Egetis Therapeutics AB (publ) (EGTX) Q4 FY2025 Earnings Call Transcript & Summary

Good morning, everyone, and a warm welcome to our quarter 4 results call planned for the coming 30 minutes. With me today, I also have our CFO, Yilmaz Mahshid; Henrik Krook, Vice President, Commercial Operations; Anny Bedard, President, Egetis North America; and Karl Hard, Vice President, Investor Relations. Let us turn to the attention of the topics being covered today. But first, let me start off saying that I'm incredibly pleased with the year in passing and also the deliverables post the period. The completion of the U.S. rolling NDA in January 2026 for Emcitate on the back of a successful pre-NDA meeting, a breakthrough designation granted by the FDA leads us to an anticipated regulatory decision in September this year. The commercial performance where Emcitate revenue during 2025 amounted to SEK 62.3 million, a 40% increase at constant exchange rate versus 2024. And also in Japan, where we have a license agreement with Fujimoto Pharmaceutical Corporation for the development and commercialization of tiratricol. There, Fujimoto completed in December a so-called pre-application consultation for drugs with the Japanese PMDA. The NDA in Japan is expected to utilize the existing data generated from the global clinical development program. Moreover, Henrik and Anny will provide an update on commercialization in Europe and launch preparations in the U.S. and then Yilmaz at the end will provide an update on our financial performance. But first, let me summarize the year. 2025 was historic for Egetis with very strong execution that led to a number of significant milestones delivered. First, Emcitate was approved in EU in February as the first and only treatment for patients with MCT8 deficiency. And subsequently, we initiated launch in the first country, Germany in May 2025. In July, a breakthrough designation was granted by the FDA. The breakthrough designation was granted by the agency's review of Egetis detailed analysis of the entire survival data set from the international real-world cohort study, the so-called EMC Survival Study by the Erasmus Medical Center, which demonstrated a significant and substantial improvement in survival in theatrical treated versus untreated MCT8 deficiency patients. On the back of the breakthrough designation, FDA granted a so-called pre-NDA meeting that took place in October with a very successful outcome. First, the NDA for MCT8 for the treatment of MCT8 deficiency will be based on currently available data, which means data included from Triac Trial I, Triac Trial II, ReTRIACt, the EMC court study, the EMC Survival Study as well as the U.S. expanded access program. So all in all, a very large and robust data set considering an ultra-rare condition. Second, the FDA agreed that in the NDA submission, data from the ReTRIACt study will complement the existing data from the EMC Survival Study and the other clinical components I just referred to. Therefore, the ReTRIACt study was closed and data accrued was included in the NDA. As agreed with the FDA and lastly, the agency agreed to submit rolling new drug application for Emcitate. So in November, we announced the positive results from the ReTRIACt study. The results demonstrate a statistically significant difference in the rate of change in serum T3 in patients randomized to withdrawal, i.e., placebo versus in patients continuing therapy. Subsequent to that, we initiated the rolling NDA for Emcitate on the 19th of December with the submission of the preclinical and CMC sections and completed the NDA on the 29th of January this year by submitting the clinical sections. Looking ahead, the FDA is now expected to validate within 60 days whether the NDA dossier is complete. Since Emcitate has both Fast Track designation and breakthrough therapy status, we have requested a priority review, which if granted, would result in FDA's reviewing being completed within 6 months after the validation period, and hence, a regulatory decision is expected in September 2026. So with that, I will hand over to Henrik for an update on commercialization in Europe. Henrik, over to you.

