Good morning to everyone. I would like to welcome to our third quarter 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 we always do. 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 the company. Such forward-looking statements are only predictions based on our current expectations, and actual results may vary from those projected.
We disclaim any obligations to update any information provided herein, and we refer you to a safe harbor statement on our corporate presentation, which is available on our website, together with the press release and the report of the results we released yesterday. Well, as shown in the preceding quarters of the year, in the third quarter, our commitment to increase our investment in R&D remains evident. Most of these R&D investment is in oncology, and we're making substantial progress in advancing our development efforts. It is worth highlighting that LAGOON trial, which represents the confirmatory phase III study of lurbinectedin as monotherapy in second line for small cell lung cancer, is recruiting, or recruiting is proceeding as planned.
We're also making significant headway in the preparatory work for launching the phase II/III trial of lurbinectedin in first-line leiomyosarcoma, which we expect to start shortly. Also, in oncology, we're actively engaged in early-stage clinical trials with other molecules like ecubectedin, PM534 and PM54. These underscore a strong belief in the potential of these molecules, and we fully committed to ongoing R&D investment that will foster sustained growth in the years ahead. Turning to our revenues, we're pleased to report a notable increase in royalties from the sales of Zepzelca in the U.S. for this quarter. It is important to note that this is an estimate, as we currently are awaiting sales information from our partner, Jazz, which is scheduled for release results on November the 8th.
We maintain a robust balance sheet and strong cash position, even after distributing dividends and factoring in the funds allocated for the acquisition of company treasury shares. With that, I'll now pass the floor to María Luisa, who will provide you with more comprehensive overview of our financial results.
Thank you, José Luis. Good morning, and thank you all for joining this conference call on third quarter 2023 financial results. I will start by reviewing the evolution of revenues. The third quarter of the year is a continuation of previous quarter and does not contain any exceptional elements. Yondelis sales continue to reflect the impact of the arrival of generic trabectedin products on the market, resulting in a 61% decline in Yondelis sales, mainly due to lower prices, as the volume impact is 18% compared to the same period last year. In relation to lurbinectedin proceeds associated with the early access or compassionate use program in France, principally, demand is, this nine months period has been slightly higher than in previous year, approximately 3%.
I would like to remind you that the main cause of the increase in this item between periods is due to the positive recalculation made in relation to the 2022 rebates, once we received from the French authorities the settlement in relation to such rebates. This adjustment was recorded on the second quarter of 2023. Following with the recurring revenues, royalties received from our partners performed well in this quarter, particularly royalties from Zepzelca sales in the U.S. In the first nine months, royalties increased 8% year-over-year. As I always mention, Jazz sales quarter royalty is an estimate made by PharmaMar. On the expenditure side, the most noteworthy is the increase in R&D expenditure, which is up 19% to EUR 70.3 million.
This increase is mainly due to the phase III trials currently underway, plus preparatory works for those trials about to begin, as Luis Mora will explain later. All other operating expenses remain fairly stable between the two periods, taking into account that in 2022, they included certain amounts corresponding to the Genómica liquidation process, which do not take place in 2023. All of the above lead PharmaMar to a net result of EUR 8 million, including a positive EUR 5.1 million of income tax due to the monetization of R&D deductions. I will finish highlighting the net cash position as of September 2023, that amounts to EUR 145.9 million, after deducting EUR 39.8 million of total financial debt.
At this point, we should mention the CapEx investment in the period, which exceeds EUR 10 million, mainly due to the new first of a new oligonucleotide manufacturing plant that is in progress, that Luis Mora will comment later. We should also mention the share buyback program, to which we have allocated about EUR 7 million since it launched until 13th September. To conclude, as José Luis Moreno mentioned before, we have a solid balance sheet to continue with our business plan. Now I pass the microphone to Luis Mora.
