Welcome to Oncopeptides Q1 Earnings Call for 2025. For the first part of the conference call, the participants will be in listen-only mode. During the Q&A session, participants are able to ask questions by dialing pound key 5 on their telephone keypad. Now, I will hand the conference over to CEO Sofia Heigis and CFO Henrik Bergentoft. Please go ahead.
Hi everyone, and welcome to the presentation of Oncopeptides' report for first quarter of 2025. This is our standard disclaimer. I'm Sofia Heigis, CEO of Oncopeptides, and I'm joined, as always, by our CFO Henrik Bergentoft, who will walk you through the financials. Let's begin by highlighting some key developments this quarter. The first quarter was a strong start to the year. Despite some headwinds in terms of weaker Euro, which we sell in, compared to the Swedish krona, which we report in, and some seasonal effects that temporarily postponed treatments for certain patients, we delivered net sales of SEK 13.3 million. That means we almost tripled our sales compared to Q1 last year and see a 34% increase compared to Q4 2024. This growth was driven by continued traction in Germany and Spain, while we are off to a good start in Italy.
I will come back to more detailed updates on all of our key markets. Our cash position at the end of the quarter was SEK 107 million, and Henrik will cover the financials in detail soon. Important to note is that we remain on track to reach cash flow positivity by the end of 2026. Our key milestone during the quarter was the positive reimbursement decision for Pepaxti in Italy that was officially published. Shortly thereafter, we received our first hospital order in the country, a significant commercial milestone ahead of our timeline. Another achievement was that the U.S. FDA lifted the clinical hold on OPD5, an important step forward for our future U.S. ambitions. I'll return to these topics shortly, but first, over to Henrik for the financial update.
Thank you, Sofia. This financial summary highlights the company's performance across several key metrics. Notably, net sales have shown significant growth, with a 34% increase compared to Q4 2024 and a strong 161% rise from Q1 2024. Cost of goods sold is slightly positive due to a revaluation of the inventory. Underlying cost of goods sold over time is expected to be 3%-5% of sales. Operating expenses have remained consistent with last year, yet they have significantly decreased from the previous quarter four. This indicates our effective cost management strategies that, combined with our sales growth, have improved our earnings. Overall, these results suggest a positive trajectory for the company as we move forward. In examining our operating expenses, we see results of strategic and conscious cost management with a decreasing cost trendline.
Sales and marketing costs have only slightly increased, reflecting our focus on efficiency as we finalize our commercial organizational structures in Italy, together with Germany and Spain. General and administrative costs have also seen a reduction, primarily due to targeted cost-cutting measures. Research and development expenses have remained stable. Still, we continue to advance our pre-clinical portfolio. The significant drop in R&D costs from Q4 2024 to Q1 2025 indicates our commitment to maintaining a lean operation while still investing in future growth. The liquidity slide provides a clear picture of our cash position, which stands at SEK 107 million at the end of Q1 2025. This aligns with our expectations and reflects our careful financial planning.
Looking ahead, our liquidity is projected to sustain operations until we achieve positive cash flow by the end of 2026, continuing on continued sales growth and the successful conclusion of a partnership in Japan. Additionally, we have, during the quarter, installed a SEK 20 million unused credit line, which strengthens our financial flexibility onwards. That concludes our financial comments, and I hand over back to you, Sofia.
Thank you, Henrik. Let's now turn to the commercial side of the business. The sales acceleration we delivered in Q4 continued into Q1, despite the external headwind already mentioned. We now have sales in all our key markets: Germany, Austria, Spain, and Italy, and are making real progress towards profitability. We already have Pepaxti included in national guidelines in Germany and Spain and have for quite some time been waiting for European guidelines. We recently learned that EHA EMN is concluding the first update since we got our approval, and the publication of the guidelines is still pending. We do have a strong reason to believe that Melflufen will be included in the right positions, which would be key for us. Once the guidelines are final, we will come back with more information.
Drivers of growth remain the same: the continued momentum we are building in Germany with increased positive clinical experience and peer-to-peer recommendations. Spain is now standing on a strong foundation with 95% regional access secured. Italy has had a stronger-than-expected start with sales already in Q1, continuing into Q2. Year-to-date, we already have 70% regional access at hospital level, and I will speak more about all of our key markets in a short while. We continue to value the European potential for Pepaxti at SEK 1.5 billion. We in addition progress our partnership discussions for Pepaxti outside of Europe. In regards to our pipeline, the possibility of a new U.S. launch for Oncopeptides also seems more realistic now compared to just a few months ago.
