Orexo AB (publ) (ORX) Earnings Call Transcript & Summary

Welcome to Orexo's Capital Markets Day. And to say the least, this has not really developed as we had planned. The positive part is that we have more participants than we've had at any other Capital Markets Day, but they're not here in the room with me, but I just heard we have more than 100 people who are connecting in through online means. And I'm pretty sure, there are a lot of people who have -- don't have anything better to do today than to listen to one of the most exciting Swedish pharmaceutical companies, at Orexo. It does sounds like an impressive number, but I'll also, actually, have a special welcome to our field force in the U.S. because we have asked the field force to join us for this call, because you see it's a tremendous opportunity to present our digital therapies, and how we're going to work with that. And I will come back to that a little later. But both investors, who are here in the room, I will say we are within the limits of -- in the U.S. with 10 people in the same room. We are just on the border line, but I'm even more pleased to see so many people joined us online, both investors and employees. So to the agenda today, where we had hoped to present our U.S. leadership team, our distinguished partner, GAIA and Dr. Weiss, who's the CEO and Founder of GAIA, here on stage. But due to all of the travel restrictions, we are going to do a little of an experiment trying to dial people in throughout the presentation on different video connections. I will say that if we have issues with the video connections, we are going over to the phone line instead as a plan B. Our agenda is in 3 parts. The first one is with me, and we will dial in Bob Deluca, who's President of Orexo in the U.S. to talk about Zubsolv. I will talk a little about our overall growth strategy. The second part is our pharma pipeline, Johannes Doll, who is our Chief Commercial Officer, who will present our pharma pipeline, and we will have a Q&A session, where our head of R&D in Sweden will dial in together with Dr. Mike Sumner, who's our Chief Medical Officer, who's sitting in the U.S. We have -- I think, actually, our most exciting part for this session is our digital therapies. In particular, you can say, a day like this, when you see the -- there's a big value to be able to treat patients maybe on an arm's length distance. These digital therapies, I think, is unfortunately probably coming in at the right time. We have Dennis Urbaniak, who is our newest employee in the management team, who will present this again on a video link from his home in the U.S. And then we have GAIA and Dr. Mario Weiss, who will dial in from -- on a video link coming from Germany to present GAIA and their innovations. After that, we'll have a Q&A session, both with Dr. Weiss and with Dennis Urbaniak and myself. And for those few of you who are here, we will have a small buffet and some mingle afterwards. So going into the growth strategy for Orexo. First, I'll actually go to the legal disclaimer. And that's because today, we are doing something we haven't done for quite a while at Orexo. We're going to talk more specifically about the sales potential in our products. And as all of you know, and in particular, in these days, things can happen that puts -- that changes this. So of course, there is a disclaimer that there could be unforeseen events. But I think you will feel when we do the presentation that we have not been overly bullish, and I'm pretty sure if a U.S. colleague of mine have been presenting the same, they would probably put a zero behind each of the numbers. But I think you will find that we have -- I hope you will agree that we have a solid foundation from some of those sales forecast. And to take just the bull by the horn and maybe the elephant in the room, we, of course, as any prudent company, we have looked at the COVID-19 and the impact on Orexo, and just taking it from development to the financial situation. In development, right now, we don't see any reasons for concerns and delays. At the same time, we are dependent on partners from everything from clinical research, from manufacturing and, of course, with the regulatory authorities as well. And right now, it's a little difficult to see how they will deliver on the timelines. But we do feel that there is enough buffer that we can still deliver on those timelines, but of course, there's always a risk of delays. What is a little interesting is our digital therapy that we filed for in the U.S. just 2 weeks ago, vorvida, there's no need for an inspection from the FDA. So if you had had a pharma product that you filed for a few weeks ago, you'd probably be decently concerned if they can meet the timelines. But for vorvida, there's no physical inspections needed. And that way, we believe that we can still deliver on the timeline for vorvida. On the supply side, right now, we don't see any need for concern. We have a lot of finished goods. We have packaged goods. We have enough API and excipients that we can continue to supply. It's a pharma product, which I'm pretty sure is one of the last supply chains that will be impacted. Then when we come to the sales force, what we are doing right now is, as a responsible company and like most other pharma companies, we have decided our field force or health care liaisons, as we call them, should not go into the doctor's offices and risk, both getting the infection, but also to spread the infection. So right now, they have been asked to work from home and today to listen to me. And one of the positive part of this is, I have been concerned that when we get vorvida approved, we would need to pull out all of our field force to train them in digital therapy. So what do you do when people are forced to stay at home? Right now, we immediately start-up a training session on vorvida and targeting, trying to understand the local markets to understand how we're putting up the sales strategies for vorvida to basically save that time in the other end when we are going to launch vorvida, hopefully, in a few months from now. But we do have our sales reps sitting and doing calls through digital means or telephone. We have seen previously that if we, for example, have a vacancy in the field force, we have not really seen any impact on sales for the first months or so. So if this is something that the restrictions are lightened within, let's say, 4 to 6 weeks, I don't think this will have any major impact on Zubsolv sales, but of course, if this is something we should live with for the next 6 to 12 months, then it's a different situation, I guess, like any other business. From a financial perspective, we are in a situation where we have a strong cash position. I think we are, in that sense, one of the lucky ones. We have a profitable business in the U.S. If there's any short-term impact on the financials is that actually that our cost right now is shrinking dramatically because we don't have any training. We don't have any travel. We are using much less resources in the sales channels than we do otherwise. So short term, I should think this will have a positive effect on our profitability. Then we'll see how it evolves over time. But we are, at least from a financing perspective, of course, not concern for Orexo. Just taking a few steps back and looking at the last 7 years from 2012 and to today, we have moved, as I think we presented several times from being a loss-making company before we broke the ice in 2016, and then last year was a fantastic year from a profit perspective. We have a very strong cash position. And that's during this timeline, what's really been driving that has been the launch of Zubsolv in the U.S. It's right now, the strategy for us, of course, have been for the last year is how can we broaden our commercial platform, how can we strengthen our profitability? And how can we ensure that we have a sustainable business model, something we can control, and we are there today. We have a sustainable business with Zubsolv in the U.S. So going to the -- to just a short glance back on last year's financial results, we had SEK 845 million in sales. Some of that is, of course, Abstral, that you would know is not there still, but 85% of this is from Zubsolv. We have a good growth rate in the U.S., both in dollars and in SEK. The number that I'm mostly interested in and to protecting also is the SEK 351 million, which is coming from our U.S. business. And as it looks right now, we expect to see similar numbers in this year from the U.S. Our cash position, I think, I've talked about. So moving a little ahead, what are we looking at right now? We have four, you can say, strategic areas that we're working on, all based on the corner down and in the bottom left. How can we maintain and protect our Zubsolv revenue and profitability? This, of course, where all of the focus for our U.S. organization right now is our most of the focus, because soon, they will start to work on the top right corner, and that is establishing our new digital therapy. So the next step right now for us is basically broadening into digital therapy. And we are going to launch the first product just in a few months. We are expecting revenues coming from digital therapies in just a few months' time. This is a product that exists. It's a product that we expect to get approved for in Q2 and launch early Q3. We're also looking at how can we further broaden our products by -- basically, I think, right now, leveraging the opportunity we have being pretty rich in cash and see other opportunities to buy new products. And we're definitely seeing opportunities in the market at the moment. And then we are working to launch our pipeline projects. OX124 is the one which is closest. We are basically running that right now. Johannes will talk about that a little later, but we're expecting OX124 could be launched within the next 2 years. So what are the objectives for today? What I hope that you will leave with when you have listened to me and to my colleagues, is that you can make a valuation, a fair valuations of our pipeline. I hope that you will leave with the same optimism and excitement that I have around both our pharma and digital products. And I hope that you can feel that you have a confidence that we are not just Zubsolv or actually right now, I think, is one of the most exciting pipelines in the Swedish life science industry, not at least because those products are all relatively low-risk and some of them are very near-term opportunities. So these are my objectives for today, and I really hope that when you leave today that you can tick those boxes. With that, I will leave the word to Bob Deluca, who is sitting from his home in the U.S. and is going to present the growing Zubsolv franchise. Bob Deluca, please, the word is yours.

Hello, everyone. Thank you, Nikolaj. And ladies and gentlemen, thank you for this opportunity to present to you today, what is the solid Zubsolv franchise and what we see as a basis for growth as we move forward. First, I'd like to start -- next slide, please. First, I'd like to start talking about the life cycle of the foundation of our company, which is, I will hold Nikolaj until, here we go. Yes. Here we go. Okay. So once again, I wanted to just talk about the fact that Zubsolv is the foundation on what we're building as we move forward as an organization. We are looking at -- can you go back one slide, please? We're still on the well positioned for strong growth, thank you. I think it's incredibly important that we understand that Zubsolv still has 12 years of life. It is been the foundation of our organization since we launched the product in 2013. And as we talk -- as we move forward, this 12 years is incredibly important for us because it's going to be able to generate revenue and profit for our organization well into the future, fund our new products, which we're very excited to launch about. But it's also important to understand that it is a profit generator. And I expect it to continue to be a revenue generator as we move forward. So I'd like to transition over now to the next slide where I'm going to talk about year-over-year growth. And Nikolaj, referred to this earlier. But if you take a look at the slide on the left, you see U.S. net operating revenue, which has grown very nicely since we launched in 2013. And this has happened despite the fact of the increasing number of generic competitors that have entered the market. And of course, the hallmark of this event occurred last year with the introduction of four generic films that came into the marketplace to challenge Suboxone film in the marketplace, and we'll talk a bit about that in a second. But these are incredibly solid performance in net revenues despite the multitude of generics that are available. Why is that? Because of our pricing and contracting strategy and a very strong understanding of market access, a solid team that continues to work with the payers to position Zubsolv very strong versus the competitive set. And if you look to the right, the operating profit. Here, you see it in U.S. dollars, but as Nikolaj highlighted previously that USD 37 million is over SEK 351 million that he was referring to earlier. So once again, incredibly strong growth and profit growth of our organization. And just briefly on the profit growth, while, yes, it's generated through the U.S. and management of expenses, it really is a global approach. It's not only the U.S. team, it's the global finance team and the U.S. team working together, along with our supply chain folks, who are working, understanding the volumes and working to reduce our COGS. So this is a full team effort that we put together to generate revenues as we move forward. And as -- then I think is very exciting when you think about what Johannes and Dennis will be presenting later because we have the knowledge as to how to maximize our products from a sales and profit perspective. As we move forward to the next slide, I would like to point out to you market access. Market access has been the core driver of our business since we launched in 2013. But today, as we look at it, we are going to simplify our approach in explaining market access as we move forward. There are really 2 categories. It's the open business, and it's the nonreimbursed business that we're going to look at. Nikolaj introduced this when he talked about the Q4 in last year's results, but this is going to be the foundation as to how we address market access moving forward. It's important to note that open is basically where Zubsolv can compete, okay? It's where it's reimbursed, whether it's nonexclusive, which is the vast majority of the business, and I'll address that on the next slide. Or it's also the few minor exclusive accounts that we have left today. And of course, there's the non-reimbursed business overall. A very simpler explanation as to how we're doing. What I'd like to highlight though is where Zubsolv has this open unrestricted access, you could see market growth of 14%. So we're going to draft on that. A, we're going to continue to work to convert the business to Zubsolv volume and prescriptions, but B, we're also going to be able to draft on a very strong double-digit growth in the open business so far year-to-date, so thank you. And we'll move to the next slide because I'd like to here explain to you how the business volumetrically has been impacted. And let me look at the open access. And this gives me great confidence here because where we have open access, we have been able to grow, and we have been able to grow our business where we have open access despite the fact that there is an introduction of generics, despite the fact that we had a minor reduction in our overall public position in 2020 versus 2019. And we still remain at very solid position as far as commercial is concerned, with 89% unrestricted coverage. Plus if you take a look at the fact that this is the high deductible period in the United States, when it comes to U.S. insurers. I think that demonstrates our ability to focus, pull-through and deliver the messages that matter to physicians so that they can treat patients. Now in the middle, you'll see the impact that the formulary additions of generics have had at Humana and at UHC, and we also included cash because it's a very similar process. What I'd like to point out here is, while that we have seen a decline volumetrically versus the same time last year, we would expect stabilization in the near future. And in addition to that, it's important to note that this is -- these are the last major exclusive deals. So in the future, having major -- or these volumetric reductions just aren't part of Zubsolv's going forward position because these are the last 2 large exclusive accounts that transitioned over. And it's also important to remember that while generics were added, Zubsolv did not lose its preferred formulary position at either one of these accounts. So that's incredibly important. We expect it to stabilize and turn around as we move into 2020. And then finally, I mean, the unrestricted business is where we're not reimbursed, is down slightly, but we'll be able to manage that overall as we move forward and offset that in the open market. If you go to the next slide, please, we're talking here about open growth in the PBMs. And the PBMs are really the dominant area where we have to grow our business. They're very broad. I think what I want to point out here, and I'm incredibly proud of the effort of the sales force here when you look at Caremark. We are focused on Caremark because Caremark made a decision to remove branded Suboxone film from their formulary. So what did we do? We utilize our messaging, our strategy and our targeting tools and our sales force is focused on driving the Caremark business to Zubsolv. And as you can see, they've been incredibly successful in just the 2 months in driving that business to Zubsolv, and we are incredibly proud as to what's happening here. If you take a look at Prime, Express Scripts and Optum, we're still seeing growth. They're more high deductible in some of those plans as they understand it. And we want to make sure that, that unrestricted access continues, which it will. In addition to that, we know how to work with payers. So what you see at Caremark is part of a dialogue that one would imagine can happen with these other payers, depending on the economics associated with it. So again, a solid opportunity for Zubsolv to continue to grow its business and to capitalize volumetrically as we move forward. So in closing, on the next slide, what I'd like to share with you is, real quickly, we've got 12 years to address Zubsolv, 12 more years, and we intend to continue to grow it. Our team is fighting to improve market access not only in state Medicaid, but in Medicare nationally across the country. The competition will shift now that the preferred authorized generic, which is basically Suboxone film from Sandoz will shift now because that is going to end based on an announcement that Indivior put out, not happening as quickly as they wanted to. Or as we would want it to, but it is happening. We're seeing a decline in the volumes there, and we see this as a great opportunity to capitalize on Zubsolv and the consistency story with our patients. From prescription to prescription, you can always rely on Zubsolv and not be switched to multiple generic films or even films and tablets. And then finally, we see Orexo as the only pharmaceutical company, and this is true, that's promoting an oral buprenorphine in a very targeted approach manner, servicing the marketplace and providing the tools, physicians and patients need to get to that recovery and sustained recovery that is so precious in this area. So it's with that, that I'm incredibly bullish about the future of Zubsolv, and I look forward to great results as we extend into 2020 and beyond. Nikolaj, back to you.

