Thank you very much, and welcome to this Third Quarter Results for Orexo 2022. Together, I should just mention with me, I have Fredrik Järrsten, our new CTO, and this will be his debut presenting his first quarter with Orexo. Also I have Robert Rönn with me for the fourth call with the head of R&D, and we'll talk a little more about the OX640 results, which came in the fourth quarter, but the study was conducted during the third quarter. We as usual have a short update on the business, moving into the financial and legal and also some perspective on the future.
Normally don't present this legal disclaimer, but I do find that we are in a time right now with quite a lot of uncertainty in society, not only due to COVID pandemic, but also with the more macro, both economic but also security issues we have in Europe. With that, a lot of stuff that is moving right now, but we think at the moment, we don't see that having some major impact on Orexo. Our third quarter achievements, if we look at our different business areas, we have our HQ and Pipeline, U.S. Pharma, Digital Therapies. We have the headline of this quarter report is advancing the pipeline to facilitate future growth.
This is really an area where we made good progress in the quarter. We have the OX124 project is continuing like a train towards the ambition of filing in the end of this fourth quarter. We also had the OX640 study was conducted successfully. We got the results in early Q4. We also see that our new technology platform, AmorphOX, continues to deliver very strong data both on small and large molecule, both in terms of bioavailability but also in terms of stability of the platform. In our U.S. Pharma, we have seen ZUBSOLV in a quite stable sales development.
It's a minimal decline quarter-over-quarter, good development in, you know, slight increase in U.S. dollar and a very good development in Swedish krona, of course. We continue to have a quite strong financial performance in the quarter. It's a little dip in the EBIT profitability. We'll come back to that later, but we don't see that as something that is more than a one-time event. Our Digital Therapies, we have started with Trinity Health. They announced the rollout in the middle of September, and we've seen the first patients coming through. It is a sort of a stepwise rollout in Trinity Health to create certainty about how the product is to be used.
It's a little slower than we anticipated when we had our second quarter call, but now we have started. We continue to see a very good uptick in our MODIA I trial. That's where we set our target doctors for ZUBSOLV promotion to test MODIA. For some of the patients where we have seen a 130% increase in number of MODIA patients during this quarter. That is in a free trial setup. What's positive is we now also seeing the first clinic and moving into a commercial stage contracting, where we expecting to see the first patients coming through in this quarter.
One of the things that is important, I think in particular in today's environment is with the uncertainty we have on the financial sector, in particular Life Science, we have a strong focus on profitability in the company. What we are working on, of course, is we're working on the top line where we're pleased to see our ZUBSOLV sales is a little inflated or you could say we have good tailwinds from the development of the U.S. dollar since most of our sales of ZUBSOLV is in U.S. dollar. It helped to mitigate some of the increase we saw in OpEx because most of our operating expenses are also dollar denominated.
But those two together is creating a very strong and solid financial ground from our U.S. Pharma business. We have seen quite high investments during the last few years and expenses in our Digital Therapies, and this is an area where we have gone through all of the direct expenses within Digital Therapies to see how we can improve efficiency, how we can leverage more of our shared resources that we have with our U.S. Pharma. We have managed to bring down the direct expenses in our Digital Therapies with 75% if we compare with the same quarter a year ago.
We still have a decent expense in Digital Therapies, but now the majority of these expenses are actually expenses that we share with our U.S. Pharma business. An area that I have mentioned in several calls is how we are focusing on our ability to control our profitability. With that we mean how we're controlling larger expenses that are what we call non-repeating or non-recurring nature. This is legal expenses, and we also put clinical trials because we can decide whether we want to start a clinical trial or not starting any clinical trial. If you take these external expenses, we are profitable on an EBITDA level, and we actually been that for the last year.
This is something we follow very closely, and in particular now as we see some of these major external expenses will diminish during the next six to nine months. We are aiming at a profitable situation for Orexo, with the knowledge we have about the market today. Our U.S. Pharma business, as I said, we have seen a relatively stable volume development. We're seeing good development in both New York and Kentucky with double-digit growth in both regions. We, however, that is compensated a little by a decline that we see in UnitedHealth Group and Humana. All in all, we are seeing a slight negative demand, but we actually see a very slight increase in our open business, and that's where we have most of the business today.
We have continued to see some decline in UnitedHealth Group and Humana. One of the things that happened during the third quarter is that we now have the full field force in place in New York, and so that is putting a little strain on the expenses in our U.S. Pharma, but we're expecting to see that to be paid off by continuous strong growth in New York. I have mentioned that COVID-19 has been impeding and reducing the productivity that we have seen from our field force because it has been difficult to access the physicians in the same degree as we saw before COVID. This has started to improve, but we are still below pre-COVID levels.
We are now seeing actually the number of sales calls for the field force is now very close to what it was before COVID, but we still see that in several clinics, the doctors are not as open to meet sales representatives. I'm very pleased to say, so far, everything that has been published for ZUBSOLV market access next year, we will see that we will maintain all of our market access. That's important, of course, if we see a market growth beyond what we have today. That would be very helpful if we have strong market access. We have seen a market growth of about 5% for the last two quarters. One of the reasons has definitely been COVID.
