Hi, I'm Sean Hammer. I'm a European analyst in the Pharma and Biotech team here at Jefferies. I'm lucky to be joined by MedinCell. We have Christophe Douat, who is CEO, and Richard Malamut, who is the Chief Medical Officer. Let's kick off. Firstly, before we dive into specifics, could you please give us an overview of your proprietary BEPO technology? What is it, and what makes it so unique?
We do long-acting injectables. Today, most long-acting injectables are intramuscular, take weeks to reach therapeutic level, and need reconstitution. Our technology has allowed us to break all those barriers, do sub-queue injections, immediate onset, and ready-to-use products. All our products are now best in class, and we are setting golden standards in long-acting injectables in many areas.
Brilliant. Thank you so much. Let's move on to your on-market schizophrenia drug, which is partnered with Teva in the U.S.. This is Uzedy. Uzedy brought in about USD 120 million of sales in 2024, which was above their USD 100 million guide. Teva's 2025 outlook is USD 160 million. With this in mind, could you outline the momentum of sales since launch two years ago?
Yeah, so we gave Teva the ideal long-acting injectable in schizophrenia for the reasons I mentioned earlier. Momentum has been extremely good. The sales for 2024 were 50% above the initial guidance of USD 80 million. The new guidance is USD 160 million. I'm not saying the final number will be 50% above USD 160 million, but it could be, given the momentum that we are seeing. Month after month, prescriptions are rising very rapidly and steadily.
Brilliant. Could you perhaps tell us what the latest is on access in the U.S.?
There are new rules on Medicare. Medicare Part D will be designed in 2025, which will reduce out-of-pocket costs, which is great for patients. On the positive side, will increase volumes as well.
Okay. Could you just remind us what the economics with Teva are here and what peak sales estimate you and Teva are baking in for UZEDY?
Yeah, so for UZEDY, we received USD 17 million of milestones and are eligible to USD 105 million of commercial milestones, which we'll receive depending on certain thresholds of sales. We are getting mid to high single-digit royalties.
Are there any plans for expanding beyond the U.S., perhaps in Europe or the APAC region? If so, could you tell us any potential timelines for this?
Yes. Yeah, so Teva has not disclosed any regions or countries they plan to go to. Rest assured that they are working on that. You should also assume that they would start with countries and regions where additional clinical studies are not required, but nothing to disclose here on that quite yet.
Okay. Stepping outside of schizophrenia, Teva disclosed that its supplemental NDA has been accepted for UZEDY for bipolar disorder, which implies potential label expansion by the end of this year. What's the total addressable market for bipolar disorder versus schizophrenia, and what are the current options for patients in this disease?
Yeah, so bipolar disorder is a large market overall, but important to note that 300,000 patients are already taking risperidone for their bipolar disorder, mostly as an oral. Now there are two long-acting injectables indicated for bipolar disorder: the two-week Janssen long-acting injectable risperidone and the one-month aripiprazole product. Both of those have challenges that UZEDY was developed to address. Also note that while in schizophrenia, we know that 80% of patients stop taking their medicines within a few years. In bipolar, it is 60%. Still an issue with non-adherence. The last thing I'll say is that aripiprazole, the long-acting injectable aripiprazole, 25% of its use is already in bipolar disorder. We are looking forward to approval sometime later this year.
Brilliant. Thank you. Now moving on to your severe schizophrenia asset. This is MDC-TJK. It's based on olanzapine, also partnered with Teva. Historically, we know that uptake of Eli Lilly's Zyprexa and Relprevv was not very good. We know that in the phase three study, there were no cases of PDSS after, if I'm not mistaken, 3,400 injections completed of the required 3,600. Following Teva's discussions with FDA, what could the label look like for olanzapine?
Yeah, so we know that the issue with Relprevv formally was this PDSS, leading to stringent monitoring requirements on their label, which has significantly limited its use. We developed the long-acting injectable olanzapine to mitigate or eliminate the risk of PDSS, which we appear to have done with zero cases of PDSS in more than 3,600 injections. That 3,600 number is important because that was a number agreed upon by Teva and the FDA when they met prior to initiation of the phase three study. Now, in terms of the label, that would be discussed between Teva and the FDA somewhere within a month or two prior to approval. We can speculate, however, that given that there are zero cases of PDSS, there's an open possibility, I'll say maybe even probability, that these monitoring requirements will not be included in the label.
