Thank you all for joining. I would like to welcome you all to the PharmaMar full year results 2023 conference call. My name is Brika, and I will be your moderator for today's call. All lines are on mute for the presentation portion of the call today, with an opportunity for questions and answers at the end. If you would like to ask a question during this time, please press star followed by one on your telephone keypad today. And now I would like to pass the conference over to your host, José Luis Moreno, Vice President of Investor Relations of PharmaMar, to begin. So, Luis, please go ahead when you're ready.
Thank you, Brika, and good morning to everyone. I'd like to welcome all of you to our full year 2023 results conference call. On the call with me today are María Luisa de Francia, Chief Financial Officer, Luis Mora, Managing Director of PharmaMar, and Pascal Besman, Vice President of Strategic Development. Following our prepared remarks today, we'll open the line for questions.
As always, I would like to remind you that today's conference call may include forward-looking statements regarding future events or the future financial and operating performance of a company. Such forward-looking statements are only predictions based on our current expectations, and actual results may vary from those projected. We disclaim any obligation to update any information provided here.
We refer you to a safe harbor statement on a corporate presentation, which is available on our website together with the press release and the report of that results we released yesterday. In 2023, our commitment to R&D investment has been evident. In oncology, we're conducting late-stage trials like Lagoon and the trial to go to first line in leiomyosarcoma with Zepzelca, but are also actively engaged in early-stage clinical trials for ecubectedin, PM534, and PM54.
These trials underscore our strong belief in the potential of these molecules. We're pleased to report that sales from Zepzelca continued to grow last year, and by year-end, we had already received approval for the drug in 16 different countries. This includes the commercial launch in Switzerland.
We maintain a solid balance sheet and strong cash position, even after distributing dividends and factoring in all the funds allocated for the acquisition of company treasury shares, which we completed in January. With that, I'll now pass the floor to María Luisa, who'll provide you with a more comprehensive overview of our financial results. María Luisa?
Thank you, José Luis. Good morning and thank you all for joining us in the PharmaMar 2023 results call. I will give a brief review of the financial and income statements for the year ended. Starting with revenues, as you have seen from our financial statements, the introduction of a generic version of Yondelis in Europe had a significant impact on the company's revenues last year. This largely explained the 19% difference in total revenue when compared with 2022.
The impact of the generic version of Yondelis has been partially offset by an increase in royalties from Zepzelca sales in the US, as well as by the growth of Zepzelca revenues in Europe. Zepzelca accounts for 70% of total revenues of the group, which, as you may know, comes from four different sources: royalties, distribution under early access program, license agreements, and sales of active pharmaceutical ingredients.
Putting numbers to the sources, royalties on Zepzelca pharmaceutical sales in the US amount to EUR 48.4 million. Distribution in some European countries under the early access program amounts to EUR 29.7 million. Deferred revenues from the Zepzelca license agreement and other minor agreements amount to EUR 24.2 million, and sales of active pharmaceutical ingredients to our partners amount to EUR 7.9 million.
On the other hand, Yondelis accounted for 29% of total revenues coming from the same sources: direct sales in Europe, EUR 26.1 million; royalties and sales of active pharmaceutical ingredients to our partners for EUR 10.8 million; and finally, EUR 9.4 million received from our commercial milestone under the Janssen license agreement. As for R&D expenses, they amount to EUR 99.3 million as of December 2023, 19% higher than in the previous year as a result of the evolution of the group's pipeline, as Luis Mora will explain later.
Given the projects currently underway, this volume of R&D expense is not expected to change significantly in 2024. All other operating expenses may remain fairly stable between the two periods, taking into account that in 2022, they include some amounts corresponding to the diagnostic liquidation process, which do not take place in 2023. Thus, mainly as a result of the decrease in Yondelis sales and the increase in R&D expenditure, the group's EBITDA amounted to EUR 2.1 million, EUR 55.4 million in 2022.