As we do build Oncopeptides from European sales of Pepaxti, our current main source of revenue and core business, I am looking forward to further developing our business case by advancing our pipeline and expanding geographically, both westward and eastward. Building on this, we have made significant strides in our partnership discussions in Japan. Since our last update, we have successfully navigated several crucial steps in the process. Typically, a timeline for such negotiations ranges from three to nine months, and as we initiated the discussions in February, we are already well along this trajectory. We are eager to finalize these negotiations and will update the market once an outcome has been reached. I want to remind you that the Japanese market is well prepared, as we have already secured alignment with the Japanese regulatory agency, PMDA, and received strong support from local KOLs highlighting the unmet need.
Japan represents a significant opportunity, both financially and strategically, and we are optimistic about the progress in the ongoing negotiations. Now, let's turn to Europe. Each step from authorization to healthcare uptake varies by country and often involves multiple layers of negotiations. With Italy and Spain, we moved quickly through the most time-consuming parts and are now firmly in the commercialization phase, with all markets needed in the healthcare uptake box to make us a profitable company in 2026. In France, Norway, and Ireland, we face challenges due to varying market access processes, data suitability, and lengthy negotiations. This is expected and not unique to us, which is also why they are excluded from our profitability plan. Our focus is on our key markets, where we are generating real-world data to support future access efforts.
Since Pepaxti was launched in 2023, more than 400 patients have been treated with either commercial drugs or in early access programs. More than half of these are coming from Germany, around 100 patients are from Italy, where we had a comprehensive early access program, and the rest from Spain and Greece. In Q1, we hit the milestone of having commercial sales in all of our key markets in Europe, and these heat maps show the accumulated total sales at the end of every first quarter since launch. The increasing number of dots is demonstrating how patients are being supported and how we are expanding based on a general positive experience. Italy has been a key achievement this quarter. Following national reimbursement and price publication in January, we have been working intensively with the regional access process.
Year-to-date, unlocked access is around 70% at hospital level. This is ahead of common timelines. This is ahead of our plan. Unlocked at hospital levels means that Pepaxti is registered in the hospitals and physicians are able to prescribe. The next step is to conclude tenders with the regions, which will make prescribing easier as less administrative burden for customers. Currently, we are processing tenders across all these regions to ensure prescribing and ordering can run as smoothly as possible. The speed we are moving with is due to swift onboarding of a solid team, high unmet need, and the result of a good understanding of Pepaxti among physicians in Italy due to a strong previous clinical experience.
Let's have a look at the visuals of our performance in Italy. I'm proud to be able to share a map demonstrating sales in Italy already in Q1. We didn't anticipate sales this early due to the time it usually takes to gain access. This is a result of that physicians requested the drug very early based on a high unmet need. Given how fast we are moving, I also wish to share a sneak peek into Q2. On this map, you can clearly see how we are broadening our footprint, going from three accounts to 13 accounts in a very short time. The promising start in Italy is confirming that we have better awareness, understanding, and preparation of the market compared to what we had in Germany. In the last quarter, I reported that we achieved 85% access in Spain, which was sufficient to capture the potential we identified for the country. Thanks to strong peer-to-peer recommendations, even the most difficult regions have ordered, and we successfully unlocked 95% access across the entire country.
We now have a very strong foundation to continue to build on. I'd also like to highlight a recent recognition in Spain, where Pepaxti was selected as one of the 100 best ideas of the year by Actualidad Económica, a leading Spanish economic publication. The award positions Pepaxti among top business innovations across all sectors in 2025 and signals growing awareness and appreciation of our science and commercial presence in Southern Europe, supporting our traction in Spain. This type of visibility strengthens our brand with healthcare stakeholders and adds third-party endorsement as we scale our business. Looking at the heat map for Spain, we can see the increasing impact of Pepaxti quarter over quarter since launch one year ago. Already now, we have case series being presented at local congresses, and the positive experience generated gives us confidence for the future.
