Okay, let's get started. Welcome, everybody. It's the second day of our conference here in Miami. With us right now is the management team of MedinCell. I have with me Christophe Douat, CEO, and Richard Malamut, CMO of MedinCell. Gentlemen, welcome. Thanks so much for taking the time, making the time for us to be down here. Before we delve into Q&A, we'd just love to get your maybe intro remarks and key business highlights, what we could look forward to in the next 12 months.
Okay. Thank you, Mike, for having us here. These are really exciting times at MedinCell. I told our shareholders that the next two years should be the most transformative years of the history of MedinCell. For three reasons. UZEDY is ramping up very nicely. Olanzapine should be approved sometime in 2026. Also, the next big product we have, the first collaboration with AbbVie, is moving forward very nicely. Very exciting times.
Got it. Got it. And for folks maybe not as familiar with your business model, you specialize in long-acting formulations of injections. And your biggest partner, actually one of your biggest partners, is Teva Pharmaceuticals. In that partnership, you're partnered with UZEDY, which is already on the market. And you've also formulated long-acting olanzapine, which will be submitted to the FDA. Is it still on track to be submitted by the end of this year?
Yes. That's what Teva said, yes.
Okay. Again, maybe to frame the discussion, there's one incumbent long-acting olanzapine that's been on the market forever, not doing very well. Maybe explain why that is and how you solved that issue.
Yeah. So there is a huge need for a long-acting injectable olanzapine product, first of all. And so Lilly, trying to build on the success that Janssen had with its portfolio of risperidone, paliperidone products, tried to do the same thing with olanzapine. And they did succeed in producing a long-acting injectable olanzapine, but it has not been a commercial success, mainly because of a safety finding called post-injection delirium and sedation syndrome, PDSS, that's believed to be caused by a burst of olanzapine. The Lilly product is injected in the muscle and does not solidify right away, so lots of opportunity to get into the bloodstream. So when we formulated our long-acting olanzapine, it was subcutaneous, solidifies right away, very few blood vessels in the subcutaneous space. And even if injected directly into human plasma, it doesn't release.
We believe that should eliminate or at least mitigate the risk of PDSS.
Got it. So your phase III came and went. You've clearly passed the bar, met the FDA's bar of 3,600 PDSS-free injections. Maybe perhaps talk or remind folks how that bar was established in the first place.
Yeah. So that came from negotiations with the FDA by Teva prior to the initiation of phase III, which is something you should always do. You should always talk to the FDA upfront to agree upon what the study will show. So that's where that 3,600 number came from, based on the relative incidence of PDSS, which is less than 0.1% of injection, 2% of patients.
Got it. Got it. So from the phase III data, clearly, it seems pretty reasonable to say that PDSS is not a risk, but you never know what the FDA is going to do. Is there still a risk that the language of PDSS, at least a warning, could be in the label?
Yeah, so my stark answer to this is it's the FDA.
Yeah.
But negotiating with the FDA and agreeing with the FDA ahead of time on the minimum number of injections is usually a good thing. And because there weren't any cases of PDSS in the entire clinical program, here, zero is a really good number. And bodes well that there should not be any of the onerous monitoring requirements of three hours in the clinic after every injection and a REMS program that really limited the use of the Lilly product. So we will see. The label negotiations occur typically a month or two before the PDUFA date. So we will all find out at approval.
Got it. The PDSS aside, just focusing on the other aspects of how it performed in clinical trials, efficacy continued to improve over the course of 52 weeks. In fact, at the end of the trial, it didn't even seem to be plateauing. But there seemed to be minimal dose response. Will Teva seek to improve all three doses?
Yeah. The idea of putting all three doses in the phase III is exactly that. You want all three doses approved to make it easier for clinicians to transition. Many of these patients, if not most, will start on oral olanzapine at one of the three doses for schizophrenia, 10, 15, or 20. Providing a PK equivalent LAI dose, which is why the milligram strengths are a little odd when you look at them, allows for clinicians to easier transition from a 10 or a 15 or whatever they're on. That was the point of having all three doses. Teva continued to follow efficacy over the full 48-week open-label using the Positive and Negative Syndrome Scale. As you said, not only did they maintain efficacy, which was really the goal, but they continued to show improvement based on that scale.
Very similar to UZEDY, had the same thing over two years, and clinicians do really appreciate that. They really want to see that continued efficacy.
Got it. In the phase III, discontinuation rates were low. But thoughts on olanzapine LAI's metabolic profile? Does it differ that much, if any, from the oral formulation?
