Good afternoon, and welcome to the Santhera Pharmaceuticals Holding AG half-year results investor presentation. For those recorded in the meeting, investors will be in listen-only mode. Questions can be submitted at any time by the Q&A tab situated in the right-hand corner of your screen. Just simply type in your question and press send. The company may not be in a position to answer every question received during the meeting itself. However, the company can review all questions submitted today and publish responses where it is appropriate to do so. Before we begin, I would like to submit the following poll. I would now like to hand you over to the Santhera Pharmaceuticals Holdings team. Good afternoon.
Good afternoon, and welcome to the first half results for the six months ending the 30th of June, 2026. Giving the presentation today will be our new CEO, Orlando Oliveira, myself, Catherine Isted, and our Chief Medical Officer, Dr. Shabir Hasham. Can I please encourage you to type in questions into the Q&A box as we go along, and we will answer these at the end of the presentation. As always, we have a disclaimer. Please feel free to read this at your leisure. I now hand over to Orlando to go through the highlights of the first half of the year.
Thank you very much, Catherine. Good afternoon, everyone. 2026 has been a strong year so far, and we have achieved a lot of success in terms of market access initiatives. I would like to take you through a few of our major achievements during the first six months. The first one, clearly, four out of the five major E.U. markets now are commercially launched. Pricing reimbursement has been secured in Spain and Italy. We continue strong commercial momentum in Germany, with volumes up 50% in the first half of 2026 versus the first half of 2025. In the U.K., we are up 40% in Q2 2026 versus Q1 2026. Our strategic APAC licensing agreements signed with Nxera has been a key achievement as well. This licensing, to remind everyone, is focused on Japan, South Korea, Australia, and New Zealand.
The total deal value is up to $215 million plus royalties, including $30 million in cash and $10 million in equity investment in Santhera. We have made continued progress as well across our smaller markets. Swissmedic has approved AGAMREE in Switzerland in January 2026, and pricing and reimbursement was agreed in Luxembourg in August 2026, making this the first Benelux market to secure reimbursement. We continue our efforts to distribute our drug across the world, and we have expanded our distributor markets as footprints by dealing with Biomedica and expanding the deal with Biomedica in July to include Georgia, Kazakhstan, Belarus, Azerbaijan, and Uzbekistan. GENESIS, our partner in Central Eastern Europe, has also secured marketing authorization for Serbia in September, further expanding patient access across that territory.
If we could look at long-term data, we have also been able to present at the MDA meeting in March 2026, data from up to eight years of AGAMREE treatment, including baseline results from the ongoing phase IV GUARDIAN study. The data has demonstrated comparable long-term effectiveness to standard of care corticosteroids alongside clinically meaningful safety advantages. On the regulatory front, we have also had a CHMP adopted positive opinion recommending extension of AGAMREE in E.U. to patients from two years of age. Data from real-world experience in adults was presented at ICNMD meeting in Florence in 2026, and this data in adult non-ambulatory DMD patients showed stabilization or improvement in upper limb function in this patient population. In terms of executive and board changes, I have been appointed CEO in July 2026.
Marc Clausse has joined us as Chief Commercial Officer in June 2026, and Dr. Srishti Gupta has been elected to the Santhera Board of Directors in May 2026. I would like now to show a snapshot of our current situation in Europe, both in our direct markets but also our distributors. As said before, we have now commercialized AGAMREE in four key countries out of the five major markets, Germany, U.K., Spain, and Italy. Additionally, we have already launched in Austria and Luxembourg. We are focusing now on getting reimbursement in France. The process of reimbursement in France will require a full resubmission of data, so the commercial launch is not expected before 2028. We remain confident in getting reimbursement in this key country, and we are exploring potential routes to accelerate access as we speak.
Other mid-sized countries like Nordics, Belgium, Netherlands, Switzerland, Portugal, or Ireland are ongoing in terms of market access and pricing discussions. We are focused on achieving pricing that appropriately reflects AGAMREE's value and is consistent with established major European markets. To not forget our collaboration with GENESIS in the C.E. region, we are now covering with them or through them 13 countries, and I have a piece of news to share. We have been able to secure national reimbursement in Poland as of the 1st of October, as of tomorrow. This is definitely a major advance in our role and our goal to really expand the use of AGAMREE across the world. To remind everyone, Poland is the sixth biggest market in Europe for DMD. Focusing now on the early launch countries in the E.U. markets. We have seen really fantastic growth in Germany.
