Welcome to Camurus Q1 report 2023. For the first part of the conference call, the participants will be in listen-only mode. During the question and answer session, participants are able to ask questions by dialing star five on their telephone keypad. I will hand the conference over to CEO Fredrik Tiberg. Please go ahead.
Thank you so much. Good day everyone. Thank you for taking the time to joining our Q1 earnings call today. I'm pleased to report on a strong quarter. First, before starting, please note our forward-looking statements. We will begin today's call with a summary of Q1 highlights, go to financial results, followed by commercial and R&D pipeline updates, finish off with Q&A. With me on today's call as previously is Jon Garay, our Chief Financial Officer, and Richard Jameson, our Chief Commercial Officer. Let me first start with the Q1 highlights. We had an excellent start of the year with good top and bottom line growth. Buvidal net sales grew by 40% year-on-year to 282 million SEK. We received new markets and pricing approvals in the Middle East and Europe.
In the US., the FDA review of Brixadi NDA continued with the PDUFA date coming up in just 2 weeks time. In the R&D pipeline, 4 phase 3 trials and 1 phase 2B trial progressed in different indications, where importantly, the pivotal phase 3 trial of CAM2029 in acromegaly is now being completed. In the SORENTO trial, that is clinically, I should say. In the SORENTO trial, we reached 50% randomization out of a target of 302 GEP-NET patients. We can also mention that our partner, Rhythm, completed their enrollment in their phase 3 trial of weekly setmelanotide for treatment of genetic obesity disease. On the corporate side, we delivered profitability for the fourth consecutive quarter, in this case of 59 million SEK, an increase of 60 million SEK versus Q1 2022. We strengthened our cash flow.
We continued growing the company with new talent, including appointing Alberto M. Pedroncelli, MD, PhD as our new Chief Medical Officer and member of the executive management team. We started the build-up of our US. commercial infrastructure for CAM2029. With this brief introduction, I'll hand over to Jon for a financial update.
Thanks a lot, Fredrik, and good afternoon, everyone. We would like to share with you now the main highlights of our financial performance this quarter. From a total revenue point of view, Camurus achieved 284 million SEK in the quarter, delivering a growth of 29% versus same period last year, and with product sales of 282 million SEK growing 40% versus prior year and 6% versus prior quarter. Product sales grew materially higher than our total revenue as Q1 last year recognized other revenues by an amount of 18 million SEK, including milestone by Rhythm Pharmaceuticals. Operating result for the quarter was 74 million SEK, which means a 69 million SEK improvement versus same period last year.
Company has achieved an earnings per share after dilution in the quarter of 1.02 Swedish krona, equivalent to a profit after tax of 59 million SEK in the quarter. Finally, Camurus' cash position at quarter end was 586 million SEK, which represents a 47% improvement versus same period prior year. If we now move to next slide, we can see the main components of our operating result. Gross margin improved 175 basic points in the quarter, driven by production efficiencies, reducing a scrap by 139 basic points and affects our ability, driving 36 basic points. In total, gross margin delivered 255 million SEK in the quarter, and year to date, gross margin reached 89.9%.
Total OPEX reached SEK 184 million, which is a 3% decrease versus same period prior year, driven by following four factors. Firstly, marketing and distribution investment to support market penetration in own territories and expansion of Buvidal into new markets grew by 32%. Secondly, administrative expenses aligned with corporate evolution to substantiate company development grew by 37%. Thirdly, R&D investment declined 15% versus same period prior year, driven by timing of milestones in our three ongoing phase 3 studies and clinical trial product generation. Finally, gain for hedging contracts was positive by SEK 3 million in the quarter, while prior years in quarter was negative by SEK 9 million. Company operating result became positive by SEK 74 million in the quarter.
Profitability may fluctuate between quarters as we continue our investment in our pipeline to bring product candidates to market as soon as possible. If we now move to next slide, our cash position at quarter end was SEK 586 million, delivering a 47% growth versus same period prior year. Camurus generated SEK 80 million cash in the quarter, mainly driven by company operations generating SEK 86 million, compensated by SEK 61 million investment in working capital, mainly customer receivables following sales growth. Other small drivers drove SEK 4 million cash reduction, mainly lease liabilities. As end of quarter, Camurus has no debt. Our guiding principles for capital allocation continue being reinvest in our business to accelerate Buvidal market penetration and geographical expansion. Secondly, bring CAM2029 to market as planned. Lastly, support our company strategy in the organic growth opportunities enhancing our company value.
