Welcome to the Hansa Biopharma AB year-end report, January - December 2020. For the first part of this call, all participants will be in a listen-only mode. Afterwards, there'll be a question and answer session. Today, I am pleased to present CEO Søren Tulstrup. Please begin your meeting.
Thank you, operator. Good afternoon to those of you in Europe, and good morning to those in the U.S. Welcome to the Hansa Biopharma conference call, reporting the yearly results for 2020. I'm Søren Tulstrup, CEO of Hansa Biopharma, and with me today I have our CFO, Donato Spota, as well as our Head of Investor Relations, Klaus Sindahl. Today we'll review the overall progress and highlights of our business in 2020, as well as the near-term milestones. Our presentation should take 15 minutes, and after that, we'll take your questions. Please turn to slide two. Please allow me to draw your attention to the fact that I'll be making forward-looking statements during the presentation today, and you should therefore apply appropriate caution. Please turn to slide three. 2020 was overall a very successful and transformative year for Hansa Biopharma.
The year during which we achieved a number of significant milestones, including not least the conditional approval of IDEFIRIX by the European Commission for the desensitization treatment of highly sensitized kidney transplant patients. Commercial launch activities have been successfully initiated and implemented as planned, including supply chain activities and productive initial interactions with national reimbursement authorities and key transplant clinics, despite the escalating COVID-19 pandemic in Europe during the fourth quarter. Clearly, though, the challenging operating environment for the transplant clinics has somewhat impeded the ability by the clinics to aggressively pursue early access to special budgets for innovative new treatments outside national reimbursement schemes, as well as the ability to implement new local protocols. We've also made significant progress in our efforts to develop valuable drug candidates outside transplantation.
Last summer, we announced an exclusive agreement with Sarepta Therapeutics to develop and promote imlifidase as a potential pretreatment prior to the administration of gene therapy in select indications. The partnership is progressing as planned, and in the second half of 2020, Sarepta initiated ongoing preclinical investigations with imlifidase as a potential pretreatment in the gene therapy setting. Another key milestone was the announcement of positive high-level data from the investigator-initiated phase II trial with imlifidase in 15 patients suffering from severe anti-GBM antibody disease. Data from the study demonstrated that two-thirds of the anti-GBM patients enrolled achieved dialysis independence six months after treatment. These positive data in anti-GBM antibody disease are very encouraging, particularly as we expand into new indications within autoimmunity.
While 2020 has been a transformative year for Hansa Biopharma with significant progress in key areas, we've also seen the negative effects from the COVID-19 pandemic impacting our operational business and clinical trial activities during the year. Recruitment in two of our phase II programs, Guillain-Barré syndrome, or GBS, and antibody-mediated kidney transplant rejection, or AMR, both had to be paused during a large part of 2020 to preserve data integrity and for logistical reasons. We recently reinitiated patient enrollment in both studies under a risk-based site-by-site approach. Depending on the development and impact of the ongoing global pandemic, we now expect to finalize recruitment in both studies towards the end of this year.
Given the current status of the COVID-19 pandemic, we may continue to see impact on our operational business and clinical trial activities in 2021, noting that we will maintain measures to protect employees and take social responsibility during this global healthcare crisis while working to limit any potential negative effects on our business. Please turn to slide four. Hansa Biopharma's evolution into a fully integrated commercial-stage biopharmaceutical company took a major step forward in the third quarter last year, following the conditional approval of IDEFIRIX by the European Commission. As communicated on previous occasions, Hansa is embarking on a sequenced and focused launch strategy that targets leading kidney transplantation centers to ensure early positive experience in the right patients by centers that have the potential to become early adopters and centers of reference. Commercial launch activities are now underway as planned.
During the fourth quarter of 2020, our first commercial product was manufactured following validation of packaging and labeling processes in select European markets. Following the publication of initial pharmacy-level pricing in the first markets, supply chains are now being established for the initial distribution of IDEFIRIX to the leading transplantation centers in Europe. Discussions with national reimbursement authorities are overall progressing as expected, and we expect decisions from agencies in some of the early launch countries to be made starting mid-year. We're also working with select key centers that have the ability to potentially access funds outside the national reimbursement system for individual patients prior to the granting of national reimbursement status.
