Q1 21/22

Aug 19, 2021

Welcome to the Osmir Pharmaceutical Audiocast for Teleconference Q2 2021. With us today, we have CEO, Francois R. Martlet and CFO, Frederic Jarsten. For the first part of this call, all participants will be in listen only mode, and afterwards, there will be a question and answer session. I will now hand over to Francois. Please go ahead. Thank you very much and good morning, everyone. It's a pleasure to provide you with an update on our Q2 and interim results together with our CFO, Fraser Gjerstern. Good morning. Slide 2 is a forward looking statement that I would not ask to read, obviously. Slide 3 is today's speaker slide. So now on Slide 4. So this quarter was essentially a quarter of transition and build as we continue to grade our level of internal capabilities, Continue to make the best decisions with Elevar regarding Aphelia in our own remaining territories. And above all, we've been heavily involved in M and A and licensing activities. Together with Eleazar, we have agreed that the best partner for commercialization purposes in Europe is Incentra, given the track record in the hospital market in Europe. On the staffing side, it's extremely important to remain competitive Should we want to become a leading oncology player? So to that end, I'm very pleased to report that Doctor. Reinhard Koenig, who worked for us as a consultant for many years, has accepted the role of Chief Scientific Officer. We have also recruited 2 senior level executives in medical, a Head of Clinical Development and a Head of Regulatory. All three positions are critical if you want to have enough expertise internally to be able to pick the right targets externally and to develop them as well. The Board has appointed Andrea Piscaglia as an independent Director. Andrea brings to the board a lot of experience in the financing area that will be very useful down the road. Who is currently CFO of Medicines for Malaria Ventures. On the clinical side, we have achieved on time the initiation of the SAC study using the zetaxel Micellar in advanced prostate cancer. This study is currently recruiting in several Swiss centers. Believe it or not, Given the COVID times, this is a significant achievement. CantriXile Phase 1 data have been reported in a run on publication, which confirms the fact that we have picked a good target to be further developed from a clinical standpoint. So all in all, it was a very exciting quarter, a quarter built fundamentally, as you could see. And I will now hand it over to Frederic to provide with the Q2 financial highlights. Frederic, please. Thank you, Francois. So next page, Page 5. If we look at the key figures for Q2. So this quarter sales, we had SEK 4,600,000. This is also an H1 sales basically. That relates to other income from sale of finished products from our inventory in preparation for Elevar's PK study. Now Now if you compare the sales in H1 2020 last year, that was almost exclusively a result of the first milestone payment from Elevar, as you know, the upfront payment of US20 $1,000,000 So operating expenses amounted in the quarter to SEK 32,000,000, that confirming annualized cost saving achieved more than SEK 100,000,000 since 2020. Operating loss for the quarter, minus SEK 56,000,000. Now that included a non cash item of a write down of inventory due to expired or soon to be expired shelf lives on finished products of SEK 17,400,000. Now the major part of that write down was related finished product intended for the Nordic market, where the COVID-nineteen pandemic has had a clear delaying impact on marketing activities. So if we adjust for this write down, the operating loss was approximately SEK 39,000,000. The operating cash flow, roughly equivalent to cash burn In Q2, minus SEK 41,000,000. In H1, that was minus SEK 75,000,000. Now that year to date translates to cash burn at around SEK 12,000,000 per month. Now the target going forward is still set at a cash burn rate of SEK 10,000,000 to SEK 12,000,000 Per month as we have previously indicated. And then cash balance SEK176,000,000 at the end of the quarter. So at the current cash burn, I want to emphasize we have more than enough cash for current operations for the upcoming 12 months. Obviously, we are evaluating a number of business development projects. So we are also evaluating a number of financing options Paul Doss. And with that, I'll hand back to Francois. Thank you, Frederic. I'm now on Slide 6. So since I joined the company back to March 2020, we have achieved a lot in relation to the transformation process of Oaxaca. The management and the Board have been changed, bringing on board senior level executives from the sector, all of them with a good track record in our industry. The strategy has then been rearticulated and further communicated to the market. We now have a crystal clear strategy for the next 18 months or so and the implementation of it is what I call Oaxmiya 2.0. First, we aim to expand the development pipeline through M and A in licensing, and we are heavily involved in various due diligence of Companies and Compounds. Secondly, we are executing on the clinical development side of our pipeline, namely Patrick Syll and Bozetaksel Noussela. Thirdly, we aim at leveraging our technology platforms through internal development and potentially out licensing. Finally, we are maximizing the commercial potential of Atelier, which is now out licensed to Eleva and Inceptra for Europe. I am perfectly aware That the full implementation of this strategy takes some time to deliver its results, but I'm confident that this is the strategy to move Oaxaca 2.0 forward. Slide 7. Today, we are an emerging oncology company and we are building a critical mass in our pipeline. On one side, We have an approved