Hello. Welcome to today's Hansa Biopharma fourth quarter 2022 conference call. My name is Bailey, and I'll be the moderator for today's call. All lines will be muted during the presentation portion of the call, with an opportunity for questions and answers at the end. If you would like to ask a question, please press star followed by one on your telephone keypad. I would now like to pass the conference over to Søren Tulstrup, Hansa Biopharma President and CEO. Please go ahead.
Thank you, moderator. Good afternoon, good morning. Welcome to the Hansa Biopharma conference call to review year-end results for 2022. I'm Søren Tulstrup, CEO of Hansa Biopharma. Joining me today is our CFO, Donato Spota, and Hansa's Head of Investor Relations, Klaus Sindel. Today we'll discuss the progress we made during the last quarter of 2022 and review our near-term milestones. The presentation should take roughly 50 minutes, after which there will be an opportunity to ask questions during the Q&A session. Now please turn to slide two. Please allow me to draw your attention to the fact that we'll be making forward-looking statements during this presentation, and you should therefore apply appropriate caution. Please turn to slide three and an overview of Q4 highlights. 2022 was a successful year for Hansa, with solid performance and strong progress across our research, development, commercial projects, and operations.
The launch of Idefirix in Europe continues to progress according to plan. Based on the successful execution of our market access efforts, we have now secured pricing and reimbursement in four of the five largest markets, including most recently Italy. In total, positive reimbursement decisions have been secured in 11 countries. Market access procedures are in progress in a total of nine countries, including Spain. We're also pleased with the progress in our engagement with the leading European medical societies, such as the British Transplantation Society, which recently published new guidelines for implementation in the U.K. Importantly, these guidelines are in line with the recommendations from NICE in the U.K., all the way from patient selection to transplant and post-transplant patient management and protocols.
Outside the E.U., we recently signed a distribution agreement with iQone Healthcare, a leading Swiss healthcare product supplier, to cover the distribution of Idefirix in Switzerland. On the clinical development side, we're pleased with the positive top-line data that was published back in November from the Imlifidase phase II study in AMR post-kidney transplantation, demonstrating statistically significant superior capacity of Imlifidase to rapidly reduce levels of donor-specific antibodies compared to standard of care plasma exchange. In anti-GBM, we recently commenced the pivotal phase III study with the first sites initiated at the end of 2022. This new global phase III study will target 50 patients at 30-40 sites in the U.S., U.K., and E.U. In our ongoing GBS phase II program, patient enrollment is picking up again following several initiatives implemented during 2022.
I'm also very pleased with the solid progress seen in our preclinical development programs, specifically in the Duchenne muscular dystrophy program with Sarepta in gene therapy and the NiceR program, which is exploring utilization of second-generation enzymes for repeat dosing. In the Duchenne program with Sarepta, Imlifidase is being investigated as a potential pretreatment in patients with preexisting IgG antibodies to Sarepta's SRP-9001. Based on encouraging preclinical data, plans to initiate a clinical study during 2023 were announced in November last year. As for NiceR, our program to develop second-generation enzymes for repeat dosing, I'm pleased to announce that IND-enabling toxicology studies have been successfully completed and that a clinical trial application was recently approved. We plan to initiate a phase I study with our lead candidate in the NiceR program in the first half of this year.
While the capital markets for biotech companies remained challenging throughout 2022, I'm pleased that we're able to successfully secure additional financing through two financing events last year, enabling us to extend our cash runway into 2025. Donato will cover this in more detail later in this presentation. Please turn to slide four. During 2022, our market access efforts in Europe continued to progress as planned. In the fourth quarter, we secured positive reimbursement decisions in both Italy and the Czech Republic for highly sensitized kidney transplant patients. These positive reimbursement decisions were both aligned with the conditional approval granted by EMA and are expected to help change the clinical practice for desensitization of highly sensitized kidney transplant patients who are incompatible to a deceased donor organ.
In Italy alone, more than 6,000 patients are waiting for a kidney transplant. It is estimated that 1 in 10 are classified as highly sensitized with limited or no access to a suitable donor with today's standard of care, a fact which serves to emphasize the unmet medical need for transformative treatments such as Idefirix. With the positive reimbursement decisions in Italy and the Czech Republic, market access has now been secured in 11 European countries, including larger markets such as Germany, U.K., and France. A reimbursement decision in Spain is expected in the near term. Please turn to slide five and a review of our ongoing clinical programs. As briefly mentioned at the beginning of our call, we announced positive top-line data in November of last year from the Imlifidase phase II study in antibody-mediated rejection episodes post-kidney transplantation.
