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

Hello, and welcome to the Orexo AB audiocast Teleconference. [Operator Instructions] Today, I'm pleased to present Nikolaj Sorensen, CEO. Please begin your meeting.

Thank you very much, and thank you for all of you who have taken time out of your busy schedule to listen to this presentation. I just heard that we are approaching 200. So that's a pretty good attendance for Orexo update telephone conference. So the purpose of today's meeting is to give you an update on how we progress in digital therapies. And I will start on moving to Page #3. And just slightly give us some perspectives on what we want to accomplish with this meeting. So the first one is, we, of course, want to share the progress on where we stand with our digital therapies. We're about a month away from our next quarterly call and it's about 3 months ago since we had our last update. So we thought it's a good time to give a little more flavor on where we stand. Another thing that we have noticed is that there is a decent interest, and we'll understand the science behind these digital therapies. And we tested presenting some of the scientific material in a way that we presented to our customers in the U.S., that would say, insurance companies and health care providers. And the feedback we got here in Sweden from 1 large investor and an analyst was very positive, and we felt, okay, that's probably something we should do for more people. So everyone have a solid understanding on where we stand. And there, I'm very proud to have Dr. Mike Sumner to participate on this call, and he will basically present the same material that he does more or less on a daily basis with potential customers in the U.S. Then we have also had a couple of news that have come some -- one from Orexo and one from -- directly from the customer. One is for GoGoMeds and the other one is for Trinity Health in North Dakota. Both of those have created a little, say, noise on the different chat forums. And so what is this? And why haven't we gone out with that from a corporate perspective? I want to underline that whenever we have an agreement that we find is material, we will, of course, go out on a corporate basis with the news for any material agreements. The reason why we didn't do it this time is the first one with GoGoMeds, was together with GoGoMeds we went out with a press release basically to announce the partnership to GoGoMeds existing customers. So this was a promotional press release stand out from our U.S. subsidiary to announce to those who are today customers of GoGoMeds that they now have a new product. The agreement with GoGoMeds, Dennis will talk a little more about that. So Dennis Urbaniak who is also joining me for today's call, our Executive Vice President of Digital Therapeutics, will go a little more into that deal. But the basis for the agreement is basically a distribution agreement where GoGoMeds has today a pretty broad reach with their own sales force and commercial activities, and they will now promote Zubsolv, but they are not buying our digital therapies, not for most Zubsolv, but our digital therapies. And we basically decided this was a promotional news and not material for the company. We did send it out through the financial media in Sweden also. But as it was in English only, we noticed that it was not picked up by the -- a lot of the Swedish online channels. The other one is with Trinity Health, and that press releases is actually not from us. It was them. So they asked us that they would like to announce this partnership or say the -- that they provide access to our products for their own employees. Trinity Health is part of a wider network of Trinity Health organization in the U.S. and the one that we have an agreement with is Trinity Health in North Dakota and some surrounding areas. Very important stepping-stone for us to get into the full network of Trinity Health but as such, that agreement is relatively small. But of course, it's a big sign of confidence in the science behind the products and in the products that they actually want to make it available for their own employees as a first step. Then we also have -- today, we will launch the brand name of OXD01. It will be modia. We'll talk a little about that in the presentation. And then we also have made a lot of advancement in our development of material commercial material for vorvida, in particular. And for those of you who are following us on video, I hope that -- online you will see a video being played. And for those of you who are following us only through telephone, you will be able to hear the sound, but of course, not the video, but I will invite you to go into the homepage to see the full video when you have an opportunity. So moving to Page #4. As I said before, the 3 speakers today is myself, Nikolaj Sorensen, I'm the CEO of Orexo. Together with me is Mike Sumner, Dr. Mike Sumner, who's the Chief Medical Officer. Mike is working both with our pharmaceuticals and have done that for several years and also Dennis Urbaniak who is only focused on digital therapeutics and is leading that effort in the U.S. I move into Page #6. And here, I just have a very brief introduction to Orexo, for those of you who are new to the company. So we started out as a specialty pharmaceutical company. Today, we have 4 commercial products that we have developed in terms of pharmaceutical products. We're doing that from our head -- our site in Uppsala, where we have the head office and also our pharma IND functions. Since 2013, we have our own commercial infrastructure in the place in the U.S., where we have all of our field force, but also Dr. Mike Sumner, as Chief Medical Officer for the entire company is located in the U.S., and he is running clinical operations, [ sales force ] is also ramped out of the U.S. We are a little unique in terms of being a pharma company in Sweden is that we stand on pretty solid grounds in terms of both revenue, EBITDA and cash position. So moving to the next page. When we look at the situation in Orexo is that we have converted from being an investment phase in 2012 that was before the launch of Zubsolv, then it took us 3 years to turn Zubsolv profitable. And since then, Zubsolv has basically been a cash cow for the company, a both cash cow and growth generator. That amount of money that we've generated from Zubsolv and I recognize a number that's on the homepage is actually from Q1 and not from Q2. So the number in Q2 was SEK 680 million. The difference is due to the acquisition of deprexis. When we look at the money that we have in our bank account today, the logic behind that and where we want to invest them is to create future growth. And what we have done now is that we have acquired the U.S. right to vorvida and deprexis, deprexis most recently. We have initiated a development of a digital therapy for opioid use disorder. We have invested quite heavily in building up a platform for distribution and reimbursement for digital therapies. The investments we're doing here are not unique to neither the deprexis or vorvida or our digital therapy for opioid use disorder. The strategy we have is, of course, to expand and get more products into the same platform. So we are deliberately designing a platform that should be scalable and be able to support other products in the U.S. And then finally, we're also advancing our pipeline where we have 1 pharma product that is entering the last phase of development, OX124. So the cash that we continue to generate from Zubsolv, the cash flow that we have generated during the last 4 years. The strategy for the company is now to invest some of that cash into the development of the digital therapy area and some of that into finalization of OX124 our new pharmaceutical product. Moving to Page #8. This is an overview of our pipeline at the moment, our products and pipeline. You see we have 3 pharmaceutical products that are all revenue-generating Zubsolv that we promote ourselves in the U.S. It's approved in Europe, and then we hope soon to be able to close a partnership for Zubsolv distribution in Europe. We have Abstral for breakthrough cancer pain went off-patent in the 2 main markets, U.S. and Europe and [indiscernible] last year, but there's still some income coming from Abstral from other markets. Edluar, we still receive royalties on a global basis. Then we have OX124, which is quite far the most advanced product and that is now entering into the final development stages. That is required decent amount of investments right now as we're building up commercial manufacturing of this product. And then we have the focus -- we have a few other pharma products, but in favor of time, I won't go so deep into those now. The focus of today is our digital therapies, and this is where we are going to explain much more about these products as we progress. I just shortly highlight that what we have today is deprexis and vorvida where Orexo has the U.S. rights for these products. Our partner, GAIA, have other partners for deprexis in other markets. And for vorvida, they are promoting that themselves in Germany. For modia, we have the global rights. Our focus right now is on the U.S., but Orexo has the global rights to modia, so we can decide where and how to promote that product when it is finally developed. Then I'm moving into Page #10. And this is a little -- so just to the -- what is the background for Orexo to decide to move into digital therapies. Some of you have probably heard me talking about this before, but for those who are new to the company, I'd say the logic that we have is actually twofold. One is that we have an established infrastructure inside into the C space