All comparable. All of the weight gain, the glucose, the lipids, all were measured comparable to the oral olanzapine, comparable to the LAI olanzapine from Lilly. Again, the important difference here is that with the oral, you send the patients home with their oral olanzapine. You're not sure when they're going to come back and when they do come back, if they're taking their medicines, they may have already gained 10 or 15 pounds, and they may already have hyperglycemia or lipid changes. Here, because it's an LAI, patients will come back to the clinic every month. There's more opportunity to measure the weight, monitor it, and if necessary, check glucose, check lipids, intervene earlier. This is what clinicians tell us is more of a value of an LAI versus the oral in regard to the metabolic.
Got it. Last data question before we got to get into the commercial aspects of LAI olanzapine. I mean, speak about injection site reactions, and is this a big issue for LAI olanzapine?
Yeah. So there were injection site reactions, 10%-14% in the study, but they were almost all mild, a few moderate, no severe, all resolved, and interesting, on repeat injections, the incidence decreased such that by the third monthly injection, they were at a level that was maintained through the rest of the injection, so the importance of that for a clinician such as me is that if I give my patient an injection of an LAI olanzapine and they get an injection site reaction, I may tell them, "Look, we have data that suggests it should decrease with repeat injections. So let's try again. Let's give another injection." Most of the discontinuations due to injection site reactions were after the first injection, so now there's data to say, "Let's continue."
When we think about the antipsychotic space, I mean, there's multiple risperidone/paliperidone options in the market. There's only currently one incumbent LAI olanzapine. How come no one's developed a subQ option so far? What is it about olanzapine aside from the PDSS? How come no one's been successful in circumventing this issue before?
One company tried, the originator, Eli Lilly. They followed the exact same strategy as J&J and risperidone, but they failed because of the PDSS issue that Richard talked about. This has been a huge deterrent for any company to attempt to develop a long-acting injectable. Only a bunch of crazy French people in the South of France with that amazing technology tried to solve it and succeeded.
There's some genius in that craziness, Christophe. I have to hand it to you. But you definitely solved this problem with the incumbent. Right now, I think Teva had a great slide on just the market share of schizophrenia. It showed that, I think, 13% of all antipsychotics are kind of comprised of LAI and psychotics, where 87% are still orals. But within that 13%, they showed that Lilly's olanzapine has less than 1% share. So when we think about the commercial prospects of your drug, LAI olanzapine, would it be conservative to assume that your LAI olanzapine could at least garner 13% share or no?
I think it would be more than conservative for several reasons. First, that 13% is an average between drugs that have a long-acting and some that don't, right? So it's a low average. If you look at, again, J&J, risperidone, one-third, one-third of patients on the risperidone use long-acting injectables. And in the case of olanzapine, there's even a bigger need for a long-acting injectable because those patients are the most severe patients, the ones that you want to make sure stay compliant.
Got it. Got it. Obviously, the schizophrenia innovation in the field continues to evolve. What have you been hearing from KOLs in terms of their willingness to use LAI olanzapine or just LAI in general versus newer, maybe muscarinic agents that are just launched?
Yeah. No, I mean, when we talk, first of all, the field is changing a bit on the uptake. Certainly, in the early days, clinicians were not using LAIs early and injection, sort of foreign for psychiatrists. But what's happened lately is that most key opinion leaders in psychiatry are now recommending earlier initiation of an LAI. Why wait till they relapse? Why wait till they end up in the hospital? Start earlier. The second thing is that the American Psychiatric Association just came out with a position paper last summer recommending exactly that, earlier adoption of an LAI. And then finally, U.S. payers are starting to see data from UZEDY and others showing that they can actually save money if they use an LAI. And so we are looking at that 13% to grow a little more.
Now, in terms of olanzapine, clinicians have told us that there's a huge need for this more potent antipsychotic for the more severe patients, and the Lilly product, for the safety reason, is just not being used, so they're excited. They're really looking for this. We expect early adoption, particularly because they're familiar with our product. They're familiar with UZEDY. They're already doing subcutaneous injections, so we think the uptake for a drug like LAI olanzapine, where there's basically no competition and a huge need, should be even quicker.
Got it. Just given the nature of olanzapine, it's generally used for the more severe cases of schizophrenia. So that said, do you feel, assuming approval, do you see business coming from new to LAI conversions versus switches? How do you see that panning out, that dynamic share?
Yeah. I mean, what we know from early data on UZEDY is that the majority are coming from switches, from oral risperidone to UZEDY. But interestingly, there already were switches from the Invega products from Janssen, paliperidone to risperidone, and even from other oral antipsychotics who would switch to oral risperidone and then come to the LAI. Now, olanzapine, because there's nothing else out there in the LAI space for these more severe patients, we do think there's going to be earlier adoption and earlier switching, even from other orals that don't have an LAI, like quetiapine or lurasidone. Certainly, from oral olanzapine, that would make the most sense. And we'll see about risperidone. There may be some switch from LAI risperidone to LAI olanzapine, just as they do now with the oral.
