Vivesto AB (VIVE.ST) Earnings Call Transcript & Summary

Welcome to the Oasmia Pharmaceutical Q4 2020. With us today, we have François Martelet, [ CEO ] of the Board. [Operator Instructions] I will now hand over to your speakers. Please go ahead.

Thank you very much, and welcome to everyone attending this call -- this quarterly report call that I will be pleased to go through right now. So if you could move the presentation to Slide 3. So you will see that I will be doing this together with our CFO, Michael af Winklerfelt. On Slide 4, you see that we will -- I will give you an overview of Oasmia. I will go through the quarterly events and forward results, and obviously, the key drivers from an outlook perspective, and then I will end this presentation before the Q&A with a summary of the presentation. Now let's turn to Slide 5. So on this slide, that does show pretty well what we are, and I have to say that we are not a drug delivery company as one could think about. But we are an integrative innovative pharmaceutical company using a technology platform that we call XR17, in order to generate new formulations of existing marketed drugs and/or to generate new innovative drugs. And I believe this is an important differentiating point vis-à-vis other companies that may appear to be similar, but they are not because we have a proven technology. We do have in-house all the capabilities of a pharmaceutical company that is quite rare in the today's biotechnology world. Apealea is our first product approved in Europe and is under review by the FDA in the U.S. We have recently signed off a deal to commercialize Apealea on a global scale. And then we performed during the last quarter a significant strategic review. And one outcome is that we have become a lean and mean organization. And for instance, we will not engage ourselves in commercial production capabilities. That is not what a company of our size should do, and this is not also our core competency. However, having said that, we will retain and will continue to retain in-house research and development capabilities, that is part of our core competency. Finally, we are listed on the stock exchange with a market cap of around SEK 3 billion. Let's move now on Slide 6, which shows our XR17 platform. That is our proven delivery technology, that has fundamentally 3 applications. The first one is in oncology that is well-demonstrated, well-proven with the regulatory approval of Apealea in advance ovarian cancer patients. And other indications, we will be also developing with our partner, Elevar in the U.S. As we retain full rights of our XR17 platform, we have also initiated a work stream aiming at developing a new API. So therefore, a new oncology compound. Then we have our animal health business. That is, to a large extent, the mirror of our human health business. We have Paclical, paclitaxel and Doxophos, doxorubicin for dogs who have cancer. And we know that this is a significant business. We know that roughly 25% of all dogs will have a cancer in their lifetime, such as mastocytoma, lymphoma, to quote a very -- a number of very frequent indications in the vet business. And then thirdly, we have -- as our platform is agnostic, we have started to broaden the scope of our technology outside oncology and, therefore, developing new formulations. And we will be looking at partnering in this area. Okay. So let's move to Slide 7, which is an important slide as it does show our pipeline as a summary. So Elevar, our U.S. partner, has now got full responsibilities for the commercialization of Apealea on a global scale with the exception of a few countries. The other key element in this slide to notice is that we are in an execution mode from a clinical development perspective regarding docetaxel micellar in metastatic prostate cancer, and this is also a significant news of the last quarter. To that extent, we have recently released a collaboration agreement we have just signed off with the Swiss Research Cancer Center called SAKK. And this is an important start for the docetaxel micellar in prostate cancer. So at the same time, as I said earlier, we have initiated R&D work, aiming at identifying a new API, but then -- that can be put into the XR17 technology platform. We're also testing the concept of a dual encapsulation. That could bring very strong benefits to our patients, and we call this XR19. So as you can see from the slides, I mean, this is really exciting times for our R&D team at Oasmia. Let's move to Slide 8, which shows you our animal health portfolio. So Paclical Vet and Doxophos Vet are true Oasmia assets and are covered by our Oasmia patent portfolio. They are intended to address animal health needs in this growing, as I said earlier, animal health markets. The initial focus will be on the U.S. market where we will be evaluating collaborations or asset sale models in order to maximize the value of those assets for our shareholders. And we are engaged in this and expect to reach a number of milestones that I will be delighted to communicate to you next year. Right. On Slide 9, this slide shows a little bit into more details what Apealea does and -- which can offer improved treatment option this product delivered to the patients. So we have the approval in Europe that is in relapsed ovarian cancer patients. And the approval is slightly broader in Russia, that is -- it does include first-line as well. So for the pool of patients, who are experiencing a number of side effects with paclitaxel. They can certainly continue that treatment by switching to Apealea and using as well carboplatin and/or cisplatin. So by doing so, we are fulfilling a true unmet medical need. As this combination, paclitaxel plus either carboplatin or cisplatin is the standard of care in most countries in the world. Furthermore, we can use a higher dosage with Apealea versus Taxol. We can climb up to 250-milligram per square meters while with Taxol, we are limited to 175-milligram per square meter. And at the same time, and even more importantly, we've been able to demonstrate a reduction of the number of neuropathies, while using Apealea vis-à-vis Taxol, and we all know that neuropathy is a significant side effect, a limiting side effect of Taxol. Right. On Slide 10, this shows the value of our global partnership with Elevar, up to USD 698 million, plus royalties based on sales. It's important to know that we've got the SEK 20 million upfront payment in April of this year. And the milestones that are based on regulatory and sales achievements equal to up to 600 -- over USD 600 million. And I will come back to that as well, but we are working very closely with Elevar in order to find the best European partner for the commercialization of Apealea in Europe. Right. So on Slide 11, this is a slide describing the events of the quarter and afterwards as well. So as I said earlier, the quarter has been significantly noted with the deal with Elevar. At the same time, we have also launched early February Apealea in the Nordic countries. And we have sent a batch of these drugs, shipped to the distributors in the Nordics. We have strengthened the Board and the management team with my appointment. But it's important to notice that the Board is now consisting of a lot of expertise, experience coming from the pharma industry with the appointment of Anders Härfstrand that have been appointed Chairman of the Board; and Birgit Stattin Norinder, who became a Board member as well. Another important milestones in the quarter is the development of -- the clinical development of docetaxel micellar in prostate cancer with the sign-off of the swiss research group SAKK. And finally, we have been able to demonstrate that we don't have any major issue at all concerning any class action in the U.S. as we released a settlement agreement a few days ago. Right. So the Slide 12 is an important slide, and this is the outcome of the strategic review. The overarching goal of Oasmia -- of the new Oasmia, I would say, is to build a cash flow positive specialty pharma company. And I know you will tell me, okay, so how are you going to get there? It's a fairly large objective. So clearly, we have streamlined the structure. We need to become much more agile and proactive organization. And this has been implemented during the last quarter. We need to reduce our burn rate. We have done that. We will be generating savings in the order of magnitude of SEK 100 million per year, that is quite significant. As I said earlier, we have -- we will be discontinuing our commercial operation, production activities post-Elevar deal. We will be retaining strong R&D laboratory capabilities to further maximize the value of XR17. This is our core -- one of our core competencies. We will be executing on the development plan of docetaxel micellar. And finally, and perhaps even more importantly, besides this organic growth, I was just describing, we will be engaging the company in mergers and acquisition activities in order to achieve a critical mass, in order to strengthen the pipeline and move the company towards its goal, which is to become a cash flow positive specialty pharma company. So having said that now, let me give the floor to our CFO, who will describe from a financial perspective, the quarter. Michael?