Thank you, María Luisa. Good morning. As María Luisa has already commented, Yondelis sales in Europe continue to be affected by the generics. There are currently two generic companies marketing Yondelis in Europe, which put a greater pressure on price and sales volumes. Although, in volume, the difference compared to 2022 is only 18%. The same does not happen in the rest of the markets, where we see an increase in the use of Yondelis. The inclusion of Yondelis in the NCCN guidelines in first line in combination with doxorubicin for leiomyosarcoma is very positive in sales in the USA. Regarding Zepzelca, the estimated royalty figure for the quarter reflects a notable increase in sales in the USA, and we expect it to be maintained in the coming quarters.
In September, we launched Zepzelca in Switzerland with reimbursement, and it's being very well received by the doctors and meeting our expectations. The compassionate use program is demonstrating that Zepzelca is already establishing itself in France as standard treatment in the small cell lung cancer in second and third line. The LAGOON trial, a confirmatory trial for the USA and registration of trial for Europe, continues recruitment as expected in about 140 hospitals, and we hope to increase the number of centers to 200. And we hope to complete the inclusion, inclusion of patients in the summer of the next year. So far, the information received by the IDMC regarding safety is positive.
Another important trial that has already completed recruitment is a phase II in the small cell lung cancer with a combination of lurbinectedin plus irinotecan, and we expect the results around end of this year. The first-line maintenance trial in the small cell lung cancer that our partner, Jazz Pharmaceuticals, is carrying out with Roche, remains on the data they have communicated, and they expect to have interim results in the last quarter of the next year. The pivotal trial and first-line registration of leiomyosarcoma with lurbinectedin plus doxorubicin versus doxorubicin, we hope to include the first patient very soon. This have raised great interest among specialists in the recent ESMO Congress. Regarding the trial of lurbinectedin in mesothelioma, we have reevaluated the project, and we have decided to not start it.
The rest of the compounds, that we have in clinical development, ecubectedin, PM534, PM54, continuing the clinical development in the phase II and phase I, according to the plan. In the regulatory field, perhaps the most relevant thing refers to the Zepzelca dossier in China. It is already been presented and is in the evaluation phase without major problems, and we hope to know the opinion of the Chinese authorities in the middle of the next year. In parallel to this dossier, the Chinese authorities have authorized our partner, Luye, for the region of China to launch a compassionate use program. Now, regarding the biology area, the most relevant is the Nereida trial, the phase II trial with ecubectedin in immunosuppressed patients, which is in the recruitment phase in 11 countries.
Sylentis, which is in phase III, with the product tivanisiran for dry eye syndrome in patients with Sjögren's syndrome, has already completed recruitment, and we expect the data in the first quarter of 2024. During this year, 2023, the construction of an industrial oligonucleotide manufacturing plant is being carried out and which will serve both to cover the needs of Sylentis and for third-party manufacturing. The first phase of the construction will be finished this year, and after validation and inspections work, we hope it will be operational in 2024. And now I pass the word to Pascal.
Thank you, Luis. Good afternoon, good morning, wherever you are. I'm going to talk today primarily about recent data presentations and try to offer some context. I'd like to focus first on PharmaMar activities at major medical meetings, starting with the IASLC World Lung in September. Here, we presented two abstracts between them that show the effect of platinum rechallenge after lurbinectedin, given as monotherapy or in combination with doxorubicin, is similar to that previously reported with platinum rechallenge as second-line therapy in sensitive patients. This supports that lurbinectedin is an alternative second-line treatment option to platinum rechallenge for patients with platinum-sensitive relapsed small cell.... intuitively, it makes sense that the benefit from using a sequence of A, platinum, followed by platinum, followed by lurbi, is likely suboptimal in comparison to B, platinum, lurbi, platinum rechallenge, and in addition, it gives patients a platinum holiday, which may enhance downstream benefits.
Moving on to ESMO last week. First, in small cell lung cancer, the LUPER trial shows again the synergy of lurbi and IO, this time pembro, which forms the basis for the IMforte trial of lurbinectedin plus atezolizumab versus atezolizumab in frontline maintenance. Just looking at the ORR, with the usual caveats about reading across trials, pembrolizumab sees a monotherapy ORR in this setting of 19%. Lurbinectedin has shown monotherapy ORR of 35%, and the lurbi pembro combination in the LUPER trial, 46%. This mirrors a similar cross-trial comparison of atezo ORR, where we have seen ORR of atezolizumab in single digits, lurbinectedin again at 35%, and the combination of the two at 58%. When you continue to see one plus one equals three, something good is going on in terms of synergistic or additive benefit.