All in all, Camurus closes Q1 with a solid financial position, interesting growth opportunities, and is on track to deliver 2023 market guidance. Having said that, I would like to pass the word to Richard. Thank you everyone for your attention.
Thank you, John. Good afternoon, everybody. We move to a commercial update, and I'll start in Europe with Buvidal's progress in Australia, Europe and MENA. Buvidal continued to grow, sales for the quarter were SEK 282 million, up 40% year-on-year and 6% quarter-on-quarter. This increase comes on the back of a strong Q4, where we had large one-time orders from the MENA region following the pricing and reimbursement approvals. We saw good growth across markets, most notably in the UK, where Buvidal exceeded 5% total patient share as new funding became available and was allocated to the treatment clinics. Similarly, the interest of using Buvidal in criminal justice settings is increasing in several countries and constitutes a substantial opportunity for further growth.
Based on the market sales in March, we had about 39,000 patients in treatment at the end of the quarter, a net increase of 3,000 patients since December. Our market expansion efforts also continued during the quarter, resulting in market approval in the UAE and pricing approvals in both the UAE and Greece. In addition, we have four regulatory applications and four pricing submissions under review. Finally, as presented earlier, we withdrew our variation application for Buvidal in chronic pain, and we'll come back to this development after the summer. Now moving over to the US. The US approval decision for Brixadi is imminent, with a PDUFA date in less than two weeks. We see a significant market opportunity for Brixadi in the US and based on the large medical need and the treatment gap shown on the right-hand side of the slide.
There are new government initiatives to increase access to treatment. It's a growing market. There's a clear differentiation and positioning of Brixadi. If we take you to those in turn, because of the severity of the opioid crisis, several important measures were recently taken by the US. government to lower the bar to treatment. These include an increase in funding with over $6 billion, removal of DATA waiver, so physicians can treat more patients, and new guidance to support expansion of treatment in the criminal justice setting. The US. opioid use disorder market is expected to grow significantly in the coming years to over three and a half billion US. dollars. Long-acting injectable buprenorphine is forecasted to be a major growth driver of this expansion. Currently, only an estimated 3%-5% of patients receive long-acting injectable treatment.
In addition to these positive market dynamics, Brixadi and of course Buvidal in Camurus' rest-of-the-world markets is well-differentiated with flexible dosing and pathology, both weekly and the monthly formulations. It's easy to switch from current daily treatments through dose equivalent table. It's the only long-acting injectable that can be initiated from day one, and it's simple to use and easy to store. With all these factors, we look forward to seeing Braeburn successfully launch Brixadi in the US. and making it available to patients. On that, I'll hand back to Fredrik.
Thank you so much, Richard, and I will give a brief update on our lead development program, CAM2029. During the quarter, we continued to progress our late-stage clinical programs for our subcutaneous octreotide depot, CAM2029, across three rare disease indications. Acromegaly, the growth hormone disease, gastroenteropancreatic neuroendocrine tumors, GEP-NET, abbreviated, and polycystic liver disease, PLD. The goal is to develop a best-in-class therapy in all of these indications, so we're actually in PLD, the first approved therapy. CAM2029 has the potential to address shortcomings of current first- generation somatostatin analogs and become the first- line medical treatment for acromegaly and NET, as well as a new treatment for PLD. This is based on the prospect of improving patient convenience, quality of life, and increasing efficacy based on significantly improved drug exposure and bioavailability.
CAM2029 has a high potential peak sale, estimated to above $2 billion annually across indications, with the largest opportunity being in NET. Based on the commercial fit and the large opportunity, Camurus intends to commercialize this product ourselves in the US., Europe, and Australia. As you also know, and I've said previously, we have a comprehensive clinical program ongoing with CAM2029. This includes three Phase 3 studies in Acro and NET and one Phase 2B study in PLD. All have progressed very well during the quarter, and I'll give a short status update on them in the next few slides. Our first and most advanced study is the pivotal randomized controlled trial of CAM2029 in acromegaly, where the last patient now has completed treatment, and we are working closely then to close the study as we are speaking.
