AcuCort AB

Hello and a warm welcome to Investor Update, today with Accocort's annual report, which will be presented by CEO Jonas Jönmark. Hi Jonas. Nice to be here, nice to be able to talk about Accocort. Yes, we look forward to that. And as always when we broadcast live, you can interact with the company management, and that makes it easier by writing your questions in the chat field. We will handle those questions at the end of the presentation, but it might be good to get them in as early as possible so we can present them before the broadcast is over. And with that, Jonas, I'll hand it over to you. The stage is yours.

Thank you very much. I thought we would talk about the company during 2024, and we will take a deep dive into the last quarter of 2024. But we will also talk about what's coming up. commercialization, the potential of the product and so on. But let's first look at what Accocort does. We have a very smart product called Secmellit, which improves the lives of people with severe allergies. The product is a very smart mouth film. If we look at the fourth quarter of 2024, there has been no turnover during the period as expected. The result after the tax went up to about minus 7.5 million. And we have also started with deductions on our immaterial facilities during the period. In general, there are deductions on research and development that you have to do according to good guidance. The result per share went up to minus 0.09 before the closure and the cash retention at the end of the period went up to approximately 2.7 million SEK. Events during and after the fourth quarter. The first thing we have communicated is that all patients in our study, our phase 4 study, have passed the study and the study results have been processed and we have created a plan now for how we are going to publish this in the international scientific journals. We have also been awarded what is known as an extended SME status at the American Medical Agency and that is important for what is to come, the expansion in Europe. SME status means that we get discounts on many of the services at the European Medical Association and that we are actually cost-free in some areas, which is very good for the company. We have also reported that we maintain increased technical acceptance from myself and our chairman in the preliminary submission. And we also reported that we made the pre-examination emission calculated to over 160%. If we look at the whole year, from January to last December, we had a net turnover of SEK 675,000, which was the first order for our partner in the Nordic countries. The results for the tax, as expected, were minus SEK 17.4 million. With deductions. And revenue per share is minus 0.21 SEK. The important thing that we have done here now is that we have built for the future. We have made a very successful pre-emission, a unit emission of about 47-48 million kronor. As I said earlier, we have scored 160%. And it is very important to have this in the cash register here now, because now it is expansion in Accocort. And the capital will be used for the approval process in the USA. and our approved processes in the rest of the EU. We are working very hard here now to get out to the big European countries such as Germany, France, the UK and even Poland. We have very long discussions with companies for these markets, so it looks good. The money will also be used for partner and license discussions, legal consultations and negotiations and so on. Especially in the USA, the due diligence process is quite costly. And then there is personnel, administration and marketing. We will invest a lot of money to improve our IR, communication with the stock market and so on. Our strategy for global communication has been launched in the Nordic countries. The Nordic countries are our home market, but that is not the largest market. The largest market in Europe is Germany. After that comes France, the UK, Poland, Italy and Spain, which are important countries. We have long-term discussions for these markets. We can expect more approval on the European market, but also on selected countries in the rest of the world. We are looking at countries such as Australia, China, India, South America and South Africa. And what we are discussing are large pharmaceutical companies, specialized pharmaceutical companies and what we are discussing is distributor agreements and license agreements. Another important piece of the puzzle is that we have the production in place. We have secured volume production. We have the opportunity to scale up this production to adapt step by step to the future, so that we get contracts in place. Let's look into the future. What can happen in the future? There are further trade agreements in leading European countries. I said earlier that we have long-term discussions in countries such as Germany, Poland, France and the UK. Market approval in the US is yet