The data readout demonstrated a statistically significant superior capacity of Imlifidase to rapidly reduce levels of donor-specific antibodies compared to standard of care plasma exchange in the five days following treatment start. In AMR, the current treatment protocols can take up to several weeks to reach the desired effect, and in some cases, the outcome remains incomplete or ineffective. We therefore believe there is a clear need for clinicians to be able to provide patients experiencing post-transplant AMR with a more rapid and effective therapy that can quickly eliminate donor-specific antibodies and thereby minimize the risk of damage to or loss of the kidneys. These first results are another important milestone in executing our Hansa strategy to expand the reach of our IgG antibody-cleaving technology platform to address significant unmet medical needs in a wide spectrum of disease areas and indications.
We plan to publish the full data set from the AMR study in the second half of this year. With respect to our GBS phase II program, we implemented several significant initiatives during 2022 to increase the enrollment rate in this trial as a shortage of IVIG, as well as reduced capacity and availability of staff across a number of trial centers had negatively impacted the enrollment rate. During the fourth quarter, we saw an increase in patient recruitment due to these initiatives, and we have now enrolled 25 out of a target of 30 patients. We expect enrollment to be completed in the first half of this year, as previously guided, with the first high-level data readout in the second half of 2023. In anti-GBM, we've commenced a pivotal phase III study as previously guided with the first sites initiated in December of last year.
The new global study is an open label, one-to-one randomized control study targeting 50 patients to be treated with either Imlifidase and standard of care or standard of care alone at 30 to 40 sites in the U.S. and Europe. In anti-GBM disease, today's standard of care consists of a combination of plasma exchange, cyclophosphamide, and steroids. For patients randomized to the Imlifidase arm, the first round of plasma exchange after randomization will be replaced by the administration of Imlifidase. As a primary endpoint, kidney function will be evaluated by eGFR at six months from randomization, while anti-GBM antibody levels, pulmonary symptoms, safety, pharmacokinetic, pharmacodynamic, and health-related quality of life measures, among others, will be assessed as secondary endpoints.
In the U.S., our pivotal ConfIdeS trial in kidney transplantation is evaluating Imlifidase as a potential desensitization therapy to enable kidney transplants in highly sensitized patients waiting for a deceased donor kidney through the U.S. Kidney Allocation System. In this trial, patient enrollment continues to progress, and we have now enrolled 51 out of a target of 64 patients. At this point, 13 clinics are open for enrollment, and new clinics are continuously added, aiming for approximately 20 to further increase enrollment capacity and accelerate the study. Completion of enrollment is expected in the first half of 2023, while completion of randomization is expected in the second half of 2023. As previously guided, we're targeting submission of a BLA under the Accelerated Approval pathway in 2024. Please turn to slide 6 and a summary overview of our pipeline.
As you can see on this slide, we have successfully developed a broad and exciting clinical pipeline in both transplantation and autoimmune diseases. During 2023, we plan to further expand our clinical development activities following the successful preclinical work completed with both our lead NiceR candidate for repeat dosing and with Imlifidase as a pretreatment to Sarepta's SRP-9001 gene therapy in Duchenne muscular dystrophy. As far as our NiceR program is concerned, we plan to enter the clinic this year with our lead candidate, HNSA-5487, following the recent approval of our clinical trial application. In gene therapy, Hansa and Sarepta recently announced plans to initiate a clinical study this year with Imlifidase as a pretreatment to Sarepta's SRP-9001 gene therapy in Duchenne muscular dystrophy.
The advancement of these programs into the clinic represents two major milestones for Hansa and our unique IgG antibody-cleaving enzymes platform as we continue to expand our activities across multiple therapeutic areas. With this overview, I will now hand over the call to Donato, who will walk us through a review of the fourth quarter and the full-year financials. Donato?
Thank you, Søren. Please turn to slide seven. Total revenue for the full year of 2022 amounted to SEK 155 million, including SEK 87 million in product sales and SEK 64 million in contract revenue from the agreements with Sarepta and AskBio. This represents more than a quadruple year-on-year total revenue and an almost six-fold increase in product sales as compared to 2021. For fourth quarter 2022, we saw again confirmation of the solid progress that we have been making throughout 2022 with respect to pricing and reimbursement and the further broadening our hospital reach. Total revenue for the quarter amounted to SEK 31 million, including product sales of SEK 20 million and contract revenue of SEK 11 million. For 2023, we aim at building upon our market access achievements seen in 2022 to foster sales uptake across European markets.
Nevertheless, we do expect product sales to remain somewhat volatile between quarters as we continue working with hospitals to strengthen the base for repeat business and in parallel also running the post-approval study throughout the year. Please turn now to slide eight. Total SG&A expenses for 2022 amounted to SEK 336 million compared to SEK 327 million for the full year of 2021. The moderate year-on-year increase is mainly related to our commercial launch activities and organizational expansion in Europe, partly offset by one-time expenses related to the US IPO preparations in 2021. In the fourth quarter, SG&A expenses amounted to SEK 82 million, which is basically on par with the level we saw during the prior quarters in 2022, but approximately 20% below Q4 2021 due to previously mentioned one-time expenses.
