BioArctic AB

Good morning and welcome to Biotic's presentation for the fourth quarter and for the full year of 2023. I'm Gunilla Osvald and I'm the CEO of Biotic and I will share today's presentation with our CFO Anders Martin Löf. It's very exciting times for Biotic with Lekembe being the first and only disease modifying treatment with a full approval in the US and Japan and now also in China. It's the beginning of a new era, and BioRTIC 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 their families. And I'll talk more about that here today. Next slide, please. BioRTIC is listed at Nasdaq Stockholm large cap, and this is our disclaimer. Next slide, please. At BioRTIC, we focus on disease-modifying treatments for neurodegenerative diseases. And we are now on the market for Alzheimer's disease patients. And we are preparing for phase two for Parkinson's disease patients. There is a huge unmet medical need and a very large patient population that we aim to help. We have a great organization with highly skilled scientists and drug developers with vast experience. And now we are also continuing to building our commercial organization to prepare for the commercialization together with our partner ASI. We have a broad portfolio. We're building on the success of Lecambi with very selective antibodies for both Alzheimer's disease and Parkinson's disease and ALS, together with a brain transporter technology that aims to get the antibodies better into the brain. We're well financed with more than 1.1 billion Swedish crowns on the bank. And finally, the fact that our science and company leadership throughout the years has given numerous awards I think that validates our innovation and global leadership position within the never-generative diseases. In this fourth quarter last year, that includes awards from Time, Scripps, Forska Sverige, and European Lifestars Awards. And all of that, of course, we are very proud of. Next slide, please. 2023 was a great year for Biotic, and so was the fourth quarter. At the Alzheimer's Congress CTAD, Biotic and Lars Lansfeld presented new data on leucanumab, further supporting the unique binding profile with lower CAA binding linked to lower incidence of the side effects called area E in comparison with competitors. ASI presented more data supporting leucandus disease modifying property and new data with the subcutaneous formulation after six months of dosing in Alzheimer patients, and that supports the subcutaneous autoinjector as a more convenient alternative for administration of Lecambi. The Lecambi launch started 20th of December in Japan, and now in January, Lecambi was also approved in China. In Europe, EMA has stated that they will convene a scientific advisory group to discuss Lecambi during this first quarter. Biotic and ASI have now also agreed how the commercialization and co-promotion of lecanumab will be done together in the Nordics. Next slide