Hello everyone, and welcome to our next, and in fact, penultimate presentation of our Austrian Select Conference today. The meeting before with Zumtobel is still running, but I know that most of the other investors will come shortly. I'm happy to have Marinomed here with me today. CEO Andreas Grassauer will enlighten us on the current development of Marinomed. Some housekeeping. The presentation will last 15-20 minutes. We will have time, 5-10 minutes, for a Q&A session afterwards. The presentation is being recorded, and as you might be aware now, the questions can be asked using the chat box at the bottom right. Given that we are already late in time, I'd like to hand over to you, Andreas. The floor is yours.
Yes, thank you very much, and thank you very much, everybody, for joining us. Yeah, I'll jump right into it. With whom do you invest when you buy the share? Typically, you invest in people. Myself, biotechnology is my training, serial entrepreneur, and since 20 years, CEO of the company. My wife, Eva, she used to be the program team head of the allergy program at Novartis, and you will see in a minute why this matters. Gabriele Ram, probably somebody of you know her. She's worked for Wienerberger, was the CFO of Pipelife, and joined us a little bit more than a year ago. Simon Nebel, Chairman of the Board, a Swiss veteran of life sciences, on the board of many life science companies. Elisabeth Lackner, also a Board Member, CEO of a clinical and a research company.
Karl Mahler, former head of strategy and investor relations at Roche, and nowadays working for a couple of other companies as a consultant. Yeah, we are a company who is more than 73% in free float. Management and founders still own around 20%, and we have our shareholders, the Al Sheikh families, which invested 2006. They have held their shares for 20 years, have divested some of them after the IPO, but are long-term shareholders from the Middle East. What is the opportunity and why it's a good idea to hold shares of Marinomed? We are in a very interesting point in our corporate history because we have progressed our key assets, Budesolv and Tacrosolv, to a level where they're ready for partnering, and we are in partnering with these assets.
The clinical trials have successfully completed, and now we're at the stage where we want to partner with Big Pharma. We are in advanced process there. We are on the term sheet level for Budesolv and on LOI level with Tacrosolv. It can be, it's no guarantee, but it can be the news in the near future. Stay tuned what comes on there. Both assets target multi-billion markets. On one hand it's in allergy, on the other one is in ophthalmology. I will come to that in a minute. We expect our business to be continuously profitable. That's not a given for a life science company, and especially not a given for us because we have, of course, generated losses in the past. The recent capital increase just completed helps us to bring us to this value, in fact, milestones.
Of course, having more cash in the company helps in negotiations with these partners. It's better to have cash in the company to go through these negotiations. What is the business model and what is the company doing? Basically, we have a technology that's very simple to explain. It's not that simple from a scientific perspective, but basically, it's a patented recipe, we call it Marinosolv, that allows the solubilization of otherwise insoluble drugs. This technology we have patented, we have shown in clinical trials that it works, and we have two key in-house projects that we expect to generate upfront milestones and royalty payments in the future. We have client-sponsored Solv4U projects, which basically, Solv4U is the brand that we offer our technology, our services to external partners. Here we get paid for what we're doing, what we do in the cost-plus model.
Later on, we get royalties and milestones upon success of these projects. A little bit similar to the Evotec model. Then recently, just we announced it in the press release yesterday, we become a component supplier for different compounding pharmacies. This allows us to generate revenues with attractive margins also to that, I will come in a minute. What is our key project? Our key product, what we call Budesolv. It's an intranasal corticosteroid. It's a corticosteroid that has an immediate effect on allergy symptom relief. That's something that if you are allergic, you probably know. If you're not, you probably don't. On these leaflets of standard products, it's written that it may take up to 14 days until you get a full relief, full effectiveness of your product.
