Arecor Therapeutics plc (AREC) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen, and welcome to the Arecor Therapeutics plc Interim Results Investor Presentation. Throughout this recorded presentation, [Operator Instructions] The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today and will publish those responses where it's appropriate to do so. And before we begin, I would just like to submit the following poll. And if you could give that your kind attention, I'm sure the company would be most grateful. And I would now like to hand you over to CEO, Sarah Howell. Sarah, good afternoon.

Good afternoon, and welcome, everybody. Thank you for taking the time to join us today. So I'll be talking through our interim results for the 6 months ending the 30th of June 2024 and also a little bit more about the outlook and upcoming milestones for Arecor Therapeutics. So I'll draw your attention to our legal notice. So for those of you that might be joining us for the first time today, I'll just spend a few minutes really giving some background information, a high-level view of Arecor. So at Arecor, we're very much focused on transforming patient care by bringing enhanced therapeutic medicines to market that are more effective, easier to use and safer. And we do this by leveraging our innovative and proprietary formulation technology platform, Arestat. So we're essentially developing novel formulations of existing therapeutic medicines that bring these enhanced properties. We have a very diverse and derisked portfolio of both in-house proprietary products as well as partner programs. In our in-house proprietary pipeline, we're focused in areas where there is high unmet patient need, but in high-value markets. So very much focused within the diabetes and obesity space there. We have 2 clinical-stage insulin products where we have best-in-class superior data compared to the best insulins that are available for the patient population today. And I'll talk about AT278, one of our insulin products, in more detail as we just announced some significant clinical data related to that program. We also have technology collaborations and new areas of research in oral GLP-1 and also key collaborations with some of the largest pharma companies and medtech companies in the world such as Medtronic here in the diabetes space, which is for a novel insulin for implantable pumps. Then on our partnering programs, this is where we partner with major pharmaceutical and biotech companies. This is where they come to us looking for an enhanced version of their proprietary products that they've not been able to achieve themselves. These partnerships are revenue generating from day 1, so they're paying for access to our technology and our expertise and the IP that sits behind that. We're a very IP-rich company. And the real upside here from this model is that when we have developed novel formulations that meet their target product profiles, they have the option to take those forward into further development or commercialization under a licensing model, and these tend to be milestone and royalty bearing. And then within our commercial organization via Tetris Pharma, we are very much focused on the increasing use in sales and marketing of our lead product, Ogluo, which is a ready-to-use glucagon pen for the treatment of severe hypoglycemia. And again, I'll talk about that in a little bit more detail. So we have growing revenue streams through our partnerships and licenses with major pharmaceutical companies and very significant upside potential from our diabetes and obesity proprietary pipeline. So I'm not going to talk in great detail around our portfolio today because I'll touch on many of these products as we walk through the presentation. But just a couple of key points to note here is because we're taking existing therapeutic medicines, it means that their safety and efficacy is already known and demonstrated. So this means that we can follow abbreviated regulatory and development pathways to market so that they're lower cost, faster to market and, of course, lower risk here. These products are not going to fail on safety and efficacy. It's all around the improvements that we can bring to the table. So just to talk about some of the operational highlights within the first half of the year, this also includes some post-period events. So across our proprietary pipeline within the diabetes and obesity space, we announced headline results earlier this year for AT278. So this is our highly concentrated ultra rapid-acting insulin. This is a study in Type 2 diabetic patients with high BMI. So these are overweight and obese patients. And this data was presented as a late-breaking oral abstract at a major diabetes conference in September, which I think demonstrates the -- how meaningful this data is to that patient population and the prescribers across the endocrinologists as well there. And this means I can also talk today in more detail around that data and show you some of that data. We also have initiated program in the oral GLP-1 space. We partnered with TRx Biosciences here to codevelop here an oral GLP-1 with improved bioavailability, and we have very promising early data from that program. Again, I'll talk about that. AT367, this is a fully funded collaboration