Good afternoon, and welcome to the Arecor Therapeutics PLC investor presentation. Throughout this recorded presentation, investors will be in listen-only mode. Questions are encouraged and can be submitted at any time via the Q&A tab situated on the right-hand corner of your screen. Simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company will review all questions submitted today and publish responses where it is appropriate to do so. Before we begin, I'd like to submit the following poll. I'd now like to hand you over to Sarah Howell, CEO. Good afternoon.
Great. Thank you, Lily. Good afternoon, everybody. Thank you for joining us today. We'll be talking through Arecor's full results for the year ending 31st of December, 2022. I draw your attention to our customary legal notice. Today, it's myself. I've got Sarah Howell, I'm the CEO of Arecor, and I'm joined by Susan Lowther, our CFO. Just by way of summary of Arecor, for those of you joining us for the first time today and for those joining us again, thank you. Just to recap, really. We're very much focused on transforming patient care by enhancing existing therapeutic medicines so that they're safer, more effective, and convenient to use for patients and the end users. We do this by leveraging our innovative and proprietary formulation technology platform, Arestat.
We use this platform to enhance the properties of those existing therapeutic products or medicines, very much focused on improving performance and ultimately patient outcomes and quality of life. As a technology platform company, intellectual property is absolutely key to us, and we have very broad and robust IP protection, both of the Arestat technology platform itself and also of the enhanced versions of therapeutic products that we develop using the technology. We are a clinical stage company. We are in clinical development for our two lead diabetes products. They're both insulin-based products where we're developing much faster acting and more concentrated rapid acting insulins. I'll talk about those in more detail through the presentation today.
We also have a portfolio of what we call specialty hospital products, so this is where we're taking medicines that are used within the hospital setting, often for chronic care or emergency use, where there's only lyophilized powders that require a complex mixing procedure prior to use available today. Here, we're able to use the Arestat technology to develop stable liquid, ready-to-use versions of these products. Again, I'll talk about these in a little bit more detail. Alongside our innovative internal portfolio of products where our strategy there is to develop those closer to market to a higher value inflection point prior to partnering for late phase and commercialization, we also partner with leading pharmaceutical and biotech companies on their proprietary products.
This is where these partners are coming to Arecor, and they're looking for an enhanced or a differentiated version of their own pipeline or already on the market products that they've been unable to achieve themselves. This is revenue generating. Our partners pay Arecor for access to our expertise and Arestat technology platform to develop these enhanced and novel formulations of their products that bring enhanced properties to the table. At the end of those studies, if our partners want to take those novel formulations further forward into development and through to commercialization, they can do so, and that's under a technology licensing model. These tend to be milestone and royalty bearing. Overall, we're very much a commercially focused business.
We have a revenue generating license model, we have existing licenses, again, that I'll talk through in more detail, and obviously the opportunity to convert new licensing from our own proprietary pipeline and also those pre-licensed partnerships with leading pharmaceutical companies. We have a de-risked product development portfolio in that we're taking existing medicines, so that means the safety and effectiveness of these products is already proven, and we're looking to further enhance these. Back in August of last year, we acquired a company called Tetris Pharma, who have a sales and marketing and distribution platform across the U.K. and Europe and also now bring commercial products to our portfolio. Again, I'll talk about that in a little bit more detail. Our vision here and our ambition is essentially to build a significant self-sustaining biopharmaceutical company.
If we just look at the operational highlights for financial year 22, including some post-period events here. We've made very significant progress across our in-house proprietary pipeline. For our diabetes products, we've initiated a second phase I clinical study for AT278, this is very concentrated, very rapid-acting insulin, and we started dosing patients in March of this year. In the final quarter of last year, we were able to report very positive headline results from a phase I clinical study for AT247, and this is our ultra-rapid-acting insulin where we're really targeting an improved insulin for type 1 diabetes when using via an insulin pump. In terms of partnering progress, again, we've made significant progress across this portfolio as well.
We were able to announce earlier this year that our partner Hikma Pharmaceuticals has made the very positive decision to take on full development and commercialization responsibility for a licensed product, AT307. This is a ready-to-use medicine that's been developed by Arecor and subsequently licensed to Hikma, and we look forward to further working with them to bring this product to market. Again, that's under a milestone and royalty-bearing agreement. In terms of our pre-licensed partnerships, these are our collaborations, revenue-generating collaborations with leading pharma and biotech companies. We've added a further 3 collaborations to the portfolio, so we now have 8 that we've entered into since the IPO, and 2 of those are the top 5 global pharmaceutical company, which really shows the strength and the need for the Arestat technology platform.
As I mentioned, intellectual property is critical to us, and we've made great progress across the portfolio. During the period, we've had a further nine patent grants that are protecting both the Arestat technology platform itself and also enhanced therapeutic medicines that we're developing with the platform. That includes important US grants of IP protecting our lead insulin products, AT247 and AT278. As I mentioned, in the period, we acquired Tetris Pharma back in August last year. That was a share-for-share deal there and a GBP 6 million placing as well as part of that acquisition. Susan will talk about that in a little bit more detail later. If we move on really to looking at Arecor's portfolio here and our pipeline of products. If we start with our in-house proprietary products here.