I will finish by highlighting that the net cash position as of December 2023 amounts to a total of EUR 128.8 million after deducting EUR 39.9 million of total financial debt. At this point, we should mention the CapEx investment in the period, about EUR 16 million, mainly due to the oligonucleotide manufacturing plant in progress that Luis Mora will explain in a minute.
We should also mention the share buyback program to which we have allocated EUR 13 million since its launch until the end of December. This program has concluded in January 2024. As José Luis Moreno mentioned before, we have a solid balance to continue with our programs and business plan. Now I pass the microphone to Luis Mora.
Thank you, María Luisa. In 2023, Yondelis sales in Europe have been conditioned by the entry of generics into the market, giving rise to a significant price adjustment, the result of which has been a sales figure in Europe of EUR 26 million, representing a difference of 60% compared to those in 2022, which reached the figure of EUR 64 million. However, in the USA and Japan, our partner sales have grown by close to 20%.
The publication of the results of the clinical trial of the combination of Yondelis plus doxorubicin in the first line of treatment for leiomyosarcoma at ESMO 2023 has had a positive impact on sales in those countries. Likewise, in 2023, we will save a milestone of $10 million as a result of achieving the commercial milestone of the Yondelis license contract in the USA.
Regarding Zepzelca, the sales of our partner Jazz have continued to grow, consolidating Zepzelca as a standard treatment for small cell lung cancer in the second line of treatment in the USA. During 2023, Zepzelca received marketing approval in 8 countries, and regulatory evaluation continues in various territories.
In China, the evaluation of the dossier continues, and according to our partner, Luye Pharmaceuticals, the opinion of the authorities is expected this year, 2024. At the end of 2023, we obtained data from the Phase I expansion trial of the combination of lurbinectedin plus atezolizumab. This trial included 103 patients, refractory, resistant, and sensitive patients for the second line of treatment.
Taking the patient population under the inclusion criteria of the Lagoon trial, I can tell you that it confirmed the synergy of the two compounds and reinforced the idea of including that combination in the pivotal trial, Lagoon. The data from this trial will be presented at the medical conferences.
The Lagoon trial, a pivotal trial and registration trial for the second line in small cell lung cancer, continues recruitment as planned with more than 180 hospitals open, and we expect it to complete recruitment by the end of this year or early next year. Zepzelca, IMforte trial for the first line maintenance for small cell lung cancer, according to the sponsor, has already completed enrollment, and the top-line data is expected at the end of this year or beginning of the next year. It should also be noted that in 2023, the SaLuDo trial begins.
It's a Phase II, III trial of Zepzelca plus doxorubicin in the first line treatment in patients with leiomyosarcoma. Today, it's already opened 13 centers, and during 2024, we will expand for more than 50 centers around the world. The compassionate use program has continued during 2023. Since the beginning in 2019, more than 3,700 patients have been already treated. In 2023, the patients treated at small cell lung cancer in this compassionate use program have been close to 900 patients, growing by 5% compared to 2022.
This reflects the good acceptance of Zepzelca, and it is covering a medical need. The launch of the product in Switzerland is being very positive. The reimbursement was obtained in September 2023, and it is meeting the planned objectives. Ecubectedin PM14 continues its development in both Phase II and Phase I in combination with Adenotecan and immunotherapy in different tumor types.
PM54 and PM534 are in Phase I of clinical development, and we hope to complete this Phase I this year, 2024. Regarding virology, we have announced that we have stopped the Nereida clinical trial, Phase II, in immunosuppressed patients due to the low recruitment ratio that is derived from the evolution of the pandemic. Therefore, the investment in the virology area will be substantially reduced in 2024 and beyond.
As for Sylentis, which we already announced at the results of the Phase I trial, it has been decided to stop the tivanisiran project. The other product, SYL1801, P hase II of macular degeneration trial continues as planned. As we already announced, the construction for the new oligonucleotide production plant continues, and we expected commissioning this plant during 2024. And now, José Luis?
