Earnings Call: Q4 2020

Jan 28, 2021

Thank you very much and good afternoon to those of you in Sweden. Good morning to those of you who are in the U. S. So this is our full year report and Q4 report for 2020, a year which I think in many ways We have made a lot of transformative actions and made a lot of progress in Oraxol. But it's clearly also a year where The COVID-nineteen have had a little harder grip on the society than we had expected when we started in March and also had Some impact on our business, both in terms of our SUBSOL business, but also digital therapies. The So an unfortunate effect of COVID-nineteen is that the disease areas that we are working in, opioid dependence and mental health This is something that will be very negatively impacted and we're already now seeing a dramatic increase in the problems associated with, For example, opioid dependence, alcohol dependence on depression. On the so from an Oraxol perspective, that is, course, a major market opportunity, why we see that a lot of patients suffers. Where we have seen this as a great opportunity for Commercially for the end of the year, we also see now that the health care providers, payers and others in the U. S. Are very busy with COVID-nineteen. And a lot of the processes we had hoped Went a little faster. It's taking time, but that doesn't mean that we're not making progress. And I think there's a lot of stuff cooking at the moment. So and we're really looking forward to 2021. Moving into the report and I will jump straight into the Page number 4, which just kind of the highlights of the year. For U. S. Pharma, the highlight of Q4. So for U. S. Pharma, the highlight of Q4 is really that we have been able to Increased the U. S. Dollar sales. We expected that to happen and it has happened also in U. S. Dollars and we're seeing the Swedish corner Strengthen, which is making the net revenues a little lower in SEK, but increased in dollar. However, what I really want to point out is how we are now really starting to optimizing and making the U. S. Business efficient, and where we see synergies with the digital therapies also. So our U. S. Pharma business had a tremendous strong quarter in terms of EBIT profitability And also the EBIT contribution from Q4 despite a significantly lower top line is nearly identical as last year. In Digital Therapeutics, one of the expectations for the second half of last year was to have some broad insurance coverage for the products. That has taken more time than what we had anticipated. We haven't really seen the insurance companies take the same show the same agility as the FDA, We're FDA very early on in the pandemic, so we need to promote new tools to get people with mental health issues access to health care and digital therapies is a good way. They gave us this enforcement policy, which enabled us to launch early. However, the payers have not moved with the same agility. That positive part is we're still in dialogue with a lot of the payers, but it is moving quite slow. I will come more into that as when we'll be coming in later. When we get to HQ and pipeline, and that's basically our R and D activities and also license agreements outside the U. S. So we have Wix 124, which will be our new, I expect, Strong profit and revenue generator in the pharma part. It's on track to be filed in Q1 2022. We are working intensively Setting up the commercial supply chain, which is the key area of focus at the moment. So we're ready to run The clinical trial pivotal clinical trial next quarter. And then with Fast Track approved, we would be ready to file it in Q1 on for 2022. Then I also just want to highlight that during the last quarter, we did get an agreement with Sub Saharan Europe, and we're now working intensively with our call to prepare for the launch in the second half of this year. Our strategic agenda It's basically since they've become a little more concrete now than we presented before, we are still actively looking to for business development opportunities both for pharma and digital therapeutics. However, at the moment, given the COVID situation, We're a little more hesitant to move forward with some of these opportunities because we want also to see that our own digital therapies, for example, are getting tractions before we're investing too much in new opportunities. The good thing in this area is that we're in the stoma. We are a relatively small player In the digital therapeutics space, we are quite large players. And with our established platform in the U. S, we do see quite a lot of interest from smaller companies to partner with us. But we do want to see that our own products at the moment can get a trajectory before we're moving forward with that. But when that is happening, I think we have a good pipeline of opportunities. So but as I'm saying, establishing our DTX business is really one of the main focuses at the moment. We have 3 products in the market, and 2 of them are already revenue generating, although on a pretty low level. But we're seeing a good movement early in January. Multije is technically ready. We are expecting to sign up some agreements with specific customers now during Q1 where we can move it into real world testing. On SUBSOLF, profit contribution is really important for us to maintain this as the enabler for both digital therapies and also for the pipeline. And yes, I think this last quarter was a pretty good indication that we are on the right way. Finally, we have Oui Son Support, which is a big focus for us of launching in 2022. So OX-one hundred and twenty four, for those of you who are new to the company, it's an overdose rescue medication. The potential that we see is about $70,000,000 to $110,000,000 This is about a third of the market at the moment. We're pretty well positioned to be the First one out with a new and stronger rescue medication with naloxone. Some of the companies who were ahead of us have faced some unexpected problems. I believe when FDA increased the demands and requirements for these products. And we are still on track to file on our timeline. So I believe we have an Opportunity to be the first three competitors in market in this market with a nasal overdose rescue medication. If look at what has happened in the market, unfortunately, as I said, the issue with opioid overdose is escalating. We've seen 83,000 Americans dying from overdose. Those who have been with us for a while will recall that the highest number we had before was 2 years ago in 2019 or 2018, I believe, were just was about 80,000, but now it has increased from last year to 21%. And the synthetic opioids are now representing 76% of opioid related deaths. The synthetic opioids, this is really The focus of 4 H1 support because they require a stronger and more powerful rescue medication to reverse the overdose. We have seen in the market, the market leader, NACAN, is doing record sales every quarter and now expect that the 2020 full year would be somewhere around $300,000,000 What