Good afternoon, everyone, and a warm welcome to Xbrane's Capital Markets Day. My name is Anette Lindqvist. I'm the CFO and Head of IR with Xbrane. In May last year, we met digitally, and we shared with you some of our ambitions for the company for the next coming years. A lot of exciting things have happened since. Some of them we'll reflect upon today. Today, you will listen to our Chairman, Anders Tullgren, our CEO, Martin Åmark, our Head of R&D, David Vikström, and also some members of our leadership team, Maria Edebrink, Head of Regulatory, and Nina Ivers, Head of HR. We also have the pleasure to welcome Bryan Kim, Head of Specialty Products with our partner STADA. He's actually online here on the screen, so he will join.
He's listening in, and he will talk quite early in the presentation. For practicalities, we welcome questions, and hence we have inserted a Q&A after each section in the presentation. For those of you in the room, it's easy. Just raise your hand and we will give it a mic and then speak up. For those of you joining digitally, please scroll down on your screen. There should be a text message that you can write your question, and then we will receive them. We will read them out loud here in the room. Without further ado, please welcome Anders Tullgren, our Chairman of the Board.
Thank you very much, Anette, and also from my side, a warm welcome to our Capital Day. We are very pleased to actually have this both as a physical and digital meeting and also update you on all the progress we've made. As you can see here, we have a tagline that's called a world leader biosimilar developer. That can be very ambitious, but I think we are actually have come so far in our journey that we can proudly say that we are actually a world leading biosimilar developer. Let me talk a little bit about why we are so confident that we can say that. I cannot forward?
I'll take it on the computer. It's fine. This is just the important information. Here is the agenda for today, and as Anette introduced to us, we will talk about all our different projects. We're very happy to have Bryan giving more update about the upcoming launch with STADA of the Ximluci. Then we will talk more about the platform. David Vikström will talk about it from a research point of view. After this meeting, for the people here in the room, it will actually be also an opportunity to see our brand-new research facility here at the campus. We will then also talk about Biogen and the oncology portfolio and a summary.
As Anette said, we also have in the program here several opportunities for asking questions, so please feel free to ask any questions to us. With that, let me start. Biosimilars, w hat is biosimilars? I think to answer that question, we need to look at what type of drugs do we have on the market. We have small molecules and biologics. Historically, all products were small molecules. It means that you have a chemical synthesis, you had done organic chemistry, you put together a couple of products, was not too complicated, and you got chemical substance. These products are quite small. The molecule weighs about 200, quite small molecules, easy to produce, but also after patent expiration, easy for someone else to do an exact copy.
Not very expensive, quite easy, and you just need to do a bioequivalence study to show that it's exactly the same. The small molecules, the copies of that that comes out of the patents is what we call generics. We know that the generics, a lot of competition, 80%-90% price reduction. We have the biologics. The difference with the biologics is that these are big molecules. It's big proteins. They are much, much bigger. Here we have the comparison between a bike and an airplane, but they are much bigger, and they also need therefore a living cell to produce them with a biotechnology. This is more complicated to do, and the first product here came back in the 1980s.
Many years ago, when I started my career in the pharmaceutical industry, I was actually working at Boehringer Ingelheim here in Stockholm, and my first role was to take one recombinant product, one biologic, and the first one, through regulatory and clinical development. Since then, this market has exploded. There's a lot of biologics. The patents of the biologic products goes out, but then you cannot do a generic. What you have to do then is a biosimilar. It's not an identical copy because you need to have a unique cell line. You need actually to come up with something that's similar enough. You also need, of course, to prove by analytical methods, by clinical trials, that you actually have a product that are as safe, as efficacy as the original. That's a biosimilar.
What's required to do a biosimilar is totally different from the generics. You require more people, more science, more investments, and therefore there is a higher barrier of entry of the biosimilars. Normally, you see here a price reduction about 30%, 40%, 50% depending on what biosimilar you talk about. The biosimilars now, because the biologics products are taking more and more ground, they're increasing rapidly. You see on this slide that the biologics in 2026 will be close to $600 billion. Actually, what you can see then is that the biosimilar growth is happening as well. In 2006, we had the first biosimilar approval in Europe. It was quite a slow uptake. Now, the uptake is coming. A lot of the biggest biologics are going off patent, and we're coming with the biosimilar.
The market we go in and compete on, where we're focusing, it's an $80 billion market in 2026. It's a huge market that we go into. The journey of Xbrane, I can say it in sort of three phases. The first phase was from 2008 to 2015, where we actually established the technology platform. David will come back and talk about more about this. Actually, what was our focus from the beginning based on a patented technology was to have a high yield and a low-cost platform. To be more efficient and be able to produce more of the substance than our competitor, and therefore also resulting in a lower cost of goods. We did a lot of collaboration, we did research, and David will come back to this.
This was the foundation of the company. The second part was to establish this development platform. This is from 2015 to 2022, we can say. We are sort of at the end of that phase, the second phase. We have now started to develop and developed a portfolio. We have five products. We have about 80 people in our state-of-the-art facility here at the campus, and we have been able to actually sign partnerships with three major companies. So that's the second phase. Now the journey continues, and we're coming into the third phase, which is actually to capitalize on the platform. We are very close to beginning of next year to commercialize our first product, and Bryan from STADA will talk about that.
Also, our objective is to become cash flow positive at the end of 2023/ 2024. The third step, which we're moving into now, is a step of also of commercialization but still have the large portfolio. What we have here is about 80 people and about half of them actually with a PhD. It's a very experienced team which is working well together in project management teams and also we have been awarded a Great Place to Work award for the company. We also have a very experienced Management and Board of Directors that has been working with development of biologics, of the clinical research, of regulatory, of supply chain, of manufacturing, of commercialization. A lot of experience in the Management and the Board of Directors to bring the company forward to yet another higher level.
If that was sort of to summarize in my introduction here, what would be the reasons to invest in Xbrane? I would say three things. First, we are a platform biosimilar developer. There is not many of those companies. We actually. There is only four companies in Europe that's working on biosimilar development. Only one company, us, in Sweden that's listed, and there is about 50 companies in Sweden working on different drug development. Only one working on biosimilar, the fastest growing segment. The second thing is that we're going into commercial phase with Ximluci and to be launched in the beginning of 2023. The other thing is that we have a very attractive portfolio. We have four products.
We have the biosimilar of Cimzia, an anti-TNF, and three oncology products, and we will talk a little bit more about those products a little bit later today. That's all for me for now. This is the introduction for the company, and I welcome over our CEO, Martin, to take the next step.
Thank you. Hello, everybody. I just want to introduce Ximluci, and then Bryan from STADA will speak much more about the product and upcoming launch. First of all, you may be a little bit confused here. We used to talk a lot about Xlucane, now we're talking about Ximluci. Xlucane was the development name of the product. Now, Ximluci is going to be the brand name of the product once it come to market. What is this? This is then a biosimilar candidate to Lucentis, that is an approved drug for several eye diseases commercialized by Novartis and Roche globally. It is used in treatment of several severe eye diseases, mainly age-related macular degeneration, so an eye disease affecting elderly people and leads to deteriorating vision, in worst case, blindness if you're not treated.
Also, diabetic macular edema, which is affecting working-age population. 1%-3% of everybody with diabetes is going to get this disease. A lot of severe eye diseases and these are big indications. We are estimated to be some 18 million affected eyes globally, and five of those in Europe and the U.S., the rest in the rest of the world. There is an issue even in this market with undertreatment. We estimate that roughly half of those eyes in Europe and the U.S. Are undertreated, and this is the reason behind this high pharmaceutical costs in combination with limitations in the reimbursement schemes. This is of course more accentuated in the rest of the world, with the majority actually going or being undertreated due to severe limitations or nonexistent reimbursement, essentially.
It's a very important thing now to bring more cost-efficient treatments to this patient population, and that is exactly what we're going to do with Ximluci. We have been going through the development pathway that you have to do to meet the regulatory standards of a biosimilar. You have to demonstrate equivalence versus the originator, and you do it on the one hand with a very extensive comparative analytical assessment with a panel of maybe 20 analytical tests, laboratory tests that you perform. You compare your biosimilar candidate versus batches that you procure on the market of the reference drug, in this case, Lucentis. We have with that demonstrated a very high level of similarity compared to the originator, Lucentis.
We have conducted a large phase III trial in 580 patients with age-related macular degeneration, and they are demonstrated equivalent efficacy in terms of vision improvement, essentially, and also comparable safety to the originator. From a timeline perspective, starting with Europe, STADA, our partner in this development, submitted the marketing authorization application in September last year, and we have since been navigating through the regulatory process in Europe. Last week, we got a positive opinion from CHMP, the scientific committee that recommends an approval to the European Commission in Europe. That was hugely important, of course, and it will lead to an approval in November this year.
Meanwhile, in July, when the patent expired on the reference drug, Lucentis, we started to produce commercial volumes of the product, and that is going to form the launch volume, which then is going to allow STADA to launch the product in the first quarter of next year. With regards to the U.S., as many of you are aware and have read, we submitted the BLA, so the application to FDA in the U.S. in March this year, but we had to withdraw it in May this year. That was due to FDA identifying a couple of information deficiencies in the application as per their requirements.
