Welcome to Oncopeptides Q4 report for 2022. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answer session, participants are able to ask questions by dialing star five on their telephone keypad. I will hand the conference over to Monica Shaw, CEO, Holger Lembrer, CFO, and Jakob Lindberg, CSO. Please go ahead.
Good morning, everybody. I'm delighted to welcome you all to my first webcast as Oncopeptides CEO. I'm Dr. Monica Shaw. I started at Oncopeptides January this year. I was delighted to join a company that has a real impact on patients in multiple myeloma. My background is as a physician. I practiced for five years in the NHS in the U.K. For the last 17 years, I've been working in the industry. One of my key drivers is launching new products. I've launched over 15 across my career, including for such companies such as Shire, GSK, Novartis, across multiple geographies and multiple therapy areas. Multiple myeloma has always had a special place in my heart, mainly because my father passed away from multiple myeloma nearly 10 years now. I'm amazed by the advances that I see in this field.
I'm also delighted that Jakob Lindberg is staying on as Chief Scientific Officer, and he will be joining us for Q&A for any scientific questions. We also have our new CFO, Holger, who will introduce himself.
Thank you, Monica. Good morning to all of you also from my side. My name is Holger Lembrer. I joined Oncopeptides a month ago as CFO. My academic background is Master of Science in Business and Economics from Uppsala University. The last 11 years, I have worked for ASSA ABLOY Group in various finance positions. Just before joining Oncopeptides, I was working as CFO for one of the business areas with inside of ASSA ABLOY Group. With that, back to you, Monica.
Thank you, Holger. The usual disclaimer slide that you will all be familiar with. I see Oncopeptides as a company that really does bring hope through science. We are in a space with multiple myeloma where there continues to be unmet need, particularly in more elderly patients who need access to easy treatments that maintain their quality of life. When I think about my father, that is what he wanted towards the end. He wanted to be able to take treatments that prolonged his life, but not at a cost to the time that he spent with us and his friends. This is something that Oncopeptides is focused on with our innovative platform of first-in-class peptide-drug conjugates, which improves alkylation and has generated Pepaxti, but also has the potential to generate new compounds earlier in the pipeline.
We also have an exciting early pipeline, including an NK cell engager, which has a potential to expand into new indications. Pepaxti, our flagship compound, secured EMA approval in August of last year. This was based on the increased benefits senen i a patient population from OCEAN, and we have already initiated our launch in Germany. We have a solid financial position with revenues of 8.4 million SEK in 2022 and a cash position of 345 million SEK. I've been with the company for a little over a month now, and I've spent my time internally but also heavily externally focused. I've been in the field in Germany, I've been to the EMA conference in Vienna, and I've started to meet KOLs across the rest of the European country.
The observations that I have so far is that we have a real opportunity as a commercial company with our launch of Pepaxti and a brighter longer-term future with our pipeline. When I look at the team we have in head office, we have a depth of multiple myeloma experience, people who are highly patient-focused and very determined to bring new science to the benefit of patients. We have what I see as an exceptional German organization that we have built from last year. These are people who, particularly in the field, have a strong multiple myeloma network, a depth of science know-how, but are also able to understand the needs of business. When I was out in the field a couple of weeks ago, I went out with Adrian, one of our MSLs. This is actually somebody that Oncopeptides previously had to let go last year.
As we started to build up our team in Q4, Adrian was the first person to sign up, and he told me it was because he believes in the company and he believes in the product. He is extremely excited to be out talking to customers about Pepaxti. We have strong relationships with our key customers across both our leadership team and also in depth in the field. It is clear within the multiple myeloma space that there is an unmet need that is not being addressed for the older patient who is looking to maintain their quality of life. In this setting, Pepaxti represents true innovation in drug design with robust efficacy and allows patients to maintain that quality of life. We furthermore have an interesting pipeline that capitalizes on that PDC platform, but also has new mechanisms of action with our NK cell engager.
Pepaxti is clearly our flagship product, and we had a big milestone last year with EMA approval. Not all labels are created equal, and the approval that we got from EMA came with a clear patient identification and no post-approval commitments. This is extremely important when we're launching a new product because the ability for doctors to easily identify the patient sitting in front of them as suitable for Pepaxti is critical to our launch success. We have a very well-defined patient population for adults who have received at least three prior therapies. This is an area of continuing unmet need and a group of patients who, if they have had a stem cell transplantation, needs to be at least three years previously. This is all centered around the mechanism of action.
