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

Ladies and gentlemen, welcome to the Camurus Second Quarter and Half Year Results 2021 Call. Today, I'm pleased to present President and CEO, Fredrik Tiberg. [Operator Instructions] Speakers, please begin.

Thank you so much, and hello, everybody, from [indiscernible] Sweden, and welcome to Camurus Second Quarter and Half Year Results Presentation, where we will give an update on our financial and business progress. Before we begin, please be aware that the presentation contains forward-looking statements, which are subject to risks, uncertainties and different assumptions. Slide 3, please. So our agenda today includes an update on strategic objectives, an overview of Camurus second quarter and first half year results; commercial development by Richard and a short update on R&D and the progress in our key pipeline programs. As usually, we will finish up with some key takeaways followed by a Q&A. With me today is our CFO, Eva Pinotti-Lindqvist; and Chief Commercial Officer, Richard Jameson. So before going into the results, I will give a quick recap of our mid- to long-term strategic objectives. Slide 4, please. It is now a little bit over 2 years since Camurus started the journey as a commercial company through the launch of Buvidal in the initial European markets. As you see, we have come a long way since then in our efforts to improve access to treatment and establish Buvidal as the leader in opioid dependence treatment. In parallel, we have made significant progress towards bringing new innovative medicines to the market to build and diversify our business. Going forward, we will continue to grow our pipeline through patient-centric innovation, collaborations and acquisitions of commercially attractive and complementary assets in strategic areas. These include: addiction; endocrinology; oncology; and chronic pain. Finally and importantly, we will continue to build our commercial infrastructure, drive operational execution excellence with the aim to deliver sustainable profits from 2022. With that said, let's look at our achievements and results in the second quarter and first half year. Slide 5, please. In the second quarter, we continued to deliver strong operational performance despite the impact of the pandemic. This is really the credit to the commitment and resilience of our teams, which are doing really a terrific job on our markets. We have executed on our commercial objectives with a robust revenue growth in challenging market conditions. We have had several progress in the life cycle management and achieve new approvals and published compelling clinical results for Buvidal in leading peer-reviewed journals. Importantly, we continue to experience a strong interest in demand for Buvidal in all markets, and we are steadily improving access. Our pipeline has progressed well during the quarter with highlights including the FDA acceptance of Braeburn's NDA for Brixadi with a PDUFA date of 15 December 2021. We advanced our registration program in acromegaly, neuroendocrine tumors and polycystic liver disease as well as the early pipeline and partnerships. Our financial development continued in a positive direction. Quarterly revenues increased to SEK 138 million and half year revenues were SEK 264 million, despite the conditions that have prevailed during this first half year. The operating loss in the quarter was SEK 60 million which is higher than the previous quarter and previous year due to high activity in our ongoing Phase III programs. So we ended the period with a solid cash position of SEK 422 million, which is a strong base for executing on our commercial -- on our strategic and commercial objectives. With that said, let's move to Slide 6 for a closer look at our financial development. So as you can see here, revenues continued to grow well in the year. And I've already mentioned the pressure of the pandemic which has prevailed. In the second quarter -- second half of the year, we experienced increased growth of product sales and total revenues as conditions in the market developed. Operating expenses have increased in the last quarter from a stable pace in 2019 and 2020. And this really reflects the progress of our Phase III programs. Overall, we see a positive trend towards profitability, which we expect to reach in 2022, as I said before, without the contribution of milestone payments from the U.S. Finally, our full year guidance is maintained based on the predicted growth in the second half of the year as the impacts of COVID-19 continue to weigh. With this brief overview, I'll hand over to Richard now for a commercial update. Slide 7, please.

