Hello, and welcome to Xbrane's presentation of the Q4 report 2024. My name is Martin. I'm the CEO of Xbrane, and I have with me our CFO, Jane Benyamin. Let us go straight into an operational update from the quarter. After that, Jane will go through the highlights from a financial perspective, and then we will wrap up with a Q&A. Most of you are probably aware of our general business. We are in the space of developing biosimilars, and the slide here shows our biosimilar portfolio. It is addressing originator sales of about EUR 26 billion annually. Sizable market opportunity we are addressing. The first biosimilar we developed was a biosimilar to the eye drug Lucentis. It's called Ximluci, and it's approved in Europe since late 2022 and launched in March 2023 by our commercialization partner, STADA.
We are going through a regulatory review process with the FDA for an approval in the U.S. We are developing a biosimilar to Cimzia, EUR 2 billion TNF inhibitor used in treatment of psoriasis and rheumatoid arthritis. Quite a unique program. We are the only one, or one out of very few developers of biosimilar candidates to Cimzia, and we believe that can be a great opportunity for us and a future partner. Here we are going through an outlicensing process. We will talk more about that. We have the ambition to close an outlicensing deal within the close or near-term future here. Xdivane is our biosimilar candidate to Opdivo, which we recently partnered up with Intas in a global co-development commercialization deal.
We're very happy with that, and this program is now going full speed ahead towards clinic in a timeline that goes towards approval and launch upon loss of exclusivity in the U.S. December 28th. We'll talk more about this program and this deal with Intas later. We have early stage development of biosimilar candidate to Darzalex in the portfolio. Let's start with a snapshot of Ximluci ex-U.S. sales, if you will. The product is now launched across 21 countries, out of which 19 in Europe. You can see the map here on the left-hand side, the countries in which the product so far has been launched. We are together with our partner STADA seeking approvals also outside of Europe, with main focus on the Middle East and select countries in Asia.
We hope to be able to get approvals across a few other countries during the course of the year and subsequently be able to launch. We see continued strong growth from a volume perspective of the sales from STADA to end customers. We have seen 20% quarter-to-quarter growth last quarter, and that is also the growth level Q4 versus Q3 2024. We are very happy to see that and that the sales trajectory is now following our forecast. There is though still a huge potential for this product across the European market. This is a market of about EUR 5 billion if you think about anti-VEGFs for ophthalmic purposes. That is to say Lucentis and Lucentis biosimilars, but also Eylea, Eylea biosimilars, and other products with the same mode of action. Ximluci has now only a 3% volume market share if you look at the ranibizumab market.
That is to say Lucentis and Lucentis biosimilars combined. As those of you who follow us know, we have higher ambitions than this. We have seen other biosimilars collectively take up to 60%-70% of the originator product over the course of a couple of years. Now, sales penetration of biosimilars to Lucentis has been slower than for many of these other biosimilar situations, but we now see that the acceptance of biosimilars in the ophthalmology community in Europe is improving, and it is all moving in the right direction. Neil, as I say, it is a huge potential if we are able together with STADA to take this 3% volume market share up to what we initially were hoping for, 25% volume market share. We are happy to see that Ximluci is currently the second biosimilar from a market share perspective across Europe, Lucentis biosimilar.
All in all, during the course of 2024, we generated SEK 63 million in revenue from Ximluci. Jane will talk more about the financials, but an important point to make here is that this comes solely out of profit sharing from sales of the product. We have made no shipments of product to STADA during the course of 2024. As you may recall, we did substantial shipments during the course of 2023, which constituted the bulk of our revenue generated during the course of 2023, but now it is solely profit sharing. I think it is all moving in the right direction across Europe, and we are confident that we are going to continue to see this growth trend during the course of this year and onwards to get towards the levels which we originally were anticipating.
Now, moving over to the U.S., U.S. still poses a very significant market opportunity for us when it comes to Ximluci. It is about $1 0 billion market again if you look at anti-VEGFs for ophthalmic disorders, including Eylea and other products with the same mode of action as Lucentis. As you may recall, we have a partnership with Valorum Biologics for commercialization of Ximluci in the U.S. This agreement is currently being renegotiated, and as a consequence of this, and I think maybe Jane will talk a little bit more about that, the upfront payment is going to be reduced on the benefit of higher royalties. I think it improves our earnings potential or royalty potentials in the long-term perspective when it comes to Ximluci U.S.
Now, getting over to the regulatory process, we resubmitted the BLA late last year, and we've since had communication with the FDA, and FDA is currently requesting some additional documentation from one of our contract manufacturers, which is now being submitted to the FDA on a gradual process. It is all going to be submitted when we come to April, and when we get there, FDA are going to decide on a so-called decision date and also determine whether or not a reinspection of this production site is going to be required or not. That will also dictate the review process for FDA. We still are hoping on a mid-year approval, but we are going to have to get back to all of you in April once all the documentations requested by the FDA are submitted and a decision date is set.