And to remind and reinforce what Luis said, Jazz and Roche have indicated they expect to complete enrollment early next year, which should deliver data with the PFS co-primary endpoint around year-end 2024. Moving on to LMS, leiomyosarcoma. Also at ESMO last weekend, we saw a phase III trial of 150 patients in first line from Dr. Pautier of Roussy in Paris, with trabectedin, also known as Yondelis. Recall that lurbinectedin is an analog of trabectedin with a similar mechanism of action. In this trial, the combination of trabectedin and doxorubicin was compared to doxorubicin in frontline patients with a primary endpoint of PFS by independent review.
The data presented showed that the PFS was more or less doubled from 6.2 to 12.2 months, with a hazard ratio of 0.37 and a statistically significant p-value, 0.001. Looking at overall survival with the caveats of post-progression treatments, the median saw a 40% extension of OS with a hazard ratio of 0.65. What was particularly pleasing in this case was to see that the control arm of doxorubicin, the overall survival, came in at more or less exactly what we've modeled with our phase III trial in these patients, which, as Luis said earlier, should start shortly. With that, I'll turn the microphone back to José Luis.
Thank you, Pascal. With this, we conclude our speech today, and we open the line to questions. Nadia?
Thank you. If you would like to ask a question, please press star followed by one on your telephone keypad. If you choose to retract your question, please press star followed by two. When preparing to ask your question, please ensure your phone is unmuted locally. Our first question goes to Amy Fadia of Needham. Amy, please, your line is open.
Hi, good morning and good afternoon. This is, Eason Lee for Amy. Thanks for taking our questions. Just a couple of quick ones. Maybe first, regarding kind of the Zepzelca U.S. royalties, I think if I sort of subtract the number you reported for the first nine months from what you reported for the first six months last, last quarter, the Zepzelca U.S. royalty does come in a bit higher than in past quarters. I'm curious, does that total, you know, contain some adjustments made from prior quarters? And if so, can you share the amount?
No, this figure we included in this quarter does not include any adjustment in the past quarters. This estimation is due for best information we have in hand.
Okay. Got it. Understand. Thanks. Maybe a second one kind of on the Zepzelca EU sales from kind of the EAPs. So understanding kind of it's, you know, it's... It makes sense that it kind of stepped down for third quarter versus second quarter. I guess, do you think, you know, that's kind of a good quarterly run rate to think about, or would you anticipate this to at least maybe potentially grow slightly, at least over the next few years prior to a potential EU approval? Just curious how you're thinking about that one.
Well, the raw material sales to our partners or the buyers depend on the level of the stocks of our partners have. Okay? And the your question is regarding the early access, the early access program. You know that this type of activities, we can't do any activity of the marketing and promotion, then this depend on the patient, the doctors, et cetera, et cetera. I can see in our early access program in France is the biggest is growing quarterly in the patients treated. Then this is a good sense- the sales channel, even if it's not approved, is established as standard of care in practice, the most important country where we have.
And probably will be affected, but not a lot, for the LAGOON trial, which is open some centers in France for the recruitment. But, we observe many doctors move from the third line to the second line, even in early access program for the patients treated. That the feedback we receive, and recently in the ESMO, they are so happy to have this drug in hands to treat patients.
Got it. Understand. And maybe, maybe just a last one. Kind of on the, on the API sales, I think you, you know, you mentioned about, the-- I think you, you had made some comments about lurbinectedin in China, I guess. You know, could we anticipate the, the API line maybe ticking up slightly as a result of that, as we, you know, go into 2024? Maybe just curious your thoughts on, on kind of, just the API?
No, no. For China, you will see the increases for the next year. Obviously, if I explained before, we expected the opinion for the Chinese authorities in the middle of next year, then usually you start to build the stock six months before. Then we expect them to start to see this figure in the early next year.