When we're digging into the data and we're talking to more and more physicians, we see that fentanyl has basically moved during COVID. We see very few patients who are using pure heroin or pure painkillers. Fentanyl is basically mixed into most opioids that you buy illegally in the U.S. What we hear from physicians is that fentanyl patients are more difficult to control. So we have a higher degree of relapse. That means that when they start a treatment, more patients are falling back into misuse than what we have seen before. This has made the patient population even more difficult to work with.
We know a lot of doctors are working with different methods, how they can improve the induction phase for these patients. Here in particular, access to counseling is very important because you need to help the patients more during the induction phase than what we have seen previously. This is, of course, as long as we're seeing the fentanyl flooding the market as we're doing right now, that will continue to be an issue for the physicians. We're also seeing more physicians getting better at treating this. Here we believe our more dosage range will actually be of help because they need to work much more actively with the dosing of the patients than what they used to do.
One of the things that we believe will trigger growth is that we're now seeing the settlements that we have for what we call the opioid litigations in the U.S.. That's where big wholesalers, pharmacy chains, and pharmaceutical companies are paying damages for the damage caused by the opioid epidemic. The settlement numbers is actually now up at $54 billion. $54 billion have been agreed in settlements, which is to be paid out, some of that in lump sum, some of that during a certain period of time. We are now seeing the first states in the U.S. are making this money available for improving treatment.
We see that as an opportunity for Orexo to actively pursue opportunities where there are grants financing, there are initiatives on a state level where with our comprehensive offering consisting of ZUBSOLV with MODIA, soon also OX124, and our knowledge from the market, we can actually create solutions together with stakeholders in different states and take part of these settlement monies. I think Orexo is uniquely positioned to do that. We are the only company who have both the counseling part with MODIA, we have the pharmaceutical part with ZUBSOLV. We soon will have a rescue part with OX124, and we have a field force which is represented in most of the U.S.
I think this is an exciting opportunity where we really have an opportunity to support the market and help patients from our perspective. Moving into the headquarters pipeline. I'll just take the headlines before Robert will go more into the details of OX640. On OX124, everything is on track with our NDA expected filing with the FDA here during the fourth quarter. All the data we have collected and tests we have done right now is basically following the plan that we have for the filing. With the current requirements for FDA, we are optimistic that we will make this target.
OX640, we had our phase I exploratory trial successfully that Robert will talk to you about shortly. We are now looking from a partnering perspective, for how we can find partners to continue the development and who can work with Orexo during the commercialization phase. We have some active dialogue ongoing in this field also. Finally, as we see the positive results on OX124 towards filing, we see the positive results from OX640. We also made the decision that we need to focus and prioritize our resources. We will continue to keep OX125 in a slow development. We collect data from stability and so forth, so we're ready to accelerate with OX125 when we see the market opportunity exists.
Project OX338, which has been a little paused for a few years, we've decided now to stop completely. If we're doing something with the ketorolac in the future, it will be a new product. OX338 has now been prioritized. Very fast on OX640 before I hand it to Robert. Why do you think this is an opportunity? This is a market where we have seen quite solid growth for close to double digits for a long time. We are seeing expectations of continued double-digit growth. It's an issue which is global, so we see an opportunity which is going beyond the U.S.
The market size today is more than $4 billion, with the U.S. being the largest market and Europe's second largest. The market leader is EpiPen, which is an auto-injector. We've seen other auto-injectors coming into market, and now we see some new formulations coming in, also some new nasal sprays applied for approval in the U.S. However, when we look at the unique properties of OX640, we still believe that we have something that differentiates towards both EpiPen, where of course, we have a needle-free solution. We also see that compared to some of the other solutions that are in pipeline, we find that we have a much more stable and robust formulation than what others have.
Another big advantage we have both towards EpiPen and some of the other competing products is that we actually have a manufacturing process already in place through OX124 , and it's much cheaper than what is needed for the auto-injectors. We expect that our cost of goods for OX640 will be much lower than, for example, for EpiPen. We have a product that has no antioxidants and preservatives, which is also known to cause allergic shocks. When you are using products with antioxidants and preservatives, there's actually a risk that you get secondary allergic shock.
All in all, we believe we have a strong product that has a differentiated profile entering into this market. As I said before, we are looking actively for development partners who can take some or all of the commercialization responsibility for this product. With that, I will leave the words to Robert to talk a little about our results and the stability data we have. Robert.
Thank you, Nikolaj. I would like to start to go into some of the stability data that we have for our OX640 product. As Nikolaj said, this is a very important differentiator for our product compared to what is exist today and also what is being developed at other companies. What we see here on the page to the left is a comparative stability study between OX640 and EpiPen. The graph to the left shows the adrenaline content in the formulation or in the product after a certain time of storage. For EpiPen in blue, we can see that almost 20% of the API has been lost after six months storage, whereas for OX640 , we still have 100% of adrenaline left even after 18 months storage under the same condition.
