Earnings Call: Q2 2021

Jul 15, 2021

Thank you very much. And again, welcome to this first half results for Rexor. It's no doubt today has been a sweaty day, not only due to the heatwave in Sweden, but also with looking at our share price. However, when I'm looking into our Q report and looking at the truckers we have made on both subsalb and also now digital therapies. I think there are some quite strong reasons to be optimistic about the development moving forward. And with that, I will start the presentation and I will go into Page number 4. So Page number 4. A short summary of the quarter here. So if we look at the U. S. Pharma business, we have seen a stable sales comparing to the last quarter. The positive part is that our core segment, the open market, in particular the open commercial segment, that's a private health insurance market. We've actually seen a little growth in a market that has been more or less standing still. We also now Into Q3, we have on the 1st July, we got full market access to Medicaid in Kentucky, the 4th largest Medicaid state in the U. S, a state where we have literally not been active before. So this is basically new, we can say, a completely new market for us. So looking at this core market growing, looking at the opportunity in Kentucky and then looking at where is it that we are losing a little in demand and that it continues to be these exclusive contracts where the exclusivity was removed back in 2019. And Those of you who have been with us for that time will probably recall we had a market share of about 90%, 90% in of these big health plans, UnitedHealth Group and Humana. That's very difficult to defend. And while we're still a big player, it is still a challenge to keep up with the previous market share in these two plants. But we have seen that the decline has been fading and is now on the lowest level since 2019 in terms of decline. On our Digital Therapy business, we have and I talked about that in the last quarter. We are now focusing a lot on making contracts with partners, starting up pilot test and bigger trials. And the first trial we started with last year was with Trinity Health in North Dakota. And that one has now finally turned through a commercial contract. Trinity Health North Dakota will now offer Vovida and Duprexxus as part of a treatment plan for alcohol misuse for Vovita and depression for duplexis. We also have a couple of other contracts with a clinic in New York City and also a and mental health hospital in St. Louis. However, these are just small beginnings. And what is interesting is to see that the Pipeline of partnership discussions is expanding not only in numbers, but also in the size of these partnership discussions, and I will come back to that. With regards to our pipeline, the big focus right now is on OX-one hundred and twenty four. And we are just literally days away from starting the pivotal trial for OX124. And in parallel, we are working on our Sub Sahib case, as you know, we have our patent litigation case. And fortunately, we have just during the last a little more than 6 months. We have 4 new patents issued and 2 of those patents were actually issued during this quarter. So when we started the year or the patent litigation with Sun. We had 5 patents listed in the orange book for sub salt. Now we have 9 patents listed in the orange book for sub salt. Moving into OIX124 and that is in Page start on Page number 6. When I woke up this morning, I saw the news about the number of people dying from overdose in the U. S. We have known that it has grown, and we have reported about that for the last few months that during the COVID-nineteen crisis, the number of people dying from overdose in the U. S. Has continued to increase. The numbers that I saw this morning or actually late yesterday evening whilst the number for 2020 is 93,000 people dying from overdose. The vast majority of these overdoses are from patients who are using Fentanyl. That's a synthetic opioid fentanyl that is produced by illegal laboratories, often in Mexico. And what we know with Fentanyl is that it requires a more powerful rescue medication. And that's exactly what we're developing with ORX124. So we are really looking forward to get the pivotal trial over and done, get our commercial stability data, which is right now the time limiting factor, to get that in ready, that's a 12 month stability study that we actually started now in June. And that would enable us to file with the FDA in the second half of next year. So looking at Where we are, Page number 7, we have a commercial supply chain established. We have all preparations for the pivotal trial starting. And as I said, we're just days away from starting this study. We have initiated our 12 month stability study, which is required by the FDA. Just looking ahead, what can we expect. We are now starting the pivotal trial. And it's a relatively small trial, but you need to have a what's called a washout period between taking in different groups of patients. So we expect to have the results in early Q4, but that's really not the time limiting for this project. It is stability started that is going to take time. With that, we will expect to file our product application in the second half of next year with a launch in 2023. One of the interesting part with OX124 is that when we started the project, we started on adventure to solve a specific problem. We needed to solve the overdose with Fentanyl. Doing that, we have invented a new technology, and new type of nasal sprays. And we're now taking that technology and applying it on other APIs. And we have one project even aware of, it's weeks 1 to 4, it's also 1 to 5, it's also an overdose rescue medication with Nalmefene. But we actually see several other APIs where it could be interesting to apply our new technology. And we are right now doing what we call a bit through test of these new APIs. And hopefully, that will lead to a new project that we could start and soon when we are done with the in house development of