In terms of our lead diabetes products, AT247 and AT278, as I've just mentioned, we've made significant progress across this portfolio. For AT278, that's initiated phase I clinical study, is important to us because it is in the target patient population, primary target patient population for this product being type two diabetics. It'll be a first clinical study for Arecor in the type 2 patient population. It's also comparing AT278 against the two gold standard treatments that are available for that patient population, very much targeting those high insulin users. All being well with recruitment, we've started dosing in March. We'll be looking forward to reporting headline results in quarter four of this year. Our strategy there very much remains unchanged.
We're building clinical and non-clinical data packages which demonstrate the superiority of these products to position these for partnering for late phase and commercialization. With our partners, we'd be looking to take market share within that existing greater than $6 billion market segment. If we move on to our specialty hospital programs here. This is where we're developing ready-to-use and ready-to-administer versions of existing hospital-based products. At the time of our IPO, which was back in June of 2021, some of these proceeds that we raised there was to support the specialty hospital portfolio to support the selection of products and then the application of the Arestat technology to develop these ready-to-use products. I'm happy to be able to report that we've made significant progress across that portfolio since the IPO.
We've been very busy selecting products, implementing them into R&D here, and we've been able to demonstrate that the technology itself is applicable to these products. We've developed a number of ready-to-use formulations of the selected programs, and we've been very busy filing IP as well. We're very much moving that portfolio and certainly the first wave of products within that portfolio towards those partnering value inflection points, and that'll certainly be a focus for us through the last parts of 2023 and moving into 2024. It's important to note here that for these products, we're developing these under what's called a 505(b)(2) regulatory pathway, which means that there'll be limited or no clinical development required for commercialization here, hence the estimated launch dates of 2025 onwards for these programs.
Moving on to our license partners. These are products that are incorporating the Arestat technology which have been licensed to pharmaceutical companies. AT220, we still anticipate will be the first product to come to market incorporating the Arestat technology, and we anticipate this product being launched later this year. This is an important milestone for Arecor, not only because it demonstrates that the technology itself is approvable by the major regulators here, but this is also under a royalty-bearing agreement, and we'll be looking forward to our partners progressing, gaining market share within that existing multi-billion dollar market segment, which of course in return will bring a recurring royalty stream to Arecor, and that's really part of our strategy there for building a growth and a self-sustaining biopharmaceutical company.
For AT292, this is a partnership with Inhibrx, for their product INBRX-101. you know, Inhibrx have made significant progress across this program through the period, and most notably, they've recently announced some very positive interactions with the FDA, that's the U.S. drug regulator there, where they've agreed an accelerated approval pathway for this product.
Inhibrx have publicly announced that they anticipate their next clinical study, which they plan to initiate imminently, within 2023, could be at the pivotal registrational study for this product, which means it would be the last clinical study required prior to filing for approval, hence the estimated 2026 launch that we have within our pipeline here. Finally on Hikma Pharmaceuticals, as I just mentioned on the previous slide, Hikma have made the decision earlier this year to take on that full development commercialization responsibility to AT307, which is a ready-to-use medicine. This will be developed under this 505 regulatory pathway. Depending on now, speed of development by Hikma and also interactions and data requirements from the FDA, we estimate that launch will be in the region of 2025-2026.
Again, this is under a milestone and royalty-bearing agreement with Arecor. On those pre-licensed technology partnerships, this is where we're working on our partners' proprietary products, which are either in development or already on the market as lifecycle management. As I mentioned, we've entered into eight of these since the IPO and will be working there to develop these enhanced formulations and formats of our partners' programs and looking to transition some of these partnerships through to those value-building licenses there, which we'd anticipate again generally following our milestone and royalty-bearing agreements. On the commercialization side and the commercialized products, these are essentially under Tetris Pharma. Well, really the main two reasons for the acquisition of Tetris Pharma was firstly, they had license rights to a product called Ogluo.
This is a ready-to-use glucagon pen. It's an auto-injector, very much like an EpiPen here for diabetes, for treatment of severe hypoglycemia. Severe hypoglycemia is essentially classified as dangerously low blood sugar, which needs to be treated with glucagon to bring that patient back up into a healthy blood glucose range here. We very much believe in this product, and we also really understand this patient population. This is indicated for people with diabetes who are taking insulin, so the same patient population as AT247 and AT278. Now under Arecor will be looking to gain market share within that existing GBP 100 million market segment within our licensed territories, which is the U.K. and Europe.