is interesting in the market is this market is, of course, big. But what is really driving NAC and sales is where they see states where co prescription, meaning that you have a mandatory requirement to prescribe these overdose rescue medications people who receive high dose opioids for pain. In those states, the sales have jumped up dramatically. And so far, I believe it's only 4 states who are doing that in the U. S, but a lot of other states are looking to do the same. Then I also mentioned the FDA requirements. This has, of There's been a little delay for us and requires some more investments into our supply chain, but they have now increased The quality requirements of these rescue medication devices. And this has led to at least one competitor have had that complete response letter. That means that FDA rejected their approval. And another competitor who said that they were expecting to get approved has suddenly disappeared from the radar screen. So we believe that it is while it's, let's say, creates some new headaches and issues for Brexit to address. Now when we are addressing them and it looks good, it also is a situation where the competition will be lighter than what we could have anticipated. As I said, the important part of OX1 support is to show a bit and stronger and more powerful profile than the established Market leader, NAKAN. And looking at the red line here, this is the PKA curve. So the plasma concentration of the exosuppsant naloxone over time. And you can see it's significantly above NARCAN. Moving into Page number 10. You will see that the Q4 progress, What we've done is that we have now established full commercial supply chain. We are now ready to start commercial manufacturing in smaller batches before we move into the full commercial manufacturing a little later in the spring. We have filed an IND, that means an investigation, new drug application with the FDA. We got that approved, positive feedback that triggered that we could also file a request for Fast Track Designation during Q4, where we're receiving an answer now during Q1. And we have continued to work on our patent section that we just got, I think, yesterday got a new patent granted for OX124. If you look ahead for 2021, Then in Q1, we hope to see that we have a fast track designation. That's possibly a strong sign of the value that FDA would associate with this product And how important it is, it should not be granted a Fast Track designation, which from the FDA perspective should be because there's already products in the category. It would mean a delay with somewhere around 6 months for the product. We are then in Q2, we will start our pivotal bridging study that's again is on healthy volunteers where we basically have to show the same kind of data that you just saw within our first study, on a bigger group of people. So we're expecting that in Q2. But I would say compared to other studies that we normally see in the pivotal bridging study, The requirements here is to be faster and at least as fast and at least as powerful as the existing product in the market. And as you saw, we had a very large margin to the existing product in the market, NAKA. So we are we feel quite comfortable that we should be able to meet those requirements in the that we should be able to meet those requirements in the pivotal bridging study. If that is successful and we get the Fast Track designation. We will then be ready to file with the FDA in very early in 2022. And with that, we'll have a 6 months review time with Fast Track Designation and that takes us into a launch in the end of 2022. So very exciting progress in a very exciting place and unfortunately an area where there is an urgent need for a new and more powerful product. Moving into our Digital Therapies. We are making progress, no doubt in Digital Therapies. So much things ongoing at the moment. However, I would also say that COVID-nineteen, where we saw that as an opportunity to get accelerated access to the market, has turned into be a little more of an obstacle than an opportunity short term. Long term, I unfortunately still believe that mental health is going to be a significant issue after the COVID-nineteen. So there's a big need for the products. But right now, we are seeing that it takes a little more time than We anticipated to get the payers on board to reimburse the product. So what is that we're seeing concrete and what we say promising development? One thing is that we are right now processing requests from payers, patients who go into our system and request the insurance coverage. And we have a positive Feedback from more than 10 payers that they are willing to reimburse the patient for the product. That means that they reimburse it without Rex are having an agreement in place. Some of these payouts are based on our new concept that we're testing. And this is a test and product we are running in Pennsylvania where we are testing going to what's called the medical benefit round, where The patients have basically put Morbida and the practice of digital therapies into an existing treatment plan. And in that treatment plan, we know today there's reimbursement and we're basically using that reimbursement path to get paid for the products. One of the things we did see during Q4 was that the payment of that reimbursement is coming in monthly installments. And that meant that we had to build up a system to manage these monthly installments, which is something that we launched in December, which Slightly delayed the product launch or the launch of that concept. But now we're up and running, and we're testing that pilot in Pennsylvania with a group of patients. So if you're looking at across what are the stuff that we're doing right now to test doing different pilots that are in the process. We have worked around the holidays. We did a campaign with some rebate coupons, New Year's resolution campaign. That have given a decent effect now early in January. We started with installments that was needed for managing this medical benefit plan. We also made that available for patients who are paying out of pocket that came in early December. And we're seeing the majority of the patients who are downloading our Our products are now using installments as their payment method. So If you take a little a step back and say what have we learned from this market? If you say where do we start, One of the things that we thought was that the payers would adapt a fast response to the COVID and basically accept Flexible offers where we together would find a solution for how to get this paid. But we're seeing is a positive reaction with payers. And I would like to show some of the feedbacks we get both in Britain and verbal from some of the payers on the medical side saying this is really something where you have Generally, it's convincing scientific evidence that it works. However, when we get over to the more administrative part to get it reimbursed, That's where we see hurdles and where we think it