Hello, everybody, and welcome to our webcast in relation to Q1 report, 2024 for Xbrane Biopharma. I'm Martin Åmark, CEO, and I have with me, Anette Lindqvist, our CFO. We're going to talk about the development activities we had during the course of the quarter. I think one thing we'll get back to is that we successfully have been able to scale up the production process of our Opdivo biosimilar candidate, Xdivane, which I think is good achievement of the team, since this is our first product being expressed in mammalian cells and demonstrates the feasibility of our platform technology for mammalian cells being successfully scaled up.
Okay, so just to recap our development portfolio, for those of you that have followed us for quite some time, we are dedicated solely to development of biosimilars, and we have a portfolio of four biosimilar candidates. First one is Ximluci, biosimilar to Lucentis, launched in Europe, commercialized by our partner STADA, and undergoing regulatory process with FDA for U.S. approval. Recently, we entered into a partnership with Valorum Biologics for commercialization of this biosimilar candidate in the U.S. The second biosimilar candidate is referencing Cimzia. Here we have a partnership with Biogen. This is a product which is undergoing scale up and production of clinical material during the course of this year.
Then, we have development programs on biosimilar candidates to Opdivo and DARZALEX, respectively, where we have active, ongoing out-licensing processes. To start off and talk a little bit about the developments when it comes to sales of Ximluci across Europe. A snapshot first of the market situation. If we look at the market for Anti-VEGF for ophthalmic purposes, this is a market of about EUR 5.3 billion annually, and we are tracking this on a quarterly basis. This is based on collection of revenues of the relevant products from quarterly reports of the respective companies selling these drugs.
What we can see, first quarter 2024 is actually that Ranibizumab as a molecule, and that is to say Lucentis, plus the Lucentis biosimilars currently being present in Europe, is the second fastest growing molecule in first quarter versus the fourth quarter 2023. So it's on 8% growth versus 2.2% growth for the overall market. The fastest growing product is Vabysmo, but it seems like this is gaining market share, mainly from Eylea, who is seeing a slight decline, it seems like, in the quarter. It's still so that the biosimilar market to Ranibizumab is nascent and uptake is moving ahead, but it still goes rather slowly in comparison to what we've seen with biosimilar launches on other biological drugs.
However, we are still believing in the long-term trajectory and prospects of biosimilars to Ranibizumab. We believe that they eventually will take up to 70% of the overall Ranibizumab market, similar to what we've seen in situations where biosimilars have been launched to biologics in oncology and immunology. So that long-term view still holds true. Then, looking at the Ximluci specifically, now in Q1, 2024, the product is launched across 16 countries in Europe. And few notes to make, recent launch in Italy, which is the fourth of the five big European countries where the product is launched. The only country out of the five big ones remaining for launch is France.
And in the UK, this NHS frame agreement, which was entered into by STADA last year, has been prolonged, so that's another development. And we, STADA is working actively with sales and marketing activities in order to drive penetration further and increase the sales across these different markets. I think needless to say, most significant prospect ahead is to further penetrate the four big European countries where the product is launched. What we saw during first quarter was that Ximluci had approximately 1% market share, and this is Xbrane estimates based, again, on collection of revenues of the respective products, and that's 1% within the Ranibizumab market, so Lucentis plus the Lucentis biosimilars. And that was...
A market of about EUR 320 million for first quarter of 2024. Ximluci remains number two amongst Ranibizumab biosimilars in Europe, and we saw an end user volume growth of 30% versus fourth quarter, 2023. And you can see on the graph here, on the right-hand of this slide, the growth in the respective quarter versus the previous quarter, where we can see that actually the volume growth has been increasing even over time, the last three quarters.
So we're making progress, and I think also this is reflected, as Anette will go through the financials in more detail, where we can see that although we did not ship any finished goods to Stada, so that a portion of our revenue, which you saw during last year, did not come in during this quarter. But the revenues were generated of SEK 14 million Swedish crowns related to profit sharing from STADA, and hence also that positively impacts our gross profit margin and gross profit. So I think that's an important read from our financials this quarter. Then we were happy to sign the license agreement together with STADA, with Valorum Biologics. We had a separate webcast around that, where also Pär from Valorum presented the company.
Here's a snapshot of the terms of this deal. It's rather traditional license arrangement, I would say. It's a license fee of up to $45 million, which is then split into an upfront and milestones on regulatory development, as well as sales-related milestones, and then royalties eventually on net sales. Important to note, of course, that we're doing this together with STADA under the co-development agreement already signed with them. Hence, all proceeds from Valorum will be split 50/50 between STADA and Xbrane. Xbrane has also signed a supply agreement with Valorum, under which we're going to supply finished goods to Valorum, and we're doing that with a markup over production cost. And we're also happy to have Valorum as a partner.