Got it. And Teva has communicated their willingness or intention to also market in Europe, correct?
Yeah. The use of olanzapine oral, while higher in the U.S., is even more higher, which isn't good English, but even more higher in Europe, where in the U.S., it's 20%. In Europe, it's 37%. So European physicians clearly are looking for, even more than the U.S., looking for efficacy and willing to tolerate safety tolerability, particularly in these more severe patients. And that is why Teva, I think, is already committed to Europe for LAI olanzapine.
Got it. And we'd love to hear your view on this, Christophe. I mean, not too long ago, Teva guided for peak franchise sales, which includes both olanzapine and UZEDY. They guided to long-term peak franchise sales of between $1.5 billion to $2 billion. That said, consensus estimates, so just for long-acting olanzapine, consensus estimates at least $1.1 billion in risk-adjusted sales by 2035. Is this conservative?
Company guidance is company guidances. Teva also gave an early guidance on Austedo of $1 billion when it is about to reach $3 billion. The early guidance in 2024 for UZEDY was $80 million. They did $117 million, et cetera. So the real question is, what is the potential of this drug? The potential, of course, depends on many parameters. But the way I look at it, and many people seem to confirm what I say, is that we have a benchmark here. We have J&J. They did $5 billion on risperidone, paliperidone, right? We know that olanzapine is used way more than risperidone, 20% in the States versus 16%, even 37% in Europe. And we know our product will have immediate onset and subQ. So in theory, the potential of olanzapine is enormous. But as I said, there's many other parameters around, especially the performance of the sales force.
We know Teva has done extraordinary work, both on Austedo and UZEDY, and we know that they are in the starting blocks for olanzapine, so it bodes well for the future.
Sure. Pivoting to UZEDY, I mean, UZEDY, different situation. It launched into kind of a crowded marketplace in terms of existing risperidone, paliperidone alternatives. But still, it's doing pretty well. Why is it doing well despite being in a crowded market?
Yeah. You know, we believe UZEDY has become the golden standard in long-acting injectables. It ticks all the boxes. For a long-acting injectable to be used, it has to have the right features. And UZEDY has every single feature that is needed. It is subQ, ready to use, immediate onset. You can inject wherever you want. No other long-acting injectable has all those features. And so it is no surprise to us that, yes, UZEDY is doing well.
Yeah, and Richard, that last attribute that he mentioned, the freedom of injection site on the body, that's underappreciated, right?
Yeah. Teva had conducted a study a few years ago called DECIDE, for those who want to look it up, before the approval of UZEDY in which they asked 100 psychiatrists if they could design the perfect LAI in schizophrenia, what features would it have? And the number one feature was exactly that, flexibility on where they could inject. And so UZEDY whether it's in the arm, the abdomen, or the thigh, has the same efficacy and safety compared to the Janssen products, where, because they're intramuscular, they have more variable absorption. And PK can differ by up to 30%.
Got it. More of a rapid fire, just given the interest of time. UZEDY just got the bipolar approval.
Yeah.
Over time, over the long term, will bipolar sales eclipse or be the majority of sales relative to schizophrenia?
Yeah. I mean, it was just approved in October, so the quick answer is we will see, but we have some hints. We know that more than 300,000 patients in the U.S. are already taking a risperidone product, mostly oral, some the two-week LAI. The other formulations from Janssen are not approved, and then we can look at long-acting injectable Abilify, aripiprazole, in which one-fourth of the scripts are for bipolar, so knowing that there's almost twice as many patients with bipolar I as schizophrenia, the market is huge, and we will see how it performs, but yeah.
Just for the record, again, for folks less familiar, what is the royalty rate that you receive on both UZEDY and LAI olanzapine?
So we are receiving mid to high single-digit royalties. And plus, we are eligible on each product to $105 million of commercial milestones per product.
Got it. Also pivoting to Celecoxib, a totally separate program. That's geared up for its second phase III to start this year, correct, Richard?
Yeah. We're targeting 2026. We've been meeting with the FDA to confirm the clinical endpoints, the study design, and we hope that one more phase III study, in addition to the completed phase III, would be adequate for approval.
Got it. And the AbbVie collaboration, any updates to this program? Where in phase I is it right now?
So remember, we selected the lead formulation with AbbVie in September of 2024. So there was no official communication on the start of phase I. But what I can tell you is that historically, it takes us about 18 months-24 months to reach IND.
Got it. Got it. Well, unfortunately, out of time. But gentlemen, thank you so much for being with me. Very informative discussion.