Camurus Ab

Thank you so much and good day, everyone. Thank you for taking the time to join our first quarter earnings call today. I'm pleased to report on a strong quarter. But first, before starting, please note our forward-looking statements. We will begin today's call with a summary of first quarter highlights, then go to financial results, followed by commercial and R&D pipeline updates, and finish off with Q&A. With me on today's call, as previously, is John Garay, our Chief Financial Officer, and Richard Jameson, our Chief Commercial Officer. So, let me first start with the first quarter highlights. We had an excellent start of the year with good top and bottom line growth. Bipedal net sales grew by 40% year-on-year to 282 million SEK. We received new markets and pricing approvals in the Middle East and Europe. And in the U.S., the FDA review of BRICSIDY-NDA continued, with the PDUFA date coming up in just two weeks' time. In the R&D pipeline, four Phase III trials and one Phase IIb trial progressed in different indications, where, importantly, the pivotal Phase III trial of CAMP2029 in Acromegaly is now being completed. In the Sorento trial, that is clinically, I should say, in the Sorento trial, we reached 50% randomization out of a target of 302 GetNet patients. And then we can also mention that our partner, Rhythm, completed the enrollment in their phase three trial of weekly set melanotide for treatment of genetic obesity disease. On the corporate side, we delivered profitability for the fourth consecutive quarter, in this case of 59 million SEC, an increase of 60 million versus Q1 2022. And we strengthened our cash flow. We continued growing the company with new talent, including appointing Alberto Padroncelli, MD, PhD, as our new chief medical officer and member of the executive management team. And we started the build-up of our US commercial infrastructure for CAM 2029. So with this brief introduction, I'll hand over to John for a financial update.

Thanks a lot, Frederick, and good afternoon, everyone. We would like to share with you now the main highlights of our financial performance this quarter. From a total revenue point of view, Camurus achieved 284 million SEK in the quarter, delivering a growth of 29% versus same period last year and with product sales of 282 million SEK growing 40% versus prior year and 6% versus prior quarter. Product sales grew materially higher than our total revenue as Q1 last year recognized all the revenues by an amount of 18 million SEK including milestone by Riden Pharmaceuticals. Operating result for the quarter was 74 million SEK which means a 69 million SEK improvement versus same period last year. Company has achieved an earning per share after dilution in the quarter of 1.02 Swedish kronor, equivalent to a profit after tax of 59 million SEK in the quarter. And finally, Camoru's cash position at quarter end was 586 million SEK, which represents a 47% improvement versus same period prior year. If we now move to next slide, we can see the main components of our operating result. Gross margin improved 175 basic points in the quarter, driven by production efficiencies reducing scrap by 139 basic points, and FX favorability driving 36 basic points. In total, gross margin delivered 255 million sec in the quarter, and year-to-date gross margin reached 89.9%. Total OPEX reached 184 million SEC, which is a 3% decrease versus same period prior year, driven by following four factors. Firstly, marketing and distribution investment to support market penetration in own territories and expansion of Gubidal into new markets grew by 32%. Secondly, administrative expenses aligned with corporate evolution to substantiate company development grew by 37%. Thirdly, R&D investment declined 15% versus same period prior year, driven by timing of milestones in our three ongoing phase three studies and clinical trial product generation. And finally, gain for hedging contracts was positive by 3 million sec in the quarter, while prior year same quarter was negative by 9 million sec. Company operating result became positive by 74 million SEC in the quarter. Profitability may fluctuate between quarters as we continue our investment in our pipeline to bring product candidates to market as soon as possible. If we now move to the next slide, our cash position at quarter end was 586 million SEC, delivering a 47% growth versus same period prior year. Camurus generated 80 million SEC cash in the quarter, mainly driven by company operations, generating 86 million SEC, compensated by 61 million SEC investment in working capital, mainly customer receivables following sales growth. Other small drivers drove 4 million SEC cash reduction, mainly these liabilities. As end of quarter, Camurus has no debt. Our guiding principles for capital allocation continue being Reinvest in our business to accelerate booby-doll market penetration and geographical expansion. Secondly, bring Can2029 to market as planned. And lastly, support our company's strategy in the area of organic growth opportunities, enhancing our company value. All in all, Camurus closes first quarter with a solid financial position, interesting growth opportunities, and is on track to deliver 2023 market guidance. Having said that, I would like to pass the word to Richard. Thank you, everyone, for your attention.