is moving slower than what we had expected. So our response to this has been this test that we're doing in Pennsylvania, where instead of having to work with individual payers, we're now integrating our digital therapies into an existing reimbursement category for medical benefits, where we and the physician can get paid to existing codes in the system and established reimbursement. So we won't need that individual approval from each of the payers. It is a little more cumbersome way to get paid for the product. It is coming in monthly installments rather than one time off. So of course, we would still like to have the agreements with the payers. But it's definitely Peaceful route to get reimbursement for the products. And with a positive outcome of the test in Pennsylvania, we will be ready to roll it out across the nation in the U. S. In collaborations with larger health care providers. We really there's a big Debate in digital therapy space, whether you should go from medical benefit or from pharmaceutical benefit, we lean towards the medical benefit route even though we would be able to manage the other one. But what we have seen is, for example, the medical benefit, you don't get paid Everything upfront, you get it in, for example, monthly installments. And that was something that we had to build during the autumn and was delaying our broader launch a little more when we realized that we actually exposed the doctor for risk should the doctor pay for the product upfront. We have targeted smaller regional insurers and integrated delivery networks. And delivery networks, that's basically, let's say, health care providers in the U. S. Who also have an insurance responsibility. This is still the aim. This is still where we are focusing. But we do see that there is complexity and we need for each of these customers to have a more focused and specific approach. And for that, we have hired new people to the organization who have an experience working with these kind of customers, and we're now ready to make that run. Then we have we saw that evidence and experience is something that is very important. It still is. But we also have to recognize is that Oraxol is a new player in the field, and we need to build credibility. And some of the stuff that we're doing to build credibility is to work with companies like Trinity Health or health care providers like Trinity Health, like the Texas Nurse Association, where we make our products available to health care workers who can then test Because who would be the more credible persons to test whether the product really works than health care people who work in the health care sector? And that, I think, is a way for us to overcome some of that being a new player with a completely new type of treatment, then working with established companies or associations. We believe this is a good route to show them it works. Then there has been a big question. So how open would consumers be to go into a system on some very stigmatized issue or we can say highly confidential issues like alcohol abuse, opioid abuse. We do see that, that is not a significant hurdle. But one of the things that we have seen is that a lot of consumers are very Phones who listen to other consumers. So this peer to peer information where we get existing patients or existing People with alcohol issues or opioid issues to talk about the products have been very important. So we have startups, I think we call where we engage mentors who already today work as mentors and, for example, are holding big groups or managing big groups of peers. And we're working with them to basically spread the news about our products. I think this is a quite exciting opportunity also, something that we'll launch in December as well. Then coming to some of these Trinity and some of you might saw the Texas Nurse Association came out with A text tweet a message just this week talking about the purchase. So why are we doing this? First of all, I would say, Initially, we are offering the product for free. So we are not getting reimbursed for this. But we do see that This is a group who, first of all, have been under extraordinary pressure during the COVID-nineteen. So we have an opportunity to help people who have been in a very difficult time. It's also a situation where we can by Engaging health care workers. We can get people who carries a lot of credibility in the health care work to test the product. And with that positive feedback, We see that as a route for us to expand into their workers. For example, all of the nurses who works in Texas, if they have a good experience, Then there's a bigger chance that their employer will also reimburse the product when we contact them and can use the Texas Nurse Association as a reference case. Same thing in Trinity Health in North Dakota. We are getting some overwhelmingly positive feedback from Trinity Health And we are now moving the discussion into a commercial discussion, how can we make our products available to their patients within the Trinity Health network. Again, Using Trinity Health, offering it for free, provides us with a reference case. It opens up both for commercial value with Trinity, but also opens up for Trinity Health to be a reference case for others in the U. S. And that's a way for a new player like Oraxol with a new tool like digital purpose to gain credibility and trust. During the quarter, we also launched Mordea. And here are some screenshots from the Mordea side. I would just say this is not complete and some examples from different screens. And you can see how it's the product is working with bonding to create trust, how it's working with following how the patient is bearing, so we can call diagnosing, but also lot of the scope is around education. So we're quite proud now to have the full technical development of Medea ready. And we're now working to get some payers on board to do real world testing in their patient population. And we're quite confident that we will be ready to announce that during the Q1. We have, if you look at 2021, some quite high expectations set for this business area. We believe that the piloting of reimbursement pathways and some other commercialization concepts is something we continue during Q1. When we see the positive outcome of that, we have the financial strength to rapidly accelerate the commercial efforts. So and here is something I just want to highlight. But in the quarter, we were yes, in the quarter, we Expected to go more broad. But when we saw how the COVID-nineteen had a negative impact on the negative impact On the business and our availability to meet customers, we took a step back And we start to work more with pilot projects. And you saw that in our financials where we have spent significantly less than what we expected in the quarter. Also expect now moving forward that we'll have partnership with larger health care providers who can use those positive these reimbursement Pathways that we're piloting at the moment. So if we get