We're currently working that through as a team and together with our partners, STADA and Bausch + Lomb, and we are having a close dialogue with the FDA. We're going to have a meeting with them next month to make sure that we understand all these items identified by the FDA correctly. Then we're targeting a resubmission of the application in the fourth quarter this year. We hope that we can reach an approval towards the end of 2023 and then allow for our North American partner, Bausch + Lomb, to launch the product in the U.S. We have two partners that are going to commercialize Ximluci so far. We have Bausch + Lomb for North America.
For those of you not familiar with Bausch + Lomb, they're an eye specialist. They have a large portfolio of eye products, including prescription drugs in the eye segment. We think that they're going to do a very good job in selling and marketing this product because they have a sales force set up already that is going for the roughly 2,500 eye clinics in the U.S. that currently are administering Lucentis to patients with these retinal disorders. They have strong relationships to the retinal specialist. They have a very well-recognized brand name in this segment, and they have a complementary portfolio and a really long-term commitment to the eye segment, and that they believe will play them well when they are selling and marketing this drug eventually.
STADA is our partner since 2018 really, that has been our co-development partner. I think that partnership has served us very well. Also considering that this really is the first biosimilar candidate that we're now bringing to market, it has been hugely important for us to work together with an experienced company such as STADA. We're hugely thankful for that partnership with STADA. I'm probably not going to say so much more about STADA because I'm instead going to hand over to someone who knows that much better than I do, Bryan. Without further ado, I therefore hand it over to Bryan and we'll all hope that the technology will work here. Let's see if we can hear a word from Bryan.
Good afternoon. Can you all hear me?
We can hear you.
Fantastic. Super. I unfortunately cannot see what you are projecting.
I'm on your first slide now, Bryan.
I'm sorry?
I'm on your first slide now, Bryan.
Yeah. No worry. I was going to say that, we can steer this, and I'll prompt you if we need to move forward on the slides. In any case, a real pleasure to be here this afternoon with all of you. I'm very happy to be part of this Capital Markets Day with my colleagues at Xbrane as well as the investors in Sweden. My name is Bryan Kim, as Martin just mentioned. I lead the global specialty organization at STADA. Just by way of short introduction, I'm relatively recent to STADA. I've been here about a year and a half building both the biosimilars and the larger specialty franchise here at STADA.
Most recently I was part of the leadership team at Samsung Bioepis leading the corporate development efforts. I think you know a little bit about Samsung if you understand the biosimilar space and they've been around 10 years in terms of biosimilars production but also have the largest mammalian-based manufacturing capacity now in the world. Building a significant presence in the bio sector and certainly a known competitor of our ranibizumab product. Prior to that, I sit as Anders I think was also we had a shared employer in Boehringer Ingelheim. This is my second time actually in Germany. At first time around there when I was here, I was with Boehringer Ingelheim.
Part of that time was helping to build the biosimilars business at BI, which unfortunately I think, has wound down since then. I think long story short, I've been part of this biosimilar story for some time now. Even as far back as, with Pfizer when they were, starting to make a foray with Biocon many years ago when I was in the U.S., with Pfizer. I think this meeting is really timely having gotten the positive CHMP opinion, which we were looking very much forward to and working very closely, with Xbrane. A real milestone for us, particularly given that not all biosimilars are alike, I would say.
I think, you know, many of the early generation, the smaller proteins, were a lot easier from a manufacturing perspective, quality control, et cetera, demonstration of biosimilarity certainly. This particular product is a difficult one, and it's not for the faint of the hearted. When Martin Åmark and Anders Tullgren suggest that Xbrane is a leader in this space, for sure, this is a major achievement. I'll start just with a little bit of an intro on the company of STADA, and then I'll dig a little bit specifically into the ophthalmologic space and our preparations thereof. If we go to the first slide, which is slide 15, which I have just in terms of STADA overall. We as an organization have been around for 125 years.
It's a well-established and well-known entity and with many brands that are familiar, particularly in Germany. Five years ago, Bain Capital and Cinven became owners of the company, so we are a PE-backed organization. Which means that aside from the capital funding, we have tremendous support from our sponsors who have a lot of experience in this area. Obviously, a lot of transformation has happened to the organization over the five years in terms of management and more importantly on the portfolio, where today we have a very diversified portfolio across the backbone of the generics consumer healthcare business, which we have really ramped up based on both organic and inorganic activities and acquisitions of Sanofi, Takeda, and others' assets.
Then my area, which is the specialty, which encompasses both biosimilars as well as value-added medicines and innovative products, for serious ailments. We've been able to, over the course of just last four or five years, double our top line and, the same for our bottom line. All the while streamlining our very massive operations, supply chain operations. I think the net result has been, you know, continuous growth despite all the macro headwinds that many organizations have been challenged with. I think, without getting into any forward-looking statements, even in 2021 or 2022, I'm sorry, we should be able to demonstrate significant growth over the previous year. If you'll go to the next slide 16.
Just in terms of our presence across Europe, obviously Europe is our stronghold, and we have front offices and commercial infrastructure in pretty much every market. There's a few exceptions, Greece, Cyprus, and I think Turkey and maybe one or two others are markets where we are working through distributors. Otherwise, STADA has its own presence across all of these markets. One of the things that we do particularly well is manage the complexity of our network in terms of manufacturers and partners. We have at any given moment around 400 CMOs that we are actively working with, in addition to our very sizable plants in-house in Serbia, Vietnam, and in other locations. At any given time, we're also managing more than 20,000 SKUs.
In terms of supply chain management and quality management, this is clearly a source of capability that we love to bring forward. If you go to the next slide, please, on slide 17, which is the Harvey ball slide. Just double-clicking into some specific countries. You know, depending on the country, different channels, customer channels matter more than others. Some markets like Germany and France, we still label it as retail markets where you really need to spend a lot of time with the physicians with these types of products. A heavy-duty traditional field force type of marketing, whereas in Italy and Spain, it may be a bit more of a hybrid. In Italy, you may have 49 provinces, so you still need to go through some level of tender.
At the same time reaching out to the key prescribers, similarly in Spain and on and on so forth. There's the one end of the extreme, the centralized single tender type of mechanism. Across the board, clearly, we have areas where we can continue to build. We are very committed to the specialty area, and there's an ongoing upgrade of talent and investment and resources across the board. Rest assured in the key markets, we do have an existing infrastructure that could readily address any and all specialty products. I'll get to that by illustration of the products that we currently have in our portfolio.
If you'll go to the next slide, just speaking about the addressable market, and I think Martin had already touched on this, but Europe alone, the bevacizumab market is still very substantial. In our key markets where we have the strength and between Germany and France, these represent the lion's share of the value. We also have the benefit at STADA of having a Eylea biosimilar that will be coming in the future through a different partner, but it gives us the ability to really invest early on into the ophthalmology space. One observation here is that, you know, I think years back, I try to recall when I was at BI and contemplating whether or not Lucentis was the right target.
I think what we've all learned is that despite the competitive landscape, new entrants, new standards of care, new innovation, there's a long tail to biosimilars. In the case of Lucentis, despite Eylea entering into the market, the overall sales across the world has been more or less, you know, maintained atyy around $3 billion and about $1.9 billion of that coming from Europe. I fully expect that at our launch and for a number of years to come that we will continue to have a very robust addressable market. Of course, we shouldn't be comfortable because we have a lot of new entrants, as I've mentioned. The originators have more sustained release formulations. There's bispecifics that are being sold, a little bit of a different mechanism of action, and then even further down gene therapies and et cetera.
All of those things we do need to take into consideration when we look at the long-term return on such type of assets. I think near to midterm, the addressable market still looks very attractive. Next slide. Just overall observation on the biosimilars uptake rate in Europe. This would be slide 19 in what I have. You have probably seen enough of this type of analysis, but the key takeaway is that with each successive biosimilar launch, the uptake appears to be accelerating, even with some of the most complex monoclonal antibodies that we've seen recently in oncology and autoimmune areas. There are, I think, number of catalysts that will continue to propel this uptake across Europe.
Some of you may have seen the announcement by EMA on the interchangeability designation that is broadly applied to biosimilars. To be sure, across Europe, I think we've all understood that biosimilars are interchangeable to the originator. This was more of a regulatory designation that was applicable to the U.S. for various historical reasons. I think there is an acknowledgment now by the central authority of the interchangeability, which I think is a very positive thing for us. More specifically, in the individual markets, there are initiatives to accelerate the uptake. For example, in France has, despite the very heavy usage of biologics, there has been limited, relatively speaking, more limited penetration of biosimilars. If you take a big product like Humira, so far there's only been about 35% penetration.
What's happening now in the recent year is auto-substitution, starting with some of the more simpler biosimilars, and they will progress forwards. Similarly in Germany, they have deferred this auto-substitution for the immediate time being. I think the trend line is very clear in terms of more and more countries providing the right incentives and quotas and other mechanisms to ensure that the biosimilars uptake is more complete. Next slide, which really for me is, you know, we can talk a lot about how we're getting ready specifically for Ximluci and STADA's capabilities, et cetera. I think for me, the most important proof points are what we have done so far with our biosimilars and specialty portfolio. In fact, we have actually had two successful and have two successful collaborations with Swedish organizations by happenstance or by design.