When we organized the clinical trial, the health authorities, they told us, "Okay, we know that the standard products, they are not effective, so please treat the patients at least for a week, and then you do your head-to-head comparison." Of course, we wouldn't sit here if that wouldn't have worked. Basically, we can show we have an immediate relief. We can do it with an 85% dose reduction. We can do it preservative-free. That's exactly what has been shown in a phase III pivotal clinical study. Under the left side, you see a curve. What happens to patients, actually, it's people who have been grass-pollen allergic, and they were put into a chamber. Of course, they were not forced. These were volunteers, of course. Then they were treated with the different products.
The comparative product was Rhinocort Aqua, which is a Johnson & Johnson brand. Then you see the effect on the symptoms, and you see that only our product, Budesolv, showed a relief after the first dose, whereas the placebo and the Rhinocort did not, which is expected and which is known. On the right side, you see that this is really a significant effect after the treatment, and it's the first corticosteroid with immediate symptom relief after the first dose. That's going to be the claim. TNSS means Total Nasal Symptom Score. It's a symptom score that is commonly used. When you look at the market of these products, there is a lot of remedies out there and different brands, different products. Rhinocort, by the way, is the lower right one. The other one, there's Flixonase, there's Flonase, there's Nasocort. Different brands from different companies.
Some big players in the field, former GSK, former Sanofi, former Johnson & Johnson. All these products have one thing in common. They contain preservatives. They are not sterile. They have slow onset of action, require relatively high doses, and face generic competition. To our point of view, these products pretty much represent what we consider a Nokia phone of the year 2000. There is definitely, first of all, a need for an iPhone, and when it comes to us, we want to change that. If you look further on the market, which is shown on the left side, basically this market, it's a U.S dollar billion, so it's a double-digit billion dollar market. Basically you have the antihistamines, which of course they have a symptom relief, but they also have side effects. Then you have the corticosteroids.
Those two products or these two compounds are the biggest pie of the chart. You have decongestants and then immunotherapy, which do a little bit around 10% of the entire market. On the right side, we have modeled what would happen if you bring such a technology into the market, a transformative market. That's the blue line, the new tech. It has the potential to ramp up to $5 billion revenues once such a technology is fully introduced. That does not mean that our product is going to make this $5 billion, but the technology has the potential. We consider our first product, Budesolv, once introduced, can take at least 10% of these numbers. We're expecting around a $500 million revenue on this product. Basically, in pharma, this is not extremely big, but for us, it would be absolute game change.
Just consider a high single-digit royalty on $500 million. That would put us in a position where we get annual royalties higher than our current market cap. That would really change the game. Yeah. When we look at these markets, it's a little bit different than other pharma products. The U.S. is dominant, but it's not the sole one big market. There's allergy patients everywhere in the world, and they need treatment, and they get treatment. You have U.S. dominance. What I can tell you here, for all these regions and all these areas, we are in discussions with potential partners on a term sheet level, on a negotiation level. We are pretty sure that we're going to be able to license the product in the near future. What is the commercialization strategy? Currently, we are in this partner process.
By the way, we take advantage of the help of an external corporate finance advisor who helps us in this project to structure this process. In parallel, we work on a dossier for the submission in Switzerland, where we already have a partner. This dossier can then also be used for other partners, but the upstream is an independent one. It has nothing to do with Switzerland. Follow on, we work then on the approvals with the partners and expect them after launch. Of course, we expect royalties from that product. In the meantime, we get milestone payments and upfront payments, at least this is the plan. Thus, finance the company until the royalties are sufficient going forward. Yeah. Our second product, Tacrosolv, is a novel ultra-low dose tacrolimus eye drop formulation.
Tacrolimus, for those who are not familiar with those type of substances, in the eye care you cannot use corticosteroids because corticosteroids increase the eye pressure, so you need alternative solutions to get the inflammation down. Macrolide immunosuppressants are the compounds of choice, and tacrolimus is the most effective macrolide immunosuppressant. This substance has one problem, it's practically insoluble and our technology, we can first of all solubilize and bring it forward and we can improve the onset of action of this type of drugs. We've already shown that in an exploratory phase II clinical trial. You see that the higher dose in this phase II trial showed a significant difference between a placebo after a treatment period of a couple of hours. The most compelling thing here is when we shared this data with key opinion leaders, doctors, was the time of treatment.
