Philogen S.p.A. (PHIL) Earnings Call Transcript & Summary

So welcome, everybody, to our new webinar. Today, Professor Dario Neri, our CEO; Dr. Laura Baldi, our CFO; and myself will provide an update on our latest financial and scientific results. We'll have a presentation which will last about 40 minutes, which is being recorded, and as always, will be followed by a Q&A session which is not recorded. [Operator Instructions] So with this, we go directly to the presentation with the latest exciting results, and I hand over the stage to Dario Neri.

Thanks a lot, Emanuele. Together with Emanuele, as always, will give the presentation, and these are exciting times after good results for the year 2024, which have just been published last week in a dedicated press release. So as always, we start with a forward-looking statement. And then we -- a few slides of introduction. I'll be very brief, especially for those who have seen this presentation before. The Philogen Group is a Swiss-Italian company, and it has 2 souls, so to say, the Philogen Group deals mainly with antibody therapeutics. So each time you see green in the presentation, this is antibody drugs. The Philochem unit, which is a fully-owned subsidiary of the Philogen Group focuses on small molecule therapeutics. So blue is small molecules; green is antibodies. Now everything we do within the company follows a simple but very powerful principle. We use payloads of proven therapeutic activity that can be drugs, radionuclides or cytokines, and we make them better because we deliver them to the site of disease. So whenever the payload is small like a drug or a radionuclide you see indicated in blue, we will use small ligands for pharmacodelivery, typically isolated from DNA-encoded chemical libraries. Whenever the payload is a protein like a cytokine, then the ligand, the delivery vehicle will be an antibody fragment. And you will see that basically the blue part of the pipeline coincides with Philochem, and the green part of the cytokine pipeline coincides with Philogen. Now the need for targeted delivery. So for this ligand-based pharmacodelivery is clearly indicated in this slide. You look at 4 patients with cancer, and they received 4 different types of drugs. The drugs were already labeled, so wherever you see black in the body of a patient, this is where the drug went and the need for targeting is very clear. You start the very left, a patient with mesothelioma, so the tumor is in pleura around the lungs. The patient received conventional chemotherapy. And basically, you see that there is no preferential accumulation in the tumor. If anything, you have excretion via the liver, spleen, feces, urine but no preferential accumulation in the tumor. With large antibodies, IgG molecules, Y-shaped, these are molecules which extravasate very slowly. They get out of blood vessels very slowly. They target tumors very slowly. It may take several days until you see a preferential accumulation in the tumor. With our antibody fragments and especially with antibody cytokine fusions, this is what Philogen does, the selectivity is much better. This is one of our patients imaged only 1 day after IV administration of the product. You see good tumor-to-organ ratios and probably -- and you will see many examples, the world record of tumor targeting happens when we have small ligands of exceptionally high affinity that bind to a target with antibody like affinity, but being small, they get to the target much more rapidly. You see a patient with metastatic breast cancer. You see at just 60 minutes, the primary tumor in 1 breast, many bone mets, liver mets and nothing else. So as a patient, I prefer to receive at this type of selective therapy rather than nonselective chemotherapy. Now we will go, together with Emanuele Puca, our Chief Operating Officer, slowly through the pipeline. We will look at Nidlegy with me, our dermato-oncology drug. Emanuele will guide us through the progress with Fibromun where we completed recruitment in a number of trials with registration potential. And then I will finish with the chemistry pipeline. You see it's a Phase I pipeline but results are really, really good. And I think they hold a lot of promise even if molecules are still at the Phase I level, but you will judge for yourself. So let's start with Nidlegy. Nidlegy is an immunocytokine product that we initially developed in melanoma, but later, we have seen that it works very well also in non-melanoma skin cancer. You see the 3 main types of cells in the skin: melanocytes, basal cells, squamous cells, and the corresponding tumors are called melanoma, basal cell carcinoma, and squamous cell carcinoma of the skin. They have high incidents, not only melanoma, 97,000 new cases per year in the United States, but even BCC and SCC have greater incidents, and you will see really with pictures what the medical problem is. Let's start with melanoma. Nidlegy is a combination of 2 proprietary active principles. We give this product intravenously because we deal with superficial tumors, and you will see we are active both in melanoma and in non-melanoma skin cancers. We have already presented the fact that last year, we announced the results of our first Phase III clinical trials in locally-advanced melanoma. 