Great. Thank you, Fredrik. Good morning, everyone -- good afternoon, everybody. In the next few slides, I'll give you an update about the commercial progress of Buvidal, our flexible weekly and monthly long-acting buprenorphine. I'll focus on an update on sales, and we'll share with you some of the growing support and opportunities we see in our markets as we build patient access driven by the significant benefits Buvidal brings to patients and society, which are becoming increasingly recognized across stakeholder groups. So if we can move to Slide 8, please. So starting with Buvidal sales, they have continued to develop well, particularly in countries spared from the restrictions of COVID. However, some markets were impacted by the pandemic, where lockdowns restricted our access to health care professionals and many patients were not accessing clinics. And this, of course, limited opportunities for new patient starts during the quarter. Currently, we have about 19,000 patients in treatment with Buvidal at the end of the quarter, a patient share of about 5% in our current markets. In those markets where we've addressed hurdles, we do see significant penetration. In Finland, as an example, we have clear market leader status now with 60% share of the total patient population now treated with Buvidal. And in Australia and Scandinavia, we've rapidly moved beyond double-digit market share, all within 2 to 2.5 years of launch. And we have a very strong position in Australia, which is the market where the 2 injectable buprenorphine are available. In other launch markets, our penetration is slower, but there's also a strong demand for Buvidal, and we continue to make good progress and are gaining share as we move those access hurdles patients are facing and release funding for treatment. I will cover some examples of this later on. There's significant potential remaining in these countries with about 300,000 patients in treatment for opioid dependence. We're also prepared for further expansion with planned launches in a further 7 new markets, which will also represent a large opportunity for Buvidal with more than 200,000 patients in treatment. We're in the final stages of the pricing and reimbursement processes. And whilst these have seen some temporary delays due to the understandable focus of health authorities in managing the pandemic, we do expect launches in Q3 and Q4. And we've received wide support and collaboration from key opinion leaders who are eager to have Buvidal available and are supporting our applications. Furthermore, we continue to work closely with our partner, NewBridge in the MENA region, preparing for both regulatory approvals and launches in several countries. The positive feedback we received daily from clinics alongside the growing evidence based, the world reports of the impact Buvidal is having on patients in the treatment system is creating growing awareness and increasing the support for patient access to Buvidal across our markets. Action is being taken by government, policymakers, health care professionals and patient advocacy groups to address the patient access. So moving to Slide 9, if we can, I can share some of these. Firstly, several government initiatives have been announced during the quarter, which will accelerate our patient access. As examples, in Scotland, the Minister for Drugs announced in the parliament new increased funding specifically for Buvidal alongside other investments in treatment. Likewise, we've seen additional funds become available for long-acting treatments from Public Health England as part of an additional funding stream for harm reduction measures. And again, in England, an independent review for treatment of substance misuse sponsored by the government has been completed with a clear recommendation for significant investment over the next 5 years. And the recommendation is for an additional GBP 552 million, which by year 5, and if approved, will nearly double the current expenditure. And we believe this will allow accelerated access to innovative treatments. Process is also ongoing in Germany and Sweden to improve the health care professional remuneration system, which has some restrictions on access. The criminal justice system is also a key focus for us with an estimated 100,000 patients in treatment at any time in prison. And of course, many patients passing through the criminal justice system. Reports and publications from Australia, Germany and Scotland, the forerunners in this area, have clearly shown the benefits of Buvidal in this setting. And I think a quote from the research report recently published by the Scottish government on their experience with a large cohort of patients was referenced on the side here is compelling. As it states in my quote, "high levels of satisfaction about Buvidal were reported by almost all patients and health care staff continue to be enthusiastic about the positive impact Buvidal can have on patients' lives." So these reports, amongst our new published evidence and health economic analysis and real-world experience that show the value promise of Buvidal, are creating significant media attention. And as you can see, with some examples on the left-hand side where Buvidal is in the media often described as a life changer or game changer. And I don't think in my 30 years in the industry, I've worked with a product that self-generates so many positive media reports and patient cases' histories. So if we can go back to the published evidence, then moving on to Slide 10. As mentioned earlier, in Q2, we grew our scientific evidence base with 2 new important publications, and you can see the titles on the left-hand side here. The first, the DEBUT study that demonstrated superiority in patient-reported outcomes with Buvidal compared to sublingual buprenorphine/naloxone was published in Jama Open Network alongside an editorial by Nora Volkow, the Head of the National Institute of Drug Abuse in the U.S., which you recognize the importance of PRO as an outcome in opioid dependence and also the value of this study. The second study, the UNLOC-T study demonstrated the utility of Buvidal in custodial settings and the advantage it brings over existing treatments. We continue to share our evidence-based and real-world experience through many scientific congresses. Many of these will be pushed to the second half of the year. Now we see easing up of the restrictions for COVID. And these are alongside presentations at local meetings and webinars. So with that overview on the progress and significant opportunities for Buvidal, please move to Slide 11, and I hand back to Fredrik.