We have to wait for the final label to be sure.
Of course. You've previously stated that olanzapine is the bigger opportunity compared to Uzedy. If I remember correctly, you flagged it as a multi-billion dollar peak sales opportunity with a faster ramp compared to UZEDY. What drives your conviction here?
As much as UZEDY is seen as a $1 billion to $2 billion opportunity by our analysts, olanzapine LAI is, for all our analysts and some of Teva's, a $2 billion plus opportunity for three reasons. Olanzapine is the most used antipsychotic in the U.S.. Second, it is reserved for the most severe patients, the ones that need the long-acting injection the most. Third, there is no appropriate competition.
Thank you. I believe NDA filing was initially expected during 1H, but it's been slightly pushed to 2H. Could you maybe touch on anything that caused this delay?
Yeah, I would leave it to Teva to comment on why there was this delay. They have confirmed as recently as last week that they do plan on filing the NDA second half of this year, perhaps even earlier in the half than later. I think more important is that it is on track for filing. We'll wait and see.
Brilliant. Thanks. Likewise with UZEDY, is there any appetite to launch olanzapine ex-U.S.? Is there any differences between the U.S. and Europe in terms of that schizophrenia market?
Yeah, so here Teva has disclosed that they will be applying and launching in Europe. When they ran the phase three study, Solaris with olanzapine, they did include sufficient European patients and European sites to allow this without additional clinical studies. It is true that in Europe, there is an even greater uptake of long-acting injectable antipsychotics than in the U.S. I think it is a very attractive market. As we've talked about, olanzapine is very different than risperidone, providing value for those more severe, more refractory patients with schizophrenia.
Thank you. Now switching gears slightly, let's move on to MDC-CWM. This is your other late-stage asset, long-acting intra-articular celecoxib. It was in a phase three study as a post-total knee replacement analgesic. Although the study missed its primary endpoint, you saw a strong signal in a particularly large subgroup of patients, which is the group of patients that previously never undergone total knee replacement. Could you just tell us what the opportunity could look like for MDC-CWM if the label was approved?
Yeah, so the study was run in all patients, independent of whether they had had a prior knee replacement surgery or not. The study did miss its primary endpoint in the total population. Important to emphasize, as you hinted at, that in the large subpopulation of patients who had not had prior knee replacement surgery, 70% in the study, as much as 90% in the real-world population, it did reach statistical significance. Moving forward, MedinCell and our development partner AIC do plan to utilize that subpopulation of no prior knee replacement as the primary population. It's also worth mentioning that Horizon, who had Zilretta approved in a similar indication, utilized this no prior TKR population as their primary population, and their label was broad, meaning they were not restricted to use in patients who had had no prior knee replacement.
Thank you. A second phase three study, to my understanding, needs to be run according to your last communication. You argued that information control is more important than pain control in this particular population of patients, but FDA wants to see a pain endpoint. Has the trial design been solidified? Is your partner, AIC, do they have the capital to run this study?
Yeah. I will emphasize that while celecoxib is an analgesic, it's an even stronger anti-inflammatory. In that completed study, in the total population, not just the subpopulation, there was a high degree of statistical significance in measures of inflammation, range of motion, joint effusion, and functional knee measures. The next study has been agreed upon with the FDA. We did meet with them earlier this year and did have a good discussion and confirmation about what endpoints would look like and study design. We do plan to initiate that study with our partners, AIC, by the end of the year.
Brilliant. Now let's move on to one of your important partnerships. You have a partnership with AbbVie for six programs. The first candidate's been chosen. It's currently in development. When could we see this in the clinic? Thus, when do we know what indication this is for?
Yeah, so to date, as you know, AbbVie has not disclosed the API or the indication, but lead formulation was identified at MedinCell last August/September. You should know that typically from lead formulation identification to IND filing is somewhere in the 18-24 month range. Again, we haven't disclosed when the IND will be filed. I would also point out that identifying lead formulation is a very important milestone that ensures success of the molecule, particularly with a long-acting injectable. I think once we have IND filing or shortly before, I would anticipate we'll be able to identify the API and the indication.