with Medtronic that we entered into earlier this year, and this is where we're using the Arestat technology platform to develop a novel thermostable, so heat-stable formulation of insulin that could be used in their implantable pump technology. And this is important because Medtronic are the largest insulin device company in the world today. And this is an important product for a very fragile patient population, but also shows our close relationship with Medtronic and the potential there for us to further collaborate with them across our diabetes and obesity portfolio. And then for Ogluo, we're very much focused on accelerating growth in 2 key territories, and I'll talk about why we picked those territories, both the U.K. and Germany. Now across our partner programs, I'll draw attention to AT220. So this is the first product on the market that incorporates the Arestat technology. So it demonstrates the value that technology can bring to the table here, but also the approvability by the major regulators here. And this is now returning, growing royalty revenue streams to Arecor under a worldwide royalty agreement. And we do have a very strong pipeline of what we call technology partnerships. So this is where we're working on our major pharma or medtech companies' products here under that revenue-generating model with that upside potential as they convert to royalties. And we're working with companies such as Eli Lilly, the largest pharmaceutical company in the world, and Medtronic, as I've just spoken about. And AT292 is also a product under license that incorporates the Arestat technology. Now this product, INHBRX-101, was actually acquired by Sanofi earlier this year and is now in a potentially registration-enabling clinical study. So this could be the last clinical study prior to Sanofi filing for approval for this product. So that's getting much closer to market and now under the leadership of Sanofi and their rare disease division that increases the probability of this product coming to market and its success once it is on market also. And that again is under a license agreement that brings both milestones and commercial payments post launch. We also have expanded our technology partnerships here. So we have multiple opportunities for value creation and license conversions there and a strong pipeline of additional opportunities that are under active negotiation currently. Now earlier this year, at the end of July, we closed the successful placing and subscription and retail offer and raised GBP 6.4 million before expenses, and that was really for us to focus on doubling down in areas of R&D investment where we can return transformational value such as the oral delivery of peptides and GLP-1. And we also appointed, at the beginning of the year, Dr. Helen Parris as Senior VP of Commercial and also General Manager of Tetris Pharma, so we can really drive the awareness and the sales of our key product, Ogluo. So I'm now going to talk in a little bit more detail about AT278. So just to give some background to this product, AT278 is a highly concentrated, it's a 5x concentrated standard concentration of insulin, but ultra rapid-acting insulin. We've used the Arestat technology here to modulate and accelerate the absorption of insulin post injection. And the reason that we're developing this product is there's very much a need, and we're seeing a growing need for people that are requiring high daily doses of insulin. And we're also seeing a move and a transition over to using insulin pump therapy. We know that patients do better on pumps, they have better outcomes, better blood glucose control. But despite this in the U.S., where we can see the highest use of insulin pumps, still at less than 40% of Type 1 diabetics and less than 10% of Type 2 diabetics use insulin pumps today. And one of the main issues and the main barriers to use of these insulin pumps is their size and their duration of wear. So currently, they're used for and worn for up to 3 days before you either throw the pumps away for the patch pumps, which are disposable or need to refill the insulin cartridges here. And they -- and you can see the size of the insulin pumps here on the screen. And it's very much a drive and a pull from the patient population, but also a drive from the insulin device manufacturers here to move to much longer wear. So we're talking about 7-day wear and to much smaller miniaturized pumps. Now if you want to move to longer wear and also reduce the form factor of these pumps, then you need to be able to have onboard a highly concentrated but rapid-acting insulin. This is a particular acute need in the Type 2 patient population, whereas we look in the U.S., on average now, the average Type 2 diabetic that's using an insulin is requiring around 100 units of insulin a day. And if we look at the patch pump, you can see on the screen here that can hold 200 units of insulin. So these patients can't get to 2-day wear with the current insulin formats and size. So if we want to move those across the 7-day wear as well, we clearly need some innovation on the insulin side. So we very much see the future here around body-worn, very small, longer-wear devices and being able to move more of these Type 2 patient populations over to insulin pumps, which will