Xbrane Biopharma AB (publ) (XBRANE) Earnings Call Transcript & Summary

Sure. It was a reason, so it all went very fast now, so just two weeks back or so, and then it went very fast, everything with us kind of wanting to expedite this termination in order to be able to quickly find a new partner.

Thank you and this is the commercialization by yourself with study in the U.S. an option? Or is that not on the table at all?

It is an option. But frankly speaking, we need to take some time to evaluate this further and further understand how that would look like from kind of an organizational development perspective and what kind of an investment we have to go into such an approach. So we're evaluating that alongside with trying to identify and find and tie up another commercialization partner. So it's something we're evaluating but priority is to find another commercialization partner.

Okay. Thank you. And just to take the opportunity to ask on your supply chain, is everything impact there and also development of the prefilled syringe. Do you still expect that to be completed next year?

Yes. We expect that the previous range can be launched the first quarter of 2025, both in Europe and the U.S. So that's still a planning.

Okay. Thank you very much.

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

Thank you. So I have a couple of questions here in the chat. So let me walk them through, I'll read them up and then do my best to try to answer to them. First one. How likely do you think it is that a new partner has been found for simulation for the U.S. market before the marketing monetization has been granted? I think it's likely. I think it's very likely that we are going to be able to tie another paper up towards the end of the year. We're going to run an excited process. We've already have a list of, let's say, the 10, 15 compounds which could be relevant here. And many of them, we had a dialogue with by the time we entered a deal with Bausch + Lomb and I think that potential commercialization parts will also understand the need to move quickly here because they will also need to prepare properly to take advantage of this opportunity. So I'm confident we're going to be able to close something during the course of this year. Next question. Are negotiations already underway with new parker candidates for the U.S. market? No, negotiations are not underway at this point in time. Next question. Will Xbrane be able to generate positive operating cash flow in 2024? Yes, we discussed that previously, that is the planning and reliant on sales of Ximluci in Europe and also other sources of income. Next question. What are the consequences of terminating the agreement? Will the laws in the U.S. now be delayed? Well, provided that we find another commercialization partner during the course of this year, I do not think that the launch will be delayed. But of course, it's contingent upon that. Next question. Do you expect to delay U.S. launch according to the time needed for preparation when at [indiscernible] partner in order to launch on time. I think that's towards the end of the year. If we sign up a partner towards the end of the year, I think still we're going to be able to keep the planning with regards to timing of a potential launch. How many potential new partners have you identified? Well, as I said, we have now a list of 10, 15 potential partners, which many of them we had a dialogue with in 2019 and 2020 when we did a deal with Bausch + Lomb. Next question. Has STADA no interest in the U.S. market? If not, how come? Well STADA have interest in the U.S. market like we do. So they believe that it's a very good opportunity to generate income from elusive, but they do not have their own sales and marketing infrastructure setup in the U.S. So they do not have a natural infrastructure to source this product to. Next question. Does STADA have a U.S. partner that may be a natural candidate for partnership? Well, I would say STADA have many connections and relationships, which, of course, they will bring to here in process. I don't think that we currently have partnership in the U.S., which could be leveraged for this product. But again, there are many relationships and know most of the companies that are relevant in the U.S. And of course, those relationships will be leveraged. Next question. How much do you count to -- in monetary terms to get to market in North America? I think that this question relates to the investment we need to do in terms of commercializing the product. Well, as I said, the priority is to find a partner. And then the partner would take that investment into commercialization infrastructure, and I mean the idea is to find a partner who already has that set up so they can slot this product into an existing infrastructure. rather than opposite, we are expecting income from this opportunity in terms of out-licensing the rights for North America, getting it upfront payment and also milestones on approval. So that's the intention here and what we try to accomplish. Next question. You have mentioned supply is some sort of bottleneck where -- while sales are