As a clinician, a mechanism of action is only interesting in the matter of so what does it mean for a patient. I believe Pepaxti has been very carefully designed to provide an alkylating payload. It's designed to be highly lipophilic, which means it diffuses rapidly into the multiple myeloma cell. Where it gets really interesting is that it's hydrolyzed by aminopeptidases. Aminopeptidases are highly expressed in tumor cells, and this leads to the selectivity of multiple myeloma tumor cells. This is then reflected in the data. You will have seen this data before from our OCEAN subgroup population that was based around the EMA label. What you see is clear separation for PFS with a median PFS of 9.3 for melphalan and an important hazard ratio of 0.58 and a similar trend in the overall survival.
What this comes with is a safety profile that is acceptable not only to physicians in terms of how they manage and are comfort in managing hematological malignancies, but also a side effect profile that is acceptable to patients in terms of being able to maintain their quality of life. This is mechanism of action. This is data. The real world is where the rubber meets the road in terms of launching products. This is a perception from physicians based from both market access and also in terms of my own observations. Our physicians tell us that Pepaxti is a treatment that offers robust efficacy, but most importantly, comes with that convenient and maintained quality of life. We know that the multiple myeloma market continues to expand in later lines, and we've previously communicated around a market potential of SEK 1.5 billion-SEK 2 billion.
The trend, however, has very much been towards expensive therapies with a high treatment burden that are logistically difficult for both doctor and patient. This means there is a clear unmet need, particularly in the more elderly patients, for a product that has a proven MOA but improved selectivity. Our physicians tell us when they see the data that they believe Pepaxti is a product with a good response rate, but one that is also convenient for both doctor and patient. In particular, this one-month dosing and ability to administer in an outpatient setting helps reduce the treatment burden, which particularly in a country like Germany, when you have office-based physicians, is extremely important. Reflecting back a little bit on Q4, we did have some key events. In the U.K., we received marketing authorization for Pepaxti, which reinforced our EMA approval, the second regulatory authority to support our data.
We also submitted our Type II variation for Pepaxti, which you'll remember brings us into an earlier line of therapy. We also published the LIGHTHOUSE data, which was a trial that was shortened early, provided some really stimulating data to discuss with physicians around combo with Darzalex. We also initiated commercialization of Pepaxti in Germany and started to review our plans for other markets. Talking a little bit more now about Germany. We have now launched in Germany. We started to build the local team in Q4 last year. As you know, for any launch, you need to take physicians on a journey. That journey starts with awareness, knowing about the product, knowing about the data, knowing about the patient profile.
That leads to a physician trialing the product, having a good experience, expanding their usage and through to advocacy where they are happy to speak on behalf of the product. Germany in particular is a highly fragmented market. Having just put the team in place, making sure that we have broad awareness and that people are aware of the ideal patient profile for Pepaxti is a key priority. We are driving this through share of voice, both scientific congresses, publications, evidence generation, and also in the field. We are capitalizing on peer-to-peer engagement, and in fact, a couple of our early patients have been due to physicians, KOLs recommending the treatment at such events. As I previously described, the feedback that we've had so far is extremely positive in terms of the patient profile.
Where we continue to need to work is on raising this awareness and ensuring people have the opportunity to experience Pepaxti. As we've pivoted to a commercial organization, we've reinforced this within our leadership team. As I mentioned, I bring experience of commercialization of over 15 launches with a breadth of commercial medical affairs and a clinical development experience. I'm very ably supported by Sofia, our chief commercial officer, who has depth of launch experience from AstraZeneca and has brought real discipline and execution to the team in Germany. Holger, our new CFO, also has a commercially focused background and will support us with our financial discipline moving forward. Overall, we see the key value drivers for Oncopeptides this year. Clearly, our launch of Pepaxti in Germany and targeted geographic expansion beyond. We will drive our scientific share of voice through key congresses and key publications.
We aim to have our Type II variation this year to enable Pepaxti use in one line earlier therapy, and we could continue to targetedly progress our preclinical pipeline. With that, I will hand over to Holger to give some financial highlights.
Thank you, Monica. Can you please proceed to the next slide. Starting with the financial summary and sales for the quarter in Q4 ended at SEK 0.6 million. This is all related to the launch in Germany. Just to clarify, the -SEK 21.7 last year in Q4, that is all related to withdrawal in the U.S. Looking into the full year's figure, sales ended at SEK 8.4 million, where, as I said, SEK 0.6 is related to Germany, SEK 7.8 is reversal of credits of sales in the U.S. done in 2021. Looking at our cost of sold goods, rounded -SEK 0.0, both for the fourth quarter as well as for the full year.
Operating expenses decreased significantly in the quarter versus last year's quarter in 2021, down from SEK 386 million to SEK 97 million. Looking into the full year, it decreased from SEK 1.5 billion to 360 million Swedish crowns. Looking into the financial items, we had a positive impact of SEK 9.3 million in the quarter. This is related to the revaluation of our currency accounts from euro and US dollars to Swedish crowns. Please, next slide. Looking into an overview of operating expenses development over the last two years, we see a significant decrease from Q4 in 2021 to Q4 2022 with 71%. More specifically, if you're looking into R&D, it decreased from SEK 184 million to SEK 57 million.
