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

Welcome to the conference call. [Operator Instructions] Now I will hand the conference over to the speakers. Please go ahead.

Thank you very much, and welcome to this third quarter call for Orexo. It has indeed been a transformative quarter in many ways for the company, in particular, in our R&D departments where we have made very good progress in 2 projects, and I will come back to that a little later. Today, I'm Nikolaj Sorensen, and I will be joined by Fredrik Jarrsten, our CFO; and this time, also Ed Kim, our Chief Medical Officer, who I believe will be new to many of you, but Ed Kim will talk a little bit more about our OX390 project and why we think this is an important project, both for Orexo, but also for the U.S. We will go through the business update. I will take that. And as I said, it will come in the -- on the products under development, focusing on OX390. Fredrik will take us through the financials before I will close out with the legal update and some approach for expansion for where we think we have some future value drivers. Starting with a brief overview of the quarter. As I said in the introduction here, we have made some great progress in our pipeline, in particular, with our GLP-1 agonist or project that we have OX472, where we showed some very promising in vivo data. And also, we received a BARDA fund, which initially is worth $8 million, but could be all the way up to $51 million, where BARDA will finance the majority of our OX390 project. During the quarter, our work with IZIPRY, formerly known as OX124 has proceeded well, and we are now starting the reliability and stability testing that was required by FDA more or less on time. With regards to OX640, we have -- during the quarter, we have manufactured the first batches of AmorphOX powder with epinephrine at commercial scale. And we have continued partner discussions, but we have also, as I wrote in the CEO comments, seen some increased uncertainty around the market in the U.S. We believe that is something that will be solved, and I will come back to that a little later. Looking at the revenues. Clearly, in the Swedish krona, the dollar-Swedish exchange rate has had a strong headwind during the quarter for the company that impacted with nearly SEK 11 million, which is kind of close to 10%. But we have also seen during the quarter that the wholesaler inventory has declined in the U.S., which explains a lot of the development compared to last year. Then on EBITDA, we have a negative EBITDA, which was not entirely according to our plans, but that is very much associated with the increased value of the share price during the quarter where we are reserving for provisions for the -- for taxes and particularly around the social securities in Sweden, which is impacting negatively in the quarter, but not from a cash flow perspective, but from a P&L perspective. Fredrik will come back to that a little later. Looking at the outlook, we reaffirm the 2025 outlook. And what's worth noting is that we still believe that it's possible for us to reach our positive EBITDA number for the full year. Moving into our U.S. commercial update. We are seeing the buprenorphine and naloxone market is picking up a little pace, getting closer to 5%, but 4% growth year-over-year. And also, over the last quarter, we saw a -- a slight increase with 1%. This is particular now which is interesting is behind the scene is that the market has really been driven by the commercial segment, which is now basically on the edge of surpassing Medicaid as the largest segment in the U.S. That is important for us because of 2 reasons. First of all, the commercial segment has a lower rebate, so it's more valuable. Each patient within the commercial segment is worth much more cost than a patient with Medicaid. But also, we have and we maintain into next year unrestricted access to nearly the entire market with 99% of the volume today sitting with payers where we have no limitations in access for Zubsolv. And we have no changes expected for next year. In the public segment, we have seen Medicaid decline. This quarter actually increased a little, but at a much slower pace than the commercial segment. And we have seen in both Medicaid and Medicare that our access is nearly unchanged. There's a small, small [flat] where we've got some restrictions for 2026, but it's not really material for the company. One thing that is interesting in this space is particularly where we see our largest account is with Humana Medicare and Humana Medicare for a Zubsolv perspective, had a significant impact of 2 reasons. So the one is that we have seen Humana Medicare declining because they had new restrictions for certain part of their patient populations, but also that the rebate increased for that particular account. So we [cannot] -- both at lower prices, but also we saw negative volumes, which have had an impact on the company year-over-year, which is actually the main explanation behind the year-over-year negative development. From a quarter-over-quarter perspective, we're actually from a pure demand perspective, we have no major changes. We are quite stable in both Medicaid and Open and actually grow a little in some of the segments, but we do still have some negative impact from Humana and to a less extent of the UnitedHealth Group. For those of you who are new to the companies, these were the formerly exclusive contracts where Orexo had nearly the entire volumes within these accounts. But after the introduction of generics in 2019, we have seen a steady decline in the 2 accounts. One thing that I have shown before is a little around the inventory and this because we have a strong expectation of a buildup here in Q4. And to validate that a little, I just want to show some more interesting data here. So one is looking at the sales to pharmacies. That means that the wholesaler sales to the pharmacies is down about 1% compared to last year. Some of that is, of course, pricing when you compare to our net sales in these numbers, we also have a 4% price increase in the start of the year, but that's also something we anticipate would happen next year. From a gross sales perspective, we are also stable despite the volatility you can see here on the dark line. And we're down about 1% year-to-date. And that is despite the destocking we have seen. And I'm just looking a little closer on the inventory levels at wholesalers. This is a new picture for all of you, I believe. You can see these 2 peaks that are in the picture, they're both in the end of the year 2023 and also 2024. And if you look at the level of inventory when we entered 2025, it was 60% above the inventory that we have today in the end of Q3. But even just looking into the inventory in the end of Q2, it was actually 30% higher than where we are now in the end of Q3. So there has been an inventory decline, and it follows the same pattern that we've seen in previous years. So we are now expecting to see the Q4 that there will be some inventory build, which help us when we reiterate our guidance for the year that we actually believe we can hit the sales numbers that are in here and also overall for the company, hit the positive EBITDA number. Coming in under products under development, first area I will go a little into depth with is we did show some promising data in semaglutide, where we have done a nasal administration. And for most of you should be aware, and I'm sure you're following the pharmaceutical industry that this anti-obesity medications, which kind of a collective name for these GLP-1s is growing substantially. One is within obesity and diabetes, but also looking forward, there are a lot of expectations in more neurodegenerative diseases such as Alzheimer's and Parkinson's. We also see that there are areas within addiction where these have shown promising data. So it's really, you can say in one way, a drug with a very wide range of applications and where we see some of these patient segments would have benefit from a new administration form. On top of that, we also see with our dry powder formulation, we can add a lot of stability to the products. So what are some of the reasons why we believe? It's, of course, compared -- it's a small needle today that you need to take subcutaneous for most of the GLP-1s. Most of them only have an injectable [HQM] pipeline and there are a couple who also have an oral formulation, but with very poor performance in terms of bioavailability. But taking it into the nose, it's quite easy to self-administer. It's, of course, needle-free. It's a noninvasive route of administration. It will bypass the first past metabolism where you would normally, and that's why we see this low bioavailability of GLP-1 medications when they're taken orally in the GI tract. We don't see any need for refrigeration. We have data for 6 months of semaglutide in our formulation. And during those 6 months in 40 degrees heat, we have basically not seen any degradation of the active substance. So we think there are a lot of advantages coming in with the powder formulation, both from a patient perspective, from a stability perspective, and we think that can help also with improved adherence for the patients. With the data that we presented, this is a preclinical in vivo study. So I will say this is very early stage. We think semaglutide is the perfect model substance, but this could probably be applied to other peptides used with GLP-1s. Semaglutide is a very difficult peptide in the sense it's a very large peptide, but we're still showing this quite impressive uptake when we compare to the oral formulation of semaglutide with basically up to about 7x higher bioavailability using the nasal route of administration in the studies. We -- as I said before, we have continued to do stability studies, and we see minimum degradations after 6 months. And what we're doing now is that based on the learnings from this study, we will continue working on the formulation because the study was in 7 milligram --we know that 7-milligram of Rybelsus. We know some of the obesity data that we've seen from Novo Nordisk is up at 25 milligram for obesity. So we probably have to work a little on the formulation to increase the dosing also. The aim is, of course, to take this into a human trial, but we will have to look at the time line. So it's a little early for us to commit to a time line, but this is, of course, the ambition that we're working towards is to show that this -- we can replicate the data we've seen in dogs also in humans with improved bioavailability over the oral formulation. Then I will invite Ed into the conference, and Ed will talk a little about our OX390 project and why we think this is so important for the U.S. So Ed, the word is yours.