We still believe in the market opportunity or opportunity for Ximluci. There's one biosimilar to Eylea launched so far, but the bulk of the Eylea biosimilars are held back by a formulation patent, which of course poses a meaningful opportunity for Lucentis biosimilars to gnaw into the Eylea market. We do believe due to the reimbursement structures under Medicare Part B that introductions of new biosimilars in a certain segment creates a good opportunity to take additional market share due to the whole mechanism of reimbursement first year being set on the basis of the back as you're not going to have an average sales price at that point in time. We're excited about the use opportunity, and we're working hard to navigate through towards an approval and of course working closer together with Valorum to make the product preparations for subsequent successful launch.
Now moving over to Xdivane, our Opdivo biosimilar candidate. As we talked about during the course of last year, we were in the process of trying to identify and tie up a good commercialization partner for this program. We are very happy the way this ended up with a license deal with Intas. Intas is an Indian biosimilar developer. They have been developing a handful of biosimilars which are all launched in the European market via their European sales arm Accord. They have a very strong position, I must say, across Europe. A third of all oncology injectables are being sold and distributed by Accord in Europe. They have a very strong position within oncology in Europe. They are now establishing themselves in a very meaningful way in the U.S. in preparation of launch of Xdivane.
As some of you maybe saw, they acquired Coherus' p egfilgrastim biosimilar to kind of set the start of that infrastructure within oncology biosimilars in the U.S. We are very happy with this collaboration, and what it entails is that we are sharing the development responsibilities. Intas are going to be responsible for the clinical regulatory development, which then is a substantial investment, as most of you know, to carry through the required clinical trial. Xbrane is responsible for certain additional CMC-related development activities, including process characterization and validation. Intas paid an upfront EUR 10 million. We have upcoming milestones of another EUR 3 million, and then there is a profit sharing scheme post-launch. We do believe that this program is going to contribute in a very meaningful way to Xbrane's income generation from 2029 and onwards.
Looking at this from a timeline perspective, we have done all the preparatory work to be able to initiate the clinical trial. We have scaled up to clinical commercial scale. We have confirmed analytical similarity versus the reference product, and we have produced the clinical material. Joined together with Intas now, we are gearing up to be able to get this trial initiated. As we've talked about before, we have a streamlined clinical program agreed upon with both EMA and FDA, which makes us comfortable that it's going to be executionable within the timeframe of or leading up to a BLA submission Q4 2027 and then leading to an approval Q4 2028 so that this biosimilar candidate can be launched in the U.S. upon loss of exclusivity. Opdivo, as some of you know, is expected to reach peak sales of $ 14 billion.
significant portion of that is in the U.S. Given the size of this originator product, I think we see rather limited biosimilar development activity. We believe that Xdivane is going to be one out of four or five biosimilars to Opdivo, which makes it a very meaningful income generation opportunity for us. Moving over to XB003, our biosimilar candidate to Cimzia. As I mentioned in the beginning, Cimzia is a TNF inhibitor with EUR 2 billion sales, roughly. It has a niche position within the TNF inhibitor market. It's a market of about EUR 40 billion. Of course, we've seen quite a few biosimilars on the other TNF inhibitors, but despite that, Cimzia is holding up its position, and that's given its niche within pregnant and breastfeeding women, which is actually a sizable niche within these indications.
What's exciting here is that we believe we can be the only biosimilar to Cimzia upon launch. Of course, that makes the whole situation more favorable when it comes to discounts versus reference product you need to offer in order to drive a meaningful volume market share. This is a very exciting opportunity, we believe. We've done some great progress, I think, in the development. It's very difficult to develop and manufacture a biosimilar where high production yield is required in order to get to a commercially viable cost picture. We've been able to reach what we believe is required thanks to our patented platform technology. We have had initial advices from both EMA and FDA, which makes us feel comfortable with the analytical profile of our biosimilar candidate.
As you know, we are working hard now to out-license this program and find a suitable commercialization partner, as we did with Intas for Xdivane. We are in promising discussions with, I would say, due diligence has come to an end when it comes to the leader in this whole process. We are on track towards being able to close a deal during the course of this quarter. That is clearly our ambition and target. We hope to be able to get back with positive news in that direction within the near-term future. With that said, I am probably going to hand over to Jane for a financial overview of the quarter.
Yes. We can see that the revenue in the fourth quarter amounted to SEK 66 million with a gross profit of SEK 61 million, corresponding to a gross margin of 93%.
