Hello. Hello, everyone. I am David Heuzé, Head of Communication at MedinCell. As you can imagine, I am very happy to be with you today. With you, Christophe, the CEO of MedinCell. With you, Jaime Arango, you are our CFO, sorry.
Hello, David.
Live with us from the U.S., Richard Malamut. Dr. Richard Malamut, our Chief Medical Officer. Hi, Richard.
Pleasure, David. Hello, David.
Hello. One person is missing today, Helen, which is the Head of Alliance at MedinCell. She leads the relation with Teva, but I think too much sport for Helen. She cannot be with us today, but coucou, Helen, as we say in French. This conference is scheduled to last around 30 minutes, okay? As usual, you can send us your questions by using the chat module on the right of the screen, don't hesitate. Christophe, I believe I will have it, but Friday, we announced that UZEDY that you can see just behind me was approved by FDA. Can you explain what is this news and what are the consequences for MedinCell?
Yes. Very, very exciting times at MedinCell. A very emotional moment. You know, for the first time our technology will be treating patients on a large scale in the United States. UZEDY is a true game changer, a product that should become a standard of care in schizophrenia. It has huge benefits. It is in an indication where compliance is critical and long-acting injectables help with compliance. You know, schizophrenia has, you know, dire consequences when people do not comply with their treatments. Of course, the challenge is to sell the product, we believe we have the best partner to do that. You know, UZEDY is a strategic priority for Teva. We know that Teva has the right sales force to promote UZEDY.
Richard will tell us a bit later on the product, Jeime on the financial potential. Indeed, you know, royalties and potential milestones will arrive in the next few years and royalties in as soon as the next few months. We're talking about dozens of millions. UZEDY validates our technology, the same underlying technology that is under all our future programs. MedinCell is now in a new era among the few companies that have reached this stage, and this is the beginning. Right behind UZEDY we have two products in Phase 3, where we expect results in the next 18 months and a full pipeline right behind.
Thank you, Christophe. Christophe, do we have any news from our partner, Teva? Okay, do you know what is the current mood, I would say, with Teva?
Well, I think our friends at Teva are as excited as we are. There's lots of emails going back and forth. You know, we have been working with Teva now for 9 years, of 9 years of efforts, tenacity, you know, to get this amazing product to patients. UZEDY is the lead program of what the CEO of Teva unveiled at his last earnings call on February 8 about building a schizophrenia franchise with long-acting injectables. Their sales force is in the starting blocks. The product should be ready to go for sale in the next few weeks. It is the same sales force that has successfully ramped up AUSTEDO, the last blockbuster of Teva, you know, to about $1 billion in just a few small years.
Exciting times and really looking forward for UZEDY to be the success it deserves.
Thank you, Christophe. Richard. Richard, you're our Chief Medical Officer. You are also part of the Teva team that launched the product a few years ago. I can imagine that it is a very emotional moment for you today, Richard.
Yeah, it's very exciting to be here at the end. Back to the beginning, I had the opportunity when I was employed by Teva to be part of the team that created the partnership with MedinCell to develop long-acting formulations of risperidone and other antipsychotics. As head of psychiatry at Teva, I led the planning around the Phase 1 study that established safety and confirmed adequate blood levels of UZEDY in humans, and which was the first time that MedinCell polymers were injected into human subjects. I left Teva as the story of UZEDY was beginning, but I am thrilled to be back working at MedinCell as Chief Medical Officer at the successful end of the story when FDA approval was received the end of last week.
I'm now very excited to see favorable outcomes for patients with schizophrenia who will benefit from the use of UZEDY.
Sure. Richard, you're a specialist in central nervous system, CNS. Can you explain why long-acting injectable such as UZEDY Can play, I would say, a major role for patients with schizophrenia?