The second reason and the rationale behind the acquisition of Tetris Pharma is that it provides us with optionality with our own specialty hospital portfolio. These are ready-to-use medicines sold within the hospital setting here. It gives us that opportunity to retain rights to the UK and Europe where it makes sense, and certainly leverage it within negotiations with partners as we're looking to commercialize and partner products within that portfolio. Just really talking around that long-term value here. Partnerships are absolutely critical to Arecor. We do enter into partnerships with major pharmaceutical companies, some of whom you can see named here, others who prefer to remain anonymous at this point.
This really validates the strength and the need of the technology, but also for Arecor and allows us to build the business, allows us to build that future revenue growth as well as we convert some of these partnerships through to value-generating licensing agreements. Overall, across both our internal proprietary portfolio as well as our partner programs and pre-licensed partner programs as well, we have a really strong pipeline of opportunities to drive future growth. On the back of this, we made the decision, and we're really pleased to be able to announce earlier this month the appointment of Manjit Rahelu, who's joined us as Chief Business Officer. Manjit really brings significant experience around deal-making within the pharmaceutical industry, both in and out licensing, and will be very much focused on that partnering and the commercialization of our existing portfolio.
slide went weird. Just talking a little bit more around our diabetes products. I think anybody that's tuned in previously, we talked around diabetes and the pandemic levels essentially, and the crisis essentially for healthcare systems and patients and individuals themselves that's brought with this disease. It's now considered to be around 537 million people living with diabetes, and the cost of treating diabetes and its complications is just shy of $1 trillion worldwide. Really sadly, due to the complications associated with diabetes, it's just under 7 million premature deaths due to the disease annually. Really, Arecor, what we're focused on here is developing improved treatment options, improved insulins that can help people with diabetes better manage their blood glucose and ultimately improve their outcomes and quality of life.
We're focused on a very specific segment of insulin. We're focused on mealtime insulins. The reason for this is that for a person with diabetes who needs insulin to manage their blood glucose, their daily challenge is to try and keep their blood glucose within a healthy target range. They can do this through most of the day and night, but the real challenge becomes around mealtimes. When we eat food, our blood glucose rises very rapidly, and the fact is that current gold standard insulins that are available today are still not fast enough acting. There's still more improvement that can be brought to the table to bring that blood glucose down into the healthy target range fast enough.
At Arecor, we're focused on developing much faster-acting insulins and also more concentrated, very fast-acting insulins to help people with diabetes better manage their blood glucose and ultimately then to better manage their outcomes by staying outside of that hyperglycemia and hypoglycemia, which lead to the severe disease complications associated with diabetes. This market is a current growth market. It's around $6.4 billion currently, and again with a partner, we'd be looking to gain market share in that market segment by bringing improved and superior insulins to patients. Starting first with AT278, I thought it'd be good to cover why. Why are we developing a very concentrated, rapid-acting insulin? The need here is very much that there's a growing number of people with diabetes, particularly type two diabetics, who require high daily doses of insulin to control their blood glucose.
There's been primary research conducted in the U.S. here, which is now showing that around 35% of type two diabetics in the United States now require more than 100 units of insulin a day to manage their blood glucose. Interestingly, increase in type one diabetics also needing greater than 100 units a day. It's around 18%. This is really going hand in hand for, certainly for type two diabetes with the obesity pandemic as well. It's also estimated by 2030 that over 50% of U.S. adults will be considered to be obese. That really drives as your BMI goes up, you tend to need more insulin to manage your blood glucose. For type one diabetics, it's a combination of insulin resistance as their disease progresses and also, increasing number of high BMI type one diabetics.
Currently, there are two treatment options available to these high insulin users. They can either use a current gold standard, rapid or ultra-rapid acting insulins. These are insulins from Novo Nordisk, Eli Lilly, Sanofi, Aventis. However, these are only available at lower concentration, so 100 units per mL, and one insulin from Eli Lilly at 200 units per mL. This means to get their high insulin doses on board, it requires high injection volumes, which can be painful and multiple injections multiple times a day. They can select the only highly concentrated insulin that's available. It's a product from Eli Lilly.
It's called Humulin R U-500, so it's 500 units per mL, the same concentration as AT278, but it has an intermediate acting profile there, which means that the patient gets the benefit of lower injection volumes and fewer injections a day. There's a compromise around blood glucose control, particularly around meal times. We know that you need those faster-acting insulins to control your blood glucose around meal times and improve your outcomes. The secondary need and really an opportunity to really disrupt the market is that we're very much seeing for insulin pump users, a drive towards miniaturization of these insulin pumps. They're much smaller body-worn pumps and a drive towards longer wear times, so seven-day use. Actually the first seven-day infusion set has also been approved from Medtronic.
If we want to have much smaller pumps and for the patient to be able to wear them for longer, it means that you need to get more insulin on board in a smaller injection volume. We can't compromise here on blood glucose control, so these need to be very highly concentrated and very rapid-acting insulins, which is the profile of AT278. The challenge here, essentially, that we've been able to overcome is that as you concentrate insulin up, it slows down its time action profile, i.e. it becomes slower acting, and we know that we need those faster-acting insulins for that improved blood glucose control. Arecor remains the only company that we're aware of to date that's been able to meet this challenge and overcome this challenge and develop a very highly concentrated, rapid-acting insulin.