OX124. Moving into our digital therapies. So I will jump into Page number 9. If you look at the space of digital health, I have noted that during the quarter, for example, one the companies who has been a first mover in the space and also one where we have some directly competing product, days. Para Therapeutics were acquired or merged with a stock, so one of these new vehicles on the stock exchange. And with that, Pear Therapeutics were valued at $1,600,000,000 I think that is quite interesting because if you look at the sales of Para Therapeutics, in particular, that is which is coming from their prescription digital therapies and not from license fees, license fees from larger pharma companies who have licensed in that technology. They are also in the infancy of the launch of their products, Reset and Reset Home, and I think they have a third one also in the market. But the valuation they have is 1.6 $1,000,000,000 And that is interesting because it just showed that it's not only Oraxol who has quite high expectations into digital health, it's also very much something we share with a lot of investors in the U. S. Looking at what we have accomplished during the quarter. As I talked about in the last quarterly cold. A lot of our focus is to drive sales through partnerships. We have always thought that the direct sales to consumers through our web pages us.morvida.comandus.tepraxis.com is going to be a quite small fraction of the total sales that we would generate. So to get some of these concrete agreements in place with health care providers has been a core of the strategy when we started. And we're now happy to see that we have some first movers, in particular Trinity Health North Dakota, which is what's called an integrated health distribution networks. That means it's a network of health care providers that have several different units in contrast to the New York Clinic or the mental health hospital in St. Louis, which is one site. Trinity Health North Dakota have several sites. And the Trinity Health North Dakota has been something that we have been able to use as a reference in discussions with other partners. And just looking at some of the discussions we have ongoing and then here I'm quite transparent because I know there's a apparent because I know there's a desire from our shareholders to get more information about what is going on. So I will flag that it's that we have advanced discussions it's not necessarily meaning that all of these will lead into a contract, but now sharing some of the stuff that we are doing. So we do have quite advanced discussions with 2 larger health care providers in the U. S. With multistate operations. So these are also integrated health distribution networks, but on a much larger scale than Trinity Health in North Dakota. We have as you know, we are running a pilot study with a large tech company in the U. S. Who have their first employees now using both Velveeta and the Praxis. We have similar discussions with a large actually larger than the tech company in terms of employees, industrial company. And they wanted to integrate to work with the insurance company also. So now we actually have a pilot project that we're discussing with 2 parts, which are both very important. 1 is the industrial company with quite a lot of employees and then it's their insurance company. And of course, getting an agreement with them would not open up for other employee, have another benchmark for employee contracts or employers, but it's also important to get the insurance company involved because then we could go to other companies working with the same insurance company and to a similar agreement. Then we're working with 1 of the leading telemedicines companies in the U. S. With a mental health. And there, we have been in quite continuous discussions for quite a while to develop a concept together where we are basically making access to VIBDA, the practice and potential also Modilla over time to telemedicine across the U. S, a quite exciting opportunity, and I hope that will lead into an agreement relatively soon. And of course, we have a continuous discussions with several individual clinics and hospitals, but just looking at all of these 3 larger integrated health delivery networks, that's multistate operations, several hospitals, several units, it's larger employers and it's larger telemedicines. And this is just and some examples of the stuff that we're doing. So moving to Page number 10. So why does it take so much time? So people who have been following us know that Trinity Health in North Dakota is someone we have talked to since I think it was 1st in September last year and where we ran a Hyland where we basically made the Prexis and Vovita available for their employees free of charge as a response to the COVID-nineteen crisis. Based on that feedback from the employees, Trinity Health opened up for discussion with us during Q4 for a model for how they could and offer these tools even to the patients within the Trinity Health North Dakota network. When we have found a model, the next step is basically how can this be integrated into Trinity Health in North Dakota. And remember, This is Mike. You can see North Dakota is small, but it's they have within their network, they're treating 2,300,000 citizens. That's our patients. That is actually the size of Stockholm. So we're talking about a system that is at the size of Stockholm in Sweden. And what they need to do is to First develop these treatment plans, see how are we going to treat patients. So we have a standardized solution with Boveda and Duprexis. They wanted to make sure that these solutions are also angered and accepted by the main payers that they're using so they don't have an issue with the payers when they come and ask for payment. They wanted to get the clinical staff involved to get their assessment of the tools to see if these are interesting. They needed to set up the internal billing processes because digital therapies is not an existing tool in most health care providers