Good day, everyone, and welcome to the Hansa Biopharma conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star and then one on a touch-tone phone. To withdraw your question, you may press star and two. Please also note today's event is being recorded. At this time, I'd like to turn the floor over to Hansa Biopharma CEO, Renée Aguiar-Lucander. Ma'am, please go ahead.
Thank you very much, and welcome to this call, covering Hansa's out-licensing of IDEFIRIX in Europe and MENA to SERB. Next page, please. Just want to draw your attention to the fact that they'll be making a forward-looking statement during the presentation. You should therefore apply appropriate caution. Next slide, please. In today's conference, we will just have a basic transaction overview, followed by a brief financial update, and a close and a Q&A.
Next slide, please. The transaction background, I'd like to just cover that briefly, before we go into the transaction details. Obviously, Europe does represent a significant market opportunity as reflected by today's announcement. However, Europe is also a fragmented market, making scale challenging for a single asset, rare disease, focused biotech.
This partnering really enables a broader, much more commercially consistent reach across the European markets. I really importantly, I think maximizes the potential for appropriate patients in Europe to truly benefit from IDEFIRIX. In terms of the process, the company saw such significant strategic inbound interest from multiple partners, which led to a more formalized process, ultimately resulting in the out-licensing agreement that we have announced today.
This deal, I believe, is transformative for Hansa Biopharma and truly validates the franchise and the market opportunity. As mentioned, obviously also offers greater regional scale and reach in Europe, based on SERB's much broader, both expertise, resources and experience in the European market. If you go to the next page, just let me give a brief kind of transaction overview.
This is an exclusive out-licensing of IDEFIRIX within transplantation in EU, UK, Switzerland, Norway, Liechtenstein, Iceland and MENA. It is represented by a EUR 110 million upfront payment to be paid at closing. There is an additional EUR 5 million milestone payment due upon acceptance by EMA of a filing for full approval of IDEFIRIX in Europe. This transaction is subject to customary regulatory approvals, including FDI. This is for foreign direct investment, this is expected to take anywhere between 30 and 60 days. Following closing, Hansa will initiate a request to EMA to basically transfer its market authorization holdership to SERB.
SERB and Hansa will obviously focus throughout this process, and for a long time thereafter, to focus on a smooth and well-coordinated handover. In terms of the responsibilities, obviously upon closing, as I mentioned, the commercialization, medical affairs, market access a bit across the licensed territories, will transfer over to SERB. Once EMA has actually affected the request for market authorization holdership, that will also transfer to SERB, which will drive the sponsorship of long-term PAS follow-up, and the pediatric study responsibility, will then fall onto SERB, as well as the filing and the obtaining of full marketing authorization with EMA. Excuse me. Hansa will be reading out the PAS, which is upcoming in Q2 as previously communicated.
And we will obviously also drive the process of the transfer of the market authorization holdership, and we will work very closely with SERB, obviously, to support SERB in its EMA submission for full marketing authorization. And we will also continue to supply IDEFIRIX to the territory. Next page, please. SERB is a private company based in Europe. It's a global specialty pharmaceutical company, has over 25 years experience in rare disease, critical care. Really has a broad, diversified portfolio across those areas, and has a direct presence in 18 countries today, and basically has almost 600 employees. In terms of, there's a very strong historical performance of excellence of SERB. There's been a lot of growth.
SERB has successfully grown the business in Europe and also obviously has a presence in the U.S. as well, through a lot of various kind of M&A transactions and been very successful at establishing this business across a diverse portfolio of products in Europe. We are very excited to be able to partner with SERB with this very important product.
We just think that this deal is extremely exciting. Next page, please. In terms of the transaction timeline, I've mentioned this briefly. There is obviously the announcement has come out today. There is an FDI review that is required. It's expected to take 30 to 60 days. There will also be an initiation of employee consultations related to those staff that are directly impacted by this announcement.
In terms of closing, that will trigger the actual effective transfer of the license, and the payment of the upfront, of EUR 110 million. The responsibility, obviously, for the commercial medical affairs, activities will then be transferred to SERB. When the market authorization holdership is transferred, SERB will step in and become the sponsor of the ongoing relevant, clinical trials, and will then also file with EMA for full approval. This, obviously in parallel with this will be this consultation process, regarding employee transfer, to SERB.