In the first half of 2026, as mentioned before, the volumes were up 50% versus the same period last year. AGAMREE has now 40% share of steroid-using DMD patients, and this comes from newly diagnosed patients, but also switching patients, and we see more and more an increasing number of older DMD patients on AGAMREE. This is really encouraging and in alignment with our strategy. To mention, a new mandatory government-imposed pricing discount will be in effect as of Q1 2027, and we have accounted for this, and this will be compensated by volume increases as of next year. In the United Kingdom, orders have increased by more than 40% in Q2 2026 compared to Q1 2026. This uptake continued to progress, supported by increasing systematic adoption across specialty DMD Centers. We have also benefited from updated treatment guidelines and improved access initiatives, including home delivery programs.
For Austria, another early launch country, we have now 50% share of steroid usage in DMD patients. Looking then in more detail at distributor markets, as mentioned before, GENESIS, our partner in the C.E. region, and Megapharm in Israel both have delivered strong growth in their regions. In September, GENESIS has secured marketing authorization in Serbia, which is a key milestone in our expansion in Eastern Europe. Also in July 2026, as mentioned before, we have expanded our agreement with Biomedica to include Central Asian Caucasus countries. To note, this region has more than 2,000 additional DMD patients, which represents a significant growth in terms of our market potential. We thought it would be good to remind everyone the progress that has been achieved since mid-last year, which is roughly 12 months.
We have expanded significantly our footprint for distributors and partners, covering a very important part of the world from Asia to other countries like Australia and New Zealand. Japan was already mentioned. Now our focus is really about going to Latin America, the only remaining key region to be partnered, and we expect to have news on this relatively soon. Zooming in on our deal with Nxera, which is definitely a transformative deal for the organization. As mentioned before, the total deal value is up to $215 million, distributed by significant upfront milestones, and of course, tiered royalties based on sales. I want to remind everyone that Japan is a very important market with more than 2,000 DMD patients and where steroids are used in 60%-70% of those patients. Nxera is a fully commercial company, fully integral commercial company with regulatory, commercial, and manufacturing activities.
What is exciting to share, going to the next slide, is that Nxera has publicly announced their intention that beyond DMD, which they are targeting to file in the second half of 2027, they are studying potentially three additional indications, which could expand significantly the potential of AGAMREE as a drug for new diseases, including Fukuyama congenital muscular dystrophy, pediatric nephrotic syndrome, and juvenile dermatomyositis. We will be collaborating with them, of course, in this expansion as part of our agreement, and we will be benefiting from royalty if eventually these indications will become one day commercial.
Besides Japan, Nxera is also looking to, of course, expanding their region, and one important milestone was the fact that Nxera has announced they were on track to submit a marketing authorization application for AGAMREE in South Korea following receiving ODD and GIFT designations from the South Korean regulatory authorities.
As you might recall, Catalyst is our partner in the U.S. Catalyst has now been acquired by Angelini Pharma. AGAMREE has been launched in March 2024. The U.S. is a very significant market for us, with 11,000-13,000 patients potentially with DMD, and the usage of steroids is roughly around 70%. The momentum has continued strong. Catalyst reported AGAMREE net product sales of $36.7 million in Q1 2026, up from $22 million in Q1 2025. Angelini has completed the acquisition of Catalyst on July 16, 2026, an acquisition of a value of $4.1 billion, expanding their presence in the U.S. with a direct U.S. commercial footprint. In January 2026, Catalyst had noted publicly already that 90% of DMD Centers of Excellence were using AGAMREE, and in February 2026, Catalyst had communicated expectations of sales for the U.S. between $140 million and $150 million.
In June 2026, Catalyst also reported phase I data suggesting AGAMREE delivers glucocorticoid and anti-inflammatory activity without significant immunosuppressive effects at approved dosing, supporting its potential evaluation across a broader range of chronic inflammatory rare diseases. Another key market for us, China, is progressing well following a commercial launch roughly a year ago. If you recall, this was a non-reimbursable commercial rollout, and so far, close to 1,000 patients have been treated with our drug. We expect Sperogenix, our partner, to continue to progress in terms of trying to obtain national reimbursement drug listing, which would allow us to cover even more patients in the future. I will now pass to Shabir, our Chief Medical Officer.
Thank you, Orlando. We previously discussed our real-world long-term data, including the GUARDIAN study. But for those attendees who may not be familiar with the importance and the impact of these new data, let me summarize some of the key outcomes which were announced in March at the MDA Congress this year in the U.S. We have shown patients treated with vamorolone in a real-world setting for a median of five and up to eight years have durable efficacy equivalent to current corticosteroid standards of care, and I will go into a little bit more detail momentarily. They were able to have the same durable efficacy as measured with time to loss of ambulation. Patients maintained a higher dose level over the eight years of about 80% of starting dose, which is in contrast to what we know about current standards of care.