The first was back in 2019 with an organization called Lobsor. We had acquired their late-stage Parkinson's asset. This product in the 20 months or so that we have been in the market competing against an entrenched competitor in AbbVie, we have been able to acquire 20%-40% of market share in the key markets, and that number continues to grow. Very recently, you may have seen a press release of a new orphan drug that we are launching starting with Germany called Kinpeygo, and it is to address a rare disease related to the kidneys. This was based on a partnership with a Swedish organization called Calliditas. This will effectively be an innovative product at a very high price point, but clearly significant value to both patients.
Both of these products involve very high touch, getting to know the specialists and the centers, exactly knowing where they are, and having the right scientific and medical communications. I would say these are at the one end of the extreme of specialty. Not having had necessarily deep background in these therapeutic areas, we've been able to build very quickly the commercial infrastructure to be able to maximize the value of these assets. On the biosimilar side, we've had some long history here as well. As far back as 2008, we've launched one of the first epoetins in the European market. In the U.S., we have a partnership with Pfizer, where we launched in 2017.
This product alone represents almost SEK 120 million in sales for us with a very attractive gross margin. We have had, again, many organizations think that we may be a recent entrant biosimilar site, but we have had some legacy here. In 2019, we launched a product called Movymia, which is an osteoporosis indication, and we are a market leader, number one in market share, aside from the originator in all of the key markets across Europe. Most recently, we have launched Hukyndra, which is a biosimilar to Humira. As you know, that is a very crowded market landscape with eight adalimumab, effectively the same molecules in the marketplace. This will be a bit of a dogfight. But even in that instance with Oyavas, which is our bevacizumab, biosimilar for treatment of solid tumors.
We launched this in April of last year, and we have been able to attain close to 10% market share in some of the key markets, and really, to my personal satisfaction, really closing in on my former employer in Samsung and some of the other market leaders. I guess a long story short, what I wanted to illustrate with this slide is that, you know, no matter the therapeutic area, STADA has been able to gear itself up for success and rapid commercialization of the various products in our portfolio. We're very much looking forward to starting Ximluci obviously very early next year. Next slide. I think I've touched on most of these aspects of our competitive position.
I would just say a couple things here without getting into, I think, what's obvious on this page. I mean, all of the things that we need to do in terms of basic blocking and tackling, as well as understanding where the customers are, concentration of the highest value customers, making sure we position the product accurately, that we have the right medical and scientific story. That is all underway, as well as people that we need. The things that we really, I think we need to be careful or consider is to ensure that we are managing the very complex supply chain well, which both across Xbrane and STADA organization are doing.
Also making sure that we are able to bring the core presentation of the pre-filled syringe on a timely basis, which again, we are in the process doing. Over time, the cost of goods is going to be a primary factor in this competition, and there's no way of getting around that for biosimilars. The scale of our production of drug substance production based on the very efficient platform or proprietary platform that Xbrane has is going to be crucial for the long term competitive basis for this product. Yes. I'll just say just a couple things about the competitors as well. Samsung and Biogen, obviously, organizations that I happen to know very well. We should consider them a very formidable competitor.
They've launched in the U.S. in July, so we are tracking them very carefully. The uptake that is happening in the U.S., some of the feedback the customers are giving, which could be good lessons learned, as we progress. Obviously, Biogen, I understand, is also now a partner, and they have all three anti-TNF biosimilars in the market. It will be a strong partner for Xbrane for the product that's in place. On the ophthalmology, I think there is an area where I think we can continue to differentiate and distinguish ourselves. I would point that out. Similarly, with Coherus out in the U.S., note that they have publicly noted that they are pivoting away from biosimilars to focus on the innovative side of things.
I think, again, without talking too much or speculating about our competitors, it's important to note that we are here for the long term. We are committed to specialty and biosimilars. We are able to build the right capabilities in ophthalmology and otherwise partner with organizations like Bausch + Lomb. We should be in good stead amongst the biosimilars competition. I would just skip the next slide and go to the team. I won't go into the individual members, but rest assured, we have assembled experienced folks with relevant experience in biosimilars across all of the key markets. Organizations like Via tris, Sandoz, Mundipharma, et cetera, are where we have found the best talents to support us in this endeavor.
Myself here, since I've joined, I have built, rebuilt the teams around both commercial and development to support us in this journey. Lastly, slide 24 is the final slide for me. Obviously, STADA from a direct commercialization is focused immediately on Europe. We have a terrific partner in Bausch to help us in North America. We are, as STADA, able to address many of the key markets in Middle East, North Africa, particularly the GCC countries which are the most attractive. We have a full infrastructure, field force, and regulatory team there. We'll have the discussions with the Xbrane team to try to be able to address those markets, as soon as possible.
We are also in active discussions with various leads in other parts of the world, including parts of Asia, as well as Brazil and Latin, to truly, fully maximize the potential of this important asset for both Xbrane and STADA. I'll stop there, and thank you again for your attention and open up for any questions that you might have.
Thank you very much, Bryan. We're gonna start with potential questions from the people in the room here. Anette has a microphone that she's going to walk around with, and you please read out the question clearly. Okay?
Thank you so much. Mattias Häggblom from Handelsbanken. I have two question, please. Curious to hear more how STADA thinks about, you know, with three biosimilars for the Sandoz. You gave us some of the metrics, what's gonna be important in terms of competitive landscape, but maybe you can expand and talk about perhaps the most single.
Most important one, to win some of those major markets in the European region that you provided us with more color on. Secondly, I'd be curious to hear, start us thinking about the overall thinking about VEGF market with biosimilar Lucentis, if it possibly can make an inroad to brand Eylea sales as well. Or since you do have a biosimilar candidate as well for Eylea in your portfolio, in contrast to some of the other competitors who only carry one of the two, is that the answer to the question? Thanks so much.
Thanks for the question. On the first question, related to how we may differentiate ourselves within the, among the competition. I think first of all, let's acknowledge that the competitive density is relatively low for this molecule compared to many of the other biosimilars, major biosimilar, blockbuster biosimilars that we see in the market. That may be partly a function of the number of VEGFs that we expect to see. But it also, I think, speaks to the challenges and the difficulties associated with developing this particular molecule that is based on a bacterial platform. I think that's a kudos to Xbrane for having executed on this front. In terms of differentiating, obviously we prefer to have been very first to the marketplace.
Again, I think we are all within the zone of competition here in terms of timeframe. We all have similar challenges, I think, in terms of freedom to launch and IP considerations that we need to work through without getting into the details of that subject. We will be very strategic and intentional about where we can win. With the BLA presentation that we will have early next year. For example, in the market of Germany, there are certain concentration of compounders that we can prosecute and convert significant shares through those intermediaries. We will be very selective about who we work with and how we pull through the initial BLA presentation through these partnerships.
The key to that, I think, is having the right discussions with the right partners early on. This is what we are exactly doing at this moment. I think again, wherever else we can ensure that we can get the bios to the markets earlier rather than later and establish our brand and trust associated with Ximluci, I think it will work favorably for us as the additional presentations roll out. On the VEGF, obviously there's a lot of variations. Obviously, there's off-label usage that we're all familiar with on bevacizumab.
I think it would be a bit of speculation for me to suggest how this thing would all evolve in the context, again, as I've said earlier, of newer versions with different targets within VEGF, device specifics that address both VEGF and Ang-2, et cetera. I think we just need to monitor the evolving landscape closely. One thing that I think I have observed over my 10 years or so in the biosimilars is that there is a long tail associated with any particular product. If that wasn't the case already, you know, one could have argued that Eylea would have taken a much greater share of Lucentis. The proof is in that Lucentis has maintained its more or less $3 billion in sales across the world in a steady fashion.
There's a lot of real world evidence. I think there's a lot of loyalists to this particular brand. To the extent that the biosimilars with fully demonstrated equivalence and the quality of production that we intend to have, I think the addressable market can remain there.
Thank you, Bryan. Next question.
Hi, Bryan. This is Sebastiaan speaking from Kempen. I was just wondering, still on Eylea, because it will become off patent in 2024, and then there are a lot more players that are actually developing biosimilars in that specific space. What is your view on Ximluci taking market share from Eylea and then also protecting it after Eylea becoming off patent in 2024? And then also, can you maybe talk a little bit about patients that are not on VEGF drugs that maybe will translate now to becoming on VEGFa drugs with biosimilars coming to the market?
Yeah, I think on the first question about taking Eylea share, I mean, I think we've seen this with other modalities and earlier biosimilars where, again, with similar mechanisms of action and a price advantage, there may be opportunities for us to capture some of that. But I think even aside from that, I think the more interesting and encouraging data is that especially with the early anti-TNF, the major anti-TNFs in Europe, we've seen that the market expansion upon launch of biosimilars was anywhere from 10%-12%, depending on the molecule. You don't see that necessarily in U.S., where I think the biologics usage has been more successful and prevalent, and there may have been a bit more of a quota in Europe.