The graph to the right shows the degradation of adrenaline, another way to look at stability. Once again, we can see EpiPen bars in blue, and after six months, more than 25% of the adrenaline in EpiPen has been degraded, whereas in OX640 , only 1.8% have been degraded after 18 months. The stability we see for OX640 is on a completely different level compared to EpiPen and also other injection solutions. I mean, basically, this is worth mentioning is that this is properties that we have seen for our AmorphOX technology. We have seen it for many other small molecules and lately also for larger molecules. Next slide, please.
Turning into the clinical results from the first clinical study we performed for OX640. Very positive results. We saw excellent bioavailability of OX640 formulations. What we can see here on the graph is actually the plasma levels of adrenaline over time. The red curve, that's one of the OX640 formulations that we tested in the study. In all, we tested four formulations. This is one of them. The solid black line, that's the EpiPen product, and that's the one that we used as a comparator in our clinical study. Included in this slide are also the dotted line, which are other approved adrenaline products. These are also intramuscular injection products, but not auto-injectors.
What we see, on an overall basis, is that we got both very rapid and very good exposure of OX640. The whole objective and the strategy with this program, that is to get pharmacokinetic properties that are within the space of other approved products. If we look at some parameters that are important for regulatory approval of this type of product, we can look at the total exposure of adrenaline, and here we can see that we are within the space of the other approved products. The same thing goes with peak exposure, which sometimes is referred to as Cmax. We also see, as this is an emergency type of product. The early exposure is another very important parameter.
Also here we can see that we are comparable or even faster than other approved products. To conclude, I mean, we met the primary objectives of our study, and we have identified the candidates that we will advance into further development. Next slide. This is just a high-level time plan or a development time plan. Right now, with the positive results from the first study, we will continue the pharmaceutical development. This will also include the initial upscaling of this product. Again, here we can capitalize on the supply chain that we have established for OS124. . 2024 will include additional clinical studies. It's worth mentioning that the studies will be not large, say, your efficacy studies. They will mostly be PK-based studies, similar size to the one study that we did perform. We are targeting for NDA submission towards end of 2025.
Thank you Robert. Moving into Digital Therapies, we are looking at particularly in MODIA, where we have seen a very fast uptake among our soft spot users. We have nearly 1,200 users who are using MODIA I during Q2, which is a 130% increase from Q2. That leave us with more than 3,700 users on [total] who have tested some of our Digital Therapies. This is important for us because some of the things that we have seen is still some skepticism and some basically lack of education and understanding among both healthcare professionals but also among patients that this actually has a positive effect. To have this awareness and get very positive feedback from the users is incredibly important.
I'm happy to see that several of the users of MODIA, in doctors who are using MODIA actually come and now want to do a commercial contract with Orexo , to start a more business-based collaboration. One thing that is important for MODIA is to have the clinical trial. Today, we are promoting MODIA under what's called emergency use authorization, but the ambition is to have a 510(k) application filed with FDA after we get the clinical trial results. Here again, during the fourth quarter, or early fourth quarter, we finalized the study based on a pretty rapid uptake of number of patients during Q3.
We basically have the last patient recruited and will now expect to have the results in six months from now, and then we can start, maybe we'll take the final steps towards a 510(k) application with the FDA. With a 510(k) approval, we see an opportunity to come in as a prescription product, but we know there are some formularies and insurance companies today who have formularies for prescription. Digital Therapies. We also know that, for example, the VA, where we have an agreement with Deprexis, will only include products that have been formally approved by the FDA. This will be a trigger for us to expand the market access for MODIA.
When it comes to Trinity Health, this is an area where we were ready to start new patients, in July. It took a little longer than we anticipated because Trinity Health want to run some additional billing tests with some patients before they're ready to roll it out. They had the announcement in, I think it was around the 7th of September, where they announced they're now starting to roll this out. We do have the first few patients on Deprexis within Trinity Health. What will happen is that we have basically decided we will recognize the revenue we get when we see that the insurance companies have accepted the reimbursement request.
We are expecting some revenues from Trinity Health during the fourth quarter. It is something that we see Trinity Health today. The doctors, even though Trinity Health as a corporation, have decided to roll this out and we acted together with John Kutch, the CEO of Trinity Health, are going to present this to other healthcare networks during this weekend that is coming up. They are very committed on a corporate level, but we also need to get the buy-in on a individual patient or physician level and clinic level. There, every clinic and physician we have seen, they want to test on patients before they are rolling it out broader.
This is a stepwise approach, but we have a very strong buy-in and support from the entire leadership team of Trinity Health and also from the clinics. They are implementing in a more controlled, a little slower pace than I of course would have liked. It's understandable also from an implementation perspective. We still believe that Digital Therapies is something that is going to be a big part of Life Science and healthcare in the future. The feedback we get from patients on all of the three products is in general very positive. We don't have any direct contact with patients, I should say. The information we get is through the caregivers.