Thank you, François. So if we move to Slide 13, where I will give a brief summary of the consolidated income statement. So we see, as François described, we received the milestone payment of $20 million from Elevar in April, which means that it's recognized completely in this quarter. So that means that we have net sales of SEK 201 million. We have other operating income and loss, which is basically foreign exchange of SEK 355,000. You can also see, as we have described many times, that we have been in preparation for commercial launch, which means that we have a large change in inventories of products in progress and finished goods, of SEK 13 million for the quarter and SEK 20.9 million for the year. We have capitalized development costs of SEK 839,000 for the quarter and SEK 4.3 million for the year. This is mainly due to Apealea and things like the FDA process. Operating expenses, as you can see, we have quite high operating expenses of SEK 105 million for the quarter, and SEK 258 million for the year. And if I just go into a little bit of detail there, the costs here are, of course, also linked to a large extent, to the preparations for launch where we have large costs for third party manufacturing. We have, of course, here our employee costs, depreciation, amortization and impairment and so on. Transaction costs linked to the Elevar deal and also, of course, legal costs. However, we have then, for the quarter, we have an operating income of SEK 110 million, which in itself has to be said is a milestone for Oasmia. And a net income of SEK 106 million. So that means also that we have a positive earnings per share for the quarter. Moving on to Slide 14 where I will go through key ratios and other information. The first one there is cash and cash equivalents, which are then SEK 201 million at the end of the quarter, and here, just to avoid any confusion, cash and cash equivalents excludes short-term investments, which are highly liquid funds that we have placed in short-term interest-bearing funds. If we add the ones together, we get a cash position of SEK 435,000 at the end of the quarter. There is no change in the number of shares. Again, we have then earning per share is then SEK 0.24 for the quarter. No change in the equity per share, no change in the equity per asset ratio here. You can see that we have a net debt, which is negative because, of course, we have -- net debt is debt with the deduction of cash and cash equivalents and so on, which of course, means a negative figure. And that gives, of course, a negative net debt-equity ratio as well. We have, again, for the quarter, we have a positive return on total assets of 12% and a positive return on equity. I can also note that at the end of the period, we had 63 employees. And if you were paying attention to what François were saying before, you can see that the plan is that we will have 27 employees at the end of the restructuring program. So I think it can be noted that this is a quite aggressive restructuring program that we have launched. Thank you. Back to you, François.

