Earnings Call: Q2 2021

Aug 10, 2021

Hello, and welcome to the Moburg Pharma Q2 Report. And just to remind you, this conference call is being recorded. Today, I'm pleased to present Anna Jung, CEO. Please go ahead with your meeting. Thank you, and hello. My name is Anna Joon, and I'm the CEO of Molbox Pharma. And I also have our VP of Finance, Mark Beveridge, with me here today. And we're happy to present the Q2 report that was published earlier this morning. And you can find the report on our website. And there we also have a PowerPoint presentation, and that's the presentation that I will be using today in this telephone meeting. So let me start on Page 3 on that presentation. So we're a Swedish pharmaceutical company that pays our product from drug delivery of known substances, which reduces time to market and development risk compared to traditional drug development. And our lead program is not 15 against male fungus, the global sales potential of $250,000,000 to $500,000,000 annually. We're now preparing to file for registration in EU based on the outcome of the 2 Phase 3 trials on more than 800 patients where we met primary endpoint and 76% of patients were fungal free, macrophotically cured, and that is higher than ever reported for our topical treatment. We're targeting filing during this autumn. And based on average processing times of 1.5 years, we expect approval early 2020 session, which would enable us to launch the product by end of 2023. We do have commercial partnerships in place with strong partners in of $120,000,000 in addition to payments for product sales. We do have a tied and tested model where we work with strong local partners and take responsibility for and invest in marketing and sales, where we take responsibility for development and production and deliver finished products. And this model do not tie any capital with the exception of U. S. Where we want to build our own presence targeting podiatrists. We learned a lot when we commercialized our 1st generation nail fungus product, Kerfol Nail. Then we built an OTC business with annual revenue for SEK 40,000,000 and our products were sold in more than 30,000 stores. That business we divested for SEK 1,400,000,000 Swedish back in 2019. And we now want to repeat that this year, with MOD15, a product with much greater potential, targeting becoming the future market leader in nail fungus. Turning to Page 4. Our main activities during this quarter has been centered around registration preparations. Most importantly, we have recently and we'll receive final comments on the pediatric term where EMI requested some supplemental data that we're now and we expect the final decision in September and this sets the time line for the registration approval that will be filed later this year. During the summer, results from the North American Phase 3 study were published in YAD, where the principal investigator in our Phase study, Professor Gupta from University of Toronto concluded in the paper that MOG15 was effective in treating male fungus and as a favorable benefit to risk ratio as the lack of systemic absorption of VOC15 reduces the potential for systemic We have further strengthened the management team with Enyata Lar Hill, who have broad experience with regulatory issues in drug development, including working for the Swedish MPA as well as companies as Oraxol and Qumab. Turning to Page 5 and the need for better nail fungus treatment. It's a very common disease, increasing with age and despite that 1 out of 10 people suffers from nail fungus, There's currently no good treatment of pharmacists available. In the U. S. Alone, there's more than 30,000,000 patients. Despite that only 5,000,000 scripts are sold annually, so there's a lot of untreated patients. The most effective treatment is oral terbeneffin, which is associated with the risk of liver damage and interaction with other drugs. And the survey showed that 72% of U. S. Doctors avoid prescribing oral terbinafine due to the side effect profile. MOG15 uses exactly the same molecule, terbinophan, but applies it topically. And we have shown that we have 1,000 times higher levels of their tervenafin in the name and 40 times higher levels in the nail bed compared to oral treatment with 1,000 times less drug concentration in plasma, thus removing the risk for systemic side effects. Moving on to slide 6 and the competitive landscape. This graph shows our positioning compared to other treatment alternatives. And normally, there's a key relationship between mycological cure rates that's killing the fungi and complete cure rates. Once you have killed the fungi, healthy and well will regrow. In our data, we have world leading mycologous of cure and we will address to complete cure rate via new dosing regimen, a shorter treatment time has the potential to increase complete cure rates for MOL15. Data from 253 studies in North America and Europe totaling 800 patients are the basis for this. And we achieved primary treatment target without serious adverse events in both studies, and 76% of patients were fungal free, which is higher than ever reported for an external treatment among par or even higher than oral terbinafine, and while our technology enables high delivery of tervenascin through the nail, Its hydrating properties also cause transient whitening in the nose, making the assessment of clinical cure challenging, and that contributed to the low complete cure rate. Learnings from the Phase 3 studies enable a shorter dosing regimen expected to increase complete cure. Once daily treatment for not more than 3 months followed by maintenance treatment once weekly should provide sufficiently high concentrations for terbinafine in the knee as we currently have 40 times higher terbene levels compared to 3 months of oral treatment and enable normalization of the water content in the mail during the maintenance treatment period. Also from a patient's A shorter treatment period is