We have a market leadership position with AT278. Just to talk a little bit more as well about the market there. As I was talking about, there's an increasing number of people with diabetes, particularly type twos, that are requiring these high daily volumes or daily units of insulin to control their blood glucose. We can also see this through the prescribing of insulin. Again, this data is available for the US here, and you can see that in the United States, the number of prescriptions for the concentrated insulin, U-500, this is Eli Lilly's Humulin R U-500. It's got a CAGR of just over 8%. U-200, which is a rapid-acting insulin, 200 units per mL, also Eli Lilly product, has a growth rate of over 10% here.
We can see that patients are requiring these higher injection volumes and moving towards those higher insulins, although there are some of those compromises that we spoke about here. This market, the concentrated insulin market, is worth up to around $1 billion today. Again, we'd be looking to take market share with a partner for AT278 with an insulin that's best of both worlds. Essentially lower injection volume, fewer injections a day, and a best-in-class PK/PD profile, so good glycemic control. Then from the disruptive element, this opportunity to enable more concentrated enabling miniaturization of insulin pumps and longer wear time. We're very much seeing markets moving and patients, both Type 2s and Type 1s, moving over to insulin pump therapy to improve their outcomes here. There's a real opportunity in the remainder of that market.
Over $1 billion, $5 billion there to convert from those existing rapid-acting and ultra-rapid-acting insulins to AT278. I'll really talk you through some of the clinical data now that gives us increased confidence of the superiority of AT278. What we're looking at here is our phase III clinical results from our first phase II clinical study. This was conducted in Type 1 diabetic patients, and we were comparing AT278 at 500 units/mL compared to Novo Nordisk's gold standard rapid-acting insulin, NovoRapid, at 100 units/mL. What we're seeing here in the graph on the left-hand side is the pharmacokinetic data. This is essentially insulin appearance in the blood and insulin on board post-injection. The injections at time zero here.
What we were looking to achieve with this study was non-inferiority to NovoRapid, so we wanted to show that despite that fivefold increase in concentration, the AT278, that it, that we were able to get the same amount of insulin on board over the same rate as NovoRapid. What we actually showed in this study that we met all of those primary endpoints for non-inferiority. As you can see from this graph, there's a shift to the left of the yellow curve. This is AT278, which shows that we had indeed accelerated the absorption of AT278 compared to NovoRapid, and we were getting more insulin on board faster in that first 60 minutes post-injection. Despite that fivefold increase in concentration, we were actually showing superiority here, which was at the very high end of our expectations for this product.
If we look at the graph on the right-hand side, this is pharmacodynamic profile. Effectively, this is our glucose-lowering effect here. Again, we saw the PK results translate over to the PD. What we're seeing here is that we accelerated the absorption of insulin post-injection, this translated into a greater glucose-lowering effect. We saw a faster and more pronounced glucose lowering in that first 60 minutes post-injection, which demonstrates that AT278 has the potential not only to lower injection volume and fewer injections a day, but also to better manage blood glucose around mealtimes, even compared to those gold standard, lower concentrated insulins that are available.
In terms of the clinical study that we have initiated and started dosing in 2023, as I mentioned earlier, we're anticipating results in Q4 of this year, and we'll be very much looking forward to reporting those. This is a phase I clinical study in adult type 2 patient populations. They will receive AT278 and NovoRapid, so that's Novo's rapid-acting insulin, and also Humulin R U-500. This is this head-to-head comparison against those two treatment options which are available today. This is really key data for us. It's in the target patient population. It's compared against the two treatment options. We'll be looking to demonstrate that superiority of AT278 within this clinical study, which will be important data as we build out our data package for partnering for this product as well.
Moving on to AT247. AT247 is a 100 units/mL, standard concentration, ultra-rapid acting insulin. What we're looking to achieve with AT247 is the fastest acting insulin available to patients. The reason for this is that we see the potential for AT247 to enable a fully closed-loop artificial pancreas system, which would be really transformational for patients today. These are systems whereby the patient wears a continuous blood glucose monitor which measures their blood glucose at any point in time. These measurements are transferred to a algorithm which calculates, based on their blood glucose reading, how much insulin do they need to keep their blood glucose inside that healthy target range, which is then automatically delivered via the pump. These systems are in use today, but they're called hybrid closed-loop systems.
The reason that they're hybrid is that around mealtimes, because those insulins that are available today are not fast enough acting to counteract that swift rise in blood glucose at mealtimes, instead the patient requires a bolus dose, needs to instruct the insulin pump to give 1 single larger dose of insulin to manage that blood glucose around mealtimes. What we're looking to achieve with AT247 is the fastest acting insulin, which will allow the patient to stay in that closed-loop mode even around mealtimes and to better manage their blood glucose and outcomes, very importantly, to reduce the burden of the disease for that patient because it will be automated and managed for them, so they don't need to intervene around at mealtimes. We're very much seeing, again, as I mentioned, patient populations switching over to insulin pump therapy.