Thank you, Richard. And let's move over to an update on the progress of our pipeline, where I will start with the life cycle management side and market approval processes for Buvidal and Brixadi and then move over to the progress of our clinical programs. During -- next slide. During the second quarter, we received market approvals for a new higher 160-milligram Buvidal dose in Australia, the U.S., the EU and the U.K., further extending the dose options for patients needing higher than the highest labeled 24 milligrams sublingual dose, which we estimate is around 10% of patients depending on market. We now have a full range of individual weekly and monthly doses covering patients' individual needs. And this is, of course, very significant progress. A further positive development in the quarter was the approval of a label extension in Australia, allowing for direct initiation of patients on Buvidal. So they don't need to be treated on sublingual buprenorphine prior to treatment with Buvidal anymore. And this is now harmonized with the EU label, which have this included priorly. Right now, our regulatory team is also busy preparing for the planned submission of a market authorization application for Buvidal and CAM2038 in chronic pain, which is scheduled for later this year with a positive -- possible approval in the second half of 2022. As Richard said, we have a lot of things going on in MENA as well where we currently have 4 market authorization applications under review and additional applications on track for submission. Meanwhile, early access programs are ongoing in the 3 countries -- in 3 of those countries with currently a few hundred patients being treated with Buvidal. The market, however, is very substantial. In the U.S., we got the positive news from our license partner, Braeburn, that all complete response letter issues had been resolved and that the NDA for -- beside it has been submitted to the U.S. FDA. This NDA submission was quickly accepted by the agency with a target approval date as I said earlier, in December. Braeburn is now preparing for the launch, and we look forward to U.S. patients finally getting access to a new and effective treatment option in the form of Brixadi. Slide 13, please. To put the potential approval of residing in context, it is worth looking at the current state of the opioid crisis in the U.S. Sadly, and it's also recognized in several news articles today and yesterday, this has continued to escalate during the COVID-19 pandemic. With a provisional number of annual overdose opioid deaths now exceeding 60,000 per year, which is a horrendous figure. And overall drug deaths reaching the tragic mark of 90,000 per year. 10 million Americans are estimated to misuse opioids each year and approximately 2 million are currently diagnosed with opioid-use disorder. Of these, about 1.4 million are in medication-assisted treatment programs and 1 million are receiving treatment with buprenorphine. There is undoubtedly a large need for treatment options in the U.S. as illustrated by the announcement of the Biden administration of a $1.5 billion investment to tackle the opioid crisis. Many other measures are taken to address the crisis including increasing the number of health care professionals with a waiver to prescribe medication-assisted -- prescribe and administer medication-assisted treatment. Next slide, Slide 14, please. So looking at the market dynamics for long-acting injectables in the U.S., we see that the U.S. market for opioid-use disorder drugs is currently about USD 2 million. This is expected to grow to more than USD 3 billion by 2028, driven by long-acting injectables and new patients entering treatment. The patient shares on long-acting injectables in the U.S. is, however, still low, corresponding roughly to about 3% of total patients. We expect Brixadi to be an attractive treatment option for health care professionals and patients with opioid-use disorder in the U.S. We believe that the market [ anti ] of Brixadi will have a positive add-on effect on the LAI market, contributing to faster growth and more patients switching from daily medication to weekly and monthly treatment options. Already, we know that through investigator-initiated programs, there are more than 1,000 patients in treatment with Brixadi and this is the total number that will come into treatment through these programs will be 2,000 patients. So looking at new interesting applications of this product in the marketplace and in the treatment place. More details about the commercial plans and market expectations for Brixadi in the U.S. will provide -- will be provided closer to launch. So let's move to the next Slide 15 and an update about the ongoing Phase III programs for CAM2029. So CAM2029 is our innovative subcutaneous depot of octreotide, currently under development for treatment of acromegaly, neuroendocrine tumors and polycystic liver disease. The product is designed both for enhancing the efficacy but also significantly improving treatment convenience for