Ascelia Pharma replaces heavy metals in MRI scans for liver cancer patients

Examination of the liver using magnetic resonance imaging (MRI) and a contrast agent is used to detect and localize secondary tumors or liver metastases. The contrast agent facilitates early diagnosis and assessment of the tumor and provides a better basis for deciding on and planning future treatment.
Today's contrast agents based on the heavy metal gadolinium have been linked to nephrogenic systemic fibrosis in patients with severely impaired renal function. Regulatory authorities have therefore advised against, or warned against, the use of these contrast agents in patients with impaired renal function as well as in patients with acute kidney injury.
These patients could instead receive Mangoral as an alternative to, as is currently the case, receiving MRI without contrast media. The problem with MRI without contrast media is that it impairs the ability to detect liver metastases and thus the chances of survival. This patient group with liver metastases and impaired kidney function has been estimated to be approximately 300 patients annually in the major markets of Europe, the USA and Japan.
There is nothing today FDA- or EMA-approved non-gadolinium-based MRI contrast agent on the market, meaning there are no products that compete with the properties of Ascelia Pharmas candidate Mangoral. Mangoral is based on the substance manganese, which is a natural trace element in the body, and which has demonstrated good contrast properties and a very favorable side effect profile in early clinical studies.

Market potential and the questioning of current contrast agents

The market for the patient group with liver metastases and impaired kidney function is, according to Ascelia Pharma's calculations, worth up to USD 500 million. Studies show that as many as 9 out of 10 cancer patients die within 5 years if cancer cells that migrate or metastasize to the liver are not detected and treated. However, if these can be identified and removed, for example through surgery, the chance of survival increases to 50 percent.
Given the fact that the use of contrast agents containing gadolinium has begun to be questioned in recent years, Ascelia Pharma's Mangoral may eventually prove to have the potential to become a first-line choice even for patients who do not have impaired renal function. Such an increase in the patient base would mean a significantly larger market for Mangoral.

The main candidate Mangoral

Mangoral is the first contrast agent in the world to receive orphan drug status (Orphan Drug Designation) by the American Food and Drug Administration (FDA), which, among other things, provides seven years of market exclusivity upon market approval.
The upcoming pivotal Phase III study will enroll up to 200 patients and aims to demonstrate the safety and efficacy of Mangoral in improving the visualization, detection and localization of liver metastases. The study will compare Mangoral with non-contrast MRI, which is the current standard of care for the target population with renal impairment.

Strong data from previous clinical studies

Six Phase I and Phase II clinical studies have been completed with Mangoral, which have shown that the candidate has a good side effect profile. The product candidate is considered safe and the studies have demonstrated Mangoral's potential as an effective liver-specific contrast agent as an alternative to gadolinium in MRI examinations.
Based on these results, Ascelia has decided to continue clinical development and has therefore established a development program for Mangoral in consultation with the FDA. The plans consist of a registration-based Phase III study of the drug's efficacy and safety, as well as two smaller complementary studies.
The commercialization of Mangoral will take place in-house or in collaboration with suitable partners.

Oncoral – a well-known chemotherapy substance in tablet form

Ascelia Pharma's second product candidate Oncoral is the well-known chemotherapy substance irinotecan in tablet form, which is being developed for the treatment of the orphan drug indication gastric cancer. Oncoral has been evaluated in a phase I study with positive results and is now ready for phase II with the long-term aim of allowing patients to receive parts of their cancer treatment at home.
Chemotherapy drugs taken orally have several potential advantages over those given intravenously, such as being easier to take, requiring fewer doctor visits and/or hospital stays, and potentially causing fewer side effects.
The intravenously administered chemotherapy drug irinotecan is often used in combination with other chemotherapy drugs and is approved in the US and EU for the treatment of metastatic colorectal cancer.
Oncoral is intended as a patient-friendly orally administered drug for the treatment of gastric cancer in combination with other cancer treatments. The candidate also has potential in additional cancer indications, but the company has not yet decided whether or which of these will be selected for clinical development. For the first indication, gastric cancer, the company intends to develop the candidate through Phase II and then seek partnerships.

Key Opinion Leaders and payer representatives contacted

Ahead of the upcoming commercialization of Mangoral, Ascelia Pharma has conducted several interviews with healthcare payers in both the US and Europe as well as with radiologists and oncologists. The overall response from these interviews has been very positive as Mangoral fills a very clear medical need for the target group of patients who cannot take today's gadolinium-based contrast agents.