positive outcome of that, that will open doors for some large health care providers that we're discussing with at the moment. We expect to have some partnerships announced to payers during Q1, where it's either reimbursement, but it can also be pilot programs test 1 or more of our products in the real world settings. We expect to announce that during Q1. And then with the positive news we have from Experience we have Trinity Health as an employer rather than a health care provider, where we see we have a quite large share of the People we expect within the Trinity Health among the Trinity Health employees who we have a quite large share of those who are expected to have depression and or alcohol issues are now using Duprexis or Borvita. So the traction within Trinity Health when it was made available for the employees was, I would say, very positive. And it's a large share of the employees that we would expect to have these issues and are now using one of these two products. So that shows that if we can find larger employers make it available for the employees. There's an opportunity to get a pretty large share of employees with depression or alcohol issues to use the digital therapies and also, of course, a significant commercial opportunity. Moving into Subsol. So Subsol There's still a challenging environment with COVID-nineteen where we have an issue to meet the positions. It was also something that hit our digital therapies because our sales force had a small window in Q3 when the COVID-nineteen went down during the summer. But then now during Q4, as everyone have noticed, COVID-nineteen has really had a hard hit on society. And that makes it very could pause to get out to these positions. So we have had a tougher market and that have also resulted in somewhat less activities and Joe will talk to the financial result of that. However, if you look at the overall issue of opioid dependence and During the COVID-nineteen, the problem had just continued to grow. We have seen the O1 market growing with 13%. But if you break that down, you'll see the majority of that growth It's within the public segment, some in cash. And this is where generics have a significant favorable position to us. Our sweet spot in the market is the commercial segment. It's people with a private health insurance where we have seen the market Showed a little, little growth in Q4. But if we look at the last time during COVID, it actually has declined. And that is maybe It's challenging for subsalt to grow because this is really where we have we earn most money. That's why we have a 99% access to the patients. But if that's not growing, it is typical to grow with sub salt. So but however, if you look at the actual sales now during the autumn, it has been flattening out. We saw the impact of this former exclusive contract was diminishing. We actually had the lowest drop in the Q4 compared to Q3 that we've seen since United decided to move out of the exclusive agreement in July last year. If you look at market, as I said, 13% overall market growth, but it's really driven by the public sector. And you can see that with the blue line on Page 19, growing with 18%, whereas the yellow line, that's why we have reimbursement, only grew with 10%. But if you break down the yellow line, Again, you'll see the growth that we have in that is also nearly all of that coming from Medicaid and Medicare. Breaking down into Page 20 into our product development. If you look at the purple line, I think that's quite interesting because that's the open business. While you've gone a little up and down, you will see we more or less end the year on the same level of prescriptions as we started the year. So we have in the market kept a pretty stable position. But where we have seen a decline during the year has been on the United and Humana sector. That's the green line in the middle. But again, if you look during just during the last quarter, you'll see that, that decline is really minimal compared to a trajectory that we saw earlier in the year. And in particular, I think what's worth noting here is why we did see a decline of 3% in the quarter. You will actually see that from the last week of Q3 to the last week of Q4, it's more or less a straight line. And again, in the open business, if you see the same from the last week of Q3 to the last week of Q4, we actually saw an increase in the demand. So looking forward, one of the triggers for Sibsal for growth in 2021, one is that we have A very good market access situation. We kept all the market access from last year, 2020. We're seeing that Express Scripts, Cigna and Narlisto are the only branded product in their commercial Medicare formulary. This means that we are now the only branded product that is recommended for more than 60% of the market in commercial. So a very strong position in commercial. We have seen a lot of activities. One of the last things that the former U. S. Administration under Donald was a removal of the criteria for prescribing buprenorphine products by Epiphysis in the U. S. Would that change? It would be every physician in the U. S. Could now prescribe subset to 30 patients. I would basically make this product a TP product. You can say that would be available across the U. S. For up to 30 patients. There are some legal issues around this that are being investigated by the new administration. But what is positive is that we see that even the new administration is very focused on improving access to medical assisted treatment, that means Puprenorphine. Our feeder forest, As said, access gradually improving somewhat in Q4 has really been difficult also. In Q3, we saw it was improving, But we are now expecting, as we hopefully see with some of the COVID restrictions are easing up, that we will be able to go back to the same efficiency as we had before. That said, we are working with a lot of new innovative tools for virtual selling. It's a new process for our field force to learn how to work with. But we also think that there would be some of those learnings that we can bring in and bring forward in the future. Even when we don't have COVID-nineteen restrictions, we could improve efficiency of our PFOS. And then finally, Khosibso, I do think that our COVID-nineteen our digital therapies would be offer a very good synergy improving the value proposition when we can add on in particularly MUDIA, which is a support tool for SUBSON. This is where we started our digital therapy journey was with MUDIA. And I also think this is where we have our sweet spot in the market. And now when that is ready, I think we have a very exciting offering both to payers and to patients and physicians when we come to the autumn and would have been tested with some specific customers in the U. S. With that, I will open up to Joe to talk about the financial information. Hello, everyone. It's Slide 23. This shows our revenues. We did have lowers upsell net revenues versus prior year, as Nikolai mentioned, predominantly due to loss