improve their outcomes and quality of life. Now in terms of market size, it's a significant market. The device -- insulin device market is worth around $5.5 billion today and is estimated to grow to greater than $500 billion (sic) [ $15.5 billion ] by 2030. And there's a real upside opportunity in that Type 2 diabetic patient market where the penetration currently is less than 10%. And the key here is that Arecor has the only highly concentrated rapid-acting insulin. It's a particularly difficult profile to achieve. As you concentrate insulin up, it slows down its time action profile, and that reduces those outcomes in terms of blood glucose control. So I'm just going to move on to talking through the headline data from the recent Phase I clinical study. So here, we were looking at comparing AT278, so that's 500-unit per ml insulin, with Novo Nordisk's 100-unit insulin called NovoRapid, and also then having an additional arm comparing with the only concentrated insulin that's available to these patients, which is a product from Eli Lilly and it's called Humulin R U-500. So if we look at the data here, what we're looking at is the PK/PD data for these patient populations. So on the left-hand side here, we have the pharmacokinetic-even data. So this is basically showing you absorption of insulin in the blood post-injection. So you inject at time 0, and then you measure the amount of insulin in the blood over time. And what's important to note here when we look at AT278 versus -- in the yellow versus Novo Nordisk NovoRapid, which is in the gray here, we can see here that we have a faster appearance of insulin in circulation. So insulin in the blood, it appears 5 minutes faster compared to NovoRapid. And then if we look at this minus 24 minutes, this is actually the half-maximal concentration of insulin. So this is a very robust measure of how fast insulin is absorbed into the blood. And here, we saw it's 24 minutes faster to get to that half-maximum concentration of insulin, which is very significant here. I mean what physiology would tell us here is as you concentrate up insulin, you'd expect its absorption to be much slower. So we've managed to counter that effect with the Arestat technology and also develop a much faster insulin in terms of its absorption. And then we saw this translate directly over to the pharmacodynamic profile. So this is essentially the glucose lowering profile. Again, we saw that initiation of glucose lowering was 5 minutes faster for AT278 compared to NovoRapid. And again, we got to that half-maximum glucose lowering profile 25 minutes earlier compared to NovoRapid. And then if we look at the tables here, so this is the area under the curve, what we can see here in the first hour, so if we first look at the PK data, so the AUC 0 to 1 hour, it shows us how much insulin is available onboard in the blood. And we saw 48% more insulin available in that first hour with AT278, and that translated to a 66% greater glucose lowering profile in that first hour. And these results are very significant because this is a period of time where a person with diabetes has eaten food, their blood glucose has risen very rapidly, you need to get that insulin onboard very quickly and start bringing down that blood glucose into a healthy target range as quickly as possible. So these are very significant data. And this as well, just to stress, is in Type 2 diabetic patients with high BMI. So these are overweight and obese patients who tend to be poorly controlled and there isn't a good treatment option available for them today. There are no other highly concentrated, rapid-acting insulins to help them control their blood glucose. And just to talk a little bit around data then compared with Humulin R U-500. So this is the only other 500-unit per ml insulin, so the same concentration as AT278, so this is the pharmacokinetic data here. And what you can see is Humulin R U-500 has this very long, slow profile. So it's quite slow to be absorbed, and then we see this very slow uptake of insulin in the blood. And then looking at the pharmacodynamic data here, you can see that again translates -- we've seen this very slow uptake of Humulin R U-500 and then it's very slow, long profile then to bring down that blood glucose. So this isn't a good mealtime insulin. It's not reacting quickly to that rapid rise in blood glucose compared here, as you can see, to AT278, which brings -- is onboard very quickly and brings down blood glucose very quickly as well. So this provides us data here and confidence that AT278 could be that unique insulin that can catalyze the development of that next generation of insulin pumps, which are longer-wear and miniaturized. And also, I'm not showing the data today, but we've previously presented a clinical data for AT278 also in Type 1 diabetic patients. And again, here, we show superiority compared to 100-unit per ml insulin, so Novo Nordisk NovoRapid. So what this is telling us that AT278, regardless of whether you have Type 1 diabetes or Type 2 diabetes and high BMI, is very effective insulin. In fact, it's a superior insulin in terms of its onset of action and glucose lowering profile. So in terms of next steps for AT278, we have now 2 clinical studies after a single injection of AT278 showing that superiority compared