Arecor Therapeutics plc (AREC) Earnings Call Transcript & Summary

Okay. Good morning, everybody. It's a pleasure to be here. So nice to see so many people in the room, and welcome to those joining today online. So as you know, my name is Sarah Howell. I am the CEO of Arecor Therapeutics, and we're here today to talk through our interim results for the 6 months ending 30th of June 2024. So I'll draw your attention, as usual, to our customary legal notice. So I know certainly, everybody in the room today knows the company pretty well now. But for anybody that's joining online, that might be new to us today, I'll just give a really brief high-level view of the business. So at Arecor, we're very much focused on developing enhanced therapeutics that can transform quality of life and outcomes for patients. We do this by leveraging our innovative and proprietary formulation technology platform, Arestat. So we're developing novel formulations of existing therapeutics, existing medicines with improved properties. We have a very broad and diversified and derisked portfolio here of both in-house proprietary products and also partner programs. In our in-house proprietary products, we're very much focused on areas of high unmet patient need, and high-value markets. So we're focused here in diabetes and obesity space. We have 2 insulins in clinical development and also technology collaborations. And I'll talk about those in more detail. On the revenue-generating side of the business, we partner with leading pharma and biotech companies. This is under a licensing model. So it's revenue generating from day 1 as we work on their proprietary products and then there's significant upside potential from licensing and these tend to be milestone and royalty bearing. And again, I'll talk about some of those in more detail. And then under our commercial on Tetris Pharma, we're very much focused on Ogluo. This is a ready-to-use glucagon for treatment of severe hypoglycemia there, and I'll talk around our strategy and focus there to drive those product sales. So I think as you can see across the business, we have growing revenue streams here from partnerships and licenses and those product sales and significant upside potential from our proprietary pipeline in the diabetes and obesity space. So I'm not going to talk in any detail on the portfolio side, but it's obviously here in the deck that you all have as well for your reference. Just a quick reminder that here, because we're taking existing therapeutics where the safety and efficacy of these are known and we're looking to improve these. It means that we can follow abbreviated regulatory and development pathways to market. So it's lower risk, lower cost and faster to market whilst bringing genuine improvements to patients. And in doing so, we would then expect to, of course, return value to our shareholders. So moving on to the operational highlights for the period here. So we've made really significant progress across our diabetes and obesity pipeline, both in our clinical phase program. So AT278, which is our ultra concentrated, it's a 5x concentrated insulin, which is also ultra-rapid acting, and I'll talk through that Phase I clinical data today, which was in type 2 diabetics with high BMI. So these are overweight to obese patients, and we showed superiority here. We also, earlier in the year, initiated a collaboration with TRx Biosciences, and this is to jointly develop an oral GLP-1. And again, I'll talk about that in more detail, but we've got very promising initial data from that program. We also entered into a collaboration with Medtronic. Now Medtronic are the largest insulin pump device company in the world today, and that is to develop a novel formulation. So again, using the Arestat technology platform of insulin that would be compatible with an implantable pump, so an implantable pump from Medtronic here. So this is for intraperitoneal delivery of insulin, and this is to serve really a really vulnerable patient population who have very limited treatment options. So this is a great program from that perspective, but also offers some significant upside for us moving forward into licensing with Medtronic. And then for Ogluo here, our ready-to-use glucagon. We're very much focused on accelerating growth and really doubling down on key territories being the U.K. and Germany. And again, I'll talk about that in more detail. Across our partner programs, AT220. So this is a biosimilar product that's on the market today incorporates the Arestat technology and that's under a worldwide licensing agreement with Arecor, and we're seeing growing revenue streams now from those royalty payments to Arecor. And again, we can talk about those. We have this growing pipeline of what we call technology partnerships. So this is where we're partnering pharma and biotech here, again, revenue generating, but that upside potential from licensing. And we're partnered with some of the biggest companies in the world here, Eli Lilly and Medtronic are two of those that have been happy for us to share their names with the AT292. So this is now under the ownership of Sanofi. So they bought an Inhibrx for this product, here it's in the rare disease space. And