Yeah, of course. Patients with schizophrenia do respond well to oral antipsychotics when they take them regularly. However, as many as 80% of patients with schizophrenia are not compliant with their medications and suffer severe relapses which require several weeks of hospitalization to regain control. And on discharge, they will again stop taking their medications, leading to relapse and a repeat of the cycle. A long-acting injectable risperidone, such as UZEDY, ensures compliance as it is injected by the healthcare provider rather than relying on patients taking their oral medication. It is because of this benefit that there has been growth in the use of long-acting injectable antipsychotics by prescribing psychiatrists for their patients with schizophrenia.
Okay, Richard. Richard, can you tell us why UZEDY could become the treatment of choice for schizophrenia?
There are many approved formulations of long-acting injectable risperidones, but UZEDY has 4 key features that can make it the preferred treatment. First, most existing formulations are given intramuscular, which leads to a higher level of pain for the patient. UZEDY will be administered subcutaneously by a smaller needle, with much less pain on injection. Second, existing formulations often must be reconstituted in the psychiatrist's office, whereas UZEDY will be available in pre-filled syringes corresponding to 4 different oral risperidone doses for each of the monthly and every other monthly formulations. Third, UZEDY will have therapeutic blood levels within 24 hours of injection compared to many of the existing formulations that do not achieve therapeutic blood levels of risperidone on the first injection and require either oral risperidone supplementation or additional titrating injections. Lastly, UZEDY has a positive impact on patients' relapses and symptoms.
The Phase 3 study conducted by Teva provided data that demonstrated other differentiating features from existing formulations of long-acting injectable risperidone, such as continued and statistically significant improvement in both relapse rate and schizophrenia symptom score beyond the six-month primary endpoint in double-blind randomized controlled analyses. There was also statistically significant improvement in the Schizophrenia Quality of Life Scale, which is of high value to people with schizophrenia hoping to resume their normal daily activities.
Thank you. Thank you, Richard. Jeime, I come to you now. The commercialization is going to start now in the U.S.
Yes.
Can you give us some details about the targeted market?
Yeah, absolutely, David. Hello, everyone. This market, long-acting injectables schizophrenia, it's a $4.4 billion market in the U.S. back in 2022. It's a market that is growing double digit, 12% on average during the past five years, so it's growing very, very rapidly. Furthermore, Richard Francis, Teva's CEO, he mentioned during the investor call in last February that he targets this product to reach a 20% market share over time. What that means is that if I take those numbers, is that, you know, with a very high market, strong market over $4 billion, growing very rapidly, 20% market share, that means that we see this product as being a potential blockbuster. Blockbuster, meaning a product that reaches over $1 billion in sales annually.
What does it mean in terms of review for MedinCell?
Right. Let me step back a little bit.
Yeah
just remind everybody about the deal that this partnership that we have with Teva. It's a multiproduct. It's a platform deal that we have with them, in which all the costs are covered by Teva. Teva is in charge of developing the products and ensuring the commercialization. In exchange, MedinCell, we can receive up to $122 million in milestone payments, development, and commercial. Plus, there's going to be some royalties or percentage of sales that we will receive mid to high single digit. Now, in the short term, what it means is that with this approval, actually we just issued already the invoice to Teva of $4 million cash that we should receive in the coming weeks. Then we can wait for the commercial milestones to be reached upon the next 3 years.
That is a total of $105 million. It's not immediately, but in the next coming years, as Teva reaches a certain level of sales.
Okay. Sorry. What, what consequences... No, I would say, what is on the cash visibility of the company to date?
Yeah. Just before talking about the that cash visibility, so you understand the teams are ready, the sales reps are ready. Marketing is already ongoing. The market share will be gained gradually. For that, I mentioned the milestones, the commercial milestones that we will receive. On a quarterly basis, we will start receiving royalties, a percentage of sales. I mentioned mid to high single digit, cannot give you contractually the details, but somewhere between 5% and 9%. If we take the average, then we're not going to be that far off. What it means is that we will start then receiving these royalties as of the next quarter, if T eva starts the commercialization.
Okay.
