Good afternoon and welcome to the Santhera Pharmaceuticals results presentation. Throughout this recorded meeting, analysts will be in listen-only mode. Questions are encouraged, and they can be submitted at any time via the Q&A tab situated in the right corner of your screen. Just simply type in your questions and press send. The company may not be in a position to answer every question that proceeds to the meeting itself, however the company can review all the questions submitted today and publish responses where it's appropriate to do so. I'd now like to hand you over to Dario Eklund, CEO. Good afternoon to you, sir.
Thank you, Alessandro. Welcome to the full year results of the year ending 31st of December 2024. Giving the presentation today will be myself, Dario Eklund, I'm the CEO, as well as our CFO, Catherine Isted. Our Chief Medical Officer, Dr. Shabir Hasham, will also be joining us for the Q&A at the end. I'd encourage you to type in your questions, as just mentioned, the Q&A box as we go along, so we'll try to answer those questions at the end of this call. Should we not be able to answer all those questions that you may have, we will definitely get back to you later after the call. I'd like you to draw your attention to the disclaimer. This is that we will be making forward-looking statements. I invite you to please feel free to read this at your leisure.
With that, I'd like to switch our focus now to the overview of Santhera Pharmaceuticals in general. While we appreciate that this is a results call, we thought it's worth maybe spending a bit of time going through who is Santhera and what we do, especially as some of you were unable to attend our Capital Markets Day recently. We will be covering off some of the key slides we presented at the Capital Markets Day today as well. I'll start with this snapshot that you're looking at right now. We are a small, nimble company. We're based in Pratteln, near Basel. We're today around 110 employees. We intend to remain small, so even with the full commercial team hired, we're expecting to be less than 150 people globally.
Our lead commercial product is AGAMREE, a differentiated product for Duchenne muscular dystrophy, a dissociative steroid which has similar efficacy to existing steroids, but with a much more benign safety profile. We are already in the commercial stages with a global rollout, which started last year. We received over a period of a little more than 12 months approvals in the U.S., Europe, U.K., China, and Hong Kong. We have now launched in our first markets in Europe, in Germany and in Austria. After one year, we had converted around 30% of existing steroid patients to our product, AGAMREE. In parallel, our partner in the U.S., Catalyst Pharmaceuticals, also launched in March of 2024 and has made some very nice inroads there as well.
On the financing side, just to mention that we had a financing last year in August of 2024 with a gross funding of up to CHF 69 million. This gives us a cash runway to take us to break even in mid-2026. We currently, or I should say at the end of 2024, were holding CHF 40.9 million of cash. Moving to Duchenne muscular dystrophy and just a brief introduction to the disease. This is a disease that is genetic. It is about one boy in 3,500. It affects only boys. The disease is inherited from the mother's side. It is caused by a missing protein called dystrophin that is produced by the largest gene in the human body. What this dystrophin protein does is it functions as a shock absorber when muscles expand and contract.
If this protein is missing, the muscles get chronically inflamed and you have scarring, fibrotic tissue buildup, and fat tissue buildup. Over time, the muscle becomes weak and ineffective. These boys are typically diagnosed between the ages of three and five. The parents notice that the boy does not get off the floor as fast as he should. He does not run as fast as his peers. They take him to a doctor who then refers the patient or the boy to a pediatric neurologist who eventually diagnoses Duchenne. They typically have the disease starting with the muscles of the skeleton, so legs and then later arms. Eventually, they also have a deteriorating heart and lung muscle capacity, and they die in their late 20s and early 30s.
Typically, they lose ambulation, which means that they end up in a wheelchair in their early teenage years, and they start having a respiratory decline where they need nighttime ventilation around the age of 16. Now, how are steroids used in this disease? Steroids are standard of care now for a decade or two because what they do is they reduce the inflammation of the muscle. Ideally, the boy should be prescribed a steroid as soon as he's diagnosed and stay on steroids for the duration of the disease to slow down the disease progression. Steroids are very potent anti-inflammatory drugs, but they're also very toxic.
As a result of them being so toxic, parents, when they're told that their son needs to be on these steroids and they hear about the side effects that will come and the toxicities that will come with the chronic use of these steroids, they typically try to delay the start of the steroids until a little bit later when the boy is clearly and visibly in decline. Today, the typical boy started on steroids around the age of seven or eight when, in fact, they're diagnosed already at the ages of three and five. They start too late. Over time, because of the toxicities, these boys also have their steroid doses reduced to reduce the side effects.