256 patients randomized in 2 arms. In 1 arm, they receive surgery within 4 weeks, if appropriate, followed by adjuvant treatment. In the treatment group, the surgery is preceded by 4 weekly injections of the product and we look at recurrence-free survival. In other words, how long the patients stay without a recurrence of the disease. And basically, these are the data that Axel Hauschild should presented at the ASCO on behalf of the investigators. You see that the control group in yellow has median recurrence-free survival of 6.8 months, whereas there is a substantial prolongation of RFS for the Nidlegy group, more than doubling of a time-dependent endpoint in oncology is a good result. We go from 6.8 to 16.7 months. This has been the basis for the Marketing Authorization Application that was filed with EMA on June 3 last year and it's in the process of being evaluated. In summary, in Europe, we have completed Phase III. We have filed the Marketing Authorization Application, and we expect a decision around summer. We are running a parallel study in the United States. 119 out of the 186 patients have been enrolled. And we are in dialogue with regulatory authorities in the United States, both in melanoma and in non-melanoma. In particular, we are curious to learn whether the European data are sufficient for a Marketing Authorization Application also in the U.S. or we need to complete the U.S. study first. And we have a distribution agreement with Sun Pharma, so we have all duties until registration. Sun Pharma is already active for early access programs for this drug, specifically in France and in Germany. And if the product is approved, Sun Pharma will commercialize it in Europe, Australia, and New Zealand. I want to share with you some exciting data in non-melanoma skin cancer. We start with this picture that you have seen before. It has now been published. It corresponds to 4 patients in the Duncan study. Actually, we had 94 patients in the Duncan study, which were treated and the study is complete. It's 1 of the 2 Phase II studies that we have promised to complete. The other 1 is called Intrinsic. And whenever we see patients like this who are candidate for disfiguring surgery, in this case, amputation of the nose, and you see such a good outcome, then, of course, we are very happy. I want to give you some really pictorial impression of the benefit that we believe actually the product is giving already now. And they look at somewhat less advanced cases of BCC but still advanced enough to require this figure in surgery. You see these are data from the collaboration with University of Tübingen, and you look at the patient with something that looks very innocent in the nose of this patient. But this is a basal cell carcinoma, which is growing deep. And so even though the lesion looks small, the surgery is quite extensive. And I'm showing you the nicest of the pictures because the other ones are much worse. And you can see that these patients can really have disfiguration surgery to get rid of the tumor. So what can we do? This is an interesting example, and I'm extremely grateful to the collaboration with Lucas Flatz, Teresa Amaral, and collaborators in Tübingen because basically, this is the experience of a patient in 2023, who had a small lesion and required a skin flap, which is ugly. This skin flap will be with the patient for the rest of her life. In 2024, a new lesion, similar lesion was coming up, and you see that the cosmetic outcome is completely different with Nidlegy. And I want to show you 2 extreme examples. This is a young patient who had a lesion in the lip, but the surgery would have been extensive, and really without disfigured the lip for the rest of her life. When I looked at the results, this is the 1-year result. I said, wow, because of course, you don't see anything and the outcome is very good. Now I'm showing you a young patient, And I want to show you at the other extreme, a 94-year-old female in this case with a squamous cell carcinoma of the cheek. She was a candidate for amputation of the cheek, which she didn't want to receive. And you can see a complete response at day 365, again, suggesting that the product can be active in younger and in older patients and the treatment can be tolerated. So it's work in progress that can be summarized with the Duncan and the Intrinsic studies, which are ongoing. So the Duncan has been completed, and the results will be presented at major congresses this summer. Intrinsic is still ongoing with 39 out of 70 patients treated, but we have made all preparations to launch 3 trials with registration potential that will complement the data that we have already accumulated, and you see 92, 92 and up to 180 patients. This will be global study so Europe and United States. So with this, I hand over to Emanuele. Just mentioning that the commercial potential is attractive, both in melanoma and the non-melanoma skin cancer. If I give you the number of addressable patients for locally-advanced melanoma, it's about 23,000 new cases, Europe and United States. For BCC as one of the non-melanoma skin cancer, you see that the number is possibly even greater. And the expected pricing is in this range, at least based on the price at which competitor drugs are sold. So we continue to be very excited about the product and even see more opportunities for helping patients at the stage that maybe at the beginning, it was difficult to get patients because they would go directly to the surgeon, but now it's the surgeon that sends the patients to the trials because they have seen that the benefit can be tangible. With this, I hand over to Emanuele Puca, who will tell us about the second most advanced program, Fibromun, on which he has been directly active for a number of years.