again, this incorporates the Arestat technology and they initiated the registration enabling study last year. So Inhibrx initiated that is now under the control of Sanofi. And obviously, that acquisition now increases the probability of this coming to market, and importantly, validates the need and the benefit that this therapy could bring to patients. And then if we look at funding across the team, obviously, we completed our successful placing and fund raise back in July, at the end of July. This included support from 2 international life science investors as well, which I think, again, validates the value that can be generated and that they see within our proprietary portfolio and of course, provides us with a sound platform for further investment both in R&D, and we'll talk about where we'll be investing there and also to drive Ogluo sales. So I'm now going to move on to AT278, talk a little bit about the product and then talk you through some of the data from that program. And this will be the first time actually that we've presented the key data from this study. So just as a quick recap. So AT278 is an ultra concentrated. So it's 5x the standard concentration of insulin. It's a 500 unit per mil insulin, but ultra-rapid acting insulin. So what happens here is as you concentrate insulin up, it slows down its time action profile. So if you didn't do anything special here, you'd have quite a slow glucose lowering profile here. So we've used the Arestat technology to accelerate the absorption of insulin even when it's highly concentrated and improve that PK/PD profile. So the real need here is that we see the increasing number of people that are requiring higher daily doses of insulin, but also really here, we're seeing more and more patients benefiting from insulin pump therapy. We know that people and patients, people with diabetes do better on an insulin pump and they have better outcomes. They have better outcomes. They have better control, better time in range. But despite this, in the U.S., which is where there is the greatest use of insulin pumps, still only around 40% of people with type 1 diabetes and less than 10% of people with type 2 diabetes use an insulin pump even though they would have better outcomes. And one of the major issues here and challenges around the use of these pumps is both their size. It's a physical indicator that you have a chronic condition, and you have to wear these daily and also their wear time. Currently, they can only be worn for up to 3 days. And so here, if we can develop a very highly concentrated rapid-acting insulin, we can able not only the miniaturization of these insulin pumps, so they become much, much smaller and body worn here. And you can see an example of that kind of size on the right-hand side, but also enable longer wear time. So it's more of a fit and forget type of products here that you can then go about your daily life whilst having superior control. And we can see this with the insulin device manufacturer, the major companies there are all talking about longer wear times, smaller pumps, they're making acquisitions in this space as well. But the key catalyst that's required for this is this very concentrated rapid-acting insulin, so you can enable these profiles. Now that market itself is a large and growing market. The device -- insulin device market is around $5.5 billion today and is predicted to grow to greater than $15 billion by 2030. So there's a real opportunity here. So I'm just going to talk to you about the AT278 clinical study. So this is a Phase I single center randomized double-blind 2-way crossover euglycemic clamp study. So this is a state-of-the-art study design for the treatment of diabetes. And so what does this actually mean? So we took AT278, which is the 5x concentrated and compared that to NovoRapid. So this is in the crossover design. So each subject in this study had either AT278 or NovoRapid in each of those treatment arms. And then we also had an open label arm, which was Humulin R U-500. Now the reason this is open label is that we know this is Eli Lilly's highly concentrated insulin, but it has a -- and you'll see in a moment when I show you the data, it has a very slow time action profile, so you can't really blind Humulin R U-500. The subject themselves and the nurses running the study would immediately know which insulin it was. So we performed this in an open-label phase of this study. And what we were looking to see here was despite that fivefold increase in concentration, can AT278 non-inferior to NovoRapid, which is Nova Nordisk's best-in-class rapid-acting insulin for the treatment of diabetes. Now I'm going to slightly change the order of the slides, you've got in front of you because I think it will be easier to run through. So -- so what you're looking at here is the data of AT278 in yellow versus the U-100 insulin aspart. So this is the NovoRapid. And we've got the PK data on the left. So this is insulin absorption and appearance in the blood and the PD data on the right, which is the glucose lowering effect here. So what you can see here, if we look first at the PK data on the left here is that we saw a much faster appearance of insulin in the blood. So this is the yellow curve