Thank you, John. Good afternoon, everybody. So we'll move to a commercial update, and I'll start in Europe, with Bufordale's progress in Australia, Europe, and MENA. Bufordale continued to grow, and sales for the quarter were 282 million sec, up 40% year-on-year, and 6% quarter-on-quarter. And this increase comes on the back of a strong Q4 where we had large one-time orders from the MENA region following the pricing and reimbursement approvals. We saw good growth across markets, most notably in the UK, where Buvidal exceeded 5% total patient share as new funding became available and was allocated to the treatment clinics. Similarly, the interest of using Buvidal in criminal justice settings is increasing in several countries and still constitutes a substantial opportunity for further growth. Based on the in-market sales in March, we had about 39,000 patients in treatment at the end of the quarter, a net increase of 3,000 patients since December. Our market expansion efforts also continued during the quarter, resulting in market approval in the UAE and pricing approvals in both UAE and Greece. In addition, we have four regulatory applications and four pricing submissions under review. Finally, as presented earlier, we withdrew our variation application for Buvedal in chronic pain and we'll come back to this development after the summer. So now moving over to the US. The US approval decision for Brixardi is imminent with a PDUFA date in less than two weeks. We see a significant market opportunity for Brixardi in the US and based on the large medical need and the treatment gap shown on the right-hand side of the slide, There are new government initiatives to increase access to treatment, it's a growing market, and there's a clear differentiation and positioning of Brixadi. So if we take each of those in turn, because of the severity of the opioid crisis, several important measures were recently taken by the US government to lower the bar to treatment. These include an increase in funding with over $6 billion, removal of data waivers so physicians can treat more patients, and new guidance to support expansion of treatment in the criminal justice setting. The U.S. opioid use disorder market is expected to grow significantly in the coming years to over 3.5 billion U.S. dollars. Long-acting injectable buprenorphine is forecasted to be a major growth driver of this expansion. And currently, only an estimated 3% to 5% of patients receive long-acting injectable treatment. In addition to these positive market dynamics, Brixadi and, of course, Buvidal in Canberra's rest of the world markets is well differentiated with flexible dosing and pathology, both weekly and the monthly formulations. It's easy to switch from current daily treatments through dose equivalent table. It's the only long-acting injectable that can be initiated from day one, and it's simple to use and easy to store. With all these factors, we look forward to seeing Braeburn successfully launch Bixadi in the US and making it available to patients. On that, I'll hand back to Frederick.