accelerating. Have you already manufactured Ximluci that can be used in the U.S.? Or can everything manufacture plan to be manufactured already be sold in Europe? We are producing during the fall batches, which are going to be earmarked to dedicated to a U.S. launch. So that is built into the planning. Next question. How much involved was Bausch + Lomb with the regulatory process ahead of the submission approval? Yes. So we worked intimately with Bausch + Lomb. The regulatory team reviewed the whole BLA and provided their feedback. And of course, the idea was for Bausch + Lomb to be involved in responding to questions coming from the FDA. But so with STADA the regulatory team of STADA, I don't think that the termination of Bausch + Lomb will materially affect the regulatory process. And I think we're well set up to handle that by ourselves and together with STADA. Next question. One of the competitors to experience former [indiscernible] in Germany and they have decided to develop a biosimilar for both Lucentis and Eylea. Both are competing of the ophthalmological products. Do you see any rationale in this decision and have You and Xbrane at any time considered to do the same? No. We at Xbrane didn't have, let's say, the capacity at the time when we will have to have started the development for biosimilar to Eylea. So that, I think, was the main reason for us not going in that direction. Now there is a certain cannibalization effect between the two products, but I wouldn't be so concerned about that. And if I think as a biosimilar developer. And effectively, you can see in our oncology portfolio, we're developing both a biosimilar type to [indiscernible], although they have quite some overlap when it comes to the indications they are approved for and use in treatment of. But for us, it was mainly due to not having the capacity at a time where we will have to have started such a development. Would it be feasible to commercialize Ximluci on your own, or would it require a too large sales force? Well, as I've said, it's something that we're evaluating alongside with the process of finding another commercialization partner. Feasible, I think, yes, based on what I know. But of course, it would come at an initial investment in terms of setting up a team in the U.S. On market access from , but then also sales force. I don't think necessarily speaking, the sales force will have to have -- will have to be so large. But then, then again, good sales persons in the U.S. are quite costly. So still it will be a material investment in taking such an approach, of course. It will come at the benefit of taking the full profit ourselves. Okay. Next question. Will you launch in the U.S. without any partner? I think this is a question we've discussed and something we'll get back to. Should it be so that we're not successful in finding commercialization partner. Does your target of $100 million in annual income function is a three year post launch still stand? Yes, it stands, but it includes the use of opportunity. So getting there is required for us to get approval in the U.S. and also have the product launch in the U.S. Next question. Can it be so that biosimilars in the U.S. are having other legal problems than in Europe for propositions. Are there larger risks regarding adverse events? And I would say that there are, of course, another, let's say, legal environment in the U.S., where there's an opportunity for patients to take legal actions versus physicians in court and if there are any adverse events in the treatment and outlook and then also versus the drug manufacturers, of course, it's certain environment. But I think that if the products are approved by the FDA, they are -- they've really gone through the very strict process of getting a regulatory approval and ophthalmologists to be comfortable with using those products without higher risks of adverse events compared to the originated product. So I would be thinking that this is not a material driver for ophthalmologists in considering using biosimilars or not. Next question. If all doses manufactured are sold in Europe instead of U.S., how much will this generate in cash flow compared to that these would have sold in the U.S. assuming that manufacturing is some sort of bottleneck. Can you comment on this? Well, it's hard to give a precise answer on that one. It's true, as you also saw in this presentation that average sales price of biosimilars in the U.S. are higher than in Europe. Currently, Lucentis biosimilar something sold at about $1,000 and you know that the originator in Europe is priced at about EUR 600. So it's quite some difference there. But then again, to answer this question, we'll have to have sorted out how economical terms would look like with the commercialization partner, and therefore, what our part of the profits will be, and therefore, if we would have higher profits on a unit basis in the U.S. than in Europe. Next question. Did you have other interested partners when you struck a deal with Bausch + Lomb? Yes, we had. So that's the list we're going back to now. Next question. How confident are you on