Earnings Call: Q3 2020

Nov 5, 2020

Thank you so much. Good afternoon, everyone, and welcome to our Q3 presentation. Hope you're all doing well in these very unusual COVID-nineteen times. Before I go into the presentation, I just want to alert you to our forward looking statements on Slide number 2. And with that, moving forward to Slide number 3. So in today's call, we will update you on our continued business progress with the commercialization of Biviral as well as provide a brief update on key R and D programs. We will finish off with key takeaways and a Q and A session. With me in today's call is our Chief Commercial Officer, Richard Jameson and our Chief Financial Officer, Ieva Pinnott, Iliong Kriest. So let's move to Slide 4 and some highlights during the Q3. As you have seen probably in today's report, we saw really good progress across our business areas in the 3rd quarter, including a solid financial performance. Bouvival continued to deliver strong growth. And in the U. S, we have Brixady under review by the FDA for final approval decision 1st December 2020. On the R and D side, we reinitiated recruitment and progressed our 2 Phase III studies in acromegaly after a temporary COVID-nineteen interruption in the Q2. And these are now up full year. In addition, the pivotal Phase 3 study program for KAM-twenty 29 for treatment of neuroendocrine tumors also aligned with the U. S. FDA in a Type B meeting. We raised SEK 300,000,000 in a directed share issue in July. And finally, as you know, we are in an arbitration process with Braeburn in England. This process is confidential. However, we will communicate the outcome from this expedited process as soon as this has been received from the arbitrational tribunal. So with that, please go to Slide 5. So turning to the finances. We continue to deliver really strong growth and financial performance, as I said, in the Q3. Our net revenue amounted to SEK 100,300,000, which is 150% higher compared to Q3 2019. Our product sales were SEK 94,300,000, an increase of 3 83 percent versus the same quarter 2019 24% compared to the previous quarter. This despite a slowdown during the summer months in Europe and some temporary challenges relating to COVID-nineteen. Our operating expenses were in the quarter SEK113,400,000. So basically the same as in Q3 2019. The Q3 result consequently was minus SEK 20,000,000 which corresponds to approximately a 70% improvement compared to Q3 last year. So including the directed share issue in July, we ended the period with a healthy cash position of SEK 476,000,000. So we're in, I would say, very good position going forward here. With that, I think it's time to hand over to Richard Jameson for an update on our progress with Bouvardal. Thank you, Frederic. So if we could move to Slide 6, please. Thanks. So in Q3, we saw continued progress with Bouvardiol. And as already mentioned by Fredrick, we've grown more than 380% over the same quarter last year and 26% versus Q2 2020 at constant exchange rates. We further increased the number of patients in treatment with an estimated now 12,000 patients receiving vuvudar to support their recovery. Our lead markets of Australia, Finland and Norway continue to expand alongside acceleration in the U. K, Germany and Sweden. As working with a broad group of stakeholders, we continue to address the infrastructure and funding challenges in those markets. I think this is a strong performance against the backdrop of recruitment as mentioned by Frode during the summer and the headwinds caused by COVID-nineteen, which had some impact on our growth due to the delays in some external processes such as prescription authorizations in Austria and the finalization of pricing and reimbursement applications in the wave 2 and 3 markets. Of course, there were some limitations too to access the healthcare professionals. However, the demand for information remains high and our team remains very active in engaging healthcare professionals through virtual face to face meetings, training and level of level of education. We've gained some momentum again after that summer slowdown. Bouvardal is now available in 11 countries and we're well advanced to launching new territories by the end of this year. So if we can move to Slide 7 for a quick update on the EU and Australian launch. We continue as market leaders in Finland and Norway where we have a significant market shares. In Australia, we're seeing strong development particularly in the GP segment is now approved to prescribe. Sweden is also showing good progress with the reimbursement by TLV in May. In England, we have some significant developments that will increase access to patients. And in Germany, we're seeing the positive impact of the modified remuneration for physicians. Of course, we're sharing these positive experiences with the next wave of launch countries. And if we go to Slide 8, I can talk about those. So we're now aiming to launch in the wave 2 and 3 markets that have a population of about 350,000 patients in treatment for opioid dependence. We submitted