You may have seen recently in the news, around NICE approving access to artificial pancreas systems to type 1 diabetic patients in the UK. About 25% of those type 1 patients in the UK now will have access to these systems. To that hybrid closed-loop systems, we're looking at enabling that next generation then fully closed-loop system. In terms of the data, I'll run through this quite quickly because this has been in the public domain, and we've spoken about this previously. On the left-hand side, you're seeing the data from our first phase I clinical study, in type 1 diabetic patients.
Again, what this data showed is AT247 is in the green, and Fiasp, which is Novo Nordisk's ultra rapid-acting insulin, so the, you know, the fastest insulin that they have out there available to patients. What you can see from the top left-hand graph is this is pharmacokinetic data. So we accelerated the absorption of insulin, and we got more insulin on board faster compared to gold standard Fiasp and also NovoRapid, of course. In the bottom right-hand side, this is pharmacodynamic data, and again, we saw that increased and improved blood glucose lowering impact of that faster absorption of insulin. Back in quarter four of last year, we were able to report headline results from our second phase I clinical study. This was performed in the US, again, in type 1 diabetic patients.
This time when they had the insulins delivered over three days via insulin pump. Which is important because we see the insulin pump patients as the primary patient population who will receive the most benefit from AT247. Again, the study demonstrated that we significantly accelerated absorption of insulin and early exposure, so this is a PK profile. We're getting more insulin on board faster compared to those gold standard insulins. Novolog is the same as NovoRapid. It's the U.S. name for the product, and Fiasp. Also we saw this superior glucose lowering effect compared to Novolog and very similar profile there for Fiasp. This data now gives us confidence that AT247 does indeed accelerate absorption. We get more insulin on board faster and has that potential to enable that fully closed-loop artificial pancreas system.
Moving on to Tetris Pharma. As I mentioned, we acquired Tetris Pharma in August of 2022, which is brought into the group now. That's sales, marketing, and distribution platform across the U.K. and Europe for hospital-based products, as well as ready to use glucagon here. We're really pleased with the progress under Tetris Pharma and the integration there into the group. At the time of the acquisition, Tetris Pharma had made available the products in the U.K. It was a relatively soft launch there due to funding. Since the acquisition, we've continued to roll out the products in the U.K. and build awareness and obviously then sales of the product within the U.K. Also, we've launched in Germany in November of 2022, and then in January of 2023 launched the product in Austria.
Moving forward, we plan to launch the product in additional key territories across Europe. When we talk about key territories here, this is where in territories where there is a sufficient prescribing population, so a sufficient number of patients, a history of prescribing glucagon, and that's the market we'd be looking to switch, and that there's favorable pricing reimbursements. Of course, the margins of this product will be important as well. Our next focus territories will be the Nordics, which meet all of these criteria. Again, there we're looking to really build the awareness of that product and obviously build the availability of the product to patients for the use of the treatments of severe hypoglycemia, and in turn then taking market share within that existing GBP 100 million markets across the UK and Europe.
I'm just going to hand over to Susan now to talk you through the financials.
Thank you, Sarah. I'm very pleased to present our first full year of financial reporting as a public company following our IPO in June 2021. Financial highlight slides for 2022 reflect our progress in that year and our focus on the strategy that we set out at our IPO. Total income doubled year-on-year from GBP 1.8 million in 2021 to GBP 3.5 million for the year just ended, and both revenue and grant income increased over 2021 levels. Our revenue base expanded to include revenue from Tetris Pharma product sales in the five months post the acquisition in August 2022, and this performance was in line with our expectations. I'll go through our revenue in a little bit more detail on the next slide.
We expect this expansion and growth in our revenue base to continue, including, as you've heard from Sarah earlier, potentially our first recurring royalties later this financial year. We had an increased investment in R&D in the year, which was as planned, and that was for clinical studies for both AT247 and for AT278. Tetris Pharma acquired in the year on a share for share exchange, and we also raised GBP 6 million of new working capital from existing shareholders. We ended 2022 with cash and short-term investments of GBP 12.8 million, and our cash runway underpins our value inflection points in our diabetes programs and also potential deal points for our specialty hospital franchise. Thank you, Sarah. Next slide. Just teasing out some key financials, particularly this growth in revenue that we talked about.
The doubling of total income included growth in formulation development revenue from technology partnering projects, of which we have signed eight new agreements since our IPO. It also represents a positive impact from Tetris Pharma for those five months period and also a full year of grant income from an Innovate UK grant which we were awarded in 2021. That grant income, when you consider it really supports our investment in R&D for AT247 and AT278. That grant income will continue at that level for a further 15 months. Our loss after tax reflects an increase in R&D over the prior year, to GBP 8.6 million compared to 2021 of GBP 5.4 million.
