Moberg Pharma AB (publ) (MOB) Earnings Call Transcript & Summary

Good afternoon, and welcome to the Moberg Pharma telephone conference. My name is Charlie, and I'll be coordinating the call today. [Operator Instructions] I will now hand over to our host, Anna Ljung, CFO (sic) [ CEO ], to begin. Anna, please go ahead.

Thank you, and welcome to this telephone conference following the press release this morning. And this call will be recorded and uploaded on our web page following completion. So with me today, I have our Chief Medical Officer, Anders Bröijersén and our Chief Scientific Officer, Amir Tavakkol. And before opening up for questions, I would like to provide a short summary on the information that we received this morning. So in essence, we received information about clinical cure in a subset of patients for our North American Phase III study for MOB-015 against onychomycosis, and the number of patients who have achieved clinical cure in this blinded subset of patients is lower than our expectations. And clinical cure, that's the physician's assessment of the amount of affected nail area for a patient. For clinical cure, this has to be 0, a perfectly healthy looking nail without any abnormalities. In total, there are 3 parameters: clinical cure, negative fungal culture and negative microscopy. Together, that make up the complete cure, which is the study's primary endpoint with -- the item that FDA will look at. All 3 need to be met. So a low clinical cure means that complete cure also has to be low. The information that we have received is blinded. We don't know if a patient has received a drug or not and also don't -- not know the percentage of patients receiving drug in this sample. However, the total number that we have achieved a complete cure in this subset, it's lower than our expectations. And thus, the risk of the study not meeting its primary endpoint, complete cure, has increased. Therefore, we assess the risk of not being able to commercialize MOB-015 in the U.S. based on this study has significantly increased, which requires us to send this press release. Our priority is to protect the integrity of the study data, both when it comes to using the study results in discussions with regulatory authorities, but also since there are patients with ongoing treatment in this study. When it comes to implications for our product in the market in EU, we have an approved product that has a different dosing. This approved product works as documented in previous clinical trials. So we don't expect any consequences from this trial. We will not speculate on possible outcomes or what this means for the future potential of MOB-015, and we need to wait top line results to avoid drawing premature conclusions. Once we get the top line data, those, of course, will be analyzed. We expect to get -- to be able to get top line data in December and final data to follow thereafter. And only then we will be able to analyze the situation of our company for the different markets, and we will get back to you as soon as we can. With that summary, I open up for questions.

[Operator Instructions] Our first question comes from Jacob Rowe of Rogue Fund, LLC (sic) [ Rogue Funds, LLC ].

Were there any impact to mycological cure rates? And is this going to have any impact, do you believe, on future patent extensions?

So we have only gotten a subset of the data, and we have not achieved any data on mycological cure, so only on clinical cure. So it's premature to draw any conclusions when it comes to future patentability since we're lacking key components. We only have 1 out of these 3 components that make up the complete cure in the trial.

Our next question comes from [ Dakota Quint ], who's a private investor.

I just have one question. Seeing as the odds to positively affect the change to the label have been reduced, is there any consideration for pulling forward the European launch?

So I think there are 2 parameters that sets the time line for the European launch: we obviously wanted to have stronger claims coming from this ongoing study, and we still want to see the results in the ongoing study; but I think, more importantly, we also need that approval of a terbinafine supplier before launching in Europe. And given the time lines, we expect to get approval by end of this year. And then there is a delay from when we get the approval until when we can actually get the product on shelf since the pharmacy chains have their decision meetings, I would say, roughly 6 months before they actually put the product on the shelf. So whether it's possible to put the product on the shelf during next year, that'll depend on when we get this approval. But we can already now see that, given that the high season starts in Q1, if you want to launch the product during the high season, it's really high season 2026 and not 2025.

[Operator Instructions] Our next question comes from [ Gang Lu ], who's also a private investor. [Operator Instructions] We have no response from [ Gang's ] line. So we move on to the next questioner. Our next question comes from [ Fio Curacue ], who's also a private investor.

I just wanted to check, is the EU launch affected? I know you just touched on it, but I just want to clarify. Is the EU launch affected by the U.S. Phase III data? And are any of the milestones with Bayer attached to the Phase III data?

So if I start with the regulatory piece, we don't see that the regulatory piece in Europe will be affected since we have an approved product that has a different dosing than the dosing that we tried in this ongoing study. So this approved product in the EU, it works as documented in previous clinical studies. When it comes to the actually launch plans for Europe, it's, of course, a collaboration between us and Bayer. And I think it is premature to draw any conclusions based on this press release if that is affected because we need to see the top line data. And once we have received the top line data, we will, of course, engage in the dialogue with all our existing partners, so.

[Operator Instructions] Our next question is from Chris Vale of Tier One Capital.

Can you tell me, does this affect the launch in Canada at all?

I would say it's the same reply as for the launch in Europe. Once we have the top line data, we will, of course, have a dialogue with all our partners. But I would say that my expectation is for Canada, as for Europe, we're relying heavily on the already approved drug in Europe and that file.

Our next question comes from [ Hugo Moga ] of [ Forarru ].

Couple of question on my end. The first one is, can you confirm about like the requirement for applying to the FDA? Was there an expectation of like a statistical difference on complete cure rates with that second trial? And the second one is that in the communication you mentioned below expectation, can you give a bit of more color on what were the expectation from Moberg's side?

Yes. So what we have communicated previously is that FDA requires 2 studies that -- where we show superiority, and we have one of these studies already in place. And our goal is that this current study will provide that second study that is needed. And our communication today or earlier today, this morning, tells that we see that the likelihood that we're being able to commercialize the product in the U.S. based on this study has significantly increased -- decreased. So we're not saying whether we can or cannot register and launch the product based on this study. We're just saying that the risks that we will not be able to do it based on this study has increased.

