BioArctic AB

And welcome to Biotic's presentation for the third quarter of 2023. I'm Gunilla Svand, and I'm the CEO of Biotic, and I will share today's presentation with our CFO, Anders Martin Lööf. I think it's very exciting times for Biotic, with Lekembe being the first and only disease-modifying treatment with a full approval in the U.S. and now also in Japan. And both these things happened during this quarter. I think it's a beginning of a new era, and Bioartic is behind this true breakthrough in the treatment of Alzheimer's disease. I find it extremely gratifying that we now can help a large number of patients and families around the world. And I'll talk more about that here today. Next slide, please. Bioartic is listed at Nasdaq Stockholm Nordkapp, and this is our disclaimer. Next slide, please. So just a quick introduction to Biotic. Our aim is to improve the lives of patients with brain disorders. And we focus on neurodegenerative disorders. We have a world-class research and development organization, and we are happy about our great collaboration with ASI, our partner in Alzheimer's disease. We have a broad project portfolio in Alzheimer's disease, Parkinson's disease, ALS, as well as the platform of delivering biologics into the brain. We are well financed, and we have approximately one billion Swedish crowns in cash. Next slide, please. I think we have had several important highlights during and after the third quarter. I think it's amazing that we have the first and only approved disease-modifying treatment with Lecambi now in the US. And that happened early July, and we got a broad reimbursement from CMS on the same day. And it has since then initiated the launch in the US. In September, Lecambi was approved in Japan, and that made Biotic also then entitled to a milestone of 17 million euros, which is equivalent to about 200 million Bioartic and ASI have agreed on leucanumab commercialization and co-promotion structure in the Nordics. And this is, of course, something we are very much looking forward to. To the latest Alzheimer Congress, CTAD, now in October, new data, strong data on leucanumab was presented from the CLARITY AD3 study and the open label extension study. And the data supports the subcutaneous administration. It further emphasizes the importance of early treatment, and it supports maintenance dosing. I'll talk more about that here today. I was also really, really excited about the transferring receptor program that was presented with us at CTAD. And I think this makes our probability of success even higher now for our own brain transporter program, which also has really good internal data. The company has also decided to start a phase 2A with Exidapnema, which is the INN name for Bano 805 in Parkinson's disease. So we should learn now to say Exidapnema. Next slide, please. So if we start to talk a little bit about the launch in the U.S., and I think the market readiness of the Cambrian U.S. is progressing as planned. I think our partner is doing a tremendous piece of work here in preparing the market. They are building a completely new market in the U.S., and it needs a lot of infrastructure. So I think we need to have a little bit of patience to understand how important this part is. In the latter part of October, approximately 800 patients were on Lecambi treatment. And our partner, ASI, they have reiterated the expectation of 10,000 patients being on Lecambi treatment by the end of March next year. So that's the same thing they have said for quite some time now. So I think it really follows the plan. ASI is working diligently to ensure access of Lecambi to patients in the U.S. And they have estimated that approximately 2,500 neurologists and Alzheimer's specialists are ready to diagnose, treat, and monitor patients with Lecambi. And that's an impressive increase from about 1,400 in June. Another great news which came in the middle of October from CMS when they decided to remove the limitation on reimbursement of envelope pet traces. And of course, this will facilitate the possibilities to diagnose the right patients for treatment in a better way. And the third important aspect is that the CAMBI has now been approved by pharmacy and therapeutic committees as approximately 60% of the top 100 integrated delivery networks in the US. And this is compared to about 10% in June. So I think there are some tremendous important steps forward that will support further growth of Lecambi towards the 10,000 patients on treatment, which is expected by the end of March next year. And on the curves, you can see that we expect this low uptake in the beginning, and then it was expected to increase more and more further on. Next slide, please. So we're now on slide six. And I want to talk a little bit about the biomarkers. And I think this is another important area where the biomarkers are developing very well. And I think that could also be important contributions for further growth of McKembe. As I mentioned, CMS expanded the reimbursement of amyloid PET tracers in October, and this will make it easier to diagnose the right patients for Lecambia in the U.S. But today, mainly it's being done through PET or CSF. But importantly, the blood-based biomarkers are progressing really well, and I think this can make a huge difference for the future. And it will make it so much easier to identify and diagnose the relevant patients to follow the disease progression and monitor treatment effects. The blood biomarkers, they can be used for triaging. And