Thank you, Nicklas, and good morning, everyone. I would like to start with some reflections on 2025. First, a reminder of what we have discussed earlier. In Europe, the national pricing and reimbursement processes are complex and take time. And anyway, the 2025 Emcitate revenue was 40% higher at constant exchange rates than the revenue we generated through early access in 2024. The revenue was primarily generated in Germany, combined with successfully implemented alternative reimbursement solutions in countries such as Austria, Poland and Switzerland. Overall, this demonstrates that our commercialization strategy is delivering tangible results and expanding access to Emcitate for patients. Turning to pricing and reimbursement. We have made advancements across our key European focus markets, Germany, France, Spain and Italy. Starting with Germany, the pricing and reimbursement process is progressing well, and we expect a final reimbursed price in Q2. In Germany, we launched Emcitate in parallel with the ongoing pricing and reimbursement process. And thanks to our focused activities during the year, we were able to double the number of identified patients in Germany and initiate treatment in more patients. We continue to develop this market through meetings with physicians, congress presence and educational initiatives. In France, we are now preparing for a resubmission. This dossier will be strengthened compared to the initial filing and will include additional clinical data such as results from the ReTRIACt study as well as survival data. In Spain, the generation of additional local data for the national dossier is progressing well. The work -- this work is an important part of optimizing the pricing and reimbursement process and ensuring that the value of Emcitate is well supported in the national assessment process. In Italy, we have made Emcitate available to patients as of November last year through a regional launch. This will be complemented by the initiation of a national pricing and reimbursement process later during the year. More broadly across Europe, this year, we will continue to move towards funded routes in an increasing number of countries such as Belgium, the Nordics and Portugal. This includes named patient sales where possible, while in parallel preparing for national health technology assessments in markets where that is considered the most appropriate long-term solution. In the fourth quarter, we also made important progress in our distribution partnering. In October, we signed an agreement with taiba rare to enable access and named patient sales of Emcitate in the Gulf region. In addition, we expanded our existing partnership with Er-Kim, extending it from Turkey to also cover Central, Eastern and Southeastern Europe. And I'm pleased with how these collaborations are developing. During Q4, we received our first order from Er-Kim for Turkey and both Er-Kim and taiba are actively identifying patients in their respective territories and are now in the process of initiating funded treatment to more patients. And with that, I would like to hand over to Anny for an update on the launch preparations in the U.S.

Thank you, Henrik, and good morning, everyone. Let me now turn to the United States, which is our priority commercial market and the foundation also for our long-term growth strategy. As we approach the anticipated regulatory approval in the third quarter of this year, our focus is clear, which is translate approval into rapid uptake and durable value creation. Over the past several quarters, we've advanced each critical launch pillar and shifted from infrastructure build-out to execution readiness. We're continuing to build stronger relationships across endocrinology, neurology and genetics within the established referral network. And as a result, and with the support of key opinion leaders and advocacy partners, awareness and recognition of MCT8 deficiency are steadily increasing. We're seeing steady growth in patient identification with more than 100 confirmed diagnosed patients to date, which we view as a strong leading indicator of the market formation. In rare disease, awareness is typically limited prior to the first approval therapy. Once the treatment becomes available, identification and diagnosis tend to accelerate and that dynamic creates meaningful upside. To date, we've taken a focused and disciplined approach to the U.S. market development and even with measured investment, diagnosis rate are trending upwards. Importantly, we believe physicians awareness remains below its full potential, representing a clear opportunity for future growth. And as we increase our investment in education, field presence and targeted engagement, we're confident that we will continue to grow awareness, drive additional diagnosis and further strengthen the foundation for launch. Our expanded access program has now grown to 17 active specialist sites nationwide, which reflects both the severity of the condition and the strong clinical engagement. Beyond patient access, this program allows us to refine logistics, site coordination and patient services in real-world setting. And we're actively preparing the transition from the expanded access to commercial supply to ensure continuity at the approval and preserve early momentum. Our market access preparation has matured significantly, and we now have a much clearer view of payer expectations and coverage dynamics, and we're refining our pricing and the value strategy through benchmarking against comparable orphan drug launches. At the same time, our specialty pharmacy and patient support infrastructure is being implemented to ensure day 1 readiness. The objective here is to enable timely coverage and minimize friction from prescription to treatment initiation. We've remained disciplined in our investment approach. And based on constructive FDA progress, we've appropriately accelerated launch investment. We have an experienced rare disease leadership team in place across medical, market access and commercial and our regional medical directors are active in the field, engaging key referral centers and preparing the clinical community. By approval, we expect a team of about 25 U.S.-based professionals, a focused team built specifically for a rare disease launch. We're now entering the approval phase fully prepared. We have patient visibility, which is increasing. Specialists are engaged, real-world experience is expanding, payer readiness is advanced and our launch infrastructure is in place. So right now, our team is aligned. Our momentum is building, and we're focused on disciplined execution to ensure full readiness at approval. I will now hand it over to our CFO, Yilmaz Mahshid, for the financial overview.