in the U. S. So they need to find a way. So how are we going to manage this in our internal system? And again, remember a healthcare system, which is reaching as broad as 2,300,000 patients. All of this work then let when they got confirmed, they can get reimbursement. They got positive response from the clinical staff. They and found a way to set up their internal processes, we have then been negotiating agreement with Trinity Health and that was signed very late in the Q2. We're now moving into the implementation phase. And what that requires from Oraxol is that now we have an open door. We know that we have a a health provider in the U. S. Who can get reimbursement for treatments where VIBITA and Duprexxis is a part of. We now need to make sure that the clinical staff is actually offering these services to their patients. And that's something we will work with right now. That is considered we're pushing it through the system into the clinical staff, but we will also together with Trinity Health, we will create a pull factor. So we'll work with marketing directly to patients in North Dakota. We work with public relations that's kind of working with the media to get attention about this unique treatment system. So While I can feel it's been taking a while and I think our products are so well documented with the effects, it should be an easy decision to implement it. I also have some understanding of why does it actually take time to implement because there's a lot of stuff that needs to be in place for the health care providers. The good thing for us is that everything we have done with Trinity Health in North Dakota is something that would shorten this time line dramatically for the next partners that we're going to work with. So another partnership we have announced, And I'm now moving to Page number 11 is SoberGrid. So who is SoberGrid? SoberGrid is the number one online community for people struggling with substance use disorder. It's a global network. They have about 300,000 users. They are Basically, the idea behind SuperGrid is to get people with substance use disorder an and access to information, they have a big network of what they call peer coaches. So they're making basically you can join the network and then you are allocated a peer coach who will help you in your recovery from your substance misuse. The partnership that we have we are seeing right now is 3 phased projects. The first one is that we will make our products now during Q3 available through Sobergrid's peer coaches. So these are people that are, as I tell, if any one of you are becoming a member of Sobergrid, you would be offered a peer coach who will then help you in your recovery. They will now have an opportunity to basically promote Vovita and the practice and to the users of SuperGrid. The next phase is that we will make it available for all of the networks. So a lot of 300,000 People who are listed with SuperGrid are not at all the time active with a peer coach. So we need to find a way to reach out of these 300,000 registered users and then promote directly with them. The benefit, of course, working with SoberGrid is that we are reaching people who have a documented history of substance use disorder, who have a who have searched for help before actively online, so they are open for online solutions. So our ability to promote our solutions to these users of SuperGrid, I think, is invaluable compared to other tools that we've been using. And then in the 3rd phase, we are going to make a package solution where we integrate and Protis and Morbida into solutions that SuperGrid with their coaching services then can go and offer to other companies, cold systems or similar in the U. S. So a quite exciting partnership. And While it's been taking some time in the discussions with SuperGrid, it's also due to their assessment of the quality of the tools that we're offering and to get a partnership with someone who is a neutral observer into the market is very, very valuable for us as a reference point. Then finally, moving to Page number 12. A big step for us is, of course, and the product where I would say that we started our entire digital therapies venture with Mordea, so what we call OHT-one before we branded it. And Mordea is now going to be launched during the second half. Late in Q3, it's a treatment for opioid use disorder. We will launch it initially under the emergency use authorization that we can get from FDA during COVID-nineteen. We will then based on the clinical trial that we just have started with 400 patients, we will aim to get what's called a and 510 classification for the product and that will long term, we believe that would be beneficial for Modia because Modia is going to be and integrated solution together with a pharmaceutical treatment. And that way, we think this higher classification for MODIA is something that we should strive for. Of course, our real world evidence study from Magellan will also be supportive in this pursuit. So with MODIA, we are it's planning a launch late in Q3, and we will have already started the enrollment of patients into this clinical trial. Moving into Sub Solve. And for Sub Solve, we have as I said before, we have had a stable Q1 despite that we still see some of the COVID-nineteen challenges with difficulties to access to customers. We've also seen that the market for, in particular, commercial is going down, which I think it's very tightly associated with unemployment and economy in the U. S. But on the positive side, we have now seen Kentucky opening up in the fee for service Medicaid. So a little summary of the sub salt market development. So we have seen a year to date market volume growth that is lower than what we've seen in recent year with 8% growth. Most of this is coming from the public segment where we have seen a little more than up to 10% growth. But if you're looking at our core segment, the commercial segment, that's people who have a private health insurance. That commercial segment has only grown 3% year over