Camurus AB (publ) (CAMX) Earnings Call Transcript & Summary

Ladies and gentlemen, welcome to the Camurus Q3 report for 2020. Today, I am pleased to present the President and CEO, Fredrik Tiberg. [Operator Instructions] Speakers, please begin.

Thank you so much. Good afternoon, everyone, and welcome to our third quarter presentation. Hope you're all doing well in these very unusual COVID-19 times. Before I go into the presentation, I just want to alert you to our forward-looking statements on Slide #2. And with that, moving forward to Slide #3. So in today's call, we will update you on our continued business progress with the commercialization of Buvidal as well as provide a brief update on key R&D programs. We will finish off with key takeaways and a Q&A session. With me in today's call is our Chief Commercial Officer, Richard Jameson; and our Chief Financial Officer, Eva Pinotti-Lindqvist. So let's move to Slide 4 and some highlights during the third quarter. You have seen probably in today's report, we saw really good progress across our business areas in the third quarter, including a solid financial performance. Buvidal continued to deliver strong growth. And in the U.S., we have Brixadi under review by the FDA for final approval decision on the 1st of December 2020. On the R&D side, we reinitiated recruitment and progressed our 2 Phase III studies in acromegaly after a temporary COVID-19 interruption in the second quarter. And these are now up to a year. In addition, the pivotal Phase III study program for CAM2029 for treatment of neuroendocrine tumors was aligned with the U.S. FDA in a Type B-meeting. We raised SEK 300 million in a directed share issue in July. And finally, as you know, we are in an arbitration process with Braeburn in England. This process is confidential. However, we will communicate the outcome from this expedited process as soon as this has been received from the Arbitration Tribunal. So with that, please go to Slide 5. So turning to the finances. We continue to deliver really strong growth and financial performance. As I said, in the third quarter, our net revenue amounted to SEK 100.3 million, which is 150% higher compared to Q3 2019. Our product sales were SEK 94.3 million, an increase of 383% versus the same quarter 2019 and 24% compared to the previous quarter. This despite a slowdown during the summer months in Europe and some temporary challenges relating to COVID-19. Our operating expenses were in the quarter SEK 113.4 million. So basically the same as in Q3 2019. The Q3 result consequently was minus SEK 20 million, which corresponds to approximately a 70% improvement compared to Q3 last year. So including the directed share issue in July, we ended the period with a healthy cash position of SEK 476 million. So we are in, I would say, very good position going forward here. With that, I think it's time to hand over to Richard Jameson for an update on our progress with Buvidal.

Thank you, Fredrik. So if we could move to Slide 6, please. Thanks. So in Q3, we saw continued progress with Buvidal. And as already mentioned by Fredrik, we've grown more than 380% over the same quarter last year and 26% versus Q2 2020 at constant exchange rates. We further increased the number of patients in treatment with an estimated now 12,000 patients receiving Buvidal to support their recovery. Our lead markets of Australia, Finland and Norway continued to expand alongside acceleration in the U.K., Germany and Sweden, as working with a broad group of stakeholders we continue to address the infrastructure and funding changes in those markets. I think this is a strong performance against a backdrop of slower recruitment, as mentioned by Fredrik, during the summer and the headwinds caused by COVID-19, which had some impact on our growth due to the delays in some external processes, such as prescription authorizations in Austria and the finalization of pricing and reimbursement applications in the Wave 2 and 3 markets. Of course, there were some limitations too to access the health care professionals. However, the demand for information remains high, and our team remains very active in engaging health care professionals through virtual face-to-face meetings, training and other education. We've gained some momentum again after that summer slowdown. Buvidal is now available in 11 countries, and we're well advanced in launching new territories by the end of this year. So if we can move to Slide 7 for a quick update on the EU and Australian launch. We continue as market leaders in Finland and Norway and where we have a significant market share. In Australia we're seeing strong development basically and the GP segment is now approved to prescribe. Sweden is also showing good progress with the reimbursement by TLV in May. And England, we have some significant developments that will increase access to patients. And in Germany, we're seeing the positive impact of the modified remuneration for physicians. Of course, we're sharing these positive experiences with the next wave of launch countries. And if we go to Slide 8, I can talk about those. So we're now aiming to launch in the Wave 2/3 markets that have a population of about 350,000 patients in treatment for opioid dependence. We've submitted multiple pricing reimbursement applications as planned in Spain, in Portugal, Belgium, Netherlands and France. And while there's been some delays in the external pricing and market access processes due to COVID, we are anticipating 2 or 3 further launches in Q4 this year and others in early 2021. [ Aside ] this expansion in EU countries, we're also progressing our market expansion elsewhere. So if we could move to Slide 9, please. As Fredrik has already mentioned, our U.S. partner is preparing for launch in the U.S. with a PDUFA date 1st of December, which triggered a $35 million milestone for Camurus. We're also working on regulatory filings in other markets and have achieved pre-approval in Switzerland and are in the final stages of the process in New Zealand. And with our partners in the MENA region, we've initiated some early access schemes to allow patients to access Buvidal whilst we submit regulatory files. And in addition to this, we've also completed the work and submitted line-extensions and label enhancements for Buvidal as part of our life cycle management plans. As we shared previously, I think the success of Buvidal was built on the foundation of a strong evidence base. So if we could move to Slide 10. The compelling evidence base for the efficacy and safety of Buvidal continues to be shared at scientific conferences. And although many of these meetings have been held virtually, we've still seen strong presence, giving an indication of the interest in this new treatment option. As a recent example is the improving outcomes in the treatment of opioid dependence meeting that was held virtually in September this year. And here we saw more than 750 health care professionals register, who accessed 4 oral presentations on long-acting injectable buprenorphine and 7 scientific posters. The presentations included updates on the clinical studies, including results from a recently completed data study that showed statistically significant improvements in patient-reported satisfaction with efficacy and the convenience of Buvidal compared with standard of care. The posters, the 7 I mentioned, they are focused much more on the real-world evidence and the experience with Buvidal in the clinical settings and continue to demonstrate the significant and positive impact Buvidal is having on the lives of patients suffering from opioid dependence. I think it's hearing about these real-world experiences that makes Buvidal such a rewarding product to work with, and we continue to accelerate our plans to improve access for patients to Buvidal across the world. So with that update, I'll just hand back to Fredrik now for more details on the pipeline and our news flow. Fredrik?