[Operator Instructions] Our next question comes from [ Alex Fak ], who's also a private investor.

Just 2 questions from me. First of all, I was wondering if you could, I guess in some way, quantify what you mean by significantly decreased? So do you think the chances of approval in the United States, given the data you received this morning, do you think they're still above 50%? Or are they below 50%? And my second question is, would you launch another test to see whether a -- perhaps a more frequent application of the ointment -- of the topical would meet the clinical cure objectives? And whether -- and how long would that test take? And how much would it cost?

Yes. So if I start with the first question, so I think going back to -- in addition to what I've already said, that we see that the risk of not being able to commercialize has increased, but we cannot really speculate on possible outcomes and percentages. It's premature, and we have to wait for the actual readout of the data. Sorry. But I didn't fully hear your second question. So could you please repeat that?

Yes. I'm sorry about that. Just let me switch. So the second question was, you tried a different way of administering the topical, where there would be a frequent application followed by an infrequent application, and that has not achieved the clinical cure. So I guess the nail is still somewhat dry after that, at least what you received the -- from the data you received this morning. Would you be willing to try another set of clinical trials where there would be something in between, such as frequent and then less frequent application and then ever -- even less frequent application? Or would that take too long and cost too much?

I think for starters, we're not at the position where we would say that we have a clear conclusion on the results in the study. We're still saying that the risk has increased, and that's really what we need to inform the market about. But we only have a limited set of data. So it's a subset of the total data. It's 1 out of 3 parameters that makes up the complete cure. And it's blinded data, and we, as a company, has not fully controlled this data. So that makes it very hard or, I would say, impossible to draw conclusions based on this. So we cannot really tell whether our hypothesis with the whitening of the nails are correct or incorrect in this instance. So that's where it's not possible for us to speculate on next steps. We just have to wait for the final data and analyze that. We would, of course, also want to look at nail fungus and mycology data, and none of that is available.

Our next question comes from Douglas Holm of Samrison.

If this study does not show good top line results in the end, what's the path forward in Canada? Does Canada require 2 studies for approval? Or would you submit your previously completed European Phase III trials for approval in Canada?

Thank you. We believe that the European dossier is sufficient to file in Canada. So we don't think that this -- the outcome of this study will be necessary in order to file in Canada.

Our next question comes from John Coppedge, who's also a private investor.

Could you please let us know what the end of the subset of data is? So the study is something like -- I think it's 378 or 386 participants in total. Is the subset meaning it's like only some of those? And if so, how many of those people is the subset drawn from?

Yes. So I'm going back to that it's an absolute priority for us to protect the integrity of the study data. And for that reason, we have decided, after looking into the regulatory issue, not to disclose details about number of subjects. It's a sufficiently big data set so that we feel comfort that this data is accurate, and we need to send out this press release. But we're not disclosing the numbers.

Our next question comes from [ David Jaffari ] of [ AXA Capital Management ].

My question was just answered by the previous person. So I have no questions.

Thank you.

Our next question comes from [ Hedde Möller ], who's also a private investor.

I was wondering, if this Phase III trial fails, is there any other way that we can get an FDA approval based on the previous regimen?

I think it's too early to answer that. I don't know the answer to that.

Our next question comes from [ Diego Trematofara ] of [ Neosho Capital ].

So I have 2 questions. Question number one would be, if we exclude the U.S., what other geographies around the world can you use the European study for approval? And I'll ask the second one afterwards.

Yes. So that's a difficult question to answer. I think there are many geographies where European data can be used, either stand-alone or with a local study, but it's hard to give general answer. I think for the markets where we have partners in place, for Israel and for Canada, the stand-alone European data is deemed to be sufficient without any local registration. For other territories, such as China or Japan, we would expect local studies to be required. So it really varies between territories.

Okay. But in the case of, for example, China and Japan, how long would the process take in order for you to find a local partner and then require local studies?

So the demands on local studies can also vary a lot. So I think it's hard to give a general answer. But of course, there is -- regardless of which country you're looking at, there is a local registration procedure, and the timing of that varies greatly. So I think there is a great advantage in us having approval in 13 countries in EU already in place and also having partners in several territories in place.

So I appreciate that. And I'll move into the second question, which is, obviously, the vast majority of the answers that you guys have given so far have been quite generally speaking, in some sort of way, almost very conservative of -- mildly pessimistic. So if we take a step back and if you look at your company right now and if you look at the next several years and the opportunity that you guys have with your product, what are you really optimistic about? And us, as investors, like what should be realistically optimistic about?

I think it's the fact that we do have approval in Europe. And we do have a very successful first launch in Sweden, where we managed to become the market leader within almost immediately, and we have now taken more than 40% of the market share in Sweden during this launch.

Our next question is a follow-up from Jacob Rowe of Rogue Fund, LLC (sic) [ Rogue Funds, LLC ].

So are you guys expecting a sales impact in Sweden? I understand that the launch is based off of past studies, but I'm assuming that this study going poorly will impact sales. Just curious what your thoughts on that. And then I have a second follow-up question that I'd love an answer to after.

Well, I don't see a direct link, I must say. If we look at the Sweden being an OTC market, and I think we have a really strong proposition in the Swedish market, so I would not see an immediate link. And we still don't know what the outcome in the study will be. So I don't foresee any change in the way we look at the Swedish market.

Okay. I'm actually just going to skip my second question.

Our next question is another follow-up and it's from [ Hugo Moga ].

Like given what has been commented so far and, as you mentioned, Anna, the lack of real answers that we have from this subset of data, what was motivating the PR that you released this morning? Was it legal-driven? Did you have like constraint that led to that? Because it feels that the impact on the company valuation has been tremendous as opposed to what you're saying, meaning we have very limited knowledge about what the impact will really be from the study.