here versus the blue. So it's appeared in the blood 5 minutes faster than NovoRapid's. So it appeared at 5 -- so you're looking at 5 versus 9 minutes here for the appearance of the insulin in the circulation. And then when we look at the half maximal concentration, which is a really robust measure of how fast insulin is being absorbed, we saw here on the PK data, it was 24 minutes earlier here. So we got to that half maximum concentration of insulin in the blood 24 minutes faster than NovoRapid in this case. And we can see both of these results translating over to the glucose lowering effect. So we saw that earlier and faster glucose lowering effect of 5 minutes for that starting of the glucose-lowering effect. And again, that half maximal glucose lowering impact shifting 25 minutes to the left, which is a really significant improvement here in the PK/PD profile. And remember here, if you don't -- physiologically, it tells us if you have a higher insulin concentration, you'd expect to see a delay in this profile. And then if we look at the tables at the bottom here showing the area under the curve here, which is split into various time points. So if we look at the first hour, so this is the 0 to 1 hour here, we can see that we have for the PK data, 48% increase in favor of AT278 compared to NovoRapid here, so 48% more insulin on board in that first hour post injection. And then if we look over in the pharmacodynamic data, this translated to 66% more insulin action, so greater insulin lowering profile with AT278 in that first hour. We always talk about this first hour because it's just really a key time where a person with diabetes is eating food, their blood glucose has risen really rapidly. You need to get that insulin on board as quickly as possible and start lowering that blood glucose as quickly as possible to help them keep that time in range. So a 66% increase in insulin action in that first hour is very significant here. So what this -- as a whole, these results are showing us that despite a fivefold increase in concentration, not only did we meet all the primary and secondary endpoints of this study, we've demonstrated clear superiority compared to one of the best insulins out there today from Novo Nordisk. Now I'm just going to go back slightly in the slide just to show you the data for the Humulin R U-500. So this is the pharmacokinetic data again, so it's the insulin appearance in the blood here. And we talked through AT278 in the yellow versus NovoRapid here. So we've seen that shift to the left. And what you're seeing here in the shallow curve at the bottom is Humulin R U-500. So this is a very concentrated insulin here. However, you can see it's very slow to appear in the blood, and it takes a long time to get a full dose of Humulin R U-500 into the patients. And we see this very long tail here. So it isn't a meal time insulin, essentially you're not going to be able to react to that swift rise in blood glucose around meal times. And then when we look at the pharmacodynamic data here, again, we see the shallow curve at the bottom, so this is the glucose lowering profile. So this is the action that you require to bring that blood glucose back into normal range. Again, you can see that there's this very shallow and long tail for Humulin R U-500. So you can see we're very significantly at the same concentration shifted that profile to the left. So we have a very highly concentrated, superior mealtime insulin here, which really gives us confidence there. We know there's a patient need for AT278 for higher concentrated insulins. We know that patients want to move over on to insulin pump therapy, and there's a real opportunity here for AT278 to be the only insulin that can catalyze that use of that next generation of insulin pumps. And just to be clear, the -- as far as we're aware, we monitor this space very closely. There's certainly no clinical data out there showing that anybody else has been able to achieve this highly concentrated rapid-acting profile. So, just summarizing AT278 here, we have conducted 2 clinical studies. The first, you may remember was in type 1 diabetics there again, we showed superiority compared to -- compared to NovoRapid in that study. So now with these results from this type 2 diabetes study, we've shown that irrespective you build diabetes type, whether you're a type 1 diabetic or a type 2 diabetic. And very importantly, irrespective of your BMI, so this was in overweight and obese patients that we have the superior PK/PD profile and a best-in-class insulin to help people manage their blood glucose, particularly around this very difficult to control meal time here. And there were no safety signals detected in this study, which is important to note. So in terms of next steps, I mean, as I've spoken about today, we see a real opportunity here for the use of AT278 in insulin pump therapy. We've conducted 2 studies via a single injection. We're confident of its profile. We're confident of the patient need here. And the next steps for us would be to perform a 3-day insulin pump study. So this would be an existing pump to show you when you continuously infuse AT278 that it's compatible with a pump and also that we see the superior PK/PD