Santhera Pharmaceuticals Holding AG (SANN.SW) Earnings Call Transcript & Summary

Ladies and gentlemen, welcome to the Santhera Pharmaceuticals' Half Year 2024 Financial Results and Corporate Update Conference Call. I am George, the Chorus Call operator. [Operator Instructions] The conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast. This conference call may contain certain forward-looking statements based on current assumptions and forecasts made by Santhera Pharmaceuticals. Such statements involve certain risks, uncertainties and other factors, which could cause the actual results, financial condition, performance or achievements of Santhera Pharmaceuticals to be materially different from those expressed or implied by such statements. Those factors include those discussed in the comprehensive risk factor disclosure in the company's website at www.santhera.com. Santhera disclaims any obligation to update any forward-looking statements. This conference may be downloaded on Santhera's website during the 2 weeks following the call. At this time, it's my pleasure to hand over to Mr. Dario Eklund, CEO. Please go ahead, sir.

Thank you, George. Good afternoon and good morning to those following us in the U.S., and thanks for participating in today's conference call on the 2024 half year financial results and performance. I'm joined today by Andrew Smith, our CFO; and Dr. Shabir Hasham, who's our Chief Medical Officer. I'll start by sharing an overview of what Santhera has achieved during the period, followed by the financial overview provided by Andrew. As always, you'll have the opportunity to ask questions at the end. The recent past has undeniably been a game-changing period across multiple fronts, especially commercially, regulatory and financially. Let's start with the commercial review. We launched AGAMREE in Germany in mid-January 2024 and a little later in early February, we also launched in Austria. Catalyst, our partner for North America, launched the product in the U.S. market in mid-March this year. I'm delighted to say that the market response in both the first-launch countries, Germany and Austria was very strong and has outpaced our expectations. In both Germany and Austria, about half of patients living with Duchenne are on steroids at any given time. Today, we are already at more than 25% share of patients with DMD who are on steroids, and this after only 8 months in the market. Clinicians are often cautious when switching patients to new treatments, especially if the existing standard, which, in this case, is prednisone, is well established. A more than 25% switch in 8 months indicates a rapid uptake and confidence in AGAMREE's clinical benefits, such as fewer side effects or better patient outcomes. To add to this picture, I want to mention that Germany and Austria had no prior experience with AGAMREE as there were no clinical trial sites there during the pivotal trial versus, for instance, 6 sites in the U.K. or 7 sites in the U.S. This fact makes the uptake even more impressive in our view. Similarly, Catalyst reported a strong start to U.S. commercialization of AGAMREE, exceeding also their expectations. Now let's move to a review of regulatory progress. Building on regulatory successes in '23 in both the U.S. and Europe, we've made further progress with approval from the U.K.'s MHRA earlier this year. In China, our NDA is under priority review, and we are maintaining our time line to approval and launch in Q1 of '25 by our partner in China, Sperogenix. Now moving to financial status. We have recently secured funding that was non-dilutive to shareholders of up to CHF 69 million, extending our cash runway into 2026 when we expect to reach cash flow breakeven as mentioned on a number of calls in the past. Andrew will also shortly speak about the finances in more detail. Looking ahead, we refined our strategy based on the strong market response that we've seen for AGAMREE in DMD and the development perspectives for the product. With regard to development, we have had very constructive discussions with Catalyst and have agreed to defer the start of any additional pivotal trial in a new indication until at least late 2025 while Catalyst conducts additional exploratory clinical work in this interim period to inform the final decision on both the indication and on the trial design. Given the freed-up resources resulting from the delay in initiating a pivotal trial for a new indication, coupled with the encouraging early demand we've seen in Germany and Austria, we have realigned our commercial and development approach and decided to invest more aggressively and with greater focus in the DMD opportunity in Europe now. We have decided to expand our self marketing strategy to include the Nordic countries, Portugal and Ireland. And herewith, Santhera will cover all Western European markets through our own commercial organization to keep the attractive margins we have in-house. For the remaining markets of Central and Eastern Europe, we announced a few days ago the comprehensive distribution partnership with GENESIS Pharma to cover part of the EU and some non-EU markets in Europe, a total of 20 markets, and we're currently in discussions with multiple potential partners for additional territories outside of Europe. We're also advancing preparations for market entry across Europe with HTA assessments or reimbursement discussions and submissions in Italy and Spain later this month as the last 2 of the so-called Big 5 in Europe. As stated in our press release, the reviews and negotiations are already ongoing in Germany, U.K. and France. So by the end of September, by the end of this month, we'll have both Italy and Spain join those discussions. On the clinical front, we're reallocating resources to capitalize on further studies to strengthen the clinical evidence behind AGAMREE's differentiated safety profile in long-term use as well as studies to highlight potential cardioprotective properties of the compound in DMD. As we look to the future, our primary focus remains on fully realizing AGAMREE's potential in the treatment of DMD. This approach allows us to capitalize on our core strengths while remaining open to opportunities that align with our expertise in rare and orphan diseases. With this strategy, we believe we are well positioned to build on our current momentum and drive long-term growth for Santhera. I'll now hand over to Andrew for comments on the financial results and our financing initiatives. Andrew?