Okay. Thank you very much, Nikolaj here, and good morning, good afternoon to everybody. For those of you who may not recall, it was in April of 2023 that the White House declared fentanyl xylazine mixtures as an emerging public health threat. So that was about 2.5 years ago. And in the latest DEA National Drug Threat Assessment, which goes back over the past 3 years, the prevalence of xylazine in illicit opioid samples that are confiscated by the DEA has increased over 4x. And it's no longer a problem just in the Northeast, but it's spreading. And certainly, if you look at this heat map, has already reached significant numbers on the West Coast and it's been identified in all 50 states. Now -- it's not just how common it is now. But what we see here is that the deaths due to xylazine fentanyl overdoses continue to rise. This is a paper that analyze CDC data, which currently only goes to 2023. Now if you recall, 2023 was the first year where the total number of overdose deaths started decreasing. What you see here, though, is that in 2023, the number of xylazine fentanyl overdose deaths continued to increase. So we're also -- we're hearing this from market research as well as informal discussions that we have with colleagues and customers in the substance use disorder space that this really is a problem. And in the last 2 to 3 years, there's been emerging animal data suggesting that while xylazine is an FDA-approved veterinary product that is safe and effective when used appropriately in animals, when xylazine and fentanyl is given to these animals, in this case, usually mice or rats, it actually increases and sometimes multiplies the lethality and the opioid-induced respiratory depression. There is a paper published in 2023. It's the title on the left, which identified -- it didn't measure respiration but identified that a moderate dose of xylazine increased the lethality of fentanyl by over 100 times. So it took 1/100th the dose to kill 50% of the animals. So we believe that this is truly a public health threat, and it is growing over time. Now the BARDA partnership that we recently announced is a true partnership with this agency that is part of the Department of Health and Human Services. They're not only contributing a substantial amount of financial support, but BARDA has technical experts in all phases of drug development and public health who are at our disposal to continue to consult with us, advise us and advocate for the continued development of OX390. You heard Nikolaj mentioned that the total value is up $51 million. The current base period is going to be dedicated to the IND-enabling toxicity studies, formulation development and in-house manufacturing capabilities, and that totals $8.5 million. Based on achieving certain regulatory, manufacturing, clinical milestones, there are 4 option periods to continue the development. And these are negotiated with BARDA at each stage so that this is a staged approach to manage the risk of this program because, as you know, drug development always carries some degree of technical risk. The goal is to develop an intranasal rescue medication for use by lay persons or first responders in the community where these overdoses are happening. It will be developed on Orexo's own AmorphOX platform that you know so much about. And it will continue to leverage the existing manufacturing supply chain that we've already developed for OX124 and OX640. Back to you.

