Earnings Call: Q4 2020

Feb 11, 2021

Thank you so much, and good afternoon, everyone, from Wintory, South of Sweden, and welcome to Kemira's 4th quarter and full year results presentation. Next slide, please. Before we start, please note our forward looking statements on this slide, Slide 3. So in today's call, we will give a brief presentation of our Q4 and full year 2020 financial and operational results, provide an update results, provide an update about the commercialization of Duveral and progress of key pipeline programs, And then we will finish off with an outlook for 2021, followed up by a question and answer session. With me in today's call is our Chief Financial Officer, Eeva Pinnoti Lindqvist and Chief Commercial Officer, Richard Jamestown. So let's move to Slide 4 and the summary of our achievements in 2020. So we had a successful 2020 with strong revenue growth and advancement of key pipeline programs. Our full year net revenue was SEK 336,000,000, of which product sales were SEK 323,000,000, which is in line with our upgraded guidance for 2020. Our full year operational expenses were SEK 508 million, including legal costs for the arbitration process with Braeburn. Despite the significant challenges associated with the COVID-nineteen pandemic, We have been quite successful in our developments, continued the commercialization of Biviral and expanded into new markets. We established the significant value that Vivdel brings to patients, the health care system and the wider society through clinical studies and real world experience. And on the R and D side, we continue to advance our Phase 3 studies of KAM-twenty 29 in acromegaly and prepared for start of registration studies in neuroendocrine tumors. Our partner, Rhythm, announced positive Phase II results for long acting setmelanotide for treatment of rare genetic visited diseases. And we also progressed our early pipeline, laying the ground for new value adding clinical programs. Moving over to Slide 5. And this is then the highlights in the Q4. We continue to deliver a solid financial performance with increasing revenues and dividend sales exceeding SEK 100,000,000. And we ended the year with a healthy cash position of SEK462 1,000,000. The number of patients in treatment with Bouvidal increased to over 15,000 in the Q4 with more than 200,000 doses administered during 2020. On the regulatory and legal side, we received the market approval for Bouvardiol in Switzerland, While unfortunately in the U. S, the approval of Brixadri was delayed when Braemann received a complete response letter from the FDA on the 1st December 2020. Further to this, we received a ruling from the arbitration process where the tribunal concluded that Bravern was not in material breach of the license agreement at the time of our notice in April 2020. This means that the license agreement continues as previously, including their obligations to develop and commercialize Brixardi in North America. Moving over to the clinical development side. We started dosing in the quarter in 2 studies of our long acting well, one study of our long acting treprostinil CAM2043 in patients with Raynaud's Phenomenal and in the pharmacokinetics study of KAM-twenty 29 with a new auto injector. Finally, we strengthened our IP position for Biviral and Brixady with additional patents granted in the U. S. And Europe. And with that short introduction, it is time for me to leave the word to Richard for an update on the commercial side. Thank you, Frederic. So we're now on Slide 6, please, just so we hold our line. As Frode just said, we now have more than 15,000 patients receiving Bouvudil across our large markets. We continue to hear the positive impact the product is having on patients like Sophie in the slide here, who continue to do well with treatment. Treatment centers are sharing the impact Bouvardal is having on the treatment of opioid dependence, and there's growing dialogue through both camera supported and independent medical education programs that highlight the benefits that Bouvardal brings to patients and wider society. So if we look at the progress specifically with Bouvardal, I'm going to Slide 7, please. In Q4, we continued the progress with Oovidar with invoice sales of 10% over the previous quarter, With underlying strong in market sales were up 33% versus previous quarter. The difference is due to variations in ordering and stockholding in a few markets It's where BUVDAL is purchased directly by wholesalers. Double digit growth was achieved in the quarter in all our markets, with Australia, Finland, Norway and the UK representing the largest markets for us. COVID-nineteen remained ever present and continues to be a catalyst for Bouygues Island in some countries with the benefit of stabilizing patients and supporting self isolation for this vulnerable patient group. The other side of the coin, though, is that the pandemic continues to create some headwind for us due to understandable