Just to comment that effectively, that reflects the costs of running two studies concurrently, in 2023 we are running one study for AT278, so we will expect that R&D expenditure to decrease this year. Our SG&A expenditure increased in 2022 compared to 2021, and that reflected effectively 2021 was very much a year of two halves because we became a public company in June 2021. We have a full year of being a public company in 2022, plus the additional SG&A costs from Tetris Pharma, who are now fully consolidated and reported as part of our group accounts. Net assets at the end of the financial year were GBP 17.5 million, slightly different mix from 2021. Cash and investments of GBP 12.8 million. We have an increased tax receivable.
We receive R&D tax credits as a knowledge-intensive company in 2021 we received just under GBP 800,000 of tax receivable, and we expect that to be in the order of GBP 1.3 million to reflect that increased R&D expenditure in 2022. We would expect that in the second half of the financial year. Our trade receivables have increased over the prior year, and our payables have also increased. In effect, those payables reflect the timing of the closing costs for the AT247 study and the startup costs for AT278, which will continue. That study was initiated earlier this year, and those costs will continue during 2023. Thank you, Sarah. Back to you.
Great. Thanks, Susan. Really just to round off the formal presentation today, it would be useful really to talk through, you know, what we see coming up actually within the business through 2023 and beyond. You know, as we talked through today, the clinical results from AT278, the current ongoing study, will be key. This will provide key data set in the target patient population for this product, also comparing against those gold standard treatments that are available today. We'll be looking forward to reporting those results later this year. I think from a partnering and a revenue growth perspective here, clearly, the launch of AT220, which then would move into recurring royalty streams is key for the company, both validation of the provability of the technology, but of course, those very important recurring royalties as well.
We'll be looking forward to being able to provide more news around that program as we're able to. Also, as we've talked about, there's significant partnering opportunities here from our portfolio, both from the transition of some of our specialty hospital products through to partnering and those value inflection points, as well as those pre-licensed technology partnerships that are generating revenue today within the business. We'd anticipate adding more of those technology partnerships through 2023 and also, of course, guiding those through to value-driving licenses. Through Tetris Pharma, obviously the increased rollout of Ogluo across those key European territories and also building market share within those markets that we're already in, so the U.K., Germany and Austria, and start to step through that revenue growth of the business there.
I think this really puts us in a position that we've got a very solid base to work through and work on in terms of partnering opportunities and value inflection points that we then anticipate really building towards that building a self-sustaining biopharmaceutical company as we go through 2024 and beyond. That really concludes the presentation for today. Thank you very much for everybody for tuning in and listening, and we'd be happy to run through the questions that will be submitted through the through the Q&A. If you do have any. I can see some are popping up now, so there's some questions, and we'll talk through those. If anybody has any additional questions, please do ask them.
Sarah, Susan, thank you very much for your presentation this afternoon. Ladies and gentlemen, please do continue to submit your questions just by using the Q&A tab situated on the top right-hand corner of your screen. Just while the company take a few moments to review those questions submitted today, I'd like to remind you that a recording of this presentation, along with a copy of the slides and the published Q&A, can be accessed via investor dashboard. As you can see, we have received a number of questions throughout today's presentation. Thank you to all investors for submitting their questions. Could I please ask you to read out the questions and give responses where appropriate to do so, and I'll pick up from you at the end.
Great. Thank you. Yeah, I'll just work through them in order. The first question is, in the CEO's review we had this statement, "We believe that further investment in the diabetes program will take the products to a significantly higher value inflection point prior to partnering." Did this indicate the intention to invest further after the current AT278 trial? I think in terms of this statement, you know, essentially, it's referring to the current clinical study, that investment that we're making into the AT278 study that's ongoing currently, that we started dosing in March. We do believe that that study, for all of the reasons that we've run through today, will add significant value to AT278 and then value to the partnering package across AT278 and AT247 as a whole.
I think here, you know, we've always been quite clear on our strategy for our diabetes programs here is to develop data packages that demonstrate the benefits and the superiority to patients. That's really crucial to us, our mission here is to transform quality of life and patient care, leveraging the technology platform, and to generate those clinical packages that obviously strengthen our partnering opportunities there, and really to take those closer to market to those higher value inflection points. Our focus at the moment is very much on the ongoing clinical studies. As we said, with AT278, the first set of clinical data was certainly at the very high end of our expectations there, non-inferiority, but also showing superiority. We very much believe in the value of AT278.
I think as we come to reporting headline results, that will offer us with a data package to make those choices of where that optimum value inflection point is for AT278. In parallel to these studies, we'll most certainly be deepening our engagement with partners, and the data and clinical data packages will provide further evidence of the superiority and further deepening those partnering discussions. Next question's for you, Susan. The question is, R&D and SG&A equals GBP 14 million. You might need to get your calculator out. Net current assets, GBP 13.8 million. Will next year income increases outweigh growth in costs and rebuild cash?
