Morning, for those in the US who are joining us, a good afternoon for those in here in Europe. Welcome to this full year 2025 investor call. As usual, I'm today joined by Catherine Isted, who is our Chief Financial Officer, as well as Shabir Hasham, who is our Chief Medical Officer. They will both give their respective parts of the presentation and be here for the Q&A as well. Can I have the next slide, please? Can we have the next slide after that? Here we go. No, the disclaimer, please. Can we go back? I just wanna draw your attention to the greetings from our legal department here, where you should, at your own leisure, read this if you're not familiar with the text. With that, let's move into the actual presentation.
2025 was a real exciting year, with expansion and global momentum continuing. These 6 points that you can see on this slide here really are the summary of our presentation today. We will have deeper dives on each of the 6 subjects. I just wanna highlight a few things here that, first of all, in Austria and Germany, we are continuing to make great progress. In Q1 of this year, we actually had 50% growth over last year, which means that in Germany, we're well over 40% penetrated in the glucocorticoid steroid market, and in Austria, we're actually already hitting numbers above 50% market share. This is in the first year or shortly after the first full year of launch. We're also making good progress with reimbursement across Europe.
A few weeks ago, we announced that we had reached an agreement with the Spanish authorities for a reimbursement in Spain. We're expecting to launch there in June or July. In Italy, we announced today that we have an agreement with AIFA. It's still pending the publication in the Gazzetta Ufficiale, which is expected in 6 to 8 weeks, after which we can officially launch also in Italy. We've also seen fantastic progress with our partner, Catalyst in the US, who delivered $117 million of US dollars of sales in the first full year. In China, our partner, Sperogenix, is also advancing nicely with the self-pay soft launch, which I'll speak to in a few minutes.
At the end of last year, we were very busy with partnering negotiations for Japan and Korea. We decided to also wrap in Australia and New Zealand into a deal. I'll speak more about that in a minute. That's a great achievement to complement our global footprint. Speaking of global footprint, we also last year signed up the five remaining countries of the GCC, India, Turkey, and Russia for distribution partnerships. We're currently in negotiations, late stage negotiations with our partners, potential partners for Latin America. Finally, Shabir will speak about this later in the presentation. The AGAMREE GUARDIAN study has had its first tranche of analysis presented at the MDA conference in March in Florida. The results are truly spectacular and a real testimony to the power of AGAMREE differentiation.
Moving to the next slide, please. Let's start with a quick update on Germany. I want to remind everybody that Germany was a market or is a market where we had no pivotal clinical trial sites. When we launched in Germany, we had zero clinical experience in the market with AGAMREE, and yet the uptake is beyond impressive. We have now, as I said, 40% plus of the patients switched. The initial patients in the first 12 to 18 months were switchers aged 6 to 12.
We start to see now a broadening of the patient population, where patients older who have either stopped taking steroids altogether or have never started are switching to or starting AGAMREE, as well as the newly diagnosed patients, four or five-year-old boys who, as a rule, almost now all get AGAMREE in Germany. The price in Germany, and it is worth mentioning, was originally EUR 3,600 per bottle. That was agreed with the German government for an 18-month period. The January 1st, 2026 price has dropped down to EUR 3,000 per bottle. That was a pre-agreed price reduction that was anticipated from our side. As you can see now, we are almost halfway through the patient population, the combined market, Germany and Austria.
Those are both markets with a relatively low penetration of glucocorticoids in the DMD population. 50%-55% of patients only are taking steroids as a standard. In other European markets like the UK, Spain, Italy, as well as in the US, that percentage, the equivalent percentage is well above 70%. We believe that in Germany and Austria, as we start seeing more and more data come out from the GUARDIAN and the long-term extension studies, we believe that this could also be a market growth opportunity because many of those patients who are not taking steroids in these two markets should medically be on steroids but are avoiding it because of the toxicities and the side effects. Can I get the next slide, please? Here's a quick overview of our launch progress.
It's obviously driven by the access in the various countries. Germany and Austria, as well as the UK and Spain, are check marks. We have reimbursement there. In Spain, the launch is imminent. In Italy, we announced today that we have a price agreement with the AIFA. As I said, in 6 to 8 weeks, when the Gazette publishes the official notification, we'll be able to launch. In the Nordics, we're somewhat delayed. We had hoped to be able to wrap up all the Nordic countries by mid-year, but it now looks like it could be delayed by 3 to 6 months in the Nordics. I will not go into a lot of details on the negotiations there because it's different from country to country.
As a whole, we want to include the GUARDIAN data into the health economic modeling that is being done in the Nordic countries to make sure that the price that we achieve in the Nordics is in line with the price that we have achieved in other markets. The same goes for Benelux as well. In France, we have decided to withdraw our application and resubmit entirely. Our initial ASMR5 was just not sufficient for a reasonable price agreement with the French government. We believe that with this long-term extension data that we have now, we can get an ASMR4 in the next round, which would then allow us to negotiate a price that is in line with pricing in other European countries. The resubmission is expected in Q3 of this year. As many of you know, that process could take up to a year.
We probably won't have reimbursement in France until the second half of next year. France is likely going to be the last country in Europe to have reimbursement for AGAMREE. In Switzerland, we're in the process of negotiating with BAG, and we're expecting to have reimbursement in the third quarter of this year. Next slide, please. A few words about our licensed partner markets. Catalyst in the US is making excellent progress with the drug in the US We had $117 million in revenue last year above the guidance that they had originally given. This also triggered a milestone payment to us, which had its cash flow early in the year. The guidance they provide for this year is $140 million-$150 million. I want to remind everybody that Catalyst has their first quarter earnings call next week on Wednesday.
