Earnings Call: Q1 2021

May 11, 2021

Hello, and welcome to the Moberg Pharma Q1 Report. Throughout the call, all participants will be in listen only mode. And afterwards, there will be a question and answer session. Just to remind you, this conference call is being recorded. Today, I am pleased to present CEO, Anna Lund. Please go ahead with your meeting. Thank you. Hi, my name is Anna Jung, and I'm the CEO of Novoib Pharma. I also have our VP of Finance, Mark Beveridge, on the call today. We're happy to present the Q1 report, you will find the report on our website. And there you'll also have a PowerPoint presentation, and that's the presentation that I will be basing this a telephone meeting on. So I'll start on Page 3 in that presentation with an overall. We're a Swedish pharmaceutical company that's based on product on drug delivery of known substances, which reduces time to market and development risk compared to traditional drug development. And our lead program is MAM15 in onychomycosis, nail fungus. And there we see a global sales potential of $250,000,000 to $500,000,000 annually. We recently finalized 2 large Phase III trials on more than 800 patients. And we met primary endpoint in these trials and have sufficient data to file for registration in EU. And we're targeting such a filing during this autumn. Based on average processing times of 1.5 years, we expect approval early 2023 and following with the launch by the end of 2023. We're not doing it all by ourselves. We do have partnerships in place for, I would say, all the major markets except U. S. So perhaps the 2 most important ones are EU, where we have Bayer as a partner, the world leader in LTC antifungal treatment with the brand Canasta. And also I want to highlight Taishu for Japan. And in total, our partnerships include milestones of $120,000,000 in addition to payments for product sales. And this is not the first time we're taking an onychomycosis product To market, we have a tried and tested model where we work with strong local partners that take responsibility for and invest in the marketing and sales where we are responsible for the development, production and supply. And this is a model that does not tie capital with the exception of U. S, where we want to build our own present targeting podiatrists. And in parallel to preparing this EU submission, we're planning a meeting with Okay, as we believe, one additional study is needed for the U. S. It will be very similar to the one that we have already conducted, the North American study, but with a shorter dosing regimen and that would enable even stronger claims and higher complete cure. On page 4, the significant events during this period, we've really focused on registration preparations and they're progressing according to plan. The most important step forward during this quarter was that we received final comments on our pediatric plan from EMA. And our goal remains unchanged to submit this registration application during the second half of this year and to be able to launch by the end of 2023. We also secured additional funding during this quarter, in January, we did a fully subscribed EZX issue without using any guarantees. And that also meant that we could terminate the old financing agreement with NICE and GLEEN. And that was terminated without cost During this quarter, as we were granted a patent, Form 15 in India, in addition to all the other patents. So we basically have patent protection until 2,032 in all major markets. And we are also working very actively with our global trademark portfolio where we own both domains and trademarks for several brand names to enable this global registration that we're preparing. So we're filing in each territory with Mumbug's brand names. Then of course, in territories where we have partners with strong brand names, those brand names will be used on the market. But the registration brand names, those we own. And we also finalized the spin off of Tutti. The report completed by the listing of our concerns that took place in February via this Lexafia divestment where the shareholders of Marburg also received shares in August such. And looking at our financials, this spin off also resulted in a positive earnings effect of €35,000,000 And they're included in the total profit. So that explains the high total profit for this particular quarter. Turning to Page 5. Besides that one out of 10 people suffers from nail fungus, there is really no good treatment alternatives available today. I would say the most effective treatment is oral terbenefene. So the same molecule that we're using, but we're applying it topically. Using oral terbinafine is associated with risk of liver damage and interaction with other drugs. And in our Phase III, MOD 15 showed 70% to 84% mycology contour, killing the fungi, and this is substantially higher than reported for other topical treatments that has levels of 30% to 54%, And it's compared with oral terbinafine, but with 1000 times less drug concentration in plasma. And these are ideal characteristics of an efficacious topical drug with no systemic exposure. Turning to Slide 6 and comparing our data to our competitors, this graph shows the relationship between mycological cure rates and complete cure rates for current onychomycosis drugs. The pattern seems a little bit different Between the U. S. Competitive market and the EU competitive landscape, but essentially it's the same, where you have a clear corollance between mycological cure and complete cure. We do have