Oncopeptides AB (publ) ($ONCO)

Welcome to Oncopeptides First Quarter Earnings Call for 2026. [Operator Instructions]. Now I will hand the conference over to CEO, Sofia Heigis; and CFO, Henrik Bergentoft. Please go ahead.

Welcome to the Oncopeptides webcast for the first quarter of 2026. Please note the disclaimer regarding forward-looking statements. Today's presentation is led by myself, Sofia Heigis; and our CFO, Henrik Bergentoft. We delivered net sales of SEK 25.4 million in Q1 2026, a 91% increase compared to Q1 2025. Following the rights issue, we announced in conjunction with our last quarterly update, the company held a cash position of SEK 205.2 million by the end of Q1. We remain on track to reach positive cash flow by 2027. During the quarter, we announced and completed a rights issue of approximately SEK 200 million. I would like to take this opportunity to thank all our shareholders, new and old, that choose to participate in the rights issue. I would also like to thank HealthCap, our main owner, for their continued support and trust in Oncopeptides. We secured Fast Track designation for a window of opportunity clinical study in glioblastoma, which emphasizes the high unmet need for this very difficult-to-treat tumor. Additionally, we continue to underscore Pepaxti's position in the treatment landscape through Real-World Data. During Q1, data was published in the European Journal of Hematology, which reinforces Pepaxti's role in today's treatment landscape. Finally, we initiated the MARINA study to strengthen real-world evidence for Pepaxti in Germany in partnership with iOMEDICO. Well worth mentioning in the events after the period is the announcement we made on Monday that we are intending to submit a Type II variation to expand Pepaxti's label into the third line, in addition to our current label in fourth line. We went over the announcement in detail on Monday, and I will give a short recap later during this call. Now over to Henrik for a summary of the financials.

Thank you, Sofia. So we're executing with focus and discipline, and today's update reinforces the strength of our scalable model. The quarter reflects strong commercial traction and tight cost management, positioning us well to convert growth into improving leverage while staying deliberate on capital allocation. Displaying highlights from Q1. Revenue growth of 91% year-over-year is a clear signal that demand is accelerating and our commercial engine is working. A 99% gross margin highlights the inherent scalability of the business model and the quality of our revenue base. Operating expenses down 11% year-over-year shows we can grow while remaining cost conscious, setting up an attractive operating leverage ahead. We continue to invest with precision. Commercialization activities are focused on high potential European markets, which supports sustainable expansion. General and administrative reductions demonstrates strong internal cost control and the decline in R&D cost reflects prioritization while keeping innovation moving forward. With no studies currently ongoing, we're optimizing near-term spend while advancing the preclinical portfolio, sharpening focus on glioblastoma as the most important value driver. Ending the quarter with SEK 205 million in cash provides a solid foundation and a meaningful execution runway. The successful rights issue, adding SEK 167 million net strengthens the flexibility to deliver on our plans and pursue attractive opportunities. All taken together, growth, margin strength, disciplined cost and enhanced liquidity, we're well positioned to create shareholder value in the quarters ahead. And with that, back to you, Sofia.