pressures in Ministries of Health that resulted in some delays to pricing and reimbursement approvals. And alongside this, access to health care professionals has been challenging and the prescription journey in some countries impacted by staff shortages. We continue to work closely with a broad group of stakeholders to mitigate these challenges and create new pathways in the patient journey and clearly define patient profiles to accelerate access to bivotal. Despite these challenges, we continue to expand in 2020. And with the recent launch and first patients treated in Spain, Uvadala is now available in 15 countries, 11 in Europe with Australia and 3 pre license sales programs ongoing in the MENA region. We're also progressing our Wave 3 country launches and have submitted 7 new dossiers for pricing and market sorry, pricing and reimbursement approvals across the EU. Our new applications for market authorization submitted during the quarters with others planned in 2021. So if we could go on to the next slide, please, on Slide 8. The success of Bouvardal has been built on a solid foundation with a strong evidence base, which has demonstrated efficacy and safety versus current standard of care, which has supported the claims that we can make about superior treatment outcomes, Which with flexible individualized treatments leads to improved patient satisfaction. And these outcomes have produced some profound case histories that are increasingly being recognized through independent reports across media channels. And there's a few examples from this activity on the slide for both national and local media sources from various countries. Governments are also developing a clear understanding of the value Bougainville brings to wider society. And as an example, you see a clip on the slide here from the First Minister of Scotland, Nicola Sturgeon, who confirmed last month that long acting treatments were one of the pillars for them to address a growing tragedy of increasing drug related deaths in Scotland. If we can move now to Slide 9, please. So now we turn to the regulatory progress in the Q4. We obtained in December a new market approval in Switzerland, And we plan to launch Intuit in Q2 once the pricing approval has been obtained. We progressed line extension applications in EU and Australia as part of our life cycle management plans, and our application for market authorization in New Zealand is under final review. We've also initiated a regulated process in the MENA region where several new MAAs were filed and where priority review status was achieved in Saudi Arabia. We already have a significant number of patients in treatment, I mean, as I said earlier, on early access provenance. In the U. S, However, as Frederic already mentioned, we were expecting approval of Luxardi on the 1st December, but our license partner, Braeburn, disappointingly received a complete sponsor resulting from quality deficiencies at a manufacturer. Based on the information we have, we expect a new PDUFA date in the second half of this year. We continue to advance plans for CAM2038 in Spain in the EU. And following a positive meeting with the EU rapporteur, We're preparing a regulatory submission in 2021. So with this, I guess, we move on from Slide 10. I will hand back to Frederic for an update on the progress on the development pipeline. Fredrik? Thank you, Richard. And back in Sweden, as you know, Chemours has a broad and diversified pipeline. We are now on Slide 10 here with an ongoing with ongoing development programs from Phase 1 to registration phase. And today, I will give a brief update on the registration programs for CAM 2029, which is one of our Most Advanced Programs. Going to Slide 11 here. CHAM 2029 is our subcutaneous depot of octreotide, which we have designed specifically with the aim to improve both efficacy and treatment convenience for patients with rare endocrine diseases and neuroendocrine tumors. Slide 12, please. And for those of you who are new to this development, this product addresses key unmet medical needs in the somatostatin analog market. Somatostatin analogs are first line medical therapy for acromegaly and neuroendocrine tumors, and the annual sales of the current market leaders, sanitatinlar and somatreline autogel, alone are currently close to US3 $1,000,000,000 per year. Despite being recognized as safe and effective, these products are also associated with significant limitations, including inadequate treatment response rates and a very complex handling and administration. CAM 2029 addresses these limitations by offering improved treatment exposures, exposures to medication that is over time and will be available for self administration with a state of the art auto injector. We believe CAM 2029 has best in class potential in this market as well as significant opportunities also in other indication areas. Slide 13, please. So as you can see on this slide, we do have an extensive late stage