In the US, it's a very concentrated market. They have about 90 centers of excellence in the US where more than 90% of the patients are treated. To continue the theme of 90, about 90% of those centers have actually started prescribing AGAMREE as a routine drug for their boys and young men. Moving to the next slide, the other licensing partner in China, which is Sperogenix. They have a early access program slash out-of-pocket pay soft launch ongoing right now. There are about 800 patients cumulatively that have been treated with AGAMREE in China. This is obviously more than we have in Germany already. And this is just the self-pay portion of the launch. They're submitting for what's called an NRDL, a listing national reimbursed drug listing in China in the fall of this year with the expectation that the reimbursement will be granted as of early 2027.
Next slide, please. Our final licensing partner of the three licensing deals that we have, the new one, which is Nxera Pharma. This is a mid-sized Japanese company. It has management sitting both in Japan as well as in London. They are having their own affiliates in both Japan and Korea. They're looking to find partners for Australia and New Zealand where they can either sub-license or distribute for Nxera Pharma. Nxera Pharma is a fully integrated company. They have their own regulatory, commercial and manufacturing activities and capabilities. They will be basically manufacturing the product themselves in Japan. Well, they will have either manufacturing done through a third party in Europe or manufacture local in Japan. What is worth mentioning here is that this team is very familiar with the drug.
The Japanese and Korean affiliates of Nxera Pharma were actually acquired by Idorsia, which obviously was the company that had the initial rights to vamorolone. The CMC group, the technical group that is now part of Nxera Pharma, is actually the former Idorsia team. They're sitting here near us in Basel. That collaboration is functioning extremely well. There are two options for the launch timing in Japan. If Nxera Pharma is not required to do a registrational bridging study in Japanese patients, we could be looking at a launch towards the end of 2027. At the end of next year, should they have to do a bridging study, which we don't expect, the launch would then be a year later in around end of 2028. Next slide, please.
This takes us to the geographical overview of where AGAMREE is now partnered and where it is already available or will soon be available through our partners and our own organization. We signed up Turkey, GCC, India and Russia in the fall of last summer and fall of last year. We signed up through Nxera, South Korea, Australia, New Zealand and Japan early this year. We're expecting a partnership announcement for Brazil slash Latin America sometime this summer. In a few months time. That will cover then most of the globe. We continue to work closely with these both distribution partners and licensing partners to get product locally either reimbursed or through other methods paid for so that the revenues from that start flowing back to us.
Just as a reminder to everybody, for distribution partnerships, we typically retain about 60%-70% of the partner's net sales. Depends on the contract, but 60%-70%. About two thirds of the net sales of these partners come to us. Obviously that's a very high incentive for us to support them and work closely with them. With that, I'll change tact, and we'll move to a clinical update. I'll pass it on to Shabir to give you a quick update on the GUARDIAN data and why we believe this is very significant for the differentiation, market access, and uptake of the drug. Shabir.
Thank you, Dario. Last month, we were delighted to be able to present the outcomes of our long-term data collection at the MDA meeting. It's a prestigious meeting based in the US, where many of the world's experts in Duchenne, both their physicians and patient advocacy communities convene. We had an extremely positive reaction to the data, both from the clinical community, and as Dario has alluded to, we've had a very positive reaction to the data from market access and payers. We will continue to dig and learn more about vamorolone and its unique attributes. For now, I'm going to present to you just the highlights of the data that were presented last month, and indicate where we think these will continue in terms of our strategic growth.
The long-term data collection is an open label study where we followed up 110 boys who originally started vamorolone in their clinical development program. They started when they were young. They are now being followed up for up to 8 years, on average 5, which is a really great period to learn about where differentiation occurs because many of the side effects, of course, occur with continued use of steroids around the 3-4 years of age. In terms of efficacy, we were very clearly able to show comparable long-term effectiveness to classical corticosteroids, both prednisone and deflazacort, and this has very important implications in terms of how we think market penetration will continue. In terms of tolerability and safety, we were very pleased to show an 80% reduction in the risk of spinal fractures.
Now this is actually the second study in which we've been able to do this. We were able to show maintenance of height. As you know, Duchenne is a terrible disease, inflicting growth stunting on these boys causes a huge social issue. I'll go into that a little bit more. We were also able to show cataracts were significantly lower than deflazacort, no glaucoma has been reported to date. We've shown that there are no new safety signals emerging, which again, gives us continued confidence in terms of the benefit risk profile.
Now that the data have been presented, we are aggressively submitting manuscripts, which will be submitted probably in the next few weeks so that the data will be available both to the clinical community, but also more importantly for our colleagues in the field to be able to educate the physicians and patient groups. We're planning additional readouts from the long-term data collection over the next three years annually, so there will be continued data flow. Next slide, please. This is an extremely impressive graph. Here you can see the impact of vamorolone in terms of reduction in spine fractures. What you will see in the panel on the right in red are the number of patients who experienced a fracture on deflazacort.
Just a reminder, deflazacort is perceived currently to be the more efficacious corticosteroid, but we have now shown absolutely clearly that we have comparable efficacy. Deflazacort is also associated with some of the more severe side effect profiles. Here we can show very clearly an 80% reduction in the number of patients who have fractures, but also on the panel on the right where you see the blue and orange, we have not only fewer patients, but we have also, very importantly, less severe fractures. We show also in the next slide. On the first panel on the left, this is a Kaplan-Meier plot where we show time to loss of ambulation. This is an extremely important milestone in terms of disease progression when children lose the ability to walk.