When you consider this comparative products or product on the market that treat the inflammation in eyes, which are on the market, especially in the U.S., for example, like Restasis, that's a product that has to be taken for a couple of weeks at least, probably a month, until you see real significant efficacy. The feedback from the KOLs was, "Wow, cool data." You already see a difference between placebo and Enbrel on day eight. It's pretty much surprising. We can measure that it's a 26% reduction in Total Ocular Symptom Score on day eight. In that case, the market is pretty much U.S.-driven. Three quarters of the market are U.S. sales, mainly driven by high prices in the U.S., also our high reimbursement prices.
Recently, there are indications that first of all, prices will go up in Europe as well, and also reimbursement for this type of products will go up in Europe. Basically, it's a U.S.-driven market. Of course, we also want to target in our partnering process the U.S. market. From that perspective, what we're going to do with that product and what we're going to do with that partner, we do not plan to conduct phase III trials ourselves, at least not alone and not without a partner. We are in a strategic evaluation and partnering process also supported by the M&A advisor. The plan is that the completion of the clinical development should then be done by the partner. In the meantime, that was the reason for the press release, we're establishing an increase compounding business for that.
The reason is that demand of doctors is so high that we have been approached by doctors and pharmacists that say, "We have seen your phase II data. Why don't we go give this to patients immediately?" Pharmaceutical compounding allows that. We are going to be a supplier here. That's going to be a very interesting additional business that allows us to explore, first of all, our technology, but also to get revenues earlier than before we have a marketing authorization of the product. Why is compounding so interesting? It's a growing specialty market. In Austria it's even the law that pharmacies can charge 20% more on a drug when they do it compounded. We have a trend towards personalized medicine, so the pharmacist can prepare that in Germany, Austria, and Switzerland, and a lot of other countries.
It's a real additional business for the pharmacist. There's a structural demand with the aging population. Of course, there's a supply gap sometimes. This drug is simply not available. Tacrosolv is a typical example. The suppliers benefit because there is high regulatory intensity. There's a growing installed base, so pharmacies can do it. They know how to do it. Of course, it's a premium service opportunity for the pharmacies, but also for us. We really can capture this value, and we plan to expand this business. Yeah. When it comes to financials, and that's the reason we just published our financial report, so I encourage you to look on our website. Here it's at a glance how Marinomed is doing.
For those who know us, we come from a difficult situation in the past. We have fixed obligations coming from the restructuring process one and a half years ago. We still have to pay EUR 5.2 million to our creditors, which is mainly one creditor, that's the European Investment Bank. You can consider it a fixed repayment without interest. We don't pay interest for this debt. The outpayments are fixed, but the income stream is not really exactly to be planned. We still have to get an earn-out of up to EUR 15 million from Unither, from the sale of our Carragelose business. Delays there were the reason for the recent capital increase. It was not initially planned to do a capital increase, and we don't want, of course, having said it, we're going to plan to be profitable.
It's not the plan to go back to the capital market. Once the pipeline of Unither, the pipeline of the earn-out streams at the moment looks okay that we can expect additional payments. Of course, we want to see upfront milestone payments from the deals that we plan for Budesolv. As said earlier, it's not exactly clear when, at what time point we will get money there. I'm pretty sure I wouldn't sit here if I would not believe that we're going to earn money with that asset, and the same is true for Tacrosolv. And in the meantime, we charge service fees to our Solv4U client, get revenues there, and also plan to get milestones and royalties. If it'll encourage you to look at our profit and loss statement, you see it's an operating result of more than EUR 18 million.