Obviously, the company will follow and observe all relevant local consultation rules and regulations in that process to enable a smooth handover and a kind of well joined up process between SERB and Hansa to effect this. In terms of post execution and post this and before closing, it's really for Hansa's perspective, it's very much business as usual. There's really no impact at this period of time on our organization or our responsibilities. As I've said, our focus is really on our ongoing FDA process as well as the readout of PAS and preparations that have been in place for a long time for the filing to EMA for full approval.
The other area, obviously, is that we will be very focused on providing all the support necessary to enable a smooth handover post-closing of any employees impacted by this announcement today. Going forward, obviously responsibility for the territory will be SERB's post-closing. We will supply IDEFIRIX, as mentioned, to the licensed territory.
Obviously there will be an alliance management structure set up because obviously we look at this as a very long-term partnership with SERB, and we want to really fully support the success and continued success of IDEFIRIX in Europe. That's really kind of what we will be jointly working on together with our new partner, post-closing, and going forward in the long term. Next page. Next slide, please.
Hansa going forward in terms of focus. Obviously this does not change our kind of long-term strategic plans as we previously have communicated. This is very much preparing for a robust launch for a potential U.S. launch following hopefully an approval by FDA towards the end of this year. Our U.S. leadership team is complete and in place.
We're strengthening our field presence both in medical affairs, market access at this point in time. Obviously we're also conducting pricing market research in the U.S. We are looking forward to having an oral presentation of the phase III data at ATC towards the end of June. Obviously, the team is working diligently on a very, very comprehensive pre-launch plan.
We are excited about the opportunities of hopefully being able to launch the product in the very beginning of next year. The clinical development of HNSA-5487 obviously will also continue with targeting GBS, the Guillain-Barré syndrome. We are having interactions with the FDA regarding the clinical development program. There has been a CRO selected and preparation started, and we are targeting to initiate a clinical development program by year-end 2026. Other key activities are obviously also gonna keep on going, be ongoing, is our ongoing review with the FDA.
We will also obviously continue to drive our early pipeline, where we're hoping to get some kind of information as to kind of where we should be able to hopefully share that publicly, sometime towards kind of the end of the year. We have some exciting early programs ongoing, and we're hoping to see some early data from that which we then will be able to share, depending on the outcome of that, those experiments and the data we're collecting. In terms of BD, obviously there, this has been a very kind of transformative and exciting deal for Hansa.
The focus going forward is really going to be potentially exploring other partnerships or other geographic regions or for kind of gene therapy where we already have, as we've mentioned, successful partnerships for development there. Otherwise, I think anything else would be more in a medium and a long-term and really would be subject to a U.S. approval. Next page. Really kind of the key takeaways. It's a EUR 110 million upfront consideration for the out licensing of IDEFIRIX in Europe, U.K., Switzerland, Norway, Liechtenstein, Iceland and MENA. An additional milestone payment of EUR 5 million upon acceptance by EMA of a submission for conversion for conditional to full approval of IDEFIRIX. This really is a transformative deal for Hansa Biopharma.
It really provides substantial non-dilutive financing. Really ensures that we can optimize, maximize, and have a really robust U.S. launch with a path to profitability subject to U.S. approval. It's very much focused on business as usual until closing and really partnering with SERB to ensure that we have a smooth handover and a long-term successful collaboration. With regards to post-closing, as I mentioned, obviously this deal I really believe will optimize patient access to IDEFIRIX and really looking forward to working with SERB and the, you know, the experience, the resources that they have in Europe, which obviously are going to be far reaching those that Hansa on its own could have provided to IDEFIRIX.
We're very excited about this transaction, specifically for those patients, and we look forward to having IDEFIRIX really become available to all appropriate patients in Europe. In terms of alliance management, obviously that will be put in place, and we are very focused on ensuring that there'll be consistent support over the long term, and continue to supply and support SERB and IDEFIRIX in the territory going forward. Next slide. With that, I'm going to hand over to our CFO, Evan Ballantyne, who will cover some of the financial, the estimated kind of financial impact of the transaction at this point.
Thank you very much, Renée. Next slide. On a pro forma basis, if you use Q1's cash on hand, the company will have almost SEK 1.9 billion or $200 million in cash on hand. In addition, in the agreement, we're able to reduce some of our ongoing costs associated with medical affairs and the commercial organization and some G&A costs as well. As Renée has mentioned, upon acceptance by EMA, Hansa will receive an additional EUR 5 million from SERB. This extends the company's cash runway significantly and possibly through profitability in the U.S., assuming approval at the end of this year. The company will also be using $15 million to reduce its mid-2027 NovaQuest debt payment by $10 million.