Thank you, Anny. To start with in the financial section, all numbers unless called out are in our reporting currency, Swedish krona. Revenue for the 12 months was SEK 62.4 million versus SEK 46.1 million in the same period last year, of which SEK 62.3 million is attributed to Emcitate and corresponds to a year-over-year growth of 40% in constant exchange rates. Revenue for the fourth quarter of the year were SEK 17.9 million versus SEK 10.8 million in the same period last year. of which all is attributed to Emcitate and corresponds to a year-over-year growth of 74% in constant exchange rates. As mentioned in our latest call and worth reminding again, the gross profit margin is visibly lower than historical figures, both for the 12 months in the fourth quarter. This comes back to the positive approval in Europe and subsequent depreciation of balance sheet R&D. As a consequence, the COGS line item numbers not only includes the recurring royalty payments, but also nonrecurring milestone payments of approximately SEK 3.5 million to Erasmus Medical Center as well as SEK 33.7 million of intangible R&D depreciation. And the depreciation is a noncash item, and it was initiated at the end of Q1 2025. In an apples-to-apples year-over-year comparison, adjusting for the onetime payments and the depreciation, adjusted gross profit is SEK 49.6 million for the 12 months, a significant improvement not only nominally, but also on the gross margin level versus the corresponding period, and we hope to improve this further post the U.S. launch. Operating results were slightly lower for the 12 months at approximately negative SEK 340 million versus negative SEK 329 million in the corresponding period, while results after tax were nearly identical for the 12 months of the year at negative minus -- negative SEK 343 million versus negative SEK 344 million due to fluctuations in some of the financial line items, especially the revaluation of the convertible right, which continues to fluctuate with the share price. Remember that this is also a noncash item. In the quarter, the R&D team worked intensely with the FDA submission and the closeout of the ReTRIACt study. Hence, we have a year-over-year one-off higher R&D cost of approximately SEK 18 million. For the 12 months, cash flow from operating activities were at negative SEK 267 million versus negative SEK 227.9 million. Also, as you may have noticed, we do continue to repay our debt and report SEK 29.3 million in repayment for the 12 months. All in all, cash flow for the 12 months were approximately negative SEK 130 million versus positive SEK 42 million in the corresponding period. And the cash position in December 2025 was SEK 215.8 million versus SEK 351 million last year. Also gratifying to see that we did strengthen the cash position further through the great support from our existing shareholders and new shareholders through a directed issue carried out 2nd of October in the Q4 2025. With that, I will hand back to Nick.

Thank you, Yilmaz. So let's turn our attention to the future then. On the back of a strong execution in 2025, we are very well positioned for 2026 and onwards. With the completed U.S. NDA submission, we have reached a critical milestone towards making the first treatment for MCT8 deficiency available in the U.S., our most important market. Here, I would like to take the opportunity to thank patients and families who participated in our clinical trials, the investigators and their teams and our colleagues at Egetis for their diligence and dedication over the last couple of years in helping us deliver Emcitate to patients affected by this rare genetic condition. The year 2026 will bring several important milestones for Egetis. Our team is focused really on the following key priorities. Working closely with the FDA during the review of the Emcitate NDA with the goal of approval in the second half of 2026 and subsequently being able to monetize the priority review voucher. As you've heard from Anny, preparing the U.S. launch, including buildup of the commercial and medical affairs infrastructure, successfully launching Emcitate in the U.S. in the fourth quarter, subject to an approval by the FDA and further continue optimizing pricing and reimbursement and continue the rollout of Emcitate in Europe. Furthermore, with Emcitate U.S. NDA completed for MCT8 deficiency, we will further evaluate subsequent clinical development for Emcitate in the next indication, RTH-beta. So with that, I will hand over to the operator for the Q&A session. Thank you.