Thank you, Henrik. We are building the foundation of Oncopeptides from our commercialization of Pepaxti in Europe. Midterm, we are working to add revenue from other geographies, and long-term, we are developing our pipeline with current focus on our PDCs that as a platform have a transformative potential for the company by addressing difficult-to-treat tumors such as multiple myeloma, AML and glioblastoma to mention a few. After a slower-than-expected end to 2025, we are back to a strong growth momentum in Europe, where our current label stands for a market potential of SEK 1.5 billion. Our pipeline targets the glioblastoma market, which is anticipated to grow due to a very high unmet need with an estimated global market potential exceeding USD 8 billion. Looking at some of the announcements in Q1 and how they affect this investment case, we conclude that we have made progress in most areas. As said, earlier this week announced our intended application to enter the third line of treatment, which would significantly increase the addressable market for Pepaxti. We have received the first feedback from regulatory authorities on our window of opportunity study, and we are on track to initiate the first clinical study and treat the first patients with glioblastoma this summer. Our ambition to conclude a partnership in Japan remains, and we are also working on other geographies in parallel. I will, during the presentation, give you an update on our progress during the quarter. Before I go into detail for the different European markets, a look at our sales trajectory. We have both experienced some seasonal challenges in the beginning of the year, and we do continue to have challenges in Spain with an underperformance during Q1. Despite this, we did demonstrate an overall encouraging development, which was primarily due to a strong continued uptake in Italy and an acceleration and step-up from Germany in the second half of the quarter. These are our two largest markets, and it's encouraging to see how they are taking off. It should be mentioned that Greece continues to deliver. And as we anticipated, we got the volumes missing in Q4 ordered in Q1. All in all, we are satisfied with the development both in Germany, Italy and Greece, while we need to catch up in Spain. Approximately 800 patients have been treated since EMA approval in 2022, and the clinical profile of Pepaxti is continuously being confirmed by Real-World Data published by independent authors from Oncopeptides. The Pepaxti inclusion in the EHA/EMN guidelines with a 1B recommendation is important when driving awareness, advocacy and the right positioning of Pepaxti in what has become a complex treatment landscape that is difficult to navigate for many prescribers. We continue to build on to the growing body of real-world evidence supporting Pepaxti following its doctors by doctors use across Europe. Let's have a closer look. I am commonly referring to that our launch is being built from a positive clinical experience. So let me walk you through some of the Real-World Data published, which confirms my statement. Important when looking at Real-World Data is that it always has limitations as it is retrospective, but it does complement clinical trials, and it is gathered from the current treatment landscape and demonstrates the real-world safety and effectiveness. To put the data into context, I wish to remind you that our current label is based on the efficacy data of the HORIZON study with 29% overall response rate in our target population. This level is considered clinically meaningful in this late-stage population with a median of prior five lines of treatment. So looking at the overall picture, these retrospective studies that are all published by external authors confirm Pepaxti's effectiveness and that the product has a manageable safety profile in heavily pretreated patients. During the first quarter, the first data from Italy was published, which is the second publication from Europe on how Pepaxti can complement immunotherapy. The Italian data included 17 patients and demonstrated a strong overall response rate of 41%. Interestingly, the response to subsequent immunotherapy treatment was considered clinically meaningful by the authors as majority of the patients achieved a very good partial response or better. This means Pepaxti can serve as a bridge in between two different immunotherapy, which is a position that is becoming more and more important. Furthermore, the Italian data was the first published case of melphalan as bridging to CAR-T with an encouraging complete response as outcome, another important position to take. Real-World Data from Spain that was published in 2025 is the other data set of sites from Europe. The Spanish data set includes 19 patients and was generated in an even more frail and late-line population than the Italian patient population. The Spanish data demonstrates an overall response rate of 28% this is very similar to the ORR in our HORIZON study, which means that the level of efficacy from our clinical trial data seems valid also in today's treatment landscape, which is important to prescribers. We have interesting case studies being published that confirm the therapy is well tolerated in patients with severe renal insufficiency, which is important as many of our patients are old and do have comorbidities. Finally, there are patients that Pepaxti is making a really big difference for included in the long-term responders publication. These patients are outliers, but it is interesting to see that if we hit the exact right patient, we can support them for a very long time. The long-term responders published have received between 46 and 83 cycles of treatment. RWD is important as it is informing clinical decision-making and generates confidence in Pepaxti as well as supports the clinical proof of concept for the entire PDC platform. So, in summary, what we see from our RWD data. Pepaxti do serve as a strategic option for patients unable to receive immunotherapy due to frailty or comorbidities. It is an ideal bridge between immune-based therapies to allow for T-cell recovery. It remains a proven alternative for patients who have relapsed after BCMA CAR-T therapies. Now let us move to have a closer look at our different key markets performance during Q1. Germany has demonstrated a strong growth, in particular second half of the quarter. As you may recall, we restructured, reduced and focused our German team on high potential customers in areas with a strong momentum. It is really encouraging to see that the effect of these efforts with a significant step-up in new patients starting treatment during one month. In fact, we have seen the number of new patients in March double versus January. And January was at the level of the average month in 2025. With the cost reductions and the acceleration in sales, we are on track to reach country level profitability in Germany during 2026. Finally, one important announcement we made for Germany in the first quarter was the partnership with iOMEDICO for the MARINA study, which is an investigator-initiated prospective noninterventional study that is designed to evaluate the real-world effectiveness, safety and treatment patterns of Pepaxti in our current label population in Germany. iOMEDICO is a highly sought-after partner as they have proven effectiveness in executing real-world studies, partly due to that they have access to the largest network of office-based physicians. As this graph shows, we are continuing to grow our prescriber base in Germany. Let's move to Italy. We have, during Q1, hit our target of close to 100% regional