It's one of the more robust ways to measure efficacy. We've shown here in red, the time to loss of ambulation for prednisone and deflazacort together pooled, and in blue, for vamorolone. You'll see there's absolutely no difference between the two. We've also shown similar outcomes when we separate the individual corticosteroids. Now we are able to confidently communicate to our clinical community that there is very comparable and durable efficacy for both. The reason this is really important is not only does this give confidence in the long-term outcomes of vamorolone, but it also now gives physicians the confidence to be able to switch patients who are currently on a classical corticosteroid with the confidence that they will maintain efficacy.
On the right-hand side is a graph showing growth, you'll see in blue that it's a flat line. This is a Z-score. It means that height for age is kept. Children on vamorolone grow as would be expected as if they were not on a corticosteroid. In red, you'll see the same comparison for the pooled prednisone and deflazacort cohort. You'll see that there is a significant widening of the curve, about 12.1 cm at five years. This is a huge change in the mindset of the physicians. There was a dogma previously that you had to keep children short to be able to maintain efficacy. Physicians in some ways were forcing children to have a stature comparing a 12-year-old looking like a six to seven-year-old.
We have now shown definitively that height has no impact on efficacy, that children can grow normally, appear normal, and retain efficacy. This is also another aspect where we will be in terms of future research focusing. If children are taller, it means that physiologically that they will probably also have larger lung volumes because lung volume and thoracic cavity are associated with height.
We're very excited, and we have already started amending protocols to collect respiratory function data retrospectively, which means that somewhere second half of next year, we should be able to do an analysis to show that not only do we maintain efficacy and we have normal height, but we may actually for the first time ever be able to define a new efficacy outcome measure in terms of respiratory function if it holds true. That's something that we're adamantly focusing on and very excited to bring to market in the next few months. With that, I'll hand over to Catherine just to talk about how we're expanding our manufacturing capabilities and some financial highlights.
Good morning and good afternoon. Look at manufacturing. We just really wanted to highlight some advancements that we've had this year. First of all, we have our second supply for drug product that was completed at the end of 2025. This is really important for us because we have. Sorry, I'm just checking that you can still see us. The screen's gone off. Hopefully, we're still running live. Okay. Excuse us. In the second half of 2025, we have the second manufacturing site online. This really is important in terms of supply chain resilience and that security of supply. You always want to have a second source of product. Additionally, it really gives important cost of goods reduction.
This is through a fivefold increase in production scale, very important in terms of that longer term aim of continuing to decrease our cost of goods. Looking at other partnerships in terms of manufacturing for Catalyst in 2025, they established their own drug product manufacturing capabilities. This is so they can serve own territories. It does mean that post Q1 2025, we won't be. Sorry, Q1 2026, we won't be providing them any more product. I'll come onto that a bit later, but that does change our revenue profile as we go into 2026 with them. For Sperogenix, they are also planning their own local manufacturing.
Can we go back one slide, please? Operator, can we go back one slide? Thank you.
Thank you. Yeah. For Sperogenix, they are also planning their own manufacturing, and we're expecting that online in 2028. Finally, Nxera Pharma, as we mentioned before, they will be responsible for their own manufacturing, as they look to bring product into their territories. If we can now move on to the next slide and going through the financial highlights. We're delighted to announce this year an almost doubling of our revenues. That was up to CHF 77.2 million. This is really on the back of that strong growth in AGAMREE, that Dario's talked about. This is obviously also ahead of our guidance originally at the start of the year of CHF 65 million-CHF 70 million. Within that, our product sales were up 72% to CHF 25.8 million.
We're seeing this from our acceleration in Germany and Austria, but also the strong uptake that we saw in the UK You know, the UK is actually tracking the German trajectory we're now seeing. Milestones were at 23.1 million CHF. That's 37% higher. This was driven by two parts. Firstly, the royalties from Catalyst. As the sales from Catalyst increase, we have increased royalties. Also, a CHF 12.5 million sales milestone from Catalyst that was recognized in the P&L for the year ending December 2025, although we received the cash at the start of 2026. Going into revenue from supply and products and services.
This is, for example, selling bottles of products to Catalyst and Sperogenix, also selling API, but also services that we sell to them. That increased substantially to CHF 28.3 million from just CHF 7 million the year before. Looking at operating expenses, we kept very good control of our costs. This is despite the increasing footprint of our sales and marketing team. While sales and marketing were higher in the year, we had lower development and lower G&A expenses. In September, we had our CHF 20.5 million raise. That was from a convertible bond extension of CHF 10 million as well as CHF 13 million royalty agreement. I spoke about that in the interim results, I wasn't go through that in more detail today.
Finally, the operating loss was CHF 37.6 million versus CHF 33.1 million. I think this is worth a bit more explanation because we've got an increased operating loss. However, as you can see, we've got increased revenues and lower OpEx, that might look a bit odd. This was really related to the higher cost of goods. Again, I mentioned this at the interim results. We had a milestone that came through. When we have milestones that are payable, these sit in the cost of goods line. We had that impact, as well as the royalties that are payable are increased as well, because we're selling more product. That is how you got that slight, slightly odd look at the operating loss.
The cash and cash equivalents at the year-end were CHF 22.4 million. However, to add to this, we have the CHF 40 million that we received from Nxera Pharma, as well as the cash payment from Catalyst of CHF 12.5 million, both of which are received in the first quarter. I now go to the next slide and go through guidance and longer term outlook. I've decided to give a bit more detail on guidance this year. I think it's really important to have better clarity around the business. There's a lot more detail here than we've previously given. In terms of the top line revenue guidance for 2026, we expect this to be CHF 80 million-CHF 90 million. Within that, we're expecting growing product sales.