to the best insulins available today. The next step for this program would be to conduct an insulin pump study. So this would be looking at AT278 again compared to those best insulins. But when it's delivered via a continuous infusion in a pump, we would use an existing pump for this profile, it's important so it can demonstrate compatibility with those pumps and also that we have that pharmacokinetic/pharmacodynamic profile that we would expect to see when it's delivered via this format. Now for AT278, really the future here is around that combination with a specific device here. So we are -- we have a number of strategic collaboration discussions ongoing and co-development, partnering discussions ongoing with device companies. And they are now moving at a significant pace since we've been able to announce and present the clinical data here showing the unique profile of AT278 and how it can really fit with the device company's strategy moving forward as well. So I'm going to move track slightly and talk about the oral delivery of peptides and, in particular, our first program in terms of the oral delivery of GLP-1. So this is a collaboration that we entered into earlier this year with TRx Biosciences. So TRx Biosciences have the lipid matrix, so the oral delivery matrix which they've proven on small molecules. But the challenge here was with peptides, in particular with GLP-1, that they weren't stable within this matrix. So this is a perfect combination of technologies here, they have oral delivery technology and Arecor's Arestat technology for stabilizing these peptides. In terms of the product concept here, as we know, I think everybody is aware of the GLP-1s and really the explosions of GLP-1s, there's very high disease prevalence here. They've been shown and demonstrated to be highly effective, both in diabetes indications, but primarily in obesity and weight loss there. But despite this, there's relatively low treatment rates here. And that's because they bring some challenges. So if we look at the oral GLP-1 space, there is only one oral GLP-1 available on the market today. It's a product from Novo Nordisk called Rybelsus, and the challenges with Rybelsus are that it has very low bioavailability. It has a less than 1% bioavailability, which means 99% of the active is not effective. It's lost through that delivery. And also, it's dosed directly to the stomach, which means that for this product, it's very strict dosing criteria that it has to be dosed on an empty stomach, which the patient population do not like here, and it causes constraints around that use and adherence and the effectiveness of that product. So our target here is to develop an improved oral GLP-1 that has enhanced bioavailability and also to target that delivery to avoid the stomach to remove that strict dosing criteria here. And despite those challenges with that existing product, Rybelsus, we saw in 2023, it had sales of $2.8 billion and already in the first half of this year, just over $1.6 billion. So it gives you a sense of the market opportunity here. And then if we can demonstrate effectiveness for oral GLP-1, this really then validates this as a potential to be a platform technology approach that we can enhance oral delivery of peptides more generally. And there are a huge number of peptides in development today or on the market that would benefit from a switch from an injectable product through to oral delivery. And there's certainly very much a high patient preference for oral delivery, so taking a single pill rather than having to self-inject, for example. Now in terms of status, the initial challenge with this program was, could we stabilize the GLP-1? We're using semaglutide here, so the same GLP-1 as in Rybelsus within the oral delivery matrix. And the answer to that is yes, we've developed here data and novel formulations that stabilize that peptide inside the matrix. And we'd be expecting to enter into nonclinical, so these are animal proof-of-concept pharmacokinetic studies. So this is to look at the bioavailability of the GLP-1 during the first half of '25. I think perhaps more importantly for this program is its potential really to expand out as a technology platform, which we know would be highly attractive to partners. Each time we talk to a major pharmaceutical company, we're talking to them all the time, we're asked, do we have anything in the oral delivery space? It's a particular difficult challenge to address, but it is a formulation challenge. And we know that we've been able to develop enhanced formulations with enhanced properties that our large pharma counterparts have not been able to achieve. So we have a fantastic opportunity here to develop this platform and to transform this into significant value creation for the company. So I'm now going to talk a little bit around Tetris Pharma and Ogluo. So Ogluo is a ready-to-use glucagon pen for treatment of severe hypoglycemia. So this is dangerously low blood sugar in patients. It needs to be administered by a third party. So the individual themselves, when they enter into severe hypoglycemia, are not able to treat themselves. And our focus here is on 2 main markets, the U.K. and Germany, as I've mentioned. So the U.K. ready-to-use glucagon market has a market value of around GBP 