Children were able to maintain growth at a normal trajectory, and again, in contrast to corticosteroids. 80% fewer vertebral fractures, improvements in overall eye health, and a benefit-risk profile that was consistent with the development program, and therefore, no new safety signals. The impressive thing that we saw in the impact of these data were when they were announced in March. Within one or two months, we started to see changes in prescribing behavior, but also uptake across patient segments. I am happy to answer questions regarding that at the end of the presentation. Next slide, please. This slide is just an example of the data that was presented. It shows a very impressive reduction in the frequency and severity of vertebral fractures. You will see in the panel that patients on vamorolone had 8.1% of patients had fractures versus 41.9% on deflazacort.
We saw an improvement both in terms of the frequency but also the severity of fractures. Next slide, please. The other thing that we showed, and this was really a turning point for us in terms of data that really shaped the market, we were able to establish with vamorolone eight years efficacy data. What you see on the panel on the left is time to loss of ambulation. This is a very important measure. It is a clinically accepted hard outcome measure, but it is also predictive of future disease progression.
What we were definitively able to show was that with vamorolone, patients had the same durable efficacy as current standards of care. On the right-hand side, we show height. You will see in the blue line, it is a Z-score, which is basically a measure of age appropriateness. A flat blue line, which shows that trajectory was normal for age.
Children on vamorolone were able to grow normally. Whereas you will see in the panel on the red line, which is decreasing, children on deflazacort prednisolone were stunted. These are well-known facts. They are very consistent what we see in natural history and registry data. At the end of eight years, we saw about a 12 cm height difference. Boys on vamorolone were 12 cm taller. These two slides are very important because today the recommendation physicians used to have was that in order to treat children appropriately, they needed to be short. They needed to look much younger than they were, and this caused a lot of psychological upset amongst the community, especially the boys. We are the only corticosteroid to have shown now in several clinical trials that you can maintain normal growth, you can look normal for age, whilst remaining efficacious.
As we go into the end of 2026 and we go into 2027, we obviously plan to collect much more data. Our children are getting older, which means that they are in now a more advanced stage of disease. We have the next cut of the long-term data, the GUARDIAN data, in quarter two of 2027. That is going to be an important inflection point for us. We have a very good safety and efficacy data set for younger children and those who are approaching wheelchair age. From 2027 onwards, we will be focused on generating data now in children who are older. We will be collecting a broader set of efficacy and safety measures more appropriate to inform physicians about the use of vamorolone in older children. As an example, we want to highlight data.
It is an independent study that was presented at the ICNMD Congress this year in non-ambulant population. The thing to appreciate is as global standards of care are being adhered to and more patients are being treated, the proportion of children who are living longer and becoming adults is increasing. It is a general acceptance that this is probably underreported at the moment. The exciting thing for us is that a proportion of these patients have either down titrated because of tolerability issues or have discontinued treatment, and we are seeing increased interest in patients either switching to vamorolone or restarting treatment. The data that was presented, this independent study, whilst small, is directionally important for us. Of the patients within one center, and this is data around 25 patients, one center, eight patients were treated. Eight of eight patients showed stabilization or improvement of muscle function.
Here we are talking about wheelchair-bound children who entirely rely on the use of their upper limbs. In those children, function was actually maintained or improved when taking vamorolone, and the exciting fact is that these patients were either half previously treated and switched, but half were actually restarters. Of those who had restarted, they actually started either at full dose or slightly below full dose, and in proportion of those who were on lower doses started to increase the dose.
Again, this is very important for a segment of the patient population that have no treatment option for them to be able to actually come back to a corticosteroid, not only to preserve upper arm function but also respiratory and cardiac function, which of course are the leading causes of death. It becomes very important for physicians who are looking after these older populations to have a treatment choice. We will continue to collect long-term data in these older boys as we go into 2027.
We now move on to the financial highlights for the first six months of the year. We are delighted to say that revenues grew by over 100%, so at CHF 48.3 million. This was due to very strong growth in our AGAMREE sales, as well as, of course, recognizing the income component of the Nxera licensing agreement. Looking at product sales, so that is from our direct markets, but also from the distributors, which are growing. That total amount of product sales grew by 48% over this half over the prior year. Obviously, as we move into the second half of the year, we are excited to add in sales from Italy and Spain. Looking at royalties. In terms of royalties and milestones, we received CHF 29.1 million.
This was obviously primarily driven by the $30 million cash upfront received from Nxera, as well as the royalty payments that we receive from Catalyst and Sperogenix. In terms of revenue from supply of products and services to partners, this was CHF 2.1 million. As I had highlighted at the first half of the year, this is a reduction on where we saw last year, and this is due to Catalyst now transitioning to direct sourcing. So that is in line with expectations. Looking at the global sales of AGAMREE, so that includes our licensing as well as distribution partners. We exceeded $175 million over four consecutive quarters. What that meant is that that triggered a $20 million milestone payment to our partner, ReveraGen, and this is recognized in cost of sales. I am pleased to say that we controlled costs well.