Reducing the dose of steroids also means that you're dabbling in a non-evidence-based dosing range where you don't know for sure if you're doing any good, but you know for sure that you're not causing all the toxicities that come with a full dose of steroids. In practice today, many of these boys and young men at this stage will be taken off steroids altogether by the time they lose ambulation, although they should continue on steroids for much longer, mainly to provide them with strength of upper limbs, arms, to be able to feed themselves, to brush their teeth, but also to play games, to use the keyboard because these boys are often socially isolated. Staying on steroids longer is also beneficial for supporting the heart muscles and the lung muscles and delaying endpoints.
Unfortunately, when they lose ambulation, very often it's seen that the benefit risk just doesn't justify these toxic drugs anymore. In summary, they start too late, they dose too little, and they stop taking these steroids too soon. Now, when we look at what are these side effects that we're speaking about, this graph that I'm showing here really illustrates well how the cumulative toxicities are starting to kick in in these boys. Early on, you immediately see stunted growth. You see mood and behavioral disorders and aggression, and you see weight gain. Over time, you start seeing a lot of other long-term toxicities kick in.
We are running a study currently called the Guardian Study, which will have its first readout in Q4 of this year, where we are studying boys who have been on steroids versus boys who have been on AGAMREE for up to eight years. Many of these boys have been on long-term AGAMREE because they continued taking AGAMREE after the phase IIA studies and phase IIB pivotal studies as part of our long-term extension program. We are going to be mining this data and hopefully be able to show some of the longer-term benefits of using AGAMREE versus prednisone or deflazacort, which are the two other steroids used for Duchenne. One point I want to mention on this slide also is that steroids are a foundational therapy, and other Duchenne drugs such as exon skippers, gene therapy, or the recently approved Givinostat are used additively to steroids.
Steroids are given foundationally, and all of these other new modalities are coming on top of steroids. The clinical trials were run with steroids as an inclusion criteria. They are not competition. They are synergistic to AGAMREE. Now, a few words about AGAMREE. It is an oral suspension, as you can see in this picture. In the pivotal study that we ran for approval, it was a one-year study. In that study, we already showed three very clear benefits. We showed that these boys, they grow at a rate that is similar to their healthy peers. We showed that they had normal bone turnover, which over time will likely translate into less fractures and osteoporosis. We showed that they had less severe and less frequent mood and behavioral disorders.
What we have also since then uncovered is that we have a differential mechanism of action compared to prednisone, for instance, by being a mineralocorticoid receptor antagonist. Being in this category means that you're potentially cardioprotective. Prednisone is a mineralocorticoid agonist, which these are compounds that are known to potentially be damaging to the heart. Over time, we will hopefully also be able to see cardioprotective properties with the drug. Most importantly, because of this benign side effect profile, boys should be able to start on steroids or on AGAMREE as soon as they are diagnosed because of the more benign side effect profile.
They should be able to stay on an evidence-based dose because our dosing range is from 2 milligrams per kilo up to 6 milligrams per kilo, where the recommendation is to start on 6 milligrams per kilo and only down titrate if cumulative side effects start to be seen also with AGAMREE. They have an evidence-based dose, a 3x range dose that they can use and still know that they are getting an efficacious reduction in inflammation in the muscle. They can probably stay on dose longer because they tolerate the drug better. As a consequence, by taking AGAMREE, you can start on time, you can remain on dose, and you can remain on treatment longer. Now, switching to the Duchenne market for a moment. This is a market in the rare and orphan disease space that is somewhat unique.
With rare and orphan diseases, you often have a challenge because they are rare and orphan diseases that they are not frequently diagnosed. There is nobody who is a specialist in these rare and orphan diseases that sees these patients early. The challenge that many rare and orphan disease compounds or companies selling compounds have is how do you educate the population of specialists to actually diagnose the disease in the first place. Once you've done that and you've created awareness around the diagnosis and recognition of the disease, the next challenge you can have is to establish and coordinate a multidisciplinary care for this disease.
You typically have the challenge of ensuring a smooth change in the treatment algorithm where clinics and clinicians and healthcare practitioners have to change their treatment algorithms in the practice to accommodate the new drug that is being introduced in this rare and orphan disease. When it comes to Duchenne, none of these challenges apply. I do not want to belittle the commercial challenges, but in reality, all of the patients, at least in North America and in Europe, are diagnosed. Not only are they diagnosed, but they are treated in centers of excellence by neuropediatric clinicians. These neuropediatric clinicians are already using steroids today and have been using steroids for, in some cases, decades and know how to use them, how to down titrate and up titrate these steroids.
Bringing in that more benign form of steroid in a disease that is well recognized and where the treatment centers are all well known is a commercial benefit, obviously, when you're launching a product like this. Moving to the market size of AGAMREE in Duchenne. The slide we're looking at here shows the various sources of revenue that we expect to see over the coming years. The first one on top is our own markets. Our commercial strategy is to launch AGAMREE in the 17 markets of Western Europe ourselves through our own commercial team where we retain 100% of the net sales. This market represents about 13,000 patients. As we've said in the past, about 8,000 of those are currently on steroids. By 2030, we plan to have 5,000 or more of those patients converted to AGAMREE.