patients compared to currently available treatment alternatives. Next slide, Slide 16, please. So we have a large clinical program ongoing to document safety and efficacy of CAM2029 across 3 orphan indications, and I mentioned before, this program includes a Phase III efficacy study, [ DEVOTE ], and a long-term safety study in acromegaly, involving more than 50 clinics -- clinical sites in Europe and the U.S., and scheduled to report top line results during 2022, followed by regulatory submissions. This study is also complemented by an ongoing Phase I study of pharmacokinetics, pharmacodynamics and tolerability designed to be a bridge between our current prefilled syringe device and the newly-developed injection pen, which will be fully validated for commercial use this quarter. The key randomized single dose part of the study is being finalized and results are expected later this year. This is then being followed or already being followed by a multiple dosing part to bridge between different subcutaneous injection sites at steady state. We're currently planning for flexibility and having both dosing options included in our regulatory submissions and preparing for commercial manufacturing is well underway. The second indication for CAM2029 is GEP-NET, Gastroenteropancreatic neuroendocrine tumors where we, during the quarter, have completed preparations for starting recruitment and expect to have the first patients entering the study after the summer vacations. This is a randomized, double-blind study design where we have the aim to show superiority in progression-free survival, PFS, with CAM2029 versus current treatment standard with Sandostatin LAR and Somatuline Autogel, which are both first-generation somatostatin analogs. We have large interest for participation in this trial and expect to complete patient enrollment during 2022 and complete the study in the second half of 2024. We're also in the process of starting a Phase II/III study in a third indication, polycystic liver disease, for which there is no current treatment approved. This follows discussions with leading key opinion leaders in this area and the Type B meeting held with the FDA earlier this year. As a part of the preparation for starting the study, we're also developing a new patient-reported outcomes, too, which is on finalization and will be used in the clinical study as a complement to the primary measure of liver volume measure -- of liver volumes. The study is planned to start in the fourth quarter. Next slide, please. So here is a short summary of what is going on in the different programs. And on the right-hand side are our peak sales projection for CAM2029 based on third-party primary and secondary research by indications. As you can see, CAM2029 represents a very sizable opportunity with total peak sales of around or about USD 1 billion. So going from that -- Let's go to Slide 18, please. So with this short update on CAM2029, I'll move over to our recent and anticipated news flow. We have delivered on the first half year objectives, as you can see. And entering into the second half of the year, we are expecting a number of important milestones, including from our clinical programs for CAM2029 and 2043. We're also expecting to see the start of Rhythm's Phase III program for the weekly setmelanotide program product that we have developed together for treatment of genetic obesity disease. The submission of the market authorization application for CAM2038 in chronic pain is, of course, a further milestone. As is maybe, most importantly today, the potential for an NDA approval of Brixadi that we are expecting to come towards the end of the year. Next slide, please. So now to my final slide here and some takeaways from the second quarter, and which I think has been a very strong quarter from our side from an operational perspective, and also commercially in the current or during the conditions that prevailed. On the commercial side, we continued to deliver significant sales growth under these challenging conditions, and Buvidal is now the market leader in the Nordics and Australia in terms of sales of individual products. We have successfully completed life cycle management for Buvidal with new regulatory approvals in Australia, EU and the U.K. And we have further strengthened the evidence base for use in communications with health care professionals and budget holders. We also saw important new funding initiatives and also new decisions in this area. We also continue to advance the product pipeline with the potential for EU approval or for U.S. approval of Brixadi. Our Phase III program has advanced. And we have also seen significant progress in our early pipeline and partnerships. On the corporate side, we have established a strong base for executing on our strategy for sustainable growth and profitability in 2022. And beyond this, I think we also have other things of large interest to come. With that said, however, we conclude this presentation, and I hand over the call to the operator to initiate the Q&A.