Now we're going to work together, Xbrane, STADA, and Valorum, in order to bring the product to resubmission to FDA as soon as possible, something which we are going to get back to within short with regards to planned timing for resubmission. Then, talking a little bit about the developments on our preclinical portfolio here. First, beta-1. Here, we are going through the scale-up process.
We have successfully done the first part of the scale-up, which we're very happy with, and that means, as you who are familiar with this kind of production processes, the fermentation process, which we've done at the intended clinical scale together with our contract manufacturer, we are going to run the first full scale-up batch, and that is to say, the fermentation process plus the purification process during the summer. We hope that that it's, of course, going to be successful and trigger a milestone from Biogen and later sale of upcoming batches. Then on Xdivane, we actually did now the first full scale-up batch at full commercial and clinical scale together with our contract manufacturer.
So that's gonna be continued with the production of clinical material during the course of the year. But then full focus for this program is related to out-licensing of the global rights of this program to suitable commercialization partner, so that we together can go into clinical development, which is the next step, really, for this program. Then on Xdorsane, biosimilar candidate to DARZALEX, it's now undergoing an early stage process development in-house. So we can comment also here that you see our expenses still being at rather high levels, and this is related to particularly beta-1 and Xdivane scale-up processes, which we now show good results from and have been long-term commitments versus partners and contract manufacturers to continue with, and we believe strongly in both of these two programs.
Whereas Xdorsane is in a more, is not consuming a lot of capital at this time, since it's going through process development at pilot scale in-house. So that's a brief update operationally, and I then hand over to Anette to go through the financials in more detail.
So thank you, Martin, and my name is Anette Lindqvist. I'm the CFO of Xbrane. I'm going to take you through a few slides and to share some more details around our cost base and specifically net sales. So kicking off with the revenue stream, which is, as Martin said earlier, lower than previous quarters. It's mainly net profit generated from STADA, with a strong gross margin. So out of it, as you can see, SEK 14 million net sales and SEK 9 million gross margin. For those of you who has been with us for some time, you would remember that we have three income streams or income sources. First one is shipment to STADA with no profit, no profit at all. Number two, net profit from STADA with a strong gross margin.
The only thing that impacts that number is ordinary production variances on an ongoing basis. And three, license agreements generating income with more or less full gross margin. So for the next coming quarters, you will see that we will generate the number three from the agreement with Valorum. And this is, this will be and is a very common pattern for Xbrane. It will vary from quarter to quarter, and it will be impacted strongly, in case we have shipments done or license agreements done, and whether those license agreements are also phased, or we can actually do revenue recognition immediately. So in case any questions around this, I'm happy to take them after. So next slide, please.
For our company expenses, those are slightly higher in the quarter than versus Q4 2023. And as Martin said, the drivers here are really the pre-commitment development expenses related to, first and foremost, the CMOs for BIIB801 and Xdivane. BIIB801 consumes quite a lot of capital and will be consuming, but however, it will also generate income later in the quarter. So hence, that's why it's important that we continue to invest behind that program, to make sure that we can get that income later in the year. For Xdivane, similarly, we are proceeding well with our CMO, and we want to continue to do so to make sure that we are on track, when we can enter an agreement.
And also, first and foremost, to keep the timelines for the overall timeline for the program to make sure that we can go live in the market when the patent expires. Ximluci is also consuming a bit, that's also more cash than P&L, but that, I'll come back to that later. I also wanted to mention the cost-saving scheme that we communicated in the autumn. That is now well underway, and the majority of the headcount was left the company in Q1. Consultants already in December, they were phased out as quickly as possible. But now, roughly 20 employees left in the first quarter, majority, though, late March. While those savings will be seen later in the year, and also following that, savings will be gradually realized up until Q3 2024.
So we'll come back to this number and present how much savings we can generate that in the future quarters. Next slide, then, please. So cash, obviously, we left the quarter with a very strong cash position because of the share emission. So we left the quarter with SEK 270 million. The burn rate in Q1, as we can see on the right-hand side, was more hefty than the previous quarter. It was SEK 113 million. But obviously, cash, majority of that is related to the inventory build, and those are the, as Martin said, the long-term binding agreement we have with the CMOs.