Last, but definitely not least, Germany continues to be our largest, but also most complex market due to its scattered prescriber base. What makes me so confident in Germany's potential is the continued positive feedback from physicians and patients and the steady growth we now demonstrate. Germany was the leading contributor to sales growth in Q1, accounting for nearly 40% of the increase compared to the overall European growth rate of 34%. The German launch emphasizes delivering a product that fulfills its promises, coupled with resilience and dedicated field execution. Market data reveals our strong performance, outpacing much larger competitors when comparing sales growth since launch. In fact, only one company with a comprehensive product portfolio surpasses us in this regard. The peer-to-peer network is proving to be highly effective, and we continue to prioritize local engagements and education to maintain this positive momentum.
For instance, during a recent visit to Germany, Dr. Paul Richardson from Dana-Farber Cancer Institute at Harvard highlighted the advantages of having a peptide drug conjugate available in Europe and emphasized the pressing need for one in the United States. The number of prescribers increased by 20% in Q1 2025 compared to Q4 2024, and we now have a little over 100 prescribers, and many of them continue to return. This growth not only expands our reach, but also deepens our engagement. Moreover, there remains a significant untapped potential in Germany, which is a fragmented market with approximately 1,000 prescribers on our target list. It has been a challenging journey for sure, but seeing the result of our hard work beginning to take shape is truly rewarding.
Before concluding Germany, let's look at the German heat map, which highlights the accumulated total sales of Pepaxti since its launch tracked at the end of each first quarter. The dynamic is clear. The key account began prescribing the drug; its reach continues to expand through effective peer-to-peer recommendations. Now, let's move on to our pipeline. Our pipeline includes two key pillars: peptide drug conjugates and the SPiKE platform. OPD5 has the potential for an improved risk-benefit profile and extended IP protection compared to Pepaxti. During the first quarter, we strengthened our case with the lift of the clinical hold for OPD5 in the U.S., and based on FDA feedback, we are now defining the clinical development path, time to market, and continuing to explore partnerships and collaborations to finance the program. We will keep you posted on the progress of this exciting opportunity.
With SPiKE platform, we see potential in oncology, hematology, and also autoimmune indications. We have selected our candidate drug and are currently exploring the unmet need and the different indications with KOLs. Talking about our pipeline, which has a platform focus, it is important to remember that we are leading the way for the PDC platform with our Pepaxti launch, as we are proving the concept in real-life patients. Our clinical data illustrates that Pepaxti is particularly suited for real-world patients who are often older and more frail compared to those typically included in the clinical trials. While last year we relied on anecdotal feedback from the field, we now have multiple physicians publishing real-world data that aligns with our clinical findings. This data confirms Pepaxti's effectiveness, with observed overall response rates of 55% in the U.S. dataset and 37% in the Italian EAP dataset.
Notably, the safety profile of Pepaxti has been consistently confirmed to be manageable with primarily hematological toxicities. Our efforts to generate real-world data are progressing, with one prospective study already underway in Germany, actively enrolling patients, and another to commence in Spain. These studies will encompass approximately 50 sites, offering valuable insights for both physicians and payers, demonstrating how Pepaxti strikes a balance between efficacy, tolerability, and quality of life remains a priority, as balance between these factors is crucial for patients with relapsed and refractory multiple myeloma. Lastly, we are thrilled to announce the launch of a new concept called the Trinity at the symposium we are hosting at the COMy meeting in Paris tomorrow morning, featuring key opinion leaders from each of our key markets. The Trinity framework has been thoughtfully developed based on discussions and feedback from our customers.
It focuses on supporting physicians in navigating the complexities of personalized treatment for patients with late-stage disease. By facilitating the evaluation of various treatment challenges, the Trinity serves as a guide for identifying the most optimal therapeutic approach for each patient. Among the diverse options of multiple myeloma drugs, Pepaxti stands out at the center of this framework of efficacy, safety, and quality of life, offering a balanced treatment solution. If you're interested in learning more and hearing insights from KOLs about relapsed and refractory multiple myeloma, it's possible for anyone to register for free and join our symposium. With that, I'll hand over to the moderator for any questions.
If you wish to ask a question, please dial #5 on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial #6 on your telephone keypad. The next question comes from Richard Romanes from Redeye. Please go ahead.
Good morning. I have three questions. The first one relating to growth. Could you discuss the growth trajectory of the different markets and if there is any potential for further growth acceleration?