Thank you very much, Ed. And maybe worth noting also is we received -- the grant was signed in the last 2 days of September, and that's also the last few days of Q2. We have not included any effect of this grant into the Q3 numbers. So you will start to see some effect in the Q4 numbers and of course, continuing into next year. What it is, is it's a cost covering. So we will basically invoice for the expenses running the project and then BARDA will cover the majority of the expenses for the project upon invoice. And the cost coverage will be recognized as other income by the company. So going on to IZIPRY. IZIPRY is, of course, you intimately connected to the same issue Ed was just talking about. Here, we have basically proceeded according to plan with our upscaling of the manufacturing. We have had some good dialogue with FDA also around the nasal device where we can now use the new nasal device without any further studies. We would say that looking at the entire market for naloxone, it's very highly competitive, and that's something we're taking into account when we're looking at the launch strategy. So we are reviewing how we can put this to the market with the least amount of financial risk to the company based on a more competitive market in the U.S. and also the need for financing some of these other projects we just talked about. We do see that the product as such and getting it approved is something that's highly valuable for the entire value chain. Every partner we're talking to is talking about the commercialization. And for those of you in Sweden, have probably seen some of our colleagues in the industry just recently have had issues with manufacturing. So manufacturing is central and I would say, the number one cause of delays of many approval processes. So that we can have a product that has been approved on a supply chain, I think, is immensely valuable for other discussions and other projects. But actually, even also some of the exceptions that we -- unique exceptions we're using for AmorphOX is something with an approved product that is also supportive evidence for some of the other products that we have in pipeline. So in many ways, I think IZIPRY is paving the way for a lot of other products moving forward. And one of them is, of course, OX640. And with OX640, we have continued to do the upscaling. We have manufactured the first batches of powder, which are now being analyzed. We have had some partnering discussions, but I will say that the data we received from the first launch of a nasal product in the U.S. and even in Europe, that launch has gone somewhat slower than some of our partners had anticipated and that have had a negative impact on these discussions where there's a little more -- let's see how the market evolves over the next quarter or 2. But from an Orexo perspective, when we look at this market, we see the first product has come out with a strong growth. And we actually see from a financial perspective, some investors are seeing it's performing above expectations. But some of the industry players, maybe based on some early expectations from the company launching the product in the U.S., U.S. pharmaceuticals they find that this is somewhat slower than what they have seen. And when we are looking into this space, we're seeing it's around physicians' hesitance to prescribe before that they see real-world data supporting that a nasal delivery as -- as effective as an injectable. We know that patients in the U.S. who have allergies have quite infrequent interactions with health care. A lot of them don't see an issue in the daily day. So it's the annual meeting with the allergists, which is the time when you can get a new product. But also, from a more market perspective and something pushback is around the first ANDA that was filed in August by Lupin Pharmaceuticals on this product. So that has created some uncertainty. But if you look at the expectations by the investors, we see that the valuations are still significant. Our competitor, AIS Pharmaceuticals, actually according to the Wall Street Journal Markets have a buy rating by all analysts. We have some of the largest investors in AIS Pharmaceuticals have just continued financing with up to $250 million in the launch of neffy in the U.S. So for those who are close to the company, there's clearly an expectation that this market will go through. And from Orexo perspective, we still believe that OX640 has significant opportunity. Looking at the naloxone market, which we know very well, we saw that it didn't really take off before after 18 months. And we saw exactly the same concerns by physicians and patients. But today, I don't think anyone in the U.S. question the benefits of a nasal administration, which is probably a lead for some of the decline we have seen a number of people dying from overdose in the U.S. And we also believe that coming in with OX640, we're actually looking competitively, and we have done some market research. We know some of our potential partners have done some market research and all of that confirms that we have a very competitive product in the U.S. We still have IP until 2044, but to continue understanding the market and to get more evidence, we have started a market research using some external experts running the study in the U.S. that will be concluded during Q4 to ensure that we're actually focused on the right market differentiating parameters of OX640 when we proceed and to confirm the attractiveness of the market. So OX640, we continue with the development. We have seen some, you can say, delay in the partnering discussions. And also there's a concern from Orexo is the attractiveness with the uncertainty of some of these partnering opportunities where if you go a little further, get more certainty around the market, we see that could be a significant value inflection for a potential partnership. Moving into the financial section, I will invite Fredrik to talk a little bit about our financial results.