profile and control here. And we talked around this, and we talked to the markets around us as well. Here, we're very much -- we're exploring co-development opportunities with device companies in this space. The data that you've just seen was actually presented earlier this month at a major diabetes conference as a late-breaking oral presentation, which I think as well demonstrates the significance of this data, and that has really accelerated the pace of a number of these discussions in this device space here. And this study really we see as a significant value accretion point for AT278, demonstrating its utility and use as the only concentrated rapid-acting insulin in insulin pump therapy. So I'm just going to move track slightly and talk a little bit around our oral delivery of peptides programs here. So as you know, we've started here with oral GLP-1. So we are using semaglutide here. So that's the -- that's the active ingredient in Nova Nordisk, Rybelsus, which is the only oral GLP-1 products on the market today. We've entered into a collaboration with TRx Biosciences. So they have a novel lipid technology here for oral delivery. But the challenge here is that peptides ordinarily, semaglutide as a peptide are not stable in the matrix that's required for these oral deliveries. So they need to be in a nonaqueous environment. So that was the initial challenge for us. Can we develop a stable semaglutide formulation in a non-aqueous matrix. And the first answer to that question is, yes. I mean it's been pretty impressive actually how quickly the team have got to that proof-of-concept point. So -- and we've got confidence now that there's feasibility here in being able to enable this oral delivery and next phases here will be some optimization and then moving into a nonclinical PK study because this is all around bioavailability. So what we're looking to do here is to enhance the bioavailability of oral GLP-1. Rybelsus currently has bioavailability of less than 1%. So 99% of this active is lost through the GI tract. It's also dosed to the stomach. And this is problematic because it means the strict dosing criteria around Rybelsus is you need to take this on an empty stomach, and that's problematic and particularly for the patient population. So we'll be looking to circumvent that and dose lower down the track there. And also, there is some IP elements to this. So there is an IP around Rybelsus and the last to expire our IP is formulation IP. So again, with a novel formulation, we'll be able to work around the IP and also have first launch advantage there. Obviously, it's a high-value market. So we see commercial value in oral GLP-1 in its own rights. Sales of Rybelsus despite these challenges that I've just spoken about are growing. They were $2.8 billion last year. The first half of this year, it's just $1.6 billion. And we all know, and I think everybody in the room knows about the GLP-1 market and the estimations around that. So that could be worth up to $100 billion or more as some analysts -- consensus analysts forecast now by 2030. But perhaps more importantly here, we're looking at this as a potential platform, technology and a platform for all delivery of peptides. It's been a challenge for some time here to be able to deliver these peptides orally. We know there's significant interest from large pharmas to be able to take some of their proprietary products, and convert them into oral delivery, patient convenience, compliance, et cetera, there, but the stability of the peptide bioavailability has always been a challenge. So if we can resolve this and solve this for the oral GLP-1, then we can expand this out further as a platform technology. And we'd expect to have that PK data in the first half of next year. So just talking about Tetris Pharma and Ogluo. So as we know, Ogluo is a ready-to-use glucagon pen for the treatment of severe hypoglycemia. So our focus here is very much on 2 territories, and the first in the U.K., our home market here. So the dynamics in the U.K. are there are only 2 products available for treatment of severe hypoglycemia is either Ogluo or ready-to-use pen or there's a legacy HypoKit called GlucaGen from Novo Nordisk, and this is this lyophilized powder that requires quite a complex mixing and reconstitution procedure prior to administration. We've got to remember this is in an emergency situation here. So the U.K. market has a value for ready-to-use glucagon of around GBP 18 million here. By unit share last year, we had about 9% of that market. So there's clearly a significant opportunity for growth for us within that U.K. market. And I'll talk about some of our tactics and status of those in the next slide. And then the second market which we're really doubling down on is Germany. So in Germany, the dynamics are slightly different. There is another ready-to-use glucagon available. It's a nasal product. It was under the ownership of Eli Lilly, but they have sold those rights to U.S. company called Amphastar for Europe, Amphastar need to take on full responsibility by the end of 2024. So again, we see that as a potentially significant opportunity for us. So Baqsimi, we currently have 59% of the market. The remainder is with the legacy glucagon