Hello, and welcome to the Camurus 2019 fourth quarter and full year report. Today, I'm pleased to present Fredrik Tiberg, CEO. For the first part of this, all participants will be in a listen-only mode, and after there'll be a question and answer session. Please go ahead, sir.
Thank you. Good afternoon, everyone, and welcome to our first call this year. Before into that, I'll just alert you to our forward-looking statement. So slide number three, I think it's today's agenda, it will include a Q4 and full year overview and also an outlook, Buvidal progress in EU and Australia, U.S. approval and launch status, and then we will also talk about the R&D pipeline, some key takeaways, and finish with a Q&A session. With me today is Eva Pinotti-Lindqvist, our Chief Financial Officer. So with that said, let's start with the Q4 and full year financial overview. We saw continued strong growth of revenues and Buvidal sales in our initial markets in EU and Australia in the fourth quarter.
Product sales grew by 55% to the previous quarter, to SEK 30.3 million in Q4, and ended up at SEK 72.1 million for the full year. Total revenues for the year increased by 114% to SEK 105.6 million total, and the results for the fourth quarter ended with a loss of SEK 88.4 million, compared to SEK 103.2 million for the same quarter in 2018. Our cash position at the end of the period was SEK 358.7 million, compared to SEK 134.4 million the previous year. This was strengthened by a SEK 300 million directed share issue in December.
Overall, we are pleased with the first-year financial performance as a commercial stage company, where we have clearly established the market potential of Buvidal and also built a solid foundation for the coming years. For 2020, our guidance is total revenues in the interval SEK 290 million-SEK 330 million, excluding BRIXADI milestone payment. Of these, we expect Buvidal sales in the interval SEK 240 million-SEK 280 million, and a total operating expenses of between SEK 570 million and SEK 610 million. The increase here is mainly due to the fact that we have a number of phase III studies in progress, and also, we'll be starting towards the end of the year. With that financial review, let's turn to the operating highlights. That's slide number five here.
As you can see, I'm proud to say that we achieved our main goals for the year. In the fourth quarter, we got clarity about the U.S. approval of BRIXADI, once-monthly injection depot, by the first of December 2020. We also were very happy to announce superior patient-reported outcomes for Buvidal versus standard of care from the randomized controlled DEBUT study that we were conducting in Australia. We submitted an NDA for Buvidal in New Zealand and successfully completed a directed share issue, raising SEK 300 million, as previously proposed, in proceeds for marketing preparations in chronic pain and phase III development of CAM2029 in neuroendocrine tumors.
We also, towards the end of the year, entered a strategic partnership with Newbridge Pharmaceuticals for Buvidal in 12 countries in the MENA region, that's the Middle East and North Africa. And looking to 2020 and beyond, I think, as I said before, we have a strong foundation going forward. So let's look, now at the status in our initial markets in EU and Australia. Slide six. So, as you know, we designed, Buvidal weekly and monthly, dosing regimens to fit with current clinical practice across geographies, with the flexibility to meet individual patient needs and address the key issues of current daily medication, including fluctuating plasma concentrations, burden, and stigma associated with daily dosing, but also safeguarding against misuse and diversion.
However, the most gratifying aspect of working with Buvidal, I mean, it's at least at this stage, it's the very positive feedback we are continuously receiving from patients and HCP, so healthcare professionals. I think on this slide, you see actually one of our patients, Will, he's from Wales. He started with drugs when he was 17, and has been in and out of treatment for the last six years. Now become stabilized, stable on Buvidal treatment, and actually, at this event, when our photographer was over in Wales, together with one of my colleagues, Will was on his way to his first job interview after getting his Buvidal injection.