Thank you, Luis. With this, we conclude our speech today, and we open the line for questions. Brika.
Thank you. If you would like to ask a question during this time, please press star, followed by one, on your telephone keypad. If you change your mind at any time, please press star, then two, to remove your request to speak. We will pause for a moment while we order the Q&A voicemail. We have the first question on the phone lines from Joseph Hedden of Rx Securities. Your line is now open, Joseph.
Good morning. Thanks for taking my questions. Firstly, on your Zepzelca royalty estimate of close to EUR 12.9 million for the quarter, for Q4, given Jazz reported $74 million sales in Q4 last night, is this estimate, do you think, a little low now? Can we expect any kind of adjustment in the Q1 results, and if so, what would that adjustment be? Thanks, José.
No, no. It doesn't need any adjustment. This is the final figure.
Okay. So that implies that you've not hit a second royalty tier under your deal with Jazz. Is that right?
In terms of royalties, we'll not disclose what we hit the different levels of royalty tiers. As Luis said, there's not going to be any adjustment. The final figure is what we've seen in this quarter.
Okay. Thanks. And then on R&D, I may have missed this because my line cut out at a bad moment. But R&D expenses in Q4, obviously, took quite a jump, and we know that you're in the midst of a couple of pivotal trials now. Can we see that as the run rate going into this year, or are things going to stabilize around EUR 100 million, say? Thank you.
Yeah. In terms of R&D in oncology, we'll have the same trials going on in terms of Lagoon and the trial in leiomyosarcoma. So we could expect in oncology similar stuff. Bear in mind that leiomyosarcoma will be a full year this year, whereas last year, we started in the last quarter, if I remember correctly. And the early-stage trials that Luis was referring to also will be going on through this year.
So from that perspective, we do not expect big changes in oncology compared last year to this year. In other areas, like Luis pointed out, there's going to be a very important reduction, of course, in investment in antivirals. And we're not going to continue with our plans with tivanisiran also. So all that it was expected to invest in tivanisiran is not going to happen this year.
Oncology is going to keep pretty much the same. The other two areas, it's going to be an important reduction. As you know, Joe, we're not giving guidance on any of our figures.
Yeah. Fine. That's helpful, Joe. Thank you.
Thank you. If you would like to ask any further questions, please press star, followed by one, on your telephone keypads now. We now have Ami Fadia of Needham.
Good morning. Thanks for taking my question. I think that we've gotten a lot of questions from investors. Given that we're coming really close to the readout of the trial in first line that's being run by your partner, perhaps if you could take a moment and maybe remind listeners around maybe the design of the trial and also, from your perspective, what are some of the pieces of evidence outside of that trial that give you confidence in this trial succeeding?
And just with regards to the second line trial that you're running, maybe give us a sense of your latest outlook in terms of when we might get the results from that trial, if you're comfortable giving that, and also talk about your strategy in Europe as you get ready from readouts from both these trials and how pricing there could look like relative to the US.
Thank you.
Yeah. I'll take the first part regarding Europe. I'll pass it to Luis. So your first question was about the first-line maintenance trial and what gives us confidence there, I think. I can point to really four pieces of data that we've generated in the past. Back in SITC 2021, there were 26 patients in a combination of atezo plus lurbi in second-line, which led to a response rate and duration of response that was significantly greater than the sum of the two products. So that was in pure second-line patients with no prior IO.
The second piece of evidence comes from the basket trial, where we had 8 patients with prior IO, and 5 of the 8 did better in second-line than they did on their IO in front-line, which to us indicates something is going on synergistically given the long half-life of the IO. The third piece of evidence comes from the Atlantis trial, where we had about 60 patients who had had prior IO. And in the patients who had prior IO, their PFS was 50% greater than in the patients who had not had prior IO.