year. In and here we think the COVID-nineteen and unemployment in U. S. Had a massive impact. But just looking ahead, We have a and this is where we come to some of the optimism. So there are new federal policies in place, which are aiming at expanding access to treatment. The death toll from overdose that we saw coming last night is definitely something that is going to drive even more attention to the issue. We're seeing a lot of States are taking their own initiatives to drive treatment and improve access to treatment. We're expecting to see a lot of the ongoing opioid trials. That's basically the states suing companies who have been selling prescription pharmaceuticals with opioids and other stakeholders and for the damages it has done to the state economy with a lot of people getting addicted. And there are already now there are a lot of settlements which will basically create and massive inflow of money into the system, which should be dedicated to improve treatment of those suffering from opioid dependence. So we have a market that growth that has gone down a little, but I'm quite optimistic that with all of the initiatives we're seeing with the improving economy in the U. S, declining unemployment that we will see a rebound of the demand in the U. S. I had expected to see some of that already in Q2, but now we have seen a positive development in the second half of Q2 and that makes me optimistic for the second half of this year. When it comes to SUBSOV and our own promotion, we have had a challenge like everyone else to reach out to the health care providers While we have seen now nearly back to normal access to the clinics in the U. S, a lot of the physicians are less accessible, partly because they are working more with telemedicine. So they're actually not in the clinic, partly because of either their own restrictions or imposed restrictions and access to health care facilities and health care providers, but we have basically seen more or less on a week by week basis we're improving access. But we are not back to where we were before COVID. And here again, local outbreaks of COVID-nineteen can, of course, change this picture relatively rapidly. For Oraxis part, I'll just say one important part for us has been that our field force are all vaccinated. When you work with a pharmaceutical, I think that should come as natural. And actually now I believe that all of our field force is fully vaccinated. Coming last to Sutsal, I talked before Kentucky. Kentucky is a big state from a buprenorphine naloxone market perspective. So with the open access we now have in Medicaid and Kentucky, we have our public open access jumping from 34% to the highest number we've ever had. And that's 42 percent of the patients in the U. S. Getting a buprenorphine naloxone products prescribed today have access to SUBSOV being covered by the insurance. We are still the only branded product which are covered by the top 3 U. S. PBMs. And positively, all of our market access for the second half, including the 3 PJMs, have been confirmed for the second half of twenty twenty one. When it comes to 2022, so far we have not seen any negative development and we have seen quite a lot of our larger contracts being confirmed in terms of market access for 'twenty two. But again, here market access and formularies are normally published for some of the larger players in August and September. So it will take a little while before we're certain that we will maintain the market access. But so far, it's a good reason for optimism that we'll keep our market access from 2021 into 2022. Moving to Page 15, and this is an illustration of the market growth. And as you can see, Actually, one of the reasons why we're seeing less market growth in both in total but also in the two segments we have here is because of the dip we saw in the Q1 of this year. So where we had a we normally see a dip in the Q1, but this it was more accentuated in the Q1 of 2022. And but If you look at the traction on from that dip, we're actually back to the same curves that we had before. So right now, the low less than double digit growth as explained partly with the dip that we saw in Q1. And we're starting to see the market actually recover. And I think this is associated with the recovering economy in the U. S. Moving to Page 16, a little more breakdown on soft salt. And as you can see, it's relatively unchanged. We see in the open segment a 0% if you look across the quarter, a change in and demand. We saw the Humana and UnitedHealth Group is down by 2% and the non reimbursed is down by 1%. If we go into the open segment and just look at the part which is commercial, that's private health insurance, we actually grew that one with 1% and the total open grew with 0.4%, but we didn't include the decimals here. So all in all, I think we have a situation where our OX124 is moving forward, working with good progress in our development just a few days away from the pivotal trial. Digital therapies, we have really taken a big step forward with the agreement with Trinity Health North Dakota, which has opened up for new and bigger discussions with much, much bigger players than Trinity Health in North Dakota. And for Subsoft, We're actually seeing that we're growing in our core segment, but we're still paying the price of the success we had before with Humana and UnitedHealth Group. And now when we're not exclusive, That is something that basically are continuing to fading, but the fate is declining for every quarter. And hopefully, soon, we'll see a stable situation in Humana and UnitedHealthcare. With that, I will open up for Joe DeFeo to take us through the financial information. Joe, please. Good afternoon. I'll go to Slide 18. This is our quarterly sales. You can see that Q2 sales are down year over year due to sub salt. But as you'll see in 2 slides, We start to see good stabilization in job sales. You can also see on this slide that Our App Store royalties continue to hold up well, actually doing better than last year. So, there