In the third quarter, we saw a slight increase from the third quarter of SEK 7 million. This is related to more preclinical activities in the fourth quarter. Sales and marketing decreased from SEK 168 million to SEK 20 million in Q4 2022. Slight increase from Q3 here with SEK 2 million due to the commercialization activities ongoing in Germany and the build-up of the team we're doing in Germany. General and administration costs decreased from SEK 34 million to SEK 20 million, with a slight decrease from Q3 into Q4. Cash flow from operating expenses ended at - SEK 78 million for the fourth quarter 2022. Please, next slide. Looking into our cash balance, we ended the year with a good cash position of SEK 345 million compared to SEK 362 million when we ended 2021.
This is of course including a directed share issuance in July of SEK 436 million. Looking into, in the quarter we renewed credit facility from European Investment Bank that is granting us access to a conditional loan facility of EUR 30 million divided into three tranches. Including the credit facility of European Investment Bank, we have covered the liquidity need for 2023. With that, I'm leaving back to you, Monica.
Thank you. At this point, we'd like to open to any questions.
If you wish to ask a question, please dial star five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial star five again on your telephone keypad. The next question comes from Patrik Ling from DNB Markets. Please go ahead.
Yes. Good morning, everyone. Can you hear me?
Yes, we can.
Great. Great. Thank you very much, Monica and Holger. Maybe a few comments on your outlook for Germany would be helpful.
Could you give us maybe some high-level thoughts on how you see 2023 working out for you? And also when it comes to other potential launches in Europe, what's your take on whether you should do it alone or whether you should look for a partner to help you with the launch?
Thanks very much for the question. For Germany, we're really at the beginning of the launch. We kicked off in Q4. We're building up the team. We're building up awareness. It's too early, really, to give any guidance at this point. The feedback from the field where we speak to people about the product, they say Pepaxti is a product that is meeting an unmet need, and we're starting to see that trial usage pick up. That's something that obviously we're gonna be monitoring very closely this year. In terms of other launches, we have a plan that I'm pressure testing at the moment. The last product launch I did was last year.
In particular, my market access bill for Europe is very hot off the press. That's something that we're just making sure that we really pressure test before we decide where to go. That then links in also to your questions around partnerships. At the moment, we're looking for what option gives us the best for the product and also, of course, value for the company. We're exploring all options at the moment.
Do you have a feeling for how long it will take before you have pressure tested the plan completely and can make a decision?
I think we're working on that now, and, of course we'll communicate anything as soon as we're able.
Okay. Also looking back to the slide that you presented on Germany, I mean, there were six people on that picture. Is that the size of a sales organization that is sufficient for Germany, or do you see this organization growing significantly now in 2023?
That's actually a mix of people that are in the field and in our virtual head office in Germany. I think, as we said last year, we've been deliberately focused in the team that we have in Germany. We are calling on a landscape that includes both KOLs and office physicians. We've also deliberately gone for a team of MSLs, but MSLs that I would say have a very particular profile. These are people who, as well as having a scientific background and some very reputable companies such as BMS, Celgene, are also able to really understand that this needs to pull through to a patient. They're very keen to speak to doctors, not only about the data but identifying the next patient.
We believe that the quality of people that we have in the field, particularly in Germany, and that's my experience launching in Germany, is that the quality of the people and the quality of the engagement is really what's important because access for all companies is a challenge, so when you have an interaction with a HCP, you really need to make it count.
Okay. fewer but better sales reps or persons in Germany. Is that what you're saying?
Yes. A size that is appropriate for the audience that we're targeting.
Great. My last question is really, I mean, Germany is normally the first market where everyone launches because you can basically set your price yourself and then launch while you're having your price negotiations. Can you say anything about how price negotiations are proceeding in other markets in Europe?
As you say, Germany tends to be first, A, because you can launch and have your price discussions ongoing and also, I guess, because it is the largest market. Those discussions are ongoing in Germany, the G-BA at the moment. With regards to the other markets, this is the planning that we're currently undergoing and we're pressure testing across all of the markets exactly what those access engagements will look like.
Okay. Great. Thank you.
Thank you.
As a reminder, if you wish to ask a question, please dial star five on your telephone keypad. There are no more questions at this time. I hand the conference back to the speakers for any closing comments.
Thank you, everybody. Appreciate you dialing in today. I think we have a really fantastic opportunity as Oncopeptides to make a difference for patients with multiple myeloma with Pepaxti, and I'm excited to continue to work with the great team that we're building to launch that product this year. Thank you for your interest, and look forward to speaking with you all again.