The next two boxes you see are our licensing partners. Licensing partnerships typically are a sale of the rights of the drug to those territories where you have a licensing partner. There's an upfront, there are revenue milestone payments, and there's royalty income. The partner now owns the asset in the territory, and they also have typically rights to develop additional indications as well as establishing local manufacturing for the drug in their territory. The last two boxes, which is rest of Europe and rest of the world, are territories where we plan to have a distribution partnership. These have different structures. Distribution partnerships, you don't typically get an upfront. You don't get large milestones, and you don't get royalties, but you get a percentage of the net sales in those markets.
In our case, we target to have net sales from our commercial distribution partnerships north of 60% of the net sales. That represents the part of the circle that you can see on the bottom there. As I have said before, the EUR 150 million of revenue from our own territories in 2030 is still our guidance. Moving on to the operational highlights for the year 2024. As I have already mentioned, we had a successful launch in Austria, Germany, where we gained 30% market share in the steroid market. In other European markets, we are working to get market access and pricing. In the U.K., we had a nice positive recommendation in actually, the recommendation was in December. It was finalized in January of 2025. Just a few weeks ago, on April 16, just before Easter, we had our U.K. full launch, including England, with AGAMREE.
It is too early right now to give you any guidance on how things are progressing in the U.K. since it has only been less than two weeks and there was an Easter in between. We look forward to updating you on that soon. As it pertains to the U.S., Catalyst successfully launched, as I said, in March. They surpassed their initial guidance and their revised guidance throughout the year and landed the year with $46 million of revenue. For this year, 2025, they have guided to $100 million-$110 million of revenue in the U.S. Should they exceed the $100 million revenue in the U.S. during the calendar year of 2025, this would trigger a $12.5 million milestone to be paid to us in early 2026. In China, the Spirogenics relationship is on very strong footing.
We are working very closely with them to prepare their rollout in a soft launch in 2025, second half of 2025, and hope to have a fully reimbursed launch in 2026. I will speak more about that in a second. In other territories, we are continuing to look at distribution partnerships. We have already signed up a partner in Israel and in Qatar. We are expecting to see first revenues from those two markets also in the second half of this year. Finally, the manufacturing expansion that we also mentioned at the Capital Markets Day is progressing well. We are setting up a second contract manufacturing organization in Switzerland for ourselves, for Santhera, in addition to the existing contract manufacturer, which we have in Belgium. Catalyst themselves are also in parallel setting up a contract manufacturer in the US.
These two are going to have both of them have EMA and FDA approvals, which means that we'll have redundancies in case we need additional capacity between the two sites or the three sites, I should say. Moving on to the specifics in the markets and going back to the Germany-Austria launch. I've mentioned before that between Germany and Austria, there are about 2,300 patients who have DMD. Both Germany and Austria are markets where there's a relatively low level of usage of steroids. Steroids are used in those markets between 50-55% of the patients are on steroids at any given time. There are other markets that are similar. France, for instance, is a low steroid use market, whereas countries like Italy, U.S., and U.K. have a much more aggressive use of steroids where there's 70% plus penetration of steroids in the patient population.
The 30% market share that we have after one year in Germany is particularly impressive in my view because we did not have any clinical trial sites during the pivotal trial in Germany. By the time we launched the product in Germany, there was nobody who had any previous experience with the drug. Yet in the first year, we were able to switch 30% of the patients. I want to manage expectations here that we are not going to be switching another 30% of the patients during 2025. Our peak sales forecast in Germany is about 60% market share by 2030.
The growth in Germany is going to become more linear in nature rather than the bolus jump that you see in the first year because of high unmet medical need where many of the patients had been waiting for the drug and were switched quickly in that first year. Looking closer at Germany, this map that you're looking at here on the left-hand side, you see all the top clinical trial or top clinical centers for Duchenne in Germany, whereas on the right, you see all the treating centers that treat Duchenne patients in Germany. This is a very unusual picture. The nature of the Duchenne treatment market is typically very centralized, as I mentioned earlier, centers of excellence. Germany actually has a lot more sites to visit than most markets do.
In comparison, in the U.S., there are about 90 centers that treat more than 90% of the patients. As you can see on the map here in Germany, they have roughly the same number of centers for a much smaller population. The colors on the right side of this map, the blue ones are sites that have started prescribing AGAMREE to their patients, whereas the brown sites are sites that have not yet started prescribing AGAMREE to their patients. This shows a typical picture of early launch uptake and adoption ladder uptake. You have the early adopters and the lead users. These are typically the clinical trial sites or clinical centers, sorry, you see on the left. They are very quickly to adopt new technologies. You have the early majority, the late majority, and eventually the laggards that will start adopting a new drug.