Thank you, Dario. I'll provide a top line view of the unaudited financial results for the first half which we released earlier today. I'll start with comments on the financial performance, followed by a status update on our financing activities and current position. Let me first turn to the half year results. All amounts I mentioned in summary will refer to Swiss francs even if not stated explicitly for verbal simplification. Revenue from contracts with customers amounted to CHF 14.4 million (sic) [ CHF 14.1 million ] compared to CHF 3.9 million in the same period last year. The prior year period reflected residual revenue from Raxone which was disposed off in the latter part of 2023. So the revenue for '24 this year is entirely attributed to AGAMREE, reflecting the launch in Germany and Austria and contributing around CHF 6.5 million since the market introduction in January, CHF 6.4 million came from milestones from our Chinese partner, Sperogenix and royalties from North America partner, Catalyst following their U.S. launch in March. In addition, CHF 1.3 million came from the sale of product to these markets to support planned demand. Operating expenses amounted to CHF 26.7 million, a CHF 4.2 million increase on the same period last year. The main contributing factors were additional development expenses related to longer-term extension studies and further CMC development costs. Also included were approximately CHF 2 million one-off cost of product -- for product development that is expected to facilitate future benefits in the manufacturing process and unit costs. Overall, these resulted in a CHF 4.1 million increase in the development costs during the period. On a comparable basis, marketing and sales expenses slightly increased by CHF 0.4 million to CHF 4.7 million, and this was in relation to the higher commercialization activities in Europe offset by the reduction in U.S. costs following the out-license in the second half of last year. G&A expenses remained relatively unchanged at CHF 8.3 million and were aimed at supporting European direct commercialization as well as ongoing development activities. In summary, this resulted in an operating loss of CHF 17.7 million, which is CHF 2.6 million lower than the first half of last year. The net financial income amounted to CHF 2.6 million (sic) [ CHF 2.7 million ] compared to an expense of CHF 3.1 million in the prior year. This is primarily related to realized and unrealized foreign exchange gains, derivative changes and interest income. Overall, we recorded a net loss of CHF 15.3 million or CHF 1.35 per share compared to a loss of CHF 23.3 million or CHF 2.09 a share in the previous period. Net cash outflow from operating activities amounted to CHF 15.3 million which remained relatively unchanged year-on-year, despite the shift in activities during the period towards a focus on commercial launches. Cash flow from investing and financing activities was minimal during the period, as the license income in the second half of '23 provided sufficient available cash, and this was further supplemented by additional funding announced in June and closed post the period end. In summary, this resulted in cash at June 30 of CHF 16.5 million compared to CHF 1.7 million at the same time last year. With this, let me move on to the financing. Coming into '24 despite having CHF 30 million in available cash, we required additional funding to reach breakeven and address the convertible bonds that matured just in August just gone. In June, we announced a combination of a term loan facility and royalty funding and further discussed the details in our call back then. As you may not have attended the call, I'd like to remind you of the highlights of the funding position following closure. We received a senior secured term loan of CHF 35 million from Highbridge and an interest rate based on SARON plus 9.75%, currently bringing to 11.75% annually. No principal repayments are required in the first 2 years, followed by a 15% a year amortization and a final repayment on the fourth anniversary in August 2028. In addition, we closed a royalty monetization agreement with R-Bridge whereby USD 30 million was advanced with a further USD 8 million to be advanced based on sales achieved in China. In return, we're monetizing 75% of the net royalties on net product sales in China and U.S., meaning royalties received, less royalties paid to ReveraGen and Idorsia and also excluding milestones on amounts received from Catalyst or Sperogenix, which we would still receive in full. Repayments to R-Bridge occur until the cap level is reached, after which the full royalty income reverts back to us. On the public and private convertible bonds, we had a June outstanding an amount of CHF 25 million maturing in August and of this listed bonds amounting CHF 13.5 million were repaid on maturity. Of the private bonds held by Highbridge, CHF 4 million with a strike price of CHF 5 per share, were converted into shares and the remaining CHF 7 million had its maturity date extended to August '25. Following the financing and repayment of bonds, the cash at the end of August was approximately CHF 52 million. In summary, it's been another transformational period where we've seen successful launches, as Dario already mentioned and closing of additional funding post period to provide a runway into '26 and expected cash breakeven without further dilution to shareholders. Further detailed financial information can be seen in the published press announcement and the interim results report released earlier today. And this concludes my summary of the detailed information announced today. So I'll hand back to Dario. Dario?