The balance of which of the remaining payments will go to reduce debt payments in mid 2028 and 2029. There's an also a $3 million loan payable fee Back to you, Renée.
Thank you very much. Next page, please. This is about just over a year since I joined Hansa. I believe that obviously there's been a lot of structural changes across the business which have been implemented, and I believe that we have achieved really substantial improvements both in financial stability, runway, pipeline strategy, and obviously also bringing significant experience and expertise into the company. All of these things have obviously contributed to the very transformative deal that we can announce today. We are very proud of what we have achieved so far.
We're excited about a new partnership, and we have a very positive outlook for the year, reflecting obviously the readout of the PAS data the presentation at ATC of the ConfideS data, and obviously a potential approval in the U.S., and importantly also obviously a filing for full approval in Europe, with regards to IDEFIRIX. With that, we're hoping to also share some of this information with you at a later stage. We have organized a capital markets day on June 25th in New York. If you go to the next page, this really will feature both European and U.S. KOLs. There's a separate invite that has been sent out that has been available as well. We're really looking forward to this.
There'll be a lot of real insights from the field in terms of physicians really working with IDEFIRIX has been part of the phase III trial. A lot of observations with regards to the use of IDEFIRIX in the real world. We're very excited to do that as well as obviously share with you some of that data that we will be presenting at the ATC. I hope that you can join us either in person or virtually on June 25th to hear some of that as well. With that, I'm happy to take any questions from the list audience.
Our first question today comes from Christopher Uhde from SEB. Please go ahead with your question.
Hi there. Thanks for taking my questions and a big congratulations on the deal. You obviously certainly moved quickly. How should we think about the financials of the supply agreement going forward? How will it be booked? What's the cash flow impact? That's the first thing I was wondering. If I could ask a second, it would be, perhaps this is a good time for an update on the HNSA-5487 plan. Obviously, you've talked about GBS, perhaps are there any updates you can give us on the program there, and any other potential applications? Thank you very much.
Thank you. In terms of kind of the supply, this really will be, you know, a very simple kind of sharing of costs in terms of kind of the codes of the production. That's really how that will be affected. In terms of the kind of HNSA-5487, there's kind of, I would say, ongoing kind of conversations with the FDA. We are in the process of following up and kind of having some follow-up questions and getting clarity from what the initial information that we've received. We are hoping to actually have a fuller picture of exactly what impact that may have on the design that we proposed.
Hopefully we'll be able to share that, and our plan is to try and share that in June, at the Capital Markets Day, when we will have more clarity as we've been able to then receive some of these answers back, from the FDA, that we're seeking at the moment.
Thank you very much.
Our next question comes from Farzin Haque from Jefferies. Please go ahead with your question.
Hello. Congrats on the deal, and thank you for taking my questions. Evan mentioned about path to profitability. What are the underlying assumptions and the U.S. adoption curve you're modeling for that?
I think what we've, what we've indicated previously or earlier is obviously that our experience so far in terms of kind of inbound requests and the interactions that we've had in the U.S. and our ability to kind of go out and speak kind of to physicians there indicate that there is, you know, a potential kind of significant demand in the U.S. for this product, post a potential approval. In terms of we also talked about obviously that the call point here is actually very, it's very kind of, well, limited, one could say, very kind of a tight call point.
The amount of capital that is required to invest and build up that kind of platform, that kind of commercial presence, is not kind of within the context of kind of launches in the U.S. by biotech is quite limited. It's really on that basis, we think we might need kind of 18 to 20 salespeople in total in the U.S., and the entire organization, including SG&A, et cetera, in the U.S., we expect to be somewhere around fully loaded, kind of maybe 45, slightly more, but around that kind of size. From that perspective, we believe that there is an opportunity to reach profitability within a reasonably short period of time from launch.
It's really those components that drive our view that this could really be sufficient for us to reach profitability, you know, based on those components. I think in terms of the uptake curve, I think it's always very difficult to kind of have, you know, very specific views on that. I think we will be informed by that as we kind of get to the market. I don't know, Maria, if you have any specific comments on apart from this in terms of the expectations or structure the U.S. market.