Thank you, Dario. So you remember that Fibromun is now also partnering with Sun Pharma since last year. We have expanded the collaboration. It is going very well from Nidlegy in Europe to Fibromun, which is now a global partnership for all oncology indications. So we have 3 trials in sarcoma. [ PBTA ] with potential, 2 of which have completed enrollment, and we have also 3 trials with [ PBTA ] potential in glioblastoma, for which I will provide an update. You remember that glioblastoma is a deadly disease. We have at least 15,000 new cases every year only in the U.S. In Europe, it's even more, so in total, we have more than 30,000 new cases every year that are addressable by eventually Fibromun. And you see, unfortunately, today, there is no curative treatments. Patients that have a recurrence of a median overall survival of 8 months so it's very fast unfortunately. And the situation in sarcoma is not better because we're speaking about 13,600 cases every year in the U.S., about 15,000 in Europe. And unfortunately, most of them become metastatic. And when they become metastatic, it's incurable to date. Here, the median overall survival is also similar to the one of glioblastoma. So what is Fibromun? Just as a quick reminder for the new people that are attending this webinar, it's an immunocytokine so antibodies cytokine protein, that antibody targets the tumor and delivers TNF, the anticancer payload selectively at the site of disease. The drug is given this time systemically by intravenous infusion. We have orphan drug status, both in Europe and in the U.S. for both indications. And we have shown several times that the product goes through the tumor sparing healthy tissues, which is the basis for targeted therapies. A quick update on glioblastoma, which are progressing at record speed. In for Gliosun, the trial in newly diagnosed patients where we have completed the Phase I part, we're cleaning the data, which will be presented at the next webinar as soon as the data have been cleaned up. In Gliostar, and we are discussing with Sun Pharma in transition to Phase II and to the Phase IIb part. For Gliostar, we have completed last in June 2023, the Phase I, and the Phase II part has progressed very rapidly. And you see that we have enrolled 156 patients out of 158. We're missing only 2 patients to complete enrollment. Then we will have to wait for the overall survival events, so meaning death to mature to readout the study and we expect that to happen by the end of this year or beginning of next year. In parallel, we're also conducting a U.S.-based study that was agreed with FDA, for which also is -- the enrollment rate is progressing faster than we expected. We are already at 52 patients out of the 90 to be enrolled. And here, the strategy is pretty clear. We use Gliostar, if we meet the primary endpoint to get full approval in Europe. And we use both Gliostar and GLIOSTELLA to get approval in the U.S., of course, always if we meet the primary endpoint. In soft tissue sarcoma, we have also completed enrollment of 2 out of 3, and we have completed enrollment of 2 out of 3 pivotal studies that you see here below. The first 1 is in Phase III, a Phase III trial in combination with doxorubicin in first-line patients. We have completed enrollment. We enrolled a bit more than the protocol for so. This is allowed by the protocol. And we're missing only 1 event. In that case, an event means progression-free survival, so progression or death. And basically, we will communicate the outcome of the study when we meet the event and when we have cleaned up the data, which will happen in the next few -- in the short-term future. The similar consideration also for the third-line trial in patients with last-line soft tissue sarcoma. This time, the combination partner is dacarbazine, the standard of care for these patients. We've completed enrollment. We're missing 6 events. So also here, an event is progression or death as the primary endpoint is progression-free survival. So for both trials, we should expect to communicate the results in the short-term future and to basically tell you how it went. And if we meet the primary endpoint, we will submit the marketing authorization application to EMA and also start a dialogue with FDA to use the European data to get approval in the U.S. So exactly similar situation as we're now facing in melanoma. Here, the market potential is pretty attractive, first, because those are high unmet medical needs for which you can expect a high pricing, even higher than Nidlegy, $100,000, $160,000. This price is based on what olaratumab got in the U.S., that was conditionally approved for soft-tissue sarcoma. Plus, there is very little competition because unfortunately. Most of these conventional drugs failed in both glioblastoma and soft tissue sarcoma. And also, we're speaking about medium-sized indications in sarcoma. At least, this is a worst-case scenario of 21,000 patients, and glioblastoma is more than 30,000. So if we meet the primary endpoint, we have a good avenue to get a good market penetration and to turn this product in a really also blockbuster if everything goes well. With this, I hand over the stage to Dario again for the chemistry.