Thank you, Michael. So let's now turn to Slide 15. Well, here, are our key inflection points that I have summarized into 2 categories, short-term and more medium term. So on the short-term side, I mean we are working very well with our partner to deliver the milestones. And I have developed personally a good relationship with the CEO of Elevar, and I believe this is important of course. We will continue to develop docetaxel micellar in prostate cancer. We will be -- and we have been able to release these news with SAKK. We will continue to evaluate strategically our animal health business. We're also working on initiating collaboration with well-known academic institutions and well-known cooperative groups. We will have an eye on the market as we want to strengthen our pipeline by adding more assets in oncology and/or in specialty pharma. We are also, at the same time, evaluating another generation of XR17, we call that XR19. That is a dual encapsulation process. So this is the strategy over the next 6 to 12 months. It is a solid strategy, and one has to be patient in order for us to execute on it properly. And I will say this is a new Oasmia lean and mean organization eager to succeed in the marketplace. So the Slide 16 summarize where we are and where we want to be. So it's all about executing -- the execution of our new strategy. And I would say that the strategy consists in 5 pillars. And we have 4 pillars internally, so organic growth, and 1 pillar externally. So the organic growth, clearly, we've been able to generate significant savings, reduce the burn rates, so this is one. Two, we need to deliver on the milestones that relates to the Elevar deal. Three, we will be continuing to pursue our clinical development plan with docetaxel micellar. Four, we will identify new API in oncology, but also in outside oncology that will be injected into the XR17 platform. And then all in all, externally, we will be looking at divestments of our noncore assets as well as looking for mergers and acquisitions, licensing in of companies and/or pipelines that do fit with our strategy. So all in all, we are really excited to execute on this turnaround of Oasmia to make it a great success. And having said that, I will now give it a try for the Q&A. Operator, floor is yours.

[Operator Instructions] We have our first question from Joseph Hedden, Rx Securities.