multiple pricing and reimbursement applications as planned in Spain, in Portugal, Belgium, Netherlands and France. And whilst there have been some delays in the external pricing and market access and processes due to COVID, we are anticipating 2 or 3 further launches in Q4 this year and others in early 21. As part of this expansion in EU countries, we're also progressing our market expansion elsewhere. So if we can move to Slide 9, please. As Frederic has already mentioned, our U. S. Partner is preparing for launch in the U. S. With the PDUFA date 1st December, which triggered our $35,000,000 milestone for cameras. We're also working on regulatory filings in other markets and have achieved pre approval in Switzerland and are in the final stages of the process in New Zealand. And with our partners in the MENA region, we've initiated some early access schemes to allow patients to access Bouvadil whilst we submit regulatory files. In addition to this, we've also completed the work and submitted line extensions and label enhancements for Bouvudal as part of our lifecycle management plans. As we shared previously, I think the success of Bouvardal was built on the foundation of a strong evidence base. So if we can move to Slide 10. The compelling evidence base for the efficacy and safety of Bouvardiol continues to be shared at scientific congresses. And although many of these meetings have been held virtually, we're still seeing strong presence giving an indication of the interest in this new treatment option. As a recent example here is the improving outcomes in the treatment of Ocular dependence meeting that was held virtually in September this year. Here we saw more than 750 healthcare professionals register who accessed 4 oral presentations on long acting injectable buprenorphine and 7 scientific posters. The presentations included updates on the clinical studies, including results from the recently completed debut study that showed statistically significant improvements in patient reported satisfaction with efficacy and the convenience of buvidal compared with standard of care. The posters, the 7 I mentioned, they are focused much more on the real world evidence and the experience with boovidal in the clinical settings and continue to demonstrate the significant and positive impact Bouvardale is having on the lives of patients suffering from opioid dependence. I think it's hearing about these real world experiences that makes boovidiol such a rewarding product to work with and we continue to accelerate our plans to improve access for patients to vuvial across the world. So with that update, I'll just hand back to Fredrik now for more details on the pipeline and IMUs flow. Fredrik? Yes. Thank you, Richard. And as you know, we have quite a deep and broad pipeline that we are working with, and we have made excellent progress also during this quarter moving these programs further. One, of course, very important thing is that we have been working with the regulatory side of CAM2038 both in relation to. So we are now on Slide 11, sorry, new regulatory filings for CAM2038 and Bovedal in several different countries. We have been advancing our pivotal Phase 3 program for KAM-twenty 29, and I'll come back to that soon. We have completed development of an auto injector, which will make administration of long acting PFOS even easier than our earlier device. And we have got new approvals for clinical trials. We have seen positive development in our partnership programs in several of these, including with CAM 4072 with Rhythm after the announcement of positive Phase II data in June. So next slide, please. So I'll start here just an update on one of our key programs, it's KAM20 29, our long acting octreotide in development for treatment of acromegaly and neuroendocrine tumors. So Slide 13 then. And for those who have not been exposed to this program or need a reminder, CHAM 2029 is a new long acting octreotide product designed for enhanced efficacy and improved convenience for patients. This product combines rapid onset and long acting release, and we have demonstrated a 500% increase in bioavailability and improved exposure compared to current products. In this case, it's sanvastatin LAR, which is marketed by Novartis. Sanvastatin has a market of approximately US1.6 billion dollars So this is by no means insignificant. With the work that we are doing with CHAM 2029, we are aiming to significantly improve convenience for patients, which will also have an important dimension for payers as we go for easy self administration by patients and can avoid the difficulty of physician administered intramuscular injections. With that said, we'll go to Slide number 14 and our ongoing Phase III program in acromegaly. This program consists of 2 clinical studies, 1 ACT1 controlled study where KAM-twenty 29 is studied again, 1 monthly placebo injections in stable acromegaly patients. And then this is also complemented by a long term safety and extension study called the 647 study, where we are recruiting both new to treatment patients, which