For 2023, we do expect a managed increase in SG&A expenses reflective of the inflation seen in Europe and the US throughout 2022, as well as us starting to strengthen our US presence in support of our late-stage development activities and preparation for potential market entry. R&D expenses amounted to SEK 346 million for the full year of 2022, compared to SEK 231 million for 2021. For the fourth quarter 2022, R&D expenses amounted to SEK 92 million, which is on par with the recent quarters. In the fourth quarter, we started to capitalize the development costs related to EMA post-approval commitments as we met the respective accounting criteria under IAS 38. The capitalized development costs amount to approximately SEK 18 million.
The increase in R&D expenses for the full year was mainly driven by the ongoing ConfIdeS study in the U.S., our post-approval commitments in Europe, and the preparations for our pivotal phase III program in anti-GBM disease. We have also been increasing our investments into our second-generation enzyme program as we prepare for taking our lead candidate into the clinic this year. Looking at 2023, we do foresee to increase our investment in R&D as we initiate the clinical program with our lead second-generation molecule, have the phase III anti-GBM study fully up and running, the ConfIdeS and the REBOUND study ongoing, as well as continue the work on the EMA post-approval commitments. Net loss amounted to SEK 610 million for the full year of 2022 and SEK 147 million for the Q4.
The increase over 2021 primarily reflects our increase on the investments and the crude imputed interest costs related to our debt financing, partly offset by significantly increased year-on-year sales and revenues. Please turn to slide nine. Cash flow from operating activities amounted to minus SEK 112 million for the fourth quarter of 2022. For the full year of 2022, operating cash flow was minus SEK 504 million compared to minus SEK 481 million for the full year of 2021. The limited increase in cash consumption reflects the significantly increased year-on-year product sales and the AskBio upfront payment. As highlighted by Søren, we have extended our cash runway into 2025. Despite challenging financial markets, we have successfully completed 2 financing transactions on very competitive terms during the last year.
Again, confirming the potential value in our technology and business. In July 2022, we raised $70 million in a non-dilutive debt financing. In December, we raised $40 million through a directed share issue. This directed share issue included participation from our existing institutional investors, Redmile Group, and new investors, including Braidwell, Heights, and other U.S. and institutional investors. With the cash injection in December, Hansa's cash position as of December 31st, 2022, amounted to SEK 1.5 billion. I will now hand the call back to Søren for his final remarks.
Thank you, Donato. Please turn to slide 10. 2022 was another successful year for Hansa with solid performance and strong progress across the organization. We anticipate an exciting year ahead in 2023, with achievement of several key milestones across our platform and therapeutic areas as we continue the development of new transformative medicines for patients suffering from serious rare immunologic diseases. Looking forward, we are encouraged by the demonstrated potential of our unique antibody-cleaving enzyme platform and the company's potential to become a global leader in rare immunologic diseases. As discussed, first half 2023 milestones include patient enrollment into our pivotal global phase III study in anti-GBM disease and the completion of enrollment in our phase II program in GBS.
Patient enrollment also continues to progress into our U.S. ConfIdeS trial, and we expect to complete enrollment during the first half of this year, with subsequent completion of randomization expected in the second half. As previously guided, we're targeting submission of a Biologics License Application to the U.S. FDA under the Accelerated Approval Pathway in 2024. We anticipate starting a new clinical trial in the first half of this year with our lead NiceR candidate, HNSA-5487, following the successful completion of IND-enabling tox studies and the recent CTA approval. Together with Sarepta, we will advance our DMD program in gene therapy into the clinic this year, following the generation of promising data from preclinical development. In this program, imlifidase is being investigated as a potential pretreatment in DMD patients with preexisting IgG antibodies to Sarepta's gene therapy SRP-9001.
I want to note that we also plan to announce this year five-year data from the long-term follow-up study in kidney transplantation from the four phase II programs which led to the conditional approval in Europe. The results from the long-term follow-up study are expected to be announced in the second half of 2023. During this time, we also expect to publish the full data readout from the AMR phase II trial. Please turn to slide 11. This concludes our presentation. We would now like to open the call for questions. Moderator, please begin.
Thank you.
If you would like to ask a question, please press star followed by one on your telephone keypad. If for any reason you would like to remove that question, please press star followed by two. Again, to ask a question, please press star followed by one. As a reminder, if you are using a speakerphone, please remember to pick up your handset before asking your question. Our first question today comes from the line of Gonzalo Garmendia from ABG Sundal Collier. Please go ahead. Your line is now open.
Hi, and good afternoon, and thank you for taking my questions. First one is on the U.S. trial, the ConfIdeS trial. Before you were aiming to enroll all patients in 2022, but you still have 13, 15 to go. I don't know if you could give us some color on the actual reason for the slow enrollment. Apart from increasing the number of clinics, are you taking other measures or are you trying to implement other measures to increase the speed of recruitment? Just like, as a past question here also, on average, how long did it take from enrollment to actually being randomized for a patient? Thank you.