This is a double-blind, placebo-controlled trial over 24 weeks in patients treated with standard of care with either octreotide long-acting release, LAR abbreviated, or lanreotide autogel. The primary endpoint is the response rate of biochemical control defined by insulin-like growth factor 1 plasma levels being below 1 times the upper limit of normal at the end of the treatment phase. This is a classical e-endpoint in this indication. In addition to that, we have several important secondary endpoints, and these include clinical signs and symptoms, several different patient-reported outcome measures, looking at, for instance, treatment satisfaction and quality of life for patients, as well as pharmacokinetic and of course, safety and tolerability endpoints. Over to the overall status in the progress. In acromegaly, our 2 phase 3 trials have progressed, both of them towards completion.
As mentioned, we are in the process of finalizing the pivotal efficacy study of CAM2029 by early June. A key milestone of top-line results from the study is expected to be announced at the end of June. The second trial is a long-term safety study, and we plan to report interim results from this later in the Q3 . This is also going to be included in our regulatory submissions that are expected to go in late 2023, early 2024. The work is ongoing here according to plan. In GEP-NET, the second indication, we reached the milestone of 50% recruitment out of the 302 patients planned to be enrolled in the SORENTO trial.
I'm really pleased that the recruitment is progressing so well, in this largest ever randomized controlled trial of a somatostatin analog in this indication. We remain on track to enroll the rest of the patients during the year. In PLD, recruitment continued in the POSITANO trial with more than 25% of patients being enrolled, and we are expecting to finalize recruitment during the second half of the year. In parallel with the clinical work, we are also accelerating our pre-launch preparation. Most importantly, we have initiated the build-up of the commercial infrastructure in the US. for CAM2029. The medical team is being expanded with key expertise and leadership and will be led by our new Chief Medical Officer, Alberto Pedroncelli, with extensive global experience in both acromegaly and neuroendocrine tumors and also in the US. marketplace.
In parallel, we are ramping up our medical affairs activities, participating in conferences, and preparing new scientific publications based on our previous and current clinical trials. We have two meeting abstracts about our newly developed patient-reported outcomes tool for PLD accepted for presentation at ISPOR in Boston here in May, and an abstract from our phase 3 acromegaly trial accepted for presentation at the ENDO conference in June in Chicago. Moving from this straight over to key takeaways from the quarter. We had an excellent start of the year, I would say, and made good advances towards our goals and strategic objectives. We achieved robust top and bottom line growth, continued market penetration and expansion with Buvidal, and we progressed our late-stage R&D pipeline towards new market approvals.
Ahead of us, we expect exciting near-term news flow, including the imminent FDA approval decision for Brixadi in the US, top-line phase three results for CAM2029 in June, and in addition to this, several other milestone events summarized on the next slide. Overall, I and the management team, and I think I can talk for the rest of the company, we're very happy with the performance in the quarter and look forward to a strong 2023. With this, thank you for listening, and let's move into Q&A. Operator, please take over.
If you wish to ask a question, please dial star five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial star five again on your telephone keypad. Our first question comes from the line of Suzanna Queckbörner. I'm just about to open your line. Please go ahead.
Hello, this is Suzanna Queckbörner calling from Handelsbanken. I have two questions to begin with. First of all, on the regulation in Europe, you mentioned that Buvidal is now considered to be first-line treatment in criminal justice settings in Sweden. I'd just like some clarification there. Does this mean that patients don't need to start with methadone or oral buprenorphine first? They can immediately go to a long-acting. Also on regulatory changes in Germany, I saw a press release on this and was wondering if you've seen that also affect your sales there. The second question is in terms of Buvidal revenue per patient. It looks like that's come down for Q1. At the same time, you've mentioned that there are no one-off bulk orders in this quarter. Is this down to pricing pressure? Maybe you can help me understand.
Thank you so much, Suzanna. I will hand over the first question to Richard and then the second question to John.
Okay. Yeah, I'll have to just start with the Sweden one. Yes, a guideline was published recently, proposing that long-acting buprenorphine should be first-line treatment in the custodial setting in Sweden. I think obviously there's a clear reason not to transfer somebody over at a very stage when doing well, but generally if patients are coming in and starting treatment, then it is recommended that there's long-acting injectable buprenorphine is first line. On the regulatory changes in Germany, yes, I think you're referring to the changes in the BTOD regulations there. They are relatively minor changes. They're to do with the length of take-home treatment. They have recognized that criminal justice settings are a place for treatment, but they were already treating anyway. Whilst they're positive in reducing the regulations in the German market, I don't think they're gonna have material impact on us in the short term.