Thank you very much, Bob, and I hate to correct you, but I think I heard 89% access in commercial, it is 98%. So...

No. I apologize. I meant to say 98%. Obviously, I'm not going to short change myself and my team.

Okay. With this, I would very much like to introduce Johannes Doll, who is our Chief Commercial Officer, who is responsible, not only for business development and bringing out Zubsolv and our other pipeline products outside the U.S., but also responsible for the project management of our pipeline projects. Johannes, the floor is all yours.

Thank you very much, Nikolaj. A very warm welcome also from me. Thank you very much for being with us in this extraordinary time, so we appreciate that a lot. So Bob has taken you through how Zubsolv continues to be a strong profit contributor of our business. If I can choose just one thing that you take away from the remainder of this Capital Markets Day, it would be this, Orexo is more than just Zubsolv. And there's some real value in both the pharmaceutical pipeline that I'm going to take you through now as well as in our new exciting digital therapeutics venture that both Dennis and Mario will talk about afterwards. So we have 3 exciting assets in the pipeline. OX124 is a powerful nasal spray naloxone rescue drug, which we have developed to reverse opioid overdoses, and specifically those from synthetic opioids like fentanyl, which is much more deadly, more potent, more long-acting. So that's a huge unmet need in the market right now. OX125 is a similar rescue drug, also a nasal spray based on nalmefene, which we have specifically designed for situations where you need a very long-acting effect, and we will get to that. And then last but not least, OX338 is an oral tablet of ketorolac for the short-term treatment of pain up to 5 days, at opioid level efficacy, but without actually being an opioid, so it doesn't come with the addiction risk. What all of these products have in common, they are fully in line with our vision of becoming the leading addiction medicines company. They're very complementary with Zubsolv. They will be great synergies with the commercial infrastructure that we've already built in the U.S, and probably most importantly, once we start selling them, they have the potential to add significant sales to our business. I will go through why these products are needed. I will talk about what makes them unique, but I'm also going to try and help you to make it easier to make a valuation, as Nikolaj said, of these assets. And I hope when I go through this, you will agree with me that we have not put out fantasy numbers as you sometimes tend to see in these types of events, but we've taken a Swedish conservative approach, and there's actually a very good reason for that because we all still plan to be around once these products are on the market. And you can actually check whether our predictions were right or wrong. And in that scenario, of course, we would like to over-deliver as opposed to under-deliver. So let's start with OX124. Of course, you're aware there's other naloxone rescue drugs already on the market. They are great products. They save a lot of lives every day, but they were developed at a time when America was facing a heroin crisis, and it was not yet foreseeable that the heroin crisis will turn into a fentanyl crisis. And that these rescue drugs would struggle with the potency and also the long-acting nature of the synthetic opioids. And this is exactly what we have developed with OX124. It's something that is stronger and longer acting, so it has the potential to reverse overdoses, irrespective of what type of opioid has caused the overdose. For the first time in a very long time, we have seen the number of death from opioid overdoses go down in the U.S. This is 2018, which is the latest national data that is available. So is this a reason now to declare victory in our fight against the opioid epidemic? No, of course, it's not. It's, first of all, only down by 800 cases, still 47,000 people have died of opioid overdoses. Second, it's a very scattered picture. So in a lot of the U.S. states, you still see these numbers go up. And thirdly and most scaringly, the number of death from synthetic opioids, again, like fentanyl, at an all-time high, and there's absolutely no indication that this trend will reverse anytime soon. And if you look at this little picture, you see why this stuff is so deadly. It just takes very, very little to kill you. And fentanyl today is being mixed into heroin. It's being mixed into cocaine, other drugs. So you never know exactly how much is in there, so as an addict, you're actually dicing with death with every single dose that you're taking. The 47,000 people that have died is, of course, only the tip of the iceberg. It's the most visible symptom of this crisis. But for every person that dies, of course, there have been a number of overdoses where the patient could likely have been rescued. So our best estimate is that between 1 million and 2 million doses of these naloxone rescue drugs were administered last year. And we also see one thing that is very typical for emergency markets or rescue drug markets, in general, only a fraction of the products that gets sold actually get used. So if you look at the number of doses that got sold last year, it's 10 million. And of course, as you would expect, in the midst of a crisis, the demand for these products has increased sharply. So the 10 million we saw on the previous slide are up from 6 million only 2 years ago. So we are looking at a market that is growing at more than 30% a year. The brand that has benefited the most from this dynamic is NARCAN nasal spray, which was introduced to the market by a company called Adapt Pharma, which went on to be acquired by Emergent BioSolutions for $735 million, which is a good -- pretty good price for a one product company. It's sold for $280 million last year, and it continues to grow, even though, Emergent is a bit conservative on their official guidance. If you do a little research and you come across market growth numbers that are even north of the growth that we are seeing today, it's because of this mandatory co prescription. So what is that? It makes a ton of sense to give these rescue drugs not only to opioid addicts, but also to pain patients who are on very high doses of opioids because there's a real risk that they will accidentally overdose on their pain medication, just because the doses are so high. And 9 states have already implemented legislation to make this mandatory. Still, CDC is estimating there's between 15 million and 20 million patients that fall into that risk category and should have a naloxone drug. Today, it's only 5% of those actually getting one. And if you look at what happens, if a law is implemented in a state to make it mandatory to co-prescribe naloxone rescue drugs together with these high dose opioids, you can see it on the right side here, that's an example from California, but we see the same effect throughout. So immediately, when the law gets implemented, the volumes jump to 10x the level, then it levels off a little bit after the initial stockpiling. But even in the steady state, you still have 4x the volume of the pre legislation volumes. So the more states coming on board and implementing legislation like this, and there's a lot of states working on that, the more you will see this market accelerate. Of course, we are not the only ones who have figured out that this is an attractive market. There's quite some competitors out there. Today, the markets consists of NARCAN Nasal Spray, the market leader that I've talked about. There's actually a Teva generic approved for Narcan. But that case is still in the court, so it's unclear whether they will be allowed to launch this product before the Narcan patents run out in 2035. There's also a auto-injector, which plays a very limited role, very low market share, and there's a number of cheap generic injectables also. If you look at the pipeline, there's quite some activity there. There's like 3 or 4 projects that are as advanced as we are, a little bit more advanced, there is one nasal spray that is currently being reviewed by the FDA. There's another injectable that got rejected by FDA last year. So let's see what happens with that. And then Emergent also has announced that they will complement NARCAN Nasal Spray with 2 currently clinical stage development products. Here's why we are so confident that we will stand out despite the competition that you've seen on the previous slides. We have tested OX124 in a human trial head-to-head against NARCAN Nasal Spray, the market leader, and we've beaten them in all dimensions. We've seen faster uptake. We've seen higher peak and we've seen longer duration. And what we hope this will translate into in clinical practice is that we will be able to save more patients with the first dose. Today for roughly 1/3 of the patients, one dose of NARCAN Nasal Spray is not enough, you need 2 or even 3. And we're also hoping to avoid more re-narcotization or second overdoses. So that means if you bring a patient back to life, and the naloxone wears off, you still have enough fentanyl in the blood to collapse again. And of course, the longer-acting your risky drug is the less likely that is to happen. Here's another reason to believe in the success of OX124, the fastest-growing segment in the naloxone rescue drugs is the retail segment. So these are doctors' offices prescribing those products to their patients as opposed to institutional sales where you sell to first responder, schools, et cetera. And among the competitors that we've seen, we are actually the only ones that already have a retail field force in place. We have 51 sales reps that are knocking on hundreds of physicians doors every day and sell Zubsolv, so these long-standing relationships that they've built over the last 7 years, of course, we can leverage them once we bring this product to market and gives us a little bit of a head start. So what can we expect in terms of net sales? We have a market that is growing north of 30% today. We have further upside from these mandatory co prescriptions that several states are working on. In this market, we have a highly differentiated asset. We are going to have a better PK profile than the current market leader. It's a bit of a home advantage also because it's opioid dependence, and this is all we've been living and breathing for the last 7 years. But even if you take a very conservative approach and say, this market will only grow 10% a year. Again, it's growing 30% and more today. And in this market, only 1 in 10 rescue medication is going to be from Orexo despite the differentiated profile, then you're approaching a $100 million product, which is north of what Zubsolv is actually selling for today. We're looking forward to the last big milestone in the development of our pivotal trial end of this year. Keep in mind that the regulatory pathway for these products is relatively simple. So you don't test this in actual overdose patients that would not be ethical, of course. But you only, only have to show that your PK profile or your blood levels are in line with a reference product or in our case, faster, stronger and longer, which we've already shown with a very big margin in our first human trial, so we're very confident that we will show that again. If that goes well, we will file in the mid of next year and are looking at a launch in early '22. Let's move on to OX125. Again, we are talking about the nasal spray. Again, we are talking about the rescue drug to reverse opioid overdoses. But this one, we have specifically designed where -- for situations where you need a very long-lasting effect. For example, if you happen to live in an area that is quite remote, and the travel time to the next hospital is quite long. Like naloxone, nalmefene is an opioid antagonist, but the molecule is inherently more potent. There's a higher receptor affinity. But it also has a longer half-life, hence the longer duration. And there's a couple of situations where this could be valuable. One, I've already mentioned, remote areas. But also the drugs that we see being sold and being misused on the street are not staying the same over time. So one thing that we are, for example, observing in the streets of Philadelphia these days, is the emergence of an oral fentanyl formulation, almost pharmaceutical-grade that the Mexican drug cartels seem to have figured out how to do that. And that seems to be extended release. And of course, we don't know whether that's the beginning of a trend. But in general, if you have longer-acting drugs that are being misused, a longer-acting rescue drug, of course, comes in handy. What comes on top, Homeland Security in the U.S. is considering to reclassify fentanyl as a weapon of mass destruction. In other words, they're afraid of a terror attack with fentanyl with potentially many fatalities. And in a situation like this, where you have a lot of people who are usually not taking opioids exposed to very strong opioids, maybe over an extended period of time, and it takes a while until everybody gets medical care. It would be a good solution to have a stockpile of nalmefene in strategic places to be prepared for such a scenario. If you look at the pipeline, it's much less crowded than for naloxone. There's currently no nalmefene-based rescue drug being marketed. There's 1 or 2 other projects underway, and our little box is actually just about to move to the clinical column as we are starting our first human trial next month, actually. It's a little bit difficult to predict how it will play out between naloxone and nalmefene. There are strong believers in nalmefene, who will say, nalmefene replaces naloxone as soon as they hit the market. There's believers it’s the other way around. Usually, it correlates, of course, with where they have placed their investments. Currently, we are of the opinion that nalmefene is the slightly smaller opportunity. You see net sales levels of roughly half or a little more than half then for OX124, but in either way, we are convinced that the best strategy for us is to have a candidate in both segments, so we can benefit in either scenario. As I said, we are moving into the first human trial just next month, and then we can leverage a lot of the learnings from OX124 because it's actually based on the same technology platform, and we are roughly following 1 year behind, looking at a launch in early 2023. Last but not least, let's have a look at OX338, and the idea here is really very, very simple. The best way of avoiding opioid addiction from happening is to prescribe less opioids because for a lot of addicts, the addiction started with legitimate pain prescription after a car crash, after a work accident, et cetera. And here, we are really trying to develop something that can deal with that pain, short-term pain of up to 5 days at opioid level efficacy, but without being an opioid, so you don't have the addiction risk that would come with it. And you would be surprised in how many situations, despite the crisis, opioids are still being prescribed in the U.S. unnecessarily. Of course, and that you see on the left, opioid scripts are coming down. But it's still a $5 billion market, and it's actually the highest per capita prescription in the world still. And then you look at the right, if you have a surgery in the U.S., and they have looked at 4 different types of surgeries in this study, you have a 75% chance of leaving the hospital with an opioid. In Sweden, that same number, same procedures is 11%. And now I'm sure part of this is Viking heritage and a high pain tolerance in Sweden, but it's also very clear that not all of these opioid prescriptions are medically necessary in the U.S. or look at the other example. Here, they've looked at teenagers who got their wisdom teeth pulled. In the U.S., unfortunately, it's still very normal to manage that pain with opioids, which in Europe is unheard of. 6% of these patients within the 12 months after the procedure, 6% were diagnosed with opioid use disorder. And this is where it's getting really absurd, because nobody should become a drug addict because they got their wisdom teeth out. And this is where ketorolac comes in. It's by no means a new invention. It's an old product. Some of these publications, as you might notice, are very old, but they show the same thing. Ketorolac has been shown over and over again, as effective as different types of opioids. If used for the short-term treatment of pain of up to 5 days. You have studies in dental, you have studies in surgeries and injuries, very consistent pictures. Ketorolac is as effective as opioids. If you're looking at the options of ketorolac products in the market in the U.S. today, you have the choice between 2 options that are both not great. On the one hand, you have the only branded products, Sprix Nasal Spray comes at a price of $1,600 for a 5-day treatment. It has a lot of administration site irritability. That means your nose burns a lot when you use it. And it's just, in general, a very inconvenient products because it needs to be refrigerated. On the other hand, you have the old generic tablets. They actually require the first dose to be given as an injection. And that somewhat limits the settings where you can get ketorolac because not all doctors feel comfortable or are even equipped to give this injection, it's much easier to write a script for opioid tablets. And what we are developing is an oral tablet that you can start with. So you don't need this upfront injection. And you will have much less of this patient discomfort, so clearly the superior choice. Some activity in the pipeline, but if you look at the other projects that are underway here, they are quite different product profiles, and they are targeting the in-hospital market. So you have things like infusion bags and others, which is not what we are looking at. We are looking at situations after procedures, after surgeries, et cetera. So we are pretty alone from what we can tell with our product concept. These are the results of our first human trial that we have done last year. We have tested our formulation against Sprix Nasal Spray. As you can see, we have managed to have faster uptake and a higher peak. So we are quite confident, we're very confident that we have a product with all the good properties. The work now is on optimizing the formulation, so we have something that is commercially viable and has solid IP protection. The simplest way to predict sales for this product would be to say, okay, this has the potential to replace a big chunk of what's today a multibillion dollar market, which is opioids, and that's not wrong. Still, we felt more comfortable looking at it from the other way and say, what are situations where opioids are being used unnecessarily today? And there are a lot of dental procedures where that is the case today. There's also a lot of, for example, ambulatory surgeries for that, where that is the case. Now the big question is how many of these patients can you transfer from opioids to something like ketorolac? And if you look at the statistics between Sweden and the U.S., it could potentially be a lot. But if you only believe in, say, 5% of patients not getting opioids, but ketorolac instead in the future, then you're actually looking at multiple hundred millions of dollars, which is, of course, multiples of what Zubsolv is selling for today. So to sum this up, 3 very differentiated late-stage asset, all of them, very exciting. All of them are very much in line with our vision of becoming the leading addiction medicines company, all of them in an area that has high unmet need, is also an area that we know well from our experience with Zubsolv. It's very complementary with our U.S. infrastructure, so we will have significant synergies. And probably most importantly, once we start selling in the year after next, we are looking at sales potential for all of them in the area of or multiples of Zubsolv today. So with that, thank you for your attention, and I'll open it up for your questions. Sorry, there was one question here. Do we have a microphone? Or... Otherwise, just ask your question, I'll repeat it.