is some increase there. So overall lower U. S. Revenues, but you'll see that these are stabilizing. Next slide, Slide 19, this is year over year. This is this actually I'm sorry, this is this shows you right now the stabilization of our sales. The main things you want to look at overall are the first three columns, which is the demands. You can see that our demand in the open segment has actually increased over Q1. And the biggest decline is in United Healthcare and Humana, the former exclusives, but you can see it's only 2% now. So We are definitely seeing that slowing down significantly and we're confident that these sales are starting to really stabilize. The wholesaler inventory, as you know, in Q1, we always see at year end, there's a high inventory level. And then in Q1, we see a drop off in that. We did not see that in Q2. Q2, the inventories have stabilized. We also did have one extra shipping day in Q2 versus Q1 that's in that column as well. The other thing is we had a small difference in Returns, we continue to see, we're managing our product very efficiently. Our returns rate is only like 0.2%. So we're definitely we continue to see some good positive returns there. It's slightly less than Q1. The other thing is positive payer mix. Our price is favorable versus our mix Is favorable versus Q1. We do have a fairly consistent currency You're for quarter 1 and quarter 2. So there's really no positive there's no currency effect right there. So overall Down less than 1%. So good stabilization of subsolv in Q2 over Q1. Slide 20, This is our U. S. Pharma LTM last 12 months. We continue to optimize our profits With U. S. Pharma, our operating margin you could see here is almost 55% and it's been up there for the last two quarters now. And you could see that our profits overall have really been fairly stable, profit levels for the last four quarters for LTM. Going to Slide 21, here are P and L. We talked about the revenues being down. Our COGS Slightly favorable. We are more efficient with our sub salt production. In our operating expenses, the operating expenses overall are slightly up versus last year. That's due to a couple of things. They're down in selling expense. We continue to optimize our commercial expenses for Zubsoft, where we see the opportunity for growth or to maintain our sales levels, We continue to keep our commercial efforts where we see that the efforts aren't working then we optimize and save some money there. That is offset by the obviously the increase in spending in our digital projects to promote those brands for Vida and Duprexis. Our administrative expenses are higher than last year and this is mostly due To our IP litigation and also the subpoena case in the U. S. Our R and D expenses are up as To be expected, this is predominantly due to OX 124, which we're seeing good progress there. Our other operating income and then also our net Financial items, due to the exchange rate there is some negative there. So overall our EBIT was 54,000,000, our EBITDA is minus 41.1 To go on to the next slide, Slide 22, you could still see that we continue to maintain a strong cash position That enables us to continue invest in our DTX and our OX124 and also some new development programs. Our liquid funds are almost SEK 700,000,000 and our net cash position is almost SEK 200,000,000 So it's still a very, very strong cash position, which we continue to maintain and monitor all the time to make sure we're able to continue to have that good strong cash position. With that, I'll move on to the next slide, which Nikolai can handle. Thank you, Joe. And just to make it clear, I noticed there was a minus missing in the EBIT. So it's a minus of €54,000,000 for the Q2. But I would also say that a lot of it is fully as we expect because we're investing right now quite heavily behind our digital therapies and behind our R and D expenses. And then, of course, we have unfortunately these legal cases, which are costing a little at the moment. If you break it down by business unit, you will actually see that the U. S. Pharma is able to fully finance our digital therapies from where we are right now. Then we have an investment in our R and D activities, which is then taking us to the negative, but all of that is deliberate. And we could, of course, just decide not to continue the development of OX1 for or significantly slowed down our launch activities for DTXA. And that would take Oraxol back to a profitable position, but at the moment, we find these investments more valuable. The other point I would make to the financial presentation is that it's Last year, I believe the average dollar exchange rate for Q2 was 9.6%, now it's 8.4%. So the If you look at the sales number, the decline in sales, nearly half of it is explained by currency effect. And now I just noticed that the dollar has that exchange rate has changed a little again. So should it be today, the dollar exchange rate would have been 8 point and sticks, I believe, so which will then have a positive effect compared to the previous quarter. So on Page 23, we have our in 2 cases. And I'm it's a little with very mixed feelings, but it's actually yesterday, we had our 1 year anniversary of the subpoena. And I must say that is extremely frustrating because we have been forced to leave over a lot of information to the authorities in the U. S. We have invested quite a lot of money to have not only 1, but 2 external legal firms to go through the information that has been handed over to the government to see if there are any reasons for concerns. And we have still not found that reason for concern, but of course, to have external U. S. Lawyers to go through everything to ensure we're prepared it has been quite expensive and taking a lot of efforts from our U. S. Leadership team, which could have been more effectively used otherwise other places. And still, we haven't heard anything more about what is the background, what are the are there any suspicions? Is this just an open, you can call, a fishing expedition? We