Well, as I told you, we go from Philogen to Philochem and this blue pipeline is progressing very rapidly. You will like the data because I think they're really sensational. The quest, as mentioned before, is really to further improve targeting selectivity. And the hope is, of course, that if we have such a good selective uptake of the drug at the site of disease, hopefully, we will have more potency and fewer side effects. These are 2 patients with malignancies positive for so-called fibroblast activation protein, FAP. The patient to the left was imaged with an antibody. The patient to the right was imaged with one of our small molecule drugs called OncoFAP. I think it's fair to say that the small molecule wins, at least at the level of nuclear medicine. So what we do is we use our proprietary DNA-encoded chemical libraries to discover high-affinity ligands. I repeat, high-affinity ligands because high affinity is essential in order to win in the clinic. And then we can decide to put different payloads onto this vehicle. Today, I will focus only on radionuclides and drug conjugates, but we have additional programs which are in development, and maybe in one of the next webinars, we will cover them as well. So let's start with targets for which we have validated nuclear medicine data. We go from FAP to carbonic anhydrase IX for which we have our second ongoing Phase I clinical trial, which started PSMA, somatostatin receptor 2, and especially ACP3, and I'll focus on FAP briefly, but mainly on ACP3 to give you a good update of what's happening within the company. Let's start with FAP. In this case, I first focus on programs with radionuclides. For imaging, we have a collaboration with the Bracco Group. We have licensed the rights to Blue Earth Diagnostic, which is a company of the Bracco Group. We have completed successfully a Phase I clinical trial with dosimetry run by Philogen as a sponsor. And we have, actually, with our collaborators by now imaged more than 300 patients even. And here, you see 5 representative patients but the selectivity of these black spots, which is the accumulation of OncoFAP in the lesion is pretty sensational. And it helped patients already at the diagnostic level. Of course, many patients want therapy, which means that once they see an uptick of OncoFAP with a diagnostic radionuclide, they want Lutetium 177, which is a therapeutic radionuclide. A Phase I trial has started. First 3 patients have received our agent. It's work in progress and we are excited to see the development of this trial. Now we can also decide to equip OncoFAP with a nonradioactive payload, in this case, with a linker drug conjugate. And the molecule looks like this. FAP is not only a target, but it's also an enzyme that cleaves after glycine and proline. So it came natural to us to develop our product with OncoFAP, this blue moiety which is the part that goes to the tumor. GlyPro here indicated in green is the part which is cleaved by FAP at the site of disease. And monomethyl auristatin E, is a very potent -- there is a typo here. It's a tubulin inhibitor, but it's a very potent drug that is conventionally used for cancer therapy. Now this is something we have shown already but it's a very nice result. We decided to go into a Phase I trial in animal patients with cancer. This was the first dog that entered the study. Coco, the dog had -- you see a sarcoma. You can see it in the CT scan. You can see it with caliper measurement. The first dose that we've given was 3.5 mg per meter square, which is the lowest dose we consider. By protocol, we could only give 4 injections once a week. So after 4 weeks, you could see that the tumor had shrunk, was still present but was much smaller, but by protocol, we could continue treatment, which actually we would have liked to do. So we had to wait. And several months later, actually, the tumor grew back and grew very large. You can see a diameter of 15 centimeters. This time, we could give a higher dose, 10 milligrams per meter square, and again, with only 4 injections, you see how the tumor was shrinking and how also the CT scan shows that a big portion of this mass had disappeared. So this and other data suggested that we were observing potent activity with extremely tolerated performance, and now this product is moving towards clinical trials in humans. And last topic, last but not least, that I want to mention is a wonderful collaboration with colleagues at University Hospital in Münster. Professor Michael Schäfers and Professor Philipp Backhaus, that I would like to honor with this slide. I will show 5 slides, which are the fruit of their research. The data also coming out in the literature with Francesca Migliorini and Tony Georgiev, as first authors and Sebastian Oehler and Samuele Cazzamalli, senior authors. The target is ACP3. So what is the story? The story is that we can do better than PSMA in the field of radiopharmaceuticals for prostate cancer. It's a huge field. I show here 3 products, which are on the market, 2 for imaging and 1 for therapy. Illuccix is for imaging with Gallium-68. Pylarify is for imaging with Fluorine-18, and they sold last year, respectively, USD 500 million and USD 1 billion-plus. So together, USD 1.5 billion, more than USD 1.5 billion. The therapy product, Pluvicto, has Lutetium 177 as a radionuclide and it sold last year more than USD 1.5 billion. So together, the market of PSMA pharmaceuticals in profit cancer is more than USD 3 billion. However, the target has liabilities because you can see that PSMA ligands also go to salivary glands, they go to lacrimal glands. They go to the kidney and this undesired uptake in normal organs precludes a suitable dose escalation. So the dose of radioactivity, which is given is suboptimal. You see that patients who receive the Lutetium product, they benefit because time to progression gets longer, but eventually after 18 to 20 months, basically all patients progress. So our proposition was to do better than PSMA also because we would spare normal organs. We have chosen to go for a different target, which is called ACP3, acidic phosphatase III, and you see a comparison with PSMA by immunohistochemistry. So what you see here are tissue sections stained. If the target is present, you see it in brown. And let me focus, for example, on kidney. You see that no surprise that the PSMA pharmaceuticals go to kidney because there is the target, the PSMA target in the kidney. You see how clean ACP3 is in normal organs. If we look at tumors, and these are serial sections from the same patient, always pairs. You see that for some patients, both PSMA and ACP3 are both good. You see a lot of brown staining. But for example, in this patient, there is a lot of ACP3, but there is not a lot of PSMA. And this is quite a frequent situation. So at least based on immunohistochemisty, we expected to do better. Thanks to Dell technology, we discovered and patented very potent ACP3-targeting agents. And of course, when we use nuclear medicine, we can choose to use, for example, gamma emitters or beta plus emitters for imaging that would be PET or SPECT, but we can also choose to use electron or alpha particles for therapy, and respectively, the payloads would be Lutetium 177 or Actinium 225. So different radionuclides for different indications. Let's start with imaging. I'll show you a few examples of metastatic cancer and also patients at early biochemical recurrence, and you will see the benefit that the colleagues in could show for this type of patients. This is a first patient. All examples will show really sequential imaging with PSMA and ACP3, so you can really compare the 2 situations well. This is a patient who had unfortunately very extensive metastatic disease. So you see the bone metastasis like all these black dots. They're very easily visible with ACP3. At 1 hour, the kidneys, you can barely see them, okay? So it's extremely clean background. And with PSMA, I would argue that the uptake in the tumor is and the liabilities in the organs in the normal organs are clearly visible. Another patient was originally planned for radiation therapy. They thought of the solitary lesion in the thorax. You see the accumulation of the PSMA ligand in normal organs, which is undesired. Actually, with ACP3, we discovered that actually there are more lesions you can easily see for very strongly absorbing lesions and the background is much cleaner. In the early biochemical recurrence, this is an interesting case. A patient who was treated for the primary tumor in the prostate still had prostate, the PSA levels went up. If you do a PSMA scan, you see the normal organs, but you don't see anything strange in the prostate. With ACP3, a recurrence was clearly visible, which immediately changed the management of the patient. This was a patient with prostatectomy, so had the surgical removal of the prostate. And then the PSA levels after sometimes were rising again. And by PSMA, you couldn't really tell anything strange happening. But with ACP3, we immediately see this small but very intense uptake in the pelvis and in the transactional scan, this yellow spot confirmed this is a bone metastasis. And when irradiated, the PSA levels dropped again confirming that we could reveal a bone metastasis, which again changed the management of the patient by simply knowing where the tumor was growing back. And maybe a last case in which you see a single osteo-metastasis coming back. So this is an extremely intense uptake. You see with PSMA, SUV of 105 is almost a record. If you have SUV, so standardized uptake value, more than 10, usually, there is a therapeutic benefit. But you see that there is also an uptake in normal organs that would receive radiation in a therapy setting. Lacrimal glands, salivary glands, liver, kidney. You see the ACP3, the uptake is now 210 and this is a record high with an extremely clean background. So we think we have a very good molecule and we are in active discussion for how to best develop this product alone or in partnership. And with this, I hand over to our Chief Financial Officer, Laura Baldi, who will discuss the last 2 slides with the financial review for the full year 2024.