Just to remind me about the mode of action of ketorolac. I mean I've got time and time again that there is not an addiction risk for various -- I'll start from the beginning. Could you remind me about the mode of action of ketorolac? And especially interesting is the -- that it is not an addictive drug since, during -- my experience that, is that many of these drugs are early on was said to not be addictive, has proven to be addictive when there is sufficiently experience of it.

Yes. So probably the most qualified person to answer that question is Mike Sumner, who's on the phone, who's our Chief Medical Officer. The short answer is, as you said yourself, it's not an opioid. Ketorolac falls into the family of [ insights ]. So pain killers that especially in Europe, we are very much used to that have been used for decades, and we've not seen the abuse potential, we've not seen the addiction risk from that. But Mike, if you're on, then I'll leave the word to you.

What you said, there's been no evidence that I've seen about ketorolac or other nonsteroidals demonstrating any addiction potential, I think also for ketorolac, we have seen that it is limited to 5 days post-surgery. And so that also helps in the clinical situation with limiting exposure to any patients.

And what would happen if I just chose to continue with ketorolac for whatever reason?

So certainly, in the United States, ketorolac carries a black-box warning, and that is primarily because of GI side effects with an increased risk of bleeding. And so obviously, as we would launch a product like this, we would educate our sales reps and the physicians that we called upon to prescribe the product appropriately. Obviously, physicians can continue to do things in off-label way, but I think the clinical data that we would generate and the way we would position the product would only go to support this product for short-term usage.

Anything from web? No questions from the web? No.

We have one question lined up on the phone so far. [Operator Instructions] The first question comes from the line of Samir Devani at RX Securities.

I just got actually a few questions on OX124. And I don't know whether I missed it on the webcast or not. I just wanted to confirm that you're still on track to start the pivotal study in the second half of this year? And I'm wondering whether you perhaps now could provide some details on the potential design of that study? The second question is then really just on, you presented the PK plot by availability plot. Was that the same dose used as Narcan? And then the final question is just on note that Perrigo settled its patent or patent case with Adapt. And I'm just trying to understand why you feel you would not be infringing Adapt 253 patent?

Yes. So I will team up with Mike Sumner again in answering these questions. The first question on your -- on the timeline, will we still be able to meet the timeline to have our pivotal trial end of this year. As Nikolaj had said in the beginning, there's currently no reason that we can't. So we are still working against that exact same timeline. Of course, we are all aware that we are in an environment where predictions can be very old, very quickly. And as Nikolaj said, we are working with several partners that help us produce the clinical trial material, that help us with the stability studies, that help us with all the preparations that need to happen before this trial can happen. So far, all of this is on track. Of course, we cannot be 100% sure that none of them will temporarily close down or see any delays, et cetera. So nothing of that is visible yet. But of course, in these times, I -- we have to be a bit cautious, but so far, no reason to believe in the delay. Maybe the part of the question that was about the trial design, I can hand over to Mike, who's probably the most qualified to answer that.

Yes. So your question on comparing OX124 PK profile with Narcan, I do believe that was a very similar dose. We are still in discussions with the FDA with regards to what we feel the optimal dose actually is going to be for OX124, as when you actually look at the data from naloxone, there is actually a wide safety margin. And so we are trying to come up with a product that will offer the highest efficacy while still maintaining a good risk-benefit, hopefully, for the product. And so that will -- we will have to inform you about in the coming months.

Mike, I think there was a question around how we are going to design the pivotal trial also end of this year? Do we have, Mike? Michael?

Sorry. Yes, so we'll be designing the clinical trial in a very similar PK 505(b)(2) approach, making sure that the doses we select are well within the boundaries of the PK profile, of the reference listed drug, so that we can use a 505(b)(2) approach to approval.

Can I just ask -- supplement that question. So is it likely that you'll have all that pivotal involved multiple doses?

I'm sure we will include more than 1 dose, but I don't think, based on the early data, we would need to include too many different doses.

That's great. And then maybe just a comment on the 253 patent.

Yes. I can take that. So it's true. Perrigo had filed a generic that got settled. I think they can launch in 2033, somewhere in the ‘30s, so that they got 1 or 2 years compared to that, when the patents run out. This is, of course, a space where IP is incredibly important. And the Narcan patents, if you've done your research, are quite broad. We are very sure that we do not fall into those same patents. So we're not infringing them. The problem that I have is that we have an IP that is pending, a patent that is pending that has not yet, I guess, been granted. So I cannot specifically talk about what makes our formulation unique, so that it does not infringe the Narcan patents. But that is actually -- that's maybe also, frankly, to be very honest, why we are a little late compared to some of the other competitors because we have done a lot of thinking upfront into the IP, and how to set this up because it was very foreseeable that a lot of the products that are on the way will at least end up in court with, today, Emergent and Adapt, as you can see from the Teva example, as you can see from the Perrigo example, and then there might be others in the future as well.

And our next question comes from the line of Klas Palin of Redeye.

And my first question is related to the current situation with COVID-19 outbreak in the U.S, and what kind of effect do you expect to see in the coming weeks when it comes to renewal or prescriptions? And if you -- do expect this to come down? And I also have a question, it will be very interesting to hear your thoughts about the strength for the Narcan brand. And if this will make it very challenging for you to be a new product on the market?

Yes. So it's the -- mic back, yes. So maybe I start with your first question, are we anticipating any effect on sales with the current situation? So as Nikolaj said, our field force is currently grounded, which, of course, is not the greatest situation to have. We have that in common with a lot of other -- all other pharma companies. We are using the time effectively, as Nikolaj says. Right now, we don't know how long this situation will be the case. If you look at historical data, when we had, for example, a sales rep leaving in a certain territory, and we didn't have anybody for 4 weeks, 6 weeks, 8 weeks. Usually, we didn't see a great impact of that. So in the short term, we are fine. But of course, there's a reason our field force is there because they drive sales, and we very clearly see a difference where we have a rep in the territory versus where we do not have a territory -- a rep in the territory. So if the situations were to continue for, say, month, next half year or so, then, of course, it's a little difficult to predict what will happen. Does that answer the first part of your question?

Yes, kind of. But I just wonder, also, if you do see opportunities for the patients of renewal, the prescriptions, and in new ways than meeting the physicians or nurses, in any ways, this does have to meet in person.

Johannes, can you hear me? Can you hear -- this is Bob Deluca. Can you hear me? I'd like to weigh in. The comment is Zubsolv is a Schedule III product. So a physician can easily call in a renewal prescription or a group of renewal prescriptions for a patient directly into the pharmacy and/or send a prescription electronically and/or via the mail. So we don't see it as a major issue as far as patients continuing their Zubsolv treatment. Good question, Klas. Thank you.

And then there was a -- if you switch back the mic. Then there was a second good question around the strength of the Narcan brand. You're exactly right, Klas. That is one thing that Adapt, at that time, has done very smartly to acquire the license to the brand name, because in the U.S., Narcan is more or less a household name and synonymous for these rescue drugs as a class, as you sometimes see that. At the same time, what we're also seeing is, while it is a household name, it is not the best drug to respond to the some of the new challenges that we are seeing in the market with fentanyl, which is more potent, more deadly, longer acting. And I'm very convinced that if you come in with a differentiated product profile that just, in clinical practice, hopefully, shows that we have a higher chance of rescuing patients from their overdoses and rescuing more patients with the first dose and avoiding more of the re-narcotization, then there's absolutely a space for that product because it's very, very differentiated. And as you've seen in our sales forecast, we are not expecting to completely replace Narcan, that would probably not be realistic, but we have shown scenarios in the area of 5% to 15% market share. So we're not -- well, maybe based on the product profile, we could be more self-confident, but we've been relatively conservative, I think.