signing a deal? And do you think terms would be worse than the one side with Bausch + Lomb three years ago, given that you, now without market and opportunity, is shrinking due to the success of Vabysmo, which wasn't the base case when the deal was signed? Well, our ambition is actually to do a better deal now than what we did with Bausch + Lomb since the development is further advanced, it's closer to market. And actually, as I alluded to in the presentation, I'm not so concerned of that the product is coming for to market from a biosimilar perspective, since the market is still going through the formation process, and the uptake is lower than anticipated. I'm very encouraged by the meaningful opportunity when it comes to off levels in volumes. Next question. Have you already had interest from any potential partners? Or is it too soon? It's a little bit too soon to say again. And we have a list of partners we believe could be interested. So we'll have to then get back during the course of the remainder of this year with an update when we've been able to do a deal. Next question. Given capacity constraints on your own volumes, how difference will this make to your revenue expectations for 2024, can more volume go to Europe instead? Of course, we're going to have to make the trade-offs of sourcing volumes to Europe versus the U.S., but it's still to early, say, how this can impact the revenue expectations for 2024. We need to give it a year and let us go through this outlasting process, and then we can answer this question more precisely. Next question. Does this affect your thinking of paying convertible shares or cash? Not right now, but of course, can have going forward, dependent again, on our success in this out-licensing process since, of course, getting to cash flow positive stage, we believe we're going to do without sales on the use in Q2, but then, of course, is the magnitude of the cash flow generated, which also contact decision on amortizing the convertible in shares of cash. Next question. When will scale up production be finished? Essentially during the course of this year in terms of the validation campaign. Next question. Are there any negotiations ongoing on the oncology franchise? Can you provide some guidance on when we can expect more news flow on this topic or on Cimzia Biosimilar? Yes, on the oncology pipeline, yes, we are in discussions with few interest process. And again, we've been guiding that we have the intentions and ambitions to close the during the course of this year, and that's still the ambition. It's also a topic we'll have to get back to news flow on Cimzia biosimilar. Here, we are going through a process of scale and production of finical material. I think we'll be able to guide a little bit more on that one in our core in relation to the Q2 report. Next question. How much can Xbrane impact the new partner for the U.S. market? Or is it solely start of the decision? Here, this is a joint decision essentially so it will be both of us, but I think most of the times are aligned and driven by the same interest, so to say, to make the best out of the opportunity for us. Next question. You mentioned that this was a mutual agreement between the parties, what potential upside do you see for Xbrane? The upside I see for us is if we can find a partner with better deal terms. And I mean, Bausch + Lomb was a good partner for us in terms of their focus in ophthalmology, but if they're not prioritized in this specific product, it's not any lower good partner. So the opportunity, of course, is to find a partner with good economical terms. So we hopefully can get a bigger portion of the profits generated in the U.S. and also a partner who really are going to focus on this product we say marketing perspective. Next question. Do you know why Bausch + Lomb do not focus on biosimilars, why they changing their plan? I don't have that insight specifically. It was a shift, as I said initially in the call based on a new CEO coming in, in March this year. Next question. Will the sale of the [indiscernible] franchise, be needed to reach cash flow positivity in Q2 2024? Well, yes, it's needed for us to do a deal with at least the most advanced product of Country pipeline, that is to say the divisible candidate and primarily in order to be able to either we had a license payments or some at a structured share part of the development cost associated with that program. Next question. Will Xbrane have Capital Markets Day in the near future? Yes, this last year, it was highly appreciated. Thanks for that comment, something also I ask that we can get back to in our Q2 call towards the end of August. Okay. So that was all the questions that came in via the chat. So with that said, I think we'll come to the end of this call. I try to do my best to respond to questions. But if something was unclear or if you have further questions, don't hesitate to reach out via e-mail or via phone, and we'll do our best to respond to your questions. And thanks a lot to all of you for calling in on such short notice and also given summer time and vacation period. So thank you very much.