Thanks, Andrew. So with that, we have completed our prepared remarks, and we'd like to move into a Q&A session. So operator, if you could coordinate that for us, please?

[Operator Instructions] Our first question comes from Ram Selvaraju with H.C.

I was wondering if you could, first of all, comment on the pricing outlook for vamorolone in China, if you have any perspectives to provide to us regarding the pricing over there and how that might compare to pricing that we've already seen in Europe and in the U.S.

Ram, the pricing in China is still open. I mean we have a price for the early access program that's running in Hainan province right now, but our partner has asked us not to disclose that price. They have, in the last couple of months since they started that program, they now have about 70 patients who are on vamorolone in the Hainan province. But pricing-wise, we have been requested not to disclose anything at this point.

Okay. And then with respect to what you had said earlier, Dario, regarding the fact that in all likelihood, development of vamorolone in additional indications will only really be disclosable late next year. Does that include the development plans in Becker muscular dystrophy or not?

No, Becker muscular dystrophy is outside of what we call new indications. That's already ongoing.

Okay. And can you perhaps comment with respect to the development time line in Becker? Maybe remind us on what kind of time line that program is currently on and when we might see additional data?

Sure, Ram. I'll pass that one to Shabir, who's sitting next to me here. He's probably more qualified to give you the exact time lines.

Ram, thanks for the question. So you'll remember that our partner, ReveraGen, is executing the pilot Phase IIa which is due to report around second half of next year. So we'll have to wait and see what the outcome of that is before we can communicate any further action.

Okay. And gents one last one. I think this is perhaps both for you, Andrew and also Dario. Can you maybe give us a sense of what the principal risk factors might be to your being able to achieve cash flow breakeven in 2026 prior to the end of your current cash runway. Is that something that we should understand to be more aligned with European market uptake or more aligned with some non-European on U.S. activities or something else? Just wanted to try to get a handle on what the potential risk factors might be on that front. Or if you feel that at this juncture, that's a relatively conservative outlook, which you should have no problem being able to achieve?