So, thank you so much, Richard, and I will give a brief update on our lead development program can twenty twenty nine. So, during the quarter, we continue to progress our late stage clinical programs. For our subcutaneous type people can twenty twenty nine across three rare disease indications. acromegaly the growth hormone disease gastroenteropancreatic neuroendocrine tumors gap net abbreviated and polycystic liver disease prv the goal is to develop a best-in-class therapy in all of these indications or actually in prv the first approved therapy can 2029 has the potential to address shortcomings of current first generations monostatin analogs and become the first line medical treatment for acromegaly and net as well as a new treatment for pld this is based on the prospect of improving patient convenience quality of life and increasing efficacy based on significantly improved drug exposure and bioavailability so camp 2029 has a high potential peak sale estimated to above 2 billion US dollars annually across indications, with the largest opportunity being in that. So based on the commercial fit and the large opportunity, CAMERA intends to commercialize this product ourselves in the US, Europe, and Australia. And as you also know, and I've said previously, we have a comprehensive clinical program ongoing with CAM 2029. This includes three Phase III studies in ACRO and NET, and one Phase IIb study in PLD. All have progressed very well during the quarter, and I'll give a short status update on them in the next few slides. So, our first and most advanced study is the Pivotal Randomized Control Trial of CAM2029 in ACROMEGALE. where the last patient now has completed treatment and we are working closely then to close the study as we are speaking. This is a double-blind placebo-controlled trial over 24 weeks in patients treated with standard of care with either octreotide long-acting release, LARN abbreviated, or lanreotide autogel. The primary endpoint is the response rate of biochemical control defined by insulin growth factor one, plasma levels being below one times the upper limit of normal at the end of the treatment phase. This is a classical endpoint in this indication. In addition to that, we have several important secondary endpoints, and these include clinical science and symptoms. several different patient-reported outcome measures, looking at, for instance, treatment satisfaction and quality of life for patients, as well as pharmacokinetic and, of course, safety and tolerability endpoints. So over to the overall status in the program. In acromegaly, our two Phase III tribes have progressed, both of them, towards completion. As mentioned, we are in the process of finalizing the PIVOCUS efficacy study of CAM 2029 by early June, and a key milestone of top-line results from the study is expected to be announced at the end of June. The second trial is a long-term safety study, and we plan to report interim results from this later in the third quarter. and this is also going to be included in our regulatory submissions that are expected to go in late 2023 early 2024 and the work is ongoing here according to plan in getnet the second indication we reached the milestone of 50 recruitment out of the 302 patients planned to be enrolled in the sorrento trial I'm really pleased that the recruitment is progressing so well in this largest ever randomized controlled trial of a somatostatin analog in this indication. We remain on track to enroll the rest of the patients during the year. In PLD, recruitment continued in the Positano trial with more than 25% of patients being enrolled, and we are expecting to finalize recruitment during the second half of the year. So, in parallel with the clinical work, we are also accelerating our pre-launch preparation. Most importantly, we have initiated the build-up of the commercial infrastructure in the US for Camp 2029. The medical team is being expanded with key expertise and leadership, and will be led by our new Chief Medical Officer, Alberto Pedronchelli. with extensive global experience in both acromegaly and neuroendocrine tumors, and also in the US marketplace. In parallel, we are ramping up our medical affairs activities, participating in conferences, and preparing new scientific publications based on our previous and current clinical trials. We have two meeting abstracts about our newly developed patient-reported outcomes tool for PLD accepted for presentation at ISPOR in Boston here in May, and an abstract from our Phase III acromegaly trial accepted for presentation at the EMBO conference in June in Chicago. So moving from this straight over to key takeaways from the quarter. We had an excellent start of the year, I would say, and made good advances towards our goals and strategic objectives. We achieved robust top and bottom line growth, continued market penetration and expansion with Buvidan, and we progressed our late stage R&D pipeline towards new market approvals. Ahead of us, we expect exciting near-term news flow, including the imminent FDA approval decision for Bricsadi in the US, top-line phase 3 results for CAM 2029 in June, and in addition to this, several other milestone events summarized on the next slide. So, overall, I am the management team, and I think I can talk for the rest of the company. We're very happy with the performance in the quarter and look forward to a strong 2023. And with this, thank you for listening. And let's move into Q&A. Operator, please take over.

If you wish to ask a question, please dial star five on your telephone keypad. to enter the queue. If you wish to withdraw your question, please dial star five again on your telephone keypad. Our first question comes from the line of Susanna Quirkburner. I'm just about to open the line. Please go ahead.

Hello, this is Susanna Quirkburner calling from Handelsbanken. I have two questions to begin with. First of all, on the regulation in Europe, you mentioned that Buvidal is now considered to be first-line treatment in criminal justice settings in Sweden. I'd just like some clarification there. Does this mean that patients don't need to start with methadone or oral buprenorphine first? They can immediately go to a long-acting? And also on regulatory changes in Germany, I saw a press release on this and was wondering if you've seen that also affect your sales there. And then the second question is in terms of Buvedal revenue per patient. It looks like that's come down for Q1. At the same time, you've mentioned that there are no one-off bulk orders in this quarter. Is this down to pricing pressure?

uh maybe you can help me understand thank you so much susanna i will hand over the first question to richard and then the second question to john okay yeah i'll have to start with the um the sweden one yes the guideline was published recently um proposing that long-acting group of morphine should be first-line treatment in the custodial setting in sweden i think obviously there's a clear reason not to transfer somebody over at their very statement doing well. But generally, if patients are coming in and starting treatment, then it is recommended that long-acting injectable buprenorphine is first line. And on the regulatory changes in Germany, yes, I think you're referring to the changes in the BT-MVV regulations there. They are relatively minor changes there to do with the length of take-home treatment. They have recognized that criminal justice settings are a place for treatment, but they've already been treating anyway. So, whilst they're positive in reducing the regulations in the German market, I don't think they're going to have material impact on us in the short term.