18 million. On the market today is Ogluo. We launched our first year -- full year of launch was in 2023, a product called Glucagen. So this is a product from Novo Nordisk. It's a rescue kit. It essentially has a vial of lyophilized powder that requires a relatively complex mixing procedure prior to its use. You have to remember, this is a highly stressful emergency situation. So there's benefits here in having a ready-to-use pen. It's like an EpiPen essentially for dangerously low blood sugar. Last year, we achieved 9% of the market by unit share. And really, our focus now through the remainder of '24 and into 2025 is to drive awareness of Ogluo in the U.K. market and drive that demand there. And then Germany is our second target market here. So Germany is a very traditional market. Prescribing is done by maybe endocrinologists in that market. It has a value of around GBP 9.5 million. Now the market dynamics are slightly different to the U.K. There is one ready-to-use product on the market, it's called Baqsimi. It's a nasal glucagon product that was launched back in 2019. It now has around 59% of the market share here. And that was a product that was owned by Eli Lilly, but they sold that product to a U.S. company called Amphastar. And we're anticipating within those agreements and that publicly available information that all of the responsibility for Baqsimi is to be transferred to Amphastar by the end of 2024. And they have very limited European footprint, and that potentially offers us an upside potential in that market also there. So there's a significant growth market opportunity for Ogluo. So just to talk very briefly about some of our tactics around Ogluo here is really growth in our home U.K. market, and this is around gaining formulary approval. So we have a reimbursed price, and then it's around ensuring that Ogluo is on the formularies for the main groups of hospitals, so the integrated care systems there, so it's easy for them to prescribe and also to drive awareness there through conferences, et cetera, where the majority of the health care professionals and prescribers attend so that they're aware that this product is now available in the U.K. and they can prescribe that. And then in Germany, as I said, it's very traditional market. So this is around ensuring that the endocrinologists themselves and diabetologists are aware of the availability of Ogluo. There's around 400 HCPs in Germany that relate to around 80% of the prescribing of Ogluo. So they'll be our targets there to ensure that they're aware of the products and also to ensure that we have sufficient stock in country so that we can meet that demand for Germany and the U.K. So just to talk at a very high level around the financials here. We saw an increase in revenues compared to the first half of 2023, a 20% increase there. We also had a slight reduction in our investment in R&D, and this is in relation to the timing and number of clinical studies here. So our investments in R&D and this -- the most significant investments were around the AT278 clinical study, which has now ended. Now moving forward, as I mentioned, our future R&D expenditure is really to focus in areas where the Arestat technology can deliver transformational value-creation opportunities, so very much in the diabetes and oral delivery of peptide space. And we're anticipating a strong second half of the year of increasing revenues there across our diverse and derisked portfolio. So we have a number of opportunities for revenue generation, not reliant on one partner or one product for that. So just to talk in a little bit more detail here, as you can see, we have royalties now and recurring royalties from AT220. That was actually launched at the back end of 2023. It's now available in major territories such as the EU and very recently in the U.S. there. So again, we'd expect to see continued growth and a strong second half for that program. And for the pharmaceutical products, so this is sales within Tetris Pharma, the sales of Ogluo very much tempered in the first half of the year as we were managing stock there. We had limited stock available to us. We now have more stock onboard post the recent fund raise, which allows us to focus on that awareness campaign and driving that demand because we know we have the stock available to meet demand moving forward. Now we had cash at the end of the year -- at the end of June of GBP 2.5 million, but that was before the GBP 6.4 million fundraise, which that was before expenses. So we have a strengthened balance sheet. So just looking at what's coming up and some of the significant milestones. On the back of the AT278 clinical data, where we demonstrated that superiority, we've seen an acceleration of pace of strategic co-developments and discussions with device companies there. So we're exploring options both with device companies and also across grants for non-dilutive funding to progress that 3-day insulin pump study. And that's very much a study as we see as a major value accretion point for AT278. We've seen that growing revenue stream from AT220, of course, is 100% margin as well. So it goes straight to our bottom line. And we'd expect to see continued commercial growth of Ogluo, especially now we are able to invest in that stock and to have our stock