Yes. So the main driver there is European sales between now and breakeven, that's going to be the main driver and the main risk factor, if you will. We're pretty confident in our prognosis that we'll hit that breakeven in '26. But there's obviously multiple variables in the equation. The most obvious variable is the final average price that we'll get in Europe. I mean the prices will be different country by country. If they are slightly lower than what we have forecasted or assumed, we would have to take some cost saving measures to make sure we get to that breakeven as promised. But at the moment, it's too early to speculate around that because we really haven't had specific pricing discussions with anybody except the U.K. at this point. Now when I say there are multiple variables in the equation, keep in mind that the patient can be dosed at 2 milligrams per kilogram or 6 milligrams per kilogram or anywhere in between. We typically start the patients or the clinicians typically start the patients on 6-milligram and most patients remain on 6-milligram because they tolerate the drug very well. But there may be the occasional patients that are then down titrated to 5 or 4 milligrams per kilo and obviously, that in turn translates into less revenue if they are on a lower dose. The other variable that plays a role here is the weight of the patient. A patient that is, say, 25 kilos, a younger boy at 6 milligrams per kilo, he would probably be taking around 1.2, 1.3 bottles a month of AGAMREE. Whereas a 40-kilo boy, which is an older boy, would be taking about 1.8 bottles a month. So there's quite a range there as well. So when you look at the overall picture, you have 4 parameters essentially. You have the dosage, you have the weight of the patient, you have the price and you have the penetration in the market, the market share that is being gained in the market. And all those 4 variables result in overall revenue. So we have taken a conservative position and certain assumptions around all these parameters. And based on that, we have communicated now for a couple of years, actually, that we plan to break even in 2026. Until a few months ago, we just didn't have the cash to take us to 2026. We had always planned to breakeven in 2026. But now we also have the cash since the last financing round. So I think a lot of the boxes are checked now.

Yes. I think, Ram, also, I'd just like to further explain a bit. You talk about the risks and the relevance of the U.S. and the China sales and the exposure there. So with the royalty agreement, at least in the near term, the rate of growth in those markets would not affect us too much financially as we're receiving only 25% of the net royalty coming to us. What it would do, of course, is over time, affect how quickly or longer, we would take to repay the royalty agreement.

If I can add to that, I think it was lost a little bit maybe in translation on the previous call we had on the financing, but the royalty financing is capped. So it's capped at a factor of the original amount that has been paid to us. And typically, in these kind of royalty financing deals, you don't always disclose that factor. But what I can say is that they typically are for a commercial stage product between 2 to 3x, 2 to 3x the original amount. And for us, the cap that we negotiated is at the lower end of that range. So once that cumulative payback has taken place in the form of royalties to the provider, all of the royalties at 100% revert back to Santhera.

Our next question comes from Bob Pooler in ValuationLAB.

Gentlemen, congratulations on the strong first half. On that strong first half, maybe just looking at AGAMREE and the uptake in Germany and Austria, seems quite strong also compared to the U.S. Is this something where you expect to maybe raise your guidance, similar like Catalyst did? I think they raised it to CHF 35 million or certainly CHF 40 million. And do you expect a similar uptake also in the U.K. now that's approved?

Thanks for the question, Bob. Yes, we're very, very happy with what we've seen in Germany and in Austria in the first half of the year. As I mentioned, we don't even have a full half year there. Germany launched mid-January and Austria in early February. And while CHF 6.5 million might not sound like a lot, if you translate that into market share, it is quite impressive. Germany has about -- depending on the source, about 2,000 to 2,300 patients living with Duchenne and Germany is very conservative when it comes to using steroids. So about -- both in Germany and Austria, about half the patients that have Duchenne are on steroids. That's about 1,100 patients or so. And of those 1,100 patients, we have had AGAMREE now prescribed to about 300 between those 2 markets. So that's a very significant market share of patients after only 8 months. And just to put the CHF 6.5 million in further context, I mean, typically, Germany is considered 1/4 of the U.S. size in terms of population. So on an apples-to-apples basis, that CHF 6.5 million would be the equivalent of EUR 26 million or $28 million in the first half year, if we were in the U.S. And if we then would be flat for the remainder of the year at that rate, we would hit EUR 52 million for the full year. And that's at a price point of EUR 5,500 per bottle. Whereas in the U.S., the price is $9,500 a bottle or something around there. So when you compare the excitement around the guidance that Catalyst provided and the jump that they got in their share price when they announced the new guidance, and you compare that with the results that we have just delivered in Germany for the first half year, I'm actually surprised that the market reaction hasn't been more positive.