Despite the raging pandemic in Europe, our front-end MSLs and key account managers have been able to closely and frequently interact virtually with key centers and key opinion leaders across Europe, and the response from key centers has been overall positive. We're also moving forward at speed with preparatory activities to enable the commencement of the post-approval efficacy study we've committed to as part of the conditional approval, which will be a great way to generate hands-on treatment experience in key centers in the later launch countries, where it will take some time to get commercial market access. We expect to initiate this study in the second half of the year. Please turn to Slide five.
In the U.S., we are in ongoing discussions with the U.S. Food and Drug Administration regarding a proposed study protocol for a new randomized controlled study of imlifidase for the desensitization treatment of highly sensitized adult kidney transplant patients. Despite the current challenging operating environment, we hope to secure alignment near-term with the FDA on the final study protocol. In parallel with our dialogue with FDA, we have for some time now worked extensively with key opinion leaders and centers targeted to be included in the proposed trial, as well as key players involved in organ allocation. As soon as we get green light from FDA, we will proceed to set up trial centers in the U.S. and initiate patient enrollment.
As previously guided, under the assumption that we can align with FDA near term and that the COVID-19 situation in the U.S. does not materially adversely affect patient enrollment, we expect to complete patient enrollment in 2022 and to potentially file a biologics license application by 2023 under the accelerated approval pathway. Please turn to Slide six. As I mentioned earlier on this call, we recently announced positive high-level data from the investigator-initiated phase II trial with imlifidase in anti-GBM antibody disease. While we await the full data set from the study, we have started preparations for upcoming engagements with FDA and EMA on a path forward towards BLA and MAA in anti-GBM.
Our two other phase II programs in GBS and AMR were both temporarily halted during a large part of 2020 due to the impact from the global COVID-19 pandemic on the ability to enroll patients and preserve data integrity. Patient enrollment was reinitiated in both studies in December 2020 under a risk-based side-by-side approach. Depending on the development of the COVID-19 pandemic, we expect to finalize recruitment in both studies towards the end of this year. As of today, we have recruited five of the targeted 30 patients in both the GBS and the AMR study. Please turn to Slide seven and a summary overview of our pipeline.
As depicted on this overview slide, we have made great progress over the past few years developing a broad clinical pipeline in both transplantation and autoimmune diseases, and we have exciting preclinical projects ongoing in cancer and anti-drug antibodies and in the promising field of gene therapy, where preclinical studies with imlifidase were commenced last year by our partner, Sarepta Therapeutics, as part of efforts to develop imlifidase as potential pre-treatment ahead of gene therapy in limb-girdle and Duchenne muscular dystrophy. I will now hand over the call to Donato, who will take us through a detailed review of financials. Donato, please.
Thank you, Søren. Please turn to Slide eight. As Søren stated at the beginning of our call, 2020 was a transformative year for Hansa Biopharma, in which we achieved many milestones, including the company's first product approval. The significant progress we have seen is also reflected in our 2020 financial performance. Revenue for the fourth quarter 2020 amounted to SEK 4 million and to SEK 6 million for the full year 2020. In the fourth quarter, we started to recognize the first revenue from the $10 million upfront payment we received under the Sarepta agreement mid last year. The 2020 revenue mainly comprises SEK 2.6 million under the Sarepta agreement and SEK 3.5 million under our agreement with Axis-Shield Diagnostics. The Sarepta upfront payment will presumably be recognized over a period of approximately 36-48 months as Hansa fulfills its performance obligations under the contract.
SG&A expenses amounted to SEK 63 million for the fourth quarter 2020 and SEK 203 million for the full year, compared to SEK 53 million and SEK 167 million respectively for the same periods in 2019. The increase in expenses reflects the progressing activities related to preparing for a commercial launch of IDEFIRIX in Europe, including investments in marketing, branding, market access, patient advocacy, and supply chain activities. In 2020, we also increased our R&D investments in our R&D programs and our medical organization as we expand our activities outside kidney transplantation. R&D expenses amounted to SEK 50 million in the fourth quarter of 2020 and were SEK 8 million lower compared to the same period of 2019. For the full year, R&D expenses were SEK 227 million compared to SEK 193 million in 2019. Investing in R&D and our pipeline activities is a priority for our short, mid, and long-term value creation.
