FluoGuide A/S (FLUO) Earnings Call Transcript

Hi, and welcome, everyone, to this webcast of FluoGuide Q3 2025 results. We will start off with a brief presentation followed by a Q&A session. [Operator Instructions] Without further ado, I want to hand it over to FluoGuide's CEO, Morten Albrechtsen; and CFO, Ole Larsen. Please go ahead.

Thank you, Christian for the introduction.

Yes. Hello. Ole Larsen, CFO of FluoGuide. I have the privilege to initiate this presentation with the financial highlights and then followed by Morten Albrechtsen, who will come and talk about the operational highlights before the outlook for '26. And then as Christian mentioned, we will open up for questions. We had an EBIT loss of DKK 9 million in Q3. And for the year-to-date, we have reported DKK 29 million in loss, which is as expected. If we look of our equity on September 30, it was negative by DKK 2.4 million, resulting in a solvency ratio negative by 8%. With the proceeds from our capital raise of SEK 104 million with net proceeds of SEK 103 million equivalent to DKK 70 million, the solvency ratio is expected to be in the 70% range by the end of '25 compared to the minus 8%. Also, the cash preparedness we reported on September 30 was just shy of DKK 14 million. But again, we have, on 25th of November, reported cash preparedness amounting to DKK 85.5 million. That -- the difference is the DKK 70 million from the net proceeds from the financing. We have also received the tax credit from the Danish tax authorities. And then, of course, we have had some cost for running the business since October 1 to 25th of November. But with this cash preparedness, we currently have a runway until April '27. And with that, I will hand over the word to Morten.

Thank you, Ole. So as we wrote in our quarterly report here, we think it's been one of the most important quarters in our life since the IPO, and the main reason is the first bullet point here that we have received the feedback from FDA on our plans for high-grade glioma into the U.S. market. And with that, it was very clear and -- the feedback we had, and we discussed both the coming Phase II trials and as well the Phase III trials as well as other things around that needed to be done to obtain an approval. And it was a very, very positive meeting in the sense that it was a clear feedback, and it was well within what we can achieve. Another thing we achieved within the quarter was the agreement with Olympus, one of the leading companies -- medtech companies within endo, what would say, scopes and endoscopes and gastrointestinal diseases. And after the quarter, we had another agreement with a similar important company, with ZEISS. It was microscope vendors, one of the leading microscope vendors in the world. We have the positive result on investigator-initiated trial in meningioma and low-grade glioma. And although it was an investigator-initiated trial, it's a very important result for 2 reasons. One is that the meningioma is very frequent brain tumor disease, and that expanded the market within the brain tumors significantly for us for the 001. Then the other one was because the low-grade glioma is a brain tumor that is hidden behind the blood-brain barrier, and the fact that we were able to light up cancer with the low-grade glioma points not only on that we can help more patients, but it also point, a very important point, both from regulators, but also from the key opinion leaders and neurosurgeons that we can find cancer that would not otherwise be able to find with other methods, for instance, MRI contrast enhancement or the 5-ALA. So this is a really significant finding pointing at our product to be able to be used for more patients and do better for those patients if used for them. Then we have the capital raise, which was important. A couple of things that was important. We always try and raise money with the next -- on the next fundraising in mind. And as a way of derisking it, we have very huge support from institutional investors. We have the current largest institutional investor supporting us. And it was done on favorable conditions, both at low discount, 5%, and also minimal fees for help around the issue to 1% only. Then we have strengthened our organization. We have Donna Haire coming into the management team from the Board. And that is important for us because that is the next big important thing for us is to get it approved. And the other thing was then that Camilla Hartvig Harder came in as a Board with the commercial expertise. So this is, again, pointing on the next phase down the road. So quite a significant quarter in our view. And we also updated our expected outcome for next year. Again, very important one. Most of the key milestones here is clinically. We expect the first patient to be enrolled in our Phase II head and neck -- sorry, aggressive brain cancer trial in second -- first half of next year. We anticipate that we will start recruiting the next 10 low-grade glioma patients in first half next year. We will have the result of the low-grade glioma, and also we will include the interim -- complete the interim enrollment of 15 patient dose finding in head and neck, and then we will have the result from -- interim result for the following Phase I that is investigating dosing and timing for the patient. We also expect an additional partnership next year. We have covered all the different equipment types now and we -- that is relevant out there, but we think there will be one more to come. And I think that will complete the partnership pool we have. Then on photothermal therapy and PDT and PTT, we continue optimizing on the PDT and the chemical destruction of the tumors, and that will be completed during the year and second half of next year. So 5 of them is clinical milestone, 1 is commercial and then one is a preclinical milestone. So quite an interesting outlook for us next year. And with that, Christian, we will hand over to you for discussing the questions that you have gotten in.