We expect product sales, despite the 17% reduction in German price, which Dario talked about earlier, we're still expecting sales to grow by more than 50%. You can see our unit sales are growing even faster than that. In terms of royalty income, again, we expect this to grow year on year. However, we do have a step down in the amounts that we receive from Catalyst Pharmaceuticals. There's actually a 5% reduction in the royalty rate for the first $100 million of sales from Catalyst Pharmaceuticals. Our royalty income will lag the underlying US sales growth. Overall, from our royalty income, we will expect that to increase. In terms of milestone income, again, we expect this to be higher than the 2025 levels. This is primarily due to the upfront payment from Nxera Pharma.
And just to clarify this is the CHF 30 million of the CHF 40 million that we received. CHF 30 million was a cash upfront. The CHF 10 million, which was the equity investment, doesn't show in revenue. Hence it's not shown in the revenue guidance, only the CHF 30 million. In this figure, or in the total figure, I have only included that one upfront payment. I have not included at this stage any additional sales milestones which may be achieved during 2026. But we'll review how our licensing partners continue to progress their sales and adjust accordingly as the year goes on. The one area that will be lower in 2026 is the revenues from supply and services.
While we expect that to increase for China in terms of the amount of product that we're selling into China, because of Catalyst now having their own production, we would expect a significant reduction post Q1 2026 in terms of the supply and services. We factored that into our guidance. In terms of operating expenses, again, as we've talked about previously, we expect that in the CHF 50 million-CHF 55 million range. Looking at cash flow breakeven, we expect this to be in Q3 2026. That's in line with the previous guidance with no additional funding. While we're talking about cash and cash flow, and I think this leads on to actually something around going concern, 'cause people look at cash and going concern together.
I am delighted to say that if you look in the our full annual report, all 150 pages of it, you'll see for the first time this year, the auditors have not given us a going concern statement, so it's effectively clean. This is the first time in Santhera's history. They are seeing our growth and our projections and are happy that they don't need to caveat their statement. I think that's a real achievement for the company. Looking further ahead, we've previously given guidance for 2028 and 2030. This remains the same as previously highlighted. As a reminder, for 2028, we expect revenues of EUR 150 million.
This is revenues excluding milestone payments, but does include our direct and partner markets as well as those royalties that we receive from our licensing partners. For 2030, if we looked at our direct markets only, so those are 17 countries, within Europe that we sell ourselves, we expect in excess of EUR 150 million of sales. With that, I'll hand back to Dario to talk through strategy.
Thanks, Catherine. We have two more slides, of which this one is the first one. It's intended to just remind you of our overall strategy, which has four pillars. The first one is the obvious one, go direct in Europe with our own affiliates, commercialize ourselves, keep the full margin ourselves. The second pillar is geographical expansion through distributors or licensing partners. We have those three licensing partners for North America with Catalyst, Nxera for Japan, Korea, Australia, New Zealand, and Sperogenix for Greater China. We also have distributors across the many geographies that we have shown to you earlier. There with the distributors, as I said, we keep about two-thirds of their net sales. The third pillar is something we're working on very actively now, which is acquiring additional assets, asset or assets.
We are in mid-stage, early to mid-stage negotiations with a number of parties to do so, and we have just made an offer for a new senior person to join our organization as head of business development and licensing, who's gonna have a dedicated task to bring this to closure. As I've mentioned on previous calls, we have a pretty elaborate infrastructure for one product with AGAMREE across Europe, both here at headquarters and also in the countries, which could be leveraged very profitably if you could bring in a second and a third asset. We are looking at rare and orphan disease assets, so we're staying in the rare and orphan disease space.
We're therapeutic area agnostic, and we're looking to bring in an asset that has typically between EUR 100 million and EUR 200 million of European peak sales. A product that is similar in order of magnitude to AGAMREE. The third pillar is additional indications for AGAMREE. Here we are relying on our partners, Catalyst , Sperogenix , and Nxera to potentially develop additional indications for AGAMREE to which we will then have an opt-in right over time. Obviously, if a clinical trial is started tomorrow, it will still take 4-5 years before you have a registration and an approval for that new indication. It's something that I think in the 5-year planning, towards the end of that 5-year planning, we foresee to expand the AGAMREE indication and sales.
Obviously we would benefit from additional sales and milestones and royalties from our partners if those additional indications then drive their top line growth. Let's move to the final slide, which relates to executive changes for 2026. We have two new executives joining us in the very near future. I'll start with the gentleman to the right here, which is Mark Clauzel. He will start on the 1st of June as our Chief Commercial Officer. He will be replacing Geert Jan van Daal, who after 11 years at Santhera, very deservedly goes into retirement and will focus on his newly found grandchildren. Mark Clauzel has a long experience in the rare and orphan disease space in the pharmaceutical industry.
He has career steps at companies like Alexion, Shire, Tesaro/GSK, and most recently was the Vice President of International Commercial Operations and UK General Manager for the US biotech company Needham Pharmaceuticals. To the left, we have my successor, Orlando Oliveira, who currently is still the Chief Commercial Officer of Boston-based, NASDAQ-listed Zenas BioPharma. He has a lot of experience as well, also mainly focused in the rare and orphan disease space, but also broad geographies. He's been General Manager for Amgen in places like Portugal and Mexico, but he's also lived with his family in the Nordics. He spent 14 years total in Amgen before moving to Cubist Pharmaceuticals and then to Tesaro, where he actually worked with Markus Clauzel. These two gentlemen have worked together in the past. Agios Pharmaceuticals and Mirati Therapeutics also in his career history.