We can see here on the right that we still have plenty of room to grow in Germany with sites that have not yet initiated AGAMREE prescriptions. Moving to the future launch plans in Europe. As I mentioned, the U.K. is added now to Germany and Austria in terms of a country that has a price negotiated and a launch with reimbursement. The next countries we expect to have on that list are Spain, Italy, Nordics, and Benelux, probably in the sequence of Spain, Italy, and Nordics. In Spain, we are hopeful that we could get an agreement on reimbursement before the August holidays in Spain, but it may be that it drags out and we only get that reimbursement decision in the Q4 timeframe.
In Italy, we are hopeful that we might get something by the end of the year agreed, but we are guiding towards early 2026, early first quarter of 2026. Nordics, the first countries will probably have reimbursement before Christmas, potentially all of them, but one or two of them might fall into the Q1 of 2026 timeframe. In France, which is worth mentioning, we have had discussions with the CNPS in France recently, and given that we have an ASMR 5, they are reluctant to give us the price that we expect to get in our markets. We have agreed that we will wait for the long-term data from the Guardian Study to resubmit that data to France to hopefully then get an ASMR 4 and get agreement on price. I want to mention that France is not in our guidance.
We have no revenue in the next couple of years in our guidance coming from France, so we take a very conservative position there. We are pretty confident that we will have a reimbursed price and a launch in France during the year of 2026. Now, a few words about the U.S. In the U.S., they have roughly the similar number of Duchenne patients as we have in Western Europe, so somewhere between 11,000 and 13,000, depending on which source you look at. They have, as I mentioned, a very aggressive use of steroids, so they are north of 70% of patients are on steroids at any given time. Guidance from Catalyst, as I mentioned earlier, is $100 million-$110 million of revenue in 2025. I believe they will announce their first quarter results in the next week or so.
Moving to China, I've mentioned before that we had an early access program on the island of Hainan. This was before we were approved in China. In that early access program, we have about 100 patients or slightly above 100 patients already on drug in China. Since then, we have been approved in China, and the negotiations for reimbursement are ongoing. Our partner in China, Sperogenix, are planning to have a soft launch, so a self-pay launch in the second half of this year. A full launch with a reimbursed price in China is expected in the first half of 2026. I want to mention here that DMD was included in China's first national list of rare diseases, which was published in 2018 by the National Health Commission and other authorities.
The list comprises of 121 rare diseases and serves as a foundational reference for policy development, clinical guidelines, and regulatory prioritization in China. We are hoping that this very prominent display of Duchenne being a priority should help in the reimbursement negotiations there. Finally, before we move to the financial highlights, just a few words about our manufacturing expansion. As I mentioned, we are setting up our own contract manufacturing organization in Switzerland. That facility should be up and running by late 2025, with supplies going to first markets in early 2026. We will wait with a submission to places like Latin America, Brazil specifically, until this facility is up and running, and we can include the CMC data, the chemistry manufacturing and controls data from this facility in our Brazilian submission.
Having this second manufacturing site for ourselves and a third one in the U.S. allows our ambitious plans to be materialized with security of supply and managing risk, but it also allows for larger batches to be produced, which will over time reduce our cost of goods. With that, I'll hand over to Catherine, who will speak about our financial highlights of the year.
Thank you, Dario. Moving to the financial highlights. As we previously highlighted in our trading update about a month or so ago, our total revenues for the year were CHF 39.1 million. This was driven by the strong sales growth we had in Germany and Austria. Comparing it, however, to the previous year when we had CHF 103.4 million of sales, it was obviously lower. However, the 2023 number had significant milestones as we outlicensed our product to both China and the U.S. in that year.
Looking at product sales, they were CHF 14.8 million in the year. As previously mentioned, this is due to the successful launch of AGAMREE in Germany and Austria. Milestones for the year were CHF 19.3 million. Again, these were lower than the prior year, but that was due again to the Catalyst and Spirogenix outlicensing. Revenue from supply of product and services, so this is mainly to our U.S. partners at present, although this will include our sales of product to Spirogenix in the future, was CHF 5 million, so nearly double that of 2023. Looking at the operating expenses for the year, these were CHF 57 million. The 2023 number, which was lower, however, was impacted by a net gain of CHF 70 million. This was on the sale of Ibetanone when we disposed of that business. However, if you exclude this gain, 2024 operating expenses were 15% higher.