of our Exclusive contracts. And then also we had lower revenue due to ceased Abstral royalties in EU and the U. S. However, we did see some Stronger than expected Abstral royalties in the rest of the world. So we did get more than expected revenue there. So you could see the revenue there. One thing to point out, as Nikolai mentioned, is Upsolve revenue has stabilized and we actually had a 3% growth In Q4 over Q3. So we are seeing stabilization in Zubsol. So that's Strong and resilient brand. If you go to the next slide, you can see where the declines come from. You could See the 2 majority items, the third one over, which is demand for United Healthcare and Humana, which is The former exclusives. And then also we've been negatively impacted by exchange in Q4 really in the second half of the year with a weaker dollar. The first one, the open business, there has been a decline in demand. This has been mostly due to COVID and its impact on the commercial segment not growing. So it's given us less growth opportunities there. Otherwise, the other ones are small amounts. We did Get a benefit from our price increase and also to note that we took a 3% price increase on January 1st of 2021. So we'll have another price increase for this year. If you go to the next slide, this really shows you Our U. S. Pharma business, you could see that the net revenues, yes, they've been declining, but they have been starting to level off. You'll see as we get to the segment P and L, so the gross profit impact is much less because we have much lower cost of sales, Significant improvement there. And then on the right side, you could see that the EBIT is holding up very well, Very stable, actually growing EBIT when you look at the last 12 months for Q4 versus Q3. And our margin, very strong margin, we had a 66% EBIT margin in Q4. And then Last 12 months, it's 53.1%. So very strong profitable U. S. Business. Next slide. This is our P and L. We talked about the revenues, but you can also see that the cost of sales is 50% lower than last year. Some of that's due to sales, but we have, as we've mentioned before, manufacturer efficiency program, Which has made our cost of sales significantly lower and made the gross profit impact much less than the revenue impact. From an operating expense standpoint, we obviously have higher selling expenses due to the launch of Orbedin, the practice For digital in the U. S, so we've increased expenses there. We've had lower selling expenses in U. S. Pharma, Somewhat lower than expected due to COVID. The difficult situation has made it difficult For the sales force to earn incentives. So there's some savings there. Plus there's been some Territories that have not been viable because of, as you may be aware with COVID, There's significantly different restrictions depending on what state you are. So some territories haven't been viable during COVID and but they may be viable Going into 2021 after COVID goes away. So that's the selling expense. Administrative expense is mostly down Due to lower cost from our long term incentive program and due to the lower share price. Research and development is flat. However, we are spending to develop OX124 and we're really prioritizing that. So you can We're definitely doing everything we can to move forward this project, but we're prioritizing that while saving in other areas, So that R and D is flat. And then you can see our EBIT is a nominal amount of loss. We did have a net financial items because a lot most of our money is in U. S. Dollars. We took a negative there due to the exchange rate, weaker dollar. So our EBIT our EBT is a bigger loss. Our tax position, we had some timing differences there, plus our deferred tax asset, We took that off because we're investing in the business. So we're not showing profits over the near term. So we took our deferred tax asset Off the books. This is related to we have a very large deferred tax asset Related tax loss carry forwards. So in a way, what you're seeing is, as we've had a negative EBIT In 2020, we've actually had a tax impact by reversing out the deferred tax asset. When we start again reporting profits, We'll actually see a tax benefit because there is no expiration on our tax loss carry forwards. So once we start earning profits again, we will also be able to take that benefit that we won't be taxed on it. So our EBITDA is basically flat, Which is it. Yes, down, but we're managing our expenses Appropriately and making sure that we do the right things from an investment standpoint. We're not hindering our ability to grow the business, But we're also not wasting money. We're being very financially conscious. And sure, we have a good P and L while we go through our investment period. Next slide is our business segments. And you can see right away probably one of the biggest highlights from a financial standpoint in Q4 is The very strong U. S. Pharma EBITDA. It's basically the same and EBIT are the same as last year despite the revenue loss. You did a great job managing the business. Some of the infrastructure, as we mentioned before, What has been available to go on to different projects and in this case with Digital Therapeutics, We were able to use the existing infrastructure to help out with the digital business. So that's been very efficient. And like I said, Very strong profitability, resilient profitability for U. S. Pharma. Digital Therapeutics clearly shows the investment into the business. We did have a little bit of revenue, SEK 30,000. One thing you should know is that Based on the accounting rules and also some of the things Nikolay talked about, installment payments, we With digital products, we have to recognize the revenue over the life of the product. So if you sell something now, we can't take all the sales. We'll have some deferred revenue going forward. And as this number grows, we'll highlight that number of about deferred revenue. But we can't recognize from an accounting standpoint all the revenue upfront when we receive it. And then the headquarters and pipeline That the revenue, as we mentioned, is due to the lower straw royalties losing U. S. And EU. And then the operating expenses is predominantly related to R and D. Next slide. This shows our financial position, obviously impacted by our investment in DTX and our development projects. But we still show a very strong over €500,000,000 of liquid funds. And then we have a net cash position of 280 after you look at the bond that we have on our books. So still a very strong liquid cash position. When you go to the next, to just highlight that to remember early in the year, we took some opportunities around buying back some Of our corporate bond at a discount and then also repurchasing some of our shares, which is predominantly due To finance some long term incentive plans in the future. So when you take those out, we're really close. Our liquid funds would have been close to 600 And our net cash position over $300,000,000 We have initiated a process to