We are very proud to bring these two gentlemen in to refresh the organization. I think to preempt a potential question on why am I stepping aside and handing over to Orlando, I just wanted to say that I believe and I have always believed that it's good corporate hygiene to, after five or six years, to refresh senior executives in organizations. I've done this in my past career as well. Bringing in new executives brings in, not only new ideas and new energy, but also fresh impulses which the organization needs. There's a timing to do it. The timing is, you know, when the company is in good shape, in good health, stable, and has good prospects, and to not step out when trouble or trouble may still be around the corner.
The second criteria is you need to have a competent successor found in order to step down. Given that we have now reached a point where cash flow positiveness is just around the corner in a few months' time, we have the GUARDIAN data in hand that Shabir was talking about, we have four out of five major European markets reimbursed, we have filled the house with talent, we have really good people now in many of the key functions, the timing to do this is perfect. The challenge that Orlando and Mark will have will be different than the challenge that I had over the last five, six years. Well, it will be almost seven by the time I leave.
The focus will be very sharply now on commercial execution in the affiliates, commercial execution of our partners, and then what I mentioned on the previous slide, business development licensing. You know, growing the company, bringing in a second and a third asset, and making Santhera a, a leading player in the small to mid-size spec pharma space in Europe. I have to say here that I can't think of a better person to lead that charge than Orlando, whom I've known for more than a decade and whom I personally lured into this role, if you will. And I'm very proud to be able to hand over to him in a few months' time. With that, I'll hand it over to Catherine for questions and answers.
Thank you all for your time. We have a lot of questions that have come in. We will try our best to answer these. If we don't, I appreciate that we can actually answer these later on. Let's see where we get to on this. The first one, could you provide more details on the breakdown of sales, for instance, by patients switching from classical steroids, and by new DMD patients? How do you expect this to evolve? Do you see any differences between North America and Europe?
I guess that's a question that I can answer.
Sure.
Initially, we saw the large cohort of patients on AGAMREE coming from switches, 6 to 12-year-old boys who had been on one of the previous steroids for a while and were facing side effects and toxicities that were intolerable, where they either had to reduce the dose to a dose that may not be efficacious or take them off the drug entirely. Over time now, we've seen more and more a broadening of the patient pool to the younger ones, the 4 to 5-year-olds who have recently been diagnosed with Duchenne. I would say in all of our markets, it's pretty much becoming a standard of care that those are initiated with AGAMREE.
They don't get the traditional steroids at all anymore. What is also encouraging is that we have seen older patients who had never been on steroids or patients who had stopped taking steroids altogether, starting on AGAMREE. This has particularly been the case in Austria, where we have seen older patients. There's even a poster that's going to be presented soon that shows the benefits in older patients that are starting AGAMREE or have been switched to AGAMREE. We think that that trend is going to continue. In a year from now, two years from now, for all the new diagnosed patients, AGAMREE will be the standard. Patients will increasingly be switching away from these old steroids.
I think that with a steroid now, with AGAMREE on the market that has the same efficacy long-term as the existing steroids but with a remarkably different safety profile, it almost becomes unethical to continue giving old toxic steroids to these boys who are already suffering from a devastating disease. I think that those, that switching is going to increase, and I also believe there's a small cohort of older patients who will benefit and will switch to AGAMREE or start AGAMREE. There's an underappreciated segment as well, which is the big chunk of patients in Europe who are not at all on steroids today. If you recall previous slides, and if you go into our corporate presentation, you'll see these numbers.
There's about 13,000 patients who live with Duchenne in Europe, Western Europe, our own markets today. Of those 13,000, about 8,000 are on steroids at any given time, which means that 5,000 are not. Medically speaking, best medical practice would dictate that all of those 5,000 should also be on steroids from the moment they're diagnosed until the moment they take their last breath. It's not happening because of the toxicities and the side effects and the fears around steroids, which is exactly what AGAMREE addresses.
While we have not built this into our sales guidance for 2030, which is the EUR 150 million-plus, we believe we can grow the market with this product now that we have the GUARDIAN data in hand. I wouldn't be surprised if sometime in the future we adjust that guidance. The question on the US is it's hard to say. I believe it's probably similar in the US, but it's a question really that I shouldn't be answering. That's a question that should be asked of Catalyst. They are closer to the market.
Okay. The second question, thank you for whoever asked this question. We should have mentioned it in the presentation. The question is, "What do you expect the recent positive CHMP opinion to expand AGAMREE's use to patients aged 2 years and older will have on AGAMREE's profile and on your revenue outlook in Europe? Do you expect such a label extension in the US?" Over to you.
Catherine. Maybe I'll start, and I'll pass it over to Shabir. I, the label extension in the US, it is already 2+ in the US The European label, which includes now 2- and 3-year-olds, is actually aligning itself with the US label. In terms of market potential, I think there's an indirect benefit. The revenue potential in those 2- to 3-year-olds, I think, Shabir, is relatively low. They're often not diagnosed that early. I think the indirect benefit is the safety signal it sends to the stakeholders, both HCPs as well as patients and their parents about the safety profile of AGAMREE. Anything else, Shabir?
One important aspect that you need to remember is that the average age of diagnosis is somewhere between 3 and 5, but the average age of starting treatment is older, 7 to 8. This is based on current recommendations in the guidelines that the benefit-risk of traditional steroids for treatment are only positive once the patients are in the decline phase. They're actually losing muscle function, and that's because of the worry around growth stunting, the bone fractures, and the toxicities. We now have data, and the change in the label for Europe was actually based on data rather than the US where we were granted a broad label by the FDA.
What I think is the impact here is that our safety profile and especially the bone and the growth benefits could mean that actually kids are treated earlier rather than waiting 3 years between the diagnosis time and the start of treatment time. There, you don't really want to stunt growth in a 4 or 5-year-old. The risk of osteoporosis within 4 years of starting treatment also limits that discussion. I think we should see earlier initiations after the time of diagnosis.