And regarding the revenue per patient, Susana, we have not had any reducing price during the quarter. So any change in the revenue per patient is even biographical mix in our accounts around the globe.

Thank you. Our next question comes from the line of Erik Hultkord from Carnegie. Please go ahead.

Hi there. Thanks for taking my question. I have two if I may. First, could you disclose a bit on what the market share you have achieved in the other top five European markets, unnoted progress in UK with a 5% share. I can comment on the level of penetration in the other markets. And second to that, thanks, John, for clarification on pricing in the quarter. I noted in the guidance that you provided after Q4 that austerity measures was an uncertainty in your guidance for the fourth year. And I was wondering if that's still the case. What are you seeing? Any sort of anticipation of price pressure the coming quarters? And when, if not, when do you expect to adjust your guidance?

Thank you. So, Richard, I guess you can start with the first question.

Yes, so on the market share question, I don't think we're giving too much detail on that, but I can say, I mean, Australia is obviously one of our big markets. long-acting injectable buprenorphine has a share around about 25% of patients, and Bufdal has about 80% share of the long-acting buprenorphine segment.

The other markets... So that's 20% approximately.

Yeah. And then the other markets, Spain, obviously now that's accelerating well. Now we've overcome the access hurdles, but they've only been recently overcome, so that's still relatively low share penetration. Sydney in France, we only launched relatively recently, and Italy, where we will launch later on with a partnership that we announced with Martini later on in this year.

And then, thanks a lot, Eric, for your question regarding the austerity measures. So the development we have seen is, on one hand, in Australia, the government published a decree in January 2023 reducing the price of several drugs in different percentages. Buvidal was included in that list with a 5% reduction that is going to be implemented on April the 1st. But this price reduction is already considered in the market guidance we provided for 2023. So it doesn't have any change in the plans that we were developing. In case of UK, we continue analyzing the law. We are impacted like the rest of the pharma sector in UK. And we believe also that the potential initial impact we may have is already considered in our market guidance provided for 2023. So these are the main highlights.

And the impact in the UK, when is that expected to come through in numbers?

We are going through the law at the moment. We have not seen any impact in Q1. We do not expect any impact in Q2 either, but we continue analyzing the law, and when we have it, we will be able to disclose it. Eric.

Thank you so much.

As a reminder, please press star five on your telephone keypad to ask a question. There are no more questions right now, so I hand the word back to you, Fredrik, for some written questions, and maybe we can come back if there is any more from the telco.

So we have from the DMV market, can you say anything about the increased dynamics for over the month? I assume this was not linear over the period. I think that's a correct assumption. So we had a good finish in March, but I would say that we're very pleased with the development in the first quarter for two reasons. One is that we had a very strong, as you remember, Q4. And on top of that strong Q4, we also had a one-time order from Saudi Arabia, for instance. and despite that we were able to grow six percent into q1 so we are very pleased with the development and in q1 we didn't have any one-time orders so i think it was a very nice development overall from we have also from john halcon Findren, you're right that you estimate US dollar 1 billion sale for Bricsati in the positive scenario. In my notes from earlier, I have 600 million to USD 1 billion. Shall we understand this is an upward adjustment to your expectation? Well, I mean, I think we are still in the same range, but there has been a number of positive developments that Richard alluded to earlier. And I think, you know, in the positive scenario, we are hopeful that it can do very well in the U.S. marketplace. Can you see anything about the investment needed? This is again from the EMB markets. Any investment needed for the coming 24 months to build up your infrastructure in the U.S.? I can say that we have accounted for that in our guidance. So the 0.1 billion SEK that is accounted that is largely including the U.S. infrastructure costs. So I have a repeat question about the one billion note here. With that said, I don't think there are any further questions here. And if there is nothing on the telephone line, I would like to finish off and thank everybody for joining our earnings call today. It was a pleasure to have you listening in and I look forward to Speaking again at our Q2 call, I think that would be a very exciting call. So please join in and have a great continuation of the day. Thank you, everybody.