Welcome to Xbrane Biopharma Q3 report 2026. During the question and answer session, participants are able to ask questions by dialing pound key five on their telephone keypad. Now I will hand the conference over to CEO Martin Åmark and CFO Jane Benyamin. Please go ahead.
Hello. My name is Martin, CEO of Xbrane. I have with me our CFO, Jane, and we will present the Q3 report 2026 for the company. I will, as usual, go through a brief operational update related to the quarter. Jane will thereafter go through the financial highlights. First, a snapshot of our development portfolio. First, our biosimilar to LUCENTIS, which is under the brand name XIMLUCI on the market in Europe and select countries in Middle East, and now recently got approved by U.S. FDA under the brand name LUCAMZI. We have a partnership with STADA for the European market and a partnership with Valorum for future commercialization in the U.S. Second product, Xdivane, biosimilar candidate to OPDIVO, partnered with Intas Accord.
We recently announced that the pivotal clinical pharmacokinetic trial was fully recruited, so we are looking forward to watch clinical readout Q2 next year, followed by submission of a BLA to U.S. FDA. Then Xdarzane, our DARZALEX biosimilar candidate, which is in more early-stage development, partnered up with JOINN Biologics, which is conducting process development currently. In parallel to that, Xbrane is seeking commercialization partners for that product. We will go through this a little bit more in depth one by one, and starting then with LUCAMZI U.S. We are very happy, of course, with the recent FDA approval, and we are now going through preparations with our partner for launch during the course of next year. Here is a snapshot of the market, and I think the right way to look at this is VEGF inhibitors for retinal disorders.
That is a market of about EUR 9 billion , with about 10 million units being administrated annually across the U.S.. So, a very sizable market. There are about 16 products in that market, as far as we can tell. Six branded products or originator products, and 10 biosimilars, both on EYLEA and on LUCENTIS. So, I think for us, this poses a big opportunity, of course. It is a very sizable market, and even if we were to capture just 1% of that market, it could reach sales up to $100 million . So, it is a very sizable market, and we are now, together with our partners, forming the commercial strategy for the product.
So, it's a little bit too early to say how this will pan out, but we can know that given the dynamics in the U.S. market, new entrants are actually favored in the segment of products which goes under Medicare Part B, due to the structure with reimbursement on the back of the list price before you have an average sales price established, which is essentially the list price minus the discounts which are given. So, I think these dynamics typically favor new entrants because you're able to structure it so that it becomes economically beneficial for, in this case, the eye clinics. So, we're quite optimistic that this will go well, and we'll make the most out of this opportunity together with our partners. As said, what lies ahead of us before a launch is, above all, of course, production of material.
We're going through that during the remainder of this year, essentially. Then preparations with our partner Valorum, of course, which relates to applying for the so-called Q-code, which is required essentially for reimbursement upon administration of the product. I think this is crucial to have in place before launch. That takes six months to get in place. It's just an administrative process, so there's no risk or anything attached to that, but it's an application which needs to be gone through. Therefore, we should have that by mid-next year, after which we believe a launch can take place. But as said, this is really something we do now in collaboration with our partners, STADA and Valorum. Then a few words about Europe.
As I said, XIMLUCI, which is the brand name in Europe, has been on the market since 2023 across the 24 countries in Europe and the Middle East. STADA is commercializing quite simple structure. We have co-developed the product together with STADA, and we're sharing the profit contribution 50/50. Here is an historical graph with the profit share, essentially, that has gone to Xbrane over the quarters since launch in Europe. We have accumulated a profit sharing of about SEK 145 million throughout this time period. You can see on this graph that it varies quite a bit from quarter to quarter, and it mostly has to do with the way this is accounted for, where actually the profit sharing is recognized as revenue upon shipment of the goods to STADA, and the shipment goes in cycles.
So, that's why it's a little bit of a variation quarter by quarter. But I think if we look at this where we stand now, it's generating about SEK 50 million a year in profit sharing for Xbrane. With that said, 6% volume market share, then looking at only the ranibizumab market, so that's a share of the total VEGF inhibitor market. We are, as we have talked about before, going through several cost reduction measures. We believe that that is crucial to bring down the production cost given an increase in competition, and that this will bear fruit second half of next year, essentially. We believe then that this could unlock further growth opportunities across Europe and Middle East. We also have a remaining inventory position of SEK 149 million, essentially mainly drug substance gradually being converted to drug product and sold to STADA mainly.
And we believe that that will be converted during the remainder of this year and next year, essentially, to cash. That was an overview of where we stand with regards to LUCAMZI or XIMLUCI, and shifting gear over to Xdivane, our biosimilar candidate to OPDIVO. This is then targeting the whole PD-1 inhibitor market, so essentially OPDIVO and KEYTRUDA, and that's about EUR 40 billion in annual net sales, so a massive market opportunity. To be noted, OPDIVO goes off patent first, so that's December 2028 in the U.S., and KEYTRUDA patent lapses some six months after. But we do believe there's an opportunity for biosimilars being there day one, post-OPDIVO patent expiration, to also capture market share from KEYTRUDA. It's a massive market opportunity, and we believe we are well-positioned from a timeline perspective in this race towards patent expiration.