I've got 3 if I may. Just wondering what you perceive the size of the opportunity to be for docetaxel micellar in mCRPC versus the opportunity for appear in ovarian cancer? Perhaps if you could quantify your thoughts on that for us, that would be great. And secondly, what steps are left to get the combination drug XR19 into a Phase I trial? Has any tox work been done yet on that? And thirdly, just if you could give any guidance on what you think the R&D spend for the year will be, that would be great?

All right. Thank you very much for these questions. The first one, which relates to the potential of ovarian -- advanced ovarian cancer vis-à-vis metastatic prostate cancer. Clearly, the sales potential of the opportunity in prostate cancer is even greater compared to ovarian. However, we are at an early stage. This study with the Swiss group is a Phase Ib study. But clearly, we see a lot of potential. And even more importantly and interestingly, we believe that the -- in prostate cancer, corticotherapy should absolutely be avoided for a number of reasons. And therefore, those patients will benefit even more of our docetaxel micellar once it is further developed down the road. With regard to the -- with your question number two, XR17 concept, well, we are in an assessment phase. And therefore, I can -- no toxicology study have been performed yet. We are, to some extent, leading in the industry by undertaking this research. If it works, that will be fantastic. Because obviously, we can reduce and maximize the administration of 2 products in 1 for the patients. Your last question, I'm not sure that I -- it was -- line was a bit difficult to hear. So if you could repeat it, please?

Yes. Sorry about that. So just on the R&D spend for the financial year ahead, could you perhaps quantify that? What you think that will be?

Michael?

Yes. I'm not sure exactly if I can give a projection now on the R&D spend, it depends a little bit also on some -- we have some studies that will start, but we're talking about in the range of SEK 10 million to SEK 20 million.

Our next question comes from Michael James, private investor.

I'd like to thank you all for your work. I'm an Uppsala inhabitant, and we look forward to the day when Oasmia takes the place of Pharmacia, which was once a very large medical company here in Uppsala. My question is the following. Periodically, reports come out from HLB communicates regarding the sales of Apealea in Germany, for example. And I think this occurred at the time when François was giving a presentation, and he was asked a question specifically about this, and he said, "I cannot comment". Now I understand there might be a contract with Elevar here. But I'm wondering why one cannot comment on public information that's coming via the HLB company before the company of [ Elevar ]?

Right. Thank you for the question. Well, the -- we have a straight communication between Oasmia and Elevar, that is actually excellent. Now HLB is the conglomerate of -- in which Elevar is part of. And therefore, to be frank, I mean, we are trying to improve the communication between all of us. What has been released in the marketplace is not correct. The numbers are not correct. The launch has not taken place in Germany. And I will be the first one to inform you when this will happen, that you can be sure of. This is our own interest as well. But I cannot comment on things that are -- and then I had this discussion with my counterpart at Elevar. I cannot comment on any leaks of information that is not even correct. And this is where we are.

Our next question is from [ Simon Chava ], who is also a private investor.

I have 2 questions. The first and foremost is ratio excipient API has been shown in a few presentations, can you explain what that means? Numbers are compared with competitors, what are the advantages for Apealea because it seems to be [ significantly ] lower.

Well, this is a very technical question. I cannot comment on the ratio that have been given to -- that I explained, of the competitors. What I can comment is that we have a high drug load capacity. And this is very important. This is one of our key feature of our XR17 platform that is by far with a great advantage compared to any other platform of that nature. I know it's difficult to compare encapsulation technologies because they are different. Ours is in the mycell sector. You have also even polymeric mycells with other companies in that sector. We are quite in a unique sector. I can assure you that from a drug load capacity perspective, which means our ability to solubilize is greater or at least as good as, depending on the company vis-à-vis our competitors. There is no doubt about that, and we have proven data. This is what I can tell you about our technology.