renew our Corporate bond and refinanced it. The market is very strong right now. We think this is an excellent time to go To market to renew our bond instead of waiting till it expires at closer to the end of the year in November. So that's the position. We remain with a good strong financial position and we're very optimistic about being able to renew our bonds As we go into the in this Q1, we'll be able to do that. So I'll pass it back To Nikolai to talk about the subpoena. Thank you, Joe. So very short on the legal spacing, nothing has really happened, not on the Peanut, we haven't heard anything more from the authorities. So we'll see what will come out of that. The other one is our patent infringement case with some of the sensors. And I think the only noteworthy change is that we have filed a new patent in our orange book, it gets to be listed this week. We got approved in December and is now listed in the orange book, which further strengthened our IT position in the U. S. So a little on the outlook. If you look at the outlook for 2021, we think that the situation right now with COVID-nineteen is making it very difficult to make firm outlooks. And there is a lot of uncertainties, both associated to how the top line market opportunity will move. But I think that, as you have seen during the last quarter, is also reflected in how we are spending our money. So if we see a loosening up in the market and growth opportunity for digital therapies, our OpEx will actually increase and that will probably have a negative impact short term on our EBIT. But if we're seeing that it takes time before the COVID-nineteen restrictions are released and time before we got get our reimbursement in place But Digital Therapies will slow down investments, which will lower the OpEx and which will actually improve EBIT short term. Long term, of course, EBIT growth is will be driven by growth also in digital therapies. When it comes to Bupren Open Market, We think there's a strong opportunity for this market to continue to grow. Just remind me we're talking, I had even new Completely new news about the Biden administration and some of the initiatives they are taking to improve access to medications. So we really believe that this market is going to continue to grow. From a subsol perspective, I think the important part when you look at subsol is to look at the quarterly projections or progression. So Q4 is the starting point. When you look into Q1, we would normally see that Q1 is a little lower than we do in Q4, partly because wholesalers tend to stock up a little in Q4 in anticipation of a price increase, same in the pharmacy chains. And also, we know in the commercial market, the commercial markets generally go down in Q1 compared to Q4 due to some of the reimbursement rules in the U. S. When we passed Q1, we do see there's a good opportunity for stabilization and growth on a quarter over quarter basis. So when you compare to 2020. We, of course, started somewhat higher when we went into 2020. So I think the real Way to look at subsolar sales is not looking year over year, but on a quarterly quarter quarter over quarter progression. On our OpEx, We do expect to see some increase. We know that OX 124 is going to drive increased R and D expenses. That is more or less fixed until the time we think we should encounter some problems. But right now, we see no reason why we wouldn't be on track to file OX1 to 4 early next year 2022 and that will increase the expenses during the year. BTX investments Also likely to increase, it's not certain, but they're likely to increase, but that will really depend on the sales progression and the market environment. Our U. S. Pharma EBIT margin, We said a little conservative. I think there are some good chances for us to beat this target 45% to 50%. And the reason for being this lower than Q4 was that Q4 was a perfect storm in terms of low cost of goods So cost of sales, we had very low activity level in our field force, which lowered the cost. It also had negative impact on their incentive schemes, which helped us somewhat. And that way, I think it was a little of an outlier in Q4, but I still believe we have a very strong EBIT margin for the U. S. Farmer next year. Just a short summary of some of the value triggers we see for 2021. Q1, Fast track designation for OXAN support, we've talked about that. We believe that, that could come sometime here early in Q1. We also expect to see some agreements with insurance companies for DTX products. It could be reimbursement, but it can also be pilot projects to test Altice Therapies in the real world setting and that could cover 1 or more products. We have agreements with employers. So we are now targeting employers based on the path to outcome we have in Trinity Health and Texas Nurse Association. So we hope to be able to announce some of the employers, little depending also if they're willing to share that we are working with them. But we are now having a targeted efforts against employers in the U. S. Agreements with health care providers. This is something with this test we're doing in Pennsylvania to medical benefit, we think will trigger some of these discussions or we are already in discussions with health care providers who are awaiting the outcome for some of these trials. And then we have our results on the pivotal trial in weeks 1 to 4. We start trial in Q2, but the results will come in Q3. Second half of the year, and with my last slide. With COVID-nineteen, hopefully, most of us have been vaccinated. We hope to see that we get the restrictions lifted, which will enable us to go back into the field and work actively promoting Subsalt, seeing that unemployment rates go down, which we know will have positive impact on the commercial segment. So that should give us an opportunity to grow Subsalt again. Subsalt Europe launched by AccorHealthcare because it goes Like planned, that will happen in the second half of this year. Actually, the tax year needs to be updated. And then we have continued commercial to progress at PTX and then the launch of Modia in the second half of next of 2021. So a lot of exciting stuff coming down the line of 2021, but keep me quite optimistic that we have a great year ahead of us. With that, I will open up for questions and thank you for listening. Thank you. Our first question is from Sameer Devani from Rx Securities. Please go ahead. Hi, everyone. Thanks for taking my questions. I've just got a couple, maybe 3 actually. Could you take any price increase on Zubsol in Q4, Jan, I guess, is the first question. And then Nikolay, you mentioned about co pay and deductibles for DTX. Perhaps you could maybe just give us a sort of example of what sort of level that's Going to be at. And then I think Joseph mentioned quite interesting that you mentioned that some states were not viable in the current environment. I was just wondering if you could just explain a little bit more what you meant by that. Thanks. Okay. I think I can take you