Here, particularly with MODIA, where we have a close relationship with all of the physicians from our soft start times, we get very positive feedback. A lot of the MODIA clinics are now moving into commercial contracts. However, we do see that this is taking some time. The reimbursement pathway we have for Trinity Health is what's called Collaborative Care Model, which is including primary care and specialty care. It's something that is new to Trinity Health. [Inaudible] They need to get educated and get comfortable with. We also get the feedback that Digital Therapies is something that each individual doctor would like to test before they find out how to or what patients they want to use it and when it will give most effect.
What we have seen is an interesting observation as we see more and more patients coming through. It's actually even on the patient-doctor relationship, some of the patients who are most satisfied with the Digital Therapies are so eager to actually complete the digital therapy much faster than what is expected. That's something that in that Collaborative Care Model is creating a little of a problem because that is based on a longer term treatment plan for the patients. If they've done the full Digital Therapies in a few weeks, and that is basically misaligned with the overall care plan for that patient. We need to work here with education of patients, education of the caregivers, how are they going to inform the doc each individual patient.
We have a very strong collaboration with Trinity, and as I said, a very high buy-in on the highest level in the organization. We also, as a corporation from an Orexo perspective, needs to accept that this is growing slower and has been slower during 2021 and 2022 than what we anticipated. We have decided to continue to focus our resources to where we think we have most effect, and this is where we see good reimbursement pathways. The Trinity Health model and get this one scalable and implemented as other health systems is of highest priority. The Veterans Affairs implementation is a high priority, and then to work with our MODIA doctors is a high priority.
By focusing on these fewer channels, we have been able to lower the number of staff working with digital therapy and also in general decline the direct cost that we have in the Digital Therapies. It's actually a 75% reduction in direct expenses within DTx compared to a year ago. Some of you might read the report and say, "Yeah, you’ve lowered the cost on DTx, but not to that extent." This is actually because we are now with the promotion of MODIA, we are allocating the cost of the sales reps in the U.S. Pharma organization based on how much time they're using on each product to either U.S. Pharma or to DTx.
This type of synergistic or allocated resources rather than direct expenses in these things. Before we increase our expenses in Digital Therapies, we want to see concrete steps forward. New health systems, more products within Veterans Affairs. We see more commercial rollout in MODIA. That could trigger increased investment. Now we will expand our cost base as we see revenues come in rather than taking the investment up front, which is a slightly different strategy than what we pursued in the beginning. With that, I will leave the word to Fredrik to take us through the financial and the update here, please.
Right. Thanks, Nikolaj. We are now on page 22. We look at our revenue stream. If we start by looking at the top part of this page, you can see total revenue in Q3, SEK 161 million, which is 10.3% higher than Q3 last year. Of that revenue, obviously, ZUBSOLV is the main contributor with SEK 160 million for the quarter, and that's up 10.4% from Q3 2021. Now the main explanation for that is the strong appreciation of the U.S. dollar. If you look at the ZUBSOLV specifically and Q3 compared to Q2 this year, you can see from the waterfall graph at the bottom part of the page, the FX effect is also the main explanation behind the growth quarter-over-quarter by 7.5%.
The FX effect was a positive SEK 10.3 million. We're happy to conclude, though, that ZUBSOLV demand is still stable as shown in the first three bars in the graph, just a slight reduction of 1%. That's compared to the overall market growth quarter-over-quarter of 1%. We do have some negative impacts from the tail risk following, among other things, the growth in Medicaid volume in New York and Kentucky. We also have a positive effect from a positive return adjustment following a trend of less returns in general, which made it possible to reduce our returns reserve. In conclusion on this page, you can also see that in local currencies, the ZUBSOLV net revenue is stable between the quarters for that 0.2 sample factor. Next page, please.
Our P&L, I just mentioned the growth in total net revenues for the quarter and for the first nine months. That growth is 11% up to SEK 468 million. Again, with the majority of that being the effect of the strong U.S. dollar. Increase in COGS is to a large extent also a reflection of the strong U.S. dollar. Now when you look at our operating expenses, we are focused on driving future opportunities as we have talked about, which in this quarter included progressing OX124 NDA filing with the FDA later this year, as well as completing the first clinical study of OX640.
We have increased expenses defending our business in relation to the IP litigation, but more than offset by significantly lower selling expenses in Q3. As I said, OpEx was also negatively affected by the strong U.S. dollar. Just pause there for a moment, commenting on the net effect on EBIT from the stronger U.S. dollar. We can conclude that even though the FX effect is significant on net revenue, we do have matching costs in U.S. dollars, which obviously also are affected by the strong U.S. dollar. This results actually in an almost perfect balance between income and costs in U.S. dollar, and if you will create the natural hedge when it comes to the currency effect on EBIT.