kit, which everything really shows us the demand for ready-to-use glucagons in Germany. And really through marketing and awareness campaign there, we look to drive the awareness of Ogluo and subsequently, the sales and the German ready-to-use glucagon market is worth just under GBP 10 million. So it's really those 2 markets that we're focusing on and doubling down on. In terms of our priorities here in the U.K., it's really around both awareness but also approval on the formularies. So you get a price in the U.K., we have price for Ogluo and then you need that to be listed on each of the care system, the integrated care systems formulary. So there's very much focus there and we've identified this 25 formularies that account for around 80% of the prescriber in the U.K. So again, very much focused approach, and we have a significant presence at a major diabetes conference where there's over 3,000 prescribers and health care professionals in the diabetes space there. For Germany, it's really around awareness. Awareness of the ready-to-use glucagon, and we've initiated there post the funding as well the fundraises is one of those activities and that outreach. Again, there's around 400 health care professionals in Germany that do the majority of the prescribing and they'll be who we are targeting. And we also need stock in country in Germany as well. So a third priority for us is, of course, to ensure sufficient Ogluo stock and the supply chain there so that we can drive that awareness and then meet the uptick in demand. And you may have seen in the results this morning if you've had a chance to read them. We have had a recent packaging issue with Ogluo. So I want to stress here, this is not a problem with the quality or integrity of the product itself. The glucagon pen -- the pen is then packaged in a foil pouch, which is sealed and then labeled over the top of that is the instructions for use. And this issue has been with some of the seals breaking on those foil pouches. So we expect it to be short term issue and disruption here associated with that supply chain, and we're actively managing that. And of course, we'll provide more updates as we go through that process. So just to talk a little bit around the financials. I'm not going to read all the numbers to you. But as you can see, for the first half compared to '23, we've seen increase in revenues there. And really, it's around the diversified nature of our revenues across the business. We have a reduction in R&D spend, and that's simply due to number and phasing of clinical studies and before [indiscernible] spending very much around in areas where the Arestat technology can deliver transformational opportunities for us, say, product opportunities and then partnering. So that's really around that diabetes and oral delivery of peptide space. Obviously, the cash share at the end of June 2024, GBP 2.5 million doesn't include the subsequent fund raise, so we've raised GBP 6.4 million prior to expenses. So really now, we're underpinned by that strong balance sheet moving forward. And if we look in a little bit more detail here, as you can see, we have a mix of revenues here across the business. We're seeing a growing royalty stream for AT220. So that's on track where we'd expect that to be also Tetris Pharma increased sales there. And obviously, as we get stock in country and drive that awareness, we'd expect to see that uptick in demand and obviously, product sales there. And we're anticipating growth on all fronts in the second half of the year on all of those revenue lines there. So just to round off really just to take a step back and look forward a little bit. There are a significant number of upcoming milestones to drive value within the business. We talked about AT278 and clinical results today, and we continue to progress co-development opportunities and discussions and also non-dilutive funding opportunities for AT278. So there will be grant opportunities there. And we see those as major entering into that insulin pumps that is a major value accretion point for AT278. We have these royalty streams from AT220. And that continued growth, obviously, of Ogluo. We do expect conversion of new licenses and technology partnerships. So there's a number of opportunities under active negotiation there. And also, as I talked about oral GLP-1, we've seen very quickly initial very positive data for oral GLP-1 overcoming that initial formulation challenge, and we'll be looking forward to entering into that PK phase of the oral GLP-1 program. So we'd expect to see continued year-on-year growth across the business, and we are working towards and expecting to achieve consensus analyst forecasts as well. We do continue to closely manage cash, of course. And you may have seen in the results this morning, we have performed a business review and there are also planned headcount reductions, which will get annualized savings as well across the business. So there's a real opportunity here through our growing revenue streams and partnerships and that significant upside potential from our proprietary pipeline in the diabetes and obesity space. So thank you for listening today, and I'll be happy to take any questions that you have. Julie?