And also a sort of follow-up. The co prescription legislation that has been implemented in some states in the U.S., how does that work? Could you be -- would it be possible -- is it the pharmacy that decides which product that should be prescribed or maybe you can explain?

As being prescribed by the -- so you're in treatment with your pain doctor, and you have such high pain that you require opioids at a certain threshold, and the threshold is different for different states. So it's usually a certain number of morphine equivalent. If you're above that, then the law says it's mandatory to also prescribe a naloxone rescue drug. Today, there's no nalmefene. So let's see what happens in these legislations when nalmefene is on the market. But there's no -- you're not being forced to prescribe just one brand, so the doctor is free to choose between the options that is available. So that's why we are hoping when we are coming with a differentiated profile. And we are out there meeting these doctors, we're hoping that a lot of doctors will decide for the Orexo brand.

And there are no further questions on the phones at this time.

Thank you very much. Then, I will hand the word back to Nikolaj.

Okay. Thank you, Johannes. So I hope this -- for me at least, I think this is -- was a great presentation of our pipeline. And I hope all of you share our optimism about the potential that we have with our pharma pipeline. Now we're moving into the digital therapies. And Dennis Urbaniak will take us through why we believe this is a super exciting area for Orexo, both in the U.S., but we actually also keep the rights to one of the products in Europe and/or actually globally. So now we see if the technology works, and we can get Dennis in from his home. So like all of our U.S. colleagues right now is you're not allowed to drive around the New Jersey, are working from home.

Dennis is not really ready on the line, yet.

Okay.

We're a bit early in schedule.

Okay. Then we take us -- then we take a short 5-minute break. So -- then we will get it, as we're a little ahead of schedule. And I think as we are anticipating to do this in person, we, of course, had a small leg stretch in the agenda. So we will be back in about 5 minutes. [Break]

Okay. Welcome back to all of you, and I hope all of you who are following us on our video stream, I bet also, you have time to take a coffee. We have to improvise a little due to all of the changes in the agenda and also location of people. So I will once again do my best to introduce Dennis Urbaniak, who is working more or less 24/7 to prepare our launch of digital therapeutics, which definitely is right on time right now in the strategy we have around COVID-19. So Dennis, I hope you're online and can take us through the presentation of digital therapeutics.

Absolutely. Thank you very much, Nikolaj. I'm excited to have this discussion today. And if we could go to the next slide to introduce -- I think the first thing with COVID-19, what we see is really digital therapy, new digital channels being put in terms of -- into the forefront in terms of new tools and alternatives in the marketplace. If there is any silver lining in this new environment that we have in place today, it's -- I think it's going to accelerate digital therapeutics from a period of emerging to become more of an actual standard as we go forward, which is significant. So if you could go to the next slide, please. Imagine a very short period of time forward, where we have an opportunity for patients who are suffering from alcohol misuse or problematic drinking, have access to a brand-new digital therapy called vorvida, a therapy that's covered by their insurance plan and a therapy that enables them to take the steps they need to change their drinking behavior in a private personalized setting. Imagine also a time where a physician has this new tool available in their toolkit, a chance to provide much-needed counseling, which is so hard to actually meet the demand in terms of qualified counseling and the supply today. And an ability to deliver this top standard canceling -- counseling at scale to so many patients that may not be able to get it today, as well as, for Orexo, as we've done on the pharmaceutical side, with the great execution you've seen from Bob, and the exciting pipeline that Johannes presented, to now add digital therapeutics as the complete core in our ambition to become a total leading company in the treatment of addiction. This imagination is something that we can realize. It is on track, and I'm very excited to take you through this and describe why this is going to be an important contributor to the Orexo growth, and ultimately, an important contributor to how you evaluate the company. So on the next slide, we are going down a path of bringing digital therapeutics, high-quality digital therapeutics to the marketplace. What you see here is an overview of digital health, this is an emerging area. There's a lot of interesting categories, but Orexo has made the commitment with our partners at GAIA to focus on digital therapeutics. And specifically, we've done that because the difference with the digital therapeutic is, it's a high-quality, evidence-driven standard that goes through regulatory pathways and meets significant unmet need in a category where it's been demonstrated in the market. So we are not just simply putting out interesting apps that we hope people will start to use, we're pursuing this with the same rigor and discipline that we would with an ethical pharmaceutical, but doing it as a digital background. And on the next slide, what you see are there's some very encouraging trends in both the U.S. and in Europe around the acceptance of digital therapeutics. First, on the left-hand part of the slide, you see the regulatory triggers. In the U.S., the FDA has put together the digital health pre-certification program. This is a chance for companies to join and demonstrate their capability in digital therapeutics, meeting the FDA standards, but moving much quicker to bring products to the marketplace, moving at the speed of digital, which is a huge change for pharma companies. On the bottom, you see the DVG, and you're going to hear more later when Dr. Weiss from GAIA speaks, but this was a significant unlocking access and mandating access for digital therapeutics in Germany, a market that's been a leader in this space for quite some time. On the right, you see the 2 largest pharmacy benefit managers, and you heard from Bob earlier about the importance of these entities in the U.S. in terms of providing formulary access and market access more broadly in the U.S., and what's encouraging here is both ESI Express Scripts and CVS Caremark have taken the time to put together their initial preliminary digital therapeutic formularies and are starting to select specific products. And so these trends are encouraging. But on the next slide, however, you'll see that by no means are we calling this a mature market, we are still in this emerging stage. As I said in the opening, I think our current environment will definitely accelerate this. But what's so much fun about working in the space, and why we're so confident that we will be a lead contributor is that this category, you have to commercialize differently. You can't follow a traditional pharma model. You have to look at different ways to provide content to realize insights and really bring solutions to the marketplace. Pricing and reimbursement are still being established. We have some benchmark examples that I'll show you here. However, the mechanisms to create value, both in terms of how it's exchanged and how it's realized, are quite broad and variable can be adapted to specific market and specific payer scenarios with over 2,000 payers in the U.S., it's incredibly important that we can be more precise there. And finally, the technologies themselves, we have an opportunity to look at some early entrants into digital therapies, where perhaps they were very focused on the technology and the engineering, certainly something to be proud of, but the real opportunity here is, to remember, we're an addiction company. We're here to serve patients, providers and payers working to improve addiction around the world. And technology will happen to enable that, but it's really the patient-focused solutions that are going to make a real difference here. So on the next slide, a little bit of more detail on one of the key foundational components of what will be our success criteria for digital therapeutics going forward. And it's establishing a pricing and a payer model. And right now, there's 3 general categories that you see here. We have on the top that what would be viewed as the traditional drug path to market from a reimbursement perspective. This is reflective in the example I shared with ESI and with Caremark, where there are some instances where these digital therapeutics, because they are as effective as drugs or might be combined with drugs will be evaluated that way. On the bottom, there are alternatives for direct-to-patient models. Because of the nature of the product, we'll see this when we look at vorvida as a potential opportunity. But the middle is really key because this is where we see a great opportunity for us to be a leader as a company in shaping new types of alternative payment plans, value exchanges, if you will, that explore not only pharmacy benefits, but medical benefits, as well as different types of value-based or even outcome-based arrangements as we go forward. So again, think of it as with over 2,000 plus payers, we have that understanding of how those payers operate. Now digital therapeutics gives us a chance to really align our value exchange with them in ways that we've never been able to before. And that's extremely exciting. It's also a lot of work that we're confident with the expertise our team has that we can deliver on. Here, what you see is the current price points in the marketplace with a subset of some existing digital therapeutics in the addiction space. There's a wide range here that you see, and I think that's the point of the slide. Depending upon the clinical sophistication of the asset or the evidence base behind it, as well as the pricing levels that are in place today. We see a fairly broad window here in terms of our price points, roughly USD 600 to USD 1,000 per treatment. This is an area that we're researching and putting into place. We'll evaluate this for each of our digital therapeutics. And you can see that we're going to come on the high end of the evidence. We want to bring the right value that goes along with that. But as I mentioned on the earlier slide, we have a chance to deliver that value and be much more flexible to accelerate the access position, and that's really going to be our focus is profitable access, a broad access that recognizes the value of our assets. And so if you look at the market on the next slide across the board, when we step back and say, digital therapy has the potential to become an important tool in the treatment of addiction. The reason I'm so excited to join Orexo to work with the team to help build this business is, I can't think of a more meaningful category than the space of addiction to demonstrate the benefit that digital therapeutics can bring. The stigma is still significant. There's massive unmet need. As you saw very clearly from the earlier presentations from all the presenters and even in the Q&A. And we can actually characterize that value in very clear real-world terms now, in ways that we've never been able to before, as well as the corresponding value that we can deliver to the health care system. So we believe with the continued execution of Zubsolv, the incredible pipeline that Johannes showed you and the addition of this new growth and new category of digital therapeutics, this will really accelerate us to realize that position of being the leading company in addiction going forward. So let's jump into the assets. On the next slide, this is how we're going to set our capability, build our business, if you will, in a way that's going to be differentiated and to really ensure that we deliver on the opportunity in front of us. The first thing is everything we do is going to be grounded on real-world patient journeys. We have data and analytics today that allow us to see this in ways that we never could before. But those insights, that experience, that patient-focused approach is going to be significantly different. Yes, we will have amazing technology behind it, but what will lead us is the patient insight. We'll support that with evidence. Peer review, randomized controlled trial evidence, that's why we have a partner like GAIA, who's got decades of experience delivering top-quality evidence. And we will pursue appropriate regulatory pathways. Obviously, our immediate focus right now is in the U.S., our dialogue with the FDA. We will ensure that we have patient-driven solutions with strong evidence that meet the regulatory standards and are appropriate for the category and the specific area that we work in. And again, with our deep expertise with the infrastructure that Bob's built in the U.S. in the OUD space, we are very uniquely positioned to deliver on this. And so these are the building blocks of the foundation of how we're going to be different, but also how we're going to deliver the value for the company and for our shareholders in digital therapeutics. The next slide is the specifics on how we're going to get started. So again, we have our partner, GAIA. I'm very excited that following my talk, you're going to hear from Dr. Weiss, a true leader, an expert in this space. And we have vorvida and OXD01. And we're going to go into detail on both of these, but a couple of things. First is, vorvida gives us a chance to really fully automate and bring a private experience around problematic drinking that simply doesn't exist in the marketplace today. So this is a new area, an adjacent space that's very exciting. I'll show you some of the valuation, as Johannes did on the pipeline, but you can see there's a meaningful opportunity here. And OXD01 is essentially digitizing counseling at scale, providing the assisted therapy in the standard of care, which is medication-assisted therapy for patients suffering from opioid use disorder. So let's get into the products a little bit more specifically. The way we're going to commercialize each of these assets and all of our corresponding assets as we build out the pipeline is a very disciplined approach, an approach that looks at an insight-driven strategy, precision targeting. These are not mass market opportunities. These don't come with the mass market investment levels, but more importantly, the experience needs to be highly personalized, and it needs to be triggered at the time when the need is the highest, both for the patient and for the physician. And so we're going to use data and analytics and insights to drive this very precise, specific marketing content. It will be enabled by our field force, existing field force, of course, but we use a lot of other digital channels and surround sound channels to do that. This allows us to measure value in the real world. Again, it sets up those new types of contracting opportunities, and it gives us a way to measure, not only upfront customer engagement around how they respond to the awareness and the interest but how we keep them engaged over time to realize the outcomes that the evidence shows that our assets will drive. And finally, we're going to do a lot of test and learn here. And as we do that, we can learn much faster than normal pharmaceutical timelines because we can read the response much quicker with digital therapeutics, and we can optimize our resources, which means as an organization, we're making the right investments, being very responsible with those investments and putting them in the most productive areas that meet the patient needs and drive the value for the company. And some of those investments are outlined here. So as you move across, we're starting building with a couple of core capabilities. These are things that we'll have to do certainly for vorvida and OXD01, but the full digital therapeutics engine, if you will, going forward. Things like our e-commerce infrastructure, how we will facilitate onboarding, payer reimbursement, first-line customer support, the kind of platform opportunities around data warehousing, on the marketing side. So -- and you can see, we've already made a significant commitment to invest in our engine. Our engine goes to work immediately for vorvida, which is our first launch. And right now, we are deep in launch preparation. We're very excited. We have market research underway right now. I'm going to share some exciting quotes we're hearing. But there's a lot we're doing to ready the market for vorvida when it comes. And then finally, we will have the launch of vorvida, and I'll share that timeline. So we're making strong investments, responsible investments in the building blocks that are going to really drive our core business and our specific assets, starting with vorvida. So let's get into those. With vorvida, the first of our GAIA-partnered assets. This is the product at a glance and the significant unmet need here, alcohol misuse, troublesome drinking. Today in the U.S., really the only opportunity you have is kind of full abstinence and go-to programs like Alcoholics Anonymous, certainly highly effective good programs, but there's a significant amount of individuals, who may not be ready to take that full step to abstinence or may not want to take the public joining a group like that, but would have problems from drinking that they need to curb. Vorvida is perfect, and it has the evidence and the professional standards behind it to drive a difference. We're going to establish vorvida as the leading digital therapeutic for people suffering from alcohol misuse. And this is going to provide a financial opportunity for the organization, you can see in the upwards of USD 200 million net sales. Specifically, let's break that down and look at the potential. On the next slide here, this is the latest data from the U.S. that looks at characterizing alcohol misuse. From the top, you can see the amount of individuals that participate in binge drinking, which would be 4 or 5 or more drinks in one sitting, depending upon male or female. You can see a very sizable population there. Our initial focus is going to be in the middle bucket and the bottom part of the triangle, which -- the 16.6 million heavy alcohol users and then the 1.5 million in treatment. The difference between a heavy alcohol user and a binge drinker is essentially, a heavy alcohol user is someone that binge drinks in 5 or more occasions within the last 30 days or on a monthly basis. So the frequency is significantly higher. And there's a significant amount of people here that have this problem, as you can see from the numbers, but very few are receiving treatment because there's not a lot of good options, and people are not necessarily ready to move into more of these public programs, again, positioning vorvida perfectly. And let's take a look at what vorvida is. So the next slide here is a quick look. This is a digital therapeutic. The wonderful thing about the assets that GAIA constructs for vorvida, and you'll see this in OXD01, is all you need is a browser. It's a very simple, self-contained, highly personalized treatment experience. This is a 6-month treatment platform. It's anchored in cognitive behavioral therapy. And clear to our commitment of evidence, it's been studied already in over 600 people in a randomized controlled trial. So a simple experience, a personalized experience, founded on the gold standard from a counseling point of view, with evidence behind it to demonstrate the impact. And the next slide here shows you specifically what that impact is. So from the randomized controlled trial, what you see here is on the graph, you see the control group and the vorvida group, and what we're looking at here is significant reduction in alcohol consumption. Remember, this is not necessarily targeting people that are going to have to go to full abstinence, but simply individuals that want to change their behavior in a significant way. If you will move out of that heavy drinking category, moving away from that binge drinking category. And the evidence here is quite clear, and it's very compelling. Vorvida demonstrated a marked difference and at 2 key takeaways, not only after 3 months, but after 6 months as well. So the benefit continues, showing that we can digitize the high level counseling and make an impact to make outcomes that really are meaningful. And this is why we're so excited to lead with vorvida. The next slide shares a couple of thoughts from the market. We have almost around the clock market research interviews going at this point, started last week, rolling through this week. We're talking to doctors. We're talking to patients, we're talking to payers. I've taken a few snapshots here from some of our early provider insights from a primary care physician, a specific therapists that deals with substance abuse and a psychiatrist. What's interesting, if you look at from the PCP, who really honed in on this idea, this is a private therapy, something that my patient can do in the privacy of their own home, that's significant. And the endpoints are really amazing. To the therapist that says, when I know what cognitive behavioral therapy means when done properly. And if this allows me to have access to that at scale, that's very compelling. To the psychiatrist that says, I like this. I like the fact that it's going through a regulatory pathway. But it also points out, we also have some work to do in terms of education. People are willing to admit that they're -- they have a problem. And if people are willing to use a smartphone, again, what's nice to hear, and what we show this individual is, yes, if you can use a phone, you can also use a tablet, you can use a PC, so you just need a browser of any kind. So very encouraging initial feedback, a lot more work coming as we get to view the marketplace. But we're very excited about the potential that vorvida brings. When you look at the unmet need and the initial market response that we're seeing here. So let's translate that into sales. And specifically, if we go back to our triangle of the size of the market in the U.S. and using those same figures, just focusing in on the middle heavy alcohol use and the 1.5 million in treatment, you can see that just by simply achieving relatively modest gains in market share over time, and here, we modeled 8%, 10%, 12% from the treatment arm and 0.5%, 0.75% and 1% just in the heavy alcohol user arm, they're for the untreated arm. This translates at -- to the USD 200 million level of sales. We've also made the assumption on the lower end of pricing here at the $600 from our external benchmarks. Again, we're refining that. So you can see a conservative pricing, relatively conservative market share opportunities. But significant potential value in this first asset, which I hope, as you can see from what I went through, is really backed up by the unmet need in the marketplace. Here's our timeline for vorvida. Hopefully, you saw that we recently issued our submission for clearance to the FDA. So a huge milestone for Orexo and GAIA partnership. We are awaiting the response from the FDA on that clearance, which we would expect to happen sometime in the second quarter. And from there, we'll execute a focused launch in Q3. Back to our commercial plan, we're going to go, where we're going to provide access first. We're going to unlock that access and then scale as we go over time. So we'll see a very targeted launch in Q3. We'll expand that launch with improved market access as we unlock different markets and categories in the fourth quarter. And obviously, as we roll into next year. So that's the high level timeline for vorvida. A lot of work to be done quickly, and we're very excited to be doing it for all the reasons that I shared. So really a wonderful start for our portfolio. But it doesn't just stop there. OXD01 is an equally important asset. It's equally important from a valuation point of view to the company. It's equally important to the unmet need in the marketplace. Again, everything is anchored on the patient need there. We know the Zubsolv -- opioid use disorder. This is our business. Bob and the team in Sweden built a group of experts that, frankly, is unmatched in the marketplace in terms of market understanding and knowledge here. And we also know that while medication is more readily available, although still a lot of people need to be treated, the assisted therapy piece is a huge gap, especially getting qualified counseling. And so we're going to show that OXD01 is really going to be the first digital therapy that shows significant sustained outcomes in treatment of OUD in the U.S. and this asset we have rights to on a global basis as well. So it really sets up the company for future growth opportunities beyond the U.S. market. And if you think about why does this make sense for us? Again, medication-assisted therapy for buprenorphine-naloxone is the standard of care. The issue is you can’t deliver it at scale today because there’s simply not enough qualified counselors. We know this market. We know all the complexities, the significant nuances. No one knows this market better than Orexo U.S. and our sales professionals, medical [ impaired ] professionals that work it every day. And this epidemic is going to continue. It's going to change in shape and position but it's going to continue. So we're going to build on our strong position. And what's so exciting about OXD01 is it's not only going to offer our existing Zubsolv patients, the right type of assisted therapy to give them the best outcomes, but this can apply to anyone on any type of medication for OUD and potentially give us opportunities to appropriately introduce Zubsolv as well, creating another potential avenue of growth, and you can see the complementary approach for the organization. When you look to translate that into sales, again, we break down, on the left-hand side, what you see here is our anticipated timing of launch, and I'll share a timeline with you here in just a second. But this is a marketplace that is still predicting -- projecting double-digit growth at a 12% level in terms of the number of patients needing treatment. So a very robust, healthy market, with a lot of growth potential that will be going into it. And again, using that low end $600 price point treatment, which we believe is relatively conservative, you can see the net sales base as it grows as we satisfy that marketplace, so $150 million to $225 million. And again, this is the U.S. market, we do have global rights. And so we will be -- as we build success and execute in the U.S., looking for other opportunities to use OXD01 as a more global growth platform, if you will. Here's our timeline for OXD01. Currently, we're finalizing our development pathway, our clinical trial design, what we're going to put to really deliver that strong evidence behind the asset. We expect to execute our clinical trial next year, with a regulatory filing shortly thereafter the following year. And obviously, based on that pathway and timing, we would have go to market. So a little bit more time, but still relatively quick given everything that's going to be happening and gives us a chance to really establish vorvida in the marketplace while we execute and prepare for OXD01 in OUD. So just to summarize and to kind of put some couple of takeaways around, again, why we're so excited about the potential for digital therapeutics, why digital therapeutics will be a complement to the overall Orexo valuation, combined with Zubsolv and our amazing pharma pipeline. There's significant headwinds here. We think, again, especially with today's environment and the need to do things differently, the acceptance and adaptation of digital therapies that meet the right quality standards is going to accelerate significantly going forward. We've got an early-mover advantage. We've got a partner that no one else has in terms of the really expertise here. And we have an organization that's already demonstrated that they can make decisions quickly. They're highly flexible in terms of delivering a commercial approach that meets the market needs, not meeting a general pharma recipe, if you will. And I think the Zubsolv success is a wonderful example of that. Vorvida is our first asset out of the gate and this is an area that has just such unmet need. It's got such wonderful potential. And it's so suited based on how this product is put together with the individualized private treatment. So that's going to get us off to a start this year with some revenue this year that we'll start to realize. So again, adding to the valuation. And OXD01 is progressing nicely. It's on track from a development point of view. And will be ready for clinical trials early next year. So this is just an incredible space to be working in, a great complement to our overall ambition to be the leading company in addiction, and I'm very happy to share the information with you here. Thank you.