just don't know and that's very difficult for us. We're doing with our lawyers trying to find ways to get more visibility into this so we can actually start to handle it if there are any concerns, but we have not been able to find the reasons for the subpoena and any concerns using 2 different external law firms. We then have our patent infringement litigation against Sun Pharmaceutical. That one is following a quite fixed schedule. The positive part during the quarter is So we have 2 new patents issued for subsol, bringing us up to 9 patents in the orange book. During the quarter, we have So the 2 patents we got in December, we have now started a case against some pharmaceuticals that we inspect will sooner or later be rolled into the overall patent infringement case, but now we have 2 more patents that we we are still expecting, but have not seen any response from Sun on these 2 new patterns. Moving to Page number 25, our outlook. We have decided not to change the outlook as it is right now. We still believe that there are good reasons why the buprenorphine and Alexan market with rebound. We did see most of the decline right now is explained by Q1. So we start kind of on a lower level, but we are on a same pace as we were before Q1. And we do think that a lot of the initiatives in the U. S. Right now and should help to move this market growth up over double digit. And we are also hoping and expecting to see the commercial market is also rebounding stronger. So it's not only the public market that will drive this growth. We have said before that we were expecting a normal seasonal decline in Q1 and then a stabilization, and that's what we're seeing now stabilization of subsolvent. And then when we see that the impact of COVID-nineteen both on the economy, meaning unemployment, meaning more patients to the commercial segment has evaporated and we are able to go back with our field force that we can start to see some growth with subsol. Our OpEx, we have said, will increase. And as you've seen, we have done that. Our U. S. Pharma EBIT is expected to be around 50% and we expect that and that's no reason for us to change that. And then just looking at a little ahead of some of the triggers that we could have for the quarter, We did say that we will have agreements with insurance companies for DTX products. We last quarter talked about the Magellan agreement. This quarter, I'll just highlight the Trinity North Dakota. They have actually gone out to their insurance companies that they are the top 5 insurance companies that patients going to Trinity Health has. They have gone to those and asked to, will you reimburse these new treatment plans, which are including morbidity and the practice and they got a yes, which is very positive because we can now go to other health care providers having the same insurance companies, which for the most part are not local to Trinity or to North Dakota. I'd say we know that you can get reimbursed for these solutions. We have agreement with employers. So we have this large tech U. S. Tech company, and we now have advanced discussions with another industrial company. And we have an agreement with a A start up company who is offering services telemedicine services to health care providers, they are in a start up phase. But again, if they get more traction, then our services will be part of their offering. And then agreement with health care providers, we have talked a lot about that and we have some good advanced discussions moving. Looking a little ahead, we still believe that subsalt will continue to stabilize. And if we see that the commercial segment starting to grow, we also expect to have a positive effect for Subsalt and see better numbers from Subsalt in the second half. Q4, we will have results from a pivotal trial for MOREXOND24 and we are expecting to see the launch of Cibsorb in Europe by Accorad Healthcare late this year. We are Still on track, we had some issues with our packaging site in Romania due to COVID-nineteen. But I think they are about to be stopped, which should put Accor Health Care on track to launch a substantive this year. And then finally, we have our continued commercial progress at DTX. We are expecting to see some of the advanced discussions that we have right now will convert into real agreements and also that we have the launch of Modilla, which is now scheduled to the second half of September. And then we will start hopefully see start to see some impact on that from Q4. With that, I will open up for questions and thank you for your attention. Thank you. And our first question comes from Samir Devani from ROTH Securities. Please go ahead. Your line is now open. Hi, everyone. Thanks for taking my questions. I've got 3. So I'll just go I'll wrap up through them. The first one is just on Abstral. Can you just remind me why we see quite a lumpy quarter on quarter variation with Abstral? And perhaps maybe if you could comment on the underlying usage of the drug and whether it's still seeing growth in the market? Second question just on MODEA. It's good that you're doing the comparison to standard treatment. I was just wondering, looking at the trial design, why you decided to use change in opioid use and not abstinence? And is that The key time point there, 24 weeks. And then the final question, you mentioned the importance of having a 510 for Mordea. I'm just wondering, what are your plans for DaVita and Dupraxis for a 510? Thanks very much. Okay. Thank you, Samir. So I will answer this. On Apsdrall, one of the reasons for the lumpy variations. It's that Abstral today, all of the sales is coming from distributors in which are not in Europe or in the U. S. Because there the product has lost its exclusivity and our contracts have been terminated. So what we are seeing is that some of the and distributors are late in reporting. So and some of them even have a different time schedule for the reporting of sales, which basically mean that we're in some quarters, we get historic adjustments when the right numbers