In terms of other indirect effects, of course, you know, Duchenne families often have 2 or 3 children by the time the first child is diagnosed, and these children will be tested genetically for Duchenne. Again, we should see earlier initiations, but also families would have an option for siblings of children with the Duchenne. I think there are several areas where we should see the impact of this.
Okay. The next question actually talks about our first reported sales from Sperogenix, that started in September. Are these sales commercial sales? I think we've actually answered that in the question.
Yeah.
These are the private payer markets. We hope that they will be moving to their the government.
Reimbursement
reimbursement, as of the beginning of next year. Also that question goes on to ask about, when do you expect the APAC partnership from Nxera Pharma to contribute to revenues? Again, I think it depends on the timeframe for approval and if they have to do a study there, which we've answered. The next question is around cash flows. You're guiding for cash flows to reach breakeven in Q3 2026. Could you provide guidance for revenues and OpEx? We've done that. The second part says, "Do you expect a sharp decline in development costs?" The answer to that will be we'll continue seeing the trend that we have seen in 2025. There won't be a sharp decline because as Shabir talked about, we have the continuation of the GUARDIAN study.
We also have several other studies that are post-approval commitments that are ongoing. Although over time, that is decreasing. There is also actually a spend within the Shabir's department in relation to actually getting approvals as well, so that medical affairs component. That obviously remains very high all the time that we are continuing to work with the various regulators to get pricing and reimbursement. Right. On to the next question. When do you expect to announce European partnership for late-stage products to leverage your European sales infrastructure? I guess we really talked about that. That's adding in a new product is what they're saying. Yeah.
It's not really partnerships in the sense that we would partner with another company.
Yeah.
What I'm referring to is a license arrangement where we acquire the license for the territory from either a European company or a US company. I mean, I'm not excluding Asian companies, but I very often those require additional clinical work before they can be approved in Europe. That our current focus is really on the US and to a lesser extent, European. Companies that are, you know, in the US, there are companies that may want to or have chosen to commercialize themselves in the US, but when they look at Europe and the 27 or 37 markets, if you include all the non-EU European markets, they are intimidated. There's a lot of complexity with launching and building infrastructure in Europe, and they would rather partner with somebody.
We hope that for assets that are in that CHF 100 million-CHF 200 million peak sales opportunity, we would be the ideal partner for those companies, given the track record we now have with AGAMREE. There's also less competition for those types of asset in that CHF 100 million-CHF 200 million bracket. If you look at the bracket CHF 200 million-CHF 500 million, we would be competing with mid-sized European companies and potentially wouldn't be able to secure such licensed assets. The focus is really to own the asset rights in Europe and commercialize them as our own products.
Okay. Next question. When would Santhera expect to be in a position to begin exploring AGAMREE in additional neuromuscular disorders?
Well, that's a good question. I mean, we are not exploring it in additional neuromuscular disorders ourselves. We are relying on our partners, certainly Catalyst primarily, but potentially also Nxera, to do so, and I'll explain why. In Europe, we have a patent protection until 2035. In the US, they have patent protection until 2040. In Japan, they will have exclusivity for at least 10 years from the moment they launch. When you look at the timelines, for us to invest in additional indications, clinical work, would take probably 2-3 years to run a study and one year to analyze it and package it for regulatory submission, and then one year for review. We would be looking at 2030-ish.
before we would get an approval for such an additional indication in Europe. The net present value calculation just makes it very risky if you have only the 5 years until 2035 to recoup that investment. What we have decided to do is that we will have our partners who have a longer exclusivity, as I said, Catalyst until 2040, hopefully, pursue those additional indications, and then we will have the opt-in rights for that negotiated. Depending on the timing of the approval, the quality of the data, the indication, the time left on the clock, we can then decide whether we want to exercise that option or not. We are not going to be spending our own hard-earned euros or Swiss francs on additional clinical work right now.
Okay. The next question. What is the anticipated impact of AIFA reimbursement approval on European revenue growth in 2026? I'll probably answer it. That is factored into our forecasts of the CHF 80 million-CHF 90 million total revenues for 2026. Launch would be very late Q2, early Q3. We have half a year of sales factored into our guidance there. The next question is on German pricing and the 17% price reduction. Was this pre-agreed? Are there expected to be any other reductions in the German pricing, or is this a one-off? That's part one. I'll answer that one first of all.
Answering part one of that question. That was pre-agreed, as I mentioned in my opening remarks. There was an agreement of 3,600 for 18 months, after which the price would drop to EUR 3,001 . That was a compromise we struck with the German authorities. The next price reduction that is expected in Germany is when we hit EUR 30 million of revenue in Germany on a rolling 12-month basis. I'm not gonna speculate when that happens now, but typically at that stage, you have to renegotiate the price. Our benchmark, I mean, I'm not gonna give you guidance here, but the benchmark that we have looked at, like drugs in SMA, et cetera, who have had this threshold reached, typically have reductions of 10%-15% on their price at that at the point where they reach the CHF 30 million threshold.
The second part of the or second and third part of the question is, does this have any implications for pricing on the other European markets? That is the change in German pricing. Please remind us of your assumptions on pricing in Europe to reach the CHF 150 million target by 2030.
Yeah. I, you know, we could have a 2-hour lecture on international reference pricing and pricing referencing within Europe over time, so I'm not gonna get into that. What I can say about the guidance is that we have assumed CHF 150 million-plus revenue in Europe by 2030. This is driven by 2 factors or 2 variables, if you will. The number of patients on the 1 hand and the price per patient on the other. The average patient, and this is also in our corporate deck if you wanna look it up, there's a slide on this. The average patient in Europe, we assume, is about a 33-kilo patient, heavy patient. This is a patient that represents the typical patient from our long-term extension study.