Thank you, Dennis. So now -- we have a little echo. But if that's all of our technical problems, I think we have solved this pretty well. Now we're moving in to present GAIA or actually, I'm very proud to have Mario Weiss, I hope, through the video here to present GAIA and their progress within digital therapy. I've talked to Mario, of course, many times. And I'm pretty sure you won't find anyone around anywhere on the globe that have worked longer with digital therapy. You would definitely not find anyone who have done more clinical research on digital therapy. And I hope you can -- when you listen to Mario in a few minutes, that you will share my opinion that GAIA is a fantastic partner for Orexo. So now I'm just hoping that the technology is working, and we are ready to leave the word to Dr. Mario Weiss. So I can see in the control room that -- I should maybe string a pause song or something.

We are still waiting for GAIA to get online.

Okay. While we're waiting, maybe for the room here. Are there any questions to the presentation we had on digital therapy, then we can take them while we are waiting? So, no questions.

[indiscernible]

Yes, but we're waiting for GAIA to get online. So I'll just take the opportunity.

I believe this is a bit premature, but [indiscernible]. Maybe Dr. Weiss will answer this in his presentation, but I think it's crucial, who is the patient, if I may call him or her, that interacting within this program? Is he or she interacting with him or herself or is there a therapist somehow? Because I think it's vital that there is some sort of authority that not forces the patient to act in the right fashion. But someone from our side should interact.

So I -- actually, I think you will have part of the answer from Dr. Weiss, and I would remember your question. So if it's not answered by Dr. Weiss, then I will address it afterwards because I can see Dr. Weiss right now on my screen. So I think I'm ready to once again introduce GAIA, and Dr. Weiss to present why we believe that he's one of the world's authorities in digital therapies. So, Dr. Mario Weiss, we're looking forward to hear you.

Yes. So can you hear me? Ian, can you hear me?

Yes. We're getting you.