This was driven by increased development and, as you would expect, increased marketing and sales expenses, but offset by lower G&A. We had a share-based payment also included in that figure of CHF 3.9 million. The operating loss for the year was CHF 33.2 million. This is versus CHF 68.8 million profit in the prior year. Another key event during the course of 2024 was the financing. As Dario highlighted at the very start of this presentation, we secured CHF 39 million. This was broken up between two components, CHF 69 million. This was broken between two components, a new term loan of CHF 35 million and a royalty monetization agreement of CHF $30 million. We ended the year with cash and cash equivalents of CHF 40.9 million. As we have highlighted, this extends the cash runway through to mid-2026 when we expect the company to be break-even.
Moving on now to the financial guidance, not only for this current year, but moving forward, we expect revenues for the year 2025 of CHF 65 million-CHF 70 million. If we move to 2028, we have a revenue guidance of EUR 150 million. This is related to our direct and partner markets, as well as our royalty income from North America and China. We have excluded milestone payments from that figure. What that EUR 150 million is showing is the underlying business without the lumpiness of milestones. If you then go to 2030, we have given a guidance of in excess of EUR 150 million, but this is on our own direct sales. This excludes our distributor and license markets, as well as the milestone payments.
Looking at operating expenses, so SG&A and R&D, for 2025 and going forward on a constant currency or constant portfolio basis, we expect this to be CHF 50 million-CHF 55 million. Note that this excludes non-cash share compensation. I'll now hand back to Dario to discuss the strategic outlook and priorities for 2025 and beyond.
Thanks, Catherine. Our revenue generation comes over the next five years from four different sources. The first and the most obvious one is our co-grow direct strategy in Europe, where, as I mentioned, we plan to commercialize ourselves in the 17 countries of Western Europe. In addition to that, we're very busy with our geographical expansion. We have negotiations ongoing currently in Turkey, the GCC, or the Gulf countries in the Middle East, Brazil/Latin America, and a few other markets.
These negotiations obviously take time because you have to conduct mutual due diligence. You have to make sure that the quality systems are up to date, that the pharmacovigilance reporting systems are up to date, and you have to negotiate the agreement itself. There is a certain bandwidth issue where we have to prioritize markets, and we can't really expand to all of the world right away. You will hear more about that soon and throughout 2025 and 2026. We have also announced that we are very actively looking to acquire additional assets in addition to AGAMREE, either through a license agreement or a distribution arrangement, or potentially even through an M&A transaction. The target compounds that we are looking at are compounds that are rare and orphaned. That is the space that we are in and that is our core competence.
They need to be late-stage assets that have completed their pivotal clinical program, so we are not willing to take clinical risk. However, we are very happy to take regulatory risk if during due diligence of such an asset, our competent regulatory and medical clinical teams feel that they can get this approved in Europe. Our therapeutic area focus is neurology. Having said that, we are also agnostic. If an asset looks very interesting in the rare and orphan disease space, has solid clinical data, we would be happy to also bring in an asset that would be in the space of nephrology or rheumatology, for instance.
Now, the question I often get is, how do you compete with other much bigger boys in Europe when it comes to such asset licenses from, for instance, U.S. companies that have decided to launch their own rare and orphan disease asset in the U.S., but are looking at Europe as a potential expansion territory? My answer to that is that if you're looking at an asset that has EUR 500 million or more of potential revenue in Europe, there are going to be much bigger boys that are going to be wanting to license in such an asset. If it's an asset that is EUR 200 million-EUR 500 million in Europe, there are mid-size European companies such as Recordati, Chiesi, Lundbeck, Sobi, and so on, who would be very strong partners for such an asset and where we can't compete currently.
However, there's a niche of assets that are in the rare and orphan disease space and have EUR 50 million-EUR 200 million, say, revenue potential in Europe. There are not too many European companies that have the full capabilities across the entire value chain of regulatory, quality, pharmacovigilance, supply chain, marketing, medical sales in Europe that would be interested in an asset that is of the size of EUR 50 million-EUR 200 million of peak sales. That would be exactly what we're looking for. That's the kind of perfect fit for us, and we believe that there's less competition in that space. We have engaged multiple parties already. It's still very early stage. It will take through 2025 before we identify an asset and have negotiated it.
Do not expect there to be an announcement this year, but I would be very disappointed if in 2026, we would not be able to announce at least one, if not two, late-stage deals like this to strengthen our portfolio. Finally, additional indications for AGAMREE. We have mentioned this in past calls. AGAMREE, obviously, with the profile you have now and the safety that has been shown in pediatrics, has potentially additional indications, additional therapeutic areas. Here we have decided that short term, we are going to be spending our money on bringing in additional assets as well as maximizing the Duchenne opportunity and investing in both the commercial expansion in Duchenne, as well as additional data generation in Duchenne.