Okay. And my next question is the most important one. When can we expect sales from Apealea? And why is it taking so long time to do an EUD for Elevar? And where are you now? So basically, the thing is like it was a couple of months ago, and I don't know nothing has coming out yet. So I'm wondering when are the sales starting? Is it...

Okay. So that's a fair question. But remember, please. We launched mid -- early to mid-February of this year, okay? You know exactly what has happened for mid-March onwards. So we've been hit as well as any other company with the COVID-19. And therefore, when a product is being launched, as you can imagine, and when the hospitals are locked down, well, it is a difficult situation when our medical Liaison officer cannot even have appointment with the physicians, it is a difficult situation. So therefore, we are expecting hospitals to reopen fairly quickly during the next couple of months. And therefore, you will see the results of our activities. I cannot comment on any target or sales expectations. But, you need to understand that it does take time as well to launch a new product in oncology.

Yes, of course. Of course. Okay. So in the next couple of months?

Yes.

Our next question comes from [ Tommy Oslon ], shareholder.

I have a few questions about docetaxel micellar. You announced the Ib study, and I was surprised to see that the main objective is to see the solubility because you have announced that XR17 is superior in making all the drug soluble. Then why is the study so hard focused on making it soluble?

Well, this is the first step of a new indication with a new compound. So we have to go through that steps. This is the classical steps of drug development. I would love to skip it, but I cannot.

But I would assume that since you already had previous study with docetaxel micellar and XR17 for the breast studies, maybe you could continue where you were even if you're seeing things for new indicator?

Yes. One could think that way, but it's a new indication. So therefore, we have to follow a different drug -- classical drug development process. And by the way, on the metastatic breast cancer, and I'm referring to the studies that have been published a year ago or so. I mean clearly, we had 1 pharmacokinetic study, Phase I and a Phase II safety study, and we've been able to demonstrate noninferiority clinical data in a subset of patients, okay? And the primary endpoint was not met. Therefore, we believed, as a conclusion, with our experts that it will be greater to initiate the development in metastatic prostate cancer. Also for the reason that I emphasized earlier of the significance of less corticotherapy for these patients that are very damaging from a clinical standpoint.

Okay. So for now, the studies for breast cancer is paused or canceled until you maybe find a new combination or something in the future?

Yes. We will not continue to develop as it is today in breast cancer. We've been -- of course, we are using the pharmacokinetic data out of the Phase I. But we will not be embarking. I want to be very clear on that on the metastatic breast cancer ahead.

That's very helpful to get -- this has been asked from investors for a while, so it's good to have it cleared up. One last question about XR17. I mean from what I've seen until now, it's only been used and developed for IV drive. Is it always -- is it also a potential there to be used for oral drugs? And is that something we can see within the next few years? Or is it only well used for IV drugs?

Yes, that's a good question. Well, you know that almost -- over 60%, close to 90% of all issues in terms of clinical development with small molecules is the [indiscernible]. And IV administration is still a significant portion of the usage of anti-cancer drugs. So we intend to continue the development of XR17 with new products in IV, absolutely. But also remember that our platform is agnostic. So therefore, we can use it in oncology and outside oncology as well. And we are also working on that. But let's be frank, I mean, the world of IV formulation is so wide that -- well, we have enough to work on.

Okay, interesting. And the last questions would be, you have hinted and mentioned that you're working on a new API, you mentioned XR17. So can just give a big estimate time frame when something about it will be announced, is it this year, next year? When is that to happen?

I will certainly communicate to you each steps as we progress towards the development of this. I will communicate that to you absolutely. I cannot guarantee you a time perspective on this because it all depends on, on the results of the first step, which is the feasibility. We have certainly selected a limited number of APIs that we want to look at. We have selected one as we speak. And also as we speak, we are -- we have worked on a project team in order to put this API into XR17 for the first -- for the first preclinical step. So you know that time lines are relatively long, I know that, please be patient. As I said earlier, we are turning around Oasmia to a new Oasmia.

The next question comes from [ Per Andersson ], private investor.