in the U.S. where we see a significant need for improved psychosocial support. We see that the majority of the patients who today receive Zubsolv and any other buprenorphine-naloxone products in the U.S. do not receive adequate psychosocial support, which is in all recommendations, the pharmaceutical is one leg of the treatment, but it's as important to work with the mind and the behavior of the patients. When we see that, we have seen -- is there a way that we could solve this and drive it in the -- with the same thinking that we had around pharmaceuticals, where we could basically build a scalable business where we could add on additional patients without a significant amount of cost. And that's why we come into detailed therapies because when you look at the advancement in digital interactions, we see that the digital therapies have an ability and a potential to replace a lot of the interaction that today require human interaction in the health care system. And for me, that appears to be a way that we could solve some of the issues that we have in the health care system on a global basis where we lack access to health care providers, to physicians, to psychologist, psychotherapies and similar, where we can basically complement the existing infrastructure and replacing some of those resources with a digital solution. It's a way to vastly improve the efficiency in the health care system. I'm absolutely convinced this is going to happen, but I also recognize that we are in some early stages. So logic for us is basically this place where we act with our current products, we see a significant need. We have found a solution, digital therapies, and we believe that this long-term is going to be a fantastic growth opportunity for the company. Moving to Page #11. The other areas is, so why are we now moving into alcohol addiction and into mental illness like depression. And then when you look at the comorbidity or cooccurrence of mental illness with any kind of addiction, it's a significant cooccurrence. It's up to 50% of those with suffering from drug addiction also reports some kind of mental health issue. So it's very simple that we go from where we stand. Opioid addiction, we see a lot of mental health issues for those patients. We expand into that space. We see a lot of cross substance misuse where opioid addicts or alcohol addicts are also using the other substance. It's quite logical to move into alcohol addiction. So it vastly became very natural to go into these other disease areas, apart from opioid use disorder. Moving to Page #12. So what is it that we want to accomplish? Today, we have the right to 3 products, all developed by GAIA, German company, probably the world leader in these digital therapies. When we look at the U.S. market, we're seeing that one of the main issues for these products and for the rollout of digital therapies is the ability to establish a platform for reimbursement for distribution of the products that's integrated into the health care system in the U.S. We have decided to invest a sizable amount of money and resources into building such a platform, and we are now discussing, of course, with payers and health care providers, how we can smoothen out the process to ensure that patients who need access to these tools can find a smooth way to do it, where they can get reimbursed by the health care -- by their health insurance or by the health care provider. So we are certain that when we've solve this issue, we have an ability to expand into new products. And what are we doing to position ourselves there? We have a partnership together someone called Lyfebulb. Where we have an innovation challenge, where we have the final is coming up just in a few weeks. You can read more about that on our homepage. It's a way for us to create presence and get insight into a lot of the entrepreneurs that you see in digital therapies that you won't really see in pharmaceuticals because the cost of developing a pharmaceutical is so high. But when you get to digital therapies and you have an ability to start from a much smaller scale. And in those smaller scales, and in particular, when the -- a lot of them come out of the health care sector, we believe there could be opportunities for Orexo to play a more active role and here, Lyfebulb challenge is one way for us to get a good insight into what is going on. And again, I'm proud to see both the amount of interest from companies and also pretty -- a very strong jury that we have been able to attract to participate into this. And then we, of course, we are participating where digital health are moving, there's something in U.S. call Digital Therapeutic Alliance. Orexo is a member of that together with several other companies because we really believe that this sector deserves a role in the health care sector -- in the health care system, and we want to play an active role in this. So we are -- right now, the strategy for us is to build this platform starting with the products we have today. But we're not done with these 3 products. We are going to expand into more new disease areas when we get confirmation that our reimbursement and distribution system works. On Page #13, the next page. We have an overview of our 3 products, and you will hear much more details about those by Mike, in particular, and a little from Dennis later. So I won't go too much into the details behind them. But as you can see here, we see them to have a pretty sizable sales potential. And if you want to get a little more data behind those estimates, and we presented that at our Capital Markets Day in March this year, so you can access that on our homepage. And you will see we have taken, we believe, a relatively conservative estimates in terms of what we can reach in terms of patients and the market share we can get in the market. And with just a little market share we can actually get to a pretty high number because the number of people who are affected from depression, from alcohol issues and from opioid issues is significant. Then said that, that we have a significant potential. I also feel it's my duty to say that we also recognize that this is in a very early stage. There are a lot of hurdles that we and other players in this sector needs to address to ensure that this market really takes off. We see that commercialization and this how do we scale it, how do we get the commercialization out to more than just a few customers is something that start to loosen up, but it's not really there. There are a few companies like Livongo, who was just acquired a few months -- a few weeks ago, for $18.5 billion, I believe. Livongo, I think, is one of those companies who have succeeded to find a route to commercialize on a broader scale. And we, of course, find that they're paving the way for others like Orexo. Pricing is an area. It's -- as I said, it's quite easy to enter this space. But how do you really differentiate and show those companies who have invested a lot in development and creating clinical evidence that those products are actually better. And this is a dialogue, you, of course, need to have with all the insurance companies who get calls from a lot of different entrepreneurs who often come with just a concept and some powerpoints. What's the difference between these products that we come with and those who are much lighter and you can download from App Store for maybe $10 or $20. Here, I think there's an educational efforts that we need to put behind. But I think, again, the evidence we have from the dialogue with payers is that they do recognize there is a quality difference. Reimbursement is another area. Of course, when a patient want the product. Since a few days back, we now make it possible for patients to pay online directly for purchasing vorvida but the optimal way and for this market to really take off, we want the health insurance to cover this. We see there is a great interest. There is a great understanding about the medical need for these products but we also recognize that for a lot of the health insurance companies, there's no established reimbursement process, no established review process for these products. And this is something we need to work with. And this comes out of this being a disruptive technology that while it has been proven clinically, there are still a -- it's coming in as a completely new treatment tool in the box for the health care sector in the U.S. and other countries. All of these hurdles is something that we can overcome. There are so many other companies who are working on the same in a very serious manner, in particular, through the Digital Health Alliance in the U.S., and we can see that the way we're received from health care insurance companies, from providers, this is clearly top of mind. One of the largest national in health insurance companies in the U.S., we have set up a meeting with them later in the autumn. And why haven't we done it yet? Because they have just recruited a person who's going to sit up in the top management of this organization with a full responsibility for digital therapies. That just happened right now. And that's kind of showing where we are. One of the largest insurance companies in the U.S. have just decided to appoint one person who has a full responsibility to implement digital health solutions into that insurance company. So we are working in parallel with a lot of the payers. So with that said, I gave you a little introduction to why do we have this telephone conference and also to this strategy behind Orexo and digital therapies. But I guess the main interest for a lot of you should be listening to Dr. Mike Sumner presenting clinical data behind deprexis and vorvida. Mike, the floor is yours.