Thank you, Dario. So the first slide is an overview on financial the full year 2024. The Philogen Group closed the full year in a very good shape. Strong increase in revenues, which came at EUR 77.5 million, so 3x more compared to the previous year and driven mainly by revenues on contract of third parties. The value of that type of contract is EUR 74 million and the remaining part is related to other income. We remember, remind that for the moment, the group doesn't have a stable stream of revenues since it doesn't have a product on the market. But it records on the income statement, the amount of upfront payments, milestone and revenues from services rendered based on contract in place. Before we move on the operating expenditure, this line is still under control, a well balance sheet considering the substantial progress of the key ongoing clinical trial. OpEx stood at EUR 36 million, plus 20% compared to the previous year. And costs are mainly related to cost of goods, preclinical and clinical activities, personnel cost and other operating cost. Number shows that there is a 50-50 amount of personnel cost, it's more or less half part of the OpEx and the remaining part is the core business activities. So consequently, the EBITDA and EBIT are well above the breakeven. We closed the year with an EBITDA over EUR 40 million. And the group closed with a record net profit of EUR 45 million, benefited from a positive tax impact linked to previous losses forwarded. Also, the net financial position is very good. Liquidity is over EUR 110 million. No bank loan, so the net financial position is impacted only by notional lease liabilities. So we have a very ample cash position. And in the second slide, we show in a bridge, in a graph, the cash burn. So the cash and cash equivalents at the beginning of the year was EUR 75.3 million. We increased this cash with more or less the same amount, EUR 72.1 million cash in from proceeds. The operating expenditure is EUR 33.5 million, more or less EUR 3 million per month, so very controlled spending. EUR 3.2 million in CapEx. We just leave the line of buyback to remember that we have started again our buyback program. But in December, the amount was not significant. And we had also in the year a positive contribution on the financial items, so EUR 2.9 million. And we closed the year with a cash and cash equivalent of EUR 113.7 million. The debt position, as I said, we -- the group has no bank loan. So the difference is only related EUR 11.9 million, EUR 12 million are only related to the notional lease liabilities, so it's an accounting representation. And we want to highlight that we have also more than EUR 10 million of tax credit that we hope in the future could help to contribute to our cash burn. So this is just in our financial of 2024. And I thank you and over to our Chief Executive Officer, Dario Neri.