Yes. Thank you, Richard. And as you know, we have quite a deep and broad pipeline that we are working with, and we have made excellent progress also during this quarter moving these programs further. One, of course, very important thing is that we have been working with the regulatory side of CAM2038, both in relation to -- so we are now on Slide 11, sorry. New regulatory filings for CAM2038 and Buvidal in several different countries. We have been advancing our pivotal Phase III program for CAM2029, and I'll come back to that soon. We have completed a development of an autoinjector, which will make administration of long-acting depots even easier than our earlier device. And we have got new approvals for clinical trials. We have seen positive development in our partnership programs in several of these, including with CAM4072 with Rhythm after the announcement of positive Phase II data in June. So next slide, please. So I'll start here just an update on one of our key programs, it's CAM2029, our long-acting octreotide in development for treatment of acromegaly and neuroendocrine tumors. So Slide 13 then. And for those who have not been exposed to this program or need a reminder, CAM2029 is a new long-acting octreotide product designed for enhanced efficacy and improved convenience for patients. This product combines rapid-onset and long-acting release and we have demonstrated a 500% increase in bioavailability and improved exposure compared to current products. In this case, it's Sandostatin LAR, which is marketed by Novartis. Sandostatin has a market of approximately USD 1.6 billion. So this is by no means insignificant. With the work that we are doing with CAM2029, we are aiming to significantly improve convenience for patients, which will also have an important dimension for payers as we will go for easy self-administration by patients and can avoid the difficulty of physician-administered intramuscular injections. With that said, we'll go to Slide #14, and our ongoing Phase III program in acromegaly. This program consists of 2 clinical studies, one controlled study where CAM2029 is studied against 1 monthly placebo injections in stable acromegaly patients and then this is also complemented by a long-term safety and extension study called the 647 study where we are recruiting both new-to-treatment patients, which can be either stable or be not well controlled, and following them over 52 weeks. Here, patient recruitment was reinitiated in the third -- early third quarter, and we have seen a good uptake since then, and both studies are progressing well at the current. Our projections is that the pivotal efficacy study will be completed during 2021, while the open-label long-term safety study will be completed around mid-2022. So that's a quick update on the acromegaly studies. In addition to that, as I said, we are also about to start the Phase III program for treatment of neuroendocrine tumors. And here we had a meeting during the quarter with the U.S. FDA. It was a very positive meeting to align on the pivotal study program for CAM2029 in this indication. And we have then agreed on the study, as disclosed here. It will be a randomized, multicenter, open-label, parallel group, active-controlled trial. And the main objective with this is to assess superiority of treatment with CAM2029 compared to current standard of care. This study is planned to start early next year with an expected completion in 2024. So moving to the next slide. You can see that our program for 2029 is quite large. We have ongoing Phase III studies in acromegaly, which are progressing and about to start the neuroendocrine tumor Phase III program. And in addition to that, we are also initiating a third program in patients with polycystic liver disease. It's an indication where there's currently no approved treatment and a large medical need. This week actually we also started a clinical trials in Phase I trial, bridging pharmacokinetic trial of the autoinjector, which we spoke about earlier here in the call. So there's quite an exciting time for the program and a lot of activities going on. We can go to the next slide, please, Slide 17. We have for these different indications conducted a series of market research studies with a third-party, about the potential of CAM2029 in the different indications, including interviews with stakeholders, physicians as well as payers in the U.S. and Europe. And the outcome of those investigations are shown on this slide. And as you can see by the arrows the target profiles that we are addressing in the different indications. We see a very significant potential of CAM2029 across these indications, ranging from around 150 million up to for neuroendocrine tumors about 700 million in peak sale potential for the product. So with that, please go to the next slide, Slide 18. I also just mentioned that we saw good progress in our partnership and partnerships. And as an example of this, we just show some of the data that -- positive data that came out of the Rhythm Phase II study, which was announced late June 2020, which shows that CAM4072, which is long-acting setmelanotide for treatment of genetically-related obesity disease, was well tolerated and that it generated a weight loss in this population that was comparable to that of the daily formulation. Since then, Rhythm has presented data on the pharmacokinetic properties of the product, comparing the weekly formulations to their current daily formulation, which is the data in the green color. So what you can see here is that CAM4072 exhibits dose proportional pharmacokinetics, and these are basically only the trough values to the end of the treatment interval, which can be well tuned into the interval or to the levels of the daily injections. So it will be exciting to follow this program as we go forward. To the next slide. So as a summary of this presentation, we have quite a good progress in all of our activities in the company right now. And as you can see from our anticipated news flow during 2020 and 2021, we have a number of very important events in front of us, including, as I mentioned before, the final market approval of Brixadi, the start of a new clinical program with CAM2043, it's our long-acting treprostinil in Raynaud's phenomenon, as well as the initiation of the long Phase III study in the neuroendocrine tumors. Next slide, please. So I think we can say that we continue to deliver on our strategy. We have established very strong position in opioid dependence in Europe and Australia over the last year. And we are only a month away on 1st of December for an anticipated approval decision for Brixadi in the U.S., which is the largest market, of course, for opioid dependence treatment in the world. We are -- have seen a good advance and growth of our pipeline of innovative medicines for treatment of chronic pain, endocrine disease and other disorders. And on a corporate level, we are expanding our commercial capabilities and preparing for new developments and also for developing and establishing sustained profitability through own sales, partnerships and business developments. Finally, some brief comments about the full year 2020 financial outlook, this is Slide #21, where we reiterate the guidance for net revenues and sales for the full year, which were raised in June -- earlier in June. However, we have reduced the full year operational costs, full year OpEx from SEK 570 million to SEK 610 million in the interval to SEK 505 million to SEK 525 million, which, of course, will result in a corresponding improvement of the full year operational result. This adjustment is mainly due to updated clinical development time lines, including manufacturing and clinical studies. So as an example, we are moving over manufacturing of validation batches from Q4 to Q1 next year. And we have also seen significant reduction in costs for congresses, travel and marketing activities. So with that, I thank you for listening, and we'll move over into a question and answering session.

