Earnings Call: Q2 2021

Jul 15, 2021

Ladies and gentlemen, welcome to the Camaro Second Quarter and Half Year Results 20 21 Call. Today, I'm pleased to present President and CEO, Fredrik Tibberg. For the first part of this call, all participants will be in a listen only mode. And afterwards, there will be a question and answer session. Speakers, please begin. Thank you so much, and hello, everybody, from hot and sunny Sweden, and welcome to Kemalurus' 2nd quarter and half year results Presentation, where we will give an update on our financial and business progress. Before we begin, please be aware that the presentation contains Forward looking statements, which are subject to risks, uncertainties and different assumptions. Slide 3, please. So our agenda today includes an update on strategic objectives, An overview of Camry's 2nd quarter and first half year results, commercial development by Richard And a short update on R and D and the progress in our key pipeline programs. As usually, we will finish up with some key takeaways followed by a Q and A. With me today is our CFO, Eeva Pernodie Lindqvist and Chief Commercial Officer, Richard Jameson. So before going into the results, I will give a quick recap of our mid- to long term strategic objectives. Slide 4, please. It is now a little bit over 2 years since Camry started the journey as commercial company through the launch of BUVITAL in the initial European markets. As you see, we have come a long way since then in our efforts to improve access to treatment and establish Biviral as the leader in opioid dependent treatment. In parallel, we have made significant progress towards bringing new innovative medicines to the market to build and diversify our business. Going forward, we will continue to grow our pipeline through patient centric innovation, collaborations and acquisitions of commercially attractive and complementary assets in strategic areas. These include Addiction, Endocrinology, Oncology and Chronic Pain. Finally and importantly, we will continue to build our commercial infrastructure, Sure. Drive operational execution excellence with the aim to deliver sustainable profits from 2022. With that said, let's look at our achievements and results in the second quarter and first half year. Slide 5, please. In the Q2, we continued to deliver strong operational performance despite the impact of the pandemic. This is really the credit to the commitment and resilience of our teams, which are doing Really a terrific job on our markets. We have executed on our commercial objectives With a robust revenue growth in challenging market conditions, we have had several Progress in the life cycle management and achieved new approvals and published compelling clinical results for Bovedaal in leading peer reviewed journals. Importantly, we continue to experience a strong interest in And the demand for Boveda in all markets, and we are steadily improving access. Our pipeline has progressed well during the quarter with highlights including the FDA acceptance of Braeburn's NDA for Brixadii with a PDUFA date of 15 December 2021. We advanced our registration programs in acromegaly, neuroendocrine tumors and polycystic liver disease as well as the early pipeline and partnerships. Our financial development continued in a positive direction. Quarterly revenues increased to SEK 138,000,000 And half year revenues were SEK 264,000,000 despite the conditions that have prevailed during this first half year. The operating loss in the quarter was SEK 60,000,000, which is higher than the previous quarter And previous year due to high activity in our ongoing Phase III programs. So we ended the period with a solid cash position of SEK 422,000,000, which is a strong base for executing on our strategic and commercial objectives. With that said, let's move to Slide 6 for a closer look at our financial development. So as you can see here, revenues continued to grow well in the year. And I've already mentioned the pressure of the pandemic, Which has prevailed. In the second quarter second half of the year, we experienced increased growth of product sales And total revenues as conditions in the markets develops. Operating expenses have increased in the last quarter from a stable base in 2019 2020. And this really reflects the progress of our Phase 3 programs. Overall, we see a positive trend towards profitability, Which we expect to reach in 2022, as I said before, without the contribution of milestone payments from the U. S. Finally, our full year guidance is maintained based on the predicted growth in the second half of the year as the impacts of COVID-nineteen continue to wane. With this brief overview, I'll hand over to Richard now for a Commercial update. Slide 7, please. Great. Thank you, Frederik. Good morning, everyone or good afternoon, everybody. In the next few slides, I'll give you an update about the commercial progress of Bouyguesdal, our flexible weekly and monthly long acting Bruker Nordheim. I'll focus on an update on sales, and we share with you some of the growing support and opportunities we see in our markets as we build patient access, Driven by the significant benefits Bouvardal brings to patients and society, which are becoming increasingly recognized across stakeholder groups. So if we could move to Slide 8, please. So