Hansa Biopharma AB (publ) (HNSA) Earnings Call Transcript & Summary

My name is Johan Unnerus. I'm an analyst at the life science team at Redeye. Today, we have the pleasure to feature Hansa Biopharma with the CEO, Søren Tulstrup. And we have some questions for Søren.

Thank you. Good to be here.

Excellent, yes.

You just reported your Q3, and overall, congratulations. You -- Idefirix is approved. And it's addressing a need for patients that hasn't had any products on the market that are highly sensitized ahead of kidney transplants. It's a big step forward, isn't it?

Absolutely, it is. And we're very happy that we can play a role in actually bringing hope to the thousands of highly sensitized patients who are today waiting a little bit against hope for a compatible kidney transplantation that might be life saving for them.

These patients can -- or as a matter of fact, they typically have been on the waiting list for a very long time, especially the highly sensitized patients, who some of us could think that, now with the product approved and now after Q2 and Q3, it's pretty obvious that it will take some time for these patients to actually be treated. Isn't that the case?

That's correct. It will take some time. And it's maybe a little bit difficult to understand given the high degree of unmet medical need. These patients are essentially more likely to die waiting for a kidney transplant than actually being transplanted. So you would think that, once the product is approved, you would move straight to very fast uptake, but the thing is that there are certain steps that you need to go through in any case. Any product being launched in Europe has to go through that. First, you need to really get pricing and reimbursement; and that typically takes 1, 2, 3 years from getting the marketing authorization. It varies a little bit from country to country. Sweden and other Nordic countries tend to be faster than others but, as I said, typically 1, 2, 3 years. So that is the very first step. And then given the fact that this is a transformative therapy, there are other things that we need to go through. As far as pricing and reimbursement is concerned, we now have that negotiated and in place in 3 countries at the national level, but even that is not enough. Take Sweden. There is a recommendation from an authority at the national level, but that needs to be then pushed down to the regions that have the funding responsibility. That process has taken place now, but again that was an additional time that needed to be taken to go through this. And then it needs to be taken from the regional level to the individual hospitals so that they actually have a budget for this. And there we are also somewhat advanced now, and we have some of the clinics getting ready for this. So that's the first step, pricing and reimbursement. And then we need to also work with individual clinics to make sure that they are ready to identify the right patients. They are ready to treat them appropriately, with good outcomes, which is obviously in the patients' and the hospitals' and our interest.

So plenty to do. And is that -- is -- your progress so far, is that in line with your expectations?

Yes. I am very happy with the progress, so far. It's totally in line with our expectations. We haven't hit any kind of major hurdles or any roadblocks. You're seeing solid progress according to the launch metrics that we've put in place. And they are around, again, pricing and reimbursement. Do we get it at the right level reflecting the value proposition, the value that we're bringing? Do we get it on label without restrictions? Do we then also see clinics getting clinically ready to treat? They have to go through certain steps. Do we see the kind of interest and awareness that we need? And we can check these boxes, and it's a rolling process. Obviously we're doing it country by country. And as we've just discussed, we now have 3 countries where we have brought access, and we need to work with individual centers. And we have a number of these centers that are getting ready and are ready and have a growing pipeline of patients that have been identified.

[ Okay, interesting ]. And at one of the recent conferences and also during this last report, the process and the progress and the -- of guidelines was featuring. It's obviously very important. And could you elaborate a bit on the guideline process that is in place? And if we -- is it realistic to expect guidelines in this area for 2022?

Yes. So we don't need guidelines in place in order to have the first patients being treated and start to seeing actually first uptake. We are working specifically with individual clinics. And they need to have protocols for their clinic around how they identify patients, how they treat them and so on, logistics and all of this, but guidelines are really helpful. I mean this is a transformative therapy. This is a paradigm shift in the transplantation ecosystem. Certainly these patients who are not really considered for transplantation and certainly very rarely were treated and transplanted, they should now have equal access. And that requires overall, over time, changing guidelines so that there is allowance, if you will, for these highly sensitized patients to be desensitized and treated. And obviously, ideally you want good, comprehensive guidelines in place at the national level and potentially at the European level. And as you said, we participated in the European society of organ transplantation's congress in August. And we're [ helpful in ] making sure that a work stream and workforce was established by the society to create these guidelines. They will now start drafting them. They will circulate them and there will be the usual peer review, and hopefully, it will lead to submission of final guidelines for publication in the not-too-distant future. And I can't give you specific months. You asked me, is it possible by the end of the year? And I certainly will say it's not impossible, but it's not within our control. But there is clearly strong interest and a desire to move this forward by the European society.

Excellent. So this process is a matter of fact. And it will -- and then it remains to see how it will actually play out in -- both European-wide and then country-wide.

Yes.

And -- but this -- part of this reimbursement and pricing is the HTA process, and you've advanced pretty far on that. And 3 countries, I think, is already sort of in place. Does this relate to reimbursement, pricing and acceptance on the country level? And then as you elaborated on earlier, the next step is to move regional and hospital-wise.