Thanks, Nikolaj. So on Page 22, looking at revenues, if we start looking on the top part of this page, you can see that our total Q3 revenue for the Group was SEK 119 million. And the vast majority of that SEK 114 million or 96% came from Zubsolv in our U.S. commercial business. Now that's down about SEK 17 million year-over-year, mainly driven by negative SEK 11 million FX impact. But we also had lower demand in net revenue terms, primarily from the previously exclusive contracts within UnitedHealth Group and Humana. So that was about a 3% demand reduction year-over-year. Now partly offsetting this, we had a lower destocking effect versus last year that contributed to a positive SEK 2 million. In local currency Zubsolv revenue declined 4.8% year-over-year. Looking at other revenues within HQM pipeline, Abstral royalties were higher, but that's largely because Q3 last year included the negative adjustment to historic reported royalties. Edluar royalties were stable, but Zubsolv ex U.S. revenues were lower, mainly because that didn't have any tablet sales to our partner, Core Healthcare this quarter. That's following the onetime inventory build earlier this year ahead of Accord starting manufacturing in Europe. Now if we switch to the quarter-over-quarter view for Zubsolv revenue, the waterfall chart on the bottom part of the page shows that opposite to the year-over-year trend, reported net revenues in local currency increased slightly in Q3 by approximately 2% versus reported Q2 numbers that though include the nonrecurring rebate payment we had in Q2 of SEK 9 million. In SEK terms, with a negative FX impact of SEK 1.5 million, quarter-over-quarter net revenue shows only a very marginal growth, reflecting a broadly stable demand picture in the quarter, as shown in the first 3 bars of the chart. And working against the gross growth was also a sizable negative inventory destocking effect of SEK 6 million during the quarter, as Nikolaj previously talked about. Moving on to the next page, the P&L. We already touched on our net revenues total of SEK 990 million. FX effect was a negative SEK 12 million year-over-year. But the weakening of the U.S. dollar year-over-year has, of course, also had a positive effect on our USD-denominated costs, which account for approximately 65% of total expenses. The decline in COGS, as you can see this quarter is driven largely by this favorable FX effect within U.S. Commercial, and that was about SEK 6 million. Also improved production costs for Zubsolv. So as a result, gross margin increased from 85% in Q3 last year to 94%. On operating expenses in Q3, which landed at SEK 133 million, we're pleased to see that's down 4% compared to last year, although about SEK 12 million is coming from the weaker U.S. dollar. But we also saw lower costs from a performance perspective with lower selling expenses in our U.S. operations in relation to staffing as well as lower marketing-related costs for IZIPRY. We also had lower admin costs, mainly from reduced legal fees. R&D costs, on the other hand, though, were higher, mostly related to high costs for OX640 upscaling of manufacturing. And then we had these costs of SEK 13 million for the long-term incentive programs. Mainly related to provision for social security fees following the sharp increase in our share price during the quarter. EBITDA was negative for the quarter by minus SEK 9.8 million. And that, though, include this SEK 13 million negative LTIP impact. So if you would exclude those costs, EBITDA would be positive SEK 3 million instead. If you look at the U.S. business specifically, EBIT was an impressive SEK 38 million for the quarter, and that's up from SEK 25 million a year ago. So that's an EBIT margin of 34% and an improvement from 19% last year. Let's move to next page, cash flow. We reported negative cash flow of negative SEK 15 million for the period. After adjusting for a negative FX effect of SEK 0.8 million that resulted in a decrease in cash and cash equivalents of SEK 16 million in the quarter. Operating cash flow was negative, and that's mainly due to negative operating earnings and interest paid on the bond. Adjustments for noncash items had a positive effect, especially from the provisions related to timing of rebate payments and also from adding back these noncash LTIP-related costs we had this quarter. So by the end of Q3, cash and cash equivalents were approximately SEK 106 million. And just a reminder, at the end of Q3, we still held SEK 20 million in our own bond, which could serve as an additional funding going forward. And then we're looking at the next page, our financial outlook for 2025. These metrics are reaffirmed and specifically, EBITDA guidance remains unchanged, driven by expectations of a positive inventory impact for Zubsolv in Q4 as well as stable demand. Continued strong cost control is also expected to have a positive effect, and then we should probably also see positive impact with the BARDA award and the covering of incurred costs in Q4. However, the EBITDA outlook is related to some increased risk due to impact from non-budgeted onetime items such as the nonrecurring rebate payment we had in Q2 of SEK 9 million. Also provisions we talked about associated with LTIP program and also significant exchange rate fluctuations. With that, back to you.