We will leverage the work for indication expansion that our partners, Catalyst in the U.S. or North America, as well as Spirogenix in China, are going to be undertaking. By the time they have completed their programs and done the clinical work for indication expansion, we would then have an option to leverage that data and get the rights in Europe in our own territories. To summarize, we have a differentiated product with worldwide rights. We have a unique selling point that is very well understood in the market. We have a very clear growth strategy for Duchenne with AGAMREE.
We have a market that has been clearly segmented into three segments: the naive segments, i.e., the patients that have been recently diagnosed; the switch segment, the patients who have been on other steroids for a while and are not tolerating them well and want to switch to a more benign product like AGAMREE. Over time, we will also penetrate the segment of older patients, patients who have lost ambulation, who have potentially stopped taking steroids altogether or have never started taking steroids, but would still benefit from a steroid for the slowing down of the progression of the disease and to give them upper limb strength. We have a strong and growing partner network. You will hear more about that throughout the year. We have a small and nimble organization. We are able to keep our costs under control. Basel is at Zurich and Zug.
The triangle space that we are operating in has a lot of talent. We have been able to recruit some very experienced senior people and are able to keep the organization small and nimble with all that experience. Finally, and maybe most importantly to shareholders, we're funded to projected break-even in around mid-2026 and don't expect to have any further fundraising or shareholder dilution under the current structure and circumstances. With that, I'd like to hand over to Catherine, who will moderate our Q&A session. I want to remind everybody that our Chief Medical Officer, Dr. Shabir Hasham, is also in the room with us. Feel free to ask any questions that you may have, and we hope to be able to answer them all before the end of the call. Catherine?
Thank you, Dario. We have a number of questions here.
We'll try to get through these during the time available. If not, we will be publishing all of the answers, including the ones that we don't get to, on the website, the Investor Meets website. To start with, first question, initial U.K. sales were expected for Q2 2025. Understanding it's still very early days, how would you rate the uptake in the U.K. in the first month? Now, I know, Dario, you commented a bit on that in your presentation, but I don't know if you had any further comments there.
It's not really even the first month. As I mentioned, we received the BlueTech code for England, which really is the majority of the market in the U.K., only on April 16, just days before Easter. You had the Easter holidays, and it's been two weeks since then.
It's way too early to give any commentary on the U.K. for the time being.
Thank you. The second question is around the Guardian Study. Data from the Guardian Study is still expected this year. Can you comment on the progress of the study? In terms of the data, what would be the best-case scenario for you, and how could it impact the uptake of AGAMREE in the market? It then goes on to say, do you also see any potential risks, i.e., that some of the benefits observed in the pivotal trial are not confirmed? I'll hand that over to Shabir, I think.
Thank you. Just to remind you, the Guardian Study is aimed at a long-term follow-up of patients who've been on vamorolone for quite some time, somewhere between five to eight years. We know who the patients are.
We know where they are. We started enrolling towards the end of last year, about December. We're about 50% enrolled. We'll just need to see how progress is the next few months, but we still believe that's on track. The objective of the study is to determine long-term effectiveness. One of the key variables we want to look at is the durability of the treatment with vamorolone and then to explore further long-term safety. In particular, we have a focus on bone health. We know from all of our studies that vamorolone shows a very consistent benefit in terms of the bone biomarkers. We've had some early analyses of bone fractures. This really just aims to strengthen that as a clinically hard endpoint. In addition to that, we are collecting information on eye health, so cataracts, glaucoma.
We're looking at puberty, although these boys will be just entering the age when we would see any hint of a normal puberty. You may know that steroids cause delayed puberty. The other important thing to remember about the Guardian is that there is a three-year follow-up. Okay? At the moment, they're rolling into the study. The data we're anticipating in quarter four is the first readouts. We will have further readouts annually for the next three years. It is not a one-stop shop. This is continuous news flow. For me, the best-case scenario is that we are able to show a robust durability in terms of treatment effect. We are able to show progress in terms of the robustness of data with bone health. We know that height is not affected. We also know that the results in terms of bone biomarkers are very consistent.
We have those data already. Any other additional safety data would be just a bonus on top of that. How do I expect this to—how do I expect this to be used in the market, or at least in top of mind for physicians? We know already that if the effect is durable and we can show robust bone health data, i.e., reduction of clinical fractures, that will already significantly impact the use of vamorolone. We know already that the average dose is about 80% of the recommended. That is already a significant advantage over current standards of care. It is just tying up the story and presenting a really nice long-term overview of vamorolone that we aim to do.
Okay.
Yep. Okay. Thank you, Shabir. Right. Moving on to the next question.