Now, in terms of cash visibility.
Yes.
This approval confirms the cash visibility that we have been communicating, constantly during the past few months. The visibility brings us at least until the end of Q1 2024. We will receive the EUR 4 million from Teva, this milestone, the approval then allows us to withdraw the third tranche of the loan that we have with the European Investment Bank, that we of EUR 10 million that we signed back in November 2022. There might be some other opportunities to increase the visibility as some potential licensing deals could come over. I will let Christophe talk about that later on.
This is a new era for MedinCell. Christophe talked a new era. Financially speaking, what does it mean, new era for MedinCell?
Yeah, absolutely. It's a new era. Why is that? It's because the company changed its profile. Now we are a commercial company. We have a first product on the market. The perception of risk will be reduced. We're not only on the research and development, but now two products in Phase 3, but now one product being commercialized. It's great. You know, in the future, the creation, the value creation will come from the different products as they advance in the pipeline. I mentioned the two in Phase 3, there are some other products in the pipeline that will generate value for the company in the future.
Thank you, Jeime. We have question for you, but I will ask you later. Christophe, before we answer the question we received, same question, new era, what does it mean from your point of view for MedinCell?
Well, first, as I said at the beginning, you know, our technology is gonna treat its first patients on a large scale. This is our mission. You know, the DNA of the company is to treat patients. We'll get our first commercial revenue like Jeime explained very well. UZEDY is also a validation of the technology, the same technology that is, you know, under all our products. Everything is gonna accelerate. We are ready. We have a great, amazing team, a team that has shown its resilience these last few months. A team where every single person is a shareholder aligned with all our investors. I'm waiting, of course, for the next approvals.
We're all waiting for that. We received a few questions. First question about the future. Congratulations to the team. Thank you. Well deserved. Does this incredible news pave the way for new partnerships with major pharmaceuticals company, Christophe?
Well, of course, you know, we saw, we've seen an acceleration in discussions with the data from Phase 3, which was spectacular. The CRL gave us additional visibility. Now the approval, you know, is the final validation. We are seeing, you know, increased discussions. We have early stage collaborations, which we'll talk about if, you know, they are successful. Yes, we expect more and more partnerships.
Thank you. Next question about our partner, about Corbion, sorry. Could you come back on the company which is manufacturing your products?
Yes.
Corbion.
Well, Corbion has been an amazing partner. You know, we've worked together for 15 years now. Corbion is the company that allowed us to scale up the polymers, you know, from lab scale to clinical stage and to, you know, commercial stage. We work with polymers, you know, at research and clinical stage coming from the same production lines from the future commercial polymer. It's a huge advantage. Corbion is the largest manufacturer of biopolymers. The alliance has become a full-blown joint venture that has allowed us to control very tightly, you know, the quality of what we do. You know, what we do is amazingly complex. You know, we have to convince authorities that each formulation is identical and can work on all patients and deliver the right amount of drug, you know, for weeks.
In each formulation, there's the equivalent of one grain of rice of our patented polymers, which are manufactured in the Corbion's factories. Thank you, Corbion.
Thank you, Christophe. Next question. Greetings, MedinCell team. Okay. Congrats again on this amazing achievement. The question now, can we expect Teva sales efforts on UZEDY to be beneficial to mdc-TJK ? TJK, sorry. The olanzapine product currently in Phase 3 in the U.S. Could you accelerate its sales ramp up in the future, assuming successful Phase 2 results and NDA? Sure. Are UZEDY and TJK sales channels similar? Christophe?
The answer is yes. They are targeting the same prescribers, although they are very complementary products. You know, risperidone is first intention treatment, a standard of care in schizophrenia. Olanzapine targets the most severe patients. Yes, they will go through the same channel. We've all learned, you know, from our experience with UZEDY, and we hope we won't get the CRL again.
Sure.
Because this is a major product, you know, one that is even bigger than UZEDY. I want this one to come as early as possible.