Thank you. Maybe a word also on the BARDA contract and OX390 million is that the -- it's covering also our internal expenses and particularly in the first phases of the project, it's really our existing staff that is working on the project. So we will have covering of salaries that we would otherwise have to finance ourselves. Among others, Ed Kim, part of Ed Kim's salary that you listened to him earlier today is also covered partly by this award by BARDA. So a short legal update, the one process we still have ongoing, never ending is the Department of Justice, where we have not really any material movement during the quarter. What is worth saying is the U.S. system with U.S. prosecutors, which are the one leading these processes, that's political appointers on the U.S. prosecutors are political appointees. And that process has been going on during the quarter, and that actually was a change of the appointed U.S. prosecutor in the district that we worked with. And they really need to be confirmed before we think we can make any movements here. This is of course a process that is taking unnecessary time and also money, and it's something we would like to resolve, but we would need to have a U.S. prosecutor in place to have that discussion. So looking at the future, we can say we have 3 buckets that we really focus on. One is our commercial assets where, of course, we have some of the revenue of royalty-generating assets like Abstral, Edluar, which are still there even though on a low level. But the most important is Zubsolv, where we are continuing to work on how can we optimize the value contribution to Zubsolv long-term. On top of that, we, of course, have IZIPRY, which we're now putting into the semi-commercial space here as we are making good progress towards a -- an approval. So where we would then look at what is the right go-to-market strategy, both looking at the market potential and the amount of expenses needed. But really value optimizing those are important to enable the next areas, which is running our own projects, which today consists of 3 projects, one is OX390 that you heard, one is OX472 and GLP-1s and the last one is OX640. On top of that, we have the AmorphOX technology and how we can apply that to other -- in partnerships and to other companies' APIs. And really with the goal to become the partner of choice in nasal powder delivery technology, we believe today, we have the world's leading nasal powder delivery. We think the powder has a lot of advantages over a liquid nasal delivery, and this is something we working to apply together to -- on partners, in particular, in large molecules where we think this can move from injectables to nasal delivery, among others to vaccines, which is in our partnership with Abera. And we also have other nondisclosed partnerships where we're testing on larger molecules using our technology. With that, I will open up for Q&A.