Thank you, Gonzalo, for those questions. First of all, as I'm sure you will appreciate, it's very, very difficult to predict in advance of a study like this, which is quite complex with many moving parts, and which is being launched in the middle of a pandemic to accurately predict when you will complete enrollment, you know, on whether it's December or whether it's a few months later, right? Currently, as you say, we have 51 patients out of a target of 64. Looking at the current enrollment rate and the initiatives we've taken recently, including expanding the number of clinics, we expect this study to be fully enrolled in the near term.
Then of course, as you allude to also, the key thing is how long will it take to then have all of these patients randomized, meaning that they will have had an organ offer. That's something we're monitoring very closely. As I've discussed on previous calls, there is a delay. It's a number of months from the enrollment, i.e. you have patient consent to then that patient actually being offered an organ. The only thing we can say at this point is that we expect all patients to be randomized in the second half of this year.
It's obviously something we're watching very closely, and we want to make sure that there is an adequate and sufficient flow of organs to the patients, and we're working with the centers and relevant, you know, third parties to ensure that that is the case. I think those were the two questions you had, right?
Yes, very clear. I have another one. It's on the gene therapy segment. SRP-9001 has the PDUFA date set for May 29th. Would it be fair to assume that the start of the trial is conditional on the potential approval of the gene therapy, therefore starting potentially in H-23?
That's not a necessity. Whether you think that it's realistic that it will happen only after, you know, the PDUFA date is another question. What I can say is that based on the very, very encouraging preclinical data, Sarepta has taken a clear decision to take Imlifidase into the clinic, right? The value of enabling a broader range of patients to benefit from their gene therapy is very, very significant, not just for Sarepta, but more importantly for the patients who've been excluded from trials so far and patients who are out there waiting for the product to be approved. We expect this, you know, clinical trial to commence, you know, this year, and I cannot be more specific than the guidance we've provided so far.
All right. Thank you very much.
Thank you. The next question comes from the line of Tazeen Ahmad from RBC Capital Markets. Please go ahead. Your line is now open.
Hi, and thank you for taking my questions. My first question is about Idefirix sales. I fully acknowledge that there is complexity and many variables around estimating timing of treating patients. Now you're two years into launch, and you have a good number of clinical centers activated, also reimbursement in most European countries. I'm wondering if you could share your expectation on the level of sales or number of patients that you hope to treat with imlifidase. A range here would be very helpful. Thanks.
Yes. We have decided not to provide a range at this point in time. It's still very early days in the launch of a transformative product where you need to have a lot of different things in place, change the mindset. There needs to be infrastructure in place, protocols, guidelines, a lot of different things. It would be a misguidance rather than guidance to give a range. If we gave a very broad range, it would be meaningless. That's why we are not doing this at this point in time.
However, as I believe we've discussed, you obviously and as you also allude to, we have a growing number of clinics that have specific local protocols in place, that have identified specific patients that are on a list, waiting for an organ to be offered and where the supply chain has been set up so that they have access to product. The question is how long does it take for these patients to get an organ offer? That obviously varies and is very, very difficult to predict. We're very, very comfortable with the progress seen so far. There's a growing number of clinics that have, as I said, put local protocols in place.
We talked about, you know, in the UK now where there is full market access, there is a total of, I believe it's around 35 centers. They've kind of established themselves as a consortium. They've put in place guidelines and so on, and they're ready to, you know, start seriously treating these patients. Again, it's difficult to predict a specific ramp up in a country like the UK. We got reimbursement in Italy very recently, I would say ahead of the normal timeline for Italy, which is very, very good. Again, it's impossible to predict the specific ramp up of patients and sales in a country like that. Altogether, all I can say is that we're pleased with the progress so far.
We're seeing patients being treated, we're seeing good outcomes, some of which have been reported in the public domain. We expect obviously as we increase number of countries that we have access to, and as clinics get, you know, the first patient treated, that we'll enter a phase where you see more repeat usage at the clinic level. This together with additional countries, being added, certainly we expect would have a positive impact on the slope of the launch curve. So far so good. Obviously when we feel comfortable providing guidance via range, we will do this, but we'll only do it when it makes sense and is actual guidance and not misguidance.
Okay. All right. Thank you. My second question is on AMR and the development path forward, which from what I understand, it will require you to initiate a larger trial. Do you have a timeframe as to when you think this could happen? Do you have the funding in place? Are you or will you consider to find a partner for this indication given the potential scale of the trial? Thank you.
Thanks, Zoe, for that follow-up question. Yes. I mean, we do think that the AMR opportunity is a real one, and it's a, you know, substantial one. There's a clear unmet medical need in that space, and we believe Imlifidase has what it takes to potentially dramatically improve, you know, standard of care. We were very pleased with the outcome of the phase II trial that we have recently completed. We've reported high level the fact that the primary endpoint was met. You clearly see this, a very rapid and complete reduction of donor-specific antibodies in a statistically superior manner in the Imlifidase arm versus the standard of care arm. We will now publish the full data sets.