are coming in. Also for some of them, they are doing estimates for the quarter just like we are forced to sometimes. For example, this quarter, we need to do a little estimate on the in the latter part of the quarter because we have a short time window before we are reporting. And the same but for some of these, when they report their royalties to us, which we're putting into our report, then we can come into the next this quarter when they have actually done an audited review of the sales, they'd need to do a little adjustment on that. Then when it comes to MUDIA, why do we compare why don't we use abstinence as a trigger? One reason is because the MHDEA trial is basically a combination with buprenorphine naloxone treatment. So your patients are, by definition, on an opioid while they're treating. And what we're looking at is illicit drug use. So we want to and you can say the abstinence in this case is abstinence from using other drugs than buprenorphine and naloxone. So we are the primary endpoint this reduction in illicit drug use compared to the standard treatment, which would for these patients be a non counseling buprenorphine naloxone prescription only without any counseling associated with that. And the final one is why don't we see a 510 for boovida and the practice. Part of that is for boovida is that we see that boovida is much more Alcohol use disorder treatment in the U. S. Is much more of a, you can say, a wellness product. It's treated outside established channels. So for example, Sopogrid are using peer coaches in the treatment. We see a lot of AA groups and similar in the U. S. It's rarely treated in the doctor's office. And if you have a 510, you actually need to get involved with a health care professional. So you need to ensure that the patients are seeing a health care professional in the process. And Here we see that alcohol misuse is not in that category. For the practice, it's more of a borderline, but The practice actually has a 513 gs and that is the marketing authorization holder is Gaia. So the practices have been set up in a way that is a 513 gs. And we haven't really seen any negative impact from that right now. With the 513 gs, we have a little more, you can say freedom in the way that we could promote it, but at the same time, we have a limitation in what kind of claims we can promote the product on. So that one can be debated, but it was approved or call it the classification by the FDA under 513 gs and it is Gaia, who are the marketing authorization holders. So right now, there are no plans to have an uplift for these products. Great. Thanks very much. Thank you. Thank you. Our next question comes from Gudana Anck From Redeye. Please go ahead. Your line is now open. Hello, everyone, and thank you for the interesting presentation. I have a question about the launching of Modias. And more specifically, what impact do you expect on the Zuub salt sales, if any, when Modir is launched? That's a good question, Jigana. So we It's interesting dynamic. When we're talking to players about our digital therapies, I can't say that while We have focused on Morbida and Epraxis. The second Modia comes up, the discussions tend to focus on Modia. I think that's partly because of the significant lack of counseling services for opioid use disorder and the escalating expenses associated with that. And interestingly, a lot of them are also coming back and say, we would like to see are there any solutions we can have with a combination with Subsalt. So we are working with different ways where we can combine Subsalt and MODEA directly to the patients even though we do see a quite large market for MODEA, which not subsult only, but we think the combination will enable us to provide new services to both payers, prescribers and patients. So I would expect a positive effect from Mordea. And in particular, I think we would have an opportunity to make more larger agreements with, for example, larger health care systems like the one we have for what we've done to practice facility health in North Dakota. We could have something similar where we combine soup salt with woodia for health care providers. So I can't give you and exact number, of course, but my guidance would be that we would have a positive impact from Odeon subsalt. And if we're successful of finding ways where we can and what we can see the 2 complementing each other. I think it's the right word because we won't have a combination product, but to have a complement of the 2. And that could be a good boost to Subside also. Thank you. And the second question is about the ORIX 124. How do you expect to profile it in terms of unique selling proposition compared to the other sprays available on the market? There is also a spray recently launched with stronger doses of Yes. No, I think the one from the one that is what is called Kluxone Kluxone, I think, Hikma. I don't think it's launched yet, but it's definitely being launched before we come out with OX124. Our expectations is to go out and show a product with a significant, very fast uptick with the in the PK profile and with that to be able to promote a stronger effect than the market leader today, NACAM. How it looks compared to Hikma's products, we don't know because we haven't compared the 2. But we think there's it's such a big market outside. So we should be able to promote this with There are space based on the PK profile we get to promote this to segments where there are concerns about fentanyl usage. And I think the main argument we'll have will be associated with the PK profile and how we can compare that to, in particular, the market leader. And then I think our network that we already have which subsolved into a lot of people who, by definition, are seeing people with opioid misuse issues will help us in the launch also compared to other players. Thank you. And then I have a Question about you mentioned you're testing the spray also with other areas with other active substances. Are they in the same area of mental health and