[Operator Instructions]. The next question comes from Samir Devani from Rx Securities.

Probably easier if I just give them to you one at a time. So I guess kicking off on a couple of the positive developments that we've seen over the quarter. On OX390, the $8 million initial period, how long will that cover? And can you make any further comment on how 390 will be differentiated from existing rescue medications? I don't think you've disclosed yet the active and maybe when we might hear about that.

So I will take the first and then Ed can answer your second question around the differentiation and difference. So, the $8 million is lasting until the first gateway, and that is right now planned to be in the first half of 2027. So this will cover the expenses until the first half of 2027. With regards to the differentiation, Ed, could you give a little comment on how this is different than other naloxone and nalmefene rescue medications?

Sure. Thanks, Nikolaj. Thanks for the question. So what the preclinical evidence shows is that naloxone does not have a beneficial effect on the respiratory depression associated with xylazine. So there is nothing else available. This will be specifically targeted to reverse the toxic negative effects of Xylazine and drugs like it. So it will be a first-in-class.

And when do you think you'll be in a position to tell us what that active is?

I'll leave that to Nikolaj. I think he's going -- we're not prepared certainly today to disclose specifics around the API.

So, Samir I think we will do that in relatively soon, but I would say, in the start of next year. It's a little around the supply chain. It's around the IP and others that we want to get control of before we will disclose the details.

Okay. That's totally fair enough. And then just maybe moving on to semaglutide. Obviously, this is a noncore area for you. And I'm just, again, thinking about -- obviously, you've got OX640 on the sort of partnering table. When do you think you'll have enough -- or what further investment do you need to make before you think you could be in a position to partner this?

So I think [indiscernible] OX472 or semaglutide is an interesting one because it's -- we see it as a 2 -- I can say, 2-legged opportunity. One is, of course, semaglutide as a product, where that one will -- before you can get to market will be subject to semaglutide API patents, which I believe some of the large market is in the early 30s before they go. So there is an opportunity in semaglutide. And before you get to a partnering around that, I think there could be opportunities short-term, but really to get through human data, I think, will be an important milestone to have the first human data showing that it actually works not only in vivo in animal testing, but also in humans. I think that would be a great value inflection point and I also think the expenses to take us to that level is not that high. On the other leg, which is more other GLP-1s where you know today, Novo Nordisk and Eli Lilly, they have an oral formulation. There are some of the other, but not a lot who have oral formulations, but there are basically a large number of companies who have peptides for GLP-1s, which don't have access to an oral or nasal formulation. And that could give an opportunity which is coming much faster to test whether GLP -- we could have the product tested on that GLP-1, which, of course, then in that end, you would have to decide whether you can run both legs or you will have to decide which one you're going on. But we really think from a partnering with a pharmaceutical company with semaglutide, the real value inflection point is likely to come with the first human study. The other ones could come earlier than that.

Okay. That's great. And then just on my final question, just on IZIPRY. I just wanted to double check that nothing has changed since we last spoke in terms of the likely time line for the FDA filing, which you've said is mid-2026. Just wanted to confirm that's your current expectation.

That is still our current expectation.