starting with Bouvardale sales, they've continued to develop well, particularly in countries spared Berg. However, some markets were impacted by the pandemic, where lockdowns restricted our access to healthcare professionals and many patients were not accessing clinics. And this, of course, limited opportunities for new patient starts during the quarter. Currently, we have about 19,000 patients treatment with Bouvardat at the end of the quarter, a patient share of about 5% in our current markets. In those markets where we've addressed hurdles, we do see significant penetration. In Finland, as an example, we have clear market leader status now with Berg. And in Australia and Scandinavia, We've rapidly moved beyond double digit market share all within 2 to 2.5 years of launch. And we have a very strong position in Australia, Which is the market where the 2 injectable buprenorphines are available. In other launch markets, our penetration is slower, So there's also a strong demand for boovidal, and we continue to make good progress as we and are gaining share as we move those access hurdles Patients are facing and release funding for treatment. I will cover some examples of this later on. There's significant potential remaining in these Berg. We're also prepared for further expansion with planned launches in a further 7 new markets, which also represent a large opportunity for Bouvardao, with more than 200,000 patients in treatment. We're in the final stages of the pricing and reimbursement processes. And whilst These have seen some temporary delays due to the understandable focus of health authorities in managing the pandemic. We do expect launches in Q3 and Q4. And we've received wide support and collaboration from key opinion leaders who are eager to have Bouyguesnel available and are supporting our applications. Furthermore, we continue to work closely with our partner, Newbridge, in the MENA region, preparing for both regulatory approvals and launches in several countries. The positive feedback we receive daily from clinics alongside the growing evidence base, the real world reports of the impact uvodal is having on Patients in the treatment system is creating growing awareness and increasing the support for patient access to Bouvadel across our markets. Action is being taken by government, policymakers, healthcare professionals and patient advocacy groups to address the patient access. So, moving to slide 9, if we can, I can share some of these? Firstly, several government initiatives have been announced during the quarter, which will accelerate the patient access. Examples in Scotland, the Minister For Drugs announced in the Parliament new increased funding specifically for boovidal alongside other investments in treatment. Likewise, we've seen additional funds become available for long acting treatments from Public Health England as part of an additional funding stream for harm reduction measures. And again in England, an independent review for treatment of substance misuse sponsored by the government has been completed With a clear recommendation for significant investment over the next 5 years. And the recommendation is for an additional GBP 552,000,000 which by year 5, And if approved, we'll nearly double the current expenditure. And we believe this will allow accelerated access to innovative treatments. Process is also ongoing in Germany and Sweden to improve the healthcare professional remuneration system, which has some restrictions on access. The criminal justice system is also a key focus for us with an estimated 100,000 patients in treatment at any time in prisons. And of course, many patients passing through the criminal justice system. Reports and publications from Australia, Germany and Scotland, the forerunners in this area, have clearly shown the benefits of Bouvival in this setting. And I think a quote from the research report recently published Berg. The Scottish government on their experience with a large cohort of patients is referenced on the side here is compelling as it states, and I quote, High levels of satisfaction about Bouvardel were reported by almost all patients. And healthcare staff continue to be enthusiastic about the positive impact Bouvardel can have on patients' lives. So these reports, alongside new published evidence and health economic analysis and real world experience They show the value promise of Bouvardal are creating significant media attention. And as you can see, there's an example on the left hand side where Bouvardal It's in the media often described as a life changer or a game changer. And I don't think in my 30 years in the industry, I've worked with a product That self generates so many positive media reports and patient cases histories. So if we can go back to the published evidence then, moving on to Slide Penn, as mentioned earlier, in Q2, we grew our scientific evidence base with 2 new important publications. And you can see the titles on the left hand side here. The first, the DEBUT study that demonstrated superiority in patient reported outcomes with buvidal compared to sublingual Buprenorphinenaloxone was published in JAMA Open Network alongside an editorial by Nora Volkoff, The Head of the National Institute of Drug Abuse in the U. S, where she recognized the importance of PROS as an outcome In