Yes, yes. So you have to go through a process to get pricing and reimbursement, and that process varies country by country. In some countries, it's a fast and efficient process, very focused. In other countries, it's a pretty comprehensive thing, but typically in general now, throughout Europe you have to submit health technology assessment dossiers, where you talk specifically about the clinical benefit that your product is bringing. You talk about, well, who might benefit the specific patient population in a specific country. It has to also be outlined, the size of that and so on. And you discuss the value proposition. What is the standard of care? How would you bring value versus the standard of care? And then the various organizations that you're in dialogue with will make assessments, cost effectiveness or cost-benefit assessments; and come up with a conclusion. In Sweden, for instance, the national organization in charge of this, TLV, assessed it. And they came out with a very, very favorable conclusion, which is important not just for Sweden but also potentially for other countries. And that conclusion was that using Idefirix, our product, at the price in Sweden would at least be cost effective versus standard of care, which is dialysis, for these patients; and might very well be a cost saving, which is something you very, very rarely see. So that's great. We had a similar kind of benign, good conclusion by the German authority, but the process is still ongoing in Germany. But to me, this is really very, very strong and positive early signals that what we're bringing to the market is perceived as something that provides value not just to the individual patient that might survive and have a much better life but also for society overall from an economic financial perspective.

Interesting. So the next big country, is that Germany, as you alluded to? Or are you -- the process in place for some other of the European big countries, I believe, Italy, France and Spain, was -- U.K. is also in process, isn't it?

That's correct. So we have submitted now HTA dossiers, these health technology assessment dossiers, in a total of 10 countries, including Germany and the U.K. And we have an ongoing process there. And we expect to have filed in all of the top 5 -- I can't say "EU countries" anymore, but that includes in the U.K. the top 5 European markets, if you will, by the end of the year. So that is also very good and solid progress.

Excellent then. And then as -- at a more practical level, it's also important to get the protocols in place, and the training and the education. Is that complicated? How is that evolving?

It is complicated, I mean, because there are many factors you need to look at. This is a little bit of a different market than if you just launch a new medicine and you're battling for market share in an established market. We need to look at the whole transplantation ecosystem with the allocation of organs, the logistics around this and so on. Obviously we have to make sure that staff is trained in the individual hospital around how to treat these patients, how to identify them and so on. And there are logistics around product supply as well that need to be in place. So it is something that takes time, but we are seeing good, solid progress. And when -- we are now essentially at a stage where we believe 9 centers are getting there from a clinical readiness perspective. So that is important. And what we want to see then is that some of these clinics have a good, positive first experience in a first patient. They will typically evaluate that, spending several months, before going on to the second patient. So we're also looking at repeat business at the center level, but that will come later.

You also work with the concept of priority hospitals. I presume that this correlates with the -- because you alluded to the centers which has a more advanced stage in terms of protocols and training and education. 9 priority hospitals are in place already, I believe.

That's correct, exactly, yes. And it is a very concentrated market. So very few centers throughout Europe represent the majority of kidney transplant volume, and we're dealing with a subset of these that really have the capacity to deal with highly sensitized patients. So it's a limited number, which is also why we as a small company can effectively and efficiently handle this launch.

And I guess it's fair to assume that, among these priority hospitals, patients are getting ready. Should we expect some patients being treated over the next half year, without giving any specific numbers or anything else?

Yes, that certainly is our expectation. I think I'm on record saying several times that we expect an S-shaped launch curve where it will be slow uptake initially as we look to these centers to treat their first patient; and then, hopefully, start repeat business, a second patient and so on. Once you get into the repeat business phase, the patients are there. They are identified. They are on wait list, so that's not going to be the challenging part. The challenging part is to get it into the mindset, get it into the budgets of these hospitals and into practice. Once we get there, you'll see much faster growth, but I can't predict specifically when we'll get there. But certainly we do expect over the next 6 months to see a number of these clinics start using it in patients.

Yes. This interview is fairly short. I guess we're approaching the end. The big market is -- as always, is, of course, U.S. And it's also more of a unified market. It's clear that you are in the process of starting recruiting patients. Texas is first out; and it will involve some, is it, 12 to 15 centers. And with the experience from Europe and that amount of centers to be included once approved, is it fair to -- is it reasonable expectations that the start and the launch will be more dynamic in this larger market?

That's an excellent question. So clearly the U.S. market is very attractive given its size and the overall dynamics and properties of that market. It's a similar-sized market in terms of volume. Typically you see higher values in the U.S. market. There is very strong interest from the U.S. centers to participate. Unfortunately, we didn't get access straightaway to the U.S. We have aligned with the FDA now around this limited study, a very focused study, that we need to run in 64 patients and that we believe will qualify us to submit a biologics license application in the U.S. under the so-called accelerated approval pathway by first half of 2024. So we have a clear line of sight to potential approval in the U.S., and working with these centers is an excellent way to actually generate the type of experience we just discussed we need to generate in Europe. That will be generated now through this clinical trial, which is very helpful. And based on that, you would expect a somewhat faster uptake in the U.S. when we eventually, hopefully, get approved.

And also, by then, you will have some complementary long-term experience like filtration data and graft survival and so on. And we saw recently that you had 3-year experience, and that was pretty solid...

Very solid, very encouraging, very encouraging. So yes, you're right. That will continue to evolve. We're generating additional data in Europe. Obviously we'll have data from the commercial uptake, if you will, but also the post-approval study that we are initiating in Europe in approximately 100 patients. And we'll run it over several years. That will also generate good data. So all of this is supporting also an eventual potential launch in the U.S. and other markets. I mean let's not forget that there is very strong potential outside of Europe and the U.S. Look at Latin America. Look at Asia Pacific. There are some very important and attractive markets there as well that we're also looking at.

Yes. I believe you already initiated the filing in some of these market. Wasn't it Israel and -- yes.

That's correct, exactly, yes.

Excellent. Thank you so much for today. Good luck going forward.

Thank you. Thanks. Been a pleasure being here. Thanks so much. Bye-bye.