The next question comes from Klas Palin from DNB Carnegie.

The first one relates to OX390. And I wonder if you are perhaps willing to share some further details about the clinical program needed to get an approval for this, what you have had kind of discussions with the FDA and the scope of such trials perhaps?

I will refer that to Ed with keeping the communication line as we have discussed, that we can't go into too much details, but on a high level, Ed, you can maybe answer this.

Sure. Thanks, Nikolaj. Yes, good questions. We are -- because OX390 is a new chemical entity, we are going through the IND-enabling studies currently. So our initial conversations with the FDA are going to be around getting to first in-human. So the clinical program and the pathway to developing this important rescue medication, those conversations need to be had once we're getting closer to our first-in-human studies.

Okay. And just to confirm, the device that you are intend to use there, is this very similar to the one for IZIPRY?

Yes, that's the plan.

Okay. Perfect. And then just jump to OX640. You are sort of downplaying the expectations of a near-term partnership, at least what I'm hearing. And just wonder, is the negotiations on pause awaiting this market research analysis or what's going on?

So there's a limit to how much I can go into individual discussions, but we still have ongoing discussions with interested parties. I think some of the opportunities, there's a question mark from us whether the attractiveness of entering a partnership with that market uncertainty is attractive or we would have more value to take this a step further while monitoring the market development. So there's a little on the value that you can get from the product partnering today, but there is still companies interested in the game with different setups. So there are still opportunities for partnership in relatively short-term, but I think the company needs to decide on what level of risk are we willing to take because we think there could be more value taking this a step further if we believe the market development is in line with some of the valuation indications for AIS Pharmaceuticals and some of their larger investors believe how this will evolve.

Great and then my last question is about OX472 then. You talked about perhaps conducting a human trial before partnering. Is it possible to provide some sort of time frame when you perhaps could enter clinical trials with this compound?

I think we -- so this has gone very, very fast for us. Of course, we've been working on the formulation and it has been even in the pattern since quite some years back, but the real work started this year. And what we are discussing internally and we are looking into the market opportunities is what is the target profile that we're looking for. For example, is the dosing that you need for obesity is likely to be higher than what you need for some of the other indications. But that also increase the risk in the study if you have to go very high in dose, then that could lead to more frequent dosing through the nose and that comes with some other potential issues that we don't know. So there's a discussion where we're leading and that comes from 2 sides. One is to understand the market and the clinical profile that we think is desirable. And the other one is purely formulation to say how can we work on excipients and how much can we get into one dose of the nasal spray. So there is some formulation work that we would like to conduct, probably followed up with some in vivo study before we move into humans with what you can say, a targeted formulation. So we will have to wait a little to see where that is going. But it is to run this first exploratory clinical study in humans is not a large study, and it's not something that's going to be quite -- very time consuming. So we could make a decision and we could run it relatively fast. As you might know, we have manufacturing capacity for clinical trial material internally. So we don't have to wait for slot times at a [indiscernible] manufacturer.

Okay thank you so much, that's what is all for me.