Yes. Okay. Sounds good. So thanks, everybody, for inviting me to this investor presentation. This is, for me, not the usual thing to do. Normally, we treat depressed patients fully digital. We do this since 10 years. Today, I'm going to treat depressed investors maybe. I don't know if you're depressed or not. But the markets are depressed, it's a kind of a funny thing. And of course, this is a disaster for all of us. But in every disaster, you have sometimes losers and winners, and I must admit that we are the winners. I see dramatic demand for our services. I came just back from vacation and the phone is constantly on and why is this the case? Because we can treat patients without seeing them, and we can scale up our resources because we build robots [indiscernible] so we don't need any nurses or any human interaction. So this makes us in a way, even if I don't like to say this, the winner out of the situation we are in now, which is, on one hand, the pity, on the other hand, it shows also the strengths and the power of fully digital solutions like we develop and we've [indiscernible]. And I think this audience might be mixed, some might be interested in digital. Some might think, this is all bulls***, let's go for the chemical entities. So I will address, of course, those that are interested in digital solutions. And maybe some of you who think to invest or not in this kind of field get a clearer picture of what this means from the investment side, but also from the R&D side because I'm not an investor, I'm primarily an R&D guy. I'm leading GAIA since 20 years now. So you see there's a lot of start-up here, it is 20 years company. We are developing digital therapeutics that means we develop 100% fully automated robots that simulate physician behavior. We test these robots in randomized controlled trials, the same trial designs you use to test drugs. And we do this in several indications. We have a team of 150 scientists, developers that are running this. We are based in Hamburg, Germany. But if you do this kind of job and if you take digitalization serious, this is, of course, a global effort, definitely from the R&D side. So from the side of the trials, we have the trials in Europe, in the U.S. and South America and also in Asia. And the core of the team sits somewhere in Hamburg now because there's nobody in the office due to the shutdown situation we have here, which is not blocking us, I must say, but all is, of course, fun to hang around with the colleagues and the coffee, but the company is fully digitalized, and we -- basically we run well, yes. Okay. So I see the next slide is on. It's always when someone switches the next slide, this means for me that I'm talking too much bulls***, and I should move on, yes, right? Okay, guys, so I'm talking bulls***. On this next slide, you see why we are in this business. And it describes basically the situation you all know in the pharmaceutical industry. Nobody remembers this personally, but if you read a couple of history books, you will find out that the development of a drug was for a long time service. The service was performed by a pharmacist. And this pharmacist basically mixed the drugs according to receipt that was prescribed by a physician. That's why it's called a receipt what you prescribe as a physician, I repeat receipt. And then there was someone providing the services. And then 100 years ago, we had a couple of clever pharmacists like Eli Lilly, and a couple of clever chemical companies like Bayer that developed an industry that's today called the pharma industry. Basically, what they did is they turned a service industry, the pharmacist mixing the drug, to a production industry where machines are producing the drugs and the service is mainly in developing those drugs, which is the fundamental shift. Because once you have crushed the pill, you can half the any product cost and increase the amount of service you can provide. This led to a decline of the role of the pharmacists and the increase of the role of pharma companies that we see today. In the diagnostic sector, some of us might still remember the good old days when there was diagnostic kits in physicians' offices like testing tubes and so on. This is, of course, history now and you see in the recent years, the offspring of large analytic companies that also changed the paradigm, by making out of a service that was conducted via pharmaceutical technical assistant or some kind of service personnel, also physicians were involved, into something that machine is doing. So also there, you see a dramatic shift. And of course, these companies are pretty valuable now and investors that jumped in at the right stage are happy investors, not depressed investors. We think that the same is going on now in the field of consultation. This is the doctor/patient interaction. So this is what I would do as a physician when interacting with the patient. We are simulating this. And we think that we can have the same economics in place that we can simulate a large part of the things that a physician does today, simulated with the computer and therefore, have the same economics as we have seen in the diagnostic sector and then the pharmaceutical Rx sector. Okay. Next slide, please. Yes, you all like this curve, maybe not all of you, but some like this curve where you see the output/input function, typical function, I in my career had to learn by training as a medical doctor, but if you do this for so long, you know what an expansion is. So you see that it is all about input to output ratios. That is what can you deliver -- what kind of value can you deliver for what kind of input. In the pharma industry [indiscernible] to provide tremendous value for limited input, a drug, the production of the drug is a fraction of the costs that were incurred in the time pharmacists were mixing this stuff. We see the digital therapeutic effect equivalent to that. We simulate in our early programs of psychotherapists. And if you have psychotherapist that, say, would take 20 hours to treat a patient [ times ] EUR 100 in Europe, in New York, it could be $300. And you see that currently, our systems are as good as some of psychotherapists. So we have achieved this at this point. Now you are listening to a investor conference of Orexo, not of GAIA. And the reason is pretty simple, we are not listed. And you can't invest in us. But you can invest in Orexo. And we also invest in Orexo because Orexo licensed some of our products, and I'm also personally, a shareholder. So you might ask, okay, why GAIA was doing this? And the reason is that we think that Orexo has good potential to become one of the leaders in marketing and selling digital therapeutics. Why is this the case? Well, I think they are smart, they are adaptive company. And they work in a very difficult market. Sorry to say that, guys, you just try to make it differently, but the products of Orexo are not so super differentiating that they sell on their own. These products require top sales force, top marketing expertise and also, I think the flexibility to really enter markets that are not as easy. I mean, everybody can sell a top drug with super evidence that has no competitor. Yes, this is not difficult, even Novartis can do that while they will put a real prospect on it. But we think Orexo is, due to this size and this speed, a very, very good partner to market -- to become market leader. And as I said, this is a perfect partner for us because we are 100% R&D company, and we want to stay 100% R&D company. Okay. Now you can ask yourself, and if you go the next slide, well, Mario Weiss' top patients want to see a real physician, I'm a patient, I want to see a real doctor, a real unfriendly doctor that has no time like the recently I saw an orthopedic physician. I mean, you guys probably are privately insured, and they charge you USD 1,000 or EUR 1,000 for consultation. But just imagine it would be a normal patient so then the orthopedic consultation would be a rather short and rather, I would say, monopathic. So what we did is we try to simulate an orthopedic consultation and ask the patients, "How do you like it?" And you see there on the right side, a lot of patients said to the program we develop, "Well, this is as supportive as my physician." Right? And a lot of patients said, this is helpful. We then turned to an area with the human touch of the interaction, the humanity is the highest. And this is with psychotherapeutic consultation. In psychotherapy, you open your soul and you talk about your mother and your sister and whatever. Yes. So the question was, if we standardize this. Of course, we won't talk about issues in your mother and your sister, what you will provide more in the psychotherapy, which is a bit different. If we simulate this, what effect will it have? And you see here results from one of our early products and 70% of the patients said we’re [ right ] as good as a psychotherapist. So this is a starting point. You start always with the patient and patients accept this. And we must say a large number of patients do. When you ask yourself, and this is on the next slide, yes, okay, the patients like it, but is it effective? And effectiveness in the world of medicine is measured in randomized controlled trials and preferably not only in one but in many and this many trials can be then summarized in so-called meta-analysis. And you could see here just a full order, one of our products called deprexis, antidepressive treatment, you see the first trial in 2009 and you see a quality and effect size, this is similar to a number needed to treat, between 4 to 6. So pretty powerful impact. And you see in the last line, personal psychotherapeutic consultation is -- the median is 0.5. So you see that in certain settings, we are better, in certain setting we are not as good as the standard psychotherapist. In the recent years, we could prove that it is possible, not for everybody, but for our group to develop programs that are as good as the most humans, so to say, physician interaction. And I know some of you might say, "No, no, I don't want that, that's inhuman." Some of you might be investors and think, uh, cool, what kind of opportunity does this open up? So there is always the ethical dispute, myself as an investor, I think, I'm very, very cool. Sometimes, as a physician, I think, uh, this computer is as good as I am? Well, I don't know if you play chess with the computer, the first time you lose against the computer, it appears sometimes weird, but then you get used to it. So I got used to it that these systems are better than what I can provide with human touch. Okay. Look, if you go to the next slide, you ask yourself how the hell does this work, and it works a little bit like a chess computer to us. So on the right side, you see a typical circle of interaction. This means the patient is identified as a unique patient and then analyzed in the short sequence where you try to understand what's the reason for the patient to drop by. You will ask the patient, how are you today, as a physician, and the same will the computer do. Based on this information, the patient provides, you will tailor the information, and the physician will do the same, to the patient needs and to your therapeutic objectives. Then you will see how the patient reacts. Patient can say, oh, yes, you walk in this foot or the patient can say no. So we also use this reaction then to steer the analysis and to steer the next piece of individualized information that we provide. We do this on a platform called broca, which was developed a long, long time ago with the help of a company called Airbus. These are the plane builders. And the plane builders at that time had the problem that the airplanes were so complex that it was not a good idea to give the pilot full control. They developed expert systems, and we were able to hijack one of these systems to use it as a base for our own technology. We have now separated from Airbus, but of course, some people we work together with are still around. Some are retired now. So it's kind of a friendship. We still have some people, some staff members that created -- helped us to create this. You can access the software via any device that has access to the Internet. So it's 100% mobile, of course, because the young generation only have a smartphone. The older generation might have [ pen ] and maybe the middle generation maybe still have a notebook. So it is accessible by all channels patients use today. By doing this, if you run through the circles for hours and hours, you learn a lot about the patient. So a physician, of course, learns a lot about the patient but the physician would have to document this and physicians don’t like that. Here, the documentation is done by the system. So after a couple of 1,000 -- 10,000 patients, you create a really in-depth knowledge of therapeutic processes and of interaction between patients -- helpful interaction between a patient and the caregiver, in this case, the machine. Okay, good. I think that's clear so far. And I think we will -- at the end, we will have time for questions. Next slide, please. You see that we are not only in the area -- active in the area of neurology and psychiatry, but also in the area of immunology, oncology and pain. These are research fields that were developed basically, East Coast and in Europe in the recent 20 years where we are active and you see a couple of products that are fully developed and a couple of products that are in randomized controlled trials. On the next slide, you can see a little bit of our pipeline, a typical pipeline approach as we would run it in a pharma company. Next slide, please. On this slide, you can see how we work. And I think in how we work, we differentiate from pharma. The trials we run are similar. The regulatory setup is unfortunately also similar. But the way how we do it is might be a bit more modern than the classical pharma company. And the reason why I would like to mention this, is that we strongly believe in the 4 Ps of R&D. This is payer, patient, political involvement and physician involvement early on in trial design and in the conduction of the trial. We have conducted a lot of clinical trials together with payer organizations and corporations because we think it is very important that payers really are involved early in that they basically get a grip for the product and that they give their input so that the product is really super fits their needs. This helps them in the price negotiations. But it also gives you access to the resources the payer has, the direct access to patients, the influence the payer can have during the trial on physicians to enroll patients. So we have done a lot of payer, basically, supported trials. Patients are of critical importance. If you run clinical trials, if you develop products of this kind, it is very important that you involve patients. And we are super proud that some of the more prestigious patient organizations, for example, like the National Multiple Sclerosis Society, this is the U.S. patient organization for multiple sclerosis, is funding a couple of large trials and is supporting our research, but also the Veterans Affairs in the U.S. and the European Union. So there's a lot of funding that is patient driven. So it is important that you develop products that patients really want. The second -- third element is the political landscape. We shouldn't underestimate that every innovation in health care has to pass the reimbursement hurdle. And you know the payer, okay they will work for you, but in a way they pay us and payers don't have deep pockets. They like to keep their money in their own pocket. But the public, represented by the political systems in Western Europe and the U.S., but I think also in Asia, is very much interested to provide good health care. Health care is a critical element to stabilize a country. And we try to be early involved with political decision-making here in Europe. We see that Orexo, for example, in the European sector is doing the same. So it's very important to have a political go for the product because -- and we see this in Germany now. Even if it takes long, a political system can also change a law to allow digital therapeutics into the market and force the payers to invest like institutions here in Germany. It has to be politically right position. For example, our products are not positioned as, oh, if you don't find a physician, you can use one of our products. No, we are positioned, hey, as a patient, I want to see a physician but I also want to have a digital therapeutic because I believe this is even better or fits my needs, I will have -- I would like to have the choice. Yes. So these tools are not necessarily physician tools, but also very much patient tools. But of course, the physician wants control, yes? So all our tools are prescribable in a way that we don't involve any service component of the physician. So the physician doesn't have to log in or fill out forms, whatever. He just has to prescribe the product. That's it. Everything else is taken care by us, and by us I mean by the computer because we don't provide any service around the product. The product is a standalone robot that provides the therapeutic effect without any service component in addition. Of course, the product is sometimes used in service component-rich environments like HMOs, like integrated care projects where there is service or in a hospital where there is service or in a general practitioner practice where the physician is prescribing a drug, talking to the patient and using our product. So you have different scenarios. It is ready to prescribe, but there is no burden to the physician because it's a fully automated system. And in this, we might be a bit different from pharmas in that sometimes developing the product, the R&D is very, very, very confrontative against the system. And then you go in and try to maximize the price and fight it through. And sometimes you win, but in a lot of cases today, you also lose. I must say you see what Novartis had suffered in Germany by trying to implement a very good antidiabetes drug. You could see that it is not even a large company like Novartis, will not succeed to win against the system because the system is always stronger than the biggest pharma company and definitely is stronger than we are. So we have to be part of the society. Otherwise we -- it will be difficult. There we are. Good. Let me give you a chance to look at a case study. To give you a little bit more of flavor what this means to develop such a product. You have here a case study of deprexis. Deprexis is today the gold standard in digital therapies. It’s the most researched product by far worldwide in the sector. It probably has more research and clinical trials than the pharmaceutical drugs in this field No one has [indiscernible]. Okay. So [ how do we ] 14 randomized clinical trials, the 7,000 patients, the [ study ] is available in 9 languages and, yes, you see a typical spread. You always have a control group. You have an intervention group. Today, we go with active control group, which is standard care. We go on top of standard care. And you see here 2 cases that were kind of spin-offs. So when you start a project, like deprexis, and it showed that it's super powerful to treat patients with depression, the physicians came quite early to us and said, oh, we really have a problem in 2 fields. One is multiple sclerosis, the other is with epilepsy. Because in these 2 areas, we can't use antidepressive drugs out of several reasons, in multiple sclerosis, the inflammation problematic and that the patient is very reluctant to take additional drugs because MS drugs have severe impacts, also side effects. And in epilepsy, this is absolutely, for a neurologist, a nightmare to get something to the patient antidepressive drugs. They want to keep the brain of the patient clear of any electrical, so to say, interference systems. So we had quite early physicians coming to us and with the demand, hey, let's develop in this field and so there is one platform is effective. And then you see, we listen to the demand, where the need is biggest. And this is, of course, and with regard to epilepsy, those are funded by external funders, like the epilepsy trial was very much promoted by a large German payer and the MS program, as I said, was funded by the National MS Society, the U.S. patient organization. We are very proud because patient money is the most honest money when you know that you're doing a product. Okay. On the next slide, you see a little bit how this looks like. So it's a very clean design. You have the text block, we have some pictures and you have selections the patient can choose. Why is it so simple, why is this not gamification, virtual reality? To be honest, last 15, 20 years of research for us have shown that it has to be very simple, very clear to the patient. And all these gimmicks are not appreciated. The patient problem should be taken seriously. Like as a physician, you're not going to start dancing around and wearing fancy clothes, might be appealing for some patients, but most patients want to have it more serious, and we do that. And it's also -- it has to be simple, normal typing, voice recognition, all those fancy things. We all like talking to Siri. Hi, Siri, how are you doing today? Do you like me, yes? So we tend to be on a serious note. So it's information, tailored information that is built by the machine as the patient clicks the answer, then it is reassembled. And it is then played by the machine the patient is using. We were very early, as I said, political element causing problems and regulatory also. So we were very early discussing how this should be regulated with the European authorities and also with the FDA. And we tried to develop low-risk products, tried to develop products with the lowest possible risk and with maximum benefit. And then we tried to convince the regulators to see it by showing them our data. And so far, we succeeded. We have something very good working relationships with also organizational, let's say, buddies. And yes, that's also very important. Okay. So these are basically last words and the last word is hanging in that, no clue about [indiscernible]. You guys are super, I know that. But I thought about myself also being the investor, and to be honest, I also separated it because, yes, I have maybe too much exposure [indiscernible]. Why should you invest in Orexo, and why not? I ask myself because I did this. And maybe [indiscernible]. I think you should invest in Orexo if you like to invest in markets, in market trends and companies. You shouldn't invest in Orexo regarding the aspect of digital therapy if you are more investor that is interested in historic data points that you can put in your computer and then calculate how the performance of the company go this far. Or if you meet other companies, that can lead you as a success story, yes? This market is at the beginning. The assets are very powerful, but the commercialization has no history. So you won't be -- you won't feel cool with it. The second element, I would advise you as an investor, you have to like disruption cases. So you would like -- in this field, company multiplies its value, like -- it's a bit like in the drug industry. You have no drugs, your value is 0. You have a drug, your value is $100 million. So this can happen quite far. So it's different than if you invest in a company where you have like 20% growth. So for me, this is like Allianz or SAP, 20% growth, nice dividends. In the digital space, you won't see that. You will see those and make it and they will like spill out in value, and those that don't, and you won't see anything there. So it will be more bipolar. And some investors like that, some investors like Google and Facebook, some investors like Allianz and SAP. I did both, which was awesome. And the third element, I would advise you is -- with Orexo, you have a mix. It's a mix between a traditional company, very solid business in a very interesting field, that is opening to digital. So it might not be that super sexy like a Facebook, but on the other hand, it's safer. And this is the reason why I personally invested. I don't know if it's of any help for you, but this is also the reason why we choose Orexo as our partner and not the big ones that were also possible options. So, that's from my side. Thanks a lot. I hope it was interesting for you. And if you have any questions, I'm ready to answer them.