Operating expenses were down 8.4% to CHF 25 million. As a reminder, we are guiding for CHF 50 million -CHF 55 million for the full year, so we are keeping a tight eye on costs. The main reason for the reduction on the prior year was a reduction in development costs as we continue to complete some of our post-marketing studies that were required by regulators.
Our operating loss narrowed to CHF 6.6 million for the year from CHF 35.4 million the prior year. If we look at cash, we had a healthy cash balance of CHF 41.8 million as at the 30th of June 2026. Going on to the financial guidance for the year. In terms of the 2026, you will see that this is actually unchanged from the guidance that we gave at the full-year results back in May. To reiterate that is full-year revenues, we are expecting CHF 80 million -CHF 90 million.
Within that, we are expecting product sales to grow by more than 50%. We are expecting royalty income to increase year-on-year. However, this will slightly lag the underlying sales from Catalyst. In terms of milestone income, obviously, that is going to be primarily driven by the CHF 30 million upfront that we received from Nxera. I have not included any additional sales milestones in this 2026 guidance. However, we continue to monitor that as the year goes on.
In terms of revenues from supply and products and services, as I previously mentioned on the earlier slide, that will be lower than last year. However, I will say the second half will be higher than the first half due to extensive product sales to Sperogenix in the third quarter. In terms of operating expenses, again, as I previously mentioned, that remains in the range CHF 50 million-CHF 55 million for the full year.
In terms of cash outlook, the cash is expected to be broadly stable from the 30th of September through to the year-end. However, we have had some changes that have affected our cash profile as we go into 2027. The first one is a mandatory German price reduction effective of 1st of January 2027. This was unexpected and was not in our modeling. That, combined with some movements of reasonably large inventory purchases into Q1 2027, does mean that we will have a decline in cash during the first half of 2027. However, we will be returning to cash generation in the second half of the year. Importantly, while we have got a change in cash flow profile, we will not require to seek any additional funding. Looking longer term, and you would have seen this guidance before for 2028, we have talked about achieving EUR 150 million of sales.
This is from direct and distributor markets as well as royalties. As we report in Swiss francs, we actually wanted to move that into Swiss francs, so our new guidance going forward, and this is purely just using the exchange rate, will be CHF 140 million. Also, looking further out, we thought it was more helpful to have a guidance for 2030 that encompasses all our areas of revenue, so direct markets, distributor, and the royalties. So comparing like for like from 2028 to 2030, we are targeting EUR 250 million of revenues by 2030. I now move on to the expected news flow through the remaining quarter of this year, as well as into 2027. We will be continuing on our discussions in terms of pricing and commercial launches in other mid-sized European countries, and we will update you as we progress those.
As Orlando has already mentioned, we are looking to sign a distribution agreement in South America. That is the last remaining large geography where we do not have a distribution partner. As Shabir has talked about, we will have another cut of our GUARDIAN data that will be coming out during approximately the first quarter of next year.
So we look forward to sharing that with you. In terms of indication expansion, we have already highlighted in this presentation the recent update from Nxera in terms of their guidance of where they are looking to expand AGAMREE beyond DMD. We are hopeful to be able to provide an update from our partners, Angelini, but obviously that is now up to them in terms of how much information they give the market post them acquiring Catalyst in the middle of the year. We continue on looking for additional products to in-license in. This is really important for our operational efficiency, and Orlando will come back to that shortly. Finally, we note that Nxera is targeting Japanese regulatory filing in the second half of 2027. With that, I will hand the slides back to Orlando, who will discuss the strategic outlook and priorities for this year and next.
Thank you, Catherine. These are indeed exciting times at Santhera, and our main strategy remains clear and really in four pillars of revenue generation. As mentioned already during the presentation, going direct in Europe remains the cornerstone for us. We want to maximize the opportunity in our currently launched markets and definitely secure reimbursement in France and remaining mid-size countries. Geographical expansion is important through our current partners, and we continue to focus on that, maximizing the current business that is already lined up, but also securing a LatAm distribution deal, as mentioned before. Acquiring rights to additional synergistic late-stage rare or orphan assets is also a priority for us and continues to be a priority during the coming year.
Looking to additional indications through our partners, as already mentioned, Nxera, Angelini, will remain a key focus for us as we do see a lot of potential upside and opportunity with our current asset, AGAMREE. With this, we have now finalized the presentation and are ready to go into question and answers. Thank you.
Orlando, thank you very much indeed. Thank you to the team for presenting. Ladies and gentlemen, do please continue to submit your questions just using the Q&A tab situated in the right-hand corner of your screen. Just while the company take a few moments to review those questions submitted there, I would like to remind you the recording of the presentation, along with a copy of the slides and the published Q&A, can be accessed by your investor dashboard. As you can see, guys, we have had a number of questions from investors today, and thank you for all of those. If I may just ask you just to read out the question where appropriate to do so, and I will pick up from you at the end.