Thanks a lot, Laura. And again, the last slide is only a summary. You have seen that the program with Nidlegy is really on track, but the non-melanoma skin cancer data, I would say, are even nicer. And they continue to surprise us every month. So we are very fond both of the potential melanoma and non-melanoma skin cancer. I think we have delivered everything we had promised in terms of completing the sarcoma trials in the expected time lines. We have gone faster than planned in glioblastoma. 2025 would be a very important year for us because there will be a readout in a number of trials with registration potential. You have seen for FAP, so this is the Philochem part of the pipeline, good progress with radioactivity, both for imaging and for therapy but also at the level of nonreactive drug conjugates. And while we have many activities, more than the ones that you have seen, I really would like to single out the ACP3 program because this has the potential to do better than PSMA, which is an established target in the field of radiopharmaceuticals. And we are working full speed to make sure that this reaches patients as soon as possible. And with this, I hand over again to Emanuele. I think the recorded part of the presentation finishes now. If there are discussions, we will be delighted to [indiscernible].

Exactly. We open the stage for discussions and I see Rajan. Please go ahead.

So 1 question on OncoFAP, so I know the -- as you said the current payload is MMAE. Just wondering if it's possible with the technology to use alternative payloads or if there's any kind of issues with the linker that we should be mindful of there? And then I don't know, I had a quick 1 on the financials, but maybe you want to take the first one first, and then I'll follow up.

With pleasure. Actually, I've only shown a small portion of a lot of work that we have done with OncoFAP targeted delivery. We have published several linkers for the delivery of monomethyl study in MMAE. And GlyPro was the winner. And this was not only based on a theoretical consideration. This happens to be the substrate of FAP, but also we really ran different linkers, including the conventional Val-Cit linker 1 against the other. We can get good therapy also with the Val-Cit linker, but the GlyPro linker is better. We have other classes of payloads which are not yet disclosed, but we could get curative results also for those payloads, at least the irinotecan analogs. These are described in the literature by now, but we have also immunomodulators, which are not yet out, but for which we have good results, and they will be disclosed in good time. So really, the OncoFAP platform is a platform which is well validated at the level of nuclear medicine, and it enjoys the benefit of having a companion diagnostics so that you could select patients and then give the therapeutic. So a lot of work and you can imagine that we are now very fond of this first step of testing for clinical activity in animal patients. So dogs with spontaneous tumors that have failed all therapy, including chemotherapy. So when we see activity in this setting, not only do we provide the benefit to the dogs, the owner, but also we have a very strong rationale to move to the clinic with clinical trials. I'll pause here. I don't know if you have follow-on questions of scientific nature before going to the numbers.

Can you still hear me?

Yes.

Okay, perfect. Yes. Just on the numbers, Laura, I guess, kind of conscious as you mentioned that there's not a consistent revenue line. So it would just be helpful to get some context about how you're thinking about revenues evolving into '25. Do you expect growth? And then similarly on OpEx, just thinking about, particularly on the R&D side of things, given that potentially some of the larger trials could be rolling off this year. And then it's kind of the earlier-stage pipeline that's coming through. How should we think about those 2 pieces?

I'm also happy to take at least part of the question because I think the question is a pertinent one says, if we are so ambitious about clinical programs, will the spending explode. There has been a modest increase in spending, which is justified if you think how many patients we study every year. However, I think that this is one of the virtues of the company. There are small and medium-sized enterprises that contract out everything and then clinical trials get expensive. I think when you tend to manage trials within the company like we do, then clinical spending is much more reasonable. And I give you a few numbers. So a typical cancer patient in a company-sponsored trial in Europe will cost you around EUR 30,000. In the United States, maybe anything between $50,000 and maybe $120,000 depending on the complexity of the trial. So if you take to an extreme, 100 patients studied in Europe in 1 year, they would be something like EUR 3 million direct clinical costs, and this number may grow a little bit if you do it in the United States. At the same time, while we are starting new trials, we are finishing all trials like the Nidlegy trials. And this is the reason why we don't really foresee an explosion of costs, again, as long as we are able to run these companies largely with operational capabilities within the company. I don't know if I've answered your question, Rajan.