opioid dependent and also the value of this study. The second study, the UNLOCK T study demonstrated the utility of boovodal Berg. We continue to share our evidence base and real world Experienced through many scientific congresses, many of these we pushed to the second half of the year. Now, we see easing up of the restrictions from COVID. And these are alongside presentations at local meetings and webinars. So with that overview on the progress and significant opportunities for Bouvardal, Please move to Slide 11, and I hand back to Frederik. Thank you, Richard. And let's move over to an update on the progress of our pipeline, where I will start with the life cycle management side And market approval processes for Bivotal and Brixilding and then move over to the progress of our clinical programs. During next slide. During the second Quarter, we received market approvals for a new higher 160 milligram Bivotal dose in Australia, the U. S, the EU and the UK. Further extending the dose options for patients needing higher than the highest labeled 24 milligram sublingual dose, Which we estimate is around 10% of patients depending on market. We now have a full range of individual, weekly Monthly doses covering patients' individual needs. And this is, of course, very significant progress. A further positive development in the quarter was the approval of a label extension in Australia, Allowing for direct initiation of patients on duvedal. So they don't need to be treated on tablingual buprenorphine prior to treatment with duvedal And this is now harmonized with the EU label, which have this included priority. Right now, our regulatory team is also busy preparing for the planned submission of a market authorization application for buvidal and CAM2038 in chronic pain, Which is scheduled for later this year with a possible approval in the second half of twenty twenty two. As Richard said, we have a lot of things going on in MENA as well, where we currently have 4 market authorization applications under review and additional applications on track for submission. Meanwhile, early access programs are ongoing in the 3 countries In 3 of those countries, with currently a few 100 patients being treated with Bivudal. The market, however, is very substantial. In the U. S, we got the positive news from our licensed partner, Braeburn, that all complete response letter issues Had been resolved and that the NDA for Bixari had been submitted to the U. S. FDA. This NDA submission was quickly accepted by the agency with a target approval date, as I said earlier, in December. Graber is now preparing for the launch, and we look forward to U. S. Patients finally getting access to a new and effective treatment option in the form of Briksari. Slide 13, please. To put the potential Approval of residing in context, is it worth looking at the current state of the opioid crisis in the U. S? Sadly, and it's also recognized in several news articles today and yesterday, this has continued to escalate During the COVID-nineteen pandemic, with the provisional number of annual overdose opioid deaths now exceeding 60,000 per year, which is a horrendous figure and overall drug deaths reaching the tragic mark of 90 1,000 per year. 10,000,000 Americans are estimated to misuse opioids each year and approximately 2,000,000 are currently diagnosed with opioid use disorder. Of these, about 1,400,000 are in medication assisted treatment programs And 1,000,000 are receiving treatment with buprenorphine. There's undoubtedly A large need for treatment options in the U. S. As illustrated by the announcement of the Biden administration, of a $1,500,000,000 investment to tackle the opioid crisis. Many other measures are taken to address the crisis, Including increasing the number of healthcare professionals with a waiver to prescribe medication assisted to prescribe and administer medication assisted treatment. Next slide, Slide 14, please. So looking at the market dynamics for long acting injectables in the U. S, we see that the U. S. Market for opioid use disorder drugs is currently about About USD 2,000,000. This is expected to grow to more than USD 3,000,000,000 by 2028, driven by long acting injectables and new patients entering treatment. The patient shares On long acting injectables in the U. S. Is, however, still low, corresponding roughly to about 3% of total patients in treatment. Yes, the market size for long acting injectables is approaching $500,000,000 per year. With a difference with a highly differentiated profile and a strong and growing evidence base, We expect Brixadi to be an attractive treatment option for health care professionals and patients with opioid use disorder in the U. S. We believe that the market entry of GISAVI will have a positive add on effect on the LAI market, Contributing to faster growth and more patients switching from daily medication to weekly and monthly treatment options. Already, we know that through investigator initiated programs, there are More than 1,000 patients in treatment with Bexari. And this is the total number that will come into Treatment through these programs will be 2,000 patients. So looking at new interesting applications of this product in the marketplace and in the treatment place. More details about the commercial plans And market expectations for