Do you think the deal with AbbVie creates a path for further BD activities with other large pharma companies? Have you had any interest from anyone else following the deal?
Of course. AbbVie is the third pharma in the world, sometimes seen as the most innovative. The deal we did with them just a year ago has increased our credibility, visibility, and we are getting more and more discussions with other companies.
Brilliant. Could you remind us of the economics you have with AbbVie?
With AbbVie, we received USD 35 million upfront. There was one program already ongoing at MedinCell, eligible for USD 315 million of milestones. We can do up to five more, again with USD 315 million of milestones each, so for a total of USD 1.9 billion, plus royalties that can go from mid-single digit to low double digit.
Brilliant. Thank you. Now let's move on to financials. Could you tell us your cash position at the moment and if you foresee any capital raises of any sort in the near future?
We did a beautiful raise in February of USD 43 million. If you do the math, today we have between USD 65 million and USD 70 million of cash. At the same time, our P&L is improving dramatically as our revenue increases. Our revenue will be about three times last year's revenue. We should reach profitability in 2026, next year. We do not foresee any new capital raise.
Brilliant. What is your latest status on your discussions with the European Investment Bank? The two additional covenants, to my understanding, came into effect in April, but compliance might be tricky as per the last communication. Are you planning on obtaining a waiver, or do you think your current cash position should support you in that?
Yeah, so we have obtained actually a waiver, and so there is no issue there anymore. Again, the EIB has been a great and very collaborative partner for MedinCell.
Brilliant. Are there any milestones you're expecting this year for any of your programs? That's something that you've disclosed.
Yes. On olanzapine LAI, we expect a milestone on approval, hopefully in 2026. On UZEDY, the next milestone should be a commercial milestone linked to a threshold of sales.
Brilliant. And then just more on a technicality, could you explain to us how you recognize the payments from the AbbVie agreement?
All payments are partially recognized every year according to IFRS. For the first six months of last year, the number was published, we recognized USD 3.7 million. The final recognition amount for our fiscal year ending March 31, 2025, will be disclosed during our earnings call in June.
Brilliant. Now let's shift to your other programs. You also have a contraceptive and also an injectable for malaria in your pipeline. Could you speak a bit more about these and whether they've entered clinical development yet?
Yeah, so let me start with the contraceptive. We're very excited about this one. It provides six months of contraceptive efficacy in a subcutaneous injection. Existing injectables last two to maybe three months. Beyond that, women need to use implants, surgical implants or devices, which is not always attractive for those women. This would be subcutaneous. Now, it is fully funded by the Gates Foundation, and we are planning to have our first patient in phase one a little later this year. The malaria program uses an ivermectin API, this time killing mosquitoes endectocidal, particularly in vulnerable areas such as sub-Saharan Africa, where this is anticipated to prevent spread of malaria, particularly in children. That one is funded as well, and we're looking to start phase one sometime within the next 12 months.
Brilliant. Thank you. Could you perhaps run us through the new Bepo formulation, so BepoStar? What is it and how is that different from what you currently have?
Bepo, as the first generation of our technology, is a combination of PEG and PLA copolymers, and the central copolymer is a PEG, linear PEG. BepoStar, we have replaced the linear PEG with a star-shaped PEG, which has improved many features of the formulations in terms of the APIs we can do, viscosity burst. On top of that, it also extended the patent life to 2040.
Brilliant. Is there any appetite for BD M&A within MedinCell?
We are constantly looking at and scouting technologies all over the world to see if some of them could be interesting for the company. I predict that in the future, 50% of our innovation will come from our internal innovation and 50% external.
Brilliant. Thank you so much. Is there anything else that you want to talk about that we haven't touched on today?
I think we've covered a lot. These are very exciting times for MedinCell. On the finance side, we are really at the beginning of the hockey stick. The next five years should really bring massive amounts of royalties to the company. In parallel, we are increasing our impact with more programs and more programs getting approved and getting into new indications as well. Very motivating for all of us. Thank you.
Thank you. Any questions? All right. Thank you so much.
Thank you.