Thank you, Nikolaj, and good morning, good afternoon to the people on the call today. If we could move to the Burden of Depression slide, please. So I'm sure to many on this call, burden of depression is well recognized. In 2017, there were actually 7.1% of the U.S. population who had a major depressive episode defined as a period of 2 weeks or more having significant symptoms. That is actually also with over half of those classified as actually having severe impairments along with those symptoms. And unfortunately, that data is obviously pre-COVID, and we know that there has been a significant increase in depression and also that will relate to vorvida problematic drinking later on. In transitioning to the next slide, that burden generated 200 million prescriptions. But as you will see on the slide, that actually only represents 50% of the population. And there is actually 35% of that population who are untreated. And there is a recognized relationship between the lack of treatment and worse outcomes down the line. So that's a significant shortfall in the management of these patients. Moving on to the overview of deprexis slide. Just like if you are a look and feel of what deprexis looks like and actually also applies to the other products. All 3 of the products that I'm going to discuss today are based on cognitive behavioral therapy principles. And they include the patented artificial intelligence aspects that is being developed by our partner, GAIA, which allows for the customized nature of both the content of the patient receives and also the nature that they receive that. And as you can see on this slide, embedded in the program are audio recordings, text, which can be delivered in different lengths, if you like, a short description or a more lengthy clinical description that's inside the program and there are animations and illustrations and videos, which just make it more engaging for the patient. So if you took 2 people going through deprexis who had different background, means, their journey through deprexis could be entirely different. And that is, in some ways, as you would imagine, very similar to how therapists could interact with their patient and change how they deliver their therapy. So moving on to the next slide. What is actually obviously more important, though, is what's the actual clinical effect of your product. Our partner GAIA has done an excellent job supporting research, and it is actually quite a challenge to get through the -- all the different clinical studies with deprexis in the time we're allocated sometimes. So -- but I -- just to highlight some of those today. They have studied deprexis in multiple clinical situations. And one of the main studies, the U.S. study by Professor Beevers out of the University of Texas, was actually in a clinical setting with very minimal interaction from the clinicians overseeing the clinical trial. So in some ways, akin to a patient going in to see their family practitioner and receiving deprexis without much wraparound services. And I'll show you the clinical benefit from that study. But they've also looked at it integrated into face-to-face therapy. And what was actually interested -- interesting in that study was -- it was a 12-week study. And in that 6-week time point, they looked at what the relationship was between the patient going through the therapy and the therapist. And if deprexis wasn't in that included in their treatment program. The working alliance between those 2 actually predicted the outcome, which I think is fairly constant. However, once you integrate deprexis into the face-to-face therapy, it didn't matter as much of what that relationship was, it wasn't able to predict whether there was a successful clinical outcome. And they've also used deprexis in specific to these states -- many disease states are associated with significant depression. And so they've looked at multiple sclerosis, epilepsy and that's gambling addiction as well. So moving on to the next slide. So what is nice about all those studies is that they -- every single one of them showed a positive clinical impact for deprexis. And this leads into the concept of effect size. What effect size really means is it's the kind that a patient can actually notice an improvement from an intervention. And in depression, that is given a score of 0.2 and if you look at sort of depression research in the whole, people start getting excited around a clinical effect size of 0.3 as a meaningful -- as the intervention has proved a meaningful output. But when you put all the deprexis studies together, you actually see a clinical effect size of 0.51. And so we're seeing a significant clinical impact across the deprexis studies. So moving to the next slide. This is the U.S. study that I said by Professor Beevers. It recruited 376 patients, there was a 3:1 randomization. So actually just 8 weeks of deprexis. So we allow access for 12 weeks in United States. So that gives the patient, obviously, more time to access the exercises in the program. But the 8-week study also shows in some ways, how quickly a patient can get a clinical improvement in their symptoms. The patients were required to have a moderate level of depression. And if they were receiving other treatments, they had to be stable for 30 days. And you were excluded if you had a suicidal risk or another major psychological diagnosis. So moving to the next slide. The primary endpoint used to be quick inventory of depression symptoms. This is a scale from 0 to 27. And as you'll see on the slide, patients had a score of around 15 to 16 on average. And this actually put them at the upper end of the moderate depression range. And you can see from following the interventions there was some improvement in the care as usual, but there was a significant improvement in the patients that received deprexis. And that the effect size, as you mentioned from the previous slide, I said there was an average of 0.5. But in this study, it was actually an effect size of 0.8, which was a very large clinical effect size. And patients actually had a 12x greater chance of receiving a 50% reduction in their depression symptoms. So that was very nice to see. But also it's not just the depression symptoms, depression affects all aspects of their life or many other aspects of their life. And there was also a significant impact on the disability. They use the Sheehan Disability Scale. And so these patients were not only seeing an improvement in their depression symptoms, but it was also translating into other elements