in country and those awareness campaigns across the U.K. and Germany. We do have a pipeline of opportunities, both in new licensing and also technology partnerships. So this is where we're working with pharma companies on their proprietary products. So we're confident, through the remainder of 2024 and certainly into 2025, that we'll be announcing new collaborations and license deals across that portfolio. As I talked about with oral GLP-1, we're pretty excited by that program. It's a significant opportunity. And as I said, we've cleared that first technical hurdle of could we simply stabilize the peptide in that matrix, which has been a challenge that's not been achieved broadly there; and then that opportunity to expand that as a platform technology. So we'd expect to continue to see that year-on-year growth. As I mentioned, we'd expect a strong second half of the year for all of those dynamics that we've spoken about. But we, of course, continue to closely manage our cash and that includes, in certain areas, a planned headcount reduction, which will bring some annualized savings to the business as well. So again, we have those growing revenue streams through partnerships, and these are partnerships with major pharmaceutical and biotech companies, and a significant upside potential as we progress our diabetes and obesity pipeline. So that concludes the formal presentation for today, but I'd be very happy to answer any questions.

[Operator Instructions] But just while the company takes a few moments to review those questions that were submitted already, I'd just like to remind you that a recording of this presentation, along with a copy of the slides and the published Q&A, can all be accessed via your investor dashboard. Sarah, as you can see there, we have received a number of questions throughout your presentation this afternoon. Thank you to all of those on the call for taking the time to submit their questions. But Sarah, at this point, if I may just hand back to you just to read out those questions and give your responses where it's appropriate to do so. And if I pick up from you at the end, that would be great.

Sure, no problem. So the first question is from Danny. I'll read it out, then I'll answer the questions. It says, what plans do the company have in light of the fact that the recent fundraise only raised enough cash for 24 months? As we have seen by the share price reaction, the market hates a company that is losing money and in constant need of funds. Is it a hope that a deal with AT278 will produce the long-awaited value inflection point that will shore up the cash flow within that 24-month period? Yes, so some background to that. In terms of the recent fundraise, as you note, that was to invest in R&D. So we're looking at investing in those transformational opportunities there, including the oral delivery of peptides and GLP-1 as well as to invest in inventory for awareness campaigns for Ogluo so that we can drive that demand and drive those revenue streams from that key product there. And through our market assumptions there, we assume that, that fundraise would provide cash for a 2-year window, as you noted there. I think there's a number of areas to note here. I think for Arecor, there are a number of opportunities for value creation across our portfolio. So there are diabetes products. As I mentioned, for AT278, we're in very active discussions around strategic co-development partnerships with device companies. There's very strong fit there between the device company strategy and how they see growing the markets themselves for those longer-wear miniaturized pumps. And the fact is there that you have to have a concentrated rapid-acting insulin. And AT278 is the only insulin -- certainly the only insulin with clinical data that can meet that profile. So there's some significant opportunities there, we believe, with AT278. Then for, if we take the oral GLP-1, for example, here, it's earlier in development here, but we have some promising initial data. And during the first half of '25, we'll be generating that PK data. So we'll be able to have a read on not only have we stabilized this, but that bioavailability. So -- and I would anticipate that GLP-1 is very valuable in its own right. There's only one product available, as I've spoken about, with less than 1% bioavailability. So there'll be some significant operation -- opportunities for value creation, and we'd expect any deals within that oral GLP-1 space to be significant. Of course, these have then become quite binary. So it's difficult in your forecasting to include those. But relative to our cash burn, we'd expect a deal in that space to be significant and then the opportunity there to broaden that out as a platform technology that could drive near-term partnering with pharma on their proprietary products, plus the opportunity for Arecor to select key products ourselves to develop further to that higher-value inflection points as we're doing with the insulin products in the diabetes space. We then have growing revenue streams, of course, from AT220. That's a 100% margin product there. The partner company, as you know, I can't talk about them in a huge amount of detail, but they're being bullish in the market. They were certainly seeing growth there. So