Thank you, Mario. And we are going over to the Q&A session. And I can see we have Dennis also and at least for my picture, you should buy the same web camera as Mario. So it's a little clearer picture. So I hope all you got a sense of that. And I did promise to answer your question also. And I think Mario did part of it. So both vorvida and OXD01 are supposed to be self-standing and not needing a physician interaction. But the way we are going to commercialize it, the way it's going to be used, it's going to be prescribed by a physician or by a therapist and what we enable the physician and therapist to do is to treat many more patients with the same input in terms of resources. But there's still a physician or a therapist, who, in the end, have the responsibility for the patient. We are not taking over the responsibility for the patient. We are just one more tool in the toolbox of that physician. So I think you should compare this like any other pharmaceutical, there is a physician that find that Nikolaj Sørensen, you are in the need of vorvida because you have an issue with alcohol consumption. I think this is a good tool. Let’s try it. You come back next month and then see how you have progressed. So we don't see this is something that you're standing that should be used independently. However, what I do think that will be the -- enables us that there are some patients who wouldn't even go to the physician who might find that this is a more convenient tool, and then there will be e-commerce setups, so they can actually access that. But my own belief is that will be a marginal business compared to the one that is going through the [ step ] health care providers channels. So I hope that answered that part of the question. And with that we'll start the Q&A session, both through the telephone lines and also here in the room.

It's [ Christopher ]. Mr. Weiss, I believe it's related to vorvida and -- have you introduced vorvida to any markets yet? And if so, what has been the reception so far?

Yes, vorvida was developed with the help of a large payer in Germany and after seeing the trial results, they just licensed it, yes. They said, okay, we take care of it, we have our own field force, we have our own patient communication team, and we will commercialize it basically for you guys. They secured for a certain time the exclusive rights. And as I said, we are not a typical commercialization company. And so it is more, let's say, by the demand of cooperating insurance companies. So in Germany and Switzerland, there is very good demand. We see a lot of positive feedback from the patients, is definitely a patient product. Patients really like -- this element of alcohol problems are not something you go to -- you go around and say, "Hey, I have alcohol problem." Maybe if you've a serious alcohol problem, then you do that. But if you have, let's say, you think, I have not such a good drinking habit, you won't storm the office of a psychiatrist. You will go to a GP, you will go to, let's say, standard care and say, "Hey, you have something for me?" For this, vorvida is very well positioned.

Any other questions?

Yes, on the vorvida product, I was thinking about, is that always prescribed by a physician or can an individual, so to speak, self-treat through the software?

Yes, you can self-treat basically. And the payer organizations always want self-treat because they don't have to pay the physician then. But of course, these tools are most important if they are in the hand of the physician because the physician can do additional support, give the patient additional support. And in the case of vorvida, it's a special case because it's very much a patient product. So we have the feeling that the physicians are okay with it, and they like to prescribe but patients really want to have it. It's kind of thing. Some products are more driven by patients. Others are more driven by physicians. And I would say, vorvida is more driven by patients. But still having the backup of the physician is the big importance to the patients and also to the payers at the end, because this creates some credibility as this is really something that works and also the physician can take some lab result and involve it in a more bigger picture of the therapeutic contact. So it's, I think, a mix.

Dennis, do you want to comment?

Sorry?

Dennis, do you want to comment on this?

I was just going to say, I think to add, to complement, I think what we're already seeing in the research and the therapist is a great example, they're really lacking tools to address this problem, alcohol problematic drinking. So the response, we think, not only physicians, but other health care providers, like therapists, individuals that might be interacting with the target patient for various means, are going to be highly influential. And so we're going to set up the infrastructure so that it can go through a physician, can go through a payer, can go through a therapist or qualified counselor, but also can be acquired directly based on the need. So it shows the flexibility of those different approaches we're going to put in place.

And what kind of distribution would you think would be the largest? I mean, would that be -- would the product be pushed mostly through physicians? Or would it be through the insurance companies? Or would you think it would be like kind of a self-treat I mean, patient initiative?

So we're currently looking at all those channels right now. I think the payer importance, and you heard this in Dr. Weiss' talk on GAIA in general, still going to be critically important because we will be characterizing the cost of alcohol misuse right now, and that creates access through a lot of different means, whether that be through pharmaceutical benefits or medical benefits. So we certainly have a focus on payers and appropriate market access to match that 2,000-plus payer mix in the U.S. But we also are going to be using digital and our reps where it makes sense to educate the providers, so that they're aware and knowledgeable. And because of the type of targeting that we could do and the data and analytics, we can also advertise very directly to patients. So we have a very efficient way to cover those. My belief right now is that the payer influence is still going to be very important as it is for most categories in the marketplace. And then we'll see different segments that are more physician or patient driven. We're definitely seeing indicators and consistent responses in multiple patient interviews now. They like the private nature. And as Mario said, there's a lot of individuals that may not be ready to go see a professional, but will act on this. And so we do think that's going to be an interesting segment to develop.

Okay. The last question for me. Do you have any cost benefit calculations to show to the payers, insurance companies that would entice them to start using this product on their population?

Yes. So we're -- the way that we're going to pursue that right now. Number one, the underlying foundational clinical trial can be translated in terms of economic benefits at the payer level. So we've got a great start with the work that the GAIA team has done. However, our belief is that, that will get us access from there, we'll create evidence within each of the specific payer entities, one of the things we see consistently. And I think across ethical therapeutics, now more than ever as well as digital therapeutics is those payers want to see that they're getting the value within their own target population. So part of our market preparation and part of our go-to-market is going to have strong health economics capabilities through field-based medical professionals as well as under Dr. Sumner's overall medical group, where we'll be characterizing, capturing that real-world value and translating that into benefit. In fact, that payer slide where I talked about the different approaches, we think that, that could be a real foundation in terms of some of these alternate value-based approaches we put together. So we have a good start. We're going to be gathering, collecting that evidence in market as part of our overall acceleration plan to make it more precise and relevant to the specific payers and the populations that they manage.

So just to be clear, so we can follow the treatment outcome for a specific payer on an anonymous basis for the patient, but we can still, on a group level, we can see that for an individual payer. So that's going to be central. I think on the question about what are the channels with the price point that we are looking at right now. I do think we need to have a payer involved for most patients. And that for the payer to be involved, we do need to have some health care professional who is validating that this patient has a need. So I think that will be the large channel. At the same time, there is definitely a segment of people who is not interested in talking to people about their issue with alcohol addiction and might see that this is an exciting opportunity. Here could be opportunities like what they have done in Germany from GAIA is to work with an insurance company where you basically have a framework contract saying everyone who has a United contract, UnitedHealth insurance, you can access this tool through some United channels. And that's, of course, some of the possible channels that we could also look at in the U.S., work together with a payer to make it accessible for all of their patients without the involvement of a face-to-face meeting with a physician. Okay. Any other questions in the room? Otherwise, are there any questions from the telephone lines?

There is one lined up. [Operator Instructions] The first question in the queue comes from the line of Ross Blair at RX Securities.

Just a few questions, primarily on vorvida. The first question is, could you confirm whether or not vorvida is going via the precertification pathway? Secondly, could you give an indication of the process and the timeline of getting vorvida into the formularies after approval? And lastly, could you comment on the uptake of vorvida in Germany and Switzerland, and give an indication of what sort of sales you've seen since the approval?

So on 2 first question, I will ask Dennis.

I can start on the first 2, if you like?

Yes. Please.

So with respect to the precertification program, so right now, the FDA's precertification program is a pilot program. It has a fixed number of entrants that were actually set early last year. So Orexo at the moment is not participating directly in the program. However, we will wait and see the results as they come out of that to see that the theory holds true in terms of the validation approach. So we filed -- we submitted for clearance according to the regular published pathways, which came from the December guidance from FDA, which, in this case, it's specifically a 513(g) pathway, as we mentioned in the Q&A for the press release. So that puts us in a response time, as I mentioned, sometime in the second quarter. The market access preparation, the formulary discussions, that's part of our market prep work we're doing right now. As we conduct the research, we'll be going to the payers early to have the conversation to identify the cost within their plans that alcohol use presents today, the different value points and the different flexible approaches that we could provide. So that will be work that will start prelaunch and will also continue in Q3 in our targeted launch and through the fourth quarter. And every plan, it will be a little bit different based on how they look at this. And each individual plan will have their own time frame that they will follow based on how and when they want to review the asset and whether they view it as a pharmaceutical benefit or a medical benefit, and we'll have the option to explore all those different pathways. And I'll let Mario comment on early indicators of commercial response in Germany and Switzerland.