Okay. I think we'll start with the first question here. I'll hand this to Orlando. What lessons from Germany and the U.K. are helping you accelerate new launches?
I love that question. I think U.K., Germany, but also Austria, as we saw, who has 50% market share at the moment. I think we've learned that definitely being appropriately staffed, ensuring that we are on message, that we work closely with our European leaders, and ensure that also the benefits of our drug, both on the efficacy and safety side, are well compared will be important. What I think will be different in Italy and Spain, as some of you might know, is that we're talking about a more regional distribution in terms of market access after guaranteeing national reimbursement. We're now working in secure regional and sometimes hospital by hospital access, and this will be slightly different from a country like Germany. Having said that, we have a very strong Chief Commercial Officer in place.
We have very strong general managers in the countries, and we see both those processes in Italy and Spain progressing really well, and remain very confident that we know we will achieve our ambition to have at least the same share than Austria and Germany and U.K. we have today with those two countries. And definitely the fact that we already launched and learned so much with the early launch countries will help us get there.
Okay. We've now got two financial questions, which I'll take. I'll read them out independently. The first one is, you've previously guided to reaching cash flow breakeven during Q3 2026. Given the positive operating cash flow already achieved in the first half of 2026, should we view the milestone as effectively achieved? When can we expect breakeven on a more sustainable underlying basis, excluding milestone income? And when do you expect the business to become consistently cash generative? To take that, in terms of the guidance reaching cash flow breakeven. We have during the fourth quarter, obviously, our cash, I expect as of now, will remain constant till the end of the year.
As I highlighted in the presentation, there have been one unexpected change in terms of the increased German discounts that has changed our forecasts, as well as some movements in inventory, and that does impact our H1 numbers in terms of our cash position. In terms of underlying, we are in a very good position in underlying. If you exclude the sales milestones in and out, and also exclude financing costs, we are operationally cash positive. I appreciate that that is sometimes difficult to see. In terms of when do we expect the business to become consistently cash generative, well, that does slightly depend on some of the timings of some of these milestones that are received and have to be paid. The timings of those are like, I try to guide to them.
For example, in the second half of this year, I noted that a P&R milestone, so that is a pricing reimbursement milestone, fell due. That is a $ 20 million milestone, of which, in terms of cash payment is around 75% of that is paid in cash. We do have those fluctuations in the business. But underlying that, we are in a good position. Looking at the second question around reaching the CHF 80 million -CHF 90 million of revenue guidance. Are you expecting any significant milestone payments in H2, or should we assume this is basically the underlying business? This is the underlying business. I actually mentioned that in the guidance. I have not included any potential sales milestones. We will need to wait to see how the U.S. and China progresses in the second half of the year, and if that triggers an additional milestone.
If there is an additional sales milestone, that would be on top of this guidance. But we wait to see how they progress in the second half of the year. I think that answers those two questions. There is another one which I think is going to be a question for Orlando and myself. This is in relation to the Angelini acquisition of Catalyst, and the question is, do you expect continuity in commercial investment and launch execution? Is the first part of the question. Are there any provisions in the license that could affect royalties, milestones or Santhera's strategic options? Very quickly on the second part, there is no changes. That is quite an easy answer. Orland, I do not know if you want to comment on the first part of that.
No, absolutely. We know that Angelini saw the Catalyst acquisition as a key driver for them in terms of revenue growth, but also in terms of expansion to the U.S. So not only we would expect a continuation, but I am sure even maybe an acceleration of the efforts. As we know, the company is really, really focused on making the portfolio of Catalyst success, and obviously AGAMREE is a very, very important component of that portfolio.
Okay. This is about reinvestments into the future. The question, sorry, it has moved. As AGAMREE generates increasing profits, how do you intend to balance reinvesting those profits into further growth with returning capital to shareholders? Could you elaborate on whether you would prioritize investments in additional indications, new rare disease assets or other growth initiatives versus potential shareholder returns such as dividends, share buybacks, or special distributions? Okay. I think we have seen from the strategic slide that it is really important for operational efficiency to bring in another asset. You have got to remember that our CHF 50 million -CHF 55 million of OPEX can support one or two other assets.
Bring in a late-stage asset, and when we mean late stage, we have said that something that has completed its commercial development and therefore is very close to market or potentially is even on market, would provide us that cash to the bottom line. We need to think about how we are growing this business, and not just remain a single asset company. In terms of additional indications, again, in line with what we have said previously, we are delighted that our partners are looking to expand indications. As a reminder, we have an opt-in right on those indications. For example, if there is a large indication being developed in one of the countries and we realize that that indication could be available to be commercialized by say, 2029, 2030, we can have the discussions at that time of the opt-in right.