there's some real opportunity to see that to continue to grow and step up through those single-digit millions of revenue receipts. And then there's a program which I didn't talk about in much detail with Sanofi. I think under Sanofi's leadership now, and they acquired INHBRX for over $2 billion for that product, it was that product only that they acquired, the others were spun out into a separate company, shows that they're highly motivated to conclude the clinical phase of that program and bring that to market. And we anticipate that could be on market at some point between '26 and '27. And again, that brings a revenue stream to the business there and more security. So I think there's opportunities in that 2-year cash runway for us to convert additional deals that would significantly extend the cash runway and with significant -- turn significant value to our shareholders. I don't think there are any other questions. I don't think, as long as my screen is refreshing properly. Oh, hang on. Yes, there is. So it's from James. The question is, you mentioned strategic discussions around co-development for AT278. Could you elaborate on potential partners and what these discussions entail in terms of time line, geography or co-investment structure? So I'll say what I can around these. Obviously, the discussions are confidential as well here. So if we look at the dynamics in the insulin pumps space, there's really 5 companies that we would consider that they could be good partners and would have motivation to partner with Arecor on AT278. So you have the incumbents and the large device companies that are already on the market and sharing that kind of $5.5 billion market today. So companies such as Medtronic who, of course, we are partnered with as well developing insulin for one of their implantable pumps; and Insulet who have the only patch pump; and Tandem as well. And then you've got the -- and they're really all competing with each other in terms of market share and patient populations. And they're all very publicly talking about the fact that they see that Type 2 patient population as under-penetrated and they want to move more patients over to that and also around their targets around longer wear time for the insulin pumps. And then you've got the new companies coming on to the market. So there are 2 companies recently that have gained approval for insulin pumps and in the process of launching in the U.S. called Modular Medical and Sequel. And there, really their motivations are around they're looking to grow the market, but also take market share from those incumbents and looking at ways that they can disrupt the current models and innovate there to do so. So there could be some motivations there in terms of leapfrogging their competitors are bringing a next-generation insulin pump to market. And really, the nature of the discussions around we'll move forward into the next insulin pump study with one pump, we need to select a pump for that study. So there's advantages to any company that partners with us at this stage that will be generating clinical data within their pump and they're also getting closer to Arecor as a company, of course, there. So we're really discussing co-development structures. So that would be skin in the game. We'd expect some investment from those device companies for that. But I'm really keen at this stage to have those as nonexclusive partnerships here. We want to be able to -- I think the data in the insulin pump is a major value accretion point there, and we want to be able to maintain that competitive tension and really be able to then drive and return the best deal value to our shareholders. So next question is from Charles, says, I regard Arecor's business model as attractive. However, the AIM market has changed a lot for loss-making technology companies since your IPO in 2021. Have you seen a need to change capital market strategy to adapt to the current U.K. landscape for such companies? Yes. I mean I think for Arecor, obviously, we've -- post the IPO, we've raised twice on the AIM market. So we did a small raise at the back end of 2022 for the acquisition of Tetris and then working capital of GBP 6 million and then the recent GBP 6.4 million of pre-fees associated with that to invest in R&D and Ogluo. So we have been able to access capital on the market. So I think what we're seeing at the moment and I think across the board, what companies are seeing at the moment is there is a bit of a disconnect between the company in terms of the health of the company, news flow and inherent value in the company and share prices at the moment, that's no doubt around that. But I think for us, it's around focusing on what we can control here and really ensuring that we execute here and that we can realize the potential value from our proprietary pipeline, particularly in that diabetes and obesity space, and generate those transformation and convert those transformational deals for the business. And I'm sure then we would see that reflected. I think there's another question from Christopher. He says, how will the recent GBP 6.4 million raise be allocated between advancing R&D, technology partnerships and expanding Ogluo sales through Tetris Pharma? What specific areas do you expect to drive the most significant value