No, I fully agree. It's quite a remarkable uptake there. Is this also something that made you -- was the trigger actually to also take on the Scandinavian countries as well to do that by yourself as well and therefore, maximize your profitability?

Yes. I mean we have a very handsome margin -- gross margin on AGAMREE. And the Nordic markets are -- they're a market that doesn't require a large organization. I mean we're probably assuming right now somewhere between 6 and 8 people to cover that market. They typically are at the higher end of the pricing range. They are sophisticated markets, the patients that are living with Duchenne in those markets are well identified. So it's kind of a low-hanging fruit. And now that we've seen the market access discussions in 3 markets already and learned a lot from those and seen the bullish uptake that we've seen in both Germany and Austria as well as in the U.S., I might say. We said, why would we want to partner away part of the Western European markets, namely the Nordics, Portugal and Ireland when with a very small incremental investment, we can keep that margin in-house and do it ourselves makes it also from an operational perspective, a lot easier because now we have only one partner for the rest of Europe, which is GENESIS, announced a couple of days ago. And then the whole rest of Western Europe, we do ourselves. And I don't think anybody is as passionate about AGAMREE as we are. I don't think anybody is as knowledgeable about AGAMREE as we are. I think we can do it better than anybody else. And with the margins as attractive as they are, we really decided that we want to do that ourselves. There's a second reason, a strategic reason for doing it, and that relates to a potential pipeline increases or additions over the next couple of years. There are many U.S. companies, rare and orphan disease companies that are -- that have decided to launch themselves in the U.S., but don't -- when they look at Europe, they're a little bit intimidated by the number of markets, the access strategies, the languages, et cetera. And they're typically looking for a partner in Europe, certainly Western Europe. And we believe that over the next year or 2, as we start getting more and more credibility with our launch here, we would become a very attractive potential partner for those types of companies in the U.S. or even European companies that have a late-stage rare and orphan disease asset similar to what where Santhera was a year or 2 years ago. But a couple of companies that have not yet built those commercial competencies nor built that commercial infrastructure that we have. So having all of Western Europe under our own belt, so to speak, and not having a mosaic of partners is also important from a strategic perspective for future growth plans. So that is the reason really for including the Nordics, Portugal and Ireland. Just to clarify, Ireland is essentially one center in Dublin, which can be managed out of the U.K. in Portugal, it would be probably one incremental person or one FTE that would report to the Iberian organization or Spain. So we're not talking about a huge investment, but the upside is not insignificant.

Yes. And as you said, it gives you leverage then later for new plots and so -- but also for new indications for AGAMREE. So why do you decide to wait with starting the new indication of the pivotal trial with Catalyst?

I'll pass that one to Shabir.

Bob, thanks for the question. Catalyst remain a very, very close partner of ours. We had a strategic discussion with them. What they have offered and we've agreed to is that they are investing in some additional profiling work at the additional dose ranges. So expanding really our knowledge about the dose response and how AGAMREE behaves at doses higher than we have done in Duchenne. This is really important information because it allows us to look at a broader range of indications. It's a relatively quick study with a quick outcome certainly in the first half of next year. It gives us a lot more choices to strategically choose our next path, Bob. So that was really the driver.