that means that if the blood test is normal, there is no need for further CSF or PET scans. If the blood test shows intermediate level, of the proteins, then they require further confirmation by CSF or PET. And if it is high levels, that shows that it's a high likelihood that the patient would benefit from Lecambi treatment. So that is another possibility. I think that the usage of the triaging with blood biomarkers is already happening now in smaller scale, and it's expected to grow during next year. And in a couple of years, we expect the blood-based biomarkers to be used in clinical practice. And this will then clearly simplify the patient journey. And that will form the basis for further growth of Lecambi. So I think this is also a very exciting area to follow. Next slide, please. Lecambi is the first and only disease-modifying treatment with a full approval in the U.S. and now also in Japan. And it's broadening and broadening around the world. If we start to look into the U.S., more things is happening there. Our partner, Einstein, they plan to submit the supplementary BLA for intravenous maintenance therapy with once a month dosing by first quarter of next year. They also plan to submit the new BLA for the subcutaneous water injector formulation. And I think that is two important parts in making it more patient-friendly and easier for the patient. If we then turn into Japan, where the approval came on the 25th of September, now the National Health Insurance is working on the pricing and reimbursement. Normally, this takes about 60 to 90 days after approval. And we know that our partner ASI is eager to start the launch and they are planning to launch imminently after the prime listing. So that is most likely happening very late this year. Then if we look into Europe and China, it's where review is ongoing and ASI anticipate approvals in the first quarter of next year. Then ASI is working diligently with further regulatory submissions. and applications around the world, has now been submitted to 10 other countries around the world. And we have got priority review and other approaches in order to make faster reviews at a couple of countries like Israel and Great Britain. I think that I'm very excited about that. Lekanamab has the potential to become the first amyloid antibody to receive a full approval on a global level. And I think it looks really promising. Next slide, please. So some of the highlights from the Alzheimer's Congress CTAD, which was held in Boston in October, that I would like to mention is, of course, things about Leucanumab. But let me start by saying that I think it was a very positive atmosphere. And there was a sense of optimism for both the diagnosis and the treatment of Alzheimer's disease. And there was a lot of highlights and strong data being presented for Lecambi. If we start with the subcutaneous treatment, which I think looks very promising, and both the pharmacokinetic and the pharmacodynamic six-month results show that it met the bioequivalence criteria, which is a very important step. And also data that was presented showed that amyloid test data showed 14% more reduction of amyloid plaques after subcutaneous administration compared to intravenous administration. So even stronger effects and with similar levels of the adverse events regarding area. And it showed that it's probably more the AUC and the average concentration, which is linked to this rather than Cmax. The other next really important part, which I think was very encouraging, was that they showed that if you start treatment with the Camby very early in the disease, then you can potentially have even better results of effect. So the data presented from a subset with patients in early stages that had low levels of the protein tau. And here they showed, and you can see that on the two graphs here to the right, that 76% of leucanumab-treated patients did not decline over the 18-month period compared to 55% of the placebo-treated patients. And 60% of the leucanumab-treated patients were even improved. And if you compare that with 28% for placebo. We should be aware that it's only small groups of patients, but it's very encouraging for patients in very early phases of the disease. So I'm really encouraged by this. And then data from the open label extension study showed that the treatment really can be continued to have an effect even after 18 months treatment. And that's pointing to the importance of continued treatment for the benefit of the patient. Professor Lars Landfelt also presented data on leucanema binding profile showing that relatively low binding to CAA are linking to the relatively low frequency of side effects compared to other anti-amyloid antibodies. Another highlight from the Congress was the external validation of the transferring the transporter concept for better brain penetration of antibodies. And I think this increased the probability of success for our brain transporter platform even further. And as I mentioned earlier, the blood-based biomarkers continue to develop well for diagnostics, disease progression, as well as treatment monitoring for Alzheimer's disease. And it's already being included in clinical practice by some leading key opinion leaders, for example, here in Sweden and elsewhere. And I think it has great opportunities for the future. Next slide, please. Now we are on slide nine. So building on the success of Alzheimer's disease, we see a lot of similarities and opportunities for our ALPHAs Nuclein Program. which is intended