My first question is, how confident are you that Oasmia will close the next XR17 deal this calendar year?

Right. We are working on that. I am confident that I will do everything that is in my power to speed that up. But you know how it is. We are working in an environment that is still not the same as earlier in the year. And when you want to collaborate, find a partner, meet with the partner, it is still difficult. So that does impact negatively our activities, but we are working on that. And -- but don't hang me on a time frame. But I can tell you this is one of our priorities as well. This is part of our internal organic growth.

Yes. And can you say anything on how soon you expect to finish the XR19 value assessment?

Yes. So I should be able to communicate some initial results within this calendar year. So that will be my goal. Yes.

And then I was wondering on Page 11 in the report, you could read that during the process to find a suitable partner, Oasmia had taken help from a financial adviser. And that the remuneration is paid in the form of a revenue dependent fee. My question is, will the financial advisers take part in the upcoming royalties and milestones as well?

Okay. Michael, you want to address that?

Yes. Well, first of all, this is, of course, standard in the industry that you use these kind of partners to help us find partnerships. And yes, it's a revenue dependent fee. The rest of that is also not to be disclosed at this moment. We will report it, yes.

Will it be reported later on?

Yes.

Can you say when?

No, not now. We have an annual report coming out very soon as well, which you know will give a lot more detail on all these matters. So I don't want to say anything now that will also be reported in a few months.

Okay. And my final question, in the report on Page 9, it is stated that Oasmia has started measures for the purpose of speeding up and finishing the recordation of assignments of the patent. And that the measures include ongoing arbitration proceedings against Ardenia based on the transfer agreement, which Ardenia has disputed. What can you tell us about this dispute? Is Ardenia questioning Oasmia's right to the patent?

Well, as you know, we have initiated an arbitration proceeding and nothing as of yet, nothing material as of yet really happened there. Recently, Ardenia disputes the reregistration of patents from Ardenia to Oasmia. This is not something -- it does not, in any way, shape or form, change our opinion of this case or what we believe will be the outcome.

Okay. So let me be very clear on this one. I mean we own the patent rights, okay? And we will be registering them in absolute proper manner. This is absolutely a nonevent from Oasmia and from our advisers.

Our next question comes from [ Ingmar Restre ], private investor.

Yes. I have a few questions regarding the XR19. One other question is that what are the main advantages you see with the XR19 for using 2 APIs in it? Is it less time in hospitals? Is it better for the patient? What would be the main advantage with XR19?

Well, of course, if you are able to combine 2 drugs in one, obviously, there is a convenience aspect that is not negligible for the patients, for the nurse. And overall, this is a significant aspect in patients that are very often receiving multiple drugs at the same time. So this is the way we should have a look at it. As I said earlier, we are in an assessment phase of the feasibility of XR19. So be patient, please.

Yes. Do you see any competitors doing the same thing out there with a similar thing, with XR19 that you're doing?

Not really, actually, not really. And I think we are at the forefront of this, in the world of proven encapsulation technologies. And I insist on this because we -- all the platforms that are in preclinical but not proven at all.

I have a question also about XR17. Do you see any competitors looking at out-licensing their platforms as Oasmia were to do?

Well, I cannot comment on any action from our competitors. I have enough to focus on Oasmia and on our platform. The way I look at it, at least for us, is that -- so Apealea was the first product out of XR17. We had one deal, and then we could be thinking about the same for docetaxel micellar. And subsequently, other deals as well with -- using the XR17 platform, which is the beauty of this technology.

One final question here. The business advisory board and scientific advisory board are listed with Oasmia? Or have they been like canceled?

Yes. With regard to this business and scientific advisory boards, as you know, we have significantly stepped up our own Board with a number of key people belonging to our Board coming from the industry with a lot of experience in drug development, regulatory, marketing, sales, and biotechnology and pharmaceutical world as such. So we felt that there were no need anymore to have both a scientific advisory board and a business advisory board. However, in -- for some selected project, we will still use, of course, advisers in order to get external proper advice in our projects meaning R&D or commercial. But we believe we have a very strong board as of today, covering all aspects of our business.