Okay. Okay. Then if I may, just a couple of questions on the financing agreement that you had and that's been closed recently. First, on R-Bridge on the monetization of the royalties. Could you explain a little bit how that works? So you're -- I think as of the second half, roughly, they'll be getting 75% of the royalties from the U.S. and China. You said that between 2 and 3x would be the multiple that just stops and also a little bit how are you going to book this? And then on Highbridge, is this a sort of dilutive loan? Or is it a different than what you have in the past?

That one, I'd pass to Andrew.

Okay. Thanks, Bob. In terms of R-Bridge and the royalty funding, how that works is that we're receiving a gross royalty from U.S. and China. And from that, we're also having royalties payable to revert in Idorsia, and we're left with a net income there. Of that net income of the royalty offset, 75% of that is going to repay R-Bridge and we keep 25% so we're left with a portion of that royalty. In terms of how that's accounted, there are some debt-like features depending on the time period that the royalty is paid back and we're working through that. However, it will be within the liability element of the balance sheet as we're -- and may be split between a debt component and the deferred component. But that doesn't affect the cash call on it. Does that answer your question on the R-Bridge funding before I get to the Highbridge?

Yes. And maybe for the nitty-gritty details, I'll get back to you on a one-on-one how to put that.

Sure. Quite a bit of that is also in the prior releases, but certainly over that. In terms of the Highbridge loan, as you know, in the past, we've had exchangeable notes, which have been repaid through conversions of shares this is -- given the stage we're at with the commercial on-market product, it's a very vanilla senior secured term loan. There's no equity exchangeable features with the loan, there were a small number of warrants that came as part of the overall structuring with that and the conversion of the bonds and so on, but it's a very straight term loan 4-year, 2-year no amortization.

Okay. And if I may, just one more question on the guidance 2028. Are you still confirming the EUR 150 million from Europe?

Yes, we are. We're still confident that we'll reach the EUR 150 million out of Europe. That's just our own revenue that we generate. The mix of patients versus price originally, we were assuming about 3,000 patients in Europe at an average price of about EUR 50,000 per patient per year. I think right now, we have a bit of a buffer because the 3,000 seems to be on the low end, when we already have 300 in Germany and Austria after 8 months, and we haven't launched in any of the other countries yet. So the 3,000 may be on the low end, that gives us a bit of a buffer on the pricing side. So even if the prices would be slightly lower than we had assumed, we would still be comfortably hitting the EUR 150 million in 2028.

[Operator Instructions] Our next question comes from Joris Zimmermann with Octavian.

Great. Two, if I may. One, staying with the guidance I think you've not explicitly confirm the spending guidance for this year. The cash reach and cash flow breakeven in 2026. So hence, I think we can assume spending guidance for this year stands. Is that correct? And regarding the new countries, what's kind of the rough number that you probably can provide us with that we should assume in additional spends coming as you move forward? And then on the delays that you announced for some of the key markets, maybe I understand that's mainly due to pricing negotiations kind of, can you give us maybe some more insights on what exactly is happening here? Is this just sort of the back and forth discussions that you have? Or are you required to submit additional data? Is this data that you need to generate first? And then also, how do you see that impacting your term pricing assumptions?