Thank you, Renee. No, I think you covered it well. I mean, it's a tight call point. It's a small organization that is required to launch this product. I think when you think about the market, we're looking at potentially 7,000 patients that have a CPRA over 98%. That is the population that I think it's fair to assume that we'll see the highest usage of in later days. As Renee mentioned, you know, we've had significant sort of inbound requests already. You know, I think time will tell when we launch, but we do believe that this is a significant market opportunity for us.
Great. As a quick follow-up, are there any additional milestone payments tied to commercial performance, regulatory approvals, and any sales-based royalties with SERB?
No, there are no other kind of subsequent payments apart from those that have been communicated.
Okay, perfect. Thank you so much.
Our next question comes from Thomas Smith from Leerink Partners. Please go ahead with your question.
Hey, guys. Good morning. Thanks for taking the questions and congrats on the deal here. Just with respect to the terms of the deal, can you comment on whether there's any part of the EUR 110 million upfront payment that's contingent on the ConfideS phase III top line readout?
There are no contingencies related to the upfront payment apart from, obviously in order for the payment to be affected, you know, and the transaction to take place, there are some typical closing conditions, including, you know, the FDI review.
Got it. Okay. That's helpful. Could you just elaborate on the alliance management structure that you mentioned and whether that includes any consultation on sort of the pricing and reimbursement in these territories? Just wondering how much influence Hansa will have over the ongoing pricing levels in Europe as you think about U.S. commercialization and the potential impact of most favored nation pricing. Thanks so much.
Sure. I guess in terms of MFN or most favored nation, obviously rare diseases are, you know, excluded from that. It has been kind of since the beginning of that being brought up, and that still certainly is the case as far as I'm aware. Obviously kind of as market authorization holder, it is my expectation that SERB would absolutely be in charge of, you know, pricing decisions in the market and the territory.
Obviously in terms of the alliance management, this is something where And as I mentioned, I think we're very committed to making this a very successful handover and transition, and we want to really be long-term good partners with everyone that we partner with.
As such, there will obviously be discussions and information flow that's going to be very consistent, and I think it's in everybody's interest to obviously kind of align as much as possible around scientific information, around publications, around everything else really, that's relevant in, you know, in, you know, in kind of the success of the product overall. As I said, I think those are kind of really my comments both with regards to pricing and MFN.
Our next question comes from Matthew Phipps from William Blair. Please go ahead with your question.
Hi, good morning. Congrats on the deal. I wanted to ask about the NovaQuest royalty. If I remember correctly, upon FDA approval, there's a royalty on global sales, worldwide sales. Will SERB pay the European portion of that to NovaQuest? Thank you.
In terms of the NovaQuest payment, yes, you are correct that in terms of the upon an FDA approval, in the agreement with NovaQuest, there is kind of a royalty payment that is triggered, and yes, it has been on a global basis. In this kind of scenario that we have entered into, this is actually why to some extent this has been contributing to the fact that obviously we are prepaying some of the kind of payments that are upcoming with regards to in relation to the closing of this transaction.
There is a $50 million de-leveraging really that the company is undertaking that goes towards all three repayment tranches, but predominantly to that tranche that is coming up in 2027. Now part of that obviously takes into account any kind of potential, you know, impact from that type of of kind of those European kind of royalties not being seen following kind of a U.S. approval. In this case, SERB would not be expected to pay any royalties in the territory that they have licensed following closing.
Okay. Thank you.
Our next question comes from Douglas Tsao from H.C. Wainwright. Please go ahead with your question.
Hi. Good morning. Thanks for taking the questions. I'm just curious, Renée, if you could talk a little bit about what this does for your balance sheet in terms of being able to fund R&D for 5487, as well as the early launch of imlifidase in the U.S.
Yes. Obviously this is why, from Hansa's perspective, we do think that this is a very transformative deal and also really provides us with significant optionality going forward. This is about SEK 1.2 billion. It's about EUR 110 million. Obviously, as I've mentioned already, part of these proceeds obviously will go to delever the company. Obviously it still leaves the company with a very substantial cash balance post-deal. I think that we are acutely aware obviously of not only, we really want to manage this as well as we possibly can.
I think we've always been very fiscally prudent, and I think we want to continue to be fiscally prudent. This obviously gives us an opportunity really kind of to ensure a very robust launch in the U.S. Yes, it does allow us post-approval in the U.S. to really look at, you know, how else could we kind of really, you know, continue to grow and create value in Hansa on this basis. I think that then is really kind of a process that we will undertake over the next six months or so to really, I think, you know, craft this into a more clear plan on, you know, subject to that, where, you know, where would we like to kind of potentially deploy additional capital.