Regarding the revenue per patient, Susanna, we have not had any reduce in price during the quarter. Any change in the revenue per patient is driven by geographical mix in our accounts around the globe. That's it.
Okay. Thank you.
Is that okay? Thank you.
Yep.
Our next question comes from the line of Erik Hultgård from Carnegie. Please go ahead.
Hi there. Thanks for taking my questions. I have 2 if I may. First, could you disclose a bit on what total market share you have achieved in the other top five European markets? I noted progress in U.K. with 5% share, but can you comment on the level of penetration in the other markets? Second to that, thanks John for clarification on pricing in the quarter. I noted in the guidance that you provided of the Q4 that austerity measures was an uncertainty in your guidance for the full year. I was wondering if that's still the case, what are you seeing? Any sort of anticipation of price pressure the coming quarters? When, if not, when do you expect to adjust your guidance? Thank you.
Yeah. Richard, I guess you can start with the first question.
On the market share question, I don't think we're giving too much detail on that. I can tell you, I mean, Australia is obviously one of our big markets. We know that long-acting injectable buprenorphine has a share around about 25% of patients, and Buvidal has about 80% share of the long-acting buprenorphine segment. The other markets-
That's 20% approximately.
Yeah. Yeah. In the other markets, Spain, obviously now that's accelerating well. Now we've overcome the access hurdles, but they've only been recently overcome, so that's still relatively low share penetration. Similarly in France, we only launched relatively recently, and Italy, where we will launch later on, with a partnership that we announced with Molteni, later on in this year.
Thanks a lot, Erik, for your question regarding the austerity measures. The development we have seen is on one hand, in Australia, the government published a decree in January 2023, reducing the price of several drugs in different percentages. Buvidal was included in that list with a 5% reduction that is going to be implemented on April 1st. This price reduction is already considered in the market guidance we provided for 2023. It doesn't have any change in the plans that we were developing. In case of U.K., we continue analyzing the law. We are impacted like the rest of the pharma sector in U.K., and we believe also that the potential initial impact we may have is already considered in our market guidance provided for 2023. These are the main highlights.
The impact in the U.K., when is that expected to come through in numbers?
We are going through the law at the moment. We have not seen any impact in Q1. We do not expect any impact in Q2 either. We continue analyzing the law. When we have it, we will be able to disclose it, Erik.
Thank you so much.
As a reminder, please press star 5 on your telephone keypad to ask a question. There are no more questions right now. I hand the word back to you, Fredrik, for some written questions, and maybe we can come back if there is any more from the telco.
We have, from DNB Markets, can you say anything about the increased dynamics for Buvidal over the month? I assume this was not linear over the period. I think that's a correct assumption. So we had a good finish in March, but I would say that we're very pleased with the development in the Q1 for two reasons. One is that we had a very strong, as you remember, Q4. On top of that strong Q4, we also had a one-time order from Saudi Arabia, for instance. Despite that, we were able to grow 6% into Q1. We are very pleased with the development. In Q1, we didn't have any one-time orders. I think it was a very nice development overall. We have also from John Holcomb, Tindrang, you're right that you estimate $1 billion sales for Brixadi in the positive scenario.
In my notes from earlier, I have $600 million to $1 billion. Shall we understand this is an upward adjustment to your expectation? Well, I mean, John, I think we are still in the same range, but there has been a number of positive developments that Richard alluded to earlier. I think, you know, in the positive scenario, we are hopeful that Brixadi can do very well in the US. marketplace. Can you see anything about the investment needed? This is again from DNB Markets. Any investment needed for the coming 24 months to build up your infrastructure in the US.? I can say that we have accounted for that in our guidance.
The 0.1 billion SEK that is accounted, that is largely including the US. infrastructure costs. I have a repeat question about the 1 billion note here. With that said, I don't think there are any further questions here. If there is nothing on the telephone line, I would like to finish off and thank everybody for joining our earnings call today. It was a pleasure to have you listening in, and I look forward to speaking again at our Q2 call. I think that would be a very exciting call, so please join in and have a great continuation of the day. Thank you, everybody