We assume that that average patient consumes 5.2 milligrams per kilogram per day. If that patient, that average patient, then uses that amount of drug, and weighs that much, it translates into 15 bottles, one-five bottles per year. At an average price of EUR 2,000 per bottle, that would be a EUR 30,000 per patient annual revenue. If we then assume 5,000 patients by 2030, that 5,000 patients multiplied with the EUR 30,000 gives you the EUR 150 million. Let's look at these two variables. On the one hand, we believe the 5,000 may be at the lower end of where we land by 2030, mainly driven by the GUARDIAN data and the evidence we have in the first launch markets in terms of uptake.
That 5,000 patients represents about 60% market share of glucocorticoid users today. As I said, in Germany we're already at 40%, in Austria we're at 50%, and in the UK we're tracking similarly. Reaching that 60% by 2030 is probably on the lower end of expectations, particularly given the data that we've seen. When it comes to pricing, which is the other variable, EUR 2,000 per bottle is what we assumed we were going to get 3 years ago when we gave this guidance. We also assumed the 5,000 patients 3 years ago. Now that we see the prices come through in Europe, we see that they're all in the EUR 2,000-EUR 3,000 range.
The German price of EUR 3,000 is at the upper end, all the others fall into the EUR 2,000-EUR 3,000 range, which suggests that there's an upside on the pricing as well. As these patients get older and get heavier, they will also no longer be the average 33-kilo patient. They will probably get closer to 35 and 40 kilos. The consumption will also increase. There's an upside on both variables. There's an upside in terms of number of patients, and there's an upside in terms of the number of bottles used and the price of the bottles.
I think that, as we get more data in from now from our Spanish launch, our Italian launch across the smaller markets in Europe also in 2026 and we start getting more data points, we may then update our guidance. The guidance for now remains at EUR 150 million or more by 2030, and it's a multiplication of the 5,000 patients in 2030 with an average price of EUR 30,000 per patient per year, which is represented by 12 bottles at EUR 2,000. Sorry, 15 bottles at EUR 2,000 a bottle.
Okay. Thank you, Dario. Next question, which might be more Shabir. Are there any initial feedback responses from doctors in the field to the long-term GUARDIAN data? How can your commercial people use this data?
Yeah. Thank you.
Yeah.
I think I hinted before that the reception has actually been extremely positive, both by clinicians but also, as importantly, by the payer and patient advocacy groups. We're delighted with that. In terms of how we're going to be able to educate the community, the thing I do need to come back to is that very early on in the registration process, we were very adamant that we wanted to have a differentiated label so that down the road we would be able to commercialize long-term data. The EU label itself has already been set up, and we did that prospectively so that we would leverage the data. We have already within the label very clear descriptions of the mechanism of action being differentiated.
We already have comparative efficacy in the label versus prednisone from the original pivotal study. Height has already been established as an advantage in the label, as well as bone metabolism biomarker and some initial wording around vertebral fractures. Again, for us, the commercialization through both the country field force, but as importantly the medical infrastructure, is already prepared. We are in final draft of the publications. They should be submitted in the next few weeks. Pending review and approval of the manuscripts, we'll be able to fully leverage the data we have.
Okay. Thank you. There's some questions around margins. I'm actually going to combine several of the questions. The first one is around margins for our products and how this is now and how that could improve in the future by 2030, and then it's another question around the margins that we get on supply of product and services. In terms of our gross margins, we always say that it is greater or our cost of goods are 10% or less even on the lowest price countries.
As we get to 2030, we should see that closer to just a 5% cost of goods. Because not only are we going to be benefiting from the manufacturing site that's online now for drug product, but also we are looking to have a second manufacturer of API, and we have a different process which also improves the cost of goods on that side. That's ongoing over the next year or two to bring that second step in in terms of reduction in cost of goods. Looking at the cost of goods for our supply of services, so that's the bottles, API, and services, that is in the 10%-20% range. That's the margin questions. The next question is also a finance question. Are there any debt repayments in the horizon?
Just to really remind you of the debt, the CHF 35 million term loan that was agreed in summer 2024, we had a period of 2 years where we had no amortization. After summer of this year, we will have a 10% amortization coming through for the next 2 years. At the end of that timeframe, we'll have to look at whether or not we repay that bond or whether or not that convertible, or the term loan, if we repay that, the remaining part of the term loan, or if we roll that. If we did roll it, obviously we would expect a far lower interest rate considering the stage of the company. Next question, what are the expectations for securing commercial partners in LatAm? Would you prefer one partner for the full region?
The answer is yes. We still have a shortlist of, well, essentially two potential partners that we're talking to. We're gonna make a decision very soon on which one we wanna pursue. They're both very strong, but we're still doing our due diligence on them. The partner, they're both Brazilian-based companies, and they will get the Latin American territory.
Okay. We have got lots of questions left, and we haven't got much time. I'm gonna answer this one just because I think it's a really important one. The question around ReveraGen, are there any other one-off related milestones due in the coming years? As what we talked about in the results, due to the 3rd of 5 major countries starting commercialization, we have what we call a pricing and reimbursement milestone that comes through this summer. That is the only what I call one-off unusual milestone.
Everything else in terms of milestone payments are sales related. As we have talked about before, any sales related milestone that's payable, we've managed to match that in terms of cash inflows from milestones in. Yes, this milestone this summer is a one-off in terms of it being the only one that isn't a sales related milestone. Another question on new asset acquisition, has there been any impact from MFN drug pricing that has maybe put partners on pause when thinking about launching their products in Europe?