So this is one story, one example, but, a very, common feedback that we are getting on the market, and I think it reminds us all of, of why we are doing what we are doing. Robin, on the left side there, is Will's key worker, and, and also for her, things have changed since he started treatment with Buvidal. So, going more into the global picture on slide seven, you can see where we are currently working and expanding. So, as you know, we are -- we have launched Buvidal in the EU and Australia. It's, an area where, where we are doing all the commercialization ourselves. About 1.3 million high-risk opioid users in this region, and a peak market potential estimate for Buvidal, of EUR 300 million.
Looking over to North America, where our partner Braeburn is preparing for the launch of BRIXADI, which is the name for Buvidal in the U.S. The situation is approximately two million diagnosed patients with opioid use disorder, and our market estimate in the region between $0.6 billion-$1.2 billion, based on external research, as well as our internal estimates. In our most recent region, the Middle East and North Africa, we have partners with Newbridge Pharmaceuticals. It is difficult to get exact figures, but the conservative figure is that there is approximately 300,000 patients with opioid dependence in this region, and we have estimated a peak market potential of between $25 million-$75 million.
So for this, you can see that there is clearly significant potential for Buvidal in our different markets and our partner markets. With that, I just want to go in and talk more about the status and the actual launch progress in Europe, as well as in Australia, where we set out a very clear strategy based on the timings of, first of all, regulatory approvals, but also pricing and reimbursement in each market. The launch in our wave one markets is progressing well, with a focus of establishing Buvidal as a new first-line treatment option in opioid dependence.
In Q4, our patient numbers grew by approximately 60%, so we ended the year with 4,000 patients in treatment, while sales grew with 55% to SEK 30.2 million for the first quarter, and as we said before, SEK 72.2 million for the year. If you convert this to U.S. pricing and price per unit, that would amount approximately to between $25 million and $30 million, just to give a perspective on the amount of patients that we have in treatment. So, I think there's a lot of progress in our markets. We are now the market leader in Finland, with over 40% of buprenorphine share, and we are seeing similar strong uptakes in Norway and Australia after receiving reimbursement in Q3.
The growth in other markets is accelerating as we are addressing access, legislation, and other momentary barriers. And then on top of this, of course, we have the continuous positive feedback that we are getting from patients, physicians, but also in our interactions with payers. And I think when you're looking at that, it's also interesting to see the very high retention we have, which is reflecting this positive feedback, where on most of our markets or on all of our markets, it's estimated to be over 80%, similar to what we have seen in the long-term study.
So looking at the next steps, and more importantly, to the strategy for 2020, we will focus then on increasing our market shares and also the patient's access to treatment in our established markets, closing the gap between need and availability of treatment, and expanding to new markets and securing price and reimbursement and regulatory approvals, of course. Importantly, we are also, of course, working to establish Buvidal as the preferred evidence-based treatment globally. Going over to the next slide, slide nine, just a quick update on the U.S. situation. As you know, this is a very important market for Camurus, and following the revoking of the orphan designation for Sublocade, we are now looking forward to the approval and launch of BRIXADI in December this year.
Braeburn management, they have been preparing for this launch for more than two years, and, we'll be coming to the market with a strong and competitive product for individualized treatment of opioid use disorder.... that they can enter the market, from a position of strength, and also will have the benefit of being able to follow or having been able to follow, the progress of earlier launches in the area. The market dynamics in the U.S. continues to be very attractive, with a huge medical need, rapidly growing market, where we think that weekly and monthly subcutaneous injections are well aligned with current practice and prescription patterns. I think this is a very important point here. Next slide, slide number 10. So this is just a brief update.
We're continuing to build the evidence base for Buvidal, with our KOLs, so key opinion leaders and clinical researchers. We have very strong relationships and build them across the world, from the U.S. to Europe and Australia. As you can see, we have been quite active in publications and congress presentations over the years. In 2020, we will continue this high level or actually increase it, presenting at all key meetings, including a number also, submissions and publications. We are also in the process of starting multiple investigator-led studies of Buvidal in the E.U., Australia, as well as the U.S. An example of these collaborations that we have completed was the successful performance of the DEBUT and Unlocked clinical studies, which were completed clinically in 2019.