So rather than to cancel those and have the same, cancel those slots with the CMOs, which would then be the same cost for us, we made sure that we could actually, that we could, secure those. And hence, you know, for those of you who've seen the stock build, it is quite strong now. We expect that, the inventory level now to stabilize, and also then obviously be impacted by any further shipments to STADA. But we already know now that those will not come regularly in 2024. So with that, I think over to you, Martin.
Yes. And to then summarize key takeaways from the quarter, as we said, revenues generated are SEK 14 million, mainly coming from profit sharing. And we expect and hope that this will increase during the course of the quarter, based on continued growth of end sales and the continued scale effects in the sales and marketing leg. Then successful scale-up of Xdivane and partly on BIIB801, so we're making good progresses on these two programs. Now, key thing for those programs, of course, to monetize on these developments, for BIIB021 to get to the stage of triggering the first milestone with Biogen and Xdivane with regards to out-licensing the rights. And the key priorities for the year remain the same as we communicated before.
Continue to support STADA with regards to Ximluci in Europe, work towards being able to launch prefilled syringe during the course of 2025. Work together with our partners for resubmission of the BLA of Lucamzi, the brand name, in the U.S. for our Ranibizumab biosimilar. Then also work together with STADA to get additional launches or regulatory approvals and launches in other territories for Ximluci. So these are our key priorities for the course of the year, and we hope we're going to be able to get back on successful outcome of these ones in upcoming calls with our quarterly reports. So with that said, I think we can open up for questions first on the phone line.
If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Dan Akschuti from Pareto Securities. Please go ahead.
Hello, Martin, and thank you for taking my questions. Just two questions. One, do you have any news to share with us regarding the communication with the FDA and the meeting with them, and or just when approximately you're expecting to be able to update the market on that? And the second question would be regarding the profit that you now reported from Ximluci in Europe. Is that something you expect to continue, or are there fluctuations in STADA's operational cost for Ximluci so that the profits will go down again? Or do you expect that to hold up and grow with 30% or maybe accelerating growth this year? Thank you.
So, we expect to be able to get back to the market to communicate on timing of resubmission of the BLA in June. We are in communication with the FDA, but so is also our production sites. And, they're making and we are making the plans for activities that needs to take place prior to resubmission, as we speak. And, we are going to get back in June on an update. With regards to the levels of profit sharing on sales of Ximluci, we hope, of course, that the end sales from STADA is continuing to grow at the levels we've seen historically, and hence, also, that the levels of profit sharing increases at the same pace.
I shall add, though, that when it comes to sales and marketing expenses, those are a little bit harder for us to predict, and they can be specific activities during a certain quarter, which makes them also a little bit volatile. But we do expect the level to increase generally in a little bit longer-term perspective, in line with the net sales, yeah, growth of STADA.
Thank you very much.
The next question comes from Filip Einarsson from Redeye. Please go ahead.
Hello, Martin and Anette. I wanted to start on the Ximluci, and I was interested if you could provide some color on the inventory levels and how they are looking for, let's say, the quarters ahead. Do you expect STADA to buy more finished product from you in Q2, for example?
Yeah. I mean, as Anette mentioned, we have had long-term production commitments versus contract manufacturers, which were active during the course of Q1 and are now coming to an end, if you will. So we believe that the inventory level will stabilize during the course or for next quarter, essentially, or this quarter. And, but then when it comes to sales of finished goods, it's harder to predict exactly how, let's say, fast that inventory level could go down due to deliveries to STADA. I think a reasonable expectation is that the inventory level remains at a similar level where it is today through the large part of the years, and then gradually goes down.
Right. Also, do you have any updates on the partnering side, discussions for Xdivane?
So we are running an active out licensing process of Xdivane. And we're having a multitude of active discussions with the potential counterparties. And we are hopeful that we're going to be able to find a suitable partner for that program. It is taking a little bit longer than what we previously anticipated, but I think now the process is moving ahead well.
Okay, thanks a lot.
As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. There are no more phone questions at this time, so I hand the conference back to the speakers for any written questions and closing comments.
So thank you, operator. I think, from what I can see on the written questions, they are more related to Xdivane and when we can expect a deal and how that partnering is going. So I think that you just responded to that, Martin, in case you want to add or expand a bit further.
No, I think we already responded to that one. For sure, our ambition is to close the deal during the course of the year, but at this point in time, I don't think we can be more specific than that.
Okay, so there are no more written questions. So, operator, whether there is any closing questions from the phone line?
We have no further questions on the phone line.
Okay. So, Martin, any summary remarks?
Big thanks to all of you who called in and who are following us. And, we are always here if you have any further questions, either via email or phone, we shall do our best to respond. And, otherwise, thanks for now and have a good day.