product in Europe, APIDIA, approved for adult patients with first relapse of platinum sensitive episarial ovarian cancer, of Primary Peritoneal Cancer, and we have a great commercialization deal with Elevar to make it happen in the U. S. As well. This is one leg, one fundamental leg of our business. The other leg is Contrexil is also focused on ovarian cancer and the Phase 2 will be initiated next year. We will apply all our knowledge and expertise gained with Aphelia in that indication to the development of Camtixil. That's the reason actually one of the reasons why we were picked by KZR Therapeutics, with Biotech Company based in Australia. Prostate XL missile Phase 1 for prostate cancer is well underway with SAC. We are continuing, as I said earlier, to work hard to add new candidates to this pipeline through e line sensing, focusing on oncology only. And finally, we have also 2 animal health oncology assets in Phase II that we are looking to potentially partner. Slide 8, please. Should we want to become a sustainable company in oncology, we need to have a solid portfolio of oncology assets that balance the risk of development as well. We are looking at in licensing oncology product in preclinical up to make Phase 3. We prefer oncology assets with Phase 1 validated, Phase 1b in particular, In order to reduce the risk we all companies are encountering during the clinical development process. We are not excluding preclinical compounds as well, but then we prefer to acquire or licensing in A platform with multiple options in terms of development. We also are not excluding to go to the market on our own To market those products as Norgas, we are in a niche indication in how to treat cancer. Slide 9. As we are bringing new drugs Into our pipeline, we are actively improving and expanding the use of our delivery technologies. We have started research and development on XR18. That is the next generation technology, which we hope will have a greater I'm actually happy to report that now we are progressing to feasibility studies based on the outcome of our recent R and D work. And we are excited about the prospect of XL19, that is we are in a process of establishing who will concentrate the ability for dural encapsulation, enabling combination therapy to be delivered in a Single IV Administration. Internal studies are underway to identify possible indications and combinations feasibility studies have been completed on XR19 and the next step will be to assess how and when to take this concept into development. We are also looking forward to the initial findings from our collaboration with the Kalinska Institute, which is exploring the full biological potential of our drug delivery platform. Those results who will be communicated to you before the end of the year. Slide 10, please. Commercial rollout of APILIAF by Elevar and its partner has been progressing over the recent months quite well. Enevar has commercial partnerships agreement in Europe, Middle East and North Africa region and discussion with potential partners progressing in Asia and Latin America. Etcetera has acquired commercialization rights for Hyperlia in Europe, including the Nordics from Elevar to Ampo Asia. Let me say a few words about Inceptura. It's a highly successful European pharmaceutical company, founded in 1997, focused on rare diseases and specialty products, making it the ideal partner for APMEA. INCEPTRA is in the process of transferring all licenses and marketing approvals for APEZIA in major markets, including Germany and in the UK. This will delay the full launch process across Europe and receipt of royalties, but both Enewa and OASMIA are confident That Inceptra has the right network, the right level of expertise and commitment to maximize the launch of APIDIA in Europe. We can't give any forecast on the timing of sales and royalties at this present time while the transfer is being completed. In the U. S, Eliza is progressing development for Apilia, and We look forward to updating you on the progress on that side as well. A named patient program for APPLIA is available through Tyler outside the U. S, where the product is not yet commercially available. And although this is not a company guidance, I have included into the slide peak sales estimates here from 2 analysts that cover Horacio to give you an indication of its potential. Slide 11, on Confixin. So Confixin, it's Tubulin binding small molecule with potent cytotoxicity against CD44 plus ovarian cancer cell cells and ovarian somatic cancer cell, CB plus-forty four, both resistant to standard chemotherapies. As you remember, it was licensed in from Asia earlier in the year and is currently in development for advanced ovarian cancer. The Phase 2 study will be a global one in the U. S. And in Europe and his plan for next year using a Camtrexil current molecular structure. We've made Significant and substantial progress towards these key studies, including, well, first of all, on the clinical supply agreement side. We are in the process to appoint a scientific advisory board of experts in ovarian Hansa, and we will be initiating discussions and consultations with the regulatory bodies such as FDA and EMEA In order to get not only a sense of our clinical design, but also an informal approval of the development program in order obviously to not to design and to maximize the commercial potential down the road. Slide 12. Today, I can also tell you that we are looking at applying our proprietary formulation technology, XR1718, to Contrixil. CamtekSil is the 1st API to be screened for formulation with XR17, XR18, and we look forward to updating you later this year on our progress. Slide 13. Coming up behind Aphelia and Tantraxile, we have Josepraxel Micella in development for Advanced