how they view melflufen as a drug class? Before, as you alluded to, there have been some perception among some KOLs that melflufen is just another alkylator. And maybe not seen as a new drug class in late-stage multiple myeloma in comparison to maybe BLENREP and Xpovio. So just curious how you're working to overcome that perception among some oncologists to have a potential launch of the drug? And how you feel that the perception is around the drug as of now?

Yes. No, really good question. And that certainly has been our focus. When you look at the disease state -- disease education program that we outlined, that was 1 of the primary intents, to build awareness around Oncopeptides but also talk about unmet need within the category. Certainly, programs like that are generating increases on some of those key ballistics. We have in preparation for launch and building, obviously, our messaging and the type of work we're doing, it's pretty clear to us that with the emerging data, going back to some of the things we referenced relative to EHA with our strong ASH presence. The science continues to support a very differentiated position. We find that when we have the opportunity to communicate those details, to go over that preclinical evidence, to talk about the HORIZON data in greater detail, to call out some of the specifics relative to the extramedullary disease patients, it's certainly resonating with the physicians we talk to. So it's always a journey. We believe the evidence that we generated to date, and we're not stopping where we currently are. We'll continue to build new evidence. That is supporting this being an exciting new class of drugs. And we know from some of the work that the alkylator payload doesn't tell the full story. There's something very key and exclusive here regarding the targeting of aminopeptidases, and we're excited about some of the emerging science that is being generated internally. And that which is soon to make the prime time in meetings like EHA, for example and ASH. So continued work in progress. We're confident having just been through a program recently where a baseline is set at the beginning, and we go through the preclinical and clinical evidence, you certainly you see the bar moving. Prior to joining the company, Jakob and I had many conversations. And he communicated to me when he stepped back and thought of all the experiences when he put the drug in the hands of a clinician or a preclinical scientist, even the skeptical ones, once it's in their hands and they play with it, he gets the call back, what did you give me? There's something different about this? This is not your standard alkylating agent. So certainly, an expanded clinical program and the work that we're doing, we'll continue to build that, and we're confident that we're going to be able to get there.

Got it. And here's a final question from my side. So your cash burn came in at approximately minus SEK 285 million in the quarter. What can we expect from here going forward in terms of your cash burn when you ramp up your commercialization efforts and broaden the platform. As far as I can see, maybe you need to raise cash here within a year, your current cash burn -- what is your plan around that? And maybe also, if you can comment if a U.S. listing is an option to consider in order to access money from the capital markets?

Yes. Thanks. So this is Anders. Yes, we are burning roughly EUR 100 million per month, and that will increase during the remainder of the year. We do not issue a forecast. But as I indicated when I talked about the numbers, the number of employees in the U.S. will increase quite significantly. The R&D costs will continue on a relevant level. So yes, the burn will continue to go up. We have communicated that with the current financing, we have worked our way through the second quarter of 2021 without any revenues or without a raise. We are always, always considering raising more money that may occur in the next 12 months. I should not lie about that. There are a number of ways we could do it. Becoming a commercial company opens a number of new possibilities. We do not necessarily have to do a directed share issue, we have done in the past. That is an option. We could also do easy convertible bonds. We could get loan facilities or we could get the royalty-based financing or licensing agreement. There are a number of ways where we could finance the company. And all options are on the table if needed. U.S. listing is also 1 of the options that we are considering. But at least near-term in the next 6 months, I do not think that you should expect a U.S. listing. Just as clear as I can do at this point.

Our next question comes from Boris Peaker from Cowen.

My first question is in terms of melflufen, one of the things you talked about is the differentiation in patients with extramedullary disease and trying differentiate it from drugs in the space. I'm just curious, do you anticipate that to be mentioned in the label somehow? Or do you have any kind of other strategy that you could market this differentiating element?

Should I take that, Marty?

Yes, that's great, Jakob. Thank you.

Yes. So I mean, first of all, we need to be very careful to state what ultimately the FDA will say here. And I would never make assumptions about what their position is. What I can say is that we included in the submission package, complete data outputs regarding the EMD subpopulation in terms of efficacy. And we had an applicant orientation meeting with the FDA in the middle of the summer, and this data created a lot of interest. And we interpreted that positive, but that's our interpretation. And then ultimately, we have to see exactly where this lands. But as you pointed out, no one else has any efficacy data in this population that is meaningful, and we have that. So we hope for it, we push for it. We have to see.

Got you. Also, can you comment how big is the EMD population fraction of myeloma patients then?

This is a tricky question because it is growing so rapidly. Our current estimate is that you roughly have 16,000 patients per year in the U.S. that has extramedullary disease upon relapse. So they -- they're not diagnosed with it but during the course of the disease, you have an extramedullary component. And from that time point on, median overall survival is, in some studies, less than 6 months. But roughly 16,000 a year. Of course, they have various refractory status as an EMD patient. So that overlaps slightly with the triple class refractory, but a lot of them have less refractory -- has less refractoryness than that.

Got you. And my last question is on the regulatory side. Just curious, what is the supply chain for melflufen? I mean where is the drug manufactured? And has the FDA inspected that the manufacturing facility or plans to be inspect in the near future? Just wanted to see if there's any kind of manufacturing limiting factors that could arise?

Marty, should I take that?

Please, go ahead, I'll let you -- yes, go ahead.

So if we first talk about our supply chain, that is as part of the submission, that means that the drug substance is manufactured here in Scandinavia. We have 1 supply unit for that. That is not limited at all. It lasts forever. And you can have years of drug -- sort of potential drug product on the shelf and at various storage units. When it comes to drug product, that is manufactured in Central Europe. And we have 1 site as part of the submission, and we plan to add a different 1 more site also in North America, in Canada, very close after the submission to also be approved. For early drug supply, this is not limiting at all. Of course, if we are amazingly successful, we will have to work hard, but we already have a third site in the works in addition to the Canadian one to expand drug supply even further. When it comes to inspections, we, of course, expect both of these sites to be inspected. They have both been recently inspected and approved by the FDA. They both have drug product and drug substance as part of KPIs and drug products, respectively. For the U.S. market, we don't expect any problems. And FDA has at least verbally said that remote inspection is fine if that is what can be achieved under the current circumstances.

[Operator Instructions] Our next question comes from Christopher Uhde from SEB.

Welcome to the team, Marty. I just wanted a quick question, I think probably for Anders here. When do you expect costs for HORIZON to come to an end?

I don't have the exact number for that. They have gone down actually. The cost for HORIZON was roughly SEK 26 million in the first quarter and then some SEK 10 million in the second. So they are going down already.

Thanks for the welcome, Christopher. And obviously, as HORIZON costs continue, it means patients are continuing to benefit. So it's kind of a good news problem to have. I appreciate the welcome.

There appears to be no further questions. So I'll hand back to the speakers for any of the remarks that they may have.

Super. Well, we really appreciate your participation and investment, continued interest in the Oncopeptides' story. We think the Q2 chapter was an excellent one for the company. And are really excited about some of the major milestones that lie ahead. So we certainly look forward to talking to you individually and also further future updates in a wider sense. So thank you very much. Have a great day, and we'll talk soon. Bye now.

Thank you.

Thank you.

Thank you. This now concludes our conference call. Thank you all for attending. You may now disconnect your lines.