You know, do we want to do this within our R&D pipeline? Do we want to in-license it, kind of R&D projects? Do we want to potentially, you know, leverage our commercial presence in the U.S.? I think it gives the company lots of different options. I think that we want to be very thoughtful, and again, very kind of clear about You know, how does that bring value to Hansa? How do we really kind of continue to build on this very, very successful foundation that I believe that we've created.
Renée, just one quick follow-up. I'm just curious, was this the result of SERB coming to you and approaching you, or had you been sort of looking for potential partners to sort of basically bolster the balance sheet? Thank you.
This process really came out of a significant inbound interest from a multitude of partners. It's really over time that we continued to get inbound requests and inbound interest that then kind of shaped the idea of actually having a more formal process really to kind of try and explore, you know, what these kind of inbound requests really could result into. This was not kind of a it wasn't the company who kind of initiated a strategic process. It was very much kind of driven by inbound interest.
Okay, great. Thank you so much.
Our next question comes from Suzanne van Voorthuizen from Kempen & Co. Please go ahead with your question.
Hi, team. This is Suzanne from Kempen. Congrats on the deal, and thanks for taking my questions. On the process, you mentioned a couple of times the inbound interest. I'm just interested to understand better what drove that momentum. Was there an increase in inbound interest? Maybe additionally with regards to the deal terms, it's a straightforward upfront and a small milestone, no royalties. Was the upfront basically the most important metric to Hansa or are there other considerations that drove this sort of front-end-loaded structure? Another one maybe for Evan, for the SG&A expenses, how should we think about how this line item evolves over the coming 12 months or so?
On the one hand, the European sales force will phase out. You plan the U.S. launch. How should we directionally maybe think about this number? Thanks.
Thanks, Suzanne. Basically, in terms of the process, I would say that this really has probably been building over time in terms of as the company has been executing on its strategy. And also I think as, you know, the data that we released kind of with regards to ConfideS, that really is the, you know, I think the first time that there's really been kind of a characterization of the profile of imlifidase both in terms of efficacy kind of and safety, in terms of just how that kind of phase III kind of came out. So I really think it's been a process that's been building over time. I don't think that there was any specific trigger that enabled this.
I think it's just really been the consequences of, you know, being very consistent, having a lot of interactions and going to a lot of conferences, you know, getting Hansa, you know, kind of out there in terms of people knowing that the company exists and what the company does. I don't think that there were any kind of particular triggers in that. I think that obviously kind of from a, you know, from a kind of corporate perspective and the structure of the deal, I would say that, you know, from Hansa's perspective, again, looking at kind of where the company is in terms of its development, and what's kind of coming next, obviously having something where there is a more significant upfront component, is very attractive.
I think that is, that is certainly something that, you know, we felt was an attractive component of this particular proposed structure. I don't know, Evan, if you want to address the second question.
Yes. Thanks, Suzanne. As you correctly noted, you know, Hansa will be able to reduce its costs of medical affairs and commercial and some G&A expenses associated with Europe. You're correct.
Our next question comes from Georges Bjerke from ABG. Please go ahead with your question.
Hi, this is Georges Bjerke from ABG. Congratulations on the deal. I have one question, please. Is there any clause in the agreement regarding HNSA-5487 that could have an impact if in the future were to extend from GBS to kidney transplantation? Thank you.
The contract really covers imlifidase. It does not kinda cover any other products of the company or any other development candidates. The contract is limited to imlifidase. And obviously in terms of HNSA-5487, it is a completely separate product. And really from that development program, the company has obviously decided really to kind of develop that in GBS. That will really be the focus of HNSA-5487.
Great. Thank you.
At this time, in showing no additional questions, we'll conclude today's question and answer session. I'd like to turn the conference call back over to CEO Renée Aguiar-Lucander for closing remarks.
Thank you very much to everybody who's listened in to this. We are super excited about this transaction. We are very happy to welcome another partner that we can collaborate with. We really think that this is going to be exciting, and we look forward to having you join us again hopefully in June at our Capital Markets Day. Thank you.
The conference has now concluded. We do thank you for attending today's presentation. You may now disconnect your lines.