If you do that exercise, the net currency effect on EBIT this quarter was only a positive SEK 1.7 million. Our U.S. Pharma business shows a good quarter, SEK 70 million in EBIT, which is an EBIT margin of 47%. Now, that is down from 54% last year. That reflects a negative impact on the margin following one-time adjustments in July and also the increased investment in OX124 . In financial items, we have a very positive currency effect on our cash and cash equivalent held in U.S. dollars. That was SEK 33 million. We also earned interest on short-term investment of SEK 1.4 million, offset in part by higher costs for the corporate bond, SEK 6.6 million.
In conclusion on this page, EBITDA for the quarter -32 million SEK. Next page. On the next page, we just wanted to highlight again the point made of being EBITDA positive. If we separate what we define as things external non-recurring costs. In Q3, those amounted to sort of SEK 47 million, and our EBITDA in that case would be a positive 14 million SEK. Now you can see those external non-repeating costs on the right-hand side of this page. They relate to clinical trials, MODIA phase III, OX640 phase I, OX124 geo effect study. Then we have the sum litigation and subpoena and the sum litigation trial, which will happen in Q1 2023.
We will have the clinical trial that's of now completed until Q2 2023. That actually means obviously that, after the first half of the year, we're no longer have these costs, which again, is why we emphasize this key metric confirming the route to returning to profitability. Next page, please. There we have the cash flow. We can see the cash flow from operating activities negative for the quarter with SEK 61 million , primarily impacted by negative operating items. As you follow the waterfall graph on the bottom part of the page, moving towards the change in total liquid funds, we invested SEK 69 million , all of our surplus cash in certificates of deposit in U.S. Treasury.
We have amortization of leasing debt, SEK 5 million, that’s an IFRS adjustment. We have an FX effect of SEK 13 million in cash assets, USD bank accounts. We also had a positive change in maturing short-term investments of SEK 98 million . That resulted in a total negative change in cash and investment funds of SEK 24 million in Q3. That meant that we had SEK 444 million in liquid funds as of 30th September 2022. Out of that total SEK 322 million in short-term investments, SEK 122 million in cash. We move on to the next page where we show the financial outlook. We can conclude that we reaffirm three out of four metrics, and we do revise the metric on group OpEx.
From the top, key market development still showing growth pace in line with 2021, although at the lower end of the interval of 5%-8%. ZUBSOLV in USD, so we're happy to conclude the stability quarter-over-quarter this year. On a full-year basis, we still believe the objective of increased ZUBSOLV in the second half of the year is feasible. Also based on that Q4 usually is a good quarter for ZUBSOLV. The U.S. Pharma EBIT margin, as I said, 47% for the quarter. That is an average. July stood out. We had a lower margin there. August and September, on the other hand, well above the 50% margin objective.
Feel pretty confident now in reaffirming this metric. We have revised the group OpEx metric from SEK 650 million-SEK 700 million to SEK 700 million-SEK 725 million. That is mostly due to the appreciation of the U.S. dollar. If in fact, we had used the previous exchange rate from Q2, the OpEx estimate would have been reaffirmed. With that, I'll hand over to Nikolaj for his legal update.
Thank you. We had anticipated that our Sun litigation process would go into the district court actually in the beginning of November. Due to a very busy schedule with the judge, this has now been moved into January. We also recognize that this is a moving target. Our expectation now is that the district court hearing will happen sometime during Q1 with a result. Unfortunate that we, as we would like to have this behind us, but we still see that we have a very strong patent position. We've been through this before, and I'm certain that we will prevail again this time.
When it comes to the subpoena, there has been a little work done because the U.S. authorities have asked us for some clarifications and are asking us to complement some of the materials that they have received previously. But we have still no clarity into the investigation and what they are looking at. All in all, the legal expenses, in particular for the Sun litigation, will now continue during Q4 and also into Q1. Looking ahead for Orexo. Why Orexo? I just want to remind a little on what is the core business for Orexo and then where we start this opioid use disorder treatment with ZUBSOLV. That's why we started with MODIA.
That's why we developed a new rescue medication because we saw the need for treatment of fentanyl overdose in the U.S. These three legs of product categories is giving us a very comprehensive offering that we can promote in the U.S., leveraging the network we have already. In particular now we see the new opioid litigation settlement funds becoming available. This is an advantage for us when we're seeking collaborations and access to some of these settlement funds to enable improved treatment of patients. Coming from this focus on the core business, we also see that from the MODIA that we needed a reimbursement platform.
We needed a solution for this, and we saw a lot of synergies of expanding into other products within mental health where we have a lot of overlaps for both the customer base and also the patients. We expand into MODIA and Deprexis, and together now we have three products making us pretty large player in the Digital Therapies space in mental health issues in the U.S. Likewise, from OX124 and OX125, we developed the technology to solve the issue that we saw for patients overdosing with fentanyl. That technology led to AmorphOX, and now we have seen that that is applicable on other APIs like epinephrine and OX640.