Yes. Thank you, Richard, for the question, and good morning. When it's, as I mentioned, Germany is the major contributor to growth. We had 40% growth in Germany. The other markets are quite early on in their launch efforts, meaning that looking at the numbers of growth, for example, I mean, Italy had going from zero to something, right? I think most important is to note that Germany is driving the growth in the first quarter, that Spain is basically continuing to expand its footprint, and the 95% regional access is what will accelerate the growth going forward for Spain. In Italy, we are in the access process, and the sign that we now have 70% unlocked at hospital levels is telling you that we are also building the foundation to accelerate from there.
When it comes to acceleration, the dynamic is slightly different in the different markets in terms of healthcare system, where, as you know, we have a more scattered market in Germany, which is more complex and comes with a large potential that takes time to capture based on the scatteredness. In Spain and Italy, you could notice on the maps we showed, in particular for Spain, the healthcare is much more centralized, meaning that once you have this broad foundation and you have access into the accounts, each doctor is seeing more patients.
The common driver between these markets in terms of what is building the launch is really the positive clinical experience that is shared between physicians, because in this late-stage disease, the treatment is complex, and you really need to consider all different aspects, as I concluded the call with. That is where this peer-to-peer recommendation is so strong, and it is really supporting our efforts.
Okay. Thanks. Two financial questions. What do you expect the currency impact to be for the rest of the quarters as there has been some strengthening of the Swedish krona?
I think thanks for the question, Richard. I would like to say that your guess is as good as mine, right? That all depends on how the Euro SEK will develop for the remainder of the year, right? What I can tell you is that our total sales are in euros then converted into SEK. Any changes in that currency relationship will have an impact on our sales. We will just have to wait and see how that develops onwards.
Yeah. I guess the best prediction of currency changes is the current spot exchange rate.
Yes.
My second question is about the funding situation. Do you expect costs to be relatively stable for the rest of the year? Could you talk a bit more about the funding options since you will need some additional cash, which you said could come from a deal to bridge your cash requirements until profitability?
Yes. With regards to cost, it will vary slightly between the quarters where we have typically less activity in the third quarter and more so in the second quarter and at least part of the fourth quarter. On average, you can expect that Q1 cost base is fairly representative for the remainder of the year. With regards to funding, we do repeat our statement that we have a cash position that will sustain until we are cash flow positive by the end of 2026. Of course, that statement is contingent on really three data points. One is our current cash position. The second one is our cost base. The third one is our revenue stream, right? Current cash position is a known data point for you and for us, of course. Cost, we do control.
The third one is where we have sort of semi-control is on the revenue side. W e certainly do have a plan where the conclusion of a license deal in Japan, together with our sales growth, will take us to the cash flow positive status by the end of 2026. Of course, a plan is always a plan. If those plans do not materially or fully materialize, we have several options how to bridge that. If we would be in that situation, we will go with the option that is most beneficial for the company and its shareholders.
Okay. That's all questions I had. Thank you.
Thank you.
As a reminder, if you wish to ask a question, please dial #5 on your telephone keypad. There are no more phone questions at this time, so I hand the conference back to the speakers for any written questions or closing comments.
Okay. There's one written question. Could we expect more details about Japan in the coming weeks? Would you say upfront payment be in line with the latest deals done in the industry?
So thank you for the question. In regards to Japan, as I mentioned, it's a process, and we are advancing all the time, the negotiations. I refrain from commenting on an exact time point because things can happen during the process that gives or takes some time. But as I said, generally, these kinds of negotiations take between three to nine months, and we initiated them in February.
When it comes to the value of the deal, again, I don't want to comment on the details as we are in negotiations, but it's fair to say that it's structured as a classical deal. If you scan the market for hematological products and in the same time of kind of patient population or size of patient population and area, I would argue that you at least have an indication. It is important to note that all these deals come with different aspects. I mean, sometimes there is one product, sometimes you include pipeline products, sometimes you include some other countries, etc. We will keep you posted as we have the outcome, and stay tuned for that.
No more written questions. Sofia, closing remarks?
Yes. Thank you, everyone, for participating in today's webcast and for the ongoing interest that you show in Oncopeptides. This year, we celebrate our 25th anniversary, and I am confident that 2025 will mark one of our most transformative years yet. With those words, I would like to wish you a good day. Thank you so much.