It will be in the second half of this year. Next step is in addition to publishing the data to obviously engage in dialogues with relevant regulatory authorities and to discuss the path forward. The fact is that it's actually quite challenging to run phase III trials in this particular indication as I'm sure you notice from other attempts in the past because of the heterogeneity of the patients, right? The difference in the protocols in different centers. What is important for us right now and has been and is to get, you know, the data out from our trial to make sure that this is appreciated and understood by relevant clinicians.
Then we'll see what the next step is from here. It's too early to speculate about that. It's really encouraging and brings hope to these patients, some of whom, you know, have lost their kidney or will do so, that there is potentially, you know, a better solution coming.
Sorry, just to clarify, would you consider to find a partner for this or you intend to go alone?
In general, I think, we feel quite comfortable operating in the transplant space. Obviously we've demonstrated our ability to do so far. That doesn't mean that we would not potentially work with a partner as well, different ways that you can partner. I mean, nothing is excluded, right? And that's something we'll determine as we get, you know, closer to the decision making.
Okay. All right. Thank you very much.
Thanks, Zoe. Moderator.
Thank you. The next question today comes from the line of Christopher Uhde from SEB. Please go ahead. Your line is now open.
Hi there, Christopher Uhde from SEB. Thanks for taking my questions. My first question is, you've talked about the importance of identifying suitable patients before using Idefirix and managing that as part of how to roll this out successfully. What can you comment on though, I guess, because there's another factor aspect of it is sort of reluctance of surgeons to allocate organs to highly sensitized patients. What can you talk about that aspect and how it varies from site to site? That's my first question. Thanks.
The way I understood your question is, there are issues around making sure that identified patients in the clinics have access to organs and that the practice there varies from clinic to clinic. Yes, you're right, absolutely. It's not certainly not enough to just identify the patients and then wait for an organ, you know, within the current setup of organ allocation systems. You need to be able to make sure that these highly sensitized patients are in fact offered an organ. There are certain things you need to do in terms of delisting certain HLA antigens, so that you get something that is close to what you would want, but where you still certainly need, you know, desensitization. That ensures that there is an organ offer.
Of course, as you know, if there isn't a positive cross-match and you cannot transplant, which will be the case here, then you initiate the imlifidase therapy. It's still a learning exercise for many clinics. Obviously our role here is to work with all of the different parties and bring the clinics together to discuss how do you make sure that there is an optimal and ongoing flow of organs to the patients that you identified and who are, you know, really in dire need of a transplant sooner rather than later.
I mean, in terms of, the extent to which, you know, some surgeons are more open to it, than others, what can you comment about that and how you try to, you know, convince them to consider using it?
It's not difficult for us to, again, to convince them to use Imlifidase in general. I think we've seen a very good perception of the message that this is a way to ensure that these patients that haven't had real access in the past now have access, and that there will be better usage of available organs because you don't need to really consider again, the specific matching. You should only based on antibodies, but you should look at matching based on other factors, relevant factors. But then, you I mean, clearly it's our task to make sure that again, that they are fully educated and informed about how should the system for organ allocation be set up.
Here we're working again, you can take the U.K. as a sector, it's a consortium of 35 clinics now. Working together, leading clinics in the U.K. that after the NICE recommendation and the decision to reimburse and provide financing for imlifidase therapy, they're very keen to get started, all of them. They have put in place then guidelines, and obviously they're also discussing how the organ flow should be optimized and so on. It's a similar situation in France, where we have early access, and it's essentially the same across different countries in Europe. You see different practices and different approaches. Again, our role is to make sure that there's optimal learning and appropriate action taken.
Okay, thanks. My second question is, obviously, well, not to downplay the achievement that you guys have done in terms of getting a drug to market, which is obviously phenomenal. But, you know, I think it's fair to say that trial recruitment pace has always been kind of on the slow side, sort of across the board of the clinical program. So far it also doesn't really seem to reflect how trials have been reading out, because they've been successful. It seems like the delays relate to processes in medical. What have you done to address this in the past? Why hasn't it been enough? What should you do and what can you do to turn that around?
I mean, should you re-recruit more people with sort of hands-on experience in rare disease trials from like a CRO like IQVIA or...? Yeah. Thanks.
I think, Christopher, if you look at the performance of other companies with similar trials and similar in the same space, if you look at the transplant space, which really almost parks along, has been affected by the COVID-19 pandemic and is a very complex space to operate in. You see similar kind of performance. I wouldn't necessarily conclude that there are very clear internal issues here, in, you know, leading to slow patient enrolment. It's clear that if you have more resources, you will see, you know, generally a better performance and faster enrollments and so on. You have more sites up and running, you have more frequent interaction with the sites and so on and so forth.
The fact of the matter is that, you know, we've been a relatively small organization. We are growing significantly, as you know, if you look at our organization. We were 35 people back in 2018. Now we're three times... Well, four times, almost five times as many. It's a fast-growing organization. We've been able to recruit really talented and experienced people. Again, it doesn't mean that we're not trying to optimize our investment and also working with external parties. As you've heard me say several times also on previous calls, we are putting in additional resources and expanding the number of clinics and so on. We need to have more face-to-face time with the clinics, that has been an issue during the pandemic.