Julie Simmonds, Panmure Liberum. In terms of the feedback you've had from the presentation of the diabetes data, how has that changed the partnership discussions? And how much of that has come from KOLs and what do they think of it?

Yes. We've actually had a huge amount of incoming from leading KOLs, particularly in the U.S. because we find for the high insulin users, a significant proportion of these individuals are in the U.S., and there isn't a good treatment option for them today. Many of these patients are uncontrolled. They're not meeting or not getting, even close to meeting the HbA1c targets, and there isn't a good treatment option out there today. So we've had a lot of incoming asking us when is the product going to be available? When you're coming to the U.S.? We can run your clinical studies for you. So yes, we've had significant incoming interest from KOLs in the space. And also, we saw a significant change in traction and discussions with device companies as well because I think this data, they're really targeting transitioning over to this type 2 patient population into that recently gained approval for type 2s on the label for their Omnipod to their wearable pump, that this challenge is that on average, a type 2 diabetic in the U.S. needs 100 units of insulin a day, they can't even get to 2 days wear, never mind 3 and the target is 7 to 10 days. So yes, the data has had a significant impact on I think a number of those discussions and the real pull and drive from the KOLs as well who really want to see this product on the market.

Excellent. And then I was just wondering, the issue you've got with sort of packaging with Ogluo, does that affect Xeris as well? Or is this your sort of product?

Yes. So this is all -- so we -- So Xeris suppliers with the pen itself. So we call that our bulk. So -- and then we package them in Europe in this foil pouch. So -- and it's just the seal essentially of that foil pouch, which is not completely sealed on some of those.

Excellent. So hopefully, not too long to.

No. I mean it shouldn't be. It's unfortunate timing. It's happened at this stage, but it's a pretty minor issue that should be easily resolved.

Karl Keegan at Singer Capital Markets. Sarah, you mentioned about the GLP-1 and obviously, it's really hot. Can you give us some idea from your perspective, what you're looking for in that PK? You've made it very clear on the 278 where the direction of travel was, but a bit of flavor on that would be very helpful.

Yes. I mean I think, obviously, one of the key challenges with Rybelsus today, such as the oral GLP-1 is it's very low bioavailability, so less than 1% bioavailability there, which means, of course, you need a high dose of semaglutide to get that effect. It's 20x the dose in the oral product compared to the injectable. So that's an issue from cost of goods perspective. But it's also -- it's an issue with supply. We know struggling globally worldwide. The major pharma companies are struggling to manufacture enough GLP-1 to meet demand there. So if we can improve that bioavailability, then you can look at a number of things. You can look at reducing the drug load, which cost of goods, but also that could have an impact then on side effect profile because that's the other key issue generally, and this is across injectables as well as oral for GLP-1s is the discontinuation rates of those is still on average now, it's still less -- the numbers keep changing but it's less than 1 year. Patients come off GLP-1s within a year because they can't tolerate the side effect profile, which means generally, what you're seeing there is significant weight loss and come off the GLP-1 and then there's a bounce effect of the weight coming back on. So if we can again, develop an oral GLP-1 improve bioavailability. So that's what we'll be looking to see in that PK also not dosing to the stomach, which will help initially with that strict dosing criteria. And then if you can work on the dose actually in that product and the side effect profile, then you could have really compelling therapeutic profile that helps patients stay and stay on the oral GLP-1 as a maintenance dose as well.