That's not the cash in. It's around EUR 29 per share earnings, but it's mainly coming from the restructuring gain that we were able to book in last year when we completed the restructuring. It's not a cash effective, but basically, it's that down writing of the debt that we had at that time. The asset part of the balance sheet, pretty simple. You see the properties, plant and equipment. It's our facility close to Vienna. It's in Korneuburg, close to the highway. Pretty nice lab space and facility. The value is probably much higher of our facility. Basically, we cannot activate in our balance sheet the intellectual property that we have, which is basically our main asset. On the equity and liability side, you see accumulated losses, which according to Austrian law, really can be used.
It's until we can make profits up to close to EUR 53 million and still have these tax deductions and if you look at the liabilities to banks, this includes the EUR 5.2 million that has to be paid to the creditors still. The plan is, once this is paid off mid-next year, to clean up the balance sheet and basically with the exception of these two convertible bonds which we expect that bondholders will convert into shares, that then the balance sheet is basically free of debt. In parallel, of course, when you go through such a restructuring, we have a very stringent and hard cost efficiency and revenue increase program. We optimize our non-milestone revenue and other income, and of course, we have a service agreement with the buyer of the Carragelose business, which is Unither. We have ongoing Solv4U customer projects.
We get the Austrian Research premium, which refunds us 14% of our R&D costs. Yeah, basically, we take care that we bring the burn rate to zero by next year, so we get independent of the milestone and royalty payments. The idea is that the running of the company finances itself, so being profitable there, and then again on top, the payments from the royalties and the milestones. To summarize it up, two late-stage assets in a very interesting time point. A company that plans to be profitable. We are far advanced with a couple of interested partners, and we expect to stay continuously profitable, and be debt-free from mid-next year. Having said that, I'm finished and open for your questions.
Hello. Thank you very much, Andreas. You mentioned 25 minutes, and on the spot, you finish your presentation 25 minutes later. We have a couple of questions. The first one probably is one you just finished your presentation with. What is the minimum funding and deal flow needed to avoid another capital raise over the next 12 months?
Basically the minimum, it's pretty simple. We need this EUR 5.2 million, of course. Basically what we expect that the earn-outs from the sale of the Carragelose business covers that and more. We expect also a down payment from licensing our first asset, Budesolv. In combination, it should suffice. Basically for the next 12 months, we plan to bring our burn rate down. Currently, we're running costs of around EUR 300,000 per month, and trying to get that down to zero.
Perfect. Thank you very much. There are two questions related to your Budesolv and Tacrosolv products. I'll try to just combine them both. Where is the external partner interest strongest today, in Budesolv, Tacrosolv, or formulation services?
Basically, Budesolv and formulation services are completely different businesses. With Budesolv, we are already in a very advanced stage, post due diligence and in contract negotiations with several parties involving the entire markets that I showed. It's going to be multi- deals, not one. As I said, it's not very clear in which exact time point we'll get it. The plan is to be finished by summer. Now we work on that. The reality knows the plans.
Okay. That's clear. Thank you very much. The final question is regarding your restructuring. What would be the clearest proof point in 2026 that Marinomed has moved from restructuring story to commercial biotech platform?
The best way to show that is to show profits, and show a good deal on Budesolv with an international partner, with a name that investors see the capability to push such a product in the market. It's not enough to have a winning product. You need a strong partner with marketing capabilities to launch that and to push it into market to generate real sales.
Perfect. I'll just look at the chat box. There are no further questions, and given that we are almost on time, I would like to conclude the presentation today. Andreas, thank you very much for presenting Marinomed. It's a very interesting phase in which you are in at the moment, and I also appreciate that you take the time to present your company today. We all know that you are on another conference today. For all others who are listening, I've just put in the next event slot into the chat box. It's EuroTILACIDES, and we're happy to see you there. Andreas, thank you very much again, and have a great day.
Thank you very much, everybody, for joining this call. Thank you.
Thanks