Prostate Cancer. We need to remind you that prostate cancer is the 5th leading cause of death in men worldwide. The incidence is increasing hugely and there is obviously a large unmet medical need for better treatments. You may know, was it AXAEL with the brand name of AXAATER, it's widely approved for a range of solid malignancies and his standard treatment for advanced prostate cancer, docetaxel missile use exor17 to enable IV administration of water insoluble rosettexel without the usual solubility enhancers. As you remember and as you know as well, we are working with the SAC group, the Swiss group for clinical cancer research. And the Phase 1b trial is underway. It is an open label, multicenter, single stage trial of the patient resistant prostate cancer with adequate or narrow liver abnormal function. The enrollment CEO. I just want to remind all of you that SAC is a very Experian's partner. They coordinate around 50 clinical trials a year involving new cancer therapy. So we are quite pleased to work with such reputable institutions. Slide 14. As you may know, environmental, social and governance is the new corporate sustainability yardstick. We call that ESG. It is actually widely accepted that ESG performance Candice Biopharma Companies a competitive advantage among their peers and is relevant to how successful a company will be in the future. We at OASMIA, Despite being a small company, are taking the matter very seriously, and we have embarked on articulating an ESG plan with the help of a consultant who is an expert in this area. The plan is now ready. We have started to implement it. Key initiatives include implementation of a comprehensive code of conduct for all employees, clear policies and education in areas such as risk of knowing, quality of treatment for all employees and partners, environmental responsibilities, safe handling of chemicals and waste in our lab, in Uppsala and many more. There is always much more to do always in these important areas. Our focus for the rest of 'twenty one and 'twenty two includes the establishment of KPIs and targets, development and implementation of action plan, regular report to demonstrate progress and highlight and how to address them. Slide 15, please. So I wanted to show you this diagram that shows our ESG maturity metrics that will help to guide our priorities as well. And it was developed developing feedback from our principal and stakeholders, including patients, including analysts and shareholders as well that will help us to drive our activities in this critical area. In a nutshell, important points are business ethics, Good governance, attracting, retaining the right type of talent to the company, offer a safe and supportive work environment, and obviously also minimize our environmental footprint where we can. Slide 16. So looking ahead, there are multiple catalysts to drive near term value over the next This includes building on our core capabilities to deliver critical mass in oncology through continued M and A and E licensing. Also advancing our pipeline into the contract seal, fire design, K1 recruitment, supply agreement for the Phase 2, Moshebexcel missile, the completion of the Phase 1b by SAC, Optimizing the potential of Aphelia, the commercial potential of Aphelia, including partnering with Baielevar in other territories, further expanding our XR17 technology platform, including combination therapy proof of concept, as I mentioned to you, for EXAR-eighteen and 2019. And finally, divestment of partnering of our animal health Asaf. So next slide, please. So overall, it has been a quarter Another quarter of steady progress of builds towards really building an oncology company with a broad of a competitive portfolio that is capable of delivering long term sustainable growth. This is our overarching goal at Dora Sierra. Thank you for listening. And at this stage, We will be pleased to answer any questions you may have. Back to you, operator, please. Thank 1 on your telephone keypad. Our first question is from Joseph Hedden of Rx Securities. Please go ahead. Good morning and thanks for taking my question. First one on Ophelia. I appreciate you can't say anything about the timings of the launch in the hands of partners. But In terms of the transfer of licenses, a deal has been signed for a little while now. So can you just give an expectation on how much longer you Thank you, Joe, for a good question. Well, first of all, obviously, as you may understand, this is the hands of our partner. So I cannot give you any really any Precise answer to that one. However, what I can tell you is that the MAH, marketing authorization holder, Transfer is a time consuming process, and I'm not expecting Elevar through etcetera to complete it before 6 months from now. Okay. That's helpful. So that would mean you're not expecting the launch European launch process to start this year? That's correct. That's correct. Yes. Okay. And Perhaps moving on to Dostex and Mitella. You're talking about near and midterm catalysts there. I just wondered if you could give us an idea on the timeline to recruitment completion of that trial and potential top line readout. Yes. So the recruitment of 18 patients should be ended by the end of next CEO. This is our estimated time frame given to us by SAC, the Swiss Cancer Research Group. Hopefully, it could be done earlier. I don't have any indication that this time line will be changed at this present time. And then obviously, the readout will be earlier 2023 as long as the enrollment will be ended NF52. So, okay. Thanks very much on that. And then just on business development efforts, you've mentioned you're looking across the spectrum preclinical to Phase 3. Can you say anything about the number of opportunities you're