Thank you. Thank you, Robin, for that question. What I would say, and I think I probably touched on it in the presentation, is that we had a planned significant investment in R&D in 2022, which was reflected in our use of proceeds and our plans that we set out at IPO. What we would expect is that the R&D expenditure from a cost perspective will probably reflect closer to what we reported in 2021 during this current financial year. That'll be in the order of GBP 5 million-5.5 million this year. That effectively managing our cash flow is a combination, as you quite rightly point out, some potential increases in our revenues that we've talked about today, but also managing our cost base.
Next year I think that, from a cash runway perspective, we are confident that the revenue that we have, plus our control of costs will support the cash runway that we have.
Great. Thanks, Susan. The next question from Christabel. Could you please comment on recent price reduction in insulin products by Eli Lilly, Novo Nordisk and Sanofi, and whether this would affect Arecor pricing strategy? Follow on from this, also please comment on Ogluo competitive position versus BAQSIMI. You know, the first question around insulin pricing, really good question. Recently, Eli Lilly and Novo in particular announced reductions in their list price, that they'll be bringing in reductions in their list price for insulins up to around 75% here. You know, we've obviously looked at this in some detail, and there's been a number of external analyses of this now. We actually see this as a very positive advancement actually, and I'll talk through why.
You know, the first on the list pricing, this is clearly of benefit to patients. If the list prices of insulin is reduced, this is in the US. This means that the co-pay, so the amount that the patient has to pay themselves out of their own pocket is also reduced, and I think this has been, you know, part of the driver for these initiatives there. It's good for patients. It's actually also not having the detrimental effects as you would expect on the manufacturers here, so those major pharma companies there. The reason for this, there's a number of reasons for this.
The pricing and reimbursement landscape in the U.S. is quite complicated, but essentially there's the list price from the major manufacturers, so from Novo and Lilly and Sanofi, for example, and then there is rebates of up to about 80% to pharmacy benefit managers. There's this middleman in the middle there. It's not clear how these reduction in list prices and the impact of that's going to be shared between the manufacturers and the pharmacy benefit managers. If we assume that it stays as it is today, and it's just a sort of proportional reduction there, the reason why the impact is expected to be minimal to no impact on the pharma companies' revenues is that there is also in the U.S., new legislation has been brought in to incentivize the reduction of list prices there.
This incentivization is if they reduce their list prices below a certain amount, which is what happens with this 75% reduction, then the government are removing the cap on rebates. Rebates that the pharma companies have to pay into the Medicaid system. Medicaid in the US is insurance that covers low income individuals. Currently the pharmaceutical companies don't make any profit in this area, but with the removal of the rebates, that changes. There's actually been a really nice analysis done by Veda Partners where they did a full analysis of this landscape, and their outcomes from that review was that they expect minimal impact and actually probably a slight increase in revenues and profitability from the pharma companies as a result of these list pricing.
From a pricing strategy perspective for Arecor, and ultimately this would sit with our partner, we still, we anticipate no changes there. That the value proposition that we bring to the table is that because we're taking existing insulin and existing infrastructure and enhancing that our insulins would be brought to market at the same price. Same list price as Novo, Lilly and Sanofi here, and that we would be. We'd be bringing additional benefits to patients and in that way, gaining market share. Sorry, I know that was a long answer, but it's quite a technical question and answer there. On Ogluo competitive position compared to BAQSIMI. BAQSIMI is a nasal glucagon, so it's also a ready-to-use glucagon product, but it's administered nasally. It's currently probably a slight update here.
It's currently owned by Eli Lilly. They announced yesterday, I think, day before yesterday, within the last couple of days anyway, that Amphastar are acquiring full worldwide rights to BAQSIMI from Eli Lilly there. Essentially, you know, we'd expect it to remain on the market. What we can say there is, you know, the patients have available to them today either the lyophilized kit that requires a complex reconstitution process, BAQSIMI's nasal glucagon or Ogluo, which is called Gvoke in the U.S., same product there. Essentially a patient choice. Some patients will prefer Ogluo as in an auto-injector pen, much like an EpiPen. Some patients will prefer nasal delivery.
What we can say and what gives us confidence in terms of ability to gain market share is this is the same competitive environment as the U.S. Xeris own Gvoke. We've licensed rights from Xeris for Europe and the U.K. They own this product in the U.S. It's called Gvoke. It's the same product as Ogluo, essentially. They've been gaining market share year-on-year now. They Gvoke now has 23% of the glucagon market in the U.S. and actually, in the Xeris' last full year results, they reported a 35% year-on-year increase in market share of Gvoke.