Brixaily in the U. S. Will provide will be provided closer to launch. So let's move to the next Slide 15 and an update about the ongoing Phase 3 programs for CAHN 2029. So CARE 2029 is our innovative subcutaneous depot of octreotide, currently under development for treatment of acromegaly, neuroendocrine tumors and polycystic liver disease. The product is designed Both for enhancing the efficacy, but also significantly improving treatment convenience for patients compared to currently available treatment alternatives. Next slide, Slide 16, please. So we have a large clinical program ongoing to document safety and efficacy of CAM2029 Across 3 orphan indications, and I mentioned before. This program includes a Phase 3 efficacy study, DEVOOCO, and a long term safety study in acromegaly involving more than 50 clinics Clinical sites in Europe and the U. S. And scheduled to report top line results during 2022, Followed by regulatory submissions. This study is also complemented by an ongoing Phase I study of pharmacokinetics, macrodynamics and tolerability, designed to be a bridge between our current prefilled syringe device And the newly developed injection pen, which will be fully validated for commercial use this quarter. The key randomized single dose part of this study is being finalized and results are expected later this year. This is then being followed or already being followed by a multiple dosing part to bridge between different subcutaneous injection sites At steady state. We're currently planning for flexibility And having both dosing options included in our regulatory submissions and preparing for commercial Manufacturing is well underway. The second indication for calendar 2029 is GESMET, Yes, through enter pancreatic neuroendocrine tumors, where we during the quarter have completed preparations for starting recruitment And expect to have the 1st patients entering the study after the summer vacations. This is a randomized double blind study design Where we have the aim to show superiority in progression free survival, PFS, With CAM2029 versus current treatment standard with sanitustatin LAR and somatuline autogel, which are both 1st generation somatostatin analogues. We have large interest for participating in this trial And expect to complete patient enrollment during 2022 and complete the study in the second half of twenty twenty four. We're also in the process of starting a Phase twothree study in a third indication, polycystic liver disease, for which there is no current treatment approved. This follows discussions with the leading key opinion leaders in this area and the Type B meeting held with the FDA earlier this year. As a part of the preparation for starting the study, we're also developing a new patient reported outcomes tool, Which is under finalization and will be used in the clinical study as a complement to the primary measure of liver volumes. The study is planned to start in the Q4. Next slide, please. So here is a short summary of what is going on in the different programs. And on the right hand side are our Peak sales projection for KAM-twenty 29 based on 3rd party primary and secondary research By indication. As you can see, CHEM 2029 represents a very sizable opportunity with total peak sales of around or above $1,000,000,000 So going from that, let's go to Slide 18, please. So with this short update on CHEM 2029, I'll move over to Our recent and anticipated news flow. We have delivered on the first half year objectives, as you can see. And entering into the second half of the year, we are expecting a number of important milestones, including From our clinical programs for KAM-twenty 29 and 2043. We're also expecting to see the start of Rythm's Phase 3 program for the weekly setmelanotide program product that we have developed together for treatment of Genetic obesity disease. The submission of the market authorization application for CAM 2038 Intronic Pain is, of course, a further milestone. As is maybe Most importantly today, the potential for an NDA approval of Ibrig Sadi that we are expecting to come towards the end of the year. Next slide, please. So now to my final slide here and some Takeaways from the Q2, which I think has been a very strong quarter from our side, from an operational perspective and also commercially in the current or during the conditions that prevailed. On the commercial side, we continued to deliver significant sales growth under these challenging conditions, And Bovedaal is now the market leader in the Nordics and Australia in terms of Sales of individual products. We have successfully completed life cycle management For Bougainal, with new regulatory approvals in Australia, the EU and the UK. And we have further strengthened the evidence base for use in communications with health care professionals and budget holders. We also saw important new funding initiatives And also new decisions in this area. We also continue to advance the product pipeline with Potential for EU approval or for U. S. Approval of Ryxairi. Our Phase III programs advanced, And we have also seen significant progress in our early pipeline and partnerships. On the corporate side, we have established a strong base for executing on our strategy for sustainable growth and profitability in 2022. And beyond this, I think we also have other