Got it. Thank you for taking our questions.
Okay.
Thank you. The next question goes to Joseph Hedden of Rx Securities. Joseph, please go ahead. Your line is open.
Good afternoon. Thanks for taking my questions. First one, could you talk a little bit more about your expectations for the lurbinectedin and combination data upcoming and the significance of that, please?
Yes, what did I say before? We finalized the recruitment, and we expected the data on the end of this year or beginning of the next year. Well, we don't know now the final result. We know, there's some interesting analysis we presented in some congresses in the past, when we only have recruited 30 to 35 patients, something like that. And the results were very impressive at this stage. Very, very impressive regarding the response rates, duration of the responses, number of cycles received by the patient, and the good safety profile. But to repeat, we don't know at this stage the data. Obviously, if the data is highly positive, our plan is to share this data with the regulatory authorities in order to decide the next steps. Okay.
Okay, thanks. That's helpful. And then just to clarify, on your lurbinectedin expansion plans, I know you're starting a potentially registrational trial in leiomyosarcoma soon. Did you say that now the mesothelioma plans are on the back burner or canceled, or is that just a 2024 project?
No, no, it's, it's, it's a different project, and we analyze the project very careful. We, we reassess the, all the program in mesothelioma, and we decide to, to, to stop. Okay? When you reassess this type of project, you reassess everything. On other hand, the leiomyosarcoma trial is great opportunity for the patients and for the drug and obviously for the company. We have high expectations about this trial. In fact, in the recent congress, in the ESMO Congress, and many key opinion leaders approached us. They... 90% of them want to participate in this trial. We expect that in go, in good, good results. Take in account, doxorubicin in first line treatment is about 40 to 50 years, that is not been approved today, a part of doxorubicin or ifosfamide.
I think it's a great opportunity for the patients and for the company, this trial.
Okay, thanks very much. And then just finally, I wondered if there was any advance on potential BD opportunities. Have you got any update on that front? Thanks.
Thanks, Joe. Hi. Obviously, if we had anything to say, we would have said it. So I'm going to be rather pedantic and repeat what we've said. We're engaged in multiple conversations with multiple partners about multiple structures for multiple assets. We continue to diligently look at them and look for a fit that makes sense for us. And, as I said, as soon as we have something to report, you guys will be right in the first hundred people to know.
Okay. Thanks, Pascal. Thanks. Thanks, Luis. Thank you.
Thank you. We have no more audio questions. I'll now hand back to José for any written questions.
Yeah, thank you, Nadia. We have a briefing question in regard to the license agreement situation in Japan for lurbinectedin. Luis, I'll hand it to you.
Yeah, well, now we are, some opportunities for that. And like Pascal said before, when we decided to an agreement, we send all the information to the market. But what is good is the interest in, some companies to have lurbinectedin in, in Japan.... more than, in LAGOON trial, we will include the Japanese patients. Then the regulatory, potential regulatory path in Japan now is so clear and is impacting great interest for the several companies for this, potential deal. Obviously, when we sign, we will announce.
Okay. Thank you. With this, we finish the round of questions. To conclude, let me just summarize by saying that this year's financial highlight is centered on the increase in R&D investment and the rising royalties generated from Zepzelca in the United States. We're also making significant progress in our ongoing clinical trials, and, despite the impact of generics on Yondelis's revenues in the European market, our balance sheet remains robust, and we maintain confidence in our investment strategy. We anticipate that this strategy will yield very positive news flow, as highlighted by our team during today's call. So, you know, we can wrap up by saying that we expect results for the phase two trial of lurbinectedin by year-endish. We also expect completion of LAGOON trial recruitment next year.
We expect data release for the phase II trial of lurbinectedin next year. We expect top-line PFS data of IMforte trial to read out the end of next year, early 2025, as it is announced. We anticipate data release for phase III trial of tivanisiran that will be in the first quarter of next year. So next year is going to be a, you know, very, very busy year for us. And with this, we finish our call today, and we would like to thank you all for joining us and wish you a nice weekend. Thank you very much.