Oncopeptides AB (publ) ($ONCO)

[Operator Instructions] Now I will hand the conference over to CEO, Sofia Heigis; and CFO, Henrik Bergentoft. Please go ahead.

Welcome to our conference on the decision to submit a type II variation for Pepaxti in Europe. The purpose of this call is to give you a better understanding on why we, at this time point, intend to submit a type II variation to broaden the European indication for Pepaxti. What we need to achieve to ensure patients can benefit from this broadening of indication, what impact a successful journey can make for both patients, shareholders and the company. Presenting today is myself, Sofia Heigis, CEO of Oncopeptides. And with me, I have Henrik Bergentoft, our CFO. We have this morning announced that Oncopeptides intend to expand the indication for Pepaxti in Europe by applying to European Medicines Agency for a third-line indication in less refractory patients than our current label. An approved indication with granted market access is expected to double our addressable patient population and double the average number of treatment cycles per patient. We plan to send the application within the next few months with the final European Commission decision expected in the first half of 2027. During approximately 15 minutes, I will walk through the strategic rationale, the potential impact and next steps. Maybe most importantly, I will also provide a historic context and go through the science that has led us to make this decision. I will aim to address the questions we have already received since the announcement this morning, but also encourage you to ask questions in the Q&A that will follow my presentation. The rationale behind our decision to move Pepaxti into the third-line treatment rests on 4 key pillars: market expansion, extended exposure, clinical value and pricing viability. We aim to move into the third line and reach less refractory patients, which would at least double the number of addressable patients in Europe. Clinical data demonstrates that treatment cycles in the third-line setting are expected to double on average compared to our current label. This submission is built on the Phase III OCEAN study data, which EMA previously deemed approvable, and I will come back to that soon. What makes us take this decision now is that our assessment of the current treatment landscape indicates we can now expand without compromising our innovative price level. To give you a better understanding of this, let's take a step back to 2023. As some of you may know, Oncopeptides has previously received an approval from the EMA to move Pepaxti into the third line. At the time we chose to withdraw that approval. If we had moved Pepaxti into the third line when we achieved the approval back in 2023, there would have been a high risk of ending up with a very low European reference price, and that would not have been sustainable from many different perspectives. Due to a rapidly evolving multiple myeloma treatment landscape with multiple launches in earlier lines, we see that the pricing landscape has evolved significantly between our 2023 analysis and our 2026 assessment. In 2023, the pricing anchor in the first market to negotiate that would have set the new European reference price would have been a single comparator in a list of drugs that was used in third line back then. The cheapest comparator was a generic drug, which would have been our price anchor. With several new immunotherapies being launched and implementation of combinations, including 3 to 4 drug classes has moved the field and made the individual treatment in third line more differentiated. This has triggered a shift from a single comparator price anchor in second to third line to a basket of drugs, meaning several different alternatives that are used today in the third-line setting. This basket is a mix of different price levels and on average, concludes a higher comparative price point than in 2023. Even though we have to negotiate new prices, we have moved from an unfavorable market access situation to a different environment that makes it worth to once more try to give patients the opportunity to receive Pepaxti in third line by applying for this type II indication. So what is the business impact? It is important to note that we need to achieve both regulatory approval and subsequently succeed with price negotiations to harvest the value of broadening the indication. With that said, let's look at what we know about the potential, we may be able to unlock and just as important, point out the current unknowns to conclude what the new Pepaxti potential could look like. Our current communicated market potential of SEK 1.5 billion reflects the current fourth-line indication in triple-class refractory patients only. Expanding into the third line creates significant added potential through 3 multipliers. We see a 2x multiplier in addressable patients and a 2x multiplier in average number of treatment cycles per patient. The third multiplier, price, will have to be negotiated as we are reaching more patients, and this process is country-specific and looks different in all European countries and also varies between our key markets where we currently have a price set for the current label. So while we know the addressable patient population and treatment pattern in the third line, we will not know the exact price until we have finalized new market access and pricing negotiation market-by-market. Now let's move away from the numbers for a while, and let's look at the scientific rationale behind our application for the type II variation. This chart illustrates the typical journey of a multiple myeloma patient from initial diagnosis through successive relapses. And given all the new treatment options, multiple myeloma has become a marathon with many lines of treatment rather than a short sprint. Today, there is no cure for multiple myeloma. And as you can see, each relapse is accompanied by an increase in tumor burden, meaning that the tumor becomes more and more aggressive and difficult to treat, partly triggered by that the tumor has to fight against many different mode of actions in earlier lines, which makes it a tough warrior and more and more difficult to beat. Our current indication is represented by the orange block on the far right, serving patients in advanced disease, specifically those in the fourth line of therapy and beyond who are triple-class refractory. At this late stage, the disease burden has already undergone rapid acceleration and the patients are commonly both old and has become frail by both the tumor side effects from previous treatments and comorbidities. Our goal with this type II variation is to move that orange block to the left as shown here. And by expanding into the third line, we can treat patients earlier in their disease course. Now let me start to briefly run through the mode of action of our peptide drug conjugates and Pepaxti to ensure you fully understand how Pepaxti is offering something new and needed. The cleverness of the PDCs lies [ in that due ] to being highly fat loving, rapidly and passively diffuses across the cell membrane. This means that there is no receptor binding, and we already, at this stage, can address resistance to drugs that are dependent