The DEBUT study, which was sponsored by Camurus and conducted at six clinical sites in Australia, compared patient-reported outcomes between Buvidal head-to-head against standard of care in 120 outpatients. This is the first-ever study in a direct head-to-head study of patient-reported outcomes of a long-acting buprenorphine injection versus standard of care. The reported superior outcomes for the primary endpoint of patient global satisfaction, and we also showed statistically improved results for several of the secondary outcome measures, like treatment burden and quality of life. I think this will be compelling evidence as we go further in presenting and publishing this data. Also, the core part of the Unlocked study, which is a study in the prison setting, was completed, and we got positive preliminary results presented at the Lisbon Addiction Meeting in October.
And, in addition to that, we have also had presentations in the fourth quarter at the AAAP in San Diego in December. With this, it's time to switch to presenting progress in our other pipeline programs. So, let's switch to slide number 12, where we have our pipeline. As you know, we have a broad pipeline, of drug candidates for treatment of chronic disorders, including pain, endocrinology, oncology, and cardiovascular disease. Today, we will focus on our registration and phase III-ready programs, that is CAM2038 for chronic pain, as well as, CAM2029 , for treatment of acromegaly and neuroendocrine tumors. Slide 13. Regarding CAM2038, as you know, that's a long-acting buprenorphine product as well, being developed in chronic pain.
We believe this represents an important opportunity as it addresses a significant unmet medical need in the management of chronic pain with oral opioids. This includes the need for frequent dosing, tolerance development, dependency, overdosing, and risk for diversion, misuse, and pediatric exposure, which are largely addressed by this dosing regimen and the formulation that we have developed. So slide 14, CAM2038 provides long-acting round-the-clock pain relief and has a relatively low risk of respiratory depression, of course, or actually protective against respiratory depression, but also buprenorphine shows less tolerance development than full agonist opioids. It also eliminates the risk of medication diversion and misuse, as I referred to before. And our clinical data suggests that CAM2038 is efficacious and very well tolerable in the treatment of chronic pain.
This is both supported by our phase II data, as well as previously announced development phase III results in opioid-experienced patients with chronic low back, low back pain. We have also, in this year, completed a long-term safety study in a broader population of chronic pain patients, again, showing good tolerability, and no, no, unexpected adverse events. All studies have so far met the key objectives, including primary and key secondary endpoints. We are currently now in the midst of a detailed market analysis to look at the product positioning and market access ahead of the planned market authorization application submission in Q2 or Q3 2020. Let's go into slide 15 on our phase III program directed at patients with neuroendocrine and pituitary disorders. CAM2029 is our long-acting subcutaneous octreotide being developed in these two indications.
We go to slide number 16, you will see that there's approximately 67,000 acromegaly and NET patients in the U.S. and Europe. The CAM2029 is through these two indications, addressing a $2.7 billion current market, which for the past 20 years has been growing steadily at approximately 10% CAGR rate. The market is dominated by Somatuline Autogel, as you can see from Ipsen and Sandostatin LAR by Novartis. You see, it's a very healthy market, despite some of the apparent limitations of these two products, as are shown on the slide here.
So if we go to the next slide, number 17, you'll see that, I think the important part of CAM2029 is that it addresses a key unmet need, and could become the first product for simple self-administration by, by patients, which is leading to improved convenience and potential for significant cost savings. In addition to that, we are also exploiting the enhanced octreotide exposure with CAM2029, which could lead, result in efficacy improvements in both acromegaly and NET. And this is indeed supported by a large and growing body of clinical evidence for octreotide and somatostatin-based products. So our strategy going forward is to position 2029 as a standard somatostatin treatment in acromegaly and NET, offering the most convenient and effective treatment option. Slide number 18.