of their life. So the next slide, this is actually from the first German study performed. It's, in some ways, a very similar design to the Beever study. So I'm not going to go into detail there. But what I used this slide to demonstrate is that you could -- these patients actually had a 6-month follow-up. And obviously, one of the questions that we received is, is there a sustained clinical effect after the use of the product? And when you actually think of what CBT does, I mean, it actually changes the way you think about issues. And I think one of the sort of simple example is actually a sort of vorvida example. If you walk into a bar and you have a single drink and then your thought process goes to, oh, well, I've had a single drink. Now I can -- I might as well just finish the night and drink how I used to. That clearly isn't a good thinking process. It will be much better to train yourself to think I've had a single drink. I enjoyed that. Now I can go home or whatever. So the fact that CBT helps you with your cognitive restructuring goes to the point that you would expect to see sustained clinical effect with these products. So with that, I am going to transition into vorvida and problematic drinking. So if we can move to that slide. So problematic drinking isn't something that is often talked about. But when you actually look at the statistics, it actually is -- has a very similar impact to depression with 16.6 million people binge drinking greater than 5x in the month, in the United States. And as you can imagine, this has significant impact in both short and long-term disease conditions and has a very significant economic burden, which is actually largely related to binge drinking. So if we move to the overview of vorvida slide. Vorvida, again, has a similar look and feel to deprexis organized in sort of 4 modules, but there is a lot of content into those 4 modules that the patient can access over 6 months. And it takes the individual through recognizing their drinking behavior, setting the goals that the patient would like to achieve. And then it gives them exercises to integrate into their daily life. And then also has a module that plans for after vorvida so that they can take those behaviors and successfully transition them into their day-to-day life. If we can move to the next slide, please. So vorvida has a single study, but a very well-designed and significant study. It was conducted in Germany. There were 608 patients who were equally randomized to vorvida or care as usual. The inclusion criteria were basically you had to be drinking more than what was the normal recognized safe level of drinking. So at that time, that was 1 drink a day on average for a female and 2 for male. And obviously, in the United States, those recommendations have actually just been reduced to one drink for all. However, the patients, as you'll see in the study, were drinking considerably more than that when they entered the trial. And 1 question I have got is this was a German study, the drinking laws are different in Germany to the U.S., so how does it translate to the United States population? And when you actually look at the age of first drinking and also the time that they started drinking regularly, they are very similar to the U.S. population with an age of around 15 for their first drink and starting to drink regularly at around 17.5 which probably isn't that different for a lot of American children going off to college. So if we can move to the next slide, please. So this is just a brief look at what they measured in the study. They used the Quantity-Frequency-Index, which is a self-report for the past 30 days of drinking and the timeline follow back, which is a report of the past 7 days. These are well recognized ways of reporting alcohol intake in clinical trials. But what I think is an easier concept to grasp, but for people to buy into is, everyone can recognize binge drinking as greater than 5 drinks per day on a single occasion. And obviously, the elements of drunkenness, and I'll present data on those in a couple of slides. So if we can move to the next slide, please. So vorvida was associated with a significant reduction, as you would hope in this trial as measures both the QFI and the TFB. And there was also an impact on the care as usual, which you might expect as these patients were seeking help with their drinking behavior. So it was -- it's nice to see also that the patients can impact their drinking without vorvida. But what they weren't able to change their drinking behavior as we move to the next slide was when you look at the binge drinking and drunkenness parameters. So for binge drinking, they started off in the clinical trial drinking -- binge drinking every other day and by the end of the 6-month time period, they were roughly down to only being able to binge drink on average once per week. And drunkenness also went from 4.4 days at the start to 1.5 days on average at the end of the 6-month period. And as you can also say, there was no real impact in the care as usual. So vorvida was doing something very different than just the self-motivation of trying to reduce your drinking. So then on to my last slide on modia. This is the product that is still in development, but certainly in the final stages. As you heard Nikolaj mentioned, there is a significant lack of access to psychosocial support for patients with opioid use disorder. Looking at the data there out of 93% -- out of -- looking at the health care providers, 93% of them reported that most MAT patients would benefit from counseling, but only 36% of them reported an adequate number of counselors in that area. And when you actually look at patients who were starting buprenorphine therapy, 41% of those reported they didn't have access to counseling at all in their first 30 days of treatment. And when I think back to the Zubsolv data, you see considerable drop out of those patients in the first few weeks of treatment. So getting that access to behavioral therapy as well, we think could have a significant impact on treatment outcomes. Modia is going to be available to patients for 6 months. It's going to be structured into 24 exercises, and we will be bringing this product to market in quarter 4 under the recent enforcing policy for digital health devices during the COVID emergency, and we will be planning a very robust data gathering exit -- exercises around modia to ensure that we can demonstrate the efficacy and safety going forward. And so with that, I would like to hand over to my colleague, Dennis.