From a competitive perspective, we know Amgen already submitted their BLA to the FDA, but I do believe that we are second in that group of expected biosimilars, having fully recruited our pivotal clinical trial. Then we have three other biosimilar candidates under development and in clinic. So eventually, we do expect to see five or so biosimilars to OPDIVO on the market, but it's really about being there in the first wave, or preferably immediately upon patent expiration, which we really do believe that we're going to be able to be. And the partnership with Intas Accord in relation to this product, we believe we have a very strong partner for commercialization.
Accord, which is a sales subsidiary of Intas, has a very high market share in Europe when it comes to oncology injectables, and is also establishing themselves in the U.S. with an acquisition done of Coherus pegfilgrastim biosimilar a while ago, and also a handful of products on their way to market. So, we believe we have a strong commercialization partner and that Accord will do a fabulous job in commercializing this product. And again, from a timeline perspective, we are now going through, on the one hand, all the CMC-related activities which are remaining, so that is drug substance, drug product, process validation, and characterization, which is going according to plan.
Again, the pivotal clinical trial was fully recruited, 340 patients in melanoma, and we're going to have an interim readout in Q2 next year, and then we are planning for submission of a BLA to the FDA mid next year, really to prepare for having an approval and being in a position to launch by patent expiration end of 2028. So, I think this is going very much according to plan currently, and we're very excited about the prospects of this program. And moving forward, I think a natural question to have, and a question we often get, is why should we believe that this biosimilar candidate is going to be approved on the first attempt by the FDA, given the delays we've had with LUCAMZI? And it's a fair comment, but I think it's important to look at this in a little bit more detailed manner.
What held us back with LUCAMZI was really related to GMP issues at the contract manufacturers, and it was related to unresolved observations from inspections by the FDA. We had two CRLs due to that, as you might recall. FDA, in the first BLA we sent in, did not have any comments in relation to the clinical development nor the whole analytical comparability package, which are the two other important aspects of the BLA. We have learned from this when it comes to Xdivane, and we work with one of the top 10 contract manufacturers globally, with two sites involved having had successful FDA inspections since 2010 and supplying commercial product to the U.S. since.
We do believe that we have reduced the risk in relation to potential issues with FDA related to inspections at manufacturing sites, and I do believe there is high probability that we are going to get approved the first time when we submit the BLA to FDA. We are quite excited about this program, and it could be very valuable to Xbrane. We have showed this slide before. We have Venture Valuation, which is an independent pharmaceutical product valuation company located in Switzerland, to do evaluation of Xdivane, essentially.
You can see on the right-hand side of this slide all the assumptions that they took in this valuation, but it is essentially just looking at the expected market or the expected sales of the originator product by time of launch, looking at the trajectory of other oncology biosimilars in the U.S. when it comes to volume market share, as well as price decline, and applying those curves or trends, if you will, to this situation in combination with the expected competitive situation, essentially. Then applying the relevant cost structure and profit-sharing mechanism, if you will. All that together, their estimate was that this could generate about EUR 100 million in profit-sharing at its peak to Xbrane, which, of course, would be fabulous and a very sizable opportunity for us.
We are very excited about this program and what it could do for patients, of course, but also for Xbrane as a company. Moving on to Xdarzane. This is more early stage, as I mentioned, but we are quite excited about this program as well. It is addressing a very sizable originator product now at about $14 billion, actually. We are navigating this through without having to invest further into the program from Xbrane's perspective. Essentially, the arrangement here is that JOINN Biologics, which is a prominent biologics CMO with sites in both the U.S. and China, they are going through process development of this biosimilar candidate and the target to get towards comparative analytical demonstration mid-next year, after which we can take this program further towards scale-up production of clinical material and go into clinic and so on.
In parallel, Xbrane is seeking a commercialization partner, like the partnerships we have done with STADA as well as Intas in the past. We are seeking a similar structure with a partner that is interested to commercialize this biosimilar candidate once approved. Early stage, but quite interesting opportunity still. To summarize, key takeaways from this quarter. XIMLUCI launched across 24 countries in Europe and the MENA, generating about SEK 50 million per year in profit-sharing for us now. We are going through cost reduction measures, which will bear fruit second half of next year, and we hope unlock further growth opportunities. LUCAMZI, FDA approval, and now going through preparations for a launch during the course of next year together with our partners.
For Xdivane, the pivotal pharmacokinetic trial was fully recruited in October, and we are moving in a timely fashion towards day one launch in the U.S. late 2028. Early development with Xdarzane, and we are working through establishing a deal with a commercialization partner. These are the key takeaways from an operational perspective of the quarter. I therefore hand over to Jane to go through the financial highlights.
Yes. As we can see, during the third quarter, we have resumed shipments to STADA, giving us a revenue of total SEK 54.8 million, whereof SEK 54.6 million are referred to shipments to STADA. COGS amounted to SEK 45.8 million, giving us a gross margin of 16%. We expect continued shipments to STADA during the course of the coming quarters. As Martin mentioned, we are still working on cost-reducing measures to reduce cost of goods and give us a more competitive cost of goods and production cost in 2027 and onwards. The administrative expense amounted to SEK 5.4 million, and the R&D expenses to SEK 13.4 million, whereof SEK 2.7 million referred to amortization of intangible assets. SEK 15.7 million have been capitalized as intangible assets during the third quarter of 2026.