After the Bundes law launches, we are privately held company. We normally don't comment on sales targets and also on sales numbers, especially in this case, because this is -- these are deals with payer organizations, and I'm not allowed to disclose, of course, any numbers in this context, but we are satisfied with it, very satisfied, to be honest. And I think Orexo can even do better than we do because our commercial capabilities are not the best, to be honest.

Any other questions?

There are 2 further in the queue. The first is from Samir Devani of RX Securities.

I had a couple of questions. One for Dr. Weiss and perhaps one to Nikolaj. I appreciate you can't comment on your own individual sales. But I'm just thinking more broadly, what's the biggest digital therapeutic currently selling in the market right now? And then the second question really, for Nikolaj. Of your existing sales force, have you sort of compiled how many alcohol use disorder patients are currently under treatment by the doctors within your target?

Okay. I actually think both Dennis and Dr. Weiss could answer -- Dennis, we had an example of one semidigital therapy within diabetes from the U.S. that you could maybe comment on. Though we didn't -- decided not to present today, but you can maybe comment on that.

Yes. So I think from -- in terms of bestselling, there's a couple of ways to look at that as always. But if you look at volume, and now value, I think the team at Livongo, who is now public, they just after the IPO, and so you can see their quarterly results and details, is demonstrating nice, consistent growth at scale and is definitely realizing, I think, the highest volume of participants based on their employer-based strategy for their diabetes treatment. They do have 4 total different areas that they focus on. But that's one that is definitely standing out in terms of the volume that they're realizing and the value, frankly, as well, because they're having a nice increase across the board. I think the overall diabetes category has been, in the U.S. market, a bit longer and is starting to show some different levels of results. But across the board, none have yet demonstrated what I would call consistent growth at scale. Each are pursuing different segments along the way. But I think Livongo is a good example right now in terms of what I would characterize as a good digital therapeutic. Broader digital health, Noom, is also very interesting given their more commercial based approach. But to me, I would put that in the category outside of a digital therapeutic and more of a digital health tool. In terms of the profiling, we are actively working with our existing organization. As you might expect, we have very intimate knowledge of the current practices that they work on. We've been looking into, beyond OUD, what types of target audience or patients they may have in the alcohol use disorder space. And so that work is underway. We're getting great insight. And we'll continue to get great insight from the field as part of our market preparation. And again, as I mentioned, in addition to the strong personal selling effort, we will look at other channels and other areas and are in the process of kind of breaking down that 16.6 million and 1.5 million into more specific behavioral and other types of segments so that we can target our launch most appropriately.

I can just comment on our field force also. So one of the things that we're doing right now when we're unfortunately in a situation where the field force cannot go out and see their physicians is that, of course, they know their physicians' offices inside out. So one of the things we're doing at the moment is trying to we're mapping out where are those, but we also ask them to start looking in their territories to see how do you do alcohol dependence treatment or treatment of alcohol misuse. So we can get a better picture of that. We have done some research a while back, and we recognize that a lot of our physicians also treat alcohol or have patients who have issues with alcohol addiction. It's quite common comorbidity of opioid addictions, also alcohol. So you see that quite often, but we also see that the majority of people who are suffering from alcohol addiction are seeking help somewhere else. And that's, of course, where we would need to broaden our access and see where we go. And the way that we anticipate to do that is we start working with the market access and when we get market access in a certain region, then we will start broadening our field force footprint. So it's not like we're going out with a nationwide GP field force at the moment. Initially, we'll start with our own field force that we have already now. Then when we see market access make it the business case to expand, we will expand in those geographies. But that's one learning we have for Zubsolv when we -- in the beginning, we were just looking at where did we have the highest concentration of opioid misuse in the U.S. that was where we placed most people. But we pretty quickly learned that market access is the one that should be the #1 driver of where we place people and we'll do the same here. Then I think there was one more question. I just -- so this was -- did we answer your question right now, Samir?

You did, and that's very helpful. And I guess sort of leading to is that you've obviously been very helpful giving some guidance in terms of what you think peak sales could be for this product. And I guess this is a very new space. We're trying to sort of get a feel as to how that will evolve over the sort of 5 years to peak sales. And you mentioned obviously, you're targeting specialists right now with your field force and the expansion into maybe a bigger audience. But if -- I guess, if we're thinking for 2021 sort of sales number, would you be uncomfortable with $20 million based on the peak sales guidance that you've given today?

So this is a little premature because we have not given any guidance for 2020, but I would not feel uncomfortable if you use that in your analysis.

And we have one further question in the queue. That is from the line of Klas Palin from Redeye.

And I have a question about OXD01. What kind of clinical data do you believe you have to generate to reach an approval? And also about what kind of requirements is set up by the FDA or other U.S. authorities about protecting the patient data generated from vorvida and OXD01?

Dennis?

Yes. So on the first one, and we can defer to Dr. Sumner as well in terms of specific, but the general clinical outcome design in the U.S., we're looking to pursue clinical outcomes that align with the Triple Aim criteria that most payers use. So clinical outcomes that would be consistent with medication-assisted therapy in opioid use disorder as well as economic outcomes and patient satisfaction outcomes, all of those now are being evaluated for different payment mechanisms, and we have the ability to build that into our development plan. I'll let Dr. Sumner speak to any of the specific OUD target endpoints that might be more aligned from a medical point of view, but in terms of general design, we're looking at that. From a data and privacy perspective, the first thing is with our partners at GAIA, obviously, European company first has to adhere to all GDPR requirements, which still remain the most strict worldwide at the moment. And we have looked at that or assessing that relative to the U.S. requirements and believe that they're fully capable of satisfying that with respect to patient data, personalized information, privacy, et cetera. This will be a continued focus on everything that we do, and we'll also be putting the same view to say, commercially as we collect information and marketing programs and other types of approaches to ensure that it meets all of the required standards. And in the U.S. today, that means high trust from a certification point of view. It means reaching state-based laws, such as in California for privacy standards, and obviously, HIPAA and the other corresponding components. The beauty of these assets because they're self-contained, as Dr. Weiss described, the exchange between the doctor and the patient is as simple as writing for a drug, and from there, it's fully self-administered between the patient and the therapy. So it actually minimizes the amount that we are forced to collect and makes a much simpler process across the board, which is, we think, a real different benefit and important benefit.

Okay. I think there are no more questions, I think, through the phone lines. So we are running out of time, so I'll just give a few concluding remarks. So thank you, Dennis. And just to you, Klas, on your question about the OXD01, we, of course, have a pretty strong hypothesis on what would be the endpoints for the trial, but I actually think that's part of our competitive advantage right now that we shouldn't share too much about what -- how we're directing this when we do the clinical trials. And we also need to consult the FDA to understand what would be needed in that process. So we will come back with more when we get closer to the actual clinical trial. So just on the concluding remarks. On the financial outlook, we have no changes to this outlook right now. We do have some of the expenses that you have seen or the expenses that we're expecting on vorvida included in our OpEx guidelines. What's not included here is if we decide to expand our commercial footprint in the U.S. for the field force based on rapid market access for vorvida. What we haven't included here is also if we're accelerating the clinical trial for OXD01, that could also have an impact on our expense level. But other than that, we are pretty comfortable with the guidance that we have provided so far. If we're looking at our news flow coming forward, then in Q2, we have an FDA clearance of vorvida, which we just talked about, and we also expect the patents on our nasal technology to be granted, the technology behind on OX124 and OX125. We are starting our OX125 exploratory study during the second quarter. Also, we should be able to have the results before the end of the quarter or at least for our Q2 call, which is in July. In Q3, we're, of course, expecting to see the launch of vorvida, the first revenue coming in from vorvida. With all of that, you will have a lot of information about resources, pricing and so forth. We have FDA decision on fast track designation for OX124, which -- that's what we expect. That's what's in the guidelines from FDA, but we haven't received that yet. And then we expect to see the OXD01 development of the actual tool to be finished. In Q4, we see the initiation of the pivotal trial coming in. But I also think in Q4, especially OXD01 and vorvida, are likely to generate more news flow as we come. Then what we don't have in here is, of course, part of what we're doing right now is looking at business development opportunities. And while I can be pretty sad looking at our share price and, of course, of the stock market in general, I also think that if there's any moment in time when cash is king, that moment is right now, and we are one of the most cash-rich companies in the small life science company both in Sweden, but even in the U.S., I think we have a very solid balance sheet. When we look at why Orexo? I'm absolutely certain. Unfortunately, that addiction is a growing need, not only opioid addiction, but also alcohol addiction, and we are looking into other types of addiction. It's an area where there are literally no one really there working with us. There are no other big pharma companies that are working in the same space. The other companies are active often small just like Orexo, they might have some pretty significant legal issues. All they're working with a very small niche segment of the market. We are one of the few companies that actually have a comprehensive approach to this. We're also one of the companies that today is doing this from a strong financial background. While I would, of course, like to be an [ SAP ] on alliance that have an ongoing growth, as Mario was talking about. We actually do have an ongoing going -- cash flow coming in from Zubsolv that you can do your math and multiples on. What I'm telling you is that we are pretty comfortable with that revenue stream coming in from Zubsolv, and this is the foundation for our investments and how we can broaden access to more products where we can leverage our U.S. platform. We do have an existing infrastructure. We do have insights into the addiction space which I think is unparalleled to most other companies and we’re [ applauding ] that now. Not only in opioid but also we’re learning basically as Dennis is talking about, we are right now doing a lot of qualitatively and quantitatively research into the alcohol addiction space. We’re looking to expand our pipeline through 2 means: business development led by Johannes and his business development team. We have people in the U.S. also working on this full time to see, can we find other assets we can put into the pipeline, both pharma and digital. And then we're working in our own pipeline to advance that pipeline all the way to market. And as you understand, the risk -- clinical risk of OX124 is not significant. We have very strong data from our exploratory study. The exploratory study was pretty broad for being an exploratory study. And I feel pretty comfortable with that one. The only thing that could be an obstacle for OX124 is the timeline because we, right now, sit in a little uncertain time, and there are a lot of partners and regulatory authorities involved in that. And then we're going into a new area, digital therapeutics. I think this is disruptive. It is difficult to find an [ analog ] where you can say, this is how this is going to work. It's difficult to find a benchmark that is spot on. They have done this before because they're really none. When you looked at what Dennis was talking about on a regulatory front with the FDA with precertification in Germany, that's not 2 years ago, it's not 3 years ago. This is a month away. This is something that happened during 2019. The changes in Germany came in the second half of 2019. It's happening right now. The formularies of the 2 largest PBMs in the U.S., Express Scripts and CVS Caremark, that didn't happen in 2018, 2016, '17. That happened in the autumn of 2019. It's happening right now. And I think the opportunity we have is that we are there right now. We're doing that from a position of strength. There are a lot of people who are working with digital health solutions. But I would say that there is a unique position for Orexo. There's those of the big pharma companies, but they struggle, they struggle on how do we position digital therapy into our existing infrastructure. I know, I've been the head of Pfizer in Sweden. I worked on Pfizer internationally. I know how difficult it was to take some of these tool, that machinery. The other end you have is that you have small entrepreneurs who might have a good idea. But they lack the financial resources, in particular, in the financial market you have right now. They lack the infrastructure to commercialize their products. We have that. And there I think we are unique. And of course, I hope you're seeing today that we have a pretty capable team, and we, I'm pretty sure, are very strongly positioned to become a winner in this digital health space. And we're definitely going all in to become that winner in this market. With that, I would really thank you for your attention. This Capital Markets Day was not what I hoped for, but I think it's important for us to get this message out. I hope that you enjoy it. I hope you could tick the boxes on what I wanted to accomplish with today. For me, the most important is that you can leave this room and/or log out of your computer and be able to recognize the value we find we have in our pipeline. And I actually feel pretty excited about it. And those of you who saw that, I did buy some shares last week. And I did that after I have reviewed these presentations because I actually got pretty beaten up or it can upbeat by the opportunity that we see in front of us. So with that, thank you for your attention, and I wish you all a good day. Thank you.