The amount that we would pay to opt in would obviously depend on the amount of time we have left on our patent, with our patents running out to 2035. This is the best way of us benefiting from that indication expansion, in terms of because we know how long we have got left effectively on our patent clock when we are paying the financing for that. I think most people would see a specialty pharma company at our stage as not at the stage of developing and paying dividends, or share buybacks. I think that is something you would expect maybe once you are far more mature, with a number of products under your belt, and that you have not got other potential areas to invest in. I do not know if, Orlando, if you have any additional—
I think it is perfect.
Yeah.
It is perfect.
Next one question is, can you please update on current market shares in your launch markets, obviously Germany, Austria, and U.K., and comment on Spain and Italy, and how you expect them to evolve in H2?
It is a great question. I think you guys have seen in the slides, Austria is leading the way with 50% share in DMD patients, Germany with 40%. We do see still potential in these two markets for growth. U.K., we are growing. We do not have validated market share tracking as we have in the other two countries that I have just mentioned through IQVIA, but we are growing. We are not at the level yet of Germany, but there is a significant steep growth.
If you look again at our sales growth from Q2 from Q1, it is pretty inspiring. Nothing would be against us getting the same type of market share as we have in Germany and Austria today with the U.K. I think for Italy and Spain, it is too early to comment on market shares. We got reimbursement over the summer. We are now really working hard on securing regional market access.
We see significant sales in both those countries already coming in. It would be way too early for me to talk about market shares. That would not be the right metric, let us say, at this stage for these two countries. Having said that, for the second half of the year, we expect to continue expansion in all these countries. Of course, Austria at the moment is the benchmark for everyone else at least. We have a competitive team here, so I know everyone wants to either match or exceed those shares, and that is what we are striving for.
Okay. Another question here. This is around the mandatory pricing discount in Germany that we have from Q1 2027, which as I mentioned, was unexpected. It said, "Could you elaborate on the underlying trigger and how should we think about the magnitude versus the pricing impact experienced in the first half of 2026?" Yes, this was an unusual move by the German government. They have done an across-the-board discount on all pharmaceutical companies and all pharmaceutical products. We haven't seen that before, which is why I said it came as a surprise, and we've had to obviously adjust our cash models for that. The order of magnitude is around an 8.5% additional discount that starts in the first, well, beginning of 2027. I think that answers both parts of that question. Moving on to the next question.
Regarding the markets where reimbursement discussions are ongoing, can you clarify what is meant by alternative access routes? Are these intended to support patient access until full reimbursement is secured, or are there markets you expect such pathways to remain the primary source to commercialization on a long-term basis?
That's a great question. I think we'll have to look into country-by-country situation. But indeed, the plan would be here to adopt an early access program in some of these countries, either a cohort program or named patient programs, and this will vary obviously by country, the approach. The idea would be indeed to try to bridge between now and a reimbursed, let's say, drug. More details to follow, but this is what we're looking at in collaboration with the medical team at the moment.
Okay. The next question is around guidance. You mentioned EUR 250 million. Sorry, EUR 250 million just went—
CHF.
CHF 250 million target. Swiss francs. Could you give more details regarding the parts of that? Just to be clear, the guidance is CHF 250 million. I wanted to make sure it was actually in the currency that we report in, and hence that is why we moved the 2028 guidance also into Swiss frans as well. We have talked about in the past that, and I am now going to switch into euros, targeting EUR 150 million in our own direct markets. That remains the same. Otherwise, the other components of that are distributor markets, which I think people generally underestimate, and we have tried to give you a bit more color in this presentation about the potential there. As Orlando said, we actually now have Poland, which is the sixth-largest country in Europe as of the 1st of October as well.
There are the revenues from our, royalties I should say, from our licensing partners, which by 2030 will be not only Catalyst and Sperogenix, but we are also expecting Nxera as well. I will say that those royalties, however, are only on DMD. If by 2030 any of those licensing partners are also selling products, selling AGAMREE in other indications, that will be additional royalties. We get royalties on any indication they are in, but those other indications are not factored into the guidance.
That would be upside. The one area that is different from today, we would not expect any revenues from our supply of products and services by 2030. The reason is that Nxera is producing their own product, so is Catalyst, and by then we would also expect Sperogenix, it is around 2028, to be producing their own products as well. Hopefully that helps with that question. The next question. "Does the unexpected price cut in Germany bear the risk of further pricing pressure in some of your other markets?"
Yeah. No, that's a good question. Not necessarily, because it will not affect the initial listed price that was negotiated. Also, to reassure everyone, Germany has anyway one of the highest list prices in Europe, which puts us in a very good space anyway in terms of reference pricing towards other markets.