Thanks, Mike, I appreciate that. And if we could go to Slide 31, I'm very happy to introduce formally the modia name and logo. We're incredibly proud of this product at GAIA and at Orexo and we think this does represent a new modern-day for patients with opioid use disorder. We're also proud of how we've got the patient insights along the way. I'll point out the smaller the speech bubble in the A that's representative of individuals in recovery, the insight is there a lot of moments, which to -- people that have an experience recovery may not seem like a big deal, but those individual moments really matter and their progress in milestones to recovery that we know modia is going to be a key part of. And so we brought that directly into the branding and to the logo and you can see the color design. And so this will be our formal reference for modia as we go forward. Obviously, we're excited to turn what Mike just described into reality for so many that need it. Moving to Slide 33. As we talk about our digital therapeutics portfolio across the board, we get a lot of questions around what are these therapies? Help me understand them a little bit more. And when you have 3 or 6-month therapies, it's not always easy to demonstrate that, but I'm really excited to share what we call a trailer video in the concept of a movie trailer. And so I am going to press play now so you can see the trailer video. [Presentation]

So we'll move to Slide 34, please. So you've seen from Mike a lot of clinical elements and some of the important aspects. But hopefully, that trailer it shows you some of the common features of our therapies and why we're so excited to bring these forward with the evidence that they deliver, they're all based on CBT, as you saw, they are supported by peer-reviewed clinical evidence and that's so important to demonstrate the true impact that's been tested of these therapies. Also this evidence has been done in pragmatic trials, so they're translatable into real-world situations. But the other thing that we love about them is that patients can access them in the privacy of their own home. They are incredibly simple from a user experience point of view, nothing to download. You just need a connected browser on any type of device and you're ready to go. And the patient can set the pace and adapt it to their own situation. And for areas like problematic drinking, for example, this is highly relevant to the needs that are out there. And as Mike mentioned, the power of our platform is we can individualize the therapy, mimicking those actions that the best therapists would take in a counselling session so that you have a highly relevant experience, and we know that, that translates into outcomes. And so if we could move to Slide 35, I'd like to just share, since we talked in July and mentioned our launch, we've made great progress, and I'm incredibly proud of the efforts the teams put forward. What we're seeing from the market in our initial discussions, the medical need and the treatment value here is recognized for both deprexis and for vorvida. Our customers are dealing with these issues, they understand the challenges and they're clear on the unmet need, and that's incredibly positive. We're advancing dialogues with -- we mentioned in July that we're targeting commercial insurers, integrated delivery networks and other types of distributors and employers. And I'm very happy to say that despite the challenges of the pandemic in terms of normal call patterns and conversation patterns, a lot of conversations are moving quite significantly with key partners on the access front. And obviously, that's an important development that we'll keep everyone posted on. And of course, this past weekend, on the 25th, we had another major milestone with our full vorvida experience and this represents a little bit of what Nikolaj mentioned earlier, how we're building a comprehensive service-based platform for all of our digital therapies, Vorvida being first out of the gate, that makes the process simple that helps people understand the reimbursement landscape and also for those individuals that want to purchase the products directly for the discrete nature, for example, with vorvida and problematic drinking, we can make that happen. Another great milestone is with our partners at GAIA, we've completed technical development on modia and are now moving forward on the testing. So terrific progress in a short period of time. Of course, we still have more to do. And we're very focused now on navigating the landscape that Nikolaj described earlier, reimbursement, while the medical unmet need is clearly recognized, individual customers and payers don't necessarily have established pathways. Not only for access but for administration. And so we're working now on creating that together with those partners. We're moving to demand generation. So we will have initial media, targeted media efforts for vorvida as well as we're very excited to unlock the power of our terrific sales organization in the U.S. to educate physicians, and that's all starting beginning in October, which is today. Finally, the deprexis updates, you'll see a little bit later in Q4 following some of those features that we have with vorvida. And then with modia, we'll move into a testing phase, both from a technical and clinical point of view, which will set us up for a broader commercial launch in the second half of 2021. So with that, if we you could go to Slide 36, just want to emphasize, we shared this information with you in July on where our launch focus was. And we're looking at a payer approaches that follow traditional pharmaceutical models, also a lot of framework based agreements, which are different types of agreements, whether it be value-based, et cetera, and patient direct models. And so we're continuing our focus on the top 2 obviously, the patient model for vorvida is out and ready to go. And what we're seeing in these payer discussions is the models are definitely evolving. And I think the benefit, they like the fact that we're open to the framework agreements. That offers the flexibility to find a way to make these fit, aligned to how care is being provided and delivered and paid for. And that flexibility, I think, shows a strong partnering opportunity when you line that up with the unmet need, we're very optimistic about the progress we'll make with access. And a good example of that, if you could move to Slide 37 is the 2 deals, the 2 very recent partnerships that we have announced. So GoGoMeds on the left. This is very unique because this is an organization that's quite innovative that's leveraging an infrastructure in place where they work with states and different types of customers, both private and public, but this is an organization that has a very strong understanding capability around behavioral therapies. And so the fit here with deprexis and vorvida was perfect. Our initial focus with GoGoMeds is looking at courts and surrounding systems. So probationary and attorney based approaches with vorvida. And from there, we will move to expand to deprexis, particularly with some of their employer-based customers. And I have to say, we just kicked this partnership off. We have been very impressed by the response we've seen from some of the judges we've been speaking to in our initial target states and so more to come there, but a terrific progress. And then equally, on the right-hand side, Nikolaj referenced Trinity and Trinity in North Dakota for those of you that might be tracking the continued progress of COVID in the U.S. Unfortunately, this region of the U.S. right now is experiencing a lot of the frontline surge that the East and others saw earlier and Trinity serves North Dakota, Montana, a very large catchment area, I think a very innovative decision by Trinity management to make these therapies available to their frontline workers. They have a very sizable employee base. A large population that they're serving. And equally, we have seen, in a very short period of time, the uptake in terms of utilization and questions and positive response in the therapies has been quite significant. So early signs, early steps forward, but very positive around the patient experience. Moving from there, I'll just remind you on Slide 38. Where we are in our commercialization approach. And as we've talked about -- as we've done these updates for you, we are taking a highly targeted approach to market, creating access. So we're still in Phase III of access creation and then we're starting to move to customer engagement and value creation. We'll do that quite carefully, meaning we'll target our commercial efforts as access is created, so that not only our investment's appropriately placed but more importantly, that, that experience for both the physicians, the payers and the patients is aligned and is positive along the way. That's a key learning we've had as a heavy focus on patient experience. I think a great example of that is on Slide 39. We, in July, announced to you on the left, our day 1 site for deprexis, for example, which is up today. We announced some of the vorvida marketing materials, which is the picture you see of our campaign in the middle and what's new and what we're extremely excited about on the right-hand side is a snapshot here of the full vorvida platform, where you can learn about the product, there's information for patients, for health care providers. And the full customer service and hub services, which help with things like reimbursement questions as well as any product questions. And I think another thing, I'm very proud that the team has been able to do is align with that we've started conversations on both Instagram and Facebook to educate individuals about vorvida, where it fits and how to learn more. So very nicely aligned social approach to support the product. Again, it demonstrates that anchor on experience. And if we could move to Slide 40, the other thing we're very proud of is along the way, whether it be development or as we now go to commercialization, our involvement and focus on patients and patient needs and patient engagement has been a top priority for everyone at the company. And now you can go to our Orexo homepage and read our blog, and we've had the great opportunity and benefit, frankly, where individuals have agreed to share their own personal stories through recovery, through mental health, all the aligned areas. And so this is just a snapshot of some of the amazing people we've got to know along the way who are providing incredibly valuable insights to us. And I'm proud not only that we're highlighting these very important stories, which are specific and give you real tangible examples. But on the next slide on Slide 41, we're also taking those insights and we're embedding that into everything we do to serve the market. And so it's recognizing their stories, but it's also providing them the tools and the access. And what you see on this slide is just a couple of examples of the way that we put together supporting tools, either directly from the website or through other channels to make the experience of learning about our products, in this case, these are vorvida examples, as well as acquiring them and then using them along the way as simple and as clear as possible. And we've seen across the board, that's a need that individuals have communicated on both the health care professional and the patient side, and so we're embedding those insights into our services. And as Nikolaj mentioned, that's the rationale for that investment on patient services and platform services that are serving vorvida today, we'll start to serve deprexis quite shortly and we'll become a core component of the experience we deliver for all of our assets going forward. So in summary, we've had tremendous progress in the commercialization front, we're very encouraged by the early response that we've seen from the marketplace. And obviously, we have a lot in front of us that we're continuing to push forward and drive with digital therapy, and we'll look forward to continued updates on commercialization as we go. So with that, I'll turn it back to Nikolaj for some closing comments and the Q&A.