highly attractive instead of having daily treatment for full year as required by most topical treatments. On Page 7, we have received final comments on our pediatric plan from WEMA and see a good chance of coming to agreements with authorities on a realistic pediatric plan with a clinical study, including a limited number of children in the age group 6 to 17 years. We expect a final decision from the pediatric committee during September. And after discussions with authorities, we believe that we can utilize a full registration route and obtain 10 years of data facility from 1st market approval in complement to our existing patent protection in all major markets up to 2,032. And this really sets the timetable for our plan to submit the registration application in Europe during the second half of this year. We expect approval within 18 months and that indicates that MOG15 could be launched in Europe by the end of 20 23. For the U. S, we're planning for one additional study. It will be very similar to the North American study that and in addition to enabling U. S. Approval, the additional study is expected to strengthen change globally, substantially increase in market potential. Turning to Page 8. By focusing on the approval process in Europe, we expect to be able to launch the product very soon in Europe, and that corresponds to onefour of the global market potential for MOD 15. As we have secured strong commercial partners both for EU, And Canada, we're in a good position to make the most of the upcoming launch, while we keep the rights to the U. S. As it is by far the largest market corresponding to half the global potential. We'll move on to the financial part of the report. On Slide 9, you will see our financials. And generally speaking, our expenses are in line with previous periods. We continue to invest in development, which is capitalized. But given that we're in the registration phase, those investments are currently limited. Due to the bookings spin off in the separate company on Kvaesenj, on the successful IPO of that company in February, we have positive earnings effect of SEK 24,000,000 in total profit this year. Also at the beginning of the year, we've completed a SEK 150,000,000 rights issue, and that means that we're currently well funded with financing in place for both registration activities and for the clinical development and can fully focus on our operations. And our current cash position is SEK 124,000,000. Turning to Page 10. In summary, we have an exciting journey ahead. The next milestone is expected approval from EMS Pediactic Committee in September, which will be followed by the EU submission later this autumn as well as preparations for one additional U. S. Study. I These milestones are very important and expected to create significant value as they enable launch in EU by the end of 2023 and commercialization in the U. S, which is the largest and most important market as well as strengthening claims globally. I think these are key steps in our journey to make more efficient in the future market leader in male Our first question comes from the line of Mads Hune Uettingen from Redeye. Please go ahead. Hello. Hi, Anna and Marc, can you hear me? Yes. Yes. Hello. Hi. It's very Some very short questions. I know that I mean, you seem to be on the progress on most fronts and everything, but just want to make a little sort of Enhance what you think what are the most important things there going forward. I mean, it's a I know it's a long process, and The market is a little impatient about this. But what are you the you think you're still on track for what you've said before, right? To reiterate your plan, so to say. Yes. We're still on track. And I think In near future, it's really the registration process in Europe, working together with our partner Bayer, Making sure that we get the strongest possible registration file and to get really good launch for the product in 2023. That for me is the main focus right now. But in parallel, we would love to to start that additional study in the U. S. Because that would open up the U. S. Market for us. And since the U. S. Market is the biggest market within onychomycosis. That too is important. I think making sure that we have sufficient quality, the best possible quality in our registration file and also continue to prepare for launch together with our partners. That is key. Okay. Thinking about this, Pedriq's Committee in September decision, do you feel a bit more Do you feel more comfortable with that one? Or is it pretty much the same as before? I would say that we have had some dialogues over the summer. So comparing with the last report, I thought I was rather confident then and I continue Rather confident. So if anything, my confidence level has increased. As always, with We don't know until we receive the decision, but now we have recently believed that, that decision will come in September. And of course, we will press release it as soon as we have it. Okay. It's one short question on financials. Could we expect that when the Akselorgyz registration comes closer that you will Have some increased costs to relate you into this? I think the registration costs Are fairly limited, I would say, looking forward, of course, if we're starting one additional clinical study, that will increased cost spending, but the regulatory phase is, I would say, rather limited, Although we of course use a lot of consultants, we do a lot of work in house and we have our partners that also are doing some work. So limited costs, I would say, during the registration phase. Okay. Thank you. That was it. Thank you very much. Thank you for the questions. And as there seems to be no further questions, I'll hand it back to the speakers. Thank you. Then I just want to thank everyone for listening in. And of course, if you have additional questions, you can always reach out to me. And then I just want to say thank you, everyone, and have a good day.