Known mechanism of action and shorter development cycle

Ascelia Pharma is now entering the main list in the late development phase with a clear business model where, instead of working with completely new candidates and new research, the mechanism of action is known, which generally means a lower development risk.
In addition, the phase III study with Mangoral appears to be relatively simple and rapid to conduct, given the fact that results are compared on the same patient by performing an MRI with and without Mangoral. The study requires fewer patients compared to typical phase III studies in oncology and the follow-up time is only a few days, compared to months or years for a typical oncology phase III study.
For orphan drugs, the time to approval is generally shorter than for other drugs and the proportion of orphan drugs that are approved is also higher.

Experienced team behind the company

What further speaks in the company's favor is its strong team with CEO Magnus Corfitzen at the helm. Corfitzen has previously been Investment Director at, among other things, Sunstone Capital A/S and Investment Director at Growth Fund.
CMO Carl Bjartmar has held leading positions at large pharmaceutical companies such as Lundbeck, Sanofi and GenzymeBjartmar most recently came from a position as CMO for the Swedish biotechnology company Wilson Therapeutics which was acquired last year by American Alexion Pharmaceuticals for 6,5 billion SEK. He possibly hopes to repeat that journey in Ascelia Pharma.
Otherwise, the company has a strong ownership structure and the main financier Sunstone Life Science Ventures Fund II K/S is a long-term major shareholder who has been involved for over a decade. Sunstone owns approximately 28 percent of the shares in the company. Chairman of the Board Peter Benson, from Sunstone Capital, is also chairman of Alligator Bioscience.

IPO of SEK 200 million takes Mangoral all the way to sale

Ascelia Pharma's SEK 200 million IPO will finance the planned Phase III study for Mangoral, as well as the application for market approval and commercial preparations. Mangoral will thus be financed until sales start, which is estimated to occur in 2022. A smaller portion of the net proceeds will also be used for Phase II preparations for Oncoral.
Ascelia Pharma intends to use the net proceeds from the IPO in the approximate percentages and in the order of priority set out below.

• 80 percent; Completion of the pivotal phase III clinical study for Mangoral and application for market approval in the US and EU/EEA.
• 10–20 percent; Commercialization preparations for Mangoral.
• 5–10 percent; Preparations for Oncoral's phase II study.

The costs for the implementation of the clinical development program for Mangoral, registration for market approval in the US and EU/EEA and preparations for commercialization are estimated to amount to approximately SEK 170-180 million over the next three years based on the company's long-term strategy and current conditions. In addition, the costs for the preparation of Oncoral's Phase II study are expected to amount to SEK 5-10 million over the same period.
To secure financing for the continued clinical development of Mangoral and other operational activities, and to finance the estimated working capital deficit, the company has decided to carry out this new share issue in connection with the listing of its shares on Nasdaq Stockholm.
If the offering is fully subscribed and the over-allotment option is not exercised, the net proceeds are estimated to amount to approximately SEK 185 million. If the Over-allotment Option is exercised in full, the net proceeds are estimated to amount to approximately SEK 212 million.

[divider]THE OFFER IN SUMMARY[/divider]

Registration for the general public in Sweden and Denmark can be done via Avanza's internet service (www.avanza.se) and Nordnet's internet service (www.nordnet.se and www.nordnet.dk).
Institutional/qualified investors contact Vator Securities.
[divider]DOCUMENTS & INFO[/divider]

Information in English and Danish related to the IPO:
Download Prospectus
Ascelia Pharma prospectus 20 Feb 2019
Ascelia Pharma Danish summary of Prospectus
Press release
190220 – Press Release IPO (ENG)
[divider]OTHER[/divider]

REMAINING INVESTOR MEETINGS

Stockholm – Monday, February 25 at 17:30 PM
Stockholm – Thursday, February 28 at 17:30 PM
Stockholm – Monday, March 4 at 17:30 PM
Malmö – Tuesday, February 26 at 11:30
Gothenburg – Wednesday 27 February at 17:00 PM

MEDIA

Watch CEO Magnus Corfitzen being interviewed by DI.TV (21 Feb 2019)
Mangoral is effectively absorbed by healthy liver cells and then excreted via bile:

CEO presents at Vator Securities Unicorn Summit (10 Oct 2018):

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