Egetis Therapeutics AB (publ) (EGTX) Earnings Call Transcript & Summary

Welcome to Egetis Therapeutics Q2 Report 2026. [Operator Instructions] Now I will hand the conference over to CEO, Nicklas Westerholm. Please go ahead.

Thank you, operator. Good afternoon, good morning, and a warm welcome to Egetis Therapeutics Quarter 2 Results webcast planned for the coming 30 minutes. For those who I haven't had the privilege to meet before, my name is Nicklas Westerholm, and I am the CEO of the company. I will start today's session with a short business update. This will be followed by Anny Bedard, President of our U.S. and North American business, who will discuss the launch preparations for the planned Emcitate launch in the U.S. subject to approval. Then Henrik Krook, Vice President, Commercial Operations, will give a commercialization update of Emcitate in the European Union as well as other international markets. Finally, Yilmaz Mahshid, Chief Financial Officer, will provide a financial update before we're looking ahead to the exciting upcoming key value-enhancing milestones. We aim to leave ample time for Q&A at the end of the session. The most significant event during the first half of 2026 was the acceptance of our U.S. new drug application NDA for Emcitate. The granting of a priority review by the FDA with a PDUFA date set for the 28th of September. So far, it has been a collaborative dialogue with the agency throughout the review. The FDA has confirmed that it expects to finish its review by the PDUFA date on the 28th of September and does not plan to hold an advisory committee meeting. Subject to approval, the Emcitate launch in the U.S. is planned for the fourth quarter this year. During the second quarter, we were also granted our first patent for Emcitate by the U.S. Patent and Trademark Office. The patent provides protection for a novel composition with tiratricol as the active ingredient. The claims cover, amongst other things, a method of treatment treating MCT8 deficiency with a claimed pharmaceutical composition that encompasses tiratricol, dosing regimens and tiratricol composition with specific excipients. This patent is a significant milestone in strengthening our intellectual property portfolio. We expect the granted patent to be Orange Book-listable with an expiration date of 2045. Revenue for the [ fourth ] quarter was SEK 17.4 million, corresponding to a year-on-year growth of 23% at constant exchange rate. As Henrik will describe further, the Emcitate price negotiations within the German reimbursement process, AMNOG, was successfully concluded in the second quarter. Furthermore, in the quarter, we also successfully carried out a substantially oversubscribed directed share issue amounting to SEK 350 million, approximately USD 38 million at the closing price on NASDAQ Stockholm on the day of the raise. We were particularly pleased to see strong participation from both existing shareholders and several new international specialist health care investors, which will further broaden our shareholder base. Last but not least, we're pleased to welcome Tiago Nunes, a very seasoned drug developer as our new Chief Medical Officer in May. One of Tiago's main tasks will be to drive Emcitate's exciting indication expansion opportunity in resistance to thyroid hormone type beta forward in the short-term future. I will now hand over to Anny. Anny, please go ahead.

Thank you, Nick. Good afternoon, and good morning, everyone. We're approaching an exciting milestone, one that could bring the first approved therapy to a community that has waited a long time for it. With fewer than 30 business days to the PDUFA date, our focus is now on disciplined execution to enable the U.S. launch in Q4. Since our Q1 update, we've completed the build-out of our U.S. commercial organization. Our medical affairs and field team are fully trained and deployed and an experienced team of rare disease professionals is now executing a single integrated launch plan. The organization is just over 20 employees to date, supplemented by specialized consultants and will scale to around 25 at launch. Launch readiness activities are advancing across all critical work streams depicted on this slide. The patient support services operating model has been established. Payer engagement and value communication activities are underway and specialty distribution and supply partners have been contracted. We continue to expand engagement with the specialist physicians most likely to diagnose and treat MCT8 deficiency. These are the pediatric endocrinologists, pediatric neurologists and geneticists while expanding patient identification efforts to increase diagnosis and support long-term market development. Our continued engagement with patient advocacy organizations helps increase disease awareness, support patient identification efforts and inform our understanding of community needs. Our top priority at launch will be continuity of care for patients currently receiving tiratricol through the expanded access. Ensuring a seamless transition to commercial supply reduces the risk of treatment interruption and supports initial commercial adoption. Today, approximately 60 patients across 17 sites nationwide are being treated under the Expanded Access Program, a number that continues to grow month-over-month. We're prepared to support each patient's transition across the key touch points, confirming the treating physicians, enabling prescription and coordinating access support. This includes prescriber and caregiver education ahead of approval, along with affordability programs and bridging support designed to keep treatment access uninterrupted throughout the transition. We're also establishing coordination across physicians, the specialty pharmacy, patient services and payers, so any potential barriers can be identified and resolved quickly. In parallel, we'll continue to engage known patients not yet on therapy while expanding diagnosis and patient identification. With the organization built, the infrastructure being activated and patient transition plans advancing, we believe the U.S. business is positioned to execute at approval and deliver on a successful launch in Q4. Most importantly, we're doing this for a patient community that has had no approved therapy options to date, and we're really energized by the opportunity to change that. Thank you, and I will now turn it over to Henrik for an update on commercialization in Europe and international markets.