access in Italy. The strong uptake is built from a strong foundation with a positive clinical experience, a more centralized prescriber base with more patients per prescriber and of course, due to an excellent team who has been working really hard to launch and utilize the positive momentum. Pepaxti is currently gaining a strong position in the fourth line in Italy, really complementing immunotherapy, which is exactly the position we are aiming for in all our markets with our current label. The challenging environment in Spain continued during the first quarter. While we saw a small step-up in March, the quarter was all in all, quite far below expectations. The doctor strike we commented on in our last quarterly update continues to influence with the result of limited access to physicians for pharma and delayed approval from committees on treatment of late-stage patients. The innovative multiple myeloma market segment is overall underperforming in Spain. And this, together with limited access has during the first quarter created a very high competitive pressure between companies. Being a small company in that environment, we have to focus to succeed in a market that has become difficult to navigate. One example of focus is that we have been in frequent contact with all the key opinion leaders, and we have together initiated different publications and projects that will support that to position Pepaxti versus immunotherapy to ensure we can catch up on sales in Spain. We will, in fact, see some very interesting data to support the market being published already the upcoming weekend at the Congress in Paris. Strengthened by the potential entry into third line, we will reassess the overall market opportunity in the rest of Europe. And regarding Central Eastern Europe, we have always aimed for a partnership and have advanced our discussions during Q1. We are continuously looking into options for the rest of Europe. This Monday, we announced our intention to expand Pepaxti into the third line of treatment, and I will now provide a summary. The rationale behind our decision rests on four 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 compared to our current label. 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 has deemed approvable. What makes us take this decision now is that our assessment of the current treatment landscape indicates that we can now expand without compromising our innovative price level. To give you an understanding of this decision down to patient level, this chart illustrates the typical journey of multiple myeloma patients 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 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 the 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 have become filed by both the tumor, the side effects from previous treatment and comorbidities. Our goal with this Type II variation is to move that orange block to the left as shown here. If we expand into the third line, we can, in addition to our current population in fourth line plus, also treat patients earlier in their disease course. This is a comparison between our current and potential future indication. Our current indication is for patients who have received at least three prior lines and are triple-class refractory. The potential future indication would target patients who have received at least two 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 already earlier in the treatment journey. We plan to submit the Type II variation to EMA in the coming months, and we are currently preparing the regulatory documentation needed to submit the application. Initial regulatory feedback is anticipated in the second half of 2026, with a final decision from the European Commission expected in the first half of 2027. We are also starting to prepare market access processes that can be formally initiated post EC decision. This process looks different in various markets, and we will update the financial market on more specifics as we proceed. Oncopeptides is continuously working to maximize our European sales potential. For more information, I want to refer to our webcast held on Monday, which you can find on our website, where you will get much more information also about the historical context and the scientific data behind. Now let's move outside of Europe. Our negotiations in Japan have taken longer than expected with several delays during the process that has been out of our control. The treatment landscape is evolving. And from our perspective, the need for PDC becomes more and more evident in the way that the Pepaxti mode of action complements immunotherapy. We are eager to conclude a deal to bring the benefit of the PDCs to Japanese patients, which is why we have taken the decision to open up for parallel discussions with multiple partners again. Regarding partnerships for other parts of the world, we have always seen these as opportunistic. In the beginning of the year, we hoped for first-name patient sales in the Middle East due to some progress in our partner discussions and last year. However, currently, the situation is unstable in the region, and it is difficult to predict if that is still possible. Regarding our pipeline, we are now focused on our glioblastoma project and are looking for external collaborations to advance PDCs in other indications. Our PDC platform includes the assets OPD5 and OPDC3. The PDC platform is based on a smart innovation that through distribution concentrates killing power inside the cell while sparing healthy tissue. It is specifically engineered to overcome resistance pathways such as p53 mutations that often stop traditional drugs. It is now also clinically validated by approximately 800 patients treated and over SEK 25 million in sales this quarter shows that while plenty of potential remains, Pepaxti is being used today and is making a difference for both patients and their relatives. We have taken the first step to broaden the use of PDCs into more difficult-to-treat cancer by targeting new markets like glioblastoma. In the first glioblastoma study, we are working hard to initiate what we call a window of opportunity study. It is a focused study of approximately 10 patients to prove human blood-brain barrier penetration. We do this because the blood-brain barrier prevents most drugs from reaching brain tumors, but our PDCs have shown a unique ability to cross this barrier in preclinical models, and we wish to confirm this in humans before we proceed to Phase I. It is a fairly low investment that can generate the human proof-of-concept data needed to progress towards the market with a very high unmet need, estimated to grow into USD 8 billion market potential globally. The glioblastoma program has true potential to transform Oncopeptides into a multi-indication global player. In the first quarter, we achieved regulatory agreement with Swedish and Norwegian agencies for the window of opportunity study. We were granted a Fast Track designation by the Norwegian DMP, enabling an accelerated review process that addresses this life-threatening condition. We have now received the first questions and are still on track to initiate the study during the coming summer. To summarize, we have achieved 91% year-over-year growth and have a fully approved product with expansion plans that could double the number of addressable patients in Europe and the average number of treatments they go through compared to our current label. We are also strategically expanding through partnerships and targeting major unmet needs like glioblastoma. With that, I would like to thank you for listening, and let's open up for questions.