of receptor binding on the surface to activate the killing of the cell. Inside the cell, the PDCs are rapidly cleaved by peptidases and esterases that we can call small scissors. These scissors are upgraded in certain tumor cells such as multiple myeloma, meaning that there is more active substance released inside of the sick cells, which triggers more influx of the PDC into those cells. And with this distribution, we spare the healthy cells. The cell is put into apoptosis or cell death by a dual mechanism of action where the activated and now water loving cytotoxic payload is building a high concentration inside of the sick cell, which leads to damage of the DNA in the cell nucleus as well as in the mitochondrias. One common resistance mechanism is that DNA is repaired in the nucleus. And we have seen in clinic that we can overcome this type of resistance, and we do believe that this is due to the mitochondrial damage. This dual DNA damage seems to be unique for the PDCs compared to conventional alkylators. Finally, the PDC mode of action is completely independent of the immune system, meaning that Pepaxti is providing a new way to attack the tumor that works also in patients with an exhausted immune system. So, in short, a highly complementary mode of action to other drugs that can be used in third line as well as in the fourth-line setting. Let's look at the broader treatment landscape across Europe to see how Pepaxti fits. As already mentioned, patients in the first and second line are exposed to standard classes of drugs, proteasome inhibitors, IMiDs and anti-CD38 monoclonal antibodies, commonly in 3 to 4 drug combinations to hit the tumor hard early on. Novel immunotherapy such as CAR-T is approved already from second line, and there are more approvals underway, which means that patients may need a rest from immunotherapy to recharge the immune system already in third line. By the time a patient reaches the third line, the most common approach today is rechallenging with options from the same drug classes used in line 1 to 2. This is where Pepaxti fits perfectly. As a PDC, it provides a distinct T-cell independent mode of action. Looking at the Pepaxti, the positioning is in one way the same in both third and fourth line as it is an outpatient-friendly treatment with manageable safety profile suitable for patients that are unable to receive immunotherapy. Its distinct PDC mode of action facilitates treatment continuity and -- makes it a suitable bridge between therapies. And it remains a proven alternative for patients who have relapsed both after CAR-T and bispecific therapies. So in summary, before we get into the scientific data, our current indication is for patients who have received at least 3 prior lines and are triple-class refractory. The potential future indication would target patients who have received at least 2 prior lines and are refractory to lenalidomide and the last line of therapy. This broader population allow us to bring the benefits of Pepaxti to patients earlier in their treatment journey. For our current label, our Phase III OCEAN study served as the confirmatory study for Pepaxti. This study confirmed the efficacy and safety profiles that were initially observed in our pivotal Phase II HORIZON study. The current label population is based on the HORIZON study and the regulatory approval we are now intending to seek is in a patient population based on the OCEAN study. So let me explain that study in brief. The OCEAN study is a Phase III head-to-head study of melflufen or Pepaxti plus dexamethasone versus previous standard of care pomalidomide plus dexamethasone, with the primary endpoint being progression-free survival and secondary key endpoints being overall response rate and overall survival. It was in the OCEAN study that we concluded the subgroup of patients having the most positive benefit risk from Pepaxti. We call this subgroup our target population, and it consists of patients that has either not been through a stem cell transplantation or a patient that had a good result from the transplantation and progressed first after 36 months from the transplantation. This is the target group that serves as the foundation for our current label and will serve as the foundation for any potential future labels. So let's now have a closer look at the OCEAN data. Our target population from the OCEAN study had logically fewer years since diagnosis and fewer previous lines of treatment with a median of 2. Importantly, they were less refractory than those in our current label, being less frail and with the opportunity to get longer treatment duration. Overall, this population is larger and represents a group that is less refractory, yet have developed an aggressive tumor that can benefit from the PDC mode of action, matching the unmet need. Pepaxti plus dex demonstrated a significant increase in PFS with a median PFS of 9.3 months for Pepaxti compared to 4.6 months for pomalidomide plus dex. The hazard ratio for PFS was 0.58 with a significant p-value of 0.0001. We also saw a favorable overall survival trend of 23.6 months for Pepaxti plus dex versus 19.8 months for POM plus dex. Pepaxti significantly favored patients in the target population for confirmed response. The overall response rate was 42% for Pepaxti versus 26% for the comparator. In conclusion, the OCEAN study met its primary endpoint. Safety was confirmed and the overall benefit risk profile in our target group of patients was positive. This was also the feedback from EMA on our first submission for a type II variation. Before we conclude and open up for Q&A, let's take a look at the time line and milestones. We expect to submit the type II variation to EMA in the coming months. We will now prepare the regulatory documentation needed to submit the application. Initial regulatory feedback is anticipated in the second half of 2026 and the final decision from the European Commission is expected in the first half of 2027. Market access processes, including benefit assessment and price negotiations can formally be initiated post European Commission decision. This process looks different in various markets, and we will update the market on more specifics as we proceed. So to conclude, Oncopeptides is continuously working to maximize our European sales potential. Expanding into the third line would double the addressable patient population and double the average number of treatment cycles. This means the expansion has the potential to reach more patients with longer treatment duration, which could generate value for both patients and shareholders. The expansion requires that we achieve regulatory approval and successful market access. We have taken the decision to initiate this process with the intention to submit a regulatory dossier coming months. Our focus remains on our key markets for now. We will, of course, assess the impact of this decision on other markets as a broader label could open doors beyond our current focus through own commercialization, partnerships or a combination. In closing, we are starting to work for a new and broader path ahead for Pepaxti grounded in robust clinical evidence and supported by an unmet need. Thank you for listening. And I will now hand over to the moderator for any questions.