The proceeds from last summer's fundraise supports our continuous focus on the development of imlifidase for additional indications such as AMR, GBS, and anti-GBM, as well as next-generation enzymes for repeat dosing, also known as the NiceR program. The net loss for the fourth quarter of 2020 was SEK 106 million, which is basically on par with the net loss recorded for the same period in 2019. For the full year of 2020, the net loss was SEK 423 million compared to a net loss of SEK 360 million for the prior full year. The increased net loss was driven by increased activities in commercial and R&D, both of which drove costs in 2020. Please turn to Slide nine.
Cash flow from operating activities amounted to -SEK 97 million for the fourth quarter and -SEK 290 million for the full year. Which is 13% below the level of 2019 and positively impacted by the Sarepta upfront payment. At the end of December 2020, our cash position, including short-term investments, amounted to approximately SEK 1.4 billion, equivalent to approximately $160 million. Last summer, Hansa strengthened its cash position substantially with a successful placement that raised SEK 1.1 billion or $121 million. The placement was multiple times oversubscribed and helped Hansa to further diversify its shareholder base with the participation from leading life science investors in the U.S. and in Europe. With our solid year-end cash position, we expect our operations to be financed into 2023. I now hand back to Søren to give his final remarks.
Well, thank you, Donato. Please turn to slide 10. Hansa Biopharma's evolution into a fully integrated commercial-stage biopharmaceutical company is now becoming a reality. We have an exciting year ahead, and are well-positioned to execute successfully on our key priorities and objectives for 2021, which are to, first, ensure the successful launch of the company's first commercially approved drug, IDEFIRIX, in Europe. Second, finalize the clinical trial protocol with the FDA and initiate a study in the U.S. to support a future filing of a BLA for imlifidase in kidney transplant. Third, continue the strong momentum to advance our pipeline of drug candidates within autoimmune diseases and gene therapy.
Looking at milestones for 2021 beyond the European launch, we expect to receive three-year data from the long-term follow-up study in kidney transplantation later this spring, and to initiate IND-enabling tox studies for our next-generation enzymes, also known as the NiceR program. In the second half of 2021, depending on the COVID-19 situation, we expect to complete the enrollment of patients into our two phase II programs in AMR and GBS, with high-level data readout in the second half of 2022. We look forward to keeping you updated on our progress in advancing our mission to bring life-saving and life-altering therapies to patients with rare diseases while generating long-term value to our shareholders and society at large. Please turn to slide 11. With this, we're now ready to take your questions. Operator, please begin.
Thank you. If you do wish to ask a question, please press zero one on your telephone keypad. If you wish to withdraw that question, you may do so by pressing zero two to cancel. There'll be a brief pause while any questions are being registered. Our first question comes from Ingrid Gafanhão from Kepler Cheuvreux. Please go ahead. Your line is now open.
Hi, thank you very much. Hi, team. Thank you for taking my question. I was wondering if you can share a little bit of background on what sort of discussions are you currently having with the FDA to define the protocol for the randomized controlled trial? I think in the past you mentioned already, you gave us some idea what the FDA would be looking for. I'm curious to hear what exactly do you still need to finalize before going ahead?
Yes. We've had a discussion for some time now. As you know, we submitted the draft protocol following our last extensive meeting based on the outcome of that meeting. We submitted that protocol over summer of last year, and we've had an ongoing dialogue with the FDA. I would say that it's clear that this is also a difficult and challenging situation for the agency. Therefore it's a little bit of a rigid interaction that we've had. Essentially, we've had a broad-ranging discussion, as you would expect when you're preparing for a trial of this nature with a transformative therapy around a lot of different aspects from the organ allocation to all kinds of logistics and so on. It's really a very broadly scoped discussion, I would say. There is no single issue that I would point to that is of critical importance.
It is really a broad range of issues. As I said, we're continuing this dialogue, and we hope to have all matters resolved in the coming months.