program ongoing with 2029 across 3 rare disease indications. And on the next slide, Slide 14, we show the current status and progress in these different programs. In acromegaly, we have 2 ongoing Phase III studies and are on track for regulatory submissions in late 2022. Moving down to new rando crime tumors. We recently got and IND safe to proceed letter from the FDA after having aligned the product the study design with both the FDA and the EMA and are in the process to start up this Phase III study. In the polycystic liver disease area, we are in the midst of developing a patient reported outcome questionnaire to be used in a Phase 3 and Phase 2 program to be started in the middle of this year according to plans. Finally, we started a pharmacokinetic study of CAM2029 to bridge between the current pre filled syringe format and our new auto injector. And we will be able to introduce that into Phase III studies after the summer. Next slide, please. So to finish off, We exited 2020 with a strong foundation and are looking forward to positive news flow during 2021 2022 as we achieve our various milestones. This includes starting out the Phase III study of KAM-twenty 29 in neuroendocrine tumors, obtaining line extension approvals in the EU and Australia and starting registration studies of weekly setmelanotide by Rhythm. And not the least, completing the efficacy trial of KAM-twenty 29 in acromegaly. And not to forget, We also, of course, look forward to the potential of the U. S. Approval for BRXADE in the second half of the year. So it's an exciting year ahead of us. And moving over to the next slide, please. We can conclude that we continue to deliver on camera strategy by establishing chip in opioid dependence with Boveda and launch in new markets. We're advancing and growing our pipeline of innovative medicines towards new regulatory approvals in major markets. And on the corporate level, we are continuing to build our commercial capabilities to develop and develop sustainable profitability through own sales, partnerships and business development. Next slide, please. So Finally, I just want to say a few words about the financial outlook for 2021. Our net revenues are guided in the interval SEK 680,000,000 to SEK 750,000,000. This excludes any potential milestone or the potential milestone triggered by Brixidy approval in the U. S. We are expecting product sales in the range SEK 620,000,000 to SEK 680,000,000. And here, we have also considered the situation with the COVID-nineteen. Our full year operational result is expected between -SEK 120,000,000 and breakeven. Of course, we are in uncertain times, but we feel comfortable about these numbers at this moment, and we foresee a positive development of our business in 2021. So with that said, I'm looking forward to any questions in the Q and A. Thank you all and back to our operator. Thank you. Our first question is from Peter Sestad of Handelsbanken. Please go ahead. Yes, it's Peter here. Can you hear me? Yes? Okay. So thanks for taking my question. Congratulations on the nice outlook for 2021. And I have some questions to that, if I may, please. Frederick, you said that you are comfortable with the outlook despite the fact that these are uncertain times. To me suggest that if times become less uncertain, there could be some upside To your current outlook, I'll say, Candido, you might have opted to take a conservative view given that we are in uncertain times. So just one, could you Give us a flavor on what kind of market level of ticks, etcetera, you have also for the new market in the new guidance, if possible. And Just to stay on that tune. You mentioned Spain as a new market coming on stream. Could you add some flavor on more markets coming on stream. And with respect to the 15,000 patients that you say currently have had experience with vuvudone, Could you cast some flavor on how much of this is in Continental Europe and how much of this is outside, please? Thank you very much. Okay. Thank you, Peter. Well, I think that when it comes to our revenue and product sales estimates. We have tried to incorporate the uncertainties of the COVID-nineteen epidemic. But I do think that we are also looking at the upside here. Of course, There are possibilities in terms of getting earlier pricing and marketing approvals than expected that may drive sales beyond the limits that we have indicated. But I think we have quite a realistic view on this. And so I would have that as the baseline, at least. When it comes to the growth potential, I think I would like to leave the question over to Richard and talk about the different markets. Continental Europe, of course, is just starting out. Spain, we launched very recently in. But Richard, would you like to give any more flavor about the sales in the different regions? Yes, I can do. I mean, certainly, Spain is our latest market. I mean, we get a very positive response from Spain. It's early days, of course, which is