for neuronal synuclein neopathy. And as we can see, both leucanumab and exudabnumab are very selective antibodies towards the toxic aggregated forms of the protein. And these forms are called oligomers or protofibers. In Alzheimer's disease, the protein is called amloibica, and in Parkinson's disease, the protein is called alpha-synuclein. And in Alzheimer's disease, we have the first disease-modifying treatments that come through, with the Chembin being the first and only fully approved disease-modifying treatment in the U.S. and Japan so far. The development for Parkinson's disease and other synucleinopathies are lagging behind Alzheimer's disease, but can really benefit from some of the important learnings that we have from the Alzheimer's disease. And I think there is a lot of potential indication that it gives further opportunities for the future in both areas. In Alzheimer's disease, for example, going even earlier, Down syndrome with dementia and so forth, and for synucleinopathies, we have Parkinson's disease, and we have Lewy body dementia, Parkinson's disease dementia, and multiple systemic atrophy, for example. Next slide, please. I also want to talk a little bit now today about Exidabnema, which previously was called Balno 805, which is a potential disease-modifying antibody for Parkinson's disease and other synoclinopathies. And here we now are progressing towards starting phase two next year. And as you know, for example, Parkinson's disease is the second most common neurodegenerative disorder. And I think that when we look at our antibody and compare that with competitors, we have a unique antibody. It's the most selective antibody that I've seen. It's very selective for the pathological forms of alpha-sucline, the oligomers and protofibers. More than 100,000-fold selectivity versus the physiological forms, monomers, in the body. So I think that is one of the unique parts. Another part which I want to mention is that how we think of biotic is that If you have a clear link to genetics, that makes it a higher probability of success and a lower risk. And we have the same thing here with Alzheimer's disease as we have for amyloid beta in Alzheimer's disease. We have very strong preclinical data, as you can see up to the right, where our antibody really makes motor symptoms come much later. and makes the lifespan of this very aggressive Parkinson's disease model. They had a doubling in lifespan. Down to the right, there you see some of the phase one results. And Exedabnamab was well tolerated in all doses up to the highest dose, which was six grams, so a very high dose. we saw excellent PK profile with an elimination half-life of about 30 days, which supports once a month dosing. We also just recently had our patent granted in, well, previously US and now also Japan, where we have a patent life up to 2046, including extensions. I think that is also a really good benefit for this program. taking it forward. So if we go to the next slide, slide 11, there we see some of the opportunities for Exidabnimab in the future. The company has taken the decision to drive Exidabnimab forward by ourselves a bit longer, and we see a lot of opportunities here. But of course we would like to have a new partner before we go into phase three, but we can definitely drive it forward a bit longer ourselves. And we have now worked hard to bring back data and material back from AbbVie. We have written clinical study reports, and we are now preparing for the Phase IIa study in Parkinson's disease to start next autumn. And after Phase IIa, we have several different opportunities for this program. For example, Parkinson's disease, but also the areas where we have a lot of expertise in the dementia area, such as, for example, Parkinson's disease dementia and Lewy body dementia. So I think that's really important opportunities as well for this program. And as well as we can drive it also in multiple system atrophy. An area which is progressing really well here as well, it's like a red thread, both in Alzheimer's and Parkinson's disease, is the biomarker. And that has been one of the limitations in Parkinson's disease. But it's great to see that there is positive progress also for the biomarkers in this area as well. So there are now biomarkers coming forward, which makes it, for example, possible to identify the right patients with pathological alpha-nuclein, for example, with seeding amplification assets. And I'm really excited to see the program and the progress of Exidapnema now going forward and going into patients. Next slide, please. So, in summary, we have an innovative and balanced project portfolio with focus on neurodegenerative disorders like Alzheimer's disease, Parkinson's disease, ALS, and also our brain-transported technology. So, I've been talking a lot about both Lecameron and Exidavnema here today, but I also want to mention that our TDP43 project for ALS is progressing really well. And for those who are really data-oriented, you can see that the program has moved one step forward in this for us, just to show the progress of that portfolio program as well. And the Brain Transporter platform continues to progress very well, and we have now increased our focus even more on our two different Alzheimer's disease Brain Transporter projects. And we are further encouraged by the data presented at CTAD together with our own data. Next slide, please. So by that, we come to the financial summary, and I will hand over to our CFO Anders Martin. Next slide, please.