It's showing that the market is moving over to ready-to-use glucagons, but also importantly, that there's a year-over-year increase in % market share for Gvoke, which is showing there that move of prescribing and patients moving over to that ready-to-use glucagon. We'd expect to see and, you know, that's what we'll be working with as well to see that same increase in market share across Europe. It's essentially, it's the same patient population with the same needs there. We would anticipate being able to also gain market share in the same competitive environment. Next question from Robin. AT220, when will partner be announced? It's a good question, and the honest answer is we don't know. You know, currently, you know, for under our confidentiality agreements, our partner doesn't want to be named at this time.
I think as the product progresses to market and certainly on market, we'll be working very closely with them in terms of announcing the product and the name of the company there. You know, we can't give a definitive answer, unfortunately, on that today. Question from Chris. How optimistic are you about the next 12 months? I think the answer to that is very optimistic. I think as we've talked through today, I think we've got a de-risk portfolio here, both in terms of taking existing medicines and improving them, but also the breadth of the partnering and value generation opportunities that we have on the table. This isn't a single product asset. You know, we license it or we don't. We've got our diabetes products, specialty hospital.
We've got existing license programs where our partners are taking those through development and much closer to market. Obviously, AT220 anticipated to be on market later this year, and also those pre-licensed partnering opportunities. I think across the board there, you know, we've got a really solid basis for growth, and now obviously bringing CBO on board as well gives us that extra expertise and capability to move forward and realize those value-generating opportunities that we have. In terms of next question from Paul. Tetris Pharma, what's focus and progress expected on their non-insulin products? Is insulin focus pragmatic re-resource, or is it about streamlining/pivoting Tetris Pharma to be an Arecor aligned division rather than broader market business?
You know, I think in terms of Tetris Pharma here are, you know, the two primary drivers for acquiring Tetris Pharma with Ogluo as a product, as we mentioned, being aligned with our therapeutic area of focus in diabetes and also a product we really believe in brings benefit to patients there, and also that optionality across our own specialty hospital portfolio. That's really very much our focus is to, you know, continue to launch and build out Ogluo across those territories and also moving forward then to assess opportunities for bringing additional products from our own internal pipeline through into commercialization in Europe, and that's very aligned with our taking products closer to market and retaining more of the value there. That's very much our strategy and our rationale for Tetris Pharma. Let me just look in terms of these final...
Sorry, my screen is frozen. Okay, a question from Paul. I think this is for you, Susan. You may or may not be able to answer this, let me know if you can't 'cause it's about the broker notes. In broker notes, there's assumed equity financing of GBP 1 million in 2023 and GBP 1.5 million in 2024. What drives that assumption?
Thank you, Sarah, and thank you, Paul. I think it probably is a question we'd need to take offline because we are covered by three different analysts, so it's probably which one you're referring to. It isn't something I'm familiar with. It certainly isn't part of our cash flow modeling. Just to add that our accounts and the accounts that are published are on a going concern basis, and so we look at our cash outflows and inflows over a 12 to 18 months period post signing the accounts. As we have talked through the presentation, you know, we're looking at a step-up in revenue in 2023 and actually possibly a reduction in R&D from prior year. That's what we've been focused on in terms of modeling our going concern and our operating cash flows.
The equity point is something we can catch up on outside of this presentation.
Great. Thanks, Susan. Robin, there's the question you've asked about the liquidity of the shares there and actions around that. I think that would be a question best placed to Panmure Gordon 's there. But you know, what I would say on that is, you know, as a sort of management team here and sort of leadership of the business, we're very much focused on delivering value. I think as we've talked through today, you know, we've got significant opportunities to enter into and deliver on those value inflection points of the business. Our focus is very much in building a growth business and to build those revenue streams to ultimately meet our ambition of building a large self-sustaining pharmaceutical company. Obviously, there's no end to that.
You know, we want to continue that growth and continue, you know, the size and strength of the company. I think in doing so, that will, you know, also support the company in terms of valuation, etcetera. I, you know, I think in terms of the liquidity point, it would be best to talk to Panmure Gordon also about that. I think that's all of the questions for today. If there's no additional questions, then I think we'll close.
Sarah, Susan, thank you. I think you've addressed all those questions you can from investors. Of course, the company will review all questions submitted today. We will publish those responses on the Investor Meet Company platform. Before redirecting investors to provide you with their feedback, which I know is particularly important to yourself and the company, Sarah, could I please just ask you for a few closing comments?
Yeah, sure. I'd just say thank you for everybody joining us today and your, you know, continued interest in Arecor. I think as we've talked around today, we're really looking forward to 2023 and beyond. I think we're in great shape as a business, and I think we've got significant opportunities to continue to grow the value and really execute on our, what you know is a very commercially focused strategy that we have within the company. Thank you for joining and as Susan said, you know, feel free to contact us outside of this format as well if you've got any additional questions.
Sarah, Susan, thank you for updating investors today. Could I please ask investors not to close this session, as you'll now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations. This will only take a few moments to complete, and I'm sure will be greatly valued by the company. On behalf of the management team of Arecor Therapeutics PLC, we'd like to thank you for attending today's presentation. Good afternoon to you all.