Thanks, Joris, for the question. Maybe I'll start with the last one, and then I'll pass it on to Andrew. So the delays in the European markets are not related to any request for new data from the various access authorities. It's more a back and forth between us and them, where they sometimes ask for additional data or additional analysis of our existing data. For instance, in the U.K., we've had discussions around which burden of illness study would be the appropriate reference to use and so on. Typically, these negotiations, when you look at other companies as well, they have become longer and more complicated than they have been in the past. I think in the U.K., the average is now up to 17 months for companies before they get reimbursement. We're still well behind that. And I think we will soon have agreement with NICE, certainly before the end of the year. In France and in the U.K., there have been changes in government or certainly in France, the government. We don't even know what the government looks like right now, and these are countries that where political decisions influence the process of market access and pricing. So that is a bit of a black box in France right now. We expect to hear back from the French in the next couple of days on where they stand. We did get an ASMR V in France, which we were disappointed with. The French were very much focused on efficacy. They said, given that we don't have better efficacy than prednisone, they didn't feel comfortable giving us ASMR IV whereas prednisone is very efficacious, it's very difficult to be more efficacious than prednisone. The issue with prednisone is the safety and the side effects. And the fact that we had a lot less side effects on a much better tolerability profile really didn't weigh much in their ASMR evaluation. Having said that though, our advisers have told us that there are many rare and orphan drugs who do get an ASMR V initially in France and still get a very reasonable price. There are many examples of companies that have been able to negotiate a good price even if they have an ASMR V. Should the French become very difficult in their negotiations with us, we will probably put the French negotiations on hold and wait for our long-term data, which we should have the first readout around the summer of next year, where we can show data on patients that have been on drug for up to 7 or even 8 years and be able to show a lot of the long-term benefits that we expect to see with AGAMREE. You may recall that in our pivotal study, which was 48 weeks, we were able to show no stunted growth, so the boys were growing normally. We were able to show normal bone turnover, which translates into less fractures. And we were able to show less severe and less frequent mood and behavioral disorders. So those are the 3 key differentiating points that we have today with a 1-year study. However, we think that the long-term benefits of vamorolone are more significant when it comes to items such as diabetes, cataracts, delayed puberty, hypertension, glaucoma. All of these are side effects that these boys develop due to prednisone over longer periods of time. And anecdotally, we have heard that there's a lot less of that or none of that with some of the vamorolone patients. So once we have that data, we would then resubmit that data to France. So that would be one example where we might have to wait for new data. But in the other markets that we are in right now or where we're starting negotiations, there have been no requests for any additional data. The delay is really a bureaucratic delay very often, we submit something to them and then weeks go by without us hearing back, and we don't know really what's happening in the meantime. So right now, we're still bullish that we'll get the U.K. this year, we may get France quickly or it may take longer. And then Italy and Spain typically take about a year from submission, and we're submitting both Italy and Spain at the end of this month, so end of September. Shabir, do you want to say anything more to that?

Yes. So Joris, thanks for that question. Just to try to add about what I feel and we feel as the excitement to 2025, we have some major data readouts that not could only support market access discussions, but of course, would be very important in terms of further differentiating vamorolone. We've completed a couple of studies this year that the data are currently being analyzed. We have the 006 study in a broader age population, 2 to less than 4, 7 to 18 years of age which included switchers. So we have boys who've been on standard of care, both deflazacort and prednisone for quite some years, and we are actually analyzing the data now, looking for recovery. That's really important for the switch market, switch segment, not only do we anticipate to show better tolerability with a potential efficacy benefit. But really what's important is recovery from some of the side effects. So these data will be critical. Another study that we've just completed is the [ LION-HEART ] study. We know from animal studies already that vamorolone is a mineralocorticoid antagonist which is really important because mineralocorticoid antagonists are currently used as standard of care to treat the cardiomyopathy and the cardiovascular risk. So you can imagine if the data are positive earlier adoption of the vamorolone could actually translate into some cardiac benefit that we are going to further characterize. And as Dario indicated, the GUARDIAN study, this is the long-term follow-up has already initiated. We want to do a data readout in the second half of next year. This group is really important. These kids have been on vamorolone for 7 to 8 years. That's the window where you start to see really side effects accumulating so we'll have some clinical hard outcome data, again, second half of next year to really drive vamorolone differentiation that I think will be very, very important. In addition, based on the [ LION-HEART ] study and observations from the 006 study, we'll be initiating a number of investigator-initiated studies, short studies, outcomes very focused on specific differentiators. So for us, 2025 will be from a news flow perspective, important, but also I hope will drive our ambitions as indicated by the recommendations we've made.

I think Joris had some question for us as well.

Yes, on the guidance. So we didn't give too detailed the guidance, but we talked about the overall operating spend of around the CHF 50 million plus/minus. And I think we're still in that region. There is maybe a slight reallocation within that from some of the studies that Shabir is talking about and also the prioritization of the additional markets, Nordics, for example, and there may be some time movement. But they're really not changing the overall picture and we would be able to manage within that for some time.