We commissioned, I think we presented this briefly, last time, a detailed market analysis of CAM2029 in acromegaly and NET. And, I just want to repeat this, and, and we see that we size the market according to different target attributes of CAM2029. And as you can see, the opportunity remains or is very significant with a total potential of over $1 billion in peak sales. Going to slide number 19, just to update you on where we are with our programs. We have, as you can see, two ongoing acromegaly studies, one randomized double-blind placebo-controlled science study, and a long-term safety study, which are both in the process of recruiting patients.
We are targeting a total of 60 sites in Europe and the U.S., and we are expecting to complete enrollment of a total of 140 patients during 2020. Meanwhile, we have also completed the design of an auto-injector that we have been working on in the past years, that was done in Q4, and we are working now to progress to scale up. We are also planning to a PK study to bridge between prefilled syringe configuration and the auto-injector format. We plan to start this in Q2 2020, potentially late in that quarter. Following the successful direct share issue in December, we are now also financed to initiate the NET program, and that is currently being planned, and we are targeting an immediate start of the program towards the very end of 2020.
As mentioned in the report, we also advanced—are also advancing early pipeline programs, with a clinical trial submission for our long-acting treprostinil study, which have been submitted and actually approved, and we are starting their pilot phase II study in the second quarter. As we said last time, I mean, Camurus is not only what we are doing in the company on our own, we also have some very interesting partnerships that are continuing with Rhythm Pharmaceuticals, where they are in the final steps of a phase II-A study of our weekly setmelanotide, which today have included more than 70 patients. We are—and Rhythm is expecting to present the data during this year from this development.
We also started a collaboration with Ra Pharmaceuticals for a long-acting zilucoplan, and where we are working with the preparations for planned clinical start in the second half of the year. So with that, I think we are coming to the end of this presentation. I think we have had, we are at slide number 21. We've had a very nice finish of the year. Buvidal was launched in seven markets. We've delivered strong double-digit growth, and became market leader in Finland, and are progressing very strongly in other markets. We have shown very strong clinical data, and our strategy for 2020 includes increasing patient share and base in our launched markets and expanding to new geographies.
We're continuing to advance our pipeline, and as a company, we have established a fully operational commercial infrastructure in the EU and Australia. So if you want to see tentative operational highlights for 2020, we have them on slide 22. I think just want to summarize here that we have built a strong foundation this year, and we look forward to delivering positive results and strong growth in 2020. So thank you all for listening, and at this point, we would like to open up this call for questions, Q&A.
Thank you.
Thank you.
Ladies and gentlemen, if you wish to ask a question and you haven't already, please can you press 0 and then one on your phone keypad now in order to enter the queue. And then after I announce you, just ask that question. And if you find that question has been answered before it's your turn to speak or want to retract that question, just press 0 and then two. So 0 and one to ask a question, 0 and two to retract it. And the first question is over the line of Harry Sephton at Jefferies. Please go ahead, sir. Your line is now open.
Hi there. Thank you for taking my questions. So three to start with, please. Firstly, are you finding that the DEBUT study results are helping you with the commercialization activities for Buvidal? And also, will you be able to use any of those, or will your partner be able to use any of those superiority claims in the inclusion of its label in the U.S.? Second question, can you remind us of the timeline for the chronic pain submission in Europe, and also when you expect your partner may be launching this indication in the U.S.? And to follow up from that, clearly, the pain market is vast. You mentioned that there are around one million patients on high-dose morphine as a rough target market, but I was hoping we could potentially get some more detail on how you're thinking about the commercial opportunity there.
Are there any other long-acting treatments that you can use as a benchmark, or are you entering somewhat an unknown territory? Thank you.
Thank you so much. So, could you just remind me of the first question, Harry, because I-
Absolutely. So the first question was on the DEBUT study results.