There's no doubt about it. Most of the delays that we've seen really have been due to the fact that the pandemic has had a very serious impact, not just on the transplant space, where the transplant volume was down more than 20% in 2020, probably more in 2021, we don't have the figures yet, but also in the reimbursement from another spaces where you've had under supply of IVIG and so on and so forth. There's been a number of very specific issues that we've had to deal with. I would say that I'm quite pleased with the way that this organization has been able to act in a very difficult and challenging overall environment.
Again, it doesn't mean that we're not necessarily going to invest more, and we are, you know, on a continuous basis, a growing organization, and we're bringing in more and more new and highly qualified people.
Okay, thanks very much. I appreciate that.
Thank you.
The next question today comes from the line of Louise van der Wilden from Kempen. Please go ahead. Your line is now open.
Hi, this is Louise, dialing in for Jacobs from Kempen. I have a couple of questions. On the NiceR program, I was wondering what are the potential indications that you are considering here?
Thanks, Louise. Good, good question. For the NiceR program, if you look at... You can actually, you know, bring to the market drug candidates that can be used in many different therapeutic universes. Essentially all of the four, you know, big universes that we're currently, you know, active in transplantation, autoimmune diseases, gene therapy, and oncology. If we take autoimmune diseases, clearly, you would want repeat dosing in the more chronic autoimmune diseases. In our case, specifically those that are IgG mediated, where you have a rapid disease progression and where you have flares, meaning that you... When you have these flares needs efficacy beyond what the maintenance therapy can bring you, right?
That would be a natural space to look at, and that's certainly something that we have been doing and we are doing, and we are considering for, you know, specific initiatives. In the gene therapy space with the nifurtimox, clearly we're looking at preexisting neutralizing antibodies. Many gene therapies, it seems like, will have to be dosed not just once, but several times. Again, that is a relevant space for a repeat dosing version of the nifurtimox. Obviously in oncology, whether it's genetic stem cell transplantation or other oncology indications, is almost by default a repeat dosing space, right?
There's a lot of different potential indications that we can target, and we are really pleased with the fact that our lead NiceR candidate has shown good preclinical data and that we're now ready to take it into the clinic. We think it would be a very considerable value driver for the company.
Very clear. Thank you. Then on the phase II GBS readouts, what kind of data can we expect there?
The GBS trial, just to summarize and repeat again. It's a single arm study. We are putting it on top of IVIG, which is the approved therapy at this point in time, the standard of care. We compare to a patient registry in Europe. You would get data on, you know, functional functionality. There is a kind of a functional scorecard that is being used broadly for this indication. That is a primary endpoint. Obviously there's a number of other endpoints that will be part of the final readouts. The first readout obviously will be high level.
Okay. Thank you very much.
Thank you, Louise.
Thank you. The next question today comes from the line of Johan Unnerus from Redeye. Please go ahead. Your line is now open.
Thank you for taking my questions. Just a few. The first one, what is the prospect of European centers starting to treat second patient, sort of multiple patient? Most centers have probably treated one patient, as I understand it. Is that correct?
I'm not sure I fully got the question, but essentially you're asking at what point the centers are getting to initiating therapies?
Yes, more or less. What, what's your feeling and impression? What sort of signals do you get? Can you not point to or should we expect some centers being close to treating the second patient?
Yes. Obviously we've had a number of centers last year that treated their first patient. As we've discussed, they will wait, you know, at least 6 months in general, to see the outcome of that first patient treated before, again, making a decision to continue using the product and so on. Once they have made that decision, they need to wait for a market to be allocated and so on. We do expect this year to have, you know, repeat business happening at a growing number of clinics.
Clearly what we expect this year is that given the fact that we've seen the big countries in Europe, now we've got a reimbursement in Italy, we have it in the UK, we have it in Germany, we have early access in France. The only country we now lack out of the top five is Spain. We are hopeful that we, you know, we are quite optimistic actually. We have very good dialogue with the Spanish authorities, and we're hopeful that we could see a decision coming relatively soon. Spain is a top three country in terms of volume. Now these more you know, significant from a volume perspective, countries are getting online.
We certainly expect also to see repeat business coming, in some of these, you know, countries, this year. That will really help, you know, the growth of the product.
Excellent. A reminder what to expect for Sarepta in terms of potential milestones, assuming that the clinical study will start sort of by Q4, maybe or in Q3 or something like that.
Yeah. There are, I mean, I think as you know, what we communicated is that there are potential milestones up to just shy of $400 million US dollars. That includes, you know, early milestones and sales-related milestones and so on. As this program progresses, obviously there will be additional milestones, and we have not provided specific guidance there. I think, Donato, there's not much we can say.