Yeah, there was uncertainty around that early on with the guidance or policy of the Trump administration with the MFN. Just to remind everybody, MFN applies to the CMS, so Medicare and Medicaid customers in the US In rare and orphan diseases, Medicare, which is the elderly, is rarely an issue. It's the more the Medicaid, which is the ones that have less income that are potentially an issue when it comes to rare and orphan diseases. After more careful consideration, we've looked at it, and in the US, it, the Medicaid branch of CMS, typically gets the best price in the US already.
That best price would then be benchmarked in Europe against the second lowest price in a basket of, I think, 13 countries worldwide. Then adjusted on a GDP per capita basis compared to the US When you do that analysis, you realize that there's actually not a very big discrepancy between the lowest price in the US in Medicaid multiplied with the GDP adjustment factor compared to the second lowest market in Europe. I'm speaking generically now, not specifically for AGAMREE. The more we look at it and the more potential partners look at this whole dynamic, they realize that it's less of a concern than it originally was.
That's even given that we don't know if this policy will be converted into law or not, and whether rare and orphan diseases will be carved out from MFN, which is also an initiative that is being discussed in the US right now. Our plan is to go forward at full speed, do the analysis depending on what the asset is, what the disease is, to see what the price in the US for Medicaid for that particular asset is, and what pricing we can then achieve in Europe before we make any dramatic statements about MFN really impacting these discussions.
We are over time, but there is one final question. There are other questions that we will come back to you, but I think there's one other final question I would like to answer because I think it's important. Before we sort of do a final wrap-up. This is a question around the Catalyst royalties, and can you provide clarity around the step-down in royalties for the first CHF 100 million of sales? I'm actually going to refer you to. There is actually a lot of detail around this in the Catalyst 10-K.
To give you the answer to that, once the product had been on the market for 2 years, we agreed a step-down of royalties from originally 12% down to 7%, so that's what you see on our top line, for the first CHF 100 million of sales. Going forward, the first CHF 100 million, it was 12%, it's now gonna be down at 7%. Everything over CHF 100 million, it then steps up. Between CHF 100 million and CHF 500 million, our top-line royalty rate, what you'll see in our revenue lines, is anywhere between 14%-20%. The exact details, as I said, are in the 10-K.
To give you an overview of the royalty rates that we get from Catalyst.
Those are the total royalties.
That's the total royalties that we bill on the top line.
And then ...
Yes.
Yes. Some of that gets passed on, and some.
Yeah
some
You have the cost of goods that's taken out in terms of the royalties paid, but to give an idea on the top line. There was, just to tie in with that, obviously we have the royalty monetization agreement, which currently, so the royalties from the US go through to CBC and Partners Group, and there's a question around when do you think that that will be finalized, and we estimate in sort of the 2029, 2030 range would be the approximate timeframe for that.
There's one more question I'd like answered.
Okay. The last one.
Yeah.
Yeah. Congratulations on the result. How does Santhera intend to finance the in-licensing of new products?
There's a couple of avenues that can be pursued here. We have been approached by private equity groups that would be willing to make a larger investment in the company should we find a second asset or a second and third asset to license in to cover our upfront payment as well as our working capital required for launching such product. We've also had other investment groups, well, not private equity firms, but investment groups, who have said to us that they would be very willing to fund, together with potentially other investment groups, such an acquisition. To them, both private equity groups as well as these investment groups, it's very attractive for them to invest in a company that has multiple assets.
It de-risks the investment significantly in their eyes and they would be very willing to build on the foundation that we've now built with AGAMREE. That would be the approach that we would probably take, or assuming that the share price development is healthy and that we have a fair valuation on the market. We've also been approached by companies that provide royalty financing, who would be willing to give us these upfronts that we require for our license acquisition and the working capital in exchange for royalties on the product that we license in.
We would then give away again, you know, from typically what, from mid single digits to the high teens over the years on increasing revenue of that product to pay back that initial funding. That's slightly more expensive money in the long run than doing an equity raise to support it. We would have to look at the circumstances at the time when such a deal would take place. Suffice it to say there's no shortage of money available to do such a deal.
Okay. I think with that answers all the questions. Appreciate we're slightly over. Dario, do you wanna do a final summary?
Since this is my last investor call, I just wanted to say a few words. What I really want to say from the heart is that it's been a real privilege to lead this company for nearly seven years by the time the clock stops. I want to thank my colleagues here at Santhera, the management team who have stuck with me, as well as all the other employees who have gone through very difficult times. Many years we couldn't pay a bonus, we couldn't make salary increases, we couldn't replace colleagues that had left and people had to do two jobs at interim.
It's been a very rewarding journey to lead this team and see the collegiality and the loyalty and the hard work that the team has put in. I also want to thank the patients and families that I've met along the way, as well as partners and investors who have supported us in this venture, and also the board, of course, who has been very supportive all these years through very difficult times.
The journey continues. I will be watching it with intensity from the sidelines as a relatively large shareholder, and I wish the team all the best. I think that, it's a fantastic opportunity to for the new Chief Executive Officer, Orlando, to, and Mark, who's the Chief Commercial Officer coming in, to just build on the foundation that we have built over the last couple of years, and I wish everybody a lot of success and joy in the future. Thank you very much.
That's great. Thank you for updating investors today. Can I please ask investors not to close this session, as you'll now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations. This will only take a few moments to complete and I'm sure will be greatly valued by the company. On behalf of the management team, we'd like to thank you for attending today's presentation, and good afternoon to you all.