Can you please comment on your exposure to U.S. tariffs if imposed on the pharmaceutical products? I think I'll probably take that one. In terms of our sales over to Catalyst, in the end, you've got to remember that they are actually buying the product. In terms of any tariffs, we actually wouldn't be impacted. We're not impacted at all. However, you could say if there were very large tariffs, would that increase the price and therefore would there be less sales? In terms of the cost to Catalyst, if you look at our product sales, that was only CHF 5 million for the year. Catalyst are making in excess of 90% margin. The cost of this product is very small. Even if they did have a tariff on it, it would be very small in comparison to the sales price.
It would only be for them to decide whether or not that would impact their sales price. All we can say is that it would be very minimal. From our side, there would be no implications.
I think in addition to that, we can also confirm that since they're starting to manufacture themselves in the U.S. towards the end of the year or early next year, the tariffs will not have any impact at all. If at all, it's minimal and only for a few months.
Okay. All right. We'll move on to the next question. Can you provide an update on your plans for Brazil?
Yeah. Brazil is a relatively large market with 200 people in it. We are discussing with a short list, now a very short list of potential partners in Brazil.
What we have decided, because of volumes potentially being high in Brazil, is that we want to be able to submit our new contract manufacturer in Switzerland to the Brazilian authorities, which means that we will only be able to submit a file in Brazil in early 2026 when the contract manufacturer is up and running. There is a clear plan to go to Brazil. Brazil is an attractive market, but it is not something that we are going to be announcing as an approval or as a launch in the 2025-2026 timeframe. Brazil, with a submission in early 2026, will be approved towards the end of 2026 or early 2027. Stay tuned for partner news later in the year.
Thank you, Dario. The next question is, you mentioned about in-licensing a product. What can you say about criteria? What are your preferred areas that you are looking at?
I think that we've actually fully answered that in the presentation. Maybe I think we'll move on from that one. The next question is around Catalyst. Assuming Catalyst will reach $100 million of sales this year, will you get that milestone in 2025? Is that included in your guidance for revenues of EUR 65-70 million this year? Basically, it's an annualized $100 million of sales, a calendar year. In terms of actually when we would receive payment, assuming that they did reach that, that would be during 2026 in terms of the cash payment. However, as it refers to the year 2025, the milestone in the P&L itself would be booked in 2025. I hope that answers that question. Moving on to the next one. How long do you expect to supply AGAMREE product for Catalyst and Spirogenix?
Let's start with Catalyst.
They're setting up their own manufacturing partner in the U.S.. As far as we know, that one should be ready to provide product end of this year or early 2026. How long we will be supplying them with finished product from our current manufacturing site depends a little bit on their inventory level. We don't know exactly what their inventory level looks like. I would expect that we will be continuing to supply them into Q3 of this year, plus minus. After that, they would manufacture themselves in the U.S..
Thank you.
Oh, sorry. Spirogenics was the other part. Yes. Spirogenics has a timeline where they want to have a local manufacturing set up by the end of 2028. We will continue to supply them with product from our existing site and potentially from the new site as well for the foreseeable two to three years.
Thanks. The next question is around Spirogenics. When do you expect the first sales from China? Does this trigger a milestone payment from Spirogenics?
We are expecting the—as I mentioned in the presentation, we are expecting the first soft launch sales. These are self-pay sales coming in the second half of this year, after the summer, probably Q3, and then a full reimbursed launch in the first half of 2026. The first commercial sale of a reimbursed product in China does trigger a milestone, but it is a tiny milestone relative to the overall deal size. That particular event does not trigger a large milestone. In the foreseeable future, there will be two other trigger points for milestones with Spirogenics. The first one will be when they reach $10 million in revenue in China.
The second one is when they reach EUR 30 million of revenue in China. Both of those milestones will trigger payments to us from both Sperogenix and the financing partner that we have for the royalty financing, which is CDC.
Thank you. Moving on to the next question. When do you expect Catalyst to announce new rare disease indications for AGAMREE?
I cannot or we cannot speak for Catalyst, really. It is up to them to decide when they want to initiate additional indication work. What they have told us is that they want to spend 2025 still analyzing the various opportunities further and see the results from their ongoing multiple ascending dose study in Duchenne patients—or sorry, in volunteers—in order to see whether the AGAMREE has immunosuppressive properties at higher doses.
They're conducting this study in order to know when, how, and if AGAMREE could be used in conjunction with the gene therapies from Sarepta that have been launched in the U.S. Just to remind everybody that when you're dosing a patient with a gene therapy in Duchenne, for instance, there's a period of several months before—a few days before and several months after the dosing of the gene therapy—where these patients are given much higher doses, sometimes two- to threefold doses of steroids to prevent an immune rejection from the foreign virus that is the delivery vehicle for the gene therapy. There is an opportunity there to introduce AGAMREE in that context. They want to run that study during 2025. It's currently ongoing. It will read out towards the end of the year.