Right. Perfect. Thank you so much for the great presentation. We've received a lot of different questions, mainly around high-grade glioma and head and neck cancer. But if we start with high-grade glioma, as you said, you're planning to start enrolling patients in a first pivotal Phase II trial next year. And we had a couple of questions around the structure. Previously, people seem to speculate that maybe you would do a combined Phase II, Phase III, for example. Can you elaborate a little bit more on the current reasoning, which seems to be maybe separate Phase II and Phase III trials?

Yes. I mean, that all comes with doing the 1 trial, a combined Phase II and Phase III trial and then doing 2 separate studies. I mean if you do it as a combined study, it will be quicker. You need more patient and you run more risk. If you do it in 2 trials, take a little longer, you use less patient, but it's much more predictable. And when we went for the FDA, I mean, we very much -- they're normally not saying to us that you have to do a certain kind of thing, but they indicate what they will suggest us to do. And they clearly made the point for us that the 2 trials will be the best to do for us in the risk mitigation setting. And I think one of the things that's important to point out here is that you could also say basically that we're doing 2 Phase II trials to get approval because the Phase III trial, the design of that one is very much like Phase II trials. So it's not a classical drug Phase III trials. It's actually much more in size and cost and time as a Phase II trial for an oncology product. So I think that the feedback is actually quite favorable in the sense that the total package is very, what can I say, reasonable to do, and it's a very low risk for them because we did take 2 trials, need fewer patients, but it takes a little longer time. So that has been kind of what we reach as being the optimal situation for us. And FDA was kind of, we want to say, in line with that.

Understood. And another question we received was around potential accelerated approval. Would it be possible to get an accelerated approval, for example, after running the coming Phase II trial?

Yes. I think that the low-grade glioma result is pointing on a very important feature with our product that it passes the blood-brain barrier and mark cancers behind the blood-brain barrier. And that actually is unique in many different ways. It's unique because it could really help a surgeon to help them with one of the big issues they have, namely that the way they do it today, they have the MRI, the contrast enhancement. They -- and sometimes, it will actually show that there's cancer where there's no cancer and will not show all the cancer that they have behind the blood-brain barrier. And having an image agent like FG001 that actually mark the cancer and not just more tissue is really, really important for every stakeholder in the field, not only the patient. So that is what we will put more focus on the Phase II trials we have coming up here, and that is what very much will -- very likely could lead to an accelerated approval process. So yes, it is very likely. But just to be sure, we will still need one more trial. FDA would like to have 2 independent trials that is showing efficacy. So there will be 2 trials, but there could be an acceleration of the time in between the trials and post trials for approval.

Perfect. And previously, you also contemplated maybe directly incorporating photothermal therapy in these coming trials. Now it seems like that might be 2 separate tracks, so to speak. Can you elaborate a little bit more on how that has developed?

Yes, we can. There's kind of 2 effects of the photothermal therapy. One of them is heat, where it destroy the cancer cell by warming up the tissue and destroying it by heat. The other feature is chemical, photodynamic therapy where it destroy the cancer cells chemically. And when you -- we have investigated the photothermal therapy, the heat, and there, we need a higher dose than we need for guidance surgery. So that is not possible to combine that into the same trial. The photodynamic feature where we're actually killing the cells with the chemical reactions, that may be combined, but we are not yet ready with the optimized dosing and optimization with the laser system. So that's why we have decided to continuing the optimization of the photothermal therapy until we have that feature of effect, optimized as well and then make a decision. But for now, it is not integrated yet the trials.

Got it. And we've also received plenty of questions around potential time lines. I mean, now you've said that the Phase II trial in high-grade glioma will commence H1 next year. But when it comes to both high-grade glioma and head and neck cancer, how should people look at the timing of coming Phase II and III trials in terms of approximately what's the path to market, so to speak?

Yes. The time for the trial will be approximately a year and the time -- that both goes for the Phase II and the Phase III trials. We don't need longer time necessarily for the Phase III trials because there will be more centers and in terms of setup time. And yes, we will need a few more centers for the Phase III, but we actually have set up already half the centers for the Phase II trial. So the time for the 2 trials is approximately a year. And then the accelerated process will potentially impact the timing in between the trials and also after the trial to approval, and that depends on the data. So that gives some kind of idea of what one could expect.

Perfect. And when it comes to photothermal therapy, we've also received a question, when could that, so to speak, enter clinical development?