Actually the technology in itself with an AmorphOX powder has shown to have an absolutely excellent stability on both small and larger molecules. This opens up new doors for Orexo to generate revenues and partnerships for the company, all spinning out of the core business of Orexo. Looking ahead, where are we right now? We believe that we have corporate profitability in sight. We see that the main external cost drivers will diminish during the next half year. We are seeing that in the current environment in the financial markets, we need to be adapting our activities to where we see revenue opportunities and actually confirmed revenue opportunities for the company.
Our R&D pipeline is something where we expect to see some revenue generating partnerships next year. That is coming both from OX640, from AmorphOX partnerships and even from OX124, where we could also find partners outside the U.S. Of course, we're also looking to get approval with the FDA next year. One thing we have decided, however, is to slow down some of the manufacturing that we would need to do at risk before the approval in the U.S. if we should start commercializing already in the autumn of next year and do that after the approval in the U.S. to avoid having to write off material in the case that FDA needs to change or want to change the label.
OX124, OX640 and AmorphOX are all likely to generate some kind of revenues during next year. On DTx, we are now seeing that we expect to see the first, but I would not call it material revenues in Q4. We do expect now to see Trinity Health starting to expand to more patients. We are expecting to see MODIA patients coming through, and we even have some other partnerships that we think could generate some revenues in DTx. This will be a slower build than we anticipated initially, and for that reason we have also adapted our cost base and continue to work with the cost base in DTx to be able to sustain the pace in our top line to match it with the cost of AmorphOX.
Finally on ZUBSOLV, we see we have a stabilized state. We haven't seen a lot of movements in volume during the year. We see a lot of opportunities to grow in the market. It is still a relatively slow pace in the market growth. As Fredrik said, it's in the lower part of the range that we guided on in the beginning of the year. If we see this market start to take off, with this very strong market access we have, we believe that we have a good opportunity to grow this market next year. With that, I want to thank you for your participation and open up for questions.
Thank you. If you wish to ask a question, please press zero one on your telephone keypad. If you wish to withdraw your question, you may do so by pressing zero two to cancel. There will be a brief pause while questions are being registered. The first question comes from a number that we unfortunately didn't get your name or your phone number. Would you please introduce yourself and ask your question?
Maybe that's me you are referring to. That's Klas Palin. I'm from Erik Penser Bank. Hi there. I'm trying to get my questions. Maybe you have to start with the question when it comes to Trinity Health. The sound was little bit, that is on my side, so I didn't catch everything that you were saying. You just wonder a little bit about the implementation and what this will lead to eventually. Will it be mandatory for all the doctors and physicians that treat depression patients and patients with alcohol abuse to use in some way the Deprexis and Vorvida eventually? Yeah, that's my first question, I guess.
Okay. We can take that in each. The question is whether it would be mandatory to use the Deprexis or Vorvida for?
To implement that in the treatment programs, or will that be up to the doctor to judge by himself?
There's a strong wish from the management of Trinity Health to have it implemented as a standard part of the treatment chain. In the end, it is every doctor who needs to make their own decision on which treatment is the most suitable for each patient. That of course requires that we educate the doctors and make them comfortable with using Deprexis and Vorvida for their patients. Given that it's now available, all the processes are in place, there's what we call pull-through that we need to do in Trinity Health.
We don't have sales reps in place in North Dakota, but we have decided to re-allocate some resources who will be there on a frequent basis to work with the doctors to ensure implementation of the products. It will not be mandatory for every doctor to prescribe it for all patients with either depression or alcohol misuse.
Okay. Just out of curiosity, have you seen any increased interest in new sort of a model to provide reimbursement for patients, since you went live with the Trinity Health from other healthcare service providers?
Actually this weekend or today, Dennis Urbaniak is leaving for a conference in Arizona in the U.S. together with the CEO of Trinity Health to present in front of a larger group of CEOs of other similar health networks who have signed up to basically come and listen to them presenting together the learnings that they have from Trinity Health. This is an active participation, they have decided to come and listen to this, and the purpose of the meeting is to present our partnership with Trinity Health. The answer to that is absolutely yes. There's some interest to do this, and we're promoting it together with John Kutch, who's the CEO of Trinity Health.
Okay, great. Thanks. Your new sort of main goal to have a core positive core EBITDA level, does that mean when we are coming into 2023, that would include all the what you need to do in the OX640 program, or do you need a partner to finance further development?
We do have the resources to finance, but we want to make comfortable before we start any new initiatives that there's financing in place. We do see a quite significant reduction in other expenses in the company. When we're weighing things together, it's not like we don't have space to do anything. We still believe we will have space to run, to pursue some of the development steps we need to take in OX640. We are of course looking for a partner, and I think that would enable us to accelerate the development for OX640 together with a partner, compared to if we should do everything on our own. I'm happy that we have a quite strong interest.