I think just by virtue of that, you will see a very significant expansion of usage that we can hope to have once the ophthalmologists get comfortable with this. I can't really speculate on how much of the Eylea share we can expect to have. I would gather that because of the price advantage, there may be some forced conversion there. On the non-VEGF MOAs, I'm less familiar, obviously, just quite frankly, what those could be and how our entry of our biosimilars could materially impact that. I'm primarily focused on the existing market and the market expansion within the measure.
Thank you, Bryan. Next question.
Hi, Bryan. Can you hear me?
Sure.
Hi, Bryan. Thank you for taking the question. Dan from Pareto here. You mentioned the platform that you liked from Xbrane, and since you came from Samsung Bioepis, I would be quite interested how it compares to theirs in terms of yield and essentially COGS in the end. One big differentiator I think is, of course, we saw that when Novartis launched the Lucentis PFS. How do you see the PFS development for Xbrane? How that is going? Maybe also specifically here, what the difference could be on the market having a polymer-based variant versus glass. Thank you.
Yeah. Very specific and informed questions, I would say. I think on the Samsung side, obviously, I have very specific figures that are confidential in my head in terms of productivity, yield, and plastic goods and all of those things. I mean, the only thing I can say that is despite, I think, clearly being at a smaller scale, at least thus far, Xbrane is in a very competitive position along with our manufacturing partners, particularly our drug substance partner on bothway biotech. I think we have opportunities to even further improve there with the scale of activities that are planned. I don't have too much.
I think there's only upside there, on the productivity side of the equation, even versus some of the larger organizations that we would compete with. I think on the pre-filled syringe, again, the launch of pre-filled syringe is pending resolution of certain IP considerations. Obviously, our initial application to the authorities reflected only the vial formulation and we are actively working on this through various means. The hope is that we will have further clarity on this early next year in terms of at least the timeline for the availability of the pre-filled syringe presentation. The last question on the polymer versus glass is something that I am not as familiar.
I suspect Martin is a lot closer to how that could be a differentiator, but so I will defer to our colleagues at Xbrane on that point.
Thank you. I think we need one more question here. I think otherwise we need to start to move on to the next section of the presentation. Let's take the last question now on the Ximluci topic.
Okay. Hi, Bryan. Since you partnered with Xbrane, if you would give a short pitch why you choose to partner Ximluci. Secondly, you talked about Asian markets for partnering. Is there any special market that you find more interesting? You talked about the platform that Xbrane has. Would you have interest for other assets from Xbrane as well?
Yeah. Thanks for the question. I think the first question and the third are a little bit related here. I think first of all, there are a few of the major biosimilar programs that are of the bacterial platform-based. Quite frankly, there aren't too many organizations that are capable of delivering on these types of programs. Clearly, Xbrane is distinguished and differentiated on that front, and that is really the reason why we have partnered early on this journey together. To be clear, this is the only program where we are invested in a co-development fashion, which means we are hand-in-hand across the entire journey of development. I think it was mentioned earlier also that we do have an equity stake in Xbrane.
Obviously, there's a lot of confidence on the larger platform and capability in Xbrane on the part of STADA. The second point around additional markets in Asia, obviously where some of the key growth markets like Korea and Vietnam are markets that we have some familiarity with and relationships with some local partners. That's where I think, despite there being relatively modest sized markets today for this product, it is worthwhile to potentially invest and secure an early beachhead. When we talk about Asia, the larger markets often get mentioned, China and Japan in particular. I think for different reasons, the barrier to entry, I would say, a little bit higher in those markets.
The Japanese PMDA, the authorities there often require additional trials and issuance of additional presentations that are specific to that locality, so that often becomes a challenge. Similar with China, I think, you know, oftentimes, despite I think the efforts that were made a few years ago, to encourage importation of global products, the reality is that we're seeing that a lot of additional work is required to register the product in China. I think for those reasons, we have to think just very carefully about how and when we might be able to prosecute those. There are smaller markets that I think more quickly that we can address and equally attractive from a growth perspective. Yeah.
Thank you. Bryan, we have just three quick questions coming in from the audience online here. First, will you be able to launch in all European countries at the same time? How quickly after an approval could a launch take place in the respective European countries? In connection to that, how long time will it take to recruit the specific ophthalmology sales force?
Yeah. Just in terms of launch timeline, obviously, you all have seen the positive CHMP opinion, and you all know that typically it's 60, 70 days. Our expectation is before end of November this year, we would have the total approval, marketing authorization, which means technically we can be in market shortly thereafter. We are in the sense that we are targeting February, but obviously the manufacturing lead time that's required for this specific product is particularly long. This is why we're giving the guidance of early next year for the launch. I would say that launch across Europe is how we would frame this. Yeah, we would be launching in Europe.
It's just the certain markets, I think it would be more obvious in terms of being able to address a large portion of the market, let's say. We will be opportunistic to see where even with the limited presentation initially that we will be able to get to market as quickly as possible. In terms of the sales force and so forth. The way we would do this is, again, if we were talking about vials, and we do this through intermediaries such as compounders, what we need are actually really capable key account managers. We're very fortunate that in markets where such mechanism exists, we already have that capability in-house. We do have a portfolio of products that are already being addressed through those channels.
Despite that, there are plans to hire relevant, dedicated key account management for ophthalmology. In fact, that will happen, for example, in Germany, at least planned to be happening by, I think, before the end of this year, for sure. Depending on how we progress with the pre-filled syringe timeline, certainly within the next year, we will be scaling up the sales reps that are required for the individual detailing activities over the course of next year. Hopefully, that answers the question.
Excellent. I think we'll round up here, Bryan, and I think we all from Stockholm here, we thank you for calling in and talking this through. It was very much appreciated. Thanks a lot.
Real pleasure. Yeah. Thanks for the opportunity. Appreciate it.
Okay. We need to move on in the program, but there will also be general Q&A in the end where we can address further questions on the Ximluci side. I hope that that shed some more lights on how our partner STADA sees the opportunity in Europe and also their thinking and planning ahead of a launch. Now a little bit more about Xbrane as a company. First of all, there's a strong purpose in what we do, and that is really what brings all the people in our organization to work each day. It's all about really bringing drugs to the market that can increase accessibility of treatment to actually patients who are suffering and not having accessibility due to financial constraints. That's what it's all about.
I think really we can do something good for society when it comes to it. I think we are doing, and now this is the first proof, of course, with Ximluci. It's a very strong purpose-driven organization where people really are motivated by that higher meaning, if you will. I think we've built now an organization that has the capacity really to start one new development program annually. We have the platform which David will talk more about, which all activity rests upon. We have built a team of some 80 professionals. We have Nina here today, Head of HR, who can take questions in the end, but I think she can also speak to that. We have had an easy time to recruit people.
I think we have a good reputation in Sweden, and that we have high satisfaction among our employees. We're certified Great Place to Work with a high so-called trust index of about 85%, which is very good, and a low employee turnover. We built a strong team, and we have great facilities, which for those of you who want, you can come and visit after this presentation. We have that set up and really now the capacity to accelerate and take on one new program annually. Our platform and our team has really been validated by these strong partnerships that we've been able to establish. I mean, think about it.
We've been able to stand the scrutiny of due diligences from these three companies, and I can tell you they're not light. They're looking into all the details of any given program when they're doing their due diligence and making final decision to sign a deal because they are investing, of course, a lot of money into these programs. As you know, STADA and Bausch + Lomb for Ximluci, and then of course, we have the pleasure of partnering up with Biogen for our next coming biosimilar candidate, Cimzia, which Anders will talk more about later in the presentation. This is over EUR 150 million in paid and committed licenses and cost coverage. Roughly speaking, EUR 100 million of those are yet to come.
There's still a high, you know, committed license fee coming in from only these three partnerships. Of course, we want to sign further deals with our upcoming programs as well. Having a look at our portfolio, it addresses EUR 53 billion of peak sales of the respective originator products in 2026. We've talked a lot about Ximluci. We have our Cimzia biosimilar candidate, which Anders will talk more about. That's very exciting. We're the only company doing a biosimilar referencing Cimzia, so real exciting. We have our portfolio of oncology products, which all in all are addressing EUR 48 billion of potential sales in 2026, a huge market opportunity.
They go off patent towards the end of this decade, but it's really time to accelerate this development so we're there in time, and also a portfolio which we want to find a suitable license taker for during the course of next year. That's a little bit more about Xbrane. Things are changing continuously in the competitive landscape. If we look at European and U.S-based pure-play biosimilar developers that are engaged in development of biosimilars but have no commercial infrastructure or ambition, but rather out-license their developments to commercialization partners. As far as we can tell, we're one out of four in that segment because many companies or a few companies that were in that category have now taken commitments to expand and also commercialize their own products.
We're one out of four. What we have a strategy, as you know, to out-license our programs to commercialization partners. On the one hand, we can then work with companies who have no in-house capability to develop their own biosimilars. In that category, we have STADA, our partner. We have Biogen. We have companies such as Teva and Zentiva. These are companies who really are looking to in-source programs from this category of developers essentially. Then we have a couple of companies who are fully integrated. That is to say they have the capability to develop biosimilars but then take them all the way to sales and marketing. Here's an opportunity for us to fill gaps in their portfolio.