Yes, I have a follow-up question on that. Can you please tell me then about the Board of Oasmia. Are they a working board, or are they more like a regular board for advisory? How is it working right now?

Well, first of all, it is working very well. I have personally an excellent relationship with the Chairman and with all Board members. They are involved in the business absolutely. And they are used as they should be, which is a soundboard giving me sounding advice. And of course, there is this very useful dialogue Board-CEO, Board-management team in order to be constructive and moving forward. So the Board is involved, and we have a constructive dialogue on the various projects and on the objectives. And I can tell you there is a full alignment between the Board and the management team.

Our next question comes from Franc Gregori, Trinity Delta.

I've got 2 questions. One is factual. The other is softer and more strategic. On the factual one, you mentioned that you are not going to do commercial production. But can I just clarify, you will continue to commercialize the drugs, the products in certain markets yourselves?

Yes. That is absolutely correct. And that's the case for Apealea in the Nordic countries, in Baltics and Russia. But clearly, it is out of our core competency to continue engaging ourselves in large commercial production facility. And we want to do that clearly.

Yes. That makes sense. Now the softer thing, you've been -- well, you've not even been there 6 months, you've achieved a lot in that period. Realistically, what can you achieve in the next 6 months? I'm aware that there's COVID, I'm aware that things can't go at the same case. So what should we be looking for in terms of news flow and achievements over the next 6 months?

Interesting question. Thank you. For the first part of my 6 months, yes, I've been now 3 months on Board. Well, for the next 3 to 6 months, clearly, we would expect delivering some of the milestones that have been agreed upon with Elevar, so this is one. Two is, we are looking for either companies and/or pipelines to strengthen us. So I would expect that this would be your expectation as well as mine. And hopefully, the next 3 to 6 months, we will have patients into the first study with SAKK and prostate cancer. We would have identified a new API in oncology or outside oncology. So -- but it is the execution of the strategy. And in a relentless way, we need to execute. And I know, in our world, and you know that very well, it takes some time. And vessels have to be somewhat patient at [indiscernible] overarching strategy. This is a new Oasmia. You've never seen that before, and I intend to continue implementing it in an aggressive way.

[Operator Instructions] Our next question comes from Bill Nelson, private investor.

François, we've heard for many years about the greatness and the possibilities of XR17. And I would like to hear your take on what we can expect from this going forward. Will there be more type of deals like the one we saw with SAKK or should we expect more from like bigger pharma companies and partnerships like that and also [indiscernible] in the time frame before we can take revenue [indiscernible] from XR17 based on [ indefinitely ].

Right. Thank you for the question, that is obviously an important one. Well, as I said earlier, we have critically review what we can do with XR17. So first is to engage ourselves with SAKK, is what we have done. And of course, if they -- in the study, they won't be -- appear to be positive, we will continue with SAKK. We have no reason not to do it, this is one. Two, through new API, either in oncology or outside, we will be engaging in collaboration. And I know that, that has been the promise years back, I have been on Board only 3 months, so you need to give me a bit of time, a bit of relief on that. But clearly, the goal is for new API to find a partner. And with regard to big pharma, which is an interesting question because we can certainly improve the formulation of existing marketed drugs that have becoming generic or just about to. This is an area that will be investigated. And you're correct, and we need to do so and we will be doing so. But again, this kind of deal, some things cannot be done overnight. So you need to be a bit patient, at least give me the credit of being patient with me a little bit.

Of course. I was not being impatient with you. I was more looking to hear your view on things since the previous Board maybe wasn't that reliable. So more of what we can expect. And if we can't make new APIs in a time frame, what are we talking about? Are we talking like 4 or 5 years in the future before we have a finished product that can generate revenue? Or is it more like 2 or 3 years? Maybe just some ballpark.