can maybe take the last one, Joe. Okay. And the price increase also, you can comment on that. Okay. As I mentioned, we did take another 3% price increase on January 1. I'll take the last question also. I know in the U. S. With COVID, It's really been a state by state response. So some states are much more restrictive in lockdown and some states are much more open. So the more restrictive the state has been, it's been more difficult for a sales rep to get in to see doctors. So in some of those cases, it's just in viable territories. It's not a significant amount, but it's And as they open up, which some of those states are starting to open up now, then they become more viable. And the doctor's offices, as they open more, then that territory becomes more viable. So the territory may come back. That makes sense. So it definitely means it means that we have taken away a sales rep from that district. Okay, got it. And then on the co pay and deductibles and EJX, it's like everything else in the U. S, I think health care system is that every patient have their own health insurance plan. And in that plan, you have your co pay, how much you have to pay If you're getting even if you go to the hospital and get a normal medical procedure, you have a certain amount that you need to pay. And that is also spilling into the DTX area. And the same is on the high deductibles. And there you have examples. I saw we had someone who had a high deductible on $2,000 So that would, of course, then you would have to pay full amount for digital therapies. But of course, that the price for the digital therapy will then be put into the high deductible. So if that person is seeking other health care during the year, They would have a shorter trip into before they can get paid by the insurance companies. And this is what we see that for most of the patients, even through medical benefits, they have to pay some of it also out of pocket. But it is when I look at the list, I of course, everything is anonymized. So I only have numbers. But if I look at The patients who have gone through, it is a pretty big variation in how much they have to pay out of pocket and how their deductible plan looks like. And this I have just so you can say, there is no database where we can get this information. So this is something we need to map out as we are going along. So We have to monitor for United Health Group. This is the deductibles, this is the co pay. Humana, this is the deductibles, these are the co pays. And then what kind of insurance that the patient have. And as we proceed, we will have better and better insight into What some of those rules would be for the patients who see reimbursement? Okay. That's great. Thanks very much. Thank you, Our next question is from Claus Pfeiff from Nordea. Please go ahead. Hi, and thank you for taking my questions. I also have 2. First, if you could please elaborate a bit on the opportunities for DTX portfolio outside the reimbursement system. Does the launch stand and fall with you getting reimbursement in place? Or are there any meaningful opportunities outside of that? And also just a brief on the pilot projects you mentioned with the insurance companies. Maybe you said it, but can you please clarify how long these projects are. Thank you. So with the opportunity outside the reimbursement system, one opportunity is post patient paying out of pocket. I think one of the things we have seen is that for Vovita, dollars 7.50 onetime out of pocket was a hurdle for quite a few people, even though there are people who have done it. But we saw when we started the installment plan that more people were using the installment plan than out of pocket pace. So that is clearly patients basically paying cash is one opportunity. Another large opportunity is employers. And there you can, of course, say that's part of getting reimbursement. But you could also it's a way that we go to an employer who say, I'm making this available for my employees and I will pay for it. I think that opportunity is something that seemed quite attractive. And again, based on the PPAG, very small sample, but still from Trinity Health, If you look at prevalence of alcohol and depression issues and see how many patients have actually accessed our products, we have a quite large share of those people who are using our products at the moment. Then I think from a if you take what other opportunities you have, it's some Health care providers have their own basically replace existing expenses, for example, for counselors and they take on the cost on their own books. So it's not paid by the insurance companies, but basically paid by the healthcare providers. We do have some interest from Some of the private clinics in the U. S. To do that because this is an opportunity for them to get to their patients. We see other health care providers who see this an opportunity to integrate into basic treatment programs where they have, for example, for depression, But this will be an integrated part of that. How their reimbursement looks like in the back end, I'm not sure. But it wouldn't be us who have to do it. And then I do think the medical benefit plans that we are running with. It does not require individual approval by the insurance companies because it's already there in the system. So in that way, you don't need individual reimbursement. Each insurance company, it's already covered. If the patient have an insurance and that cover that kind of mental illness treatment. When it comes to the pilot program projects, It really depends. I think some of the projects that I can see coming is testing, for example, MODEA, testing in a real world evidence population. The Mordea treatment is for 6 months. So I would guess that the pilot would go on for 6 months. But as we get Feedback as we proceed. I hope that will also lead to a constructive dialogue with the insurance companies for making it available to border global stations. I could see some of the some pilot programs with some insurance companies could also be along the reimbursement pathways. It could be around our payment models, where we have quite a lot of flexibility in how we can do this. We could have value based programs, meaning that we could take and paste to meet certain indicators in terms of improving their condition. S. So I think this is on an individual basis. But you said pilot programs to test and get real world evidence would probably exceed the lifetime of the project, which means that Some of them could probably run for a year or so. But that doesn't exclude that we could use that as an entry point to get more and broader reimbursement plans. The pilot project that we're doing right now for medical benefit that we're running in Pennsylvania, that one is aimed at finishing now during Q1. So and there we don't wait for the full amount of treatment. Of course, we do know that the medical benefit plans will have the majority of the payments early on in the treatment journey. And that's really the important