Oh, yes, yes, of course, yes. Yeah, I mean, we are already using the DEBUT study results in our market access processes, not only in Australia, or not in Australia, but in other territories. So and there is, of course, a large interest in this. Patient-reported outcomes are very important, of course, and quality of life measures as well. As regards to, you know, the possibility of including these data in the U.S. label, I think that is potentially challenging, but I cannot say definitely no. I mean, I should mention that we do have, you know, through the tentative approval, there is a completed label for the product, at least a tentative label. So in terms of any updates, I would say that is maybe speculative.
So, when it comes to the pain indication, we are working for Europe, and that's our first target. We are planning a submission, as I said, in Q2, towards the end of Q2. Potentially, it will drag into Q3 because we still have things that we are working through in terms of the profile. As you very rightfully say, I mean, we are not targeting, you know, the complete pain market here, but we will be focusing on a niche segment of patients where we believe, you know, the unmet medical need is very significant, and where we believe that our product is very well positioned, and which is also supported by our phase III data and the inclusion criteria, as well as exclusion criteria in the phase III study.
So I think, I mean, certainly this is, you know, clear focus for us. In terms of the U.S., I will say that Braeburn is, of course, very much focused at this stage on the upcoming approval and launch, and I will let them follow up with more details on their plans for the NDA submission. But I know that there are, even right now, there are activities ongoing, you know, in this area, and that they have a large enthusiasm for the indication.
Brilliant, that's really helpful. Thank you.
Okay, just to remind all participants that if you wish to ask a further question, please press 0 and then one on your phone keypad now, and there'll be a further pause while any further questions are being registered. Okay, we have a follow-up question, and it's back to the line of Harry Sefton at Jefferies. So Harry, please go ahead.
Hi, just a few follow-up questions on the financials, if I may. So I noticed on intangible CapEx, the spend was relatively high in 2019. Can you remind us what that related to and your expectations for CapEx spend in 2020? Secondly, can you indicate the approximate growth in sales of Episil in 2019, as that, I understand, is included in your product sales? Thirdly, on your cost of goods sold, can you indicate what sort of gross margin you're expecting to get from Buvidal sales going forward? So no, that 78% margin was a little below what my expectations were. Thank you.
Okay, we can start with the CapEx expenditure in 2019, and that mainly relates to the DEBUT study, where we have capitalized the R&D cost for that clinical trial. There will be a small portion beginning of 2020, and then that will fade out as it looks right now.
Yeah, when it comes to the Episil sales under the product, I can say, so for instance, it's, in this year, it's marginal, due to the fact that we are sending product directly to our partner. And that was mainly done in Q4. The large amounts that were sent were done in Q4 in 2018. So for instance, of the SEK 30.3 million sales in Q4, there was only SEK 200,000 that was Episil in that track record. Does that answer your question?
Yes. No, that's really helpful. And then just on the cost of goods sold and the gross margin on Buvidal.
Yes, I should say that when it comes to the gross margin, you know, we have been above 80%. In January, we, due to, you know, the Brexit story that came about, we actually sent quite a large quantity over to the U.K., and some of that was short expiry times and have had a negative impact on the gross margin for Q4, which you will not see in future quarters. Also, I should say that we have been very successful in terms of increasing the shelf life of our products since approval, and so that picture has changed dramatically.
Yeah, and I think we should also keep in mind that we launched already two months, two months after the EMA approval, and I mean, to ensure a sufficient supply, and a high potential demand, such as in Finland, for example, we scaled up early manufacture and launched with a relatively short shelf life for the first supplies in the wave one market. And that's basically what we are seeing now in Q4, where we had to, where the shelf life expired for some of the manufacturing.
That's really helpful. Thank you.
Okay, at this stage, there's no other questions in today's session, so can I please pass it back to you for any closing comments at this stage?
We thank you all for listening in on this call if there are no further questions. It's always a pleasure to be presenting our quarterly report. So thank you very, very much for listening, and I look forward to meeting with you, or we look forward to meeting with you at any of the forthcoming investor events and also to our next call. Thank you, everybody, and talk later.
This nowf concludes this quarter's session. Thank you all very much for attending, and you can now disconnect.