Thank you, Anny. For Europe and other international markets, Q2 was another quarter of progress for Emcitate with continued revenue growth, the conclusion of the German reimbursement process and further expansion of access beyond our initial launch market. Revenue in Q2 was SEK 17.4 million with Germany as the largest contributor. This corresponds to 23% growth at constant exchange rates compared with Q2 last year and approximately 30% sequential growth compared with Q1. In Germany, the AMNOG price negotiations with GKV were concluded during the quarter. We are pleased that the German authorities recognize the value of Emcitate. The new negotiated price and further insights into daily dosing lead to an estimated average annual treatment cost just below EUR 200,000. This is an important step whilst we continue our field-based work with pediatric endocrinologists, pediatric neurologists, other specialist physicians and relevant treatment centers to develop the German market further. And here, I would like to make a clarification because one Swedish analyst has misunderstood how sales revenue is accounted for. In Germany, in May 2025, we started commercial sales based on an initial price. In line with how the German system works, our reported sales have reflected the final negotiated price based on our assumptions, meaning that all our reported sales revenue since November 2025 accounts for the final negotiated price. And beyond Germany, we are progressing toward reimbursed access in additional European countries. In Spain, the national pricing and reimbursement dossier has been submitted. In Italy and France, we plan to strengthen the value dossiers with Emcitate survival data once it has been published in the peer-reviewed journal. At the same time, we continue to use funded access routes where available in other European countries, helping treatment reach patients through the most appropriate access pathway in each country. Internationally, we also see growing reach through our distribution partners. We are supported by Er-Kim in Turkey plus Central Eastern and Southeastern Europe and by taiba rare in the Gulf region. Both Er-Kim and taiba rare are actively identifying patients and initiating the processes aiming for funded treatment, which contributed to named patient sales revenues in Poland and Turkey in the quarter. After the quarter, we also signed a collaboration and supply agreement with Orspec Pharma for Australia and New Zealand, further broadening the geographic reach for Emcitate. So taken together, this reflects solid commercial progress. Germany now has an agreed reimbursed price. We are advancing funded pathways in key European countries, and our partner model is helping us reach patients in additional geographies. With that, I would like to hand over to our CFO, Yilmaz.

Thank you, Henrik. To start with all numbers unless called out are in our reporting currency, Swedish krona. Revenue for the first [ 3 ] months was SEK 17.4 million versus SEK 14.5 million in the same period last year, corresponding to a year-over-year growth of 23% in constant exchange rates. The gross profit is SEK 3.6 million. This comes back to the continued depreciation of balance sheet R&D, a noncash item. Excluding the quarterly depreciation of SEK 10.1 million, gross profit would have been SEK 13.7 million, corresponding to an adjusted gross margin of approximately 79%, which is considerably stronger than the 74% in the last quarter. As long as we are in an initial ramp-up phase in Europe, the depreciation will have a meaningful impact on the reported gross margin. However, we anticipate this to gradually dissipate as we start rolling out Emcitate in the U.S. post a potential FDA approval. Q2 2026 operating results were negative SEK 109.3 million versus negative SEK 78.5 million in the prior period. Just want to highlight that SEK 5.6 million of the administrative costs are -- booked in the quarter are employee stock option plan related bookings and the noncash item. This is a year-over-year delta of SEK 12.5 million as the Q2 2025 numbers included a positive booking of SEK 6.9 million. Also, a onetime cost of approximately SEK 4 million was booked during this quarter for social charges in connection with the ESOP exercise. These numbers should help you understand the underlying administrative cost line item during the quarter. Overall, the lower results are due to our continued investments and the work with the U.S. NDA, U.S. commercial buildup and corresponding prelaunch activities. The management, the Board and our main shareholders are all aligned that investing in the U.S. is a key priority as we believe this will be by far our most important market and where we need to succeed. For the second quarter, cash flow from operating activities were at negative SEK 93.9 million versus negative SEK 59 million. As highlighted in the report, we did strengthen the cash position further on April 21. In total, we did raise SEK 350 million, corresponding to approximately USD 38 million on a gross basis. The high demand for the shares offered were depicted by the fact that they were issued at a share price of SEK 5.25, which corresponds to a 0% discount to market close the same day. With the cash from this transaction, we ended the quarter with a healthy cash position of SEK 378 million, corresponding to approximately USD 40 million. With that, I would like to hand back to Nicklas.