Thank you. And I believe we have received some questions on the telephone conference here. So I will go through those here. So have you applied or intend to apply for these FDA vouchers giving the company much shorter time line. So one to 2 months of approval for drugs of importance for the U.S., for example, OX390 and OX124. For OX124, we have tested to see if we could get accelerated approval. We think we came in a little late because there are other alternatives on the market. So we didn't have that pathway available. For OX390, that could be a possibility. And that, of course, is something we're exploring. What's worth noting here is, as said, BARDA is not only a financing. They are an active part in the development. BARDA is part of the HHS in the U.S., which is under the same department as the FDA. So I think even here, there are opportunities for us to work with BARDA to find the most optimal pathway to approval in the U.S. So that is something we expect. Then there's a question whether OX390 will be a single-agent product or we could combine it with naloxone together with an alpha-2 receptor antagonist. So alpha-2 is the target for xylazine for those of you who don't know that. And the use of a combination product in the U.S. is from FDA perspective, it's a hard sell. It requires quite a lot of data to combine the 2 products. Often, it will be easier to have some kind of combination package or you will have work with pharmacies to make a combination of the 2 agents. We will have to see how we would -- what is kind of the emergency steps you would take when you see someone who is potentially overdosed with an -- with xylazine or similar agent and then decide what is the best distribution way. But to combine it in one nasal spray, we believe will be a very complicated process from an FDA perspective. Then we have a question here, which is around whether we think inhaled semaglutide would be a better solution than the oral products in clinical trials given -- or production in clinical trials given higher toxicology discontinuations seen in trials such as those led by Viking, which is another company just for those of you who don't know who works with a GLP-1. Do you see interest from new investors, including international investors, given potentially huge market opportunity coming from that product. We think there's a lot of advantages of using a nasal delivery of a GLP-1. Working with inhaled could be, but in my -- and here, I'm not a physician. It is, of course. So Ed, maybe I will take it to you later. But I would just say, in general, I have seen that inhaled products come with more tox stories, at least historically than what we have seen with others because you get it into the lung and the long-term toxicology effect of that is difficult to predict. And I at least have been part of withdrawing a product from the market because of late coming toxic indications when from real-world data. The nasal distribution or nasal, at least with our powder formulation with a 7x higher uptake to the nose without the issues that you have with using an oral tablet, what we've seen with Rybelsus is very low bioavailability and also high variability among the individuals who receive Rybelsus and taking it through the nose, at least in our in vivo study, we saw much more consistent data from the nasal delivery than the oral delivery. So we think there could be a great advantage from a nasal delivery over the oral on the inhaled, I'm not that sure. I don't know, Ed, if you have any thinking around inhaled semaglutide.

Yes, Nikolaj, I think you've stated it all that the inhaled route of administration carries some risks. And what we want to focus on is derisking as much as we can the development of novel formulations. And we believe that the intranasal derisks it the most.

And then there was a second part of the question, which is around whether we have seen interest from new investors, including international investors, given potentially huge market opportunity. What I can see is that our share price have increased, even though today it probably came with some disappointment. I can understand from the commentaries, it's a lot of that is related to OX640, where we, of course, also had hoped and had some qualified expectations that we could have come to an agreement this autumn. But I would say that the quarterly data and also the patent litigation that [indiscernible] ended up with came as a surprise to both us and at least the lead potential partner that we have during the summer. But looking at what has happened after the GLP-1 announcement and also OX390, which one of them is driving, it's a little hard, but I actually think they might are very complementary with the GLP-1s having a huge market potential and OX390 actually give us some financial stability in the company by supporting a development program with a lot of the staff that we're working with, we are a small company, of course, the same people who have to work on both the GLP-1s and also on the OX390. And what we have seen is increased, significantly increased volumes. We have seen more block trades in the stock than we have seen recently. Some of the block trades are managed by international banks or banks which are at least a part of the banks not present in Sweden. And that indicates in my view that it's either some very affluent private individuals or more likely it's an institutional investor that is buying the share. We have not seen that in our statistics. And I think that is due to many international investors don't disclose their holdings. So we just see that we have an international custodian bank that hold an additional amount of shares. Then we normally would see that there are -- some of these investors will call us and ask for individual presentations. And I will say that we have had more inbound interest in the company after the GLP-1s from international investors than we have seen for quite a while. So that's maybe different indications that the hypothesis presented here in the question that we have new investors and that there has been an increasing interest is correct. And then we have another question, which is, I think, came before the conference, which is around whether Orexo is involved in Abera's long-term study for its influenza vaccine? What data was presented quite recently, which was quite promising? The short answer is no. We were not part of this long-term study. But I also think looking at how you design these studies, it would be natural for Abera to actually focus on the delivery method with the least noise, and that is probably working with an injectable or the way of delivering the product that they have done for most of their studies. That said, we still have an intimate dialogue with Abera. We have discussions about future studies that we could conduct together. So this is just supportive of Abera's vaccine that they have some great data that they could show. For us, that is very good news because it, of course, help us in the discussion with Abera for where the powder could add value to Abera's vaccine candidate. So -- but we have not been involved in the study. With that, I believe we have no further questions. And I would thank all of you that you listened in. I hope this is a new partner we work with for the conference call from our side. It seems to have been worked very well. I hope it's the same for you. So thank you so much for your time, and you're welcome to reach out to Orexo if you have any further questions. Thank you.

There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

Thank you so much.