inflection? So yes, so in terms of that use of proceeds, about half of that, just over half of that investment in advancing R&D, and this is really around, as we talked about, the oral delivery of peptides and the GLP-1 programs, there is an area that we're really focusing on. In terms of those technology partnerships, they essentially, in terms of that development phase, and Arecor fund themselves because our partners pay Arecor to develop those enhanced versions of their products and then there's the upside potential from licensing. So that's very low-risk area of the business for us as long as we keep the right cadence of programs coming in, which we've been able to do year-on-year because of the value that technology can bring to the table. And then the other half, around GBP 2.7 million is for investment in Tetris, and that's really the majority of that is investment in inventory, which will, of course, match with demand there to ensure that we're managing those working capital cycles appropriately. So we'll match that inventory as the sales are pulling through. In terms of areas that I'd expect to drive the most significant value, I mean, in terms of near-term value, there's obviously those revenue streams that we're gaining through partnerships that we've already entered into and licenses that we've already entered into. And that's low-risk revenue generation there with products on the market incorporating the Arestat technology. It's just a case of how successful are our partner companies, how quickly do they increase product sales within the market, but of course, there's no risk to Arecor there. But I see the most significant value inflection points there and most significant products that we have would be twofold, really. I think there are insulins there and AT278 and this real transformational opportunity in insulin pumps. And the oral delivery of peptides is technically difficult, but we know it's a hugely sought-after profile and product profile. If we're able to achieve that, then I'd expect to be able to return transformational value to the business there through partnering with pharma in that area. So a question from Danny. Is there any news on a CFO? So you may have seen in our results there that we were at the late stages of appointing a permanent CFO, but for a set of fairly unusual circumstances that were out of our control, not related to Arecor business at all there, that candidate has to withdraw from the process. So in terms of next steps, we've been going through a very rigorous search process here. So we have a short list of candidates would be to appoint an interim CFO so that we have them in place and managing, obviously, the financials of the business is certainly coming up to year-end whilst we take the time to continue to ensure that we get the right permanent CFO on board there, but we have sufficient coverage then across the business with the interim as well.

Perfect. Sarah, if I may just jump back in there, thank you very much indeed for being so generous of your time then addressing all of those questions that came in from investors this afternoon. And of course, if there are any further questions that do come through, we'll make these available to you immediately after the presentation has ended just for you to review to then add any additional responses, of course, where it's appropriate to do so. And we'll publish all those responses out on the platform. But Sarah, perhaps before really just looking to redirect those on the call to provide you with their feedback, which I know is particularly important to yourself and the company, if I could please just ask you for a few closing comments just to wrap up with, that would be great.

Yes. I mean I think in terms of Arecor, we remain really confident on the outlook moving forward. There's significant opportunities, as we've spoken about today, for value creation both across our diabetes and obesity platform and our partnered portfolio as well. And with multiple opportunities here, not being reliant on a single product or a single partner here, it really is that kind of diverse and derisked strategy there. I think moving forward, we expect strong news flow through the remainder of 2024 and 2025 in terms of new partnerships with pharma, licensing and, of course, as and when we can, we'll come back with an update around those co-development discussions with device partners, which is at a gathering pace now since we were able to announce and show a very positive clinical data. So we have momentum now and I expect to see that continue to build throughout the year and look forward to coming back and talking to everybody once we've inked some of these, so I can give a little bit more detail.

Perfect. Sarah, that's great. Thank you once again for updating investors this afternoon. Could I please ask investors not to close this session as you will now be automatically redirected for the opportunity to provide your feedback in order that the management team can really better understand your views and expectations. This will only take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the management team of Arecor Therapeutics plc, we would like to thank you for attending today's presentation. That now concludes today's session. So good afternoon to you all.