Arecor Therapeutics plc (AREC) Earnings Call Transcript & Summary

Hello, you're watching Proactive. Joining me is Arecor Therapeutics CEO, Sarah Howell.

Sarah, very good to speak with you today. You recently announced a new partnership with Skye Bioscience. Could you tell us more about that, please?

Yes. As you said, we announced a formulation development collaboration with Skye Biosciences. They're a NASDAQ-listed clinical-stage biotech company, and it's to leverage our innovative and proprietary formulation technology platform that we call Arestat to develop a novel enhanced formulation of Skye's nimacimab, which is a CB1 inhibitor, which is currently being studied in a Phase II clinical trials. So this product has the potential to be a next-generation weight loss therapeutic to safely and effectively reduce weight in patients with obesity. So clearly, a really exciting area and an area that we're also engaged in as well, which I'm sure we'll talk about later. And our target here is to use our expertise and technology platform to develop a higher concentration format of their proprietary products. So higher concentrations, of course, means that you have the potential to reduce the frequency of dosing, and this can bring benefits to patients in terms of improved adherence and compliance, which can improve outcomes there. So we're really excited about this collaboration with Skye.

Sarah, this is a third partnership you've announced so far in 2025. Why are these companies choosing to partner with Arecor?

Yes. So major pharmaceutical and biotech companies come to Arecor simply because we're able to leverage our proprietary platform and also our expertise to develop enhanced versions of their products. So these with enhanced properties that bring improvements to patients that are otherwise unachievable. And again, the Skye Biosciences partnership is a great example of this. And as you mentioned, we've entered into 3 collaboration agreements so far this year. So great momentum for us. And I think that's a key validation of the value that we bring to the table here. They obviously bring near-term revenues for the company as well because the -- our partners fund the development phase of these programs. But importantly, once we've developed these novel enhanced formulations, our partners have the opportunity to license those for further development and commercialization. And these tend to be under milestone and royalty-bearing agreements. So have the potential to bring significant upside to the business as well. And this is all driven by the innovation and -- the patent-protected innovation that we have within the business that can achieve these profiles that are otherwise unachievable.

What about the longer-term upside potential from these license agreements? You have a number of products already under license. How are those progressing?

Yes. So we have 3 products under license currently. The most advanced of those is a product called AT220. It's a biosimilar product that incorporates the Arestat technology. That was actually launched by our partner at the end of 2023, and they're rolling that out globally. And so that's generating now growing revenue streams for Arecor under a global royalty-bearing license. So that's a great example of both the value of our technology that it can bring to partners and patients, but also, of course, the long-term value that can be generated through these recurring royalty streams. We also have a product under license with Sanofi, obviously, a major pharmaceutical company. That's in the rare disease area. That product is currently in a pivotal registrational clinical study, so the last clinical study prior to filing for approval and commercialization. So we look forward there again to Sanofi as our partner, bringing that product to market. And then most recently, at the back end of 2024, we entered into another license with a specialty pharmaceutical company here. So this was AT351, it is known as at the moment. And it has the potential to be the first and potentially only ready-to-use medicine for use in the specialty hospital area. So again, bringing significant advantages to patients and caregivers. So these all have the potential, of course, as they generate near-term revenue, but that longer-term recurring revenue as well for the business under those milestone royalty-bearing agreements.

Can we expect to see more collaborations this year? What else should we be looking out for from Arecor?

Yes. We have a strong pipeline of potential collaborations moving forward. So I certainly expect to be coming back to you with some more news as the year progresses. I mean at Arecor as well, our primary focus is around our core proprietary pipeline. So here, we're very much focused on leveraging the Arestat technology to develop these enhanced versions of existing therapeutics in areas where there's high unmet patient need in high-value markets. So we're very much focused there in the diabetes and obesity space. We're clinical stage with our proprietary insulin products there where we've shown best-in-class clinical data against the very best insulins that are out there today. And we're making significant progress for one of those, AT278. So that's a very highly concentrated, very rapid-acting insulin that we spoke about in the past around the patient benefits there and the unmet need. And we're making significant progress towards striking a strategic partnership there for the further development and commercialization of AT278. So certainly look out for news around that. We're also developing a novel technology platform for the oral delivery of peptides. And again, this is a really exciting area, not peptides are an important class of therapeutics and particularly in the diabetes and obesity area. There's over 800 peptides in development today, but only 2 commercially available as oral delivery. And again, the significant patient advantages there and benefits to orally delivered therapies rather than injectables there. And this is because they have very low bioavailability. So we're looking again to use our expertise to develop a platform here with improved bioavailability in that peptide field. And during the second half of this year, we'll be generating some key and animal pharmacokinetics. So this is to measure the bioavailability of our orally delivered peptides during the second half of this year. So again, look out for news around that really exciting area there. And I guess just to round off, we have growing revenue streams around our AT220, of course, and we're looking for data coming through our clinical and oral delivery pipeline. So I'm really confident around the company and its prospects moving forward and the value that we can bring to both patients and our shareholders. So there'll certainly be more news as we go through the year.

It sounds like a very busy period ahead, Sarah. I hope you'll keep us updated on any progress. Thank you very much for speaking with us today.

Thank you.

Sarah Howell, CEO of Arecor Therapeutics.