launching. But certainly, The regional and national drug plans are very supportive of move down and see the benefits it will bring. For new markets, You can imagine the markets in Europe we'd be looking at, so the ones we're not in now. So that includes Italy, Switzerland, Belgium, Greece Croatia example. So we're looking at those and add pricing applications in there. I think you had a question about the split Between Europe and the other regions, I think Europe is the biggest. The other regions are developing markets, should we say. They don't have big large treatment systems yet, but the They're open to regulatory approvals means that they're looking at this seriously as a needed treatment in those markets. So they will come in at the time. Did that answer all your questions? Yes, I was. So even taking Australia into account, Europe is still The largest part. Yes, certainly. Yes, Australia is still a large country for us, of course, and it's an important part of the business. So I think, yes, I think what I've tried to fish out was sort of the patient split between Australia and sort of the West. I think at this moment, I mean, we have a significant number of patients in Australia. It is absolutely in the range of 1 fourth to 1 third of the total patients. So it's a considerable slice of our overall markets. Can I just throw in a follow-up, if I may, on, of course, the U? S. Brixadii and the opportunities not only in In opioid dependency treatment, but also in pain and your collaboration with Bremen, I don't know how much you can say whether you have signed some sort of agreement not to say anything at all. But Are you still comfortable with the way that Weyburn, if handling things, are there any options for you to sort of Do something yourself on the other side of the Atlantic versus with pain, etcetera. Is there anything And all that you can cast some flavor on your respect to what you might be able to do with the U. S. Sanctions. Yes, Graeme's preparations for the launch, please. Thank you. Yes. I think, I mean, the important thing is, of course, that We think it was very unfortunate that the NDA was not approved at the PDUFA date. And of course, that's to us, it's a big disappointment and also a big disappointment to a lot of the physicians and patients in the U. S. That don't get access to this treatment. At the moment, we are doing everything we can to support in the development and help resolving any issues that we can contribute to. When it comes to Gregor and I and there I mean, I think there is a good opportunity to contact them. But I think we would give an update as soon as we have a clear understanding of the situation in terms of the exact time lines towards a new approval. And I think I will leave that to them. Okay. Thank you very much. Our next question is from Harry Sefton of Jefferies. Please go ahead. Hi, there. Yes, thanks for taking my questions. My first one is on the expected timing of dcam 2038 submission for chronic pain in Europe. I understand that that's been slightly delayed from previous expectations given around this time last year. Can you maybe comment on why that's been pushed down a bit and the likely timing For a launch in that indication. And then my second question is on the European markets. Clearly, you've seen a lot of reports In the U. S. About the impact the pandemic is having on the opioid crisis over there. What are you seeing in terms Numbers of patients coming into treatment in Europe and also Australia, that would also be helpful. Thank you. Yes. So if we're talking about the chronic pain program, the final studies were completed last year, and we also had a positive discussion with the repertoires about the registration program. What has been a delay, you could say, or a conscious one is that we have been looking at the market access strategy for the product and the best way and best timing for a submission. So from a practical perspective, we have everything in place. But from a tactical perspective, we have been looking at the optimal time points for moving in there and also looking at the opportunity of, or should I say, getting the optimal indication for the product, also in the light of the fact that Bouvardiol is on the market for opioid dependence. So that has been the consideration, and we are working through that those strategic aspects right now. And so in terms of timing, Our current plan is most likely in the second half of this year. And then Harry, can you repeat the other question about Yes, absolutely. So it was more on the number of patients coming into treatment for opioid dependence in Europe, Australia, and whether you're seeing the pandemic was a spike in the number of patients coming into treatment as we've seen in the U. S. Yes, in the U. S, I mean, it's very clear, and there has been recent reports, I think, even yesterday coming in about how the situation is worsening. We don't have any statistical data. I don't have that in Europe except