All right. Thank you.
Thank you.
Thank you.
Our next question comes from Charles Weston from RBC. Please go ahead. Your line is now open.
Hello. Thanks also for taking my questions. I have three, please. First of all, in terms of AMR and GBS recruitment, what can you do in order to improve the probability of recruitment by the year-end? Are there extra centers you can bring on? Is there anything else you can do to accelerate that and mitigate COVID risk? My second question regards any discussions you may be having with other gene therapy companies. Presumably, that would all be confidential, but are those discussions still ongoing, and are you expecting any additional data to be published on the use of IDEFIRIX in this application? Thirdly, just to continue on the FDA discussion with regard to the pivotal study design. In order to meet your expectations for the timing of submission of the BLA, when do you need to get approval for the study design, please?
Thanks much, Charles, for these questions. Let me take them in turn. Starting with the question around GBS and AMR patient enrollment. Clearly we want to accelerate enrollment now as we start these centers. As you indicated yourself, one of the things that we're doing is we're actually adding additional centers. As you do that, you obviously need to keep in mind that you also have to have a high frequency of interaction, right? It needs to be top of mind at the centers. We're certainly keeping that in mind. We're not going to add a very large number of new centers, but clearly we are expanding. That's clear. We also have a strong and very focused team on our end that is ready to, and already is interacting with the centers. There is strong interest at the center level. The patients are there.
We know. We've seen that if you look at the number of patients we have missed, if you will, when the COVID-19 pandemic forced us to halt patient enrollment. We think it is possible, clearly, but we have to look at the COVID-19 situation and see how it impacts patient enrollment. Certainly, we believe it is possible, and we're doing what we can to achieve that target. Let me move on. If you have additional questions, we can take them. Let me move on to the second question you asked around our discussions with potential partners in the gene therapy space. Clearly there is very strong interest.
I would say that if anything, the interest overall has increased over the last year, not just based on the fact that exciting preclinical data on imlifidase has been published, but also due to the challenges that the gene therapy companies clearly have encountered in terms of not just neutralizing antibodies
You also asked in relation to that, when we would expect to publish or announce additional results. That is very, very difficult to predict. As I said already, very strong and promising data are out via an article in Nature. There may be additional data coming, but I can't predict at this point in time when and in what format and where. Moving on to your third question around the FDA situation. We think it's going to take approximately a year to fully enroll a trial of the approximate size that we're discussing with the FDA. Again, that needs to be nailed down in the final protocol. That's something that can vary a little bit, but it's going to be a limited scope trial. This is what we are discussing, and as I said, we expect it to take approximately 12 months to fully enroll.
That will be under the assumption that we can enroll patients at the normal level. We really need to watch for the impact of a COVID-19 situation in the U.S. that may not be fully controlled by the time that we're ready to start. The specific starting time, not just setting up the clinics and going through the legal work there and getting the certifications and so on, but also just making sure that they're ready to enroll the first patients, and we can preserve data integrity and so on as the right scenario may be impacted by the COVID-19 situation. That is obviously something we're watching.
I would say if we get approval by the FDA over the coming months, we should be in a position to start the study so that we could have data readouts that would enable us to submit a BLA by 2023.
Thanks very much. That was very clear. Just as a follow-up, please, on the last point. You said in the coming months. I know you're not trying to tie yourself down to a specific date, but I guess I am trying to tie you down. If you do the counting back and you know how long it's going to take to enroll, you know how long it's going to take, or you can estimate how long it's going to take to get all the trial centers up and running and to go from approval of the study to the first patient and the follow-up. Presumably you have a date in mind by which we assume that we should have seen a press release from you saying that the study design has been approved. Is that sort of middle of the year this year?
Is it a bit earlier?
Yeah, certainly not the second half of the year, right? As I said, it's in the coming months. Meaning that in order to be able to meet that timeline, again, depending on the COVID-19 situation, we should have the approval during this half. That's clear. That's the overall time frame.
Okay. Thank you.
You're welcome.
Thank you. Our next question comes from the line of Adam Carlson from ABG. Please go ahead.