Thank you very much, Dennis, and to Mike, for a -- for 2 very good presentations. I am a salesman, and I can't help telling you, if some of you have a U.S. credit card, I invite you and you think you have a need for vorvida, I can invite you to go into our homepage and you can buy a full subscription of vorvida for $750 for a 6-month treatment period. So that is available right now. So moving to page number 43. So why should Orexo be an interesting value story for you? We believe that when we look at our pipeline, we look at the need, and in particular, the need that it's emerging in the world right now as a result of the pandemic, we are placed in a very large and definitely growing market. We are moving into digital therapies, which we are absolutely certain, is going to be an integrated part of health care delivery when we look x number of years ahead. The only thing that I'm not certain about is the pace, but that we intend to 15 years that all of us, whenever we access health care, will have a digital health element into that interaction. I'm absolutely certain about. Orexo is there right now, when this market takes off, just like I said, there are several of these large insurance companies who right now are recruiting people to lead their own efforts into this space. Moving to page number 44. So one of the things that makes us unique compared to a lot of the other companies is we do have Zubsolv. Zubsolv is profitable. We had a more than 50% EBIT margin in the last quarter of Zubsolv. It's going to generate cash that we can now invest into both the digital therapies and into our pharma pipeline. And it will continue to do that for the next many years. This is enabling us basically to take this cash and now invest into the future growth of the company, which I think differentiate us from a lot of the other digital therapy companies who are more focused on this space and basically don't have that solid ground to lay on as we have from an Orexo part. The other unique thing that we have, and I think this is differentiating us, in particular, again, for companies who are coming from the [ tax ] horizon is, we do have an established U.S. commercial infrastructure that is meeting hundreds of physicians every single day, all relevant for modia in particular. But as you're seeing with the comorbidities and co-occurrence of alcohol addiction and depression. Of course, they are very relevant for that group also. And as we progress, and we will, of course, expand our sales presence into the other disease spaces as well using digital therapies as a stepping ground. And finally, we have a pipeline that even on the pharma side, is expanding and targeting some very unique needs, and I'm very sorry to see that the number of people who are affected from alcohol addiction, but maybe even more serious on opioid addiction has basically accelerated throughout the COVID-19 period. In some of the states where we have seen a lockdown, we've seen the number of people dying from opioid at the overdose has grown with more than 10% compared to the same month last year. So when being in this space, I'm sure we are in a position as a company where we, unfortunately, are in the aftermath of the pandemic, Orexo is very well positioned to play an important role. And with that, I will stop the formal presentation and open up for any questions. I apologize that we're getting close to the hour, but we will stay on as long as there are questions to be answered.

[Operator Instructions] Our first question comes from the line of Samir Devani from Rx Securities.

I've just got a couple, I guess, Nikolaj, you've talked about some challenges in terms of reimbursement. I guess, since over the last few months and since we last spoke to you, perhaps you can just outline the sort of the -- a bit more granularity what those challenges are? What are payers asking from you? And then secondly, just -- one of your slides, you're talking about going out to physicians this month. But is that premature if the reimbursement isn't in place?