They're never going to develop biosimilars on everything that they want, and most of them don't even have a strategy to do that. Some of them say, "We do 50% of our final portfolio in-house. The rest we source in from other developers." That's also an opportunity or a set of clients or customers to us. I think what I want to say with this is the way it is developing now. I see a world where there are more takers of any given program than developers, which of course puts us in a very good position when we are going to strike a deal and we are going to negotiate a deal. That's very good, I think, in terms of market development.
If we look at our closest peers, the way we define it, to European developers, Alvotech and Formycon, I think really, this question was asked also with regards to comparing our platform with Samsung. It's hard to say because we don't have always the insights into exactly what these other developers do. But one thing we can follow and that we are following is patent approvals and patent applications that we do and that our competitors do. I think based on that analysis, it's clear that Xbrane has been more focused on IP, which relates on the protein expression and getting up the yield or the productivity in the production system. So we have 10 approved patents and 24 pending, and they're centered around this.
While our peers have been more focused on formulation and device, also areas which by the way are very important and an area where we need to strengthen ourselves. I think we really are differentiated in that focus on yield and low cost. That's that. Now David Vikström, our CTO and Head of R&D, will talk more about exactly that, our platform technology.
Thank you very much. Great with such a big audience. Now it's the most exciting part of this day, of course. It's the R&D part. My name is David Vikström. I've been with Xbrane since 2010, so I've been through the entire journey, more or less. It's been a great journey. Very exciting and lots of exciting things to come. I think it's important to say first, you know, we have our platform. I think it's very important to realize that, you know, we're continuously developing our platform. We're never done, and we're not happy with the platform. We're happy with the platform, but it can always be improved. That's the good thing with R&D.
There are always things that you can improve and build on. Our platform technology, it's really a toolbox of our technologies and knowhow. You know, our aim is the results that we get is really high yield with good quality products. The high yield with good quality means that we can produce the protein at a lower production cost, which of course for biosimilar is really important. How do we produce a biosimilar or a target protein that I will also call it? I think also for the people that are not here, I hope they can see the hand here. Everything starts with the gene construct. The gene construct is sort of the blueprint of the protein.
It contains all the information that the cell needs to be able to produce this protein of interest. You take this blueprint, you put this into a host cell, and the host cell is, for us, it's either E. coli, a bacteria, or a Chinese hamster ovary cell, which is a mammalian cell, so from a little hamster. The host cell, that's really our factory. The blueprint together with the host cell goes into the process, and this is exactly how we grow things. We put them in a tank like this. You grow them, you feed them with everything they need. The cell is, you know, really sensitive. E. coli loves sugar, for instance. It's like kids, you know, feed them sugar, and they're happy.
If you feed them too much, they will be too happy, and they will not produce the target protein with good quality anymore. The same thing, if you give them too much oxygen, you can have difficulties there, et cetera. You know, what temperature, how much should you feed them? When should you feed them? It's lots of difficulties or challenges when you optimize the process. Inside such a tank here, you can control everything. You can really control everything, and then we try to figure out how to grow them so they are as happy as possible. Once the host cell has produced the protein of interest, the biosimilar, you purify it.
You need to remove the cell debris, and you need to get your protein of interest out from this soup. I hope you can join me in the lab tour, and I can show you more exactly how this is done. Because of course, the host cell is producing, you know, thousands of their own proteins. We need to find our protein and pick that out from this soup. Once you have purified it and removed all other proteins and all the cell debris, you finally end up at, you know, the target protein, which is hopefully a biosimilar then. Then you need an analytical department or a lot of analytical power to really prove that what you have produced is a biosimilar. You know, each block here. That's funny.
Each block here could be like a Lego, a piece of Lego. Each piece of Lego has to be exactly in the right spot, and it has to be exactly the right color, and it has to have all these different knobs that the Lego bricks have in the right position. They have to be positioned together in the right way. It's a you know, it's fairly complicated process to develop and produce a biosimilar. At Xbrane, we you know that's the way to do it. At Xbrane, we have our toolbox. For each step along the way, we have our tools that we use. You know, obviously, the bigger the toolbox, the more tools you can use to build something that is more efficient.
For the gene construct, the blueprint, we have the LEMO system and the Rhamex system. I will go more into detail on those on the next slides. We also have other techniques to increase the expression if the increase of expression is what is needed. That's the toolbox for the gene constructs. For the host cells, for E. coli, we made a whole library of different E. coli strains that then fit perfectly with our blueprints. Because it's like a whole chain. If the chain breaks somewhere, it's useless. You need to have a strong chain all over the length of the chain. We also are developing strains for CHO cells now. Good toolbox for gene constructs, good toolbox for host cells.
When it comes, of course, to the process, we're extremely happy to have a really good lab here with state-of-the-art equipment. Equipment is great to have, but if you don't have the people that knows how to run it and the team that can work around all the challenges that we meet, then, you know, it's useless. A strong team with good facilities, that's how you can be successful. It could sound a bit, you know, how can we in Sweden actually compete with all these big companies out there. We see it over and over again with our interactions. The interactions that we have, the discussions that we have, we see all the knowledge that we have, and we see the infrastructure that we have.
Really good knowledge and really good infrastructure. For the process then, we optimize both upstream and downstream with something that is called design of experiments, and this is a very efficient way of running experiments. We look at the experimental space that is looking at all the different parameters, how they interact together, and instead of then running, you know, 120 different experiments, we can run 12 experiments and get more information out of those 12 experiments compared to 120 experiments. In-house, we also have a really, really good analytical team with good equipment. Those are the eyes and ears of the organization. If you don't have a really good analytical team nearby, it will take you a much, much longer time to get all the answers that you need.
Because of course, it's an iterative process. You do something upstream, you need the result as quickly as possible from analytics to figure out, you know, what has happened inside the tank. Once you know that, then you go back and you redesign your setup. Good analytics in-house is really, really important. The analytical department is also very much in charge of the analytical characterization, again, to show that we really produce the biosimilar that we want to produce. As Martin mentioned, you know, you can't get patents if your inventions are not good. You need, if you come up with something, you know, that could be nice, but it's not gonna be a patent.
You need to show that it's really useful and it's a new thing that you come up with and you can also use it. We can show that, you know, we can really invent things. Right now, 10 approved patents and 24 pending patent applications. Good. What I mentioned previously, the LEMO System is a great tool for us. The LEMO System, LEMO means less is more. What you should look at is over here, you know, the target protein. For the standard system, when you produce it, you take your blueprint, you put the blueprint into the living cell, you grow the living cell and you try to express as much as possible. You try to make the cells produce as much protein as possible.
If they produce a lot of protein, you know, then you say, you know, "This was successful." When you start analyzing it, you see that they have produced a lot of protein, but it's actually misfolded, and misfolded in this case is useless. If they produce a lot of protein, but 90% is misfolded, you can't use it. What one of our platforms then or one of technologies is the LEMO System. Less is more. We use the system, we put the blueprint into the system, we put it into the living cell. When we grow them, we do it in a special way, so each cell is then producing maybe slightly less protein, but all of the cells are producing protein, and all of the cells are producing protein of good quality.
It's like an assembly line of cars. You know, if you let the assembly line go really, really quick, you'll get lots of cars in the end, but none of them will be nice. Here we can really, you know, make the speed of this assembly line. We can pinpoint and say, "This should be the speed in each cell." Each cell can then build lots of cars and all of the cars, you know, we can sell all of the cars. This really maximizing the amount of protein that we get out from the system. If we can maximize the amount of protein we get out of the system, you know, we can lower the cost of production. This is, of course, in the biosimilar world, really, really important.
You know, depending on the target, we can see anything from 3-fold to 12-fold increase in the production on how much that can be produced with our system. Another example is for the certolizumab biosimilar, and here again, we have used a couple of key technologies from our toolbox. We have used Rhamex, which is, you could say similar to the LEMO System. It's you get the same or similar result. We have also used and optimized both the signal sequences and the translation initiation region. Signal sequence is like the address tag.
If the cell produces something over here and it should be moved over here inside the cell, then they need this little address tag, and it should state like, "Okay, I should go over here." If this address tag is not good enough, the protein ends up somewhere else and is usually degraded, and it's useless. For the certolizumab biosimilar, we also did a lot of strain engineering, so we removed genes from the chromosome of the bacteria. We took them away to make sure that they don't produce other proteins that can degrade our protein of interest. This together then with the design of experiments again gave us a really good yield advantage. 45-fold yield advantage compared to actually to the originator setup.
Very good toolbox to have, that's for sure. Of course, we are continuing developing this platform. The previous slides were in for E. coli, and now we're moving over to CHO cells, which are the Chinese hamster ovary cells. We're moving over to these other type of cells now because they are capable of producing more advanced targets such as the full length antibodies. The new targets that we produce, they require these type of cells. On the Y-axis, you can see the yield, and on the X-axis, you can see the number of tools that we have in the toolbox for mammalian cells and that we can use.