Yes. No, that's very clear.

It's Riccardo Romiati.

Two questions. First of all, finally, we have seen a couple of slides stating very -- in a very easy way and very clear how could be the market potential on the 2 -- well, let's say, on the Nidlegy and on the other one. It's very nice, but can you give an idea of the percentage of penetration that you suggest you can have in this market? Because if you get 100% patient, okay, it's a champagne problem, but I do think that there will be someone else that is, in any case, maintaining the position. So what is -- what do you think could be for a blockbuster medical treatment as it looks like being the Nidlegy fair penetration -- percentage penetration on the market?

Well, it's very difficult to estimate this in advance but I can give you some guidance. First of all, we are learning about the acceptance of the group from the early access programs. These programs are managed by our partners, Sun Pharma and they are already operational. They are not remunerated in Germany. They are remunerated in France. So this is a question that you would have to ask Sun Pharma, but we are very pleased that the program started according to plan. We are learning about the appetite for the drug, and we are certainly happy to provide the drug before the marketing authorization. Now let me be precise on how many patients and what type of penetrants do we need for reaching blockbuster status. So if the pricing is confirmed at around USD 100,000 per patient, you reach blockbuster status if you can treat 10,000 patients per year. And this is basically the mathematics, $100,000 times 10,000 patients. So the incidence of the disease suggests that even if a portion of those patients were really treated, the economic benefit would be the 1 that I've mentioned. So unfortunately, I cannot estimate whether the market penetration will be 10% or 90%. This, we will learn experimentally. I can tell you that in oncology, anything has happened. And I give you the 2 extremes. Gleevec was a Novartis drug that, to my knowledge, development stopped twice because analysts thought that it would sell at more than USD 50 million per year. It ended up selling more than USD 2 billion per year. And the difference between the estimates and the real market data where because the -- the drug was so good that the market penetration was close to 100%. And second, the drug was effective over a long period of time, so patients would stay several years on this drug before shifting to something else. So it's extremely difficult even for very large and successful companies to make a careful estimate of market penetration. But what I want to say, even with a fairly small market penetration, the product retains blockbuster potential. And we will know soon. One step at the time. First, we have to see if we win as we hope the marketing authorization. And then on 3 months, by 3 months, we can see how well we do in the market.

Second thing that -- of which I've already spoke about in this recent days. And can you clarify 1 point on your recent press release regarding the numbers, the full year numbers, where there is a small part where you mentioned that the Board of Directors could propose to the next general meeting the authorization to rise up to 20% of the capital. So if you can clarify this point in a very precise way, we would appreciate.

No, with pleasure. I mean, this is an option which the company has always had ever since the first day of the IPO. So the company has the freedom to raise cash if and when the Board feels that this is the good thing for the company. As you know, many biotech companies treat follow-on offerings almost as a bankomat, going for cash when they need it. If you look back, we have now been a listed company for 4 years, and we have never gone back to the market for a follow-on offering. So we like to have the option to do it in the future, as in the past. Honestly, we have not done it in the past. Based on the numbers and the signs that you have seen now, I would say there is no need to do it. But the company should always have the option to do it, and that's what has been authorized now. I don't know if Laura wants to expand to be more precise, but this is an option that we have, and we always will want to have if the company works well. We obviously don't need it.

And Dario, it's perfect. It was part of our bylaw at the time of the IPO, so now we just renew it because it was expired, but the reason is the ones you have explained. It's an option that the Board have and can use in case some opportunities will come. But it's an option. It's a common provision in all listed companies, in all listed companies. Our consultant, legal consultants suggest to have. And it's also part of the bylaw, not only a decision of the Board.

Permit me, and then we close. Permit me that it's not something that is not purview for every listed company, first. And second, I understand, Dario, when you said that it's something that was written at the time of the IPO. And in my opinion, at that time was needed because correctly, biotech company could have or would have the need to raise money for scientific and for their purpose. But as correctly today, we are in a very completely different situation. So due to the fact that the liquidity situation on the market is not so clear, I would have thought something different to put something different on the press release.

I understand. Really, the company wants to have full freedom to react based on conditions, and I give you an example. I think you have seen a number of products in our presentation that I think are performing very well and could be very attractive for deals. If you look at the field of radiopharmaceuticals for therapy, for example, recent deals have been worth anything between USD 100 million to more than USD 2 billion. So you could say, I can make a deal. I finance the activity of the company for the next 40 years. It's also true that you open champagne once the deal is signed, if all the conditions are right. It can happen. It has happened to us in the past that we had opportunities to sign deals but the conditions were not right. And so it's very important for a biotech company that is always have the opportunity to develop the product internally if the company feels that this is the right thing to do. If necessary, as we have shown for Nidlegy, and for Fibromun, all the way until completion of Phase III. But of course, we think that there are different opportunities for different products. At this moment in time, I don't think that it's likely that we would make a raise because the company is doing well. But we certainly always want to have all the options available, and that's the meaning of the approvals at regular time intervals. Let me see. Isacco, I think also wanted...