another milestone that we are looking forward to passing. What will happen here now, we have submitted our IPSP that will be approved by the American Medical Association and they will answer us at the end of March if there are no delays on their side. After that, we will send in what is called a final IPSP. After that, we can submit our application to the US. We expect to be able to submit the application to the US sometime in the second half of the year. We are also looking forward to further orders from our partners in the Nordic market. We are looking forward to the start of sales in Denmark. Continued expansion in the USA. When we have submitted our applications in the USA, we will be able to take the next step in our discussions with the companies that we have dialogues with in the USA. We also have opportunities for expansion in selected countries in the rest of the world. Vi har precis avslutat vår studie och fått studierapporten som ser mycket bra ut. Vi ser fram emot att kunna se vetenskapliga publikationer i viktiga vetenskapliga tidskrifter. I want to say something about the market potential for this product. It is huge. If we look at the entire market as a pyramid, then we have in the base of the pyramid, here we have the patients where the primary treatment is antihistamine. And those patients go to their pharmacy and can pick this up without a receipt. Then we have the big part in this pyramid, and that is those with a moderately severe allergy where antihistamine is not enough. They are the ones who need a product such as our product Sekmelit, a steroid, in order to overcome the difficult allergic attacks. Then you have the small top of the pyramid, which is what is called anaphylaxis. The primary treatment principle there is adrenaline, EpiPen, you've probably heard of it. It's not directly our customers, but they are a large part of the pyramid, which corresponds to about 25 to 30 million diagnoses a year, new diagnoses a year in the EU and USA. The market size in terms of money for the EU and the USA is somewhere around 3 billion USD per year. So that's a big part of this cake. If we look at the world, I mentioned here that we have sales that take place in the three largest Nordic countries, Sweden, Finland and Norway. We look forward to starting sales in Denmark during the spring. The domestic market is important, but the volume actually exists outside of the Nordic countries. And these are countries such as Germany, France, Great Britain, but also Poland, Italy and Spain. And I don't know if I said that, we have long-standing discussions with very interesting companies for these markets. Other countries that are interesting for us, where we have ongoing dialogues, is above all the United States. It is the world's largest individual pharmaceutical market. But we also have interesting dialogues in countries such as China, India and Australia. I can also mention some countries in South America, South Africa and so on. So there is no doubt that it is expansion that counts for Accocort. There is no one who has avoided seeing that it is starting to appear here now in the newspapers, in Sweden at least, that the pollen season is around the corner. If we look at the Nordic market, then our commercial partners are out and inform the doctors about the product. What is needed now is that the patients when the pollen season comes to the doctor and gets his new medicine. And there is a lot of work behind that. I am a self-pollen allergist. I don't usually look forward to the season, but it will be interesting to see what happens now during the spring. A few words about our product, Secmellit. The product is a quick, smooth treatment. It is a mouth film that is used in severe acute allergic reactions. 25 to 30 million people are diagnosed annually with this diagnosis. If you look at Europe and the United States together. We should not forget India and China and such when we start talking about real, real volumes. Market share, 3 billion US dollars. There is a clear medical patient need for this type of product. And we have shown this both through interviews with patients and doctors, but also in our studies. Available treatment today with tablets that are to be dissolved in water and so on. They are very complicated and difficult for the patient to administer when you have a severe allergy. In one of our studies, 70% of patients preferred a mouthpiece over their old tablets, which is a very strong indicator of the need for our product. If you turn to ask the doctors, 9 out of 10 doctors are willing to prescribe our product as long as the patient comes to the clinic, which is also very strong. We have a lot of exciting things going on. It will be an intensive spring with many news. So please follow us both on LinkedIn and on YouTube or go to our website akkokort.com. So, that's what I was going to tell you about the company. Back to you, Carl.

