2025-01-31
We have interviewed Stian Kildal, CEO of OncoZenge, who talks about the company's recent successes and investment agreement with Yangtian Pharma. The capital will be used to start the phase 3 study of BupiZenge™ and to strengthen OncoZenge's position in the global market.
You recently signed an investment agreement of 30.2 million SEK with Sichuan Yangtian Bio-Pharmaceutical Co. What will this mean for you?
OncoZenge has a stated partnership strategy and we recently announced our intention to collaborate with Molteni Farmaceutici for the commercialization of BupiZenge™ in Europe. The most important and value-adding thing for the company now is to start the Phase 3 project, so that we have a confirmed and clear timeline for when the product can reach patients and the royalty revenues it brings.
With Yangtian Pharma as a new owner, we strengthen our ownership with an industry player who shares our vision and sees significant commercial upside for OncoZenge globally. In addition, they are prepared to invest with us to realize this. In today's financial market, securing financing for our Phase 3 project on favorable terms is good for our current owners, meets Molteni's expectations of us and is extremely value-adding as we move through operational milestones towards market approval.
Would you like to tell us a little about the investor and what made them notice you?
We have been in dialogue with Yangtian Pharma for a few months as part of the business development activities we have been running together with Eurosin Capital in China. During the autumn it became increasingly clear that Yangtian saw great potential in our product, not only in China but globally, and that they therefore wanted to support our journey as a strategic partner rather than just a licensee.
Yangtian is a private, fast-growing pharmaceutical company with three driven founders and entrepreneurs. They have acquired shares in other companies in China and are actively working with M&A to broaden both the portfolio and distribution. Thus, OncoZenge is an important piece of the puzzle in their growth journey. At the heart of it is, of course, a strong belief in the product and the market opportunity. Now the first priority is to enable European approval as a basis for licensing in several regions.
Yangtian also sees great commercial opportunities in China and Asia for the treatment of mouth pain in oral mucositis, but also in dentistry. With their expertise and market knowledge, they are well positioned to help us maximize the commercial potential locally in China. They have also announced that they want to contribute to a plan to reach the US market. They share our vision and see great opportunities to develop the collaboration over time, both in China and in other markets.
The investment agreement is conditional on certain milestones linked to the regulatory process. How confident are you that these will be achieved?
We have regulatory milestones in both Sweden and China that we will now work through. First, an extraordinary general meeting on March 3rd, where OncoZenge's owners will vote on the deal. We already have voting commitments of 34% from our largest owners, including Niclas Holmgren, Linc AB, Andreas Özbek and others.
In China, Yangtian needs to register the agreement as part of their Foreign Direct Investment processes. Given the size of the deal and that it is a clear agreement between two pharmaceutical companies, we assess that this does not pose any particular risks. The process is expected to take a few weeks.
The fact that we are securing funding for the project is of course also very positive for our European partner, Molteni Farmaceutici, who is the recipient of the project and the product. We are now working intensively with Molteni to determine the synopsis and other aspects of our study, so that we can receive final plans and decision-making information from our intended CDMO and CRO. It is not difficult, but it will take a few weeks.
It is very motivating to now go from a stage where we have been conducting business development and evaluating several different scenarios, to having decided on a concrete plan that covers market, project implementers and financing. We look forward to reporting our progress!
How would you assess that the opportunities to move towards the American market have been affected as a result of you securing a strategic investor?
We have noticed a clear shift in sentiment among several of our stakeholders following the announcement of the European partnerships, and now also following the funding announcement. In the short term, this opens up the possibility of confirming licensing for other markets that rely on European approval.
A solid plan for Europe is in turn a prerequisite for us to be able to credibly establish ourselves in the American market. We will return with more information on this.
Would you like to tell us a little more about the upcoming phase 3 study?
The detailed plan for the Phase 3 study is now being set together with Molteni, CDMO and CRO, and we will communicate more about this when it is ready. It is of course in our mutual interest to complete this as soon as possible to enable Yangtian's second investment tranche. Once it is in place, we can complete the application to the authorities, which in turn releases the third investment tranche. All parties have a common goal to keep these lead times as short as possible.
The good news is that Yangtian's investment covers the costs of the project according to the current scope of the study. We have been asked about the cost level of the project and whether it is really correct. The short answer is "yes". We have collected quotations from several CROs. A phase 3 study conducted entirely in Europe would cost around 10 million euros. However, we have chosen to conduct the study with the majority of patients in India and with a few study centers in Europe as a complement. In addition to this providing a significantly more favorable cost picture, patient recruitment is also facilitated, since India has the world's highest prevalence of head and neck cancer. This in turn enables a compressed schedule.
To clarify, we will be using CDMOs and CROs as suppliers, rather than entering into a partner agreement during the development phase. We evaluated this as an option in early 2024, when it would be capital efficient, but concluded that the limited investment from a development partner was not proportionate to the royalties we would need to share with our global commercial potential. Therefore, we have decided to take the full cost of the project, which gives us full control, full rights and maximum upside from future sales.
We will communicate both the formal selections of CDMO and CRO as well as the overall milestones for the project once planning with Molteni is complete.
What news flow can investors expect in 2025?
In addition to the confirmation of the regulatory milestones, we have many project milestones to look forward to, such as the start of studies, etc. In addition, we have a final agreement with Molteni to look forward to. At the same time, we are actively working in parallel with licensing opportunities in several other markets, where the Middle East and parts of APAC are probably the closest in time.
We have previously communicated that we will develop a strategy for the US, and we will work more structured on that issue going forward. There is already interest and proposals, but we need to make decisions on the US as part of an overall plan.
Given that the company is now on its way to becoming a company with an ongoing Phase 3 study, the nomination committee is also actively working on opportunities to complement the board with experiences that can support the company on its continued journey, now that the foundation has been laid for Europe.
It will be an intense and exciting spring and summer!
We thank Stian Kildal for the interview and wish the company all the best in the future.
Disclaimer:
This is an interview that has been done on behalf of the company. Impala Nordic or people behind Impala Nordic owns no shares in the company at the time of the interview.