can be either stable or be not well controlled and following them over 52 weeks. Here, patient recruitment was reinitiated in the 3rd quarter early Q3, and we have seen a good uptake since then. And both studies are progressing well at current. Our predictions is that the pivotal efficacy study will be completed during 2021, while the open label long term safety study will be completed around mid-twenty 22. So that's a quick update on the acromegaly study studies. In addition to that, as I said, we are also about to start a Phase III program for treatment of neuroendocrine tumors. And here, we had a meeting during the quarter with the U. S. FDA. It was a very positive meeting to align on the pivotal study program for KAM-twenty 29 in this indication. And we have then agreed on the study as disclosed here with the randomized multicenter open label parallel group backfill control trial. And the main objective with this is to assess superiority of treatment with KAM-twenty 29 compared to current standard of care. This study is planned to start early next year with an expected completion in 2024. So moving to the next slide. You can see that our program for 2029 is quite large. We have ongoing Phase III studies in acromegaly, which are progressing and about to start the neuroendocrine tumor Phase III program. And in addition to that, we are also initiating a 3rd program in patients with polycystic liver disease. It's an indication where there is currently no approved treatment and a large medical need. This week actually, we also started a clinical trial, a Phase 1 trial bridging pharmacokinetic trial of the auto injector, which we spoke about earlier here in the call. So there's quite an this is quite an exciting time for the program and a lot of activities going on. We can go to the next slide please, Slide 17. We have, for these different indications, conducted a series of market research studies with a third party about the potential of KAM-twenty 29 in the different indications, including interviews with stakeholders, physicians as well as payers in U. S. And Europe. And the outcome of those investigations are shown on this slide. And as you can see by the arrows that the target profiles that we are addressing in the different indications, we see a very significant potential of KAM-twenty 29 across these indications ranging from around SEK 150,000,000 up to for neuroendocrine tumors, about SEK 700,000,000 in peak sale potential for the product. So with that, please go to the next slide, Slide 18. I also just mentioned that we saw good progress in our partnership and partnerships. And as an example of this, we just show some of the data that positive data that came out of the RISM Phase II study, which was announced late June 2020, which showed that KAM-four thousand and seventy two was which is long acting setmelanotide for treatment of genetically related obesity disease was well tolerated and that it generated a weight loss in this population that was comparable to that of the daily formulation. Since then, Rivameth has presented data on the pharmacokinetics properties of the product, comparing the weekly formulations to their current daily formulation, which is the data in the green curve. So what you can see here is that KAM-four thousand and seventy 2 exhibits dose proportional pharmacokinetics, and these are basically only c trough values to the end of the treatment interval, which can be well tuned into the interval or to the levels of the daily injections. So it will be exciting to follow this program as we go forward. To the next slide. So as a summary of this presentation, we have had quite a good progress in all of our activities in the company right now. And as you can see from our anticipated news flow during 2020 2021, we have a number of very important events in front of us, including, as I mentioned before, the final market approval of Brixari, the start of a new clinical program with CAM-two thousand and forty three, it's our long acting treprostinil in Raynor's phenomenon as well as the initiation of the long Phase III study in the renoPrime tumors. Next slide, please. So I think we can say that we continue to deliver on our strategy. We have established very strong position in opioid dependence in Europe and Australia over the last year. And we are only a month away on 1st December for an anticipated approval decision for Bryxairi in the U. S, which is the largest market, of course, for opioid dependence treatment in the world. We are have seen a good advance and growth of our pipeline of innovative medicines for treatment of chronic pain, endocrine disease and other disorders. And on a corporate level, we are expanding our commercial capabilities and preparing for new developments and also for developing and establishing sustained profitability through own sales, partnerships and business development. Finally, some brief comments about the full year 2020 financial outlook. This is Slide number 21, where we reiterate the guidance for net revenues and sales for the full year, which were raised