Yes, Jonas. Interesting, exciting. And we can start by noting that you had an emission that you managed to fill in today's climate, which I'm a little impressed with. Overfilled, you could say. Why do you think the emission was overwritten?

I think it's about... If you look at Accocort as a business case, an investment case, there is a low to zero risk in development. The product is underdeveloped, we are not going to do any more things, so there is a very low development risk. It is a product with a very high potential. The first commercial agreements are signed. Sales have started, so we've gone from being an expected company to actually being on the market. Not on the biggest market yet, but that's the next step for Accokort. And that's where we have long-term discussions on the best markets.

And that will be a good springboard to some of the questions that have come in here. You talk about sales, Q4 specifically, then 2024. But if we start here, how is sales in the Nordic countries? And do you see any trends?

Now the pharmaceutical market, especially the Zepel-based pharmaceutical market, is very conservative. You can compare it to a locomotive that is about to start. It requires a lot of energy and power in the beginning. But when you've got a roll on it, it becomes a lot easier. We are now in this phase where we have started this, it is rolling forward, we are starting to get speed. Pure sales figures on the local market I leave to our commercial partners to comment on. But we look forward to getting more orders from our commercial partners.

We have a close dialogue with them. So even if it is not reported a turnover, it does not mean that it is not a sale, is that how we should see it? That's right. And then we have the partnership work here in the Nordic countries, which I understand is well developed and a good reason to stand on. If you go further and look at sales and look at Secmelit, then the question is, I get a question here, if you have any other projects and inputs, any other medicine substance that can be applied to the mouth film, How are you thinking about that?

That's a very interesting question. There is an incredibly interesting potential behind this mouth film, and not just in allergies and so on. What the company is doing now is to focus entirely on getting this product out in the world, Sekmelit. In parallel with that, it can very well There will be discussions with other companies about licensing and so on. But the focus of the company right now is on this product.

And that is so that we will not spread ourselves too heavily. It is quite logical when you have come this far. What happens to the subsidy application in Sweden?

We were in a dialogue with TLV about whether or not you can get a subsidy. What happened there is that if you look at the Nordic market, it is not always an advantage to be subsidized. Because then the doctor must be able to motivate why you prescribe this. It becomes a threshold for the doctor. And when it comes to the price picture of the product, we have today a price picture of about 300 SEK for two mouth films in one package, an acute treatment. The price is not even a matter of discussion when the sellers are out to meet the doctors. The price is not the decisive factor here. If it had been subsidized, it would have been a small gap for the doctor. Now, since the price has been accepted,

then it's not a problem. You mentioned that it's a conservative industry. I almost get the impression that it's even more complicated. You have a good product, nine out of ten doctors prescribe it, Does this mean that there won't be any new applicants for TLV?

It's up to our commercial partners. They're closer to the market than we are. It's their strategic choice, of course in accordance with us. But both Akopkort and Unimedica agree on this strategy. It can change in the future, but since... The price is not a question for the patient, so it is a pity to create this gap for the doctor.

You had a nice map with different colors when you started launching Seckmelit in Europe. You mention countries such as Germany, Poland, France and the UK, and they had a little different colors. because they were in different priorities. Do we dare to say that we will launch in Europe before the end of the year? And in these color combinations, is there a country that is in front of another country?

Some countries are more important than others. We have long-standing discussions in Germany, for example. Germany is almost 20% of the medical market in Europe. So it's a very important country, and we have a very interesting partner there that we're in a dialogue with.

So the point here is actually the partner discussions. Yes.

Then we have the opportunity to be flexible. We are a small smart company that has the opportunity to be opportunistic. So if something appears somewhere else that is interesting to us, we have the opportunity to work there.

We have a question here that is related to the market acceptance in both the US and the EU. How sure can you be that the timetable will stay the same? The date here is the second half of 2025 for the USA. The ideal timeline is that the FDA may return in March, if I understood correctly. Are we going to see the same timeline in Europe, or are you able to do two parts of the world at once?

Yes, we are able to do both parts at the same time. If you look at the FTA, if you keep the timelines that they are bound to, then we will have news at the end of March. What we have seen historically is that they have a hard time keeping their own timelines. We keep our timelines. And that's why we're on our toes, on our entrances, and are always interested. If you say so, how's it going? How's it going? So that we see that everything moves forward. We do what we can to control it by the end of March. Then it may happen that there will be a delay on their side. But I still see that we will be able to submit an application in the second half of this year.

I feel that the important thing here is, if you want to travestise Warren Buffett, that there are almost a thousand reasons why the FDA does not approve at a certain date, because they have internal processes and the like. But there is only one reason why they approve. But in this case, there is not much the companies can do. Is it right to assume that when it comes to Europe, it is not as much the authorities as it is your negotiations with the right partners that are in charge?

Yes, that's exactly right. contracts, license contracts or distribution contracts come first. And there you also discuss who is responsible for what in the approval process. Then, we don't wait for The contract has to be signed. We start preparations beforehand, so that we have everything in place, which is adapted to that particular medical authority. Then we have the advantages of being included in the EU, which means that we can do what is called a mutual recognition process. And that is that you use an application that is approved in Sweden and benchmark it against, for example, Germany.

So there are two distinctions here. Then I will expose my ignorance here. You submitted an application on December 23, just before Christmas. Yes, you can't be more just before Christmas than the so-called IPSP. What does IPSP stand for?