Last year, we had this and we were showing this and saying, you know, we have already now with our technology showed that we have a significant advantage for one of our targets. Now, we continue this journey this year into more technology designs. It's very difficult to explain, but even more technologies that again, we can use to improve the expression and get more out of each cell. For those on the tour, you will also see that we're scaling up into 200 L scale up, or a 200 L scale in-house. This is also really good because that will make us less dependent on service providers, and it will also speed up things.
If we can do things in-house, we see immediately we will gain knowledge, we will gain quality, speed, and it will also lower the cost. Really good to have these in-house, and again, have the analytical tools in-house. For the future, we're looking into more mammalian strains that we will develop. Even further develop our technologies and also move into perfusion technology and continuous processing. This is a more, hopefully a much more efficient way of producing the proteins, with a smaller footprint, but still getting even more proteins out and maintaining really good quality. An example of what we already now successfully have done with our new targets in the new platform or the expanded platform. We have used several different techniques.
If we take these different techniques that I show here as optimized DNA fragments, so optimized blueprints that you know basically fit together really well in a vector design. This is the bigger DNA fragment that you put into the cell. This contains a lot of information for the cell, you know, what should I do with this? Where should this end up? And how should I produce this in the best possible way? You put this into a stable cell line. You want to have a very stable cell line. Of course, you know it's like a factory. If it's unstable, it's not good. You want to have something that is really stable.
Together with, you know, a stable cell line, with our technology, we get really an optimized cell machinery to produce our target. Again, we can show that this is really working. We can see that compared to a CDMO setup, they had been working on their setup since 2004. Then we have not been working with our setup since 2004, but we could immediately get an increase in yield of 33%. With the, you know, using more tools, we are up 50% compared to the CDMO setup. Really good results in the new CHO cells and with the new targets. This again shows with the, you know, number of approved patents and the pending applications.
If it's not novel and new, we wouldn't get a patent. This is interesting, and then we have very exciting times to come with all the new developments. Good. Maybe I took too much time.
No, no, you're good.
All right. Excellent.
If questions, maybe I should just take one from the digital audience whilst you're up on stage. If your drug substance platform is so much cost efficient versus your competitors and so good, why not expanding into being a CDMO for originators?
Yes. That would be, of course, you know, very interesting. I think that's something that is up for, you know, for the board and strategic decisions. Absolutely. Let's see for the future.
Hi, me again. Just one question. Can you maybe clarify the difference between bacterial fermentation and eukaryotic production in terms of costs?
Yeah.
Believe that one is quite more expensive than the other.
Absolutely. Produce basically the media for CHO cells is very, very expensive. Production in CHO cells is more expensive compared to E. coli. Absolutely.
Do I understand it correctly that the LEMO system is now used in every single product, or is it only used for the Ximluci product?
No, it's different. The LEMO system is great. We actually use what we call the Rhamex system more because we see other benefits from that. The LEMO system have their, you know, benefits, but the Rhamex system is slightly easier to work with.
I can maybe clarify. We always need to work with the host cell of the originator, that the originator used. Lucentis and Cimzia are expressed in E. coli, and the LEMO system is an E. coli system.
Yeah. Mm-hmm.
The oncology portfolio, it's all expressed in CHO, and there we need to work with this platform what David Vikström now explained.
Okay. The Cimzia and Lucentis molecule are both produced with the LEMO system?
Yes.
Yeah. They're produced by.
Are biosimilars? Yes.
Yeah.
Okay, great.
Yeah.
My final question is regarding the Cimzia biosimilar. Is there already a system in place that can produce enough to conduct a clinical trial study?
I can-
Yes.
We signed an arrangement with a contract manufacturer called AGC Biologics in, I think it was October last year. What's going on now is the scale-up to clinical scale together with them. That probably should be done during the course of next year, and then from that point and onwards, the product could be taken into clinic.
I think we have time for one or two questions for David. There will be a general Q&A in the end, so please rest assured that we will try to answer as many questions there might be.
No, I'm happy to take questions during the lab tour, of course.
Yeah.
Okay. Thank you, David.
Good. Thank you.
We move on to Anders.
Thank you. Thanks, David. Great presentation. Let's go further and we pick up on the question about Biogen and the Cimzia biosimilar. What about this market? This is a huge market, and the biologics, the anti-TNFs have really revolutionized the way we can treat anti-inflammatory diseases like rheumatoid arthritis and psoriasis. There are several of these TNF products, four that are approved, but one that's quite unique is Cimzia. The reason for that is that that's actually an even bigger molecule. It's pegylated, so therefore it cannot pass over to the placenta. There is clinical data that actually also pregnant and breastfeeding women can use that product.
This is, of course, very important because this is a chronic treatment, and you also go from one product to another when they are not working or you see a less efficacy over time. About 5% of this huge market is for Cimzia, and they have sales about $2 billion they generate. Of course, not all patients are treated today because the biologics that are still patented have a very high price. There is a lot of opportunity for volume growth, and we talked about that before. This product that we now call BIIB801, it's the only publicly known biosimilar to Cimzia. Cimzia is produced by UCB, and it's the only one.
Then you can say, "Why is that?" Because Humira, which we know is another TNF, I think they have 20 biosimilars and also others. The reason is here actually that it's not so easy to produce and as David talked about, it's not so easy to produce with a high yield. It's actually quite complicated. It cost a lot. Due to all what David talked about, our unique LEMO system, what we are able to do there to get up the yield, we actually think that we have a product here that can be produced in a cost-effective manner, and this was also what interested Biogen. Biogen is a major American pharmaceutical company. They have a lot of biosimilars.
They have, I think, three other biosimilars that's just anti-TNFs, and still they were interested to sign a deal with us for the Cimzia. We are in this deal responsible for the preclinical development, and they will be able to fund and do the development from a clinical and regulatory. We signed a deal with them earlier this year. We got an upfront of SEK 8 million, and there is SEK 80 million of further milestones to come. We were very pleased with this, and we are very pleased also with the collaboration. It's a very intense collaboration with Biogen, and therefore even for them, this is a high priority for them as it is for us. Just one slide to show a little bit graphically here what we are talking about, because when we talk about deals, what does it mean?
If we go first to the left, the internal development of pilot scale process, that's what we do ourselves. That's what David talk about. We do that. We do that at our cost. We were so successful with that they signed a deal with us, and we got an upfront. Our next part is to do the scale up, as we talked about with the contract manufacturing. As David was saying, we go up to 200 L, but going up in even bigger tanks, we need to do it with someone else. We signed an agreement, and we do that intensively, working very closely with Biogen. When we come to a point later, we will actually then give it over to Biogen.
The program will actually from a financial point break even for us, and then after that, it's actually more or less no cost for us, but only revenue. First milestones, and then of course a royalty on the sales. What is interesting with Cimzia is that there is no other known biosimilars, and this is under development. This comes back to the fact that it's difficult to produce and especially difficult to produce in a cost-effective way. The dynamics when it comes to price here will of course be different if we only have one biosimilar to our original than in Humira cases where you have 20 different competitors competing. That's why we believe a lot in this. We think it's. We're very pleased with the collaboration and that Biogen actually choose us to be the competitor. As Martin said, they are picky.
They are doing a lot of due diligence, and we passed that, and I think we signed a very important and also very interesting deal. We look forward to continue to work with Biogen to launch Cimzia, and hopefully we can also have more patient that can benefit from this fantastic product. With that, I think I give it back to you, Martin, to talk about our oncology products. It's even more to come.
Yeah.
Yeah.
What we then have under development are three biosimilar candidates to three big oncology products, Opdivo, Keytruda, and Darzalex. Opdivo and Keytruda are these famous PD-1 inhibitors which also were subject to Nobel Prize two years ago, if I'm not mistaken. Big drugs expected to sell all these three together for EUR 48 billion in 2026, but also usually beneficial for cancer patients. I mean, these have been drugs that have been able to treat cancers that previously were untreatable. This has revolutionized the cancer treatment even in many fields. Here is a really big issue with high costs. Going on Opdivo or Keytruda costs at least SEK 1 million here in Sweden, and much, much more in places like the U.S.
There is issue with accessibility in many parts of the world due to the high cost of these drugs. If you go to a country like the U.S., it's a concept of financial toxicity, where you accumulate a lot of debt as part of your treatment, and then after surviving cancer, you face personal bankruptcy. We can do really something good for patients with more cost-efficient alternatives to these drugs. That's what we intend to do. Now, we are in preclinical development. We are finalizing a process development at pilot scale for our first product in this portfolio. During the course of next year, we're really going to advance that further, take the first product into a scale-up together with the selected contract manufacturer, and then also the other two programs.
We're getting towards the stage during next year, which is similar in time to when we did the deal with Biogen with our Cimzia biosimilar candidate. That is now our intention. We think that this is a business model which works well for us and we want to try to do an out-licensing arrangement with this oncology portfolio during the course of next year. This is an attractive portfolio from, you know, size perspective. Pretty much all companies that you saw in one of the previous slides engaged in sales and marketing of biosimilars are going to want to have biosimilars on these three products in their portfolio. We have started in time with the intention of being able to bring the products to approval by time of patent expiry of the original, which is crucial.
