Xbrane Biopharma AB (publ) ($XBRANE)

Hello, everybody. My name is Martin. I'm the CEO of Xbrane, and I'm here together with Jane, our CFO. So we will go through the highlights of our Q1 report 2026. I will start with an operational update, and Jane will thereafter go through the financials. So we will start with Ximluci, our Lucentis biosimilar, and we will then go through some highlights in relation to Xdivane, our Opdivo biosimilar candidate on the development. Ximluci is launched across 24 countries in Europe and the Middle East. It's a product which we have partnered with STADA. STADA is commercializing the product across these different countries, and it's a quite simple setup where we share profit contribution post production costs and sales and marketing expenses 50-50. It's a sizable addressable market. If we look at it as anti-VEGF products for retinal disorders. We have, of course, then Lucentis and Lucentis biosimilars, that's the dark blue chunk in the bottom of this graph on the left-hand side, active ingredient ranibizumab. And then we have other competing molecules, Eylea and Vabysmo and some off-label usage of the cancer drug, Avastin. But all in all, a market opportunity of EUR 5 billion, which is growing on the back of an elderly population driving increased need for these kind of drugs, and also, to some extent, more cost-efficient options coming to the market within the ranibizumab or Lucentis biosimilars as well as Eylea biosimilars. Looking now specifically on Ximluci and the performance the last quarter. Important to note is that we have constant cash profit sharing coming in, in Q1 2026 in relation to fourth quarter of 2025. So we will see a little bit later in the presentation when Jane go through the cash flow that we had SEK 13 million coming in cash-wise this quarter, and that was from the fourth quarter, and we'll have a similar amount as a result of sales this quarter. But the volumes have gone down slightly compared to the last quarter, but it's a result of a focus on maintaining profit margin level and maintaining the profit contribution in the market where we actually are seeing prices going down and quite high degree of price competitiveness within this market segment. And we are, as we've talked about before, going through several measures to reduce our production cost. And we believe that, that is going to bear fruit in 2027 and onwards. And our estimation is that, that can unlock further volume growth for us. But for now, we are going to have to focus on maintaining the profit margin with the current production cost that we have. We still have an inventory of many drug substance, which we are now gradually converting into cash as we are shipping more product to our partner STADA, that will take place during the course of this and next year. So it's SEK 170 million, which we expect to gradually be converted into cash. Then U.S., we released the press release last week, we resubmitted the BLA to the FDA. As you might recall, we had a complete response letter in October last year, and that was due to one of our contract manufacturers having unresolved observations from an inspection performed by the FDA during last year. And that site have now worked through those observations and have submitted documentation to the FDA where all the actions in relation to the observations have been finalized and the related documentation submitted to the FDA. So we now expect a regulatory time line of 6 months and we'll have to wait and see whether FDA chooses to reinspect this specific site or not, and we'll have to get back when we know when the specific PDUFA date, the decision date is going to be by the FDA and the activities leading up to that. Shifting gear to Xdivane, our Opdivo biosimilar candidate. We're quite excited about this program actually. It's going according to plan towards a regulatory submission to U.S. FDA second half of '27 to enable an approval second half of '28. And an ability to launch the product in the beginning of '29 provided, of course, a timely approval. And that is the point in time when the patent on Opdivo expires. It's an ongoing clinical trial with recruitment going according to plan. And we're also in parallel going through all related CMC activities, process characterization and validation of both drug substance and drug product processes. And worth to mention here as well, we are working with a well-established contract manufacturer for this program with long history of supplying commercial pharmaceutical products to the U.S. and having successfully gone through FDA inspections for related products. So we feel quite comfortable in -- that we have reduced that development risk, if you will, having learned quite a bit from our Ximluci program. In relation to financing of the development activities, we released the press release this morning where we have agreed with our partner Intas in relation to financing on specific CMC-related activities which are under Xbrane's responsibility and in the original license agreement were under Xbrane's financing responsibility. Now Intas have agreed to partly finance these activities. And that will take place during the course of this and next year and will accrue with an 18% add-on on these respective expenses, which they're paying for per annum. And then when we are entitled to a profit sharing, when the product is on the market, those expenses will be deducted prior to Xbrane receiving any profit sharing. In connection with this, Intas has also been granted an option to make a onetime lump sum payment corresponding to 40 months of forecasted profit sharing, and they can do that at any point in time during the course of the license. And if they were to do so, that would then release them from the obligation of paying Xdivane any further profit sharing from sales of the product. We have though a period from this point and 6 months ahead, where we -- if we were able to arrange other suitable financing that we could essentially repay whatever Intas would have paid at that point in time and then reverse this option to make this onetime lump sum payment. So that's the essence of this arrangement. And in connection with this, we also engaged a company called Venture Valuation, an expert in valuing pharmaceutical products, and they had a look on the prospects of Xdivane, and they -- under fundamental assumption that the product is approved and could be launched beginning of '29 in the U.S. and upon European patent expiration mid-2030. They made what they thought were reasonable assumptions with regards to overall market opportunity, biosimilar volume penetration, price discounts and market share of Xdivane, looking at how oncology biosimilars have developed historically in the U.S., the level of expected competition for this specific molecule and so on and so forth and then applying the profit sharing levels, which Xbrane are entitled to from this program and came to, let's call it, the base case with over the course of 10 years from '29 to 2038, accumulated profit sharing of close to SEK 10 billion, out of which 1/3 would be related to the first 4 years. And if you take that expected profit sharing during the course of these 4 years and calculated a net present value in the beginning of '29 using a 15% discount rate you end up at SEK 4.4 billion. So we did this valuation in connection with this amendment, which were done with Intas, and it's to give some kind of guidance on what, 40 months of profit sharing could be worth should that onetime lump sum payment option exercised by Intas as I described on the last slide. So I think that was the essence from an operational perspective, and we can then shift over to the financials. So I hand over to Jane.