IPSB stands for Pediatric Study Plan. It's more about how the product can be used by children. It's the last piece of the puzzle in this big puzzle that you have to do. Say we have a puzzle of a thousand pieces of the puzzle, then we are now in putting in the last piece of the puzzle in order to get a complete application.

And then I thought we'd take a few technical questions about the mouth film. How long is the mouth film durable?

That's a great question. If you look at the product you're using today, the tablets, it's one year durable. The mouth film is more stable. It has three years of durability. It's both good and bad. We want the product to be used correctly so that we get sales and so on. But three years of durability is very good when you come out and have discussions with potential commercial partners.

And it can handle the heat that a phone can give if you store it in a mobile case. Because it is so thin that you can have it in your new plan book, which is the mobile.

Yes, it does. It can handle higher temperatures than that. And it can also handle it if you want to bring it in the winter in the snow. It is very stable.

Yes, it is temperature insensitive. Countries outside of Europe and the USA that can be interesting. You mentioned Australia, China, India. The first question is that you have some kind of patent protection when it comes to India and China. Now there are some who have some insights on how Indian and Chinese authorities handle patent protection. How is the thought going there? Are they wrong as well, those who have points of view?

It's not for me to talk about how other countries' patent agencies act. But we are very careful when it comes to these countries. A lot is about which partner you find in this. Now our focus is expansion, Europe, USA. We have the opportunity to be opportunistic with the right partner, China, India and other parts of the world.

Right partner. What does an ideal partner look like for you? Is there a standard partner? For those of us who are not really involved in these partner discussions.

It's always a give and take. Many say that the ideal partner is a union. But some basic factors are that you should have resources in your back. The partner should also have knowledge of this market, the allergy market above all, and have developed a contact network among allergologists. You should have sales power in place that can handle premium sales or value-based sales, as they say. And you have to have storage and storage systems in place. This is harder than you think. There were many factors there. Yes, but it's a bit of give and take. It's important to do your due diligence. But we have long-standing discussions now. We have passed the first thresholds, including in Germany.

When it comes to partners, you will build on partners and Scandinavia is one example. Can you imagine having a global partner? Do you want to have local partners all the way?

Somewhere in between, I would say. Because if you have a world where you only have distributor contracts, it will make a very big effort on the company. The ideal situation for a company like Accocort would be to have distributor contracts on one part of the market, for example parts of Europe or the Middle East and so on. But then license agreements for homogenous markets like the USA, China, India and so on. So you can and play them against each other. Because if you only have one that takes everything globally, then you earn money and so on, but you are sitting in a corner and are very dependent on one partner.

And they are so big, maybe, so they can... And then I came in on the next question a little bit. Exciting product. Fulfills a need. Needs partners. Are you in the right place now? Because if they do our Defices of the World, with all due respect to Accocort and Marketcap and the like, it's not that expensive for a giant to buy here.

No. I can't speak for myself as a CEO, but I can speak for myself as a larger shareholder. I would say that the value of this company will go up many times before it is sold, I would personally say. And we are on that journey now. Now it is expansion.

And if you look at what you've mentioned here for 2025, then I feel that 2025 will be at least as hectic for you in the board and management here, although perhaps more focused on negotiations in order to achieve sales. Can you handle everything?

Now we do. We have done this new mission, which means that now we can work on several fronts at the same time. But then it's about keeping the organization and team focused. And I feel that we are.

So it's Secmelit, it's partner and it's sales.

Yes, it's SecMilit, partnering and approval.

Approval, and then sales. And next data point, what do you want us to look at?

I think we should look here during the spring at new contracts. I mentioned that we have long discussions on many exciting markets. And it is also the start of registration processes in countries. We have a very good study that we have just completed, which says that the work with scientific articles that support our case will be published.

And they can perhaps help in negotiations with a partner, because you might get better pay. You definitely do. You get a better agreement, I should say. Yes, Jonas, exciting. You look to have a hectic 2025. And for those who are interested in Vakko Kort, you should not only turn to the company, but you can also look at the press releases that will come. Absolutely.

Otherwise, you are welcome to contact us.

So, I thank you, Jonas. It was great to have you here. Great to be here. And we thank all of you who have watched and asked questions. And as I said, if you have more questions, you can use your warm hand to turn to Ackercourt. So, that's all for us. Thank you for watching.