We have, as David talked about, our platform technology, which we believe gives us a competitive production cost on these products. I think we, as I explained earlier, are in a good position in relation to yes the number of companies developing these kind of drugs. Now, we don't know specifically what our peers are doing in this field, but I think we are just in a good situation comparing the number of developers versus number of potential license takers. That's the dynamic we like to see to be able to have a successful process for an out-licensing. That's our ambition. That was briefly about oncology portfolio, and we'll come to now a summary and then followed by more general Q&A.
Thank you, Martin. The long-term strategy. What we have done this year is that we have quite an extensive work with looking at the strategy, both from the board and from the management with the team and coming up and clarified our vision to become a leading science-based biosimilar developer of cost-effective medicines targeting high unmet medical need, utilizing the state-of-the-art technology. This vision is summarizing that. That's what we want to be. We feel very comfortable that we have the knowledge and the people to be able to do that. I also think it's very important to focus on what you're really good at. We are becoming a world leading biosimilar developer.
There is a lot of other products outside of our portfolio, and as Martin said, we have an ambition to have one more product every year. The play field is a pure play biosimilar developer and out-license at preclinical stage. Do more of these sort of Biogen type of deal also for the new products. The competitive advantage we have is a low production cost via the patented high yield technology. Here, are we really unique? I would say that we are unique in the world. There was not many that was pure play biosimilar developer. We talked about only four in Europe. We talked about only one in Sweden. When it comes to this patented high yield technology work on that, we are probably very unique. The target is here.
We have EUR 100 million annual income generation from Ximluci three years after the launch in the EU and the U.S. Initiate one development program per year, so very committed to continue to develop new product. Of course, also what's very important for us to turn in and becoming cash flow positive by the end of 2023, early 2024. That's of course coming from the revenue of Ximluci, but also the milestones and the revenue coming in from the existing partnerships, but also new partnerships to come. This is the results of the strategy work that we did this year, and we approved by the board for the long term for Xbrane. With that, I think we come to the last slide with the key takeaways. Martin.
Key takeaways. Really what we want you to remember and take many things away from this session, but if there are some key things, these are the ones. A good competitive situation, one out of four pure play biosimilar developers in Europe. Good situation for further out-licensing. We're addressing a very attractive market, probably one of the fastest-growing segments in the pharmaceutical industry. We're doing something good for society in everything that we do. We have a differentiated technology which gives us superior production cost. We have that platform and our team validated by strong partnerships, STADA, Bausch + Lomb, and Biogen. We have an attractive portfolio addressing a very sizable market. Now it's very close to our first product being launched in Europe, Ximluci.
Then we have exciting things to come for next year when we target to do an out-licensing deal with oncology portfolio, which is a sizable portfolio. As Anders said, we have a target to become cash flow positive towards the end of next year, which we think that is very important. A target and an ambition we need to really put high in the priority. That probably concludes, let's say, the formal presentation, and let's open up for a more general Q&A session. Maybe we start with people in the room, and after that, we go towards what's coming in.
Can we just then welcome up also David Vikström and Maria Edebrink, Head of Regulatory, Nina Ivers, Head of HR, and obviously then please feel free to. I think first one here.
Yes. You're talking about the out-licensing of an oncology portfolio. Could you elaborate about the value? It's three projects and the previous you've done is one project. I guess you have higher competition that should be taken in as well, but should we think of a 3-fold of the deals that you already made, or how should we think?
Yeah, we want to do a portfolio deal. We think it. We have an advantage in having a comprehensive portfolio in the oncology field, and we've seen previously that license takers appreciate that, and we haven't been able to cater to that demand earlier. Now these are huge products. They're likely going to be more competitive than Cimzia biosimilar candidate. So it's, you know, really hard to give you any numbers here. We've said that we want to do any kind of deals with the meaning that we like that structure being rather front-loaded in that we're getting towards break even rather early. That kind of a structure we would like to do, but putting any concrete numbers on that right now is just too early.
I'm really curious, this is mostly directed to you, David. Related to, I mean, with the Xlucane and Cimzia initially with the LEMO platform, you have proved to have an increased yield and, which has proven a significant advantage to the conventional methods. How certain are you that this can also be achieved in mammalian cells with your oncology portfolio? I mean, from the position where you are right now, will you be able to achieve a similar sort of yield increase? Is that your
Yeah. I mean, what I showed is already now we see an increase of 35%-50%. This is, of course, not, you know, the same numbers as we see in E. coli. E. coli is starting, you could say, from a lower level. Therefore, you see a much more increase there, compared to CHO cells. CHO cell has been developed for quite some time, of course, also E. coli. The amount of protein you get out, it's difficult to increase it. That I can say. It's difficult to increase it, and therefore the numbers are not as significant as in E. coli. In this case, every percent is definitely counting towards, you know, lowering the production cost.
So-
I can say also, we're committed to investing behind our competitive advantage of low cost. I think in the mammalian cell world, we are going to have to invest behind the novel production methodologies such as perfusion and continuous manufacturing, something which we really believe can be the next level with regards to reducing production cost for mammalian cells. That's something which we are going to invest behind as well and is part of our competitive advantage really to really become lowest in COGS, and then we need to use all tools in the toolbox, so to say.
Okay, interesting. Just a short follow-up, if that's okay. Would you say that there is sort of a critical level, I mean, from your previous discussions with previous partner, et cetera, of how much yield you think is like where is the critical level of what you want to reach before the partner think that this is a very significant part in your offering to them?
I wouldn't really look at it like that. They are typically very knowledgeable in the area, and there are differences from molecule to molecule with regards to yield you can get, and they can look at it and see that this is very good, and without having a specific threshold or predefined number in mind, so to say.
Okay, thanks.
Hi. I just wanna make sure in case I missed something regarding the LEMO system. The LEMO system, is it something unique only to developing biosimilars?
I can go for that one. No, I mean, the LEMO System, you can use it for any protein that you would like to express. The LEMO System is more specifically for a certain type of E. coli strain, so called the B strains. It depends a bit on what strain you have from the beginning, which E. coli strain you use. Either you use the LEMO System or the Rhamex System.
Thank you.
Sorry. Also on the LEMO system. Like it's a unique platform, and it can produce a lot of products. Are there any other types of targets in the industry that you can actually use the LEMO system for with bacterial production besides Cimzia and Lucentis?
Yeah. Oh, good question. Nowadays, most biologics are expressed in mammalian cells, actually. It would otherwise be natural opportunities for us to go for. Now there are a couple of products which goes off patent in 2030 and onwards, which could be interesting for us to address. No decisions taken, but there are a couple coming up in that period.
I have a question that is a bit more commercial. Now you're about to to launch the first product, and the number has been floated around to have a discount of around 50% to originator. But then we see like biosimilars for Herceptin, for instance, where there are five on the market, the biggest discount there is 22%. How are you thinking about that? And is that something that you can influence as well with your partners or is that completely at their discretion?
A good question. First of all, pricing is a decision taken solely by our partners, STADA and Bausch + Lomb respectively. Of course, we are listening to them and how they think about the situation and what they expect. When we, for example, started the development with STADA, we thought that 50% down was a reasonable kind of base case assumption given the level of competition expected, there are three biosimilars in total. I think that still holds to be a base case, so to say. You know, it's going to be their decision. We have to trust that they are commercial, which, you know, I believe they are. We'll see then how it develops.
I think you can say as well is that, of course, there are still very different dynamics in different markets, as Bryan was saying. I mean, you know, the biosimilar markets in some countries, like you can take an extreme like Denmark with a national tender. Of course, there is another dynamic there than there is in other market. It's also each of the products, each of the biosimilars, depending on how many competitors they are and the dynamics there. I think it's very difficult to say something. I think what you can say is a range 30%-50% is probably a range that's sort of reasonable. What I think you always have to remember when you're talking about this is the number of untreated patients.
Even in Western world, there is about 50% that is not getting this. When the price go down, if you have a clinic, for example, and the price go down with 50%, it means that I can actually double the number of patients that has an urgent need for this product that are today not receiving it, or perhaps not receiving the number of injections that they should have. Perhaps you postpone that next visit to the doctor a little bit. Yes, there will be price decrease. Yes, there will be more affordable, but I would say there will also be an opportunity for a volume growth.
Thank you. Maybe one other question.
Yeah.
We talked about it briefly with Bryan as well in the pre-filled syringe. Lucentis is 165 µL, and you will have less, I understood at one point, around 80 µL-100 µL. Also here in terms of like getting to market, should a competitor come to the market earlier, they will save a lot more on COGS simply because of having much less filling volume in the PFS versus the vial version.
Correct. That is, of course, important from a COGS perspective. I think in our development of pre-filled syringe, we've gone as low as one could. I think we would be competitive in that sense.
Maybe just one follow-up. Do you see that you will be plus or minus around the same time with a PFS on the market with your competitors, or could they come faster?
Very good question. I mean, all three Lucentis biosimilars are not approved yet, but we're going to be in November, but it's only the vial presentation for all of them. We don't know the exact, you know, developments of a potential pre-filled syringe of our two competitors. We think that we have something that we could hopefully bring to market first or at least roughly the same time as potential competitors would come. It's an area where, frankly speaking, we don't know exactly the timelines and the development efforts of our competitors in that area.