Thank you. Thank you, Christophe. Jeime-
Yes.
The next question is for you. Well done to everyone.
Thank you.
Are you planning a capital increase in the short term?
Right. As I talked in the past, and a few minutes ago, it's a new era. We've mentioned that, and it's a new era being, you know, the risk in the company. We will always be looking to finance the company either through different grants or non-dilutive financing. Of course, We're always monitoring the capital markets, and we will do what is best for MedinCell and its shareholders on the basis that if we were to refinance the company, it's basically to refuel, to fuel the pipeline of the company, to be able to bring more products in the pipeline, to advance some others even further. That's how we will create value. We'll look into all the different options that will arise to us.
Thank you, Jeime. Next question. I don't know, maybe Richard can address it or maybe you, Christophe. Do you expect initial scripts to come from newly diagnosed patients, or will it come from patients currently on orals or even other LAI formulations? Christophe?
You know, there's probably three segments, you know, Teva will probably look at. Of course, you know, the prime target is patients that are switching from oral to long-acting injectable every year. There's about 15,000 of them, you know, every year in the US. Of course, there are, you know, patients that are already using long-acting injectables that may look at UZEDY, you know, as a better product, you know, small needle, subQ injection. It may take a bit longer to switch them over. Of course, then, you know, there might be also the opportunity to treat patients earlier in the disease, you know, first episode patients. Since we know that UZEDY is a very easy product to use, you know, Prescribers can switch easily from oral to injectable.
We know that the earlier patients with schizophrenia are treated, you know, the less cognitive irreversible damage, you know, they have to sustain.
I don't know if Richard, you want to add something?
Well, I think just to add one other thing is that, you know, while it... We of course would love it if psychiatrists would use UZEDY or a long-acting injectable first, it is likely that the patients will be on orals to gain control before switching to a long-acting injectable. We do know that patients who are on long-acting injectable antipsychotics do have lower costs related to hospitalizations, which should be of interest to payers in the United States, to perhaps allow for earlier adoption of a long-acting injectable over orals in these in these patients.
Thank you. Thank you, Richard. The last question started by congratulations, but not about UZEDY, but about another program, which is mdc-WWM, a program we developed with the support of the Bill & Melinda Gates Foundation. The question is simple: Will Bill Gates, so the foundations, continue to fund projects in the future? Projects.
We hope they will. We've been able to to go further than anybody else on their, you know, prime objective to develop a 6-month contraceptive for humanitarian purposes. You know, they've been a great partner and we hope we can help them with their humanitarian goals.
Mm-hmm. Jaime, I think we already received a grant for up to twenty-five-
EUR 23 million.
$23 million. Yes. Okay.
Yeah, absolutely. In this partnership with the Bill & Melinda Gates Foundation, they are supporting us with this grant that can go up to EUR 23 million to bring the product up until the end of a Phase 1, in exchange of the rights for humanitarian purposes in the low and middle-income countries. MedinCell keeps all the commercial rights everywhere in the world.
Thank you, Jeime. Thank you all. No more question. Thank you. Christophe, I leave you the floor for the last word.
Yes. Thank you, David. You know, it's an amazing event for the company. Thank you to all of you know, for trusting the team, trusting MedinCell. You know, we look forward to the next milestones and more products getting approval. We have major news coming in the next 18 months. I would like to pay tribute to Anh-Tuan Nguyen, our Chairman. Anh has been also my mentor for all those years and was, you know, had the vision to move MedinCell in the direction where it has. I would like to thank all our former employees for their contribution to MedinCell. All the existing employees who have showed incredible resilience in these last few months. Thank you to all.
Thank you to, you know, our investors and maybe future investors, that are attending the call today. I say à bientôt.
À bientôt. Next video conference will be on June the 13th.
Thirteenth.
Okay. For the annual results. I hope you, you will be with us. Thank you, Christophe. Thank you, Jaime.
Thank you.
Thank you, Richard. Thank you, everybody. Bye.