addiction? Or do you consider expanding to other Both, I would say. So we the way that The way that Oraxol has been operating in our R and D for the last 8 years, at least when I've been the CEO, has been to try to solve specific issues we have identified in the market and not go gone with the technology. But of course, when the technology exists and we have a broad patent protection around the technology, we go the other way around. And right now, we are looking at the C spaces while we have a need for something where you have a fast uptick, something that where we can and have a pricing that is motivate a combination product with a device and areas where the API and fit into the formulation work we have done on AWIX124. And based on that, we're basically looking very opportunistic on what other APIs could work. And here we have both APIs within the mental health space, but we also have APIs which are completely outside the mental health space. I do think that some of the APIs we're looking for would not be Oraxol to take all the way to the market and we would probably seek a partner when we have the first clinical data from early trials. Okay. Thank you, Nicolas. Thank you. That was all. Thank you. And our next question comes from Josefina Persson from Nordea. Please go ahead. Your line is now open. Thank you for taking my question. So FDA announced a budget request By the end of May to address complex challenges facing the country such as the opioid crisis. And they were in particular mentioning digital therapies to resolve this. And they Have a funding of US2 1,000,000 Dollars to advance the development and evaluation. So my question is, What is your view of this? And will it help out with the reimbursement challenges and so on? I think for FDA, it's a little disconnected from the reimbursement. But I think they have identified an area which is It's basically you have a if it hadn't been for COVID, you have a catastrophe on their feet at the moment with the opioid misuse and juice epidemic. It's I think it's something that just needs to get attention from everyone in the U. S. All the way from the federal level FDA to the insurance companies. And I think the view is right now from FDA, which is positive, is to see that Peetodot therapies actually has a space to play. And I think when they open up for that, you suddenly have an opening for other units within the government to see, okay, How can we find ways to help the reimbursement process? And that's not saying to get reimbursement, but actually to find systems. How should we coat, these digital therapies, how should we use them and kind of set up infrastructure to ensure that they are easy to manage, both from patients, payers, prescribers and of course from the companies. So that recognition that digital therapies has a plate space in the treatment paradigm for opioid use disorder. I think it is very, very important and will help us maybe not directly in the dialogue with insurance companies, but to put up all of these systems that simply is lacking. And that is something that I were A little too optimistic last year that due to the COVID-nineteen crisis and the need for these products that there would be a more willingness to cut corners and find solutions which would bring interim. But a lot of the health care providers and insurance companies we're talking to, They are basically lacking this consistent system across all digital therapies where they can easily categorize them, easily find a way to recognize them in the system and to put reimbursement codes on that. And that I think is better solved on a federal level than by the insurance companies and health care providers individually. So I'm very happy to see that there's that focus from FDA. And I think it also helps us At least dialogue we have is to see that the emergency use authorization we are launching Mordea on is not likely to be removed in the short term. Okay. Thank you very much for your answer. Thank you. And as there appears to be no The questions, I would turn the conference to the speakers for any closing remarks. Thank you. And I'll just say we have online received 2 questions. We have one question is what is the decline in subsag earnings and local currency adjusted for shipping days. And here, I think Joe was mentioning that we do have in Q1, we had 2 less shipping days compared in Q4. This quarter, we have 1 more shipping days compared to Q1. And that one is partly reflected in this and wholesaler inventory where you saw it jumped up in our graph. And looking at that, you can have a decent view on the impact of the shipping days. On subsolv, the other question I received was subsolv in Europe. And that one, I think, I addressed when I talked about the progress we're doing with Accor in launching Southern Europe late this year. And also there was a question about MUDIA. And I interpret the question we received that it's not there also for Europe. And here, we have started a process to review the regulatory opportunities, frameworks across Europe, reimbursement opportunities for Modilla to make a decision later this year, which country should we start on and how should we proceed with Europe? Should we do it independently and just being Oraxol? Or should we and find partners in different countries. Today, Mudia is only programmed in English and it's done for Americans. So if we're going to Europe, we would need to invest somewhat in changing the language in Mudea. But we are looking at that and we have global rights to Mudea. So Of course, this is something that we are very interested in is to find new ways of broadening the impact of Molya. And with that, I would thank all of you for taking your time to listen to us during this very hot summer day in Sweden at least. And I wish all of you a good summer and hopefully one year on vacation. If you're going to that, I hope you have your eyes open because I think there will be some good news coming from Oraxol as we proceed. So thank you a lot for your attention and have a great summer. Bye.