Here you can see the cash flow breakdown for the third quarter. SEK 6 million was received from profit sharing from STADA for the second quarter. Production of finished goods of XIMLUCI amounted to SEK 3 million, which will give us and has given us revenue during the third quarter and also in the upcoming quarters. Fixed costs amount to SEK 17 million and are referred to salaries, social security, IT storage, et cetera. XIMLUCI sales gave us SEK 39 million and came from accounts receivables for the second quarter and also sales during the third quarter. Development costs amounted to SEK 5 million in cash flow and Xdivane to SEK 3 million, referring to CMC-related development costs. The cash balance closed at SEK 37.4 million, which all in all gave us an operating cash flow for the quarter amounting to SEK 4.1 million.
Excellent. We thereby close the formal presentation and open up for potential questions coming in from listeners calling in.
If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Fredrik Thor from Redeye. Please go ahead.
Hello, and thank you, and congratulations on the approval. My first question was about volume growth for XIMLUCI. I am not sure if you showed that, but if you can discuss that a bit, and also the market share dynamic a bit.
Yeah, the volume market share for XIMLUCI across Europe was 6% as of July. The volume growth in the quarter, Jane?
Well, we haven't seen really a volume growth. The total market has been declining a little bit due to increased competition coming from other treatments. Unfortunately, as a total, the ranibizumab market has been declining, and the growth for XIMLUCI has more or less stayed the same.
Got it. In the presentation, you also mentioned that the time to launch in the U.S. will take quite a bit into 2027. Can you discuss that a bit, what needs to be in place before a launch?
Yeah. First of all, of course, to produce material and ship to our partner in the U.S. I think the most time-limiting element here is related to this Q-code, which needs to be applied for and received, and that takes six months. That's just the time the application process takes. You can submit that by the end of each quarter. Effectively, our partner is going to submit that by the end of this quarter and have it in place by the end of Q2 next year. That's probably the most time-limiting factor for an upcoming launch.
Got it. You also mentioned the learnings from the XIMLUCI FDA process, and I believe mostly was about contract manufacturing, but maybe how much have you learned in other areas in terms of applying to the U.S., for example, uses of consultants and how to prepare an application and so on? Would be interesting to hear a bit more.
I think we're gradually learning a lot, actually. One key aspect, of course, when it comes to Xdivane, if I compare to XIMLUCI, is the clinical trial in itself, where we were one of the first companies to get acceptance from both EMA and FDA to conduct a pharmacokinetic comparative study instead of looking at an efficacy endpoint for comparative purposes. So, we managed to reduce the size of that trial significantly, and therefore also the time to conduct the clinical trial and the cost. So, I think this was a crucial development from XIMLUCI to Xdivane when it comes to how we run these programs. I do think that there is much that we still are learning and can be applied and will be applied to future programs, and all centers around bringing down the timeline and bringing down the cost for development.
Got it. A final question. You mentioned the refinancing of the outstanding debt to Fenja, and that there are ongoing discussions. But what about payments from Valorum? Is that included in these calculations, or is it on top of that? Or, yeah, how do you balance between renegotiation and financing and using the potential milestone from the approval in the U.S.?
Yeah. As we've said before, the financial terms in the agreement with Valorum are subject to an ongoing amendment discussion or negotiation, essentially, which now is going to be completed between the parties. So we cannot really comment further on any financial details in relation to the agreement with Valorum that needs to be finalized, if you will, during the coming weeks or months. When it comes to the outstanding debt to Fenja, we talked about this before in relation to the Q2 report, and we stated the same now, that essentially, we have a cash position with which we can manage till the end of next year or so if we do not include potential incomes from the U.S. nor repayment of debt to Fenja.
Hence, given that we are currently having discussions with them, of course, and with other potential investors with regards to potential refinancing of that debt, also something which we will have to get back with during the coming months.
Got it. That is all from me. Thank you very much.
Thank you. If no further questions from people on the line, let us go through. We have three questions here on the chat. First one, "Any updates regarding agreement with Valorum?" I think we discussed that. Second one, "When can we expect resolution of the financial situation with Fenja?" We also discussed that one. Yeah, and the third question in relation to the loan with Fenja. So I think actually these three questions are covered with your questions coming in. One new question that came in now, "Any updates on the prefilled syringe?" I think this refers to XIMLUCI/LUCAMZI, and this we talked about a few quarters ago, that this has been paused, given essentially how the market has developed and our resource situation in finalizing the development of the prefilled syringe.
If we are going to take this up again, we will get back to the market with regards to communication in relation to that.
There are no more questions at this time, so I hand the conference back to the speakers for any closing comments.
We will upload this presentation along with the recording on our webpage. With that said, I thank you all for calling in. If you should have any further questions, we are here, myself and Jane. You can reach us over phone or email, and we shall do the best to respond to your questions. I wish you then a good rest of the day.
Thank you.
Thank you.