A new interim readout from OPTIMIZE-1 has been published. New numbers from 57 evaluable patients are available. The objective response rate (ORR) and disease control rate (DCR) are slightly lower than in the first interim readout (n=23) with an ORR 44% vs 52% and a of DCR 77% vs 90%. However, many patients are on the trial for only a short period and the numbers might improve with a longer treatment period. In fact,  the ORR of the first 23 patients hat increased to 57% since January. The median duration of the responses was 8.7 months, which is also a very strong result (versus 5.9 months with FOLFIRINOX alone), with deepening responses being observed (which is unusual for chemotherapy alone). The interim readout therefore reinforces our conclusion from the first readout that the study likely will be successful, which should enable Alligator to continue with a pivotal phase III trial. Finding a partner who can fund this is imperative.

The operating costs were SEK82m in Q2, up from SEK73-SEK74m in Q4-Q1. The cash flow before working capital changes was around SEK-60m (essentially the same as in Q1). This, in our opinion, is a very high burn rate in relation to the cash position of SEK160m (an additional SEK20m can be gained from TO6) unless Alligator can out-license mitazalimab before or at the full readout of OPTIMIZE-1 in Q1 2024; however, a partner would probably prefer to see the full readout.

Our new Base Case of SEK2.3 (SEK3.3) assumes Alligator finds a partner in mid-2024 but needs to raise another SEK70m as bridge financing, leading to some additional dilution.