[Operator Instructions] The next question comes from Chiara Montironi from Van Lanschot Kempen.

A couple for me, if I may. The first one, what is your latest thinking on the U.S. pricing strategy for Emcitate, especially in the context of similar small molecule drugs with a survival benefit that are now achieving prices approaching $1 million per patient per year? And the second one would be if you could comment on the possible Emcitate expansion into RTH-beta. How does the possible clinical development look like time line-wise, any outstanding gatekeeping items that could influence the start of a clinical study or not?

And I'll start off with the U.S. pricing perspective and the U.S. opportunity and then hand over to you, Anny, for further comments. But rightly so, Chiara, as you commented, the U.S. market will be the most important market for Egetis and Emcitate, driven by actually swift not just price points, but also swift access -- you heard from Henrik referring to the pricing and reimbursement processes in Europe, which are lengthy. It takes time, and it's 26 different national pricing and reimbursement processes one needs to walk through. So U.S. is very attractive, considering that access in general will span from 0 to 6 months based on a state-by-state basis with a payer mix skewed towards Medicaid. When it comes to price points, the team, together with Anny has done some diligent work, including market research over the last couple of years. And rightly so, as you said, even though we don't give any guidance, when you look at relevant analogs in the review we have done, you're looking at price ranges between USD 700,000 up and to USD 1 million and above per patient per annum. So of course, it's a very, very attractive opportunity for us. But Anny, please. comments and builds.

I think you've said that the key elements in terms of the opportunity that the U.S. offers in terms of pricing. And our key focus is really going to be on the value that tiratricol brings, the severity of the disease, the fact that it's an ultra-rare condition and also the significant unmet need. And that will really drive the framework for our pricing. We've done a lot of work. And as I mentioned, significantly advanced our progress for market access. And we've consulted with several external access experts -- and we validated also what will be the key requirements and the evidence that these payers will be requesting as well as the payer dynamic and the policy considerations. And that has been taken into our consideration as well for the pricing because at the end of the day, what we want to achieve is really to strike a balance between the price and the accessibility of the drug. And as Nick mentioned, in terms of price range, it's hard for us to say more at this time, but it will probably sit in that range of the analogs that we've been assessing. So as we progress towards the launch, we'll be providing more detail on that. But as you can imagine, we're looking at a potential launch at the end of the year. So we still have some work to do in order to refine our pricing strategy. But we're -- that's pretty much the approach we're taking.

And then to your second question, Chiara, RTH-beta. So this is an opportunity we're very excited about, and it fits well with our strategy, building a sustainable rare disease company. As I'm sure you're familiar with over the last couple of years, there have been a couple of natural history papers published on the disease, illustrating also in this condition, a reduced life expectancy. Furthermore, in September, there were a scientific article published describing clinical benefits of treatment with Emcitate in this condition, RTH-beta. So for us, this is an exciting opportunity. We are now starting to further advance and build our clinical development plan in this condition with the ambition to have one pivotal trial aligned with the EMA and FDA for registration and of course, initiate that as soon as possible. caveat to investment decision by the Board, of course. I hope that answered your questions, Chiara.

The next question comes from Oscar Haffen Lamm from Stifel.

Do you have any updates on the number of patients that have been identified in the U.S. in 2025? And then maybe just a follow-up to that. You mentioned that the approval end stage would impact positively the rate of diagnosis. So my question is, to what degree do you currently forecast patient identification to ramp up in the U.S. post approval?

Sorry, Oscar, you were actually breaking up a bit. So I had a bit of a difficulty to hear your question. So if you don't mind repeating them, please?

Yes, sure. Is it better now?

I think so, yes, please.

All right. So let's try again. So it was just regarding the number of patients identified in the U.S. in 2025. And then I have a follow-up on that, but I can wait.