Thank you, Gunilla. We should then be on slide 14. First of all, I want to comment a little bit on the sales that have been achieved so far with Lecambi in the market. We have received some questions whether we think this is according to expectations or if we think the revenues are low. But we clearly think that this is as expected, and we are according to plan or actually exceeding plans in some ways. And I will try to explain why we think so. So first of all, when the drug was launched, it takes time to make sure that the hospitals start using the drug code and get all the necessary approvals in it to make that happen. And at Gunilla, that is progressing according to plan. The number of IDNs... that are using it has increased from 10% to 60% already. But that's not enough. The patient also has to get the drug. So even if the hospital is using the drug, it takes up to two months before the patient actually can get this treatment and the sales are starting to be generated. So what should be expected is that in the first two months or so after the launch, there should be very, very low levels, very cheap patients. can get their treatment. Then in the third month, you should start to see that some patients are actually starting to get treatment, but those are basically coming from the hospitals that were using the drug from the very beginning. And then in the following months, you should start to see patients coming on from new hospitals that are starting to use the drug after the launch. So basically, what you should see are very low numbers for July, August. You should start seeing increases in September, and then you should start to see sort of a catch-up effect from October and onwards. And that is exactly what we are seeing so far. If you look at the graph on the left-hand side, you see the weekly average revenues in the U.S. And the October figure, that's the first week of October. I think the sales in the U.S. were in the neighborhood of... $0.5 million, and that's roughly 100% up from four weeks before. So we are really starting to see this catch-up effect, and we think that this will continue. Gunilla has already mentioned that all the hospitals are now coming online. We will also see the PEP reimbursement in the US being implemented in the last few months of this year. And this will also be then helped by the Japanese launch that we expect will start around year end. So we really think that we are in a positive trend. This is according to plan. And if we turn to the left-hand side of the picture, you see that ASI has set an aim to reach 10 billion yen in sales for their fiscal year 2023. That would mean roughly that they have to sell some 65 million U.S. dollars in in Q4 of this year and the first quarter of next year. And we clearly think that this is feasible. And for us, that would mean we get single digit royalties, high single digit royalties on those numbers. So I think this is all in the right ballpark range. However, it's really, really hard to extrapolate from just a few weeks to see exactly where we end up. So this should be seen sort of as a ballpark estimate rather than any guidance or a forecast. But I do think that the numbers that are set up to ASI are really feasible. And I hope you now understand what that would mean for us in the next few quarters. If we then turn to slide 15, on the left-hand side, you see our net revenues. And for the quarter, we had revenues of $209 million. And for the nine-month period, we had revenues of $605 million. more or less explained only by the milestone payments we have received, totaling 52 million euros in the nine-month period, and we received the Japanese milestone of 17 million in the third quarter. But we should also start to look at the new revenue streams that are included in our revenues now. We recorded 2.5 million Swedish of royalty in the third quarter, and we also got co-promotion revenues of 3.6 million. So royalty is, of course, the royalty on the global sales for Lecambi. The co-promotion revenues is what we are getting out of the collaboration with ASI in the Nordic for the commercialization of Lecambi here. And we are, of course, we have not launched the product yet already, but we are working together. So we are receiving some reimbursement from Marcos as we split the profit from that collaboration 50-50. Over time, these two revenue streams will, of course, be the most important revenue streams for bioarchitecture. But I would say next year, you should probably expect that they would be half of the revenues that we have in that war park range. The rest will probably be milestones. And then from 2025 and onwards, you should expect that the royalties and co-promotion revenues will make up the majority of the revenues for bioarchitecture. Turning down to the expenditures in the middle graph, you can see that our operating expenses decreased to $78 million in the third quarter from the second quarter, increased year over year. But the decrease from the second to the third quarter is mainly explained by personnel costs that went down from the second to the third quarter due to non-recurring wind effects in the second quarter due to our stock option programs. We have then reiterated our operating expense guidance, but we have narrowed down the range a little bit. So we now expect to have full year costs of 350 to 370 million Swedish kronor for 2023. It is an increase from 2022 by 246 million. And we will continue to see increases in our costs over the coming years. Next year, we will increase our R&D costs as our project portfolio is progressing really, really well. Gunilla mentioned the Parkinson project that is now entering clinical trials. For example, we're also building up our commercial organization a little bit more. I think we're at roughly 50% now, so it will continue to increase during next year as well.

On the left-hand side is your operating profit.