And Joris, you asked about the incremental cost of the additional markets, Nordics, Portugal, Ireland. So Ireland is not going to cost anything that's going to be managed out of the U.K. Portugal, maybe 1 FTE additionally. And then in the Nordics, we're looking at 6 to 8 FTEs eventually, but we are starting very, very slow and very methodologically. We believe that the Nordics may have an opportunity for some early access program, paid early access programs, while we negotiate the reimbursement in the Nordics. So we're not going to be able to do it in a self-financing way. That would be a little bit exaggerated, but as close to self-financing as we possibly can, so that it really doesn't impact much the overall picture.

Great. Maybe just as you mentioned the early access program, any learnings from the early access program in Spain so far. I mean it's only 3 months, but...

Learnings in terms of what?

How is it? I mean, we've seen a super strong uptake in Germany. Can you already read something from the demand for that early access program in Spain?

Well, what we can read is that there is clearly traction. I mean, it's a lot of bureaucracy in Spain to get a patient on an early -- name paid early access program prior to the drug being reimbursed by the Spanish authorities. So it requires the equivalent of a [ Scheffer ] German or Austrian Swiss [ Scheffer ] prescription. But in addition to that, there are pages and pages of documentation that need to be filled out by the clinicians and the health care professionals that take care of the patient to justify it. And so the burden to get a patient into this program is high. And yet, we are seeing very high level of interest. And I think we have -- I don't know exactly how many patients we have now, but about 5, 6 patients already after a few months who have gone through this battle and have received vamorolone or AGAMREE on an early access basis. So Spain is not the only market where we see this. I mean we are flooded with requests from places like Turkey, Saudi Arabia, Qatar, South America, Australia, New Zealand, Israel, there are plenty of markets where -- in India, I forgot India, there's many requests from India as well, where we are now trying to set up a mechanism with a company that provides medications for early access programs who coordinate these early access programs and basically that's the administration of that for us in markets where we are still a little bit further away from finding a partner. Obviously, we are having partnering discussions for some of the major markets in Brazil being one, Turkey being one, the GCC or Saudi being another Qatar where we are planning to our partners signed up relatively soon. So for those markets, we would use those partners for the early access programs eventually. But for markets where we think it could take longer to sign up a partner, we want to have this one partner to provide globally access to the drug for patients who are willing to pay or where the government is willing to pay. But a lot of interest from all over the world. Keep in mind, this is the first drug for Duchenne for this disease that is approved in both U.S. and Europe. It's the first drug in DMD that is approved in Europe, fully approved in Europe and the U.K. So it's well known in the community. During its development, many patient advocacy groups around the world participated in the funding. So ReveraGen was funded not through venture capital but funded through the NIH and various patient advocacy groups around the world who have followed the development over the years. And they are, of course, now eager to get their hands on the drug.

Ladies and gentlemen, this was our last question. Back over to the management for any closing remarks.

Thanks, George. So this past half of 2024 has been an important 6 months for our company, and we have been extremely encouraged by the interest and uptake of AGAMREE in the first markets in Europe as well as the U.S. Given the strong response, we're doubling down on our success in DMD by expanding the markets in which we want to launch ourselves rather than using a distributor partner to keep the attractive margins of AGAMREE within Santhera. In parallel, with the resources we now have post funding, we are also investing in further clinical projects to strengthen AGAMREE's differential profile, particularly as it pertains to efficacy and safety and long-term use. Meanwhile, our partner Catalyst is conducting additional clinical work to properly inform the choice of a potential new indication as well as the ideal trial design required. These strategic decisions reflect our commitment to maximizing AGAMREE's potential in DMD and beyond. We look forward to providing updates as we progress, and thank you for your continued support and interest in Santhera. Goodbye, everyone.

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