Our business development team has participated in BIO-Europe just a week ago, and some of them is CPhI this week. There's a good interest in OX640, and we have some concrete discussions ongoing with potential partners. We do have the ability and we basically have all the knowledge we need to take it into the next phase. It would be great to have a commercialization partner on board before that.
Yeah. Great. It was also mentioned in the report that you have seen a strong interest in the AmorphOX platform. Just wondering, is there any companies that actually evaluate the platform today or are you in discussions of such evaluation efforts?
We have run feasibility studies with an external company in November. The luxury we have from Orexo is we can use some of the synergies with some of our existing resources. We do some feasibility studies without having a formal contract in place. We do have other discussions ongoing which are a little more holistic in its nature. There is quite large interest in it in the sense that we actually from Orexo needs to prioritize which one do we want to pursue, because there are several smaller companies which have an interest and have issues that we think we could solve together with AmorphOX. We are prioritizing the big opportunities in terms of partnering.
Because it is some of the same resources we use for OX640 and OX124 will also need to work with these external partners. We have one we already done formulation and we have others where there are very concrete discussions ongoing.
Okay. Great. Thank you so much.
No.
Thank you. The next question comes from a telephone number that ends with 2625. Would you please like to introduce yourself and ask your question? Your line is now open.
Okay. Nothing. We've got a question.
Nothing.
We've got a question online, so I can take that one. Or do we have someone coming in? Okay, I take the question I received online. It seems that you're downsizing your clinical ambitions going forward. Will this lead to redundancies in the R&D organization?
The short answer is no. In Sweden, we have worked a lot with consultants in the process of OX124 in the last phase, which is causing some expenses also. Some of these consultants are specialized in the space of OX124 and would not be needed in OX640. In that sense , we are downsizing because we won't need the same amount of consultants. But these consultants have been hired for very specific projects. It's. But from our core staff, that's not the plan. Any other questions?
We have received a question here from a telephone number that ends with 2625. Would you please like to introduce yourself and ask your question? Your line is now open.
Hello, can you hear me?
Yeah.
Yeah. Sorry, I believe that must be some sort of a mistake of the number. However, I'm Ethel Luvall from Redeye, and I have a few questions that relate to OX640. It is with regard to the clinical results from the study. How would you describe the power and the interval of confidence of the study?
Robert?
Thanks, Ethel. With regards to the power, I mean, there were 40 subjects included in the study. I mean, to the comparator to some product, it depends on which specific parameter you have in mind. Looking at, for example, the total exposure we saw, we did see, you know, a significant difference in the total exposure. Which is obviously, as you could see from the mean graph, that we had higher exposure of OX640 compared to IM, and that's statistically significant.
When you do mention the significance, what would you say? What size of that number is it?
The size of that number, what I refer to as statistically significant is within the 95% confidence interval.
All right.
Comparing the total exposure.
Thank you. Although FDA requires additional studies, would you say that the target product profile for OX640 have been reached?
So far, I would say yes. Because as I mentioned during the presentation, the target is to be able to bracket our product from pharmacokinetic parameters between the already approved products. It's both in relation to approved autoinjectors, but also, injectable intramuscular solutions. From that perspective, I would say that we have reached our target profile.
Thank you.
Obviously, there will be additional studies that we need to perform, but so far, so good.
I understand. You have, I believe this question, my last question, you have answered parts of it already. How would you describe the ultimate partnership with regards to OX640 and in terms of continued development, manufacturing, commercialization, and all that?
I think the optimal partnership is someone who have some knowledge in this field and have an established commercial infrastructure which is relevant for promoting OX640, whether it's in the U.S. or outside the U.S. We're ensuring partnerships both on a global scale. We think the partner will have a lot of benefit of leveraging the manufacturing supply chain that we have established with OX124. It'll shorten the timeline dramatically and we believe also as long-term the expenses to the project. We see that Orexo will still be an active part of the development of the supply chain. It will then evolve over time when you have a final product that depends on the partner and their interest.
I think the most important is someone who knows about the space and have an established commercial infrastructure that is relevant to this product.
Thank you.
Thank you. The next question comes from a telephone number that we didn't receive, and we didn't get your name either, unfortunately. Would you please like to introduce yourself and ask your question? Your line is now open.
Hi, this is Samir Devani. Can you hear me?
Yes.
Hi, guys. Thanks for taking my questions. They're actually also on OX640. Maybe just one on the legal costs as well. The data looks very encouraging, and particularly your bioavailability plot, slide 14. I was just wondering if you could comment on the inter-patient variability you're seeing with your formulation versus the auto-injector. If you could also just clarify how many mg of epinephrine is in this chosen formulation that you're presenting? I guess that's the questions on OX640. Then just on the legal costs, I'm just wondering, is Q3 a good run rate to use now for Q4 and Q1 next year, or will the expenses likely be higher?
Maybe just in terms of your EBITDA discussion today, could you just clarify which clinical trials will be ongoing in 2023 that you would consider outside of your EBITDA metric? Thanks very much.