Yeah. I think what is important to note, Johan, and we discussed that before, is obviously that there is a certain backloading of the milestones, so it's more related to, you know, so regulatory milestones and then obviously sales milestones. Don't wanna say that there's no development milestones, but they're not going to make or break Hansa.
No. That's our understanding and that's related to another question. You have obviously extended your access to growth capital, both the credit and the equity issue, and strictly financial, you have repeated that you are comfortable financing 2023 and 2024. What about the actual equity level? Is that, I mean, a milestone from Sarepta or elsewhere could be not more sort of welcome in terms of equity than strict financing.
I hear you right. I mean, we're happy with the financing events in 2022. We have runway into 2025 as just communicated. Donato, do you wanna comment on the equity-?
Yeah.
question?
Obviously we've been able to strengthen the equity now also with the last raise that we did, capital raise. We're looking at that as well. You're right. I mean, you need to look at both the cash and the equity and of course if there's Sarepta milestones coming that would obviously help the cash and the equity.
Excellent. A smaller thing. In this quarter, the gross margin was markedly better. Is that sort of related to inventory or other changes, or should we read into that?
Donato.
Yeah. I think you can't read too much into that at this point, Johan. I think what, you know, what again, also discussed at previous calls, what you need to consider is that obviously we have a manufacturing capacity set up, which is obviously directed to be able to serve the market once we are fully up and running in this indication, but also in additional indications. There is a bit of overcapacity right now. This is considered whenever there's a manufacturing happening then, You know, if that is, if there's an overage compared to what we have currently in our projections, then obviously that will hit the P&L.
Right now, I don't think you should put too much emphasis on that. I mean, the in the long run, or even in the midterm, I think what I can say is that, you know, the gross margin will be quite healthy.
Yeah. Also another question. R&D, can you provide some sort of more granularity in terms of increase in reported expenses and cash expenses for 23 without, of course, being overly specific?
Well, I mean, we do expect, as we said, we do expect an increase in the R&D expenses. It's going to be well managed. You know, I'm not, we're not talking about, you know, 50% or a 100% increase. I mean, there's obviously, an additional phase 3 study now coming, and that's basically driving the increase. You know, there will be some, somewhat of an increase, but it's very well managed and it's anyhow considered in the cash guidance that we've given.
Okay. Obviously slightly higher in terms of cash, I suppose.
Mm-hmm. Not sure I got that one.
I mean in terms of yearly increase. If you if you capitalize some of the R&D expenses, that could be a higher number for 2023.
Yes. On the other hand side, we'll be able to offset from the increase, expected increase in sales.
Great.
Well.
Did that answer your questions, Johan?
Yeah, that's perfect. Thank you.
Thanks so much.
Thank you. The next question today comes from the line of Douglas Tsao from H.C. Wainwright. Please go ahead. Your line is now open.
Hi, good morning. Thanks for taking the questions. Søren, in terms of the NiceR program, it sounds like we're getting a phase I study this year. I'm just curious. I presume that's going to be in healthy volunteers, and I'm just curious, you know, will the results from that determine or help inform what indications you're going to pursue with the lead NiceR asset, and how quickly do you expect to be in a phase II study with that program? Thank you.
Thanks, Douglas, and good morning. Yes. I mean, obviously, that's a correct assumption. We'll go into healthy volunteers looking at safety and pharmacokinetics and dynamics and so on. We have certainly already made a very clear kind of list of indications that are relevant, right? The results of this phase I trial will inform the final decision-making. Obviously we have some pretty good thoughts on what's what indications would be relevant. I just discussed, following Louise's questions, you know, what could be potential indication spaces for a candidate, there's quite a number.
The final decision will be made at a later stage, but we're certainly preparing for that, and we're happy that we can now move forward with this, you know, phase I trial.
Just as a follow-up, how many doses do you expect patients to receive during the phase I study?
At this point in time, we're not providing, you know, more details, but obviously at some point this will be announced and available.
Okay, great. Thank you.
Thanks, Marcus. Are there any more questions, moderator? Do we still have the moderator on the line? Moderator?
My apologies. The next question today comes from the line of Bo Zhang from Intron Health. Please go ahead. Your line is now open.
Thank you. Hi, this is Bo Zhang from Intron Health. Thank you for taking my question. I have two quick ones. One, going to market access. In terms of the receiving reimbursement from Spain and also potentially full access from France, would it be fair to assume this could happen sometime, you know, later this year within 2023? My second question is you mentioned expanding imlifidase across multiple therapeutic areas. We saw the recent first case study, right, in lung transplant patients, highly sensitized lung transplant patients in France. Would it be in the pipeline or plan considering exploring to this indication in particular, considering the increased market size caused by severe COVID patients? Thank you.