Christian Glennie from Stifel. Maybe just on the discussions obviously a prospect of some sort of collaboration with the device manufacture, just characterize, if you can, the nature -- the stage of those -- some of those discussions? Is it across the piece? Or is it -- should we expect more of the sort of challenger companies here than maybe something the bigger incumbents in terms of the nature of those discussions?

Yes, it's a good question. I'll tell you as much as I can. So obviously, we've entered into -- it's not for AT278, but we've entered into a collaboration with Medtronic there, it is an insulin program for pumps. So this is the implantable pump, which I think demonstrates that we strategically are close to some of the major companies. I mean, they're the largest insulin pump manufacturer there. We are also across the board, across the insulin device companies are doing a lot of modeling data. So this is taking the clinical data that we have and those PK/PD profiles and those results and using their algorithms and they're in silico modeling here and looking at, okay, how can we improve time and range, which is the key target here across the patient population using their own proprietary algorithms. So -- and that's a first stage really to demonstrate in that concept without needing to do a clinical study of actually you can show and demonstrate improvements here. And we have published some data on that previously. We did a collaboration with the University of Virginia, who have an FDA validated in silicon model, and we saw a significant improvement in time and range for AT247 there. But we've expanded that now and looking at AT278. So again -- and that's all being done at the cost of the device companies themselves. And then with respect to the clinical study, this is really around actually the -- if we look at the kind of opportunity here jointly, there's a real opportunity here for AT278 as the only highly concentrated rapid-acting insulin plus an insulin pump that's modified for its use, so it can be longer wear, smaller to come together as a combination products essentially. And that will bring significant improvements to patients, but also a significant barrier to entry for others. If you don't have the concentrated insulin, there's no point miniaturizing your device and going for longer wear time because patients won't get to 7 days. And if it's very much smaller, they might only get to 1 day wear, so it's a really compelling opportunity there. And that's really the nature of our discussions with those device companies here is that there's an opportunity together with joint innovation here to bring a product to market that can significantly improve outcomes and can transition those type 2s and those high insulin users onto insulin pump therapy. So we have a number of discussions ongoing there. And real confidence that we will choose the right partner to move forward to under a co-development structure for the next clinical study.

And then on -- sorry, on Ogluo, I wasn't clear. Was it an impact in the first half? Or is it a post-period this packaging issue -- and what you can quantify how much was that impact? And then related to that, I think you previously had said it's about -- breakeven is probably GBP 7 million to GBP 8 million of revenue for the product. Is that still the case? I mean, you talked about head count reductions, but I don't know if that's in a separate part of the business?

Yes. So in terms of the packaging, it's very recent. It was notified to us this month. And there, so it's the new stock that we have bought in -- a new stock post the fund raise. So we do have stock in the U.K. currently. We don't have stock in Germany, and that was a whole part of -- part of the raise here. So there is a -- at the moment, a short-term impact on getting that stock into Germany to obviously then drive demand and meet that demand. And for the U.K., it's very much dependent on the time frame for fixing the sealing of the pouches. But we have a number of mitigations in place that we're going through with the packager at the moment. So we do expect it to be short term in nature, but I can't give you an exact quantify it's going to be this period of time. In terms of impact, I think you asked what's the impact there. We have now bought stock and have stock in country that needs to be packaged, which would translate to revenue of about GBP 1 million. So it's that stock that we want to get packaged and obviously, into the supply chain so that we can really drive that awareness and demand and be confident that we have the products in country to respond to that demand.

Breakeven [ point ].

Yes, that's still. Yes. Great. Yes, we can close there. Thank you. Thanks, everybody.