Hi. Thank you for taking my questions. A couple questions around the reimbursement side of things. I was wondering if you could give any more details on which countries or perhaps the number of countries that you said might be able to access these special local budgets for reimbursing the use in individual patients. Is it fair to assume that volume from such use would be very limited, or are you expecting any kind of substantial volumes from that use?
Good question. In general, you would want to and you would need to, in most countries, go through a national assessment with a full HTA submission and so on. We're doing that. We have submitted in some countries, and we're preparing in others where it takes a little bit of time before you're actually allowed to submit. There are some countries, as you indicated, and as we've indicated ourselves, where the centers may be able to access reimbursement or funds for individual patients outside of such a national evaluation. Those countries are countries like Denmark, Netherlands, Finland, Czech Republic, for instance. We're certainly working with the centers there. There's strong interest in some of these centers that have specific patients in mind. It is a process that they need to prioritize and go through.
We are handholding them as much as we can, but it is a challenging thing to do in the middle of the worst pandemic that the world has seen recently, and where it's difficult to interact for them also with those decision-makers that they need to interact with. Where, of course, priorities are being shifted in the clinics and funds are being, or budgets are being cut, and so on. I have to say, it's a very challenging environment. As I said, what is really encouraging is the interest and desire to, regardless of this, doing what they can to see if they can get funding for patients that may otherwise die. That's great to see.
Another question, if I could, along the similar lines. Are you able to give any more details around perhaps the number of national reimbursement decisions that you're hoping to see during 2021? Perhaps you said they were hopefully going to come around the start of the middle of the year. Do you have any kind of expectations around the number of decisions this side of 2021?
As ever, and I've been involved in this a number of times, many times actually before, it is difficult to predict the specific timing of these decisions and of course, the outcome. It is an iterative process with pushback, and you have to supply additional information, and so on. Especially during these times, the timing is a little bit difficult to predict. Certainly, I would hope that we get a couple of such decisions this year so that we can add additional national-level reimbursement in a number of countries. It will be a process over the next years, essentially, also to get the later launch countries to go through such assessment processes.
As I've indicated, what is a great situation for us is the fact that in parallel with all of this, where we will gradually gain access to individual reference centers in Europe, the commercial pathway, we will also be able to generate experience in these centers through the post-approval efficacy study that we have committed to as part of the conditional approval. Which essentially will be geared towards generating more of the same type of data that we generated already in phase II. As I said, a great way to work with these key centers and have them have the right experience early on. I want to stress in this connection, we truly believe that there is very significant potential just for this one indication for amyloidosis. There is a very high degree of unmet medical need. It is transformative therapy.
It will require a shift in mindset, implementation of protocols, at some point guidelines. There will be a trial period where these key centers will try it on one patient first and follow that patient for many months before they are ready to say, "Okay, let's use it a little bit more frequently and broadly in this center." It's going to be, as I've said many times before, an S-shaped launch curve. We're happy if at the end of this year, we have been able to initiate treatment in some of the key centers in Europe that everyone is watching and that these experiences are positive. This is what we are focused on this year. That's what you should be watching for.
Great. Thank you.
Thank you. As another reminder, if you do wish to ask a question, please press 01 on your telephone keypad now. We have a follow-up question from Charles Weston from RBC. Please go ahead.
Hi, just a quick follow-up, please. In terms of the post-approval study in Europe, are the centers with which you'll be working on that, will they be working at commercial terms, or are the patients that you recruit into that study therefore lost patients on a commercial basis?
They're essentially not going to be lost. It's going to be on trial terms. It's not commercial supply. They're not going to be lost in the sense that as an opportunity cost, because we are primarily going to set up these centers in the later launch countries where it will take some time to get market access as usual. That's the overall focus of that trial. We can generate experience in the early launch countries via the commercial route and then in the later launch countries using this trial to do it.
Great. Thank you.
Welcome.
Thank you. As there appear to be no further questions, I return the conference to you for any closing remarks.
Well, thanks so much. Thanks for the interest this time. As I said, this is a truly exciting and transformative year for Hansa Biopharma, once again launching our first product. We're very excited about the progress in our pipeline-building activities, and we really look forward to continuing the dialogue. Thanks so much.