On an annual basis, we see that the sales from out-licensed products amounted to SEK 132 million, and SEK 63.4 million was generated from product sales. This resulted in a gross profit amounting to SEK 180.5 million with a gross margin of 91%. Total revenue for the year of 2024 reached SEK 198.7 million. The administrative expenses amounted to SEK 10.1 million for the fourth quarter and SEK 40.1 million for the full year. The main underlying expenses are related to personnel costs and normal activities. R&D expenses amounted to SEK 80.8 million for the quarter and SEK 391.8 million for the full year. The main activities are related to the upscale of Xdivane production volumes, the resubmission of the BLA to the FDA, and the scale-up of production processes for XB003. SEK 78.9 million has been capitalized on a full-year basis.
The operating cash amounted to SEK 94 million positive for the last quarter of 2024, which comprises of SEK 115 million from an upfront payment from the Intas Pharmaceuticals partnership for the Xdivane deal, as well as achieved milestones from Biogen. For the full year, operating cash amounted to SEK 133.7 million. Cash from the investment activities accounts for negative SEK 17.3 million for the quarter and negative SEK 52.2 million for the full year, referring mainly to the capitalization of Ximluci and Xdivane development costs. From the financing activities, we have a positive SEK 16.8 million for the last quarter, which mainly corresponds to a bridge loan in the amount of SEK 20 million that was settled in January of 2025.
Thanks. To summarize the fourth quarter, revenue generated of SEK 66 million during the quarter.
Key highlights: the license agreement around Xdivane with Intas, progress of Ximluci sales across Europe, being launched in 21 countries and continuing to see a growth trend of 20% quarter- by- quarter. Overall, if you compare towards Q4 2023, it is a little bit more than 200% volume growth. The resubmission of the BLA of Ximluci to the FDA. Looking ahead during the course of this year, what we are really focused on now, as I said, is to conclude an out-license deal with XB003, to navigate through an FDA approval for Ximluci, which is going to be branded Lucamzi in the U.S., and to together with Intas initiate a clinical trial for Xdivane. Of course, to work closely together with STADA to continue the strong growth trend of Ximluci across Europe and additional territories.
With that said, we can move over to the Q&A and start to see if there are any questions on the ones who called in.
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 Qian Hun Li from Pareto Securities. Please go ahead.
Hi, good afternoon, and thanks for the update. Just have some quick questions. Regarding the account payables for SEK 242 million, can you elaborate a bit on your payment schedules? Thank you.
Yes. We have agreed payment plans to three of our main suppliers, which constitutes the bulk of these accounts payables, where we made a certain payment just after year-end, in January.
We're now making gradual payments to these three main suppliers.
Okay, thank you. Maybe another question regarding the upfront payment from Intas. The remaining part is expected to be recognized by Q2. Is that correct?
Yes. It's going to be recognized up until May this year.
Okay. All right. Thank you very much.
The next question comes from Philip Eneison from Rede ye. Please go ahead.
Hello, everybody, and thank you for taking my questions. I wanted to start on the Valorum topic. Can you explain why you haven't received the upfront from Valorum yet and what topics are the current negotiations on? Thank you.
Yes. It has been related to ongoing refinancing or financing of Valorum, which has made an inability for them to pay the upfront as agreed in the license agreement.
As a consequence of that, renegotiation of the license agreement has been initiated. It is yet not concluded, but I do believe it is going to be concluded in the near-term future, which essentially is meant to create more financial room, if you will, for Valorum to carry through the preparatory commercial activities for an upcoming launch of this program, given the financial resources they have at hand. As a consequence of that, significantly increasing the royalty rate for Xdivane and STADA.
Okay. I got a few more. Could you also tell us what is your view on the U.S. ranibizumab opportunity in light of Sandoz's recent statement?
Yeah. No, I think we still view it as a very significant market opportunity. The volume is there, definitely.
I think what the Sandoz news shows is probably that the discounting has been a little bit higher than anticipated, or pricing has been going down a little bit quicker than anticipated. Although I think they've said that they're going to get back on the topic, I think our read on it is that they are withdrawing the product from the market to reintroduce it with kind of a resetted ASP, if you will, which then determines a new reimbursement level. That's my read on the situation. As far as I can tell, it's not impacting our overall view of the market opportunity. We still believe that ranibizumab in itself, and then going beyond from that, the whole Eylea market and the current off-label Avastin market poses combined very good market opportunity for our product, Ximluci or Lucamzi, what's going to be branded in the U.S.
Okay.
When can we expect the pre-filled syringe to be launched ready?
We're still working on the syringe, and we are targeting to get towards an approval during the course of the year in Europe initially, and then we need to take that further on into other territories such as the U.S. subsequently.