in June, earlier in June. However, we have reduced the full year operational costs, full year OpEx from NOK 570,000,000 to 610,000,000 in interval to 505,000,000 to 525,000,000 which, of course, will result in a corresponding improvement of the full year operational result. This adjustment is mainly due to updated clinical development time lines, including manufacturing and clinical studies. So as an example, we are moving over manufacturing of validation batches from Q4 to Q1 next year. And we have also seen significant reduction in costs for Congress' travel and marketing activities. So with that, I thank you for listening, and we'll move over into a question and answering session. Thank you. And our first question comes from the line of Harry Sefton of Jefferies. Please go ahead. Yes. Hi there. Hello, Harry. Thank you for taking my questions. So just to start with, can you maybe comment on some of the in market dynamics that you're seeing, especially in terms of converting methadone patients over onto buvedil and also the expansion of the current buprenorphine patients in the market? Yes. I can start out by just saying that a very interesting question. And I think it's a little bit special with Bewehrvira because we have we do see that an interest among both patients and physicians to transfer from methadone over to buprenorphine, which you don't see to the same extent, I believe, for SABLINK with buprenorphine. So that dynamic is certainly there. But I'll hand over to Richard to kind of give a more detailed picture around that question. Yes. Thanks. Hi, Hari. Yes, I mean, we are seeing this increasingly. So as Frederic said, we're seeing patient demand. They do like the idea of a less burdensome treatment option for them. And so they are prepared to move. Obviously, there is some movement down to 30 milligrams, which is our dose to transfer on, but we are seeing that increasing over across the markets. Your other question was about expansion in the Brupanorffine segment, I think. And that's another interesting question. We're certainly seeing we know there's a group of people outside of treatment that don't come into treatment because the current burden they're faced with the daily dosing. And we're now seeing increasingly those numbers come into treatment, more patients like that coming into treatment now because there is a new treatment option. And again, we've seen that in 2 or 3 countries where more patients are coming in. That will inevitably expand the buprenorphine segment in time. That's very helpful. I will just move on to BRXSADI now. Can you confirm whether you expect the BRUXALI launch to happen in December? I think that you clarified in your report that the licensing agreement is still in place even through the arbitration proceedings, but just like to get clarification from you. And then also, just on the same vein, do you expect a similar level of legal expenses in relation to the arbitration in the Q4 of this year? Thank you. I think that the intention, of course, of our partner, Braeban is to launch the product as quickly as possible. So that is answer to the first question. And I think their ambition is to be on the market as soon as possible, providing the circumstances are the right ones. And it's also, of course, dependent on other ongoing processes. But certainly, that's my understanding. On the second question, Harry, I forgot to Sorry, it's just in terms of in terms of your administration expenses, they were up quite significantly in the Q3. I understand that's as a result of the arbitration legal expenses. Just wanted to That's correct. Yes, if you expect a similar level of legal expenses in the 4th quarter? Hi, Harry. I can comment on this. Yes, I agree we had some significant costs in Q3. We foresee that they will not be to the same extent in Q4, but that is with regard without regard to the outcome of the legal process. So cameras legal costs are included in that. Okay, brilliant. That's very helpful. And then just in terms of SG and A, given that you've had SG and A is relatively flat during this year, I'm just curious what you expect the level going into next year. Obviously, it will be largely dependent on what happens with COVID-nineteen. But would you look to significantly increase U. S. G and A spend going into next year? Well, with the current plan, we are seeing a relatively modest increase, but it's definitely up in the double digit territory. So I would expect somewhere around the area of 20% increase. Is that right, Eva? I confirm that, considering that we can continue to expand the markets as planned and not being hit by further or any COVID related issues. Unexpected. That's very helpful. Thank you. That's all for me. And there are no further questions at this time. Please go ahead, speakers. Okay. Thank you very much for listening in on our call today. We just want to say that we look forward to having you all coming again for our Q4 call next year, and we are looking forward to a very exciting finish of 2020. So thank you very much. And with that, I think we can