It depends on which of the 2 effects we will move ahead with because one of the interesting aspect of it is that if we look at, want to say, photodynamic therapy, the chemical destruction of the cancer cell, it actually have a potential going far beyond high-grade glioma. It also goes into the tumors of the brain. So that means low-grade glioma, meningioma, and actually goes even beyond that. So the potential for the photodynamic therapy is much larger than for photothermal therapy. And we would like to have that fully [ elucidated ] before making a decision of which of the 2 effects we go in with because the dose between the 2 and the time of treatment is different for the 2. So answering your question when we go into clinical trials, we need the data. Photodynamic optimization will come here, as we said, during the year. And then we can communicate the plans going forward from that. But it could go in quite quickly with the proof-of-concept trial, having into approval, probably take longer.

Perfect. And then when it comes to the current head and neck trial, we had some questions around, you've delayed the potential readout from Q4 this year to H1 next year. Can you be a little bit more specific around the reasons for the delay? And then also whether we should expect it more in Q1 or Q2?

Yes. I mean what happened, we had 3 patients that were lined up for surgery. Unfortunately, all 3 of them were not fulfilling the inclusion criteria. So that makes a big shift in actually the model for when we expect to complete the trials. The current -- with the current data we have now is April, and that's just in between the 2 of the quarters. So that was why we said H1. It could go faster, it could go slower. So H1 is the best guess we have at the moment.

And one investor also wondered, you mentioned that you've excluded some patients with incomplete data sets. Can you elaborate a little bit more on why not all data was collected there?

Yes. In the trial, just going back to it, there's 2 things with the trial. One thing is that we have included a lot of equipment. So we have 5 different types of equipment included in the trial. That's one aspect of it. The other aspect of it is that we include almost 10 -- approximately 10 regulatory endpoints that could prove benefit of our FG001 for the patient with head and neck cancer in different ways. And for certain of those endpoints, it's not able to be done in patients that have bone involvement in the cancer. So patients with bone involvement has been excluded from the trial. And some of the patients did show post surgery that they actually had bone involvement of the trial -- of the cancer, meaning that, in principle, not all the endpoints could be investigated for those patients. So we decided that we will actually replace them. And so we have full data set for all 15 patients.

Great. And previously, you talked about, after this interim readout, you could theoretically move forward into potential pivotal trials. Is that still the plan? Or do you also plan to see the additional data from that trial that you plan to post in the second half of next year?

Yes. What we try to say and that has not changed is that potentially we can move into a Phase II/III trial, but we may also move into 2 separate trials. And this, again, is coming back to the risk we run between the 2, how well defined we have the endpoints in this trial we are running now and the data coming out of it. It could also be a situation where we consider that we -- just for sake of argument, that we want to investigate another time point or another dose because that will then mean that this trial could support a combined Phase II/III trials, and total time lines will be shortened by that. So there's a different option that is possible for how we run it from here until approval and data will really speak at the end of the day. And also to give you an example, if we have 5 equipment say, and the dose is optimized for all the equipment, if we can get equipment #5 included as well by changing the dose, it may make more sense for us to include 5 more patients proving that, that equipment works as well than stopping the trials, doing new trials and then to get the final equipment. So there are several options that could come of outcome. And really, we have to see the data before we can -- we give a guidance. But still, it's possible both go into a Phase I/II trial and going into 2 separate trials depending on the outcome.

Perfect. And when it comes to your different partnerships, as you described, you have a nicely growing portfolio of different collaborations, especially the one with Intuitive Surgical now. It's already, I think, 1.5 years old, so to speak. And some investors wondered when you will potentially receive any updates on what work has been done and how these collaborations are progressing?

I mean what was the whole idea with this trial we're running in head and neck is that we want to have equipment manufacturers for each type of equipment, so robotic equipment, microscopes, endoscopes and also open-field systems involved in the trial. And then we work with them optimizing the systems in the trials. And then when we have the data, we could determine how that collaboration could look going forward. But what is kind of the key point for all of the equipment manufacturers is the head and neck -- the complex location of the head and neck cancer. Today, only oral head and neck cancer undergo surgery in principle, but more advanced stage cancer and more complex located cancer is not undergoing surgery by default. And that is a market we can open up with the equipment manufacturers in different ways. So one could imagine that we make multiple agreements in head and neck with different positioning of the drug/the equipment. But to conclude and decide on next step, we need the data from the trial, which will also goes for Intuitive.

Perfect. And there is similar question that kind of connects to what you just ended with in terms of these collaborations, they're obviously early stage, but people are obviously speculating they could become more involved, so to speak, down the line. You mentioned, for example, the coming readouts. Is that when you, for example, could negotiate around having some deeper collaborations?