Based on the results from that study, they will then evaluate which indications could be of interest. If AGAMREE has immunosuppressive properties, it would obviously open up a door for a lot of autoimmune diseases, which we had not considered before. As I've mentioned on previous calls, we had a short list of pediatric indications where we thought AGAMREE could be very interesting. Catalyst is aware of those indications. We've had extensive discussions with them about it. They want to evaluate the immunosuppressive properties first before making a final decision. It is a long way of saying that the earliest we could probably hear from them is end of this year or early 2026.
The next question will be for Shabir. It's a follow-on question around the Guardian trial.
Again, with results expected in Q4, how can these long-term efficacy and safety observations be included in the label? How long would that take?
Just bear in mind that currently, steroids are used off-label within Duchenne. We have in our label, the European label is actually very well differentiated. We have the basis and language for many of the endpoints we're looking for in the Guardian study. Our focus really for the Guardian Study is to use it as an educational tool. Physicians, and it's such a small community and very tightly knit community that we believe that the educational component will be sufficient for us to be able to achieve our objectives. At the moment, pending actually looking at the data, the focus really is on communicating the data at conferences and publications.
Thank you.
Onto the next question, I think it's also for you, Shabir. On positive POC data results from—lost the question—Becker's muscular dystrophy. That's expected to report in Q4 2025. How long would it take to include BMD patients in the label? What kind of peak sales do you project for this indication?
I'll leave the peak sales for Dario, but just in terms of the Becker's, now, it's a pilot study. Really what we want to do is to see the data and then make a determination of the next steps. There is a possibility that it could be a biomarker-led strategy moving forward, but I'd need to see that confirmed first before we make a comment.
With regards to peak sales, as Shabir mentioned, we don't know what the label looks like yet.
We don't know what the data looks like yet and if it even is going to be successful or not. It is a little bit too early to speculate on peak sales. Just to give a bit of an order of magnitude maybe about this market, the number of patients in Becker's is roughly one-third of the number of patients you have in Duchenne. It is one-third of the Duchenne market. However, in this study, they are using a higher dose than they are using in Duchenne patients. Becker's patients also live longer. Typically, these patients are heavier than our Duchenne patients. While the number of patients is lower than in Duchenne, the dose would be higher if successful.
You can then extrapolate what the market size could potentially be if you just look at the average dose in that study and the number of patients being about one-third of Duchenne. As I said, it's a pilot study at this point. If successful, it will still require a formal pivotal study in order to get it into the label for Becker's muscular dystrophy. We're still a few years away.
Okay. The next question. When do you expect to announce late-stage pipeline and distribution agreements to leverage your E.U. sales infrastructure and expand your pipeline in rare diseases? I know we talked about that a bit earlier. I don't know if you want to add anything more to that.
Yeah. I mean, I spoke about it already. We have an infrastructure which is fully fledged.
Basically, all functions as if we were a large pharmaceutical company, but we have that all for just one product at the moment. Even with that one product, we're going to become profitable in 2026, cash flow positive and profitable in 2026 and beyond. You can imagine that if you could add a second product and potentially a third product to that infrastructure and leverage that infrastructure with very limited incremental costs, that would obviously be a very attractive proposition. We're working hard to make that happen. As I said, one or two announcements in 2026.
Thank you, Dario. Just moving on to one more question. Some of this has already been asked around talking about the milestone timing from Spirogenics. Then it talks about how might this counterbalance any milestone obligations in 2025, 2026.
Just to remind you, we do have milestone obligations to our originator companies. We do pay that through the cost of goods line. We have not actually disclosed the exact agreements that we have with them. However, what we can say is roughly overall that the milestones that we have to pay out of cost of goods will balance out with the milestones that we receive in. I think that is pretty much all the questions that I have there. Actually, we are now up for time. I do not know if we want to—yeah?
That is perfect. Dario, Catherine, Shabir, thanks very much for answering those questions. As mentioned previously by Catherine, the company can review the questions submitted today and publish the responses on the InvestorMeet company platform.
Just before redirecting analysts to provide you with their feedback, Dario, could I just ask you for a few closing comments?
Yes, of course. Thanks, Alessandro.
I thank you for the hour you spent with us today. I hope you're as excited as we are about the future prospects of Santhera. We're in really good shape now. It's been a rough couple of years, but we're really not only out of the tunnel. We're running or driving fast out of a tunnel. I have a lot of exciting things going on. Stay tuned for more news from us. Should we not have answered some of your questions today, feel free to email us, and we'll get back to you as soon as we can. Thanks again, everyone. Bye until next time.
That's great, Dario. Thank you once again for your presentation.
Could I please ask analysts not to close the session as you'll now be redirected to provide your feedback in order that the management team can better understand your views? On behalf of the management team of Santhera, we'd like to thank you for attending today's presentation. Good afternoon to you all.