Thanks, Bo Zhang for those questions. First, on market access, we do remain optimistic that there will be a decision in Spain, and obviously we're hoping this will be a positive decision to provide, you know, reimbursement and access for Idefirix in Spain, and that this decision is coming in the near term, even very near term potentially. We're optimistic there. As far as France is concerned, we have full access now using the early access program. There's no restraints or constrictions if you will. Obviously, we do need at some point to get more permanent or permanent reimbursement, and that process is ongoing.
It's not critically important for us timing-wise to get it as long as we have access using the early access program. That was France. Then obviously we have other countries where we have ongoing discussions, you know, like Belgium, Denmark and so on. We're also hopeful that that will bring these, you know, significantly forward in the coming months and this year. As far as expanding into other organs, lung transplant, absolutely you're right. There has been a good case report coming out of France. We know that there's a very high degree of interest here. There's certainly a high degree of unmet medical need. This is a very critical situation for these patients.
We do expect at some point that we will see that as a commercial opportunity for us, lung transplant. Similarly, we also expect that heart transplants will be a commercial opportunity for us. At what point, you know, we will have this in the label, obviously will depend on, you know, trials being run and discussions with regulatory authorities and so on. That's, that's too early to speculate about, but I certainly expect given the level of interest that there will be real usage at some point in these indications, yes.
Great. Thank you.
Thanks, Bo Zhang.
Thank you. The final question today comes from the line of Erik Hultgård from Carnegie. Please go ahead. Your line is now open.
Hi there. Thanks for taking my questions. I have two. If I may first, could you give us some sense of how the post-approval study in Europe is progressing? Roughly how many of the 50 patients that you plan to enroll have been dosed with imlifidase to date? Secondly, I'm just trying to understand the dynamics here. We've seen quite broad access, but still we haven't seen any type of pickup in commercial demand. Trying to understand the dynamics here, what is the feedback that you're getting from physicians? Is it the sort of lack of long-term or more sort of more patient data that is keeping them sort of cautious?
Will sort of more data from, I guess, the U.S. trial and from also the post-approval study really change that dynamic? Do physicians still need to sort of test one patient at a time before we will start to see an acceleration? Thank you.
Thanks, Erik, for those questions. First, we do have patients treated in the post-approval efficacy study. We are not reporting, you know, patient numbers here. We need to recruit and treat 50 patients in total, and we need to complete this trial by the end of 2025. There is no, you know, urgency for us to complete it, you know, as quickly as possible. We're pleased with the progress. It's moving forward. We have patients treated. As we've discussed, I believe also it's a great way not just to generate data, but to generate experience in relevant centers.
This is running in parallel to our commercial efforts. Obviously there is some impact given the performance that we have, the good performance, I would say, from our market access team getting access. There is competition in some in some countries. This is not only being run in countries where we don't have a, you know, access, but it's being run in parallel to commercial efforts. On your second question, you know, the observation that you don't see a very rapid uptake and very fast growth of patients being commercially treated, this is fully as expected. Again, you need to change the mindset of the physicians, create the awareness and interest. That certainly is there very, very broadly. We're getting extremely positive feedback.
I've been involved in a number of similar launches, and I'm really pleased with what we see, not just from individual physicians, but from centers and from societies. You know, the European Society for Organ Transplantation has issued, you know, first batch of guidelines and mentioned Imlifidase. As I just said, the British Transplantation Society has also come out with very good guidelines. The physicians, the clinics want to treat. They see a real need for individual patients, and they see a need to optimize the use of available organs, and in some cases, actually increase the number of available organs. What is holding them back is the fact that the system has many moving parts.
As we discussed during this call also, you need to optimize the organ allocation system, and the clinic's role there, to make sure that there is a continuous flow of organs to the patients identified. This is something that's being done now. There is a delay from identifying patients, putting up supply chain and so on, and then actually receiving an organ offer. That is certainly holding things back a little bit and has been. The other is the fact that, yes, you get market access, right? Let's take a country like Sweden, that you know quite well.
After you have that decision at the state, at the national level, it needs to be pushed down to regions and from the regions down to the hospitals, and the hospitals need to negotiate budgets and so on. It's a very cumbersome and long process, and it's something that also politically, I think many people are trying to have changed because it just takes forever for new innovative therapies to be used. Those are some of the issues, you know, in play here. Overall, as I've said, our strategy has been to make sure that the centers become clinically ready to treat, and they are a very impressive number are and a growing number, that patients are identified, that the first experiences are positive, and all of those things are happening.
We're waiting for kind of the repeat, usage, time point, where you'll see more, you know, steeper growth. As we discussed, we expect at some point, this year to see that in a number of clinics.
Thank you. That concludes today's Q&A session. I'd like to pass the conference back over to Søren Tulstrup for any closing remarks. Please go ahead.
Well, thank you very much, operator. Thank you everyone who called in here. Thank you for your questions and interest. As we've discussed, 2022 was a busy but overall also very successful year. We have an exciting year ahead of us here in 2023. We all look forward to continuing the dialogue. Thanks so much, and you can now disconnect.
This concludes today's conference call. Thank you all for your participation. You may now disconnect your lines.