Hope you can hear me. Two questions on my side. The first one is on non-melanoma trials. You mentioned these 3 registrational trials. Can you give us a bit more color on the timing we should somehow think about for the recruitment phase and then also if a readout is faster or slower compared to melanoma? And then I will make the second question later on.

It's a good question. It's a question for which we would like to know the answer ourselves because this will only emerge from the dialogue with regulatory authorities. We see 2 types of patients and they will have to be handled differently. And we are in constant dialogue with regulatory authorities. If you look at 1 situation, they will need a high-risk locally advanced BCC in non-melanoma and SCC patients. These are patients who typically would have failed alternatives. They would face disfiguring surgery and they want to receive Nidlegy. We have asked for scientific advice both from EMA and FDA. We have received scientific advice from both authorities, and both authorities have been extremely clear that in this high-risk setting, the straightforward avenue of development is in third-line for BCC and in second-line for SCC. What does it mean? It means that the trials that are starting now for BCC in Europe and in the United States are in patients who no longer benefit or maybe have never benefited from hedgehog inhibitors and PD-1 blockers, whereas we are in second-line for squamous cell carcinoma, which means patients who have not benefited from PD-1 blockers. Now I've given the numbers. I have not given time lines. So what does it mean? It means that 92 patients are the number of patients that we have to study in these trials. We can only say how long did it take us, for example, to recruit these patients. In the Duncan trial, that was between 1 and 2 years. But of course, each trial is different and we will learn as we go. The other part of the question is how will authorities react. And these are open-label trials in which you record results on the fly and you don't have to wait for an unblinding. So these are trials on which we can constantly go to the authorities and especially if and when Nidlegy is approved for melanoma, then it's easier to go to the authorities with the new data and see if the new data set is sufficient. And I want to give you some numbers. If you sum the number of patients in Duncan, 94, plus the number of patients in Intrinsic, 70, plus the more than 200 patients that we will study with the new trials, we will have a substantially higher number of patients in non-melanoma skin cancer than those that were required for the registration of Erivedge, Odomzo, and Libtayo. So it's many words only to tell you that I think that recruitment can be managed because we managed it in the past. And also, we have the opportunity to have a constant dialogue with authority. Now where is the difficulty? The difficulty is really whether you only go for the extremely high-risk patients with very extensive disease or you also care for those patients with smaller lesions, where, however, the impact of surgery can be terrible. And this is, again, a very fine line because the high-risk patients, maybe, I don't know, 0.8%, 1% of the total cases, but you go to the patients, like I showed in the slide. They can easily be more than 5% of the total population of BCC patients. So again, I apologize many words because we don't know the answer. But the dialogue both with the EMA and FDA is very good, and it continues at regular intervals.

Got it, Dario. Second question is on the small molecule, say, side of the business, considering your growing excitement on OncoACP-3, very high-level one. What's the strategy for this? You go alone looking for a partner. What's the plan?

It's a very good question. And I have to say the field of radiopharmaceuticals is a booming field, and it requires very specific supply chain provisions because it's not a nonradioactive drug that you can store and maybe you can distribute later. If you think for imaging, you need to label and give the product to the patients within a couple of hours. And this requires huge complex logistic procedures. You typically do the radiolabeling at night. You fly a drug with helicopter and it's given to the patient in the early morning. And for therapy, the logistics are less complicated because the half-life of lutetium is about 1 week. But you still have to make central labeling, ship the radioactive product to different sites and then use it in the clinic. So many words only to say that we think that ACP3 is a perfect product for partnership with companies that have established supply chain and expertise in the field, if the economics are appropriate. You have seen that the field has multi-blockbuster potential. And then I think the short answer is if we are able to sign a good deal with a very strong partner, I think this could be a very good strategy and owner for the product. But if this doesn't happen, I think we have the skills and the resources to continue the development. But I would say the preferred strategy would be a good partnering and development agreement.

Thank you, all. We thank you also for your patience. We have run 3 minutes over time. We remain, of course, at your disposal in case you have any questions or you want to have one-to-one meetings. If you have something, please send us a message to our e-mail. You have it. So we remain at your disposal and I hope you enjoyed the presentation.

Thank you. Bye-bye.

Bye-bye.

Thank you.