[Operator Instructions] And our first question comes from the line of Harry Sephton of Jefferies.

Quick question. So just to start with, can you maybe comment on some of the end market dynamics that you're seeing, especially in terms of converting methadone patients over on to Buvidal and also the expansion of the current buprenorphine patients in the market?

Yes. I can start out by just saying that a very interesting question. And I think it's a little bit special with Buvidal because we have -- we do see an interest among both patients and physicians to transfer from methadone over to buprenorphine, which you don't see to the same extent, I believe, for sublingual buprenorphine. So that dynamic is certainly there. But I'll hand over to Richard to kind of give a more detailed picture around that question.

Yes. Thanks. Harry, yes, I mean we are seeing this increasing. As Fredrik said, we're seeing patient demand. They do like the idea of a less burdensome treatment option for them. And so they are prepared to move. Obviously, there is some movement down to 30 milligrams, which is our dose to transfer on, but we are seeing that increasing over across the markets. Your other question was about expansion in the buprenorphine segment, I think. And that's another interesting question. And we're certainly seeing -- we know there's a group of people outside of treatment that don't come into treatment because the current burden [ interferes ] with the daily dosing. And we're now seeing increasingly those numbers come into treatment, more patients are now coming into treatment now because there is a new treatment option. And again we've seen that in 2 or 3 countries where more patients are coming in. That will inevitably expand the buprenorphine segment in time.

That's very helpful. I will just move on to Brixadi now. Can you confirm whether you expect the Brixadi launch to happen in December? I think that you clarified in your report that the licensing agreement is still in place even through the arbitration proceedings, but I'd just like to get clarification from you. And then also, just in the same vein, do you expect a similar level of legal expenses in relation to the arbitration in the fourth quarter of this year?

I think the intention, of course, of our partner Braeburn is to launch the product as quickly as possible. So that is the answer to the first question. And I think their ambition is to be on the market as soon as possible, providing the circumstances are the right ones. And it's also, of course, dependent on other ongoing processes. But certainly that's my understanding. On the second question, Harry, I forgot.

Sorry, just in terms of your administration expenses, they were up quite significantly in the third quarter. I understand that's as a result of the arbitration legal expenses. Just wanted to...