that we see overdoses are escalating in Scotland, for instance, have continued to do so, but and are continuing, unfortunately, to do so. We're also seeing an increased tendency of overdoses in some Scandinavian countries. And I do believe that in general, physicians are very concerned about the current situation and that The opioid use or opioid use is increasing as a function of people being isolated and in this situation. Richard, do you have anything further to that? No. I think you said it all project. I mean anecdotally, we do hear of patients coming in, but there's no statistics yet To show that, it will be interesting to see when the next publications come out on that. But certainly, we hear and those are stories of more people coming into treatment in some countries. But it may part of that is because there's a new treatment option as well. I think it's partly because of Brudadol as well as the COVID pandemic. Okay, understood. Just a quick follow-up on the last questions in terms of The agreement with Braeburn and Briggs Rd CRL. You noted in your comments that The results of the arbitration proceedings meant that Bravern was not in breach of the licensing agreement When you submitted it in April 2020, I'd just like to get some clarification from your perspective Whether the latest CRL does put them in breach of the licensing agreement. Thank you. Thank you, Harry. I must say that I can unfortunately not comment that question. Okay. Not to worry. That's all from me. Thanks very much. Thank you. Our next question is from Patrick Ling of BNB Markets. Please go ahead. Yes. Hi. Thank you. Just a couple of questions, short ones. When it comes to your guidance, You're saying that you exclude Milestone payments, but you exclude any royalties as well? From the U. S? Yes, yes, from the U. S. So this is completely without the U. S. That's the way we should interpret it. I think that's an adequate interpretation. And It goes for the EBIT level as well, I understand. That is also excluding the milestone. Yes, that's correct. Okay, great. Then my second question was regarding pricing. If you could elaborate a little bit on pricing for Bivudal right now because if I remember correctly, you talked about around EUR 300 per patient per month historically. And Looking at the number of patients that you have now, it seems like pricing is coming down a little bit. And I suppose that's Maybe a reflection of moving into new markets with lower prices. And maybe you can elaborate a little bit on where we should see average price for Vivadol going and what type of range in prices you see on the different markets where you are launched right now. Yes. I think that I mean, the EUR 300 per month is Definitely, Watson is a hand waving number and approximation. Price varies a little bit between the countries and country mix. And I would say that your analysis there is correct, it's slightly under the limit of 300 for many of the countries. But it's still an adequate approximation. So if I phrase it Differently, what is the highest price per month you get? And in what country is that? The highest prices are obtained in Northern as always in this business in the Nordics and Germany, for instance. And we have the higher pricing, but it's not very differentiated at this moment. Okay. Great. Thank you. Thank you. 3. There are no further questions at this time. So I'll hand back over to our speakers. We have one more question, sorry, from Peter Forsett of Handelsbanken. Please go ahead, please. Yes. Thank you. Actually, I had a follow-up to the previous question, but that makes it quite central here. The question on The CRL, which I guess you mentioned It could be related to not to your partner not being sort of truly diligent about making sure The manufacturing was in place. So my question is In order to get as much information as I can out of you, do you believe that Your partner has acted in accordance with the agreement with respect to making adequate diligence with respect to making sure that manufacturing was in place at the time of launch. I think under the current circumstances, I cannot comment on that question, and we have not taking an active position in this. So I cannot give any more comments around the legal of former legal discussions. Can you comment on whether manufacturing issues are a part of your agreement with Waybanc? Well, most, I mean, license agreements cover a wide range of topics, of course. And so This agreement is confidential, and I cannot say anything further than that. But typically, a license agreement covers, especially for when it comes to commercial products, cover a range of different aspects, including manufacturing. Fair enough. I'll just try it better than I could. So thank you. Good work. All right. If there is no further questions, I think We will conclude this call and look forward to the next update in May at the Q1 and of course, meeting you in between. Thank you very much for listening.