[Operator Instructions] The next question comes from Richard Ramanius from Redeye.

I have a few questions. Just to start, does this affect your financial targets?

Thank you for the question. Maybe I hand over to you, Henrik, would you like to respond?

Yes, absolutely. Thank you for that question, Richard. And well, the long story short is that we are not changing our financial target of being cash flow positive during 2027. But to give some more color to that, in order for us to adjust the financial target, we will first need a successful regulatory process and clarity on all factors affecting the potential for Pepaxti. Now we already know that an approved application for a broader indication would double the current addressable patient population for Pepaxti in Europe and double the average number of treatment cycles for patients compared to the current label. What is unknown is the time line and also the outcome of the market access process and price negotiations, which are both important factors. So again, we perfectly well understand your question. But at this moment, we're not changing our guidelines of being cash flow positive during 2027.

All right, and as I understand it, up until the fourth line, most treatments are combination treatments. So would you use Pepaxti mainly as a bridge therapy then because I assume you would need additional studies to use it as a combination treatment except for dexamethasone, but you could add another thing to that combo?

Yes. So to try to -- the third line is not a simple line as the treatment, just as I mentioned during my presentation, has become so differentiated in the first and the second line where you use combinations of both triplets and quadruplets. And now when you also start to use immunotherapy like CAR-Ts and eventually also bispecifics already in the second line, the patient's profile will look more in the third line as it has been looking in the fourth line in the sense that there may be a need for a bridging therapy. Important to mention is then that a bridging therapy is not only a few cycles, but it is really to give the patient a different mode of action that is complementary to immunotherapy and that allows the patient's immune system to rest so we can recharge and then be responsive to immunotherapy again. So just to put some flavor on what would a bridge mean. So it can be quite long treatment still even though it would be in the third line. When it comes to combining Pepaxti, you are right that it is a doublet that is Pepaxti plus dexamethasone, where we are still expanding our indication on. And you are right that there are many combinations used, of course, in the third line. But if you look at the data, the efficacy data, the safety and tolerability data, I would argue that compared to other, let's say, similar combinations, our doublet stands strong looking at the OCEAN data with a PFS of 9.3 months and the overall survival of 23 months. If you compare to novel immunotherapy, it's, of course, less, but our idea is not to compete with novel immunotherapy. It's more to complement to allow patients to be able to get novel immunotherapy, both in second line as well as in fourth line should we then succeed to get into the third line. So there is a quite clear position that is evolving and that has been evolving. And I think this position listening to the scientific congresses and the debate that is currently, it's all about sequencing and how you ensure that the patient can get as many different treatments as possible in the different lines to, of course, live as long as possible. So I hope that responds to your question. And if not, feel free to ask if you have any further question to that topic.

[Operator Instructions] There are no more questions at this time. So I hand the conference back to the speakers for written questions and closing comments.

And as there are no written questions, back to you, Sofia, for closing remarks.

So thank you to everyone that listened today. And of course, should there be any further questions, feel free to reach out to us. And by that, I wish you all a good day.