So on the reimbursement. So what payers are asking us for is if you look at the distribution channels you have today, you have the pharmaceutical distribution channel, it's very well established. The payer process -- the payment process are going through the pharmacies to the wholesalers who will then pay to the pharmaceutical companies. That required that you have a prescription and goes into the pharmacies, the prescriptions in the U.S. for pharmaceuticals is very well established with a certain code. And there, we know some of our colleagues in the industry are working a lot with what they call prescription PTX. But the process is still not there. So it's everything from upgrading the IT systems to be able to reflect the -- are these new products, which are often based on an FDA approval with a certain number, a unique number for the products. So that is not there. The other alternative you have is medical benefits. And that's basically when you have a physician who is sending in a bill to the insurance companies. And then they will ask for getting reimbursed for whatever hours and other services that they have provided. Here, we are a little in the middle. We are providing what is much more like a medical service but we're providing in a way which is much -- which is more similar to the pharmaceutical therapy. And I think that is kind of the clash, where do we belong? Are we Unipharma product? Or are you a medical benefit? And how do we integrate that reimbursement process into the existing system and processes? And the same goes, you can say, for the review of pricing and benefit of the products when you get to pharmaceuticals, it's a very well-established process. All of the insurance companies have forms that we need to fill in. They have what they call P&T committees often. But there's no such things for digital therapies. And I think this is where you end up is when we are talking to a lot of the insurance companies from the medical perspective, they're really positive about this. I think we can say that unanimously across the companies we have talked to, they like the idea, they get the medical benefit. The question they come back is, but now we need to find a way, how do we put this into our systems? And here, I actually think there's a difference. There's not 1 answer to your question, it is different. But I think the problem is this kind of we are an -- in the middle between a pharma and a medical benefit. But at the same time, there's a huge interest in solving it. But I think this is something that is taking time, but it's very positive now to see several of the large insurance companies are actually hiring people to take care of this. So we are able to work along with them. And then with regards to the field force. So the opportunity we have right now is, of course, that our field force is already out there. The main targeting for the field force will be the existing physicians who are working with Zubsolv. It will basically be for those who are also seeing alcohol -- patients who are suffering from alcohol addiction. And if you compare the alternative for a lot of these patients is to go to a rehab center, it is to pay for their own counselor and when you look at the price of that, even $750 that we're charging is quite attractive for these patients. So for patients who do have an issue with alcohol addiction and for the physicians where we meet there is now an opportunity for them to purchase access to the product. So this is more direct to patient. It's basically paying out of pocket. At the same time, we are working with a lot of the -- with more and more physicians to put pressure on the insurance companies to reimburse it. So you're kind of working from 2 ends. One is from our market access team meeting the insurance companies asking them or trying to -- asking them to reimburse the product. And at the same time, creating a demand from physicians who are going to the insurance company and say, we want you to reimburse this product. So it is kind of from 2 edges. But right now, the main focus is on existing targets, so to say, the price for us to go out with our field force is not that high because we have a significant synergy with the established organization. So I don't know, Dennis, if you have anything to add to this.

Yes. I think that addresses it. I think there's kind of 4 phases, there's awareness of DTx, what are they and how do they work? There's the medical evidence generation. Then there is how do we create access? And finally, the logistics of how do we administer it? Which are the practical ways to get things paid for. So we're kind of moving through each of those phases, as Nikolaj described. And with each payer right now, they're unique and individual. So it's a matter of connecting within each of those steps. But the evidence we have gives us tremendous momentum to do that.

Okay. Any other questions?

That's great.

The next question comes from the line of Klas Pyk from Nordea.

Two, if I may. So first, thank you for elaborating on the challenges ahead in the previous questions, but could you please be a bit more concrete about your expectations on the timeline ahead? What is a reasonable expectations for getting, for example, vorvida reimbursed? And second, in the out-of-pocket segment, even though vorvida has only been available for around a week, can you give any indication on the very early uptake of new users?

So on your first question, that's, of course, it's a difficult one. There's a lot of discussions going on with both regional and national insurance companies. If we take just from the response we have from the medical part, we would believe it's something that is going quite fast, but then some of these organizations are very large. But we do anticipate to see reimbursement building over the next quarter. But as we've said all the time, we believe the real acceleration in sales is going to come next year, but we do believe there will be reimbursement during this quarter. But to be very -- I can't be more specific than that because you can say we have some very positive discussions with large national players. But at the same time, we're also seeing that it's difficult for them even to get together their team partly because of COVID-19, which is delaying that a little. But we do believe that we see some reimbursement come during the first -- this fourth quarter, but consistent with our previous message, we believe the real buildup is coming next year. Then around uptake for our for homepage. So first, I say the homepage is live, but the promotion of the homepage is starting now. So whatever -- whoever is coming into the homepage is more by accident and actually more through some investor relations like impact and then maybe some of my friends on LinkedIn have found out because I published the link at LinkedIn. So it's -- we have not gone out wide this. So our expectations to sales this first week is not high. And at the same time, I will also say, we will not comment on the sales as we're just closing our third quarter, and we have our Q3 report coming in about a month's time. So I can't comment more specific on that. Any other questions?

As there are no further questions, I will hand it back to the speakers for closing comments.

Thank you. We have received a couple of questions through the Internet. So there's a question here. So in the vorvida [ ICTs ], where the self-reports of drinking cooperated by significant others. So were there any significant others involved in the self-reporting? It's maybe to you, Mike if you know that vorvida?

No, that was not part of the study design.

Then I received a question says, I wonder how long time it will take before you have reached a reimbursement solution with insurance companies? And my response here is, again, I believe that we'll see some of the first reimbursement coming through this quarter, and we will then expect to build up during next year. We have another one. Here's the civil one to U.S. market intention. The U.S. market in regards to patients treated with antidepressant somewhat 40 million to 50 million patients on a yearly basis. Of course, the addressable market for deprexis is a smaller portion of the total number of patients. How large do you assume the addressable market is? I believe the number we are looking at, Dennis, you can correct me if I'm wrong, but I think what we have identified is about 15 million to 20 million patients. Dennis do you have a more exact number?

That's correct. There's in terms of the mild to moderate to severe and experiencing depressive episodes, 20 million would be the full base and about 10 million of that are those that are undergoing some type of treatment today. And in both categories, deprexis is an option as an adjunct approach.