Yes. So when it comes to the number of -- if I heard you correctly, number of diagnosed patients in the U.S., again, as Anny mentioned, the team has been very diligently identifying and ensuring diagnosis of patients over the last couple of years, one should recognize that up until October, we have had a very, very limited infrastructure in the U.S., which we have now further invested in, and we have 4 regional medical affairs directors in place early this year to further engage with key opinion leaders and stimulate patient identification and diagnosis. What we know of today is that we have more than 140, 140 diagnosed patients in the U.S. That has increased substantially since 2022, where we knew about 28 people diagnosed, but also back end of 2024, we called out around 100 patients being diagnosed. So I think this is a huge effort by a very limited team. And I know also already so far this year, the team has identified a handful of patients. So hopefully, that answered your question, Oscar. And also, we see that we will find further patients as we strengthen our infrastructure and being more present in the U.S. But Anny, I don't know if you want to add anything, please?

No, I think that's pretty much it. And it's a rare condition typically at the -- before the launch, the awareness is still relatively low. and that's common. But with the efforts that we're doing, we are very confident that we will quickly identify and activate the majority of the patients post launch.

Just maybe one follow-up. Henrik mentioned that the identification in Germany doubled this year. Do you think that getting approved in the market changed the diagnosis dynamic there?

Oscar, Henrik here. Yes, I think it's many different things contributing to that we identified more patients in Germany. One, the approval definitely because then there is an incentive for the physicians to find the patients when there is a treatment available and correctly diagnose them. And secondly, I think the activities that we have done in the field, more engagement with HCPs, that did definitely also contribute to finding those patients. And that is, I think, what we can expect to see also now in U.S. now when we will have 4 regional medical directors in the field and expanding the team further during this year.

And then we'll move to the last question. Operator, please.

The next question comes from Arvid Necander from DNB Carnegie.

I had 2, so I'll try my luck. And so the first one goes on costs. With the conclusion of ReTRIACt, how much of a step down should we expect in Q1? Should we expect OpEx to return sort of closer to Q2 and Q3 levels? And secondly, if you could just briefly comment on the pace of patient identification in the U.S. How does this trajectory compared to Europe? Is it broadly similar right now? Or are you continuing to see a significantly faster rate of case finding?

So if we start with the cost question then, I appreciate that you're coming from a somewhat higher increased cost in quarter 4, driven by mainly R&D. And that's more, as Yilmaz said, a one-off item driven by the closeout of the ReTRIACt study. And then, of course, the very intense activities related to the FDA submission. So one would assume that from an R&D perspective, we will see a drop in costs going forward. However, to a certain extent, that will be offsetted by the increased investments in the U.S., which are flexible costs and will be driven by opportunity and gated on some certain milestones. But as you know, we don't give any further guidance, Arvid, on cost base going forward, but it's reasonable to assume that you will see a bit of a drop in quarter 1 this year compared to quarter 4 from an overall cost perspective. Yilmaz, I don't know if you have anything to add?

No. Thanks, Nick. I think you mentioned the essence of it.

So moving to your second question then Arvid, around patient identification in the U.S. versus Europe. And I think there are a couple of components. I will shortly hand over to Anny. But as Henrik said, we definitely have seen here in Europe, in Germany, especially when we have an approved product that we can refer to and have more presence in the market, the number of patients being identified and aware to us has increased significantly. We have already seen a bit of that in the U.S. last year, where we have increased the number of -- we have seen an increase of number of the identified patients in the U.S. as well. But Anny, please further elaborate from your perspective, you're closer to the market.

Yes. Maybe just to give a bit more color in terms of the -- where these patients are is mostly exclusively in the major pediatric academic centers. So we've built our footprint in the U.S. really around those sites so that we can access as quickly as possible. And as we've mentioned, we've already identified 140 genetically confirmed patients. We have our expanded access that is currently active in 17 sites across the U.S., and that allows us to keep really a close connection with those treating physicians. So we're confident that the pace has been good. But with the increased resource that we're putting in place right now, we're very confident that we will accelerate that pace before the launch.

And I think all in all, Arvid, it's reasonable to assume that the number of diagnosed patients where to us by quarter 4 year-end, where we assume a potential launch in the U.S. will be substantially higher than the number we referred today, i.e., 140 patients. And operator, I think this takes us to the end of the call. Thank you.