Thank you, Yilmaz. Let me summarize and whilst reflecting for the first 2 quarters in 2026, it's -- I'm very proud to say that we have had several key deliverables that has been with a very successful outcome. Let me also remind you of the upcoming milestones for Egetis. We have a PDUFA date set for the 28th of September. Subsequently, subject to approval, we expect to launch Emcitate in the U.S. in quarter 4, our most important market. Also worthwhile noting is being granted a priority review voucher upon approval, it is likely that monetization of such a priority review voucher could take place in quarter 4. Of note is that PRVs sold in 2026 have fetched between USD 180 million and USD 220 million each. Last but not least, the preparation of indication expansion into RTH-beta, our next exciting pipeline opportunity is now progressing at pace. We are convening a scientific advisory board with key opinion leaders in the field to finalize the development program for Emcitate in RTH-beta and are in parallel preparing for regulatory interactions to agree the overall development pathway with the aim of starting a clinical study during 2027. Of note is that we have today over 50 patients with RTH-beta that are being treated with Emcitate as a part of a managed access program. In summary, we believe that the commercial opportunity here could be on par with the one for MCT8 deficiency. With that, I'll hand over to the operator for Q&A. Thank you.

[Operator Instructions] The next question comes from Kristen Kluska from Cantor Fitzgerald.

Congrats on all the progress this last quarter. While respecting you're still very much in active review with the FDA, can you give us any high-level feedback on the mid- to late cycle meeting? Was there anything substantial that came up? Anything that surprised you, for example?

Thank you, Kristen, and great to hear from you. Well, in essence, we, as always, don't communicate around ongoing regulatory interactions. Having said that, though, to give some more color, as mentioned during the call, it's been a very, very constructive and productive dialogue with the FDA. The FDA has also reiterated that they will hold true to the PDUFA date set on the 28th of September. They are not planning to hold an advisory committee. And of course, with respect to that, if something would have materially deviated with our internal plans, i.e., a PDUFA date on the 28, that would have been seen as material. And subsequently, we would have to notify the market. So I think all in all, internally, we are very pleased with the dialogues with the agency so far and looking forward to the PDUFA date on the 28th.

Okay. I appreciate those comments. And then on the survival data, I know we could expect this perhaps in a peer-reviewed journal at some point. But can you just remind us, has the FDA reviewed these data yet? And I know you can't comment on all of the findings just to hold it for that journal. But again, like high level, what do those data perhaps include that haven't been reported again without getting into the specifics of findings?

Thank you, Kristen. And again, here, I fully appreciate your question. I can't give too much more granularity on that. Unfortunately, the data, as you mentioned, has not yet been published in the peer-reviewed journal. But as mentioned previously, both during calls like this and through reports, -- if you think about the new drug application that was submitted, it included data from numerous clinical studies, clinical trial Triac Trial I, Triac Trial II, the ReTRIACt study and also the survival study. And of course, that being part of a submission package, the FDA has reviewed and looked across the different studies to view -- to provide a view on the benefit-risk profile of the drug.

The next question comes from Chiara Montironi from Van Lanschot Kempen.

Congrats with the progress. So you now disclosed that 60 patients are treated in the Expanded Access Program versus first 40 at the beginning of the year. I was wondering whether the new 20 patients are previously identified patients or these are completely new diagnoses?