Wow, you're doing great things. As you've really convinced me as an investor, and I'm just wondering, we've seen the plans five to 10 years ahead, but maybe this is a weird question, how do you see like 25, 30 years ahead? What's the plan? You know. Probably a hard question.
Yeah. I'm not sure.
Yeah, that was challenging one. Normally, we think we are thinking long when we think five years ahead. Now, I mean, I think we have, as I tried to say, we have done this journey. We see a path forward for the next three to five years. Where could that end? Who knows? I mean, I think it's obvious that there will be more and more innovative biological products coming out, and there will be a lot of those, for example, the oncology products that in 2030 will go off patent. There will also be a mechanism of more biosimilars, so more patients can use those products and be treated with those products to save money for other even more innovative new medicines.
I think being a biosimilar company and continue to build on our platform is definitely our strategic focus. Can we expand even more into novel production methods or others? We will, of course, look into that as well. But as I said when I talked about our strategy, we feel very comfortable with this first step, which is not a small step of being one of the leading biosimilar developers in the world. We do that, we go, and then we will look at all other strategic options in the future. Thank you. I have a question back there. Anette, Mattias.
Thank you so much. Mattias from Handelsbanken. Two questions, please. The U.S. approval of Ximluci is delayed, but cash flow positive target is unchanged for late 2023, early 2024. Help me understand why the U.S. approval and delay does not influence the timing of cash flow breakeven. Secondly, the Inflation Reduction Act recently passed the U.S. Congress in August. Some of your oncology candidates have patent expiration that starts 2028 and later, but with the new legislation, Medicare will be able to negotiate price starting 2026, addressing some of those products on the pipeline. You know, how does this impact, if at all, how you think about, in particular, perhaps new candidates for the pipeline?
Yeah. The first one, our ambition to get the cash flow positive stage, remains. We think that the income generation from Europe on Ximluci shall be sufficient. Provided that we are successful in doing an out-licensing deal with oncology portfolio. Otherwise, if we were to be running that portfolio full steam ahead, so to say, that would consume more capital and that target wouldn't be reached. It comes with us being able to do that and, you know, making the decision to continue those programs full speed ahead. Yeah, maybe the other question, do you want to have a stab at that one, Anders, or?
The other question was, remind me, Mattias.
Yeah. I mean, sort of, the sweet spot for biosimilars has historically, of course, been the largest products.
Yeah, yeah. Yeah, yeah.
Now to some extent, you know, smaller products that may not end up on the list of Medicare, and in particular, if they're tricky to make and less biosimilars will show up like Cimzia, is perhaps the sweet spot. So things are a bit fluid here.
Yeah.
Of course, this is many years ahead, but you know, lead times are long. You know, is it wait and see what finally happens with the legislation and if industry policy or you know, well you know, if there's gonna be changes to the final.
Yeah
legislation or is the board already thinking around this? I mean, it's obviously.
Yeah
Only one, two months since it passed.
Yeah. I've been working in the U.S. And when it comes to the whole pricing and reimbursement and what's happening there, I mean, you know, even the experts are debating on what will happen. I mean, I think what is very obvious is that it cannot sustain in this way because there is not money for it. There is not money for innovation. In the U.S., they have never really have any sort of limits on the spending or anything. One of the opportunities they have is actually to do something more effective when it comes to biosimilars, especially for the immuno-oncology products, which are fantastic. I was myself part of launching a couple of them globally, and they are fantastic.
They have revolutionized the way we can treat a lot of cancer forms. When you see those numbers, about $50 billion in cost, there must be incentives for effective and safe biosimilars to come in. That is what we're betting on. We're betting on that will happen. There will be others, there will be competitors, but we are also betting on our science of us being able to have also high yield for the mammalian produced in oncology. That's why we are also optimistic about the oncology portfolio and that we can take a good part of that. You are perfectly right. We are also looking at can there be earlier entrants. The other thing that can happen as well, how will the requirements be for biosimilars in the future? Will you be...
Will other countries go the way that the U.K. has gone with actually there is an opportunity to not do the big phase III studies, which are big hurdles which cost a lot of money. I think we need to be very, stay very in tune in a market that will transform itself and change in many different ways. Mattias, you're perfectly right and we try to have a strategy which is also the right strategy depending on different scenarios and what can happen in the market. There will definitely happen a lot in the next five to 10 years in this space. Good. Any other questions? Yeah.
I must have missed out on a basic thing regarding the production. The choice between Escherichia coli setup and the mammalian, is that determined by what the originator uses or is it a production question as such?
It's a question of what the originator is using. It also depends on the target. If we can get the information of what kind of cell the originator is using, then we will try to mimic that as much as possible with our own technologies. Both Lucentis and Cimzia are produced in E. coli. It's so-called fabs. They're slightly simpler molecules compared to the full length antibodies. Full length antibodies, you cannot produce in E. coli. There it's very simple. It's impossible to produce them because, I mean, they're three times bigger. They have much more delicate, what you call it? additions to the protein after it has been produced, in a certain way by the cell. You can say it that.
They have a glyco pattern that looks like a Christmas tree on them, and that Christmas tree has to look exactly the same for our biosimilar compared to the originator. The bacteria cannot
Handle that Christmas tree that you can see. It depends on the molecule we want to express.
Another question regarding your hope to make a portfolio deal on the oncology in line with the Biogen deal. Now, the STADA deal, we know pretty much about the profit sharing but not with the Biogen deal. Obviously, it's not. It's much less than 50% since there are milestones, but we don't know how much less than a 50% profit sharing that deal is and then not what we can expect with the oncology portfolio. Can you disclose anything about this?
I mean, we have not disclosed the exact figure on the royalties I think you're referring to, as per agreement with Biogen, but rather we've said that it is within the ballpark or the benchmarks of preclinical deals. Now, I don't know how much that tells you. You know, we've seen preclinical deals being done with 5%-20% probably of royalties. That's what we've said.
I was just thinking about the organizations and all the work that's been behind the positive opinion that we received Friday. Maria, if you want to comment on anything around that process and how that work has been going. Second also to Nina, because Sweden is this very, very small country. How have we been able to recruit in the darkness?
Thank you. I'm Maria. I'm heading the Regulatory Affairs and Quality Assurance department within Xbrane. I don't know how familiar you are with the EMA procedure for approval of biosimilars and new drugs. We started like a year ago in around January, end of January. We received 144 questions, both high and lows, on our application. We actually managed in the first round, like you have two question rounds, to respond to like 120 questions successfully, which was, for me, an amazing result really.
Mm-hmm.
We had, during the summertime, like, six weeks or even four, to respond to the rest of the 24 questions. Actually, we could have a recommendation from CHMP according to plans without any interruptions or extensions of the procedures. The questions were in both areas, so clinical, non-clinical, and CMC. Now, as soon as we have the commission decision, we are actually ready to go. It's been a great achievement by the team. It's actually the Xbrane team that's been doing all the work. Of course, STADA has been involved. They're doing reviews and assisting us in the clinical part, and also together with, of course, the CRO performing the clinical trial. But it's, I would give a huge reward to the Xbrane team.
Isn't that worth a bit of an applause?
Yeah.
Just to be?
If you have any questions, please put them afterwards. I can hand over to Nina.
Mm-hmm.
We have recruited a lot. It was two years since I joined, and we have doubled the team since then. We have a good reputation, as Martin said. Also I think it's the purpose-driven organization that drives a lot that we are here for a good purpose, and that we are helping patients out there that cannot afford these medicines. Also thanks to this, if you look at the history in Sweden, we have a lot of biologics development, but the big companies are not here any longer. We have a lot of small companies that are skilled in this. We have recruited a lot from Sobi, for example, who has closed down the early research there in the CMC. We have been lucky there.
We have a great team. As Maria said, there's a lot of passion and hard work. We will grow more. If you have good candidates that want to join us, so please contact me.
Martin, is there anything you're writing there?
Yeah. No more questions from the audience here. Let's see. We have the standard question about cash position. Do you want to have a stab at that one?
Yes.
Anette?
Yes, I can. That's mine. End of Q2, we had a cash position of SEK 250 million. As you know, we have, as Martin alluded to, our forecast includes lots of assumptions around these milestones that also are the share. We are always exploring other ways to finance the company.
Good. Then we have a couple of questions related to expected sales of Ximluci. I think all we can say, apart from what has already been said, is that the target was also understood as getting to EUR 100 million of annual income generation stands firm, but three years post-launch in both Europe and the U.S.
Mm-hmm.
In that sense, it's delayed with a year since the U.S. launch is delayed with a year. Yeah. I think there are other questions which has already been addressed. I think that, with that, we can probably
If there's no final question, I think. No.
I think we shall thank everybody for coming here and to listening to the presentation and asking great questions. We shall thank everybody online for calling in. We shall thank the team here from Xbrane side. Now, it will be closed down digitally. For those of you who want, you can join us to our facilities, and David will show you the lab and have a tour in the lab. With that said, thank you very much.
Thank you.
Thank you.