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

First question on the operating costs. Is this new lower cost base compared to the previous quarters? I calculate it was around EUR 10 million lower, the new cost base going forward?

Yes. Thank you, Richard, for that question. Well, as we announced in conjunction with the release of the year-end report, we have made adjustments to the organization, sharpening both our commercial organization, mainly in Germany and also our R&D organization and how we conduct R&D activities. So you are to expect a full year cost for 2026 that will be somewhat below the 2025 full year cost. But just as a reminder, there is certain seasonality to our cost base as well where typically, the second quarter and the fourth quarter are higher mainly due to increased Congress activities compared to Q1 and Q3. So takeaway, yes, you can expect lower cost for the full year, but also expect a seasonality in the cost base.

Very well. And a question for Sofia. Could you say something about the trend in Q2 for sales?

So thank you, for that question. We would like to refrain from commenting on Q2, but what I can say is that we had a very strong momentum towards the end of Q1, and we see no kind of differences in the market from that.

Do you still assume a slightly lower quarterly sales revenue compared with before the problems in Spain in order to reach your sales target?

So when it comes to Spain, as I already mentioned, even though we did see a small step up in March, overall, the quarter was under our expectations. And sales are obviously built by volumes. That's also why I commented on the new, important new patient acquisition in Germany, because the sales in Q2 will, of course, be influenced by how many new patients you managed to gain in the first quarter. So from that perspective, the first quarter in Spain will have an influence on the second quarter, but we are obviously doing everything we can to catch up and gain many more new patients in the second quarter in Spain, and continuing to build on the strong momentum we saw in both Germany and Italy.

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

There are a few written questions. The first one comes from Rutger, and I think you covered this, Sofia, but maybe worth a recap. How large is the third-line market in comparison to the fourth line?

Thank you, Rutger, for the question. It, of course, depends on how you are looking at the market. You can look at the value market potential overall. You can look at the potential for us to sell Pepaxti, and you can look at it in number of patients. And at this time point, given that we are still, of course, need to secure the regulatory approval and secure market access, we have chosen to look at the market in terms of the number of patients and how much sales we can gain from each patient compared to the current label, because that is the fact we have as of today. And then, of course, the potential depends on how many markets we can enter, et cetera, et cetera. But if we stay there and look at the big opportunity with this expansion, the number of patients in the third line is approximately double compared to the fourth line. And this is due to that. As I said, multiple myeloma is an aggressive tumor, and there is no cure, and there are always pacing, unfortunately, passing away between the different lines. That also means that the patients who are surviving, they are becoming more frail because they have been through yet another line, and they are more advanced in their disease in the fourth line. And that's the other aspect. So double the number of patients, and then the patients in the third line, on average, get double the number of treatment cycles. That is, we would sell double the number of vials on each patient if we would be able to succeed in getting into the third line. So it's obviously much bigger, and it's a great opportunity also from the market dynamic because multiple myeloma is a rare disease. And what we have been struggling with and what everyone is struggling with is to identify the patients, as they are so rare. And in particular, in the largest market, Germany, we have a very scattered market with few patients per prescriber, and they obviously get fewer and fewer per line. So if we take an average office-based prescriber in Germany, they may see between two to four patients of the fourth-line patients every year. If we move to the third line, they will have the double number of patients. Hence, it will be easier also for them to identify the patients because they see more of the patients. And that in itself can, of course, support potential and sales uptake. So there are many different positive aspects of this. And then when it comes to the exact potential, we would like to have more certainty, both in terms of regulatory approval, of course, but also from a market access perspective, before we give you specific numbers. And I hope that is still giving you some more information and some more ability to assess the market.

The next question is from Tom. Are you still talking to the same company in Japan?

Yes, we are. So even though we have seen all of these delays, we still have a discussion with what we have called our preferred partner. The delays have been a lot due to their internal processes and how they make decisions, but it has also been due to a couple of restructurings in the company. And that happens a lot. I mean, in the pharma industry, we do tend to restructure our organizations, but it has been unfortunate for us as we have been partly or fully been changing the teams that we are working with. And now we have such a change again. So I'm actually going to Japan now in May to meet the new team and to continue the discussions. But this is obviously slowing us down a bit. And that is why we have said we have a great opportunity. And now we are looking at multiple opportunities with the PDC platform, with all the scientific advancements and a potential expansion in Europe. So that is why we are now also opening up for other discussions to ensure that at the end of the day, we can conclude the best possible deal as soon and fast as possible, obviously. But it will take some more time. I should be honest to say that. At the end of the day, I am confident that Japanese beneficiaries deserve to benefit from capacity and that we should make that happen.

That's all the questions. Closing remarks, Sofia.

Yes. So this has been a week of very exciting news and a show of positive momentum from Oncopeptides. And I would like to thank all of you out there for listening in today, for your continued support, and as we work really hard to realize the value for both patients and shareholders in the Oncopeptides team. And by that, I wish you a nice day.