I think actually to add that even with that additional 8.5% reduction, this is significantly above the guidance that we gave of EUR 2,000 a bottle. So I think we have to remember that the guidance for EUR 150 million is based on only EUR 2,000 a bottle, so we are well above that. Moving on to the next question. "Can you give some indication which part of the milestones and royalties on sales are going to financial companies now, and which percentage of royalties will go to Santhera now versus 2030?" That's fine. There's a second part to the question I will come back to. So just as a reminder that as of last year, we have all of our royalties from Catalyst and Sperogenix are currently going to our royalty partners, that's CBC and Partners Group. We expect to pay that back in the circa 2030 timeframe.
However, if there are launches in other indications which mean that sales are higher, then that potentially could be brought forward. Also, if there is an NRDL listing in China, which would significantly increase the market size and potential in China, that could also potentially bring the time to pay back forward from the 2030 timeframe. So that's that question. "How many products are planned to in-license in the coming years, and how will in-licensing additional products be financed?" So you do that.
Thank you. No, definitely we will go step by step. Our goal is first to secure one product, and I think as mentioned before, our desire would be to get a product that is synergistic, ideally commercially ready or very close to be commercial. I think once we have really achieved that, we will be thinking and continuing expanding the portfolio, maybe one day adding a pipeline even. But I think we need to be cognizant that this has a cost. So, I will be very happy if we go step by step, in-license the first asset, and then keep you up to date in further potential developments on the BD side.
The second component of that is in terms of in-licensing additional products. Well, it is quite interesting. It depends on what structure you have. If you are in-licensing, normally the upfront would be in the order of magnitude of about 10% of peak sales. As a reminder, the approximate size of peak sales we are looking at is CHF 50 million -CHF 200 million of peak sales. However, that is a licensing deal. We could also look at a distribution deal, which then has the option to convert into a licensing deal.
An upfront of a distribution deal is very small. It would be in the low single-digit millions. It really depends on the type of deal structure that we work with. Also, in terms of financing, I think we have a number of options open to us. I don't think it is appropriate to go into all of those at the current time. But we certainly have a lot of people interested in our company if we are looking to add an additional product because they can see the benefits of that operational efficiency. This one is, I think, for yourself.
Yeah.
Now there is a multi-part question here, so I will start with the first one. "In Germany, in the 50% volume growth," so this is talking about the growth, "what is the mix of new switchers and older patients? Previously, would you have been majority switching, but perhaps mix shifting?
Mix shifting. Mm-hmm. No, I think that is a great question. Definitely you are right. The initial part of our business was really coming from switchers, from deflazacort and prednisolone. But now we see an evolution indeed, with new patients coming in as well. And what is exciting is that older patients are also now being treated with AGAMREE. We don't have precise numbers in terms of share, and I will not try to guess here, but we definitely see that dynamic, which also explains, you are right, the significant volume growth we have assisted to so far. The commercial team is now very focused in going more granular in their strategy in terms of patient types, patient ages, and so forth, and I think this is paying off. I think number two we have already responded. Pricing discount, reference pricing.
That is how we mitigate. On Germany pricing and the discount that is coming in in January.
It is mandatory.
Is there anything you could do to mitigate that? Given Germany is often a reference price, what are the implications for pricing in other markets? Actually, there is not any implications for other markets because this is a discount. The actual price that you see remains the same.
Yeah.
Thankfully, there is no knock-on impact for this 8.5% reduction. It is just a slightly different way of how they calculate it rather than the list price reducing. I think otherwise, we have commented on how we will mitigate the drop. Obviously, we have We are expecting continued sales growth in that territory. As we saw, the data that we have got in older patients in Germany, I am sure will be helpful to that. The third question, sorry, that has been answered. What is the breakdown of the 2030 target? Any updates on your progress in seeking new products to license, acquire to leverage your platform?
Yeah. No, the only update I think was already referred. We have a new head of BD that joined us also in June, which has been very, very active in screening and assessing opportunities along with the team. No concrete update, but just that we are really busy and active in trying to identify the right asset. Of course, we want to do a deal, but it has to be the right asset.
A question around LatAm. What is the potential timing for a partnership in LatAm?
I think we have communicated before that we would like to do it in 2026. My answer will be similar to the one previously. We want to get the right partner. We have great candidates at the moment, but we need to make sure the terms are right, that the conditions are right, that the deal is elaborated the right way. We would hope that this is to come soon, but we cannot share a precise timeline at the moment.
Okay. At the moment, this is going to be the final question unless any others come up. I like this question. Can you elaborate on how prescription behavior has changed after the presentation of the GUARDIAN study, and how do you expect it to impact your peak sales potential in DMD?