currently evaluating and Whether any of those are at later stages of discussion? Yes. I mean, since I joined the company back Since months ago, I mean, clearly, we have already been in a full process, full due diligence of A number of companies. I cannot tell you the number, but it's the order of magnitude. It's more than one thing in hand. It's actually close to 10. It is important to find the right company for Our business, and that should be a fit. Overall, I'm looking at the whole armamentarium of oncology, ranging from CAR T down to oncology viruses, to antibodies, to Vaccines to small molecules. So this is the ambition. The ambition really is to create and a leading oncology company by adding a number of assets that do cover the spectrum of how to treat cancer. So that's the goal. Okay. Thanks. Thank you, Francois. You're welcome. Thank you. Our next question is from Thomas Yee Tom of RMS Geiger. Please go ahead. Please go ahead with your questions. Yes. My question is what is the latest regarding the of Clinical Development of OPTAVIA in the U. S. And what's your best estimate as to when a U. S. Launch could happen? Well, you know that, again, this is a matter for Elevator to answer. What I can tell you is that we have we are obviously in regular contact with Enevar on of those two studies, the PK study and the Phase III. And Elievar will be and then later on, we will be reporting Okay. And as to your best estimate with the current Right. Usually, a Phase 3 study in This kind of indication takes about 2 to 3 years in terms of enrollment process. CEO So then you can calculate yourself the kind of a time frame. But you understand that I'm hesitant to give you any precise timeframe because I'm not in control of the medical department of Elevar. I mean, the each step at one side. I mean, certainly, there is a full commitment of Ellevar to perform those studies without any doubts. The COVID situation didn't help at all, as well as the backlog at the FDA level regarding meeting them and getting their kind of a blessing for the clinical designs. So this is There will be some delay, but you can easily and I think that was communicated earlier, Actually end of last year, we got a timeframe for the approval and potential approval of Hyperdia in the U. S. But again, things have slightly changed in a way that due to COVID, it is With regard to the hospital enrollment, it is difficult situation now. And also, Okay, okay. Thank you very much. I understand. And when it comes to outlining your technical platform. Has any interesting discussions emerged in that respect? Yes. We are always in an interesting discussion to be frank with a potential partner. At the same time, we are trying to, as I mentioned with EXR18 and 2019, trying to progress the upgrading of our platform towards later stage of Now we are entering that phase. And the feasibility studies have been reported to be positive. And we will be obviously updating you on any potential partner at the right time. Okay. Thank you very much. You're welcome. Thank you. Our next question is from Klas Paalen of Erik Pemtter Bank. Please go ahead. Thank you very much, and thanks for taking my questions. I'd like to start with. You mentioned during the presentation that sales during Q2 also related to the preparations of the PK study for Elevar. Should we expect you to provide material also for the in preparation of the Phase 3 trial. Yes. I mean, again, as soon as this is a decision made by Elevator that will be made by Elevator So as soon as the execution of it will be done, that will be reported certainly. Yes. But you do not have an agreement when it comes to delivering a Telia substance for the Phase III trial. Well, we have a licensing agreement. So basically, that sets very clearly The terms of that trial, but then it is licensing out. So ultimately, Great. And then a question about the write off of your inventories that you are doing in the this quarter. I mean, do you see risks of further write off of your current inventories in the next 6 to 12 months? Frederic. I mean, we do have to follow protocol, obviously. So we do act on the shelf life. When the shelf life expires, that's obviously a need to act on our balance. But this was mainly related to the Nordic sales and we have acted on that. So Bjorn. But there is no obvious reason to believe that you need to do another write off in the next quarters then. Well, I mean, we obviously, again, following protocol. And if that happens, Exactly. So, I can't say more than that. Okay, great. Thanks so much for taking my questions. Thank you. Our next question is from Jon Preissner of Edison Investment Research. Please go ahead. Hi. Thanks for taking my questions. I have a couple, so I'll ask them individually. Is there any impact for Apellia from the appointment The new CEO at Talavar. Yes, it's a positive impact. Yes, we have good relationship with Kay. She She was the former CEO Chief Commercial Officer at Elevar, and we have an excellent relationship with her. And she's absolutely committed to speeding up the process on the clinical development side. Fantastic. I was wondering if you could provide some additional details around the kind of inventory write down, mainly Wondering if you could remind us of the current shelf life of Ophelia and how this may potentially be extended by the XR18 technology? Frederic. No, I mean, The shelf life, we I mean, we need to act as those are expiring. And looking at the inventory, This batch that we did do a write down had passed that shelf life. I mean, very clearly, the pandemic situation did not allow us to launch. I mean, the launch was put on hold. Let's be very clear on this. And that unfortunately had an impact on the inventory. Brad. Thank you. And I was wondering if