Okay. The last one, if I may. That is from a liquidity point of view, how far will your current cash take you?
I think what we now need to do is that we need to get a deal done with XB003 during the course of this quarter, as we've communicated, in order to, via an expected upfront payment from such an arrangement, secure the company's need for its further working capital requirements.
Okay. Thank you for taking the questions off with that.
Thank you.
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.
From the written questions, I see we have questions regarding the upfront payment, which you have addressed, and also a question with regards to the syringe, which has also been addressed.
Yeah, and I can comment also. There's a mention about Biogen. There was a milestone expected to come in of $5 million from Biogen. Subsequently, we had a discussion with them and agreed upon an immediate payment by half of that milestone. That's why we took a credit loss also on $2.5 million in relation to that milestone.
Can you present some big differences and similarities between Xbrane and just Alvotech? In which situation does Xbrane have a stronger position?
Yeah. I think what we really have focused on from Xbrane's perspective, and where I really do believe we have a competitive advantage, is related to our platform technology, which I feel confident in that it provides us with a higher productivity, if you will, or yield in the expression of targeted antibodies and leading to a lower production cost. I think we can see at XB003 or Cimzia biosimilar candidate as a testament of that, where we are the only one or one of very few developers of biosimilar candidate to Cimzia, where you really have a challenge in getting to high productivity or high production yields on a fairly difficult-to-produce antibody fragment in this case.
I think this demonstrates the potential of our platform technology and our focus. I do believe that production cost is, in this market, going to be more and more important. Therefore, I do believe that Xbrane and our platform technology is going to become more and more relevant within the space.
We have received another question with regards to Biogen. I think that was addressed.
Yeah. Any other questions? Something is coming in here. Yeah. Biogen, we addressed. Okay. Will you publish a summary of Q&A after the meeting? Yes. I think we have done that in the past, but maybe not in the most recent quarterly calls. That we can certainly do. Okay. Let's see here. Another question. How will the out-licensing of products affect the profit and loss this year? Too early to tell.
We have certain revenues, as we talked about, from the upfront payment from Intas, which is going to be partly recognized during the course of this year. We are hoping and expecting on an out-licensing of XB003, which we also do believe shall lead to revenues being recognized during the course of this year. We also have milestone payments expected from Intas. We believe that out-licensing or license fees, generally speaking, are going to contribute in a meaningful way to revenues during the course of this year. They come, in that sense, at 100% gross margin, if you will. I think we'll have a quite good contribution from license fees during the course of the year. It's hard to say at this point in time, though, exactly what amount it will be. Okay. Let's see. I think there's another question on Biogen. Did we address that?
Why the Biogen payment was halved? I think we came into a certain dispute with Biogen with regards to to which extent the milestone had been completed or not. I think in the light of that, we were also in need of rather quick payment and resolution. That, I think, was the background to the agreement on taking an immediate payment of half of the milestone payment. We have the pre-filled syringe. We have addressed that.
Yes.
Okay. Are you planning to reduce your company costs? If so, how? We did a cost reduction program in end of 2023. We introduced that one. We have seen the results of that during the course of last year. We are continuously, after that, looking very carefully at our costs.
But we need to balance that versus making progress on the respective different programs in order to be able to generate revenues and income that goes across all the programs, essentially. It needs to be balanced, but we work very cautiously looking at the cost picture. Good. Okay. I think that probably concludes the Q&A. There's a question about cash flow, time out of being cash flow positive. Actually, as you probably can see now, also fluctuates from quarter- to- quarter based on a slide which Jane showed, where actually there was a positive cash flow during the course of Q1, but that was driven by enlarged by upfront payments from Intas coming in. It is going to be fluctuating, I guess, actually based on certain such events. We are also seeing that the cash being generated from sales in Europe from STADA is progressing.
That will contribute more and more in a meaningful way. Also, we have the expected upcoming approval of Ximluci in the U.S., which also then is expected to contribute from a cash perspective in a meaningful way via milestone payment from Valorum, but also pre-payments of goods to be shipped. It is a little bit hard to predict at this point of view, and at this point in time. We are going to have to get back to this question. It is also going to be fluctuating a bit during the course of the year due to this kind of event such as out-licensing. Would you say that the STADA sales activities in the European Union for Ximluci are progressing as planned? Not as they were initially forecasted upon launch.
When we reset the whole sales plan Q3, 2023, that plan is now followed. We see volume growth, which are in line with the expectations which were set back then. I think that was the last question. Good. Okay. We thank all of you who listened in to this call and those of you who put forward questions. We are, as there was a question here, going to provide transcripts to the Q&A and put them on our web page. With that said, thank you very much. We are here should there be any further questions. Thank you.
Thank you.