Thanks, Samir. This is Robert. I will answer your first question when it comes to inter-patient variability. I would say, generally, OX640 shows the comparable variability to our reference product. To your second question regarding dose, this is not something that we have disclosed. That's the short answer.
When it comes to the legal expenses. The legal expenses, that is a little of a moving target depending on what kind of motions that are coming in, but we do expect a slightly higher expenses in Q3 or Q4, because this is where final evidence base is presented on both parties, and we also have a Markman hearing coming up that was not scheduled before. In next quarter, we'll have the district court ongoing.
I think slightly higher than what we're seeing in Q3 before. Yes. On the EBITDA target, there's no clinical trials which are not outlined on the slide that we have here. We have no other clinical trials that we have planned right now for next year. All of them are in service here.
Great. Thanks very much.
Thank you. We have received quite a few questions on the chat, and unless we're sitting here for several hours, it will be difficult to respond to all of them. I can take some of them very quickly. It’ll be short and not too elaborate answers. ZUBSOLV sales in Europe, can we expect a Q4?
We do see some sales. However, we have had some issues in the supply chain which has stopped or slowed down some of the rollout in Europe, more associated to our supplier in the U.S. We are solving that together with our partner. We do see that we expect ZUBSOLV sales to increase somewhat.
We have a question here which is when would you expect the first DTx revenue from Trinity Health? I think I answered that we do believe to see some revenues in Q4, but I don't think this will be super material.
There's been a question around Orexo and our spending on DTx, and we are basically just a distributor? That's both yes or no because quite a lot of investments have gone into building a reimbursement data system. We're not allowed to have data on individual patients outside the U.S. Basically, the system that is needed to run the reimbursement process and work with the individual patient's access to the system has to be in the U.S. and has to be HIPAA compliant. That we basically mean we need to deliver on the same patient or data privacy levels that you have in that you see in normally in medical record system or journal systems.
Let me see. What do we have more? DTx revenues, again, we won't provide more guidance than we have right now. We had hoped to see some more revenues in Q3 from Trinity Health. It was a little slower than anticipated, but we are expecting to see more revenues coming up, both Trinity Health and also from MODIA coming in.
We have. Let's see here. Can you elaborate on the partnership with OX platform? It is focused mainly on OX640. It could also include OX12 4. We just have discussions with potential partners on OX 12 4 outside the U.S. We think there are some concerns around the strength of OX12 4 compared to what, for example, is needed in Europe. It might need some reformulation before it could be used outside the U.S.
As Fentanyl’s problems are expanding, the OX12 4 could absolutely have a platform or should have a platform outside the U.S. Our partnerships for a mobile platform is actually more related to other companies who have APIs where we could benefit from the platform's properties.
Then we have some requests about targets for DTx next year, we will come back to our guidance for next year in the Q4 report. I have a lot of questions on DTx again here, around the reduction in direct DTx expenses. How much of this is reinvested in other initiatives within DTx and how much is permanent? The reduction that we see is permanent based on the level of activities we have right now.
We have not reinvested those expenses, but on our total selling base, what we have done is , we’re checking, we have seen some positive effect on ZUBSOLV when we do compared to Q2 last year compared to Q2. We actually have the same amount of people working in the ZUBSOLV field force with MODIA as we have in Q3. Compared to last year, we have moved more expenses from our U.S. Pharma business into DTx. The reductions we see is real in DTx and not just moved around to other initiatives. There are multiple initiatives going on to improve access to MAT and the timing of these. There are a lot of initiatives right now.
Among others, there are suggestions of removing the waivers that is needed to prescribe. However, as we know, there's a midterm election coming up in the U.S., more or less imminently. A lot of this has been frozen until that. We think there are several suggestions that this basically could become a prescription product like anything else. That all of this money coming in for the litigation that we expect will drive additional sales coming in. It is moving slow through the political system in the U.S.
There's a question about the Sober Grid contract. Sober Grid was something I had decent expectations to, but they have been through a lot of internal leadership changes during the year. Their CEO basically went missing in the beginning or the end of last year. The one who was basically driving Sober Grid was missing and is still missing, literally. They had to change the entire leadership team, and he was the entrepreneur behind Sober Grid. That has somewhat had a negative impact on that relationship. We still have a contract in place with Sober Grid. We can still work with them, but we've decided not to invest additional money into the partnership.
With that, I apologize. There are some questions here. Some of them are very lengthy, which I won't have. I think we will respond to individually because I can also recognize some of the names to go through them in more detail. Thank you so much for joining us for this one hour, and I hope you feel the same confidence I have in both our ability to stabilize and grow our U.S. Pharma business. Our DTx business is moving in the right direction, but we're doing that with a more reduced cost base than what we had before. Finally, on our R&D and our pipeline, I think we have made great progress during the last quarter.
We see a lot of opportunities to both get more revenues out of the pipeline, but also more products and the broadening of our commercial base as time goes. With that, I would say thank you and for all of you, have a great day. Thank you. Bye.