things of large interest account. With that said, however, We conclude this presentation, and I hand over the call to the operator to initiate the Q and A. Thank Tiburgh. Teberg. And our first question comes from the line of Harry Sefton from Jefferies. Please go ahead. Your line is now open. Brilliant. Hi there. Thanks for taking my questions. My first one will be on The competition that you've been experiencing from Amphibio's long acting subutex in your markets, can you maybe comment on whether You've seen any intense competition which might have led to a slight weakening of the growth rate quarter on quarter? Well, I think one thing I think I mean, we are, of course, not viewing products as competitive, But add on, and I think it's important for patients to have the choice here. So that is a clear point. That said, we have had continued strong growth and we have not seen the pressure from other Treatments on the growth projections or the actual growth, no. Okay. Brilliant. That's very helpful. And then maybe just to comment on the point you made around the COVID disruption. So I think at the start of Pandemic, it seemed that you are more benefiting from restrictions and that it favored the transfer of patients on to buvedil given the reduced Interaction, with the product. You've now highlighted that COVID is limiting the patient uptake. Can you maybe talk through how These contrasting dynamics have changed over time. Yes. I can talk about that, and then I will leave over to Richard for any Add on comments. But what happened in the first half of last year Well, so I think a combination of the fact that we had established a robust base of patients there. But also when COVID came, I think There was a buildup in hospitals, etcetera, of stock that perhaps was not To the extent we understood it in market sales, but there was definitely a buildup relating to and we have heard that from other companies that had Similar dynamics going on. Then I think quickly that the impact of COVID Was not recognized to the same extent. So we had the base. And then going into The second half of the year, we really saw a pickup in terms of increasing number of patients during the entire Autumn last year and then came the 2nd wave in the 1st part of this year. And a lot of our different markets have been almost shut down. I mean, I know, for instance, It's been extremely difficult to have any interactions with health care professionals in Germany. We have had the criminal justice system not allowing for digital meetings. So it's been very challenging to have Uptake there. And other markets such as Norway, same thing. There was essentially no face to face meetings. And I think so it's a gradient from markets that were slightly affected, but to some that were very heavily affected by the situation and where we didn't have access to healthcare professionals. In addition to that, I know that in some markets, there were They prioritized administration of vaccines. So we saw that Adding on to the issues we had in Germany, for instance, where GPs were also Prioritizing giving and rightly so perhaps, giving vaccine injections. So Multiple factors. Richard, do you have anything you want to add to that? No, I think you're coming here, Trungvik. That's very helpful color. Maybe just quickly on the Briksandir resubmission. As you've highlighted before, there was quite a comprehensive list of items on the FDA 4/83 letter. Just want to get your thoughts on how satisfied you are that all of those issues have been addressed? You are that all of those issues have been addressed. Well, I mean, the fact that the FDA accepted The application means that they have been provided with a complete response. So I think we have to take that for satisfactory. Brilliant. And then maybe just quickly on the KALM-twenty 29 Phase 3 spleenuronepine tumors. You said that you expect patients to enroll by the end of the summer. Would you say that as a result, you're expecting a second half weighting For R and D costs this year, so we can see a quite big pickup in potentially the late Q3 and in Q4. Well, we have had, of course, in the start up phase, there are significant costs coming in When you're starting out with Phase 3, Stavie. Yes. So our projection is that we will kind of we have established, at least for the coming quarters, Reasonable stable levels, Eeva. Eeva, do you want to say something on that? I agree. There are some significant That's related to the programs. And to complete this program, I believe we have a kind of reached the level where we will see we will end up also for the Q3 and Q4. Brilliant. That's very helpful. That's all for me. Thanks very much. Thank you, Harry. Thank you. You have a brilliant number. It is 1 on your telephone keypad if you would like to ask Ritchieberg. Any questions? And as we do not have any more questions registered, I now hand back to our speakers. Okay. Thank you all for taking the time here in the middle of the summer to listen to Our presentation, it's always a pleasure to be to have the opportunity to give an update on what we are doing in the company. I wish everybody a wonderful summer. And I look forward to Providing you a further update in our Q3 call. And meanwhile, we will do our best to make everybody Pleased. So thank you, everybody, and have a great summer.