a world leading macrological cure, better than any topical among paired with oral terbinafine. And the complete cure, we will adjust that rate via new dosing regimen as shorter treatment time has the potential to increase complete cure rates. This is based on our very high mycological cure rate And that we get 40 times higher levels of terbinofin in the nail bed compared to oral terbinofin. So we know that 3 months treatment with oral terbinafine is effective. And we also know that onset of the antifungal effect is more rapid for 115 and then for oral tibenafil. So by reducing The treatment, we're reducing this hydrating effect that creates this white discoloration that temporary, but is the reason behind our low complete cure rate. So reducing this hydration effect, reducing the impact of the clinical score assessment at week 52. So of course, this data will not only be used for our U. S. Trial, but also to strengthen claims worldwide. According to Page 7, we have recently received final comments on our pediatric plan from EMA, And we see a good chance of coming to agreement with authorities on a realistic pediatric plan with a clinical including less than 30 children. And this study will not start now, it will start later. But we're expecting a final decision So, EMA, this autumn, given the discussions that we have had, we believe that it's possible for us to do a full registration and also called 8.3 route and obtain data exclusivity. And this will give us up to 10 years of data exclusivity from first market approval and to complement our existing patent protection in all major markets up to 2,032. And it's really this approval by the pediatric committee that sets the timetable for our plan to submit the registration application in during this autumn. And we expect it to be approved within 18 months. So we're planning for a launch by the end of 2023. And for the U. S, we're planning for this meeting with FDA after this after we have a little bit less to do in the European setting. And we have that assumption that one additional study may be needed for registration in the U. S. I'm turning to the next page. Looking at that Study is really about shortening the dosing regimen, but keeping everything else from the Phase III study that we recently completed in the U. S. And of course, from a patient perspective, it's a huge benefit, not only not having to have daily dosing for a full year, but instead having daily dosing for 2 to 3 months and then just follow-up once weekly. And we also see this rapid improvement that further strengthens our case. So in the Phase III, Actually, 75% of the patients saw improvement already at the start follow-up visits. So I think overall, the profile of MOD15 is really that this is the only topical alternative that will compare to oral treatment when it comes to efficacy, but without the safety issues. So we believe that this could take a market in position with being the treatment of choice. Turning to the financial part of this report on Slide 9, we will see our financials. There are no surprises in the figures, I would say. Cost of operations are in line with previous periods. We're capitalized investments in mode 15, but as the studies are finalized, these investments are very limited. And the cash position at the end of this quarter is about DKK150 1,000,000, much thanks to the rights issue that was finalized in January. And then in February, Dupee was spun off there is distribution of shares in 1 percentage and this successful IPO of 1 percentage on the first note. This spin off also resulted in a positive earnings effect of DKK 25,000,000 to mobile pharma. So that is included in the total profit in Q1. So the total profit for us in Q1 ended up on €19,000,000 On Page 10, in summary, we have an exciting journey ahead delivering on EU submission this year, receiving feedback from FDA and initiating the additional EU study. I think these milestones are very important and expected to create significant value as they enable emerging new by the end of 2023 and commercialization in the U. S, the largest and most important market, as well as strengthening claims globally. These are key steps in our journey to make Mod50 the future market leader in only thermocosis. I'll stop there and happy to open up for questions. Thank And we have a question coming from the line of Mats Indiente from Redeye. Please go ahead. Your line is open. Hi, Anna. Just a very short question on that. You really seem that you have still have the you're on Right. On the time line, that's just what I want to confirm, that there's no changes to the time line. You're still it's pretty much the same as before, right? Yes. It's exactly the same time. We're aiming for this registration during this autumn. And then If you look at the average approval times, they're about 1.5 years. So that's what we're expecting. And then It could be shorter. It could, of course, also be longer, but we're calculating with us having an average application. So approval early 2023 and then launch straight thereafter basically. Okay. Thank you very much. Thank you. Thank you. And we have no further questions at this time. Speakers, please go ahead. Okay. Thank you. Then I just want to thank everyone for listening in. And of course, if you have additional questions, don't hesitate to reach out to me, send me an e mail or give me a call. Thank you, everyone, and have a good day. This now concludes our conference call. Thank you all for attending. You may now disconnect your lines.