part for us is to ensure that we get paid for our products and also that the physicians get paid for his or her time. And that's what we're testing at the moment. And you could say how difficult can this be. And I can tell everyone who have worked in a U. S. Insurance environment. It is difficult, in particular, if you're building a system that should be able to do it on a large scale. Okay. Thank you very much for that clarification. That's it for me. And our next question is from Ross Blair from Rx Jody, please go ahead. Hi, there. Thank you for taking my question. Just The one today is on OX-one hundred and twenty four. So in the U. S, it's obviously quite a big opportunity for OX-one hundred and twenty four, dollars 70,000,000 to $110,000,000 per year. I was hoping you could just provide some color on what the opportunity might be in Europe as well. Yes. So OX-one hundred and four is a very powerful naloxone medication. And there is a difference in the approach treatment in Europe and the U. S. In the U. S, the sentiment is that you have to have an Alexon dose that you can distribute to individuals which will get the person alive. The way in Europe is that the regulatory authorities, we need to have a dose of rescue medication that keep people Alive and the time enough for the ambulance to come and being able to provide naloxone through an injection. So, so far Europe has not been open for these high dose naloxone risk medications. And the reason for that is that they're afraid that the patients will have Severe respiratory severe the cold symptoms. So when you get naloxone, it's kind of immediately blocks all of the Receptors and patients will immediately get it go into withdrawal. That will probably save their life, but they will have severe sick withdrawal symptoms. And here in Europe, we believe that you should have more the health care and emergency rooms should be able to adjust that for the individual patients so they don't get into too much with Waltham. And the reason for the difference in approach is that fentanyl overdose is much more prevalent in the U. S. Than in Europe as a whole. If Pentland will get more traction in Europe, Europe would need to take a rethinking because the normal dose is just to Sea and the nasal sprays in Europe is generally much lower than what it is in the U. S. Okay, that's great. That's really helpful. Thanks very much. Our next question is from Gagana Alunqvist from Redeye. Please go ahead. Hello. I have a question about the proxies and Specifically, the marketing strategy and reimbursement strategy? For the practice? For the practice? Marketing for Duprexis? Yes. Okay. Yeah. So the commercial side, we in December, we opened The system for Duprexis to for direct sale and you can also apply for reimbursement through the system. So if you go in on us. Theprexis.com. You can basically acquire the Prexis. And this was the first step. We are now Basically, Berlin, kind of how much forward should we wait for the Boveda results or should we also start testing Duprexis? So we are going to Defrexis in the same system as we're doing for Bovida. That means integrating Defrexis into an existing treatment plant. And that is something that we will start now during Q1. When apart from that, we have the practice just like Morbida, we're talking to insurance companies, to employers and others to get reimbursement of the products. So there's no difference in approach between those two. The practice have taken the sorry, yes, please. Nicolas, I was just wondering because Depression, just like opioid addiction and overdoses are rising, skyrocketing now during and after the lockdown. I was wondering if you're seeing some movement or more openness to treat depressions? I think it's So as you all know that Vovida, we had Vovida long before we had the Praxis. So the Praxis came in during the summer and it had taken a little time for us to get all material ready. The practices already were certified by the FDA. And it's that marketing also has to sit with Gaia. So we have worked with Gaia also to ensure that we have the right claims that we can use during the autumn before we've been able to move out. But now we are there. So now we can start to move to practice more broadly. And I do think the practice is an easier product than Morvita because Morvita Alcohol treatment is something that it's like smoking cessation. Until we had a shampage, some fights, similar products, It was something you care you were responsible for on your privately. You went to the pharmacies or you bought different programs privately from different counselors and others. So if you're alcoholic, you go to AA meetings. The practice and depression is something that is treated in the healthcare sector. So in that way, I think it's an easier product to come in with. But at the same time, it's also a little more crowded space. There are more It's in the therapies for depression and there is alcohol abuse. But I see in my daily data here on how many people who are accessing the program that we're seeing a quite dramatic increase in people using the practice within the agreements we have in Trinity Health and also the Texas Nurse Association now after Christmas. So it's clear that there's a pretty large demand for this for the Brexit. And I think Given the situation right now, the Brexit should be a you would believe it should be a pretty easy sell. Okay. And another question I have is about Modia, the opioid treatment. Why is it so difficult to Sell it in the framework of MAT, together with the Epsom Sol. Yes. What would it take to To speed up the answer there. So Mondia is one right now, we are discussing with partners to where we can collaborate, test it with a specific group of patients. And That one is simply to be sure that the program works as intended. It has been tested technically. It's been developed. But I think before we can be sure that it is something that is there's no hiccup somewhere and then we want to test it with a larger group of patients. And we're expecting to do that now during the first half year. But we are looking at commercial opportunities to combine it with Subsalt in different shapes and forms. And we do see that there are some significant synergies commercially between the two products, which could help both Subsob and of course also Modia. So if you follow us in the autumn, you would probably see concepts where Those 2 are combined in different ways. Okay. Thank you very much. Thank you, Giuliano. And as there are no further audio questions, I will hand the word back to the speakers. Okay. Thank you very much. And as usual, I said to the operator here before we started that I hope that we will be able to questions after 35 minutes. And I apologize that I speak too much and the presentation took long. So thank you so much for taking the time to listen to us throughout the hour here today. And I hope that a lot of you will continue to follow Rexel and the progress we're making during 2021. Thank you.