Then I have a question is how large is the accessible part of the addressable market? So how many of these patients, 10 million to 20 million are accessible? I think this is really about reimbursement. So this is how fast we get reimbursement. And I do think that the main focus for us are commercial reimbursement. So the ones who are on Medicaid, and I don't know exactly how that looks like for depression is definitely coming late or much later than the portion who have commercial insurance. And for most spaces, I believe that it's about a little more dominance on commercial insurance and Medicaid. So to make it easy, maybe half of this is commercial. Then I have a question, I like here, as Orexo's assumption predictions for future sales potential of deprexis, $150 million to $225 million in light of the number of patients seem low as that is only 225,000 patients annually. I must admit, I haven't done the math behind this. So -- but the question is, why are your ambitions predictions forecast so or low? I like that at the same time, also recognizing, and I know that from previously that if I go out with a much higher number than a lot of you will come and tell me, why didn't you get to that number. So this time, we have decided to be a little more conservative. And if you look at the assumptions that we shared at the Capital Markets Day, we believe that the assumptions behind these sales forecasts are reasonable. We also recognize that there is some uncertainty into the market. But of course, if we really see that is taking off, given the very sizable patient population, there's, of course, a -- you can have more optimistic scenarios than what we have shared. From the price ranges, $600 to $1,000 per patient revealed by Orexo, how much may be considered as gross profit, net profit? And then the third question is who manages the system maintenance in market support of DTx ,Orexo, GAIA? I can, of course, not right now share that number for gross profit and net profit, you would need to follow that when we report our financial numbers. I can say basically, the cost we have for this is the royalty we are paying to GAIA that cost is different by product. And so we're paying a different level of royalty for each product to GAIA. And that will be visible as we start reporting. But I would say if you compare our digital therapies it's very comparable to a pharmaceutical where you have a royalty and a cost of goods sold. So the rise is a little higher than what you have to see for pharmaceuticals, but then we don't have any cost of goods sold. And here, actually, I see, net profit is defined here is gross profit minus cost of sales and royalty to GAIA. So for me, that was sort of just explained to gross profit. And then there's a question about maintenance. And here, the way that's set up is that we pay a fixed fee to GAIA as a maintenance fee on an annual basis. That's not included in the gross profit report that we have that will be under our running cost. And it is GAIA who is doing all of the system maintenance, which is coming to the product. So when it comes to the reimbursement systems, the data analytics that we're building up, customer support system, all of that is Orexo or companies that we work with from Orexo. So we don't have any IT team even internally yet. So it's all through partnerships with different companies. Then I have one here again. And so could you shed some light on the safety features of deprexis, particularly relating patients which are worsening symptoms during the programs? Mike or Dennis, can you comment on that? So what will happen with patients who are seeing worsening symptoms?

So I mean, from a safety perspective, we obviously encourage people having such symptoms to reengage with their health care provider. To date, there is -- and we as part of the instructions use, the patients are warned that such things could happen. But on the whole, based on the data we have seen, this is a very infrequent event.

I can comment that when we were negotiating with GAIA, we have, of course, tested the products, of course, different employees tested the product. And we took on a little different role and one of our employees was deliberately trying to become suicidal in the way that he described his symptoms in the system. And the system basically came up with an immediate warning, say, we recommend that you immediately take contact with health care. And I believe there was even a phone number for the suicide helpline on the system. So it basically triggered. You should seek help from the health care professional.

Okay. Are there any further questions?

We have one more question from the phone -- from the line of Gergana Almquist from Redeye.

I have a question about the strategy of Orexo going forward because you compare to Livongo, but they own the technology. Do you plan to develop your own technologies? Or will you continue in-licensing from GAIA?

No, that is correct. And there's, of course, other differences with Livongo. So they also had a device included, which, in some way, helped them in the reimbursement process. But at the same time, if you look at the distribution model here, this -- the way that we are trying to build the control of one very, very important step in the value chain, and that is the reimbursement and logistics systems. And those systems we all own -- we own at Orexo. And while we, of course, are partners, a lot of the partners are different IT companies for helping us building this entire system. We will also own all of the data analytics capacity that we have around this and how we're going to use this data. All of that is something that we right now are using partners, but where we see that we will internalize some of these competencies. When it comes to the actual product, we will continuously review opportunities for business development. I can't foresee the -- I can't see that we right now should start employing IT specialists to start from a blank sheet of paper to build something. That is too long and it's too far away from our competencies. But what I do see is that Orexo can take a very active role either in a partnership or as an acquirer of a company that sits with competencies and technologies that are proprietary to that company. And in that way, building the system. And I will say that what we are looking for right now is to take some of all of the cash that we have in the company and we're generating from Zubsolv to look for acquisition candidates who have proprietary technology that we find would be valuable for the company moving forward. So -- but to start hiring IT specialists to start on a blank sheet paper is not in the strategy right now.

Okay. And my next question is about the marketing and sales. Have you addressed or do you plan to address the largest employers in the U.S., like Walmart, Amazon, I mean, large companies?

The short answer is yes. And the way that we -- but the way that we're looking at it is some of them, we will reach out to directly, and we are in process of hiring people on that experience. But what we have found is that a lot of these large companies have partnerships already with different suppliers who have a broad range of services. And the strategy we have is to reach out to distributors who already have that access to these large employers. I've worked with this before, although that was in Sweden, where we -- when I worked at [indiscernible], we were reaching out to companies with a smoking cessation solution, but we quite fast found that a lot of them have different health partnerships with different suppliers, who as part of that total package also have these smoking cessation solution. And when we start to partner up with them, that became much more efficient distribution channel. And GoGoMeds is actually a good example of that because GoGoMeds is today selling services directly to some of these large employers that you just mentioned. So that's one distribution channel, but we don't see that they are an exclusive channel. We are actually discussing actively with other companies who have that relationship established, who also provide other services.

I understand. And in this mode of collaboration, I mean or this middleman, what kind of fees will they charge? Do you know about roughly?

We know the deal with GoGoMeds, but that's not something we share. So we will -- we can't -- we will -- you will see the financial list. We won’t share the exact figures.

And that was the 1 question from the phone.

Okay. I must admit, those of you who have been following us all the way until now, we are 15 minutes later than I think we have said we would. So I appreciate that a lot. I appreciate the amount of questions both through the web and also those of you who have dialed in. We had a very exciting time at Orexo and like I say, the energy in the organization is tremendous, despite having the COVID-19 obstacles that we, like everyone else, have to address. But we're really looking forward to opening up our offices in the U.S. for all new colleagues that have been hired during the last few months, so we can start to really create a new company focusing on digital therapies under the leadership of Dennis in the U.S. So thanks a lot for your attention today, and I hope all of you will have a great day. Goodbye.

This now concludes the conference call. Thank you all for attending. You may now disconnect your lines.