Cool. I think we all love that question. The short answer, there has been an impact on prescription behavior. Moreover, there has been an impact on reimbursement behavior. It is fair to say that the long-term GUARDIAN data has helped us significantly achieving reimbursement in Italy and Spain. That has also driven prescription behavior positively in countries that are more established like Germany, Austria, and the U.K. I will pass the ball quickly to Shabir, which can add a bit more color.
Thank you, Orlando. There is a couple of perspectives I would like to add to this in terms of where the impact is and why. Then you will understand why we are so excited. When we look at corticosteroids, we know that currently they are used across all segments of patients. What we have deliberately done is had an approach to trying to generate the most effective data for each segment, addressing the problems for each segment. There are distinct problems by patient age.
The GUARDIAN data basically showed for us what was the most important data set was the durability and efficacy. That was really the door that opened for us that we could not previously demonstrate. Physicians have two main problems. They start steroids late because these kids are very young. They do not want to arrest growth. They do not want to cause fractures in a very young child.
For us to be able to demonstrate that in the young child, you could treat earlier without the fear of stunting growth and a much reduced risk of bone has really helped uptake in new patients, especially now that we can show long-term efficacy. They start straight away with vamorolone. I should add that this year we also got approval in our label to expand the patient population, which is now two years and older, as it was four years and older previously. Physicians now really have the option to treat younger, and that is actually opening the market. These are previously untreated patients. In terms of the older switch segment, which of course is the largest segment and a key focus for us, initially at launch we were looking at safety switches.
These were children who were having tolerability issues on current standards of care. These were switched quite rapidly in the initial uptake phase. Now we are able to show durable efficacy. That hesitancy in switch has gone. We are seeing a lot more physicians aggressively moving to vamorolone now because we have demonstrated equivalent efficacy where safety becomes important because now you are treating before the safety problems and the tolerability problems. There is a philosophy to try to treat now earlier with vamorolone to avoid issues. The poster that we presented and the data that we plan to collect now in 2027 focus very much more on this switch segment and older boy segment with data that is very particular to their stage of disease. We will be looking at upper limb function, we will be looking at respiratory function, some signals within cardiac function.
Of course, these are really the important efficacy measures. We will also be looking at measures that are very important for families and boys. Puberty we will be looking at. We will be looking at blood pressure, glucose metabolism. There is a wealth of data that were coming out. The exciting thing for us is we can actually see changes in the market as we announce these data. I get feedback from a lot of the physicians that I speak to that their confidence in vamorolone is improving and their willingness to switch is also increasing earlier. That is really a very logical expansion of the market, but also uptake and increase in market share across segments.
Thanks, Shabir. We have had one last question coming in, just coming back on the in-licensing topic. It says, is the uncertainty around MFN pricing still impacting your partner discussions or are, in particular U.S. companies, more open again to discuss out-licensing assets to the E.U.?
No, it is a fair question, and I think it is fair to say yes, there is still some nervousness by U.S. biotechs to come to Europe because of MFN. Having said that, what is interesting for us is if you look into rare diseases, essentially pediatric rare diseases, the delta between pricing between U.S. and Europe is normally much lower than other areas. The risk there is much lower. We also know that innovation that is maybe European-focused could be of interest for us. There are U.S. biotechs that bring innovation, but more and more Chinese biotechs are bringing innovation.
This has also been a focus for our BD team to assess assets that could come from other parts of the world beyond the U.S. with the right level of innovation, with the right focus in rare diseases. That could be interesting, let us say, for more ex-U.S. markets. This is something we have been putting some more efforts. We have definitely not given up talking with our U.S. counterparts because people are waiting to see what MFN really plays out. Again, there are areas where MFN has little to no impact, namely pediatric rare diseases.
That's the last question.
Fantastic. No, look, thank you for answering every single question you had through, and there's a fair few of them. Thank you very much indeed for that. Just before redirecting investors to provide you their feedback, I know it's particularly important to you and the team, Orlando, may I just ask you for a few closing comments, please?
No, absolutely. Thank you so much for spending this afternoon with us. I just wanted to say again, the team is very excited about the prospects for AGAMREE. We have achieved a few milestones, but there's still a few more to achieve, and we remain very confident that we'll be executing on those during the coming months. We have a great team, we have a great product, and that's all that you need to be successful. Please stay tuned and thanks for going on this ride with us.
Fantastic.
Okay.
Thank you very much indeed, Orlando. Can I please ask investors not to close the session? You should be automatically redirected to provide your feedback in order the management team can better understand your views and expectations. This will only take a few moments to complete and is greatly valued by the company. On behalf of the management team of Santhera Pharmaceuticals Holding AG, we'd like to thank you for attending today's presentation. That concludes today's session and good afternoon to you all.