Yes. Yes. So looking at APIs and the way we intend to develop them, so it will take probably 2 to 3 years in order to have a formulation or a product that has been going through Phase I, Phase II. At this point in time, it will be a further evaluation to say, okay, do we do it ourselves? Or do we find a partner? And the answer is, we will most likely find a partner. So expect 18 to 24 months before we can engage ourselves in a collaboration with a partner to go further up to the approval. So this is more the way I see it. I see it more trying to get a number of APIs out of the XR17 rather than go to the full-fledged clinical developments because, obviously, there is some risk involved, first. And two, there is a cost involved as well. And then all together, it's a long time frame. So this is the way I see it. We will be operating more into the window, let's say, Phase I up to Phase II, Phase IIb. Well, from preclinical for new APIs, of course.

Our next question is from Frank -- Frederick Hayden, private investor.

Two questions if I may. First of all, yesterday was an analysis released on [indiscernible] and they predicted USD 300 million of sales in 5 years. And surely, those numbers must come from you more or less. I was just wondering if you could confirm that this prediction was accurate in your mind?

Well, these numbers -- I mean, well, first of all, the line wasn't that clear. You said that in [indiscernible], you saw USD 300 million to deliver in 5 years. Is this your question?

USD 600 million in sales, in the base case, 2025, if I remember correctly?

Well, first of all, I'm not responsible for the write-up of [indiscernible]. Obviously, they are taking input from us. I'm not aware about the USD 600 million, by the way. What I can tell you is that the potential of ovarian cancer advance, if you take the indication of patients with hypersensitivity, et cetera. So the right indication of ovarian cancer patients for Apealea, we can think about the order of magnitude of peak sales of around USD 300 million. This is the order of magnitude of the potential of the drug worldwide. That I can say.

And the full potential will surely not be reached immediately [indiscernible] if that.

Well the -- yes, of course. I mean, there is -- well, usually, we talk about peak sales at 5 years, usually.

All right. And next question. You've stated a couple of times that you're in contact with institutional investors. Obviously, they are a little hesitant. Why do you think they are a bit slow to moving there? Why do you think they're hesitating to invest in Oasmia?

Well, I'm not sure that it is fair to say that they are hesitating. What I'm sure is that, I am in -- I have initiated contact with them. And you know that obviously, my first goal was to put the house in order, first. Two is to define the strategy. And third is to go and meet them. So now I will be beginning my fourth month on Board, so you can easily imagine the path going forward. So...

Maybe this is a slow process than I had in mind. So it's nothing like that. Final question then if I may. Could you say anything about the time line for expansion of [ CIS ] or other indication?

Okay. Yes. So we have also initiated the work with Elevar on this. It's -- I can't give you any time frame. We are working at identifying the right other indications and put together, from a budget standpoint, all these kind of things have started to be initiated with Elevar. The goal is, of course, first and foremost, to finalize the selection of the European partner for Apealea in Europe. In order to market Apealea in Europe as soon as possible. So that's the first and the foremost goal that I have with Elevar, then there will be other indications to be working on. Yes.

There appears to be no further questions. I will return this conference to the speakers for any closing remarks.

Well, I would like to thank you very much for all the questions, for your patience as an investor and also that you -- and I hope I was clear enough on the new strategy for the new Oasmia, consisting not only on pursuing organic growth through the execution of the Elevar deal, through the new APIs, through the clinical development plan of our new product. But also, you need to be confident that we are now become a lean and mean organization with a significant reduction of the burn rate. And we are hopefully, very much agile in the coming months in order to capture opportunities that exist in the marketplace to strengthen ourselves, to strengthen our pipeline. And I'm confident that we will make it. And having said that, I would like to thank you very much. It's always a pleasure for me to dialogue directly with you, investors. And hopefully, we will continue to do so in the next coming months. Thank you.

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