Yes. So the revenue for the period amounted to SEK 17.3 million, whereof SEK 17.2 million related to product sales of Ximluci to STADA. And the COGS or the profit margin amounted to 39%. During this coming quarters, we expect more production sales as we have production slots planned, and we have also started the production on site. During this next coming quarters, we are also working, as Martin said, on cost reduction measures to reduce cost of goods and be more competitive in the market. The administration expenses amounted to SEK 17.6 million, and R&D expenses amounted to SEK 9.9 million, whereof SEK 2.7 million related to amortization of intangible assets both of which are in line with our expected expenses. This is the breakdown of the cash flow. You have seen this before. And as you can see, we received SEK 13 million of the profit sharing from STADA related to Q4 2025. The production of finished goods, which will be shipped during the second quarter amounted to SEK 4 million. And the fixed cost of admin and R&D as explained on the last slide, amounted to SEK 17 million. Some small investments have been made on Ximluci among other things, to reduce the COGS as explained, and also some expenses have been invested into the Xdivane project. The closing balance of cash was SEK 66.7 million at the end of the quarter. Here, you can see the operating cash flow, which amounted to SEK 8.5 million in Q1. And as I mentioned, the cash amounted to SEK 66.7 million at the end of March 2026.

Yes. So the key takeaways from the quarter. Ximluci launched in 24 countries. We have constant market share of 8% from a volume perspective in Europe. We are working on several initiatives to bring down the production cost of Ximluci. That's really the most important thing for that program right now, and it's really to ensure the long-term competitiveness of the program in a market where we are seeing reduced price levels overall. We have resubmitted the BLA to U.S. FDA. And we expect 6 months regulatory process. So we hope for a decision date and, of course, an approval during the second half of this year. And Xdivane development is proceeding according to plan, and we are targeting BLA submission in second half of '27. So with that said, I think we are shifting over to questions, and we'll start with any potential questions from people calling in.

[Operator Instructions]

Okay. There seems to be no questions from people calling in. We have one question in the chat here. How likely is it that the Intas will use the 40 months option and if when in time? Really impossible to answer that question. We cannot estimate the likelihood of Intas choosing to exercise this option or when it would occur. It would depend on multiple different factors such as timing of approval, the level of competitiveness at that point in time and how the market has developed up until then. So it's really impossible for us to estimate that likelihood. So I think actually that was the only question on the chat. So with that said, we will then close down the call. And we are here and available over e-mail or phone should there be any other questions. And otherwise, we are looking forward to next time in a quarter time and have a great day, all of you. Thank you.