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

My first one will be on the competition that you've been experiencing from [indiscernible] long-acting Subutex in your markets. Can you maybe comment on whether you've seen any intense competition, which might have led to a slight weakening of the growth rates quarter-on-quarter?

Well, I think -- one thing, I think -- I mean, we are, of course, not viewing products as competitive but add-on, and I think it's important for patients to have the choice here. So that is a clear point. That said, we have had continued strong growth, and we have not seen the pressure from other treatments on the growth projections or the actual growth. No.

That's very helpful. And then maybe just to comment on the points you made around the COVID disruption. So I think at the start of the pandemic, it seemed that you are more benefiting from restrictions and that it favors the transfer of patients on to Buvidal given the reduced interaction with the product. You've now highlighted that COVID is limiting the patient uptake. Can you maybe talk through how these contrasting dynamics have changed over time?

Yes, I can talk about that, and then I'll leave over to Richard for any add-on comments. But what happened in the first half of last year was, I think, a combination of the fact that we had established a robust base of patients there. But also when COVID came, I think there was a buildup in hospitals, et cetera, of stock that perhaps was not to the extent we understood it in market sales, but there was definitely a buildup relating to, and we have heard that from other companies that have similar dynamics going on. Then I think quickly that the impact of COVID was not recognized to the same extent, so we have the base. And then going into the second half of the year, we really saw a pickup in terms of increasing number of patients during the entire autumn last year. And then came the second wave in the first part of this year. And a lot of our different markets have been almost shut down. I mean I know, for instance, it's been extremely difficult to have any interactions with health care professionals in Germany. We have had the criminal justice system not allowing for digital meetings. So it's been very challenging to have uptake there and other markets such as Norway, same thing, there was essentially no face-to-face meetings. And I think -- so it's a gradient from markets that were slightly affected but to some that were very heavily affected by the situation and where we didn't have access to health care professionals. In addition to that, I know that in some markets, there were the prioritized administration of vaccines. So we saw that adding on to the issues we had in Germany, for instance, where GPs were also prioritizing giving -- and rightly so perhaps giving vaccine injections. So multiple factors. Richard, you have anything you want to add to that?

No, I think you covered it, Fredrik.

That's very helpful color. Maybe just quickly on the Brixadi resubmission. As you've highlighted before, there was quite a comprehensive list of items on the FDA 483 letter. Just want to get your thoughts on how satisfied you are that all of those issues have been addressed?

Well, I mean, the fact that the FDA accepted the application means that they have been provided with a complete response, so I think we have to take that for satisfactory.

Brilliant. And then maybe just quickly on the CAM2029 Phase III for neuron consumers. You said that you expect patients to enroll by the end of the summer. Would you say that -- as a result, you're expecting a second half weighting for R&D costs this year, so we can see quite a big pickup in potentially the late third quarter and in the fourth quarter.

Well, we have had, of course, in the startup phase, there are significant costs coming in when you're starting up the Phase III study. So our projection is that we will -- kind of we have established at least for the coming quarters, a reasonable stable levels. Eva, do you want to say something on that?

I agree. There are some significant costs related to the programs. And to complete these programs, I believe, we have a kind of which -- the level where we will see we will end up also for the Q3 and Q4.

Thank you, Harry. We have a brilliant color.

[Operator Instructions] And as we do not have anymore questions registered, I now hand back to our speakers.

Thank you all for taking the time here in the middle of the summer to listen to our presentation. It's always a pleasure to have the opportunity to give an update on what we are doing in the company. I wish everybody a wonderful summer, and I look forward to providing you a further update in our Q3 call. And meanwhile, we will do our best to make everybody pleased. So thank you, everybody, and have a great summer.

This now concludes our conference. Thank you all for attending, and you may now disconnect your lines.