And the fourth piece of evidence was at ESMO last year, where a second-line combination trial with pembrolizumab presented by Antonio Calles showed basically variation on the same theme that these two drugs together are generating a greater ORR and DOR and other parameters than the sum of the parts.
So given all this, this was a logical trial for clinicians to be excited about, and we're excited ourselves to get the results. I think that that was your first question. If I left something out, you can come back after. Luis explained to you our European strategies for both Lagoon and European filing, and you can give it a try and see if he'll tell you when that trial will read out, but if I was a betting man.
The strategy in Europe, I mean, it's so clear that currently, the calendar that sets the trial, we will have in hand the data coming from the important trial. Then the strategy is if the trial is positive, obviously, we will submit the dossier in Europe in the first-line maintenance therapy. Regarding the commercial strategy, as far as you know, we have a commercial infrastructure in Europe who has subsidiaries, sales, medical affairs, market access, all is covered across Europe.
And we plan to launch the first launch will be if the trial is positive and the authorities will approve the drug in the first-line maintenance therapy. After that, we expect it to obtain the Lagoon trial. If the Lagoon is positive, then we will submit too for the second-line treatment.
The idea is to give the patient the opportunity to keep the lurbinectedin from the first line until second and third line and beyond. In any moment of the treatment, the patient will have the opportunity to take lurbinectedin because we hope this is a very clinical benefit for the patients for the small cell lung cancer.
Thank you for that. Maybe if I could ask a follow-up with regards to the IMforte trial. On an absolute basis, how much of a change would you want to see on the primary endpoint? Thank you.
Roche and Jazz have not shared the statistical plan, and therefore, we're not either because we don't know it. No.
Thank you.
Thank you. As a reminder, if you have any further questions, please press star, followed by one, on your telephone keypads now.
All right. Brika, we have some recent questions. Some of them, we received ahead of the call, so some of them have already been addressed during the call. There's some others that were probably not mentioned or worth repeating. We had questions about if there are any ongoing or is there any news about licensing in now, potential license agreements in Japan. Luis, I don't know if you could say something about that.
Yeah. Well, for lurbinectedin, there's the unique big market for me without partnering now. We have conversations with several companies. They are interested in this territory for lurbinectedin. And if we will start some process for license and we achieve the agreement, we will announce.
Okay. Thank you. All the questions in terms of guidance, we've said we're not giving guidance. And also, again, just to make clear, we have received all the questions about the amounts of milestones and whether it triggered, as you all know, this has not been disclosed. And finally, someone asked about the news flow expected for this year. We've also addressed this, but as a summary, we can say that we expect to present results of the Phase II trial, lurbinectedin, Aplidin, doxorubicin, in one of the major congresses where we've submitted it to.
Also, Luis mentioned that we expect to complete recruitment of the Lagoon trial this year as well as some of the Phase I trials that we have with the other molecules, also finish recruitment of some of them also this year. It has been said and mentioned yesterday during the call.
We anticipate top line PFS readout of the IMforte trial by the end of this year or early next. About the construction plan, we also have some questions about the oligonucleotide plant that we construct. Luis also mentioned that we expect to finish and have operated the first phase of that plant during this year. That'll be to wrap up with questions. I'd like to thank Brika for your assistance today.
Just to summarize the call, to mention that the financial highlight of this year revolves around the increase in R&D investment and the growth of royalties generated from Zepzelca sales, as well as the growth of revenues generated in Europe. We're also making significant progress in our ongoing clinical trials, approaching the end of the ongoing Phase III trials with Zepzelca and small cell lung cancer.
Despite all the challenges of last year, we remain profitable, and we anticipate our investment efforts will yield relevant new flow in the short term, as highlighted by the team during today's call. With this, we finish our call today, and we'd like to thank you all for joining us and wish you a good weekend. Well, that'll be tomorrow. Thank you.
Thank you for joining. I can confirm that does conclude today's conference call with PharmaMar. You may now disconnect your lines, and please enjoy the rest of your day.