you could comment on whether any patients have been treated through the name patient program with TANFARMA? Well, this question is also for Elevator. But I think that They are not reporting that, Eleazar, as we speak. And That yes, I mean, the answer is yes. And now I cannot give you the precise number because it is not reported on a Regular basis, but there were patients. There were physicians that we'd asked for APeVIA, yes. That's great. And you previously reported the kind of first sales and treatment to a patient with Opelio in Finland. Can you comment on whether there's been any kind of repeat sales there and the kind of feedback that you've got from clinicians on their kind of thoughts on the product? The marketing and sales rights have now been transferred to Etcetera and to the Etcetera to follow-up on these Okay. Thanks for answering my questions. You're welcome. Thank you. Our next question is from Tommy Wilson, a Private Investor. Please go ahead. Thank you, and hello, everyone. I just briefly want to mention that I was disconnected twice from the call. So if I ask anything related to things that you already answered you previously. I apologize for that. So I want to ask you because you had an interview earlier this Sommer, where you confirm the delays in the Elivar studies and as well the APEZIA launch in the EU, and that is A little more than a month ago, what have happened since in that short time span to now announce That the Q4 sales in the EU will not happen and that the Elevar studies may not start in Q3 as announced. I don't think there is anything changed, and I don't think that what I said is anything different compared to what I That a month ago, I there is a delay in the launch of ADILIA in Europe due to the reason that I mentioned, MA Transfer mainly, a serialization process with the main supplier agreement for Baxter that is now in the hands of Eleazar. It's quite a complex situation. You have Eleazar, you have Etcetera and in the play and Baxter. And then with related to the studies, Well, I mean, the PK study, the final preparation is there, Okay. So the PK study will happen during H2 of this year. Okay. Thank you. You have also said now for quite a while that you are in Like you also said today, you are in long discussions, long going discussions with partners for China and Latin America, and you're looking for commercial partner there. But HLD states on their website and in their Semi annual report this week that they are that there is commercialization ongoing in Latin America. Can you say anything about that? There is not a formal partner or compensation partner in Latin America. There will be some prescription on the ad hoc and one On a case to case basis, so this is probably what HSB mentioned into their report, but it's a little bit it's An extensive use of the word internationalization, if you understand what I mean. I understand. Thank you for the clarification. There were also some mentioning that they are looking into to put rivosiranib in ovarian indication in combination with Apela. What can you say about that? I cannot say anything. This is in the area of internal between Eleazar and us as well. And when the Final clinical design will be subject to be communicated to the market by Eleazar. You will note it on time, Lucie. Okay. Thank you for that. Last summer, on most of the presentations, Asme did, You were referring to the new API and XR17 in progress and to be revealed soon. And when Tantric Xyla was eventually revealed 6 months Slater, and I add, you said that was in fact not the API that you had referred to earlier. Is that New API in XR17 still a thing? Because I haven't heard anything about it for a long time. Yes. You know that unfortunately, academic research doesn't necessarily give results very quickly. But having said that, we have decided internally that calc16 will be the API that will be tested with of Exar seventeen platform. So that is our choice. And why do we do that? Because obviously, we have the full ride of Canfigtill and because it's easier for us and also because it makes a lot of sense from a business standpoint to work on an IV formulation together with the intra virginal formulation that we have as we've been using to the Phase 2 trial. So this is yes. Thank you. And what do you think the Phase II trial will cost? And how will that affect the burn rate Once the study start next year. We certainly as Filipe, we certainly have enough cash to run the operations For the next 18 months or so, right? Now with we are in a planning process to Bill to factor that in and looking also at Equinitive Financing options as well, and he will update you whenever we have made some decision on this. Oui. Thank you. And my final question is, I may have missed that, but I think it was, Mas, before that they were applying an SBC for extended approval for the past tense. Has there been any updates on that? Well, This is totally in the hands of the IP department at Elevar. So I'm not aware of Any recent news on that side, unfortunately. Okay. Thank you for everything. Welcome. Thank you. There are no further questions at this time, so I'll hand back over to our speakers. Thank you, and thank you all for your interest in our quarterly report. As I said earlier, you should really see that as a quarter of transition, quarter of build. And yes, in companies like ours, News flow is a critical issue, but I also made the conscious decision to report really news when they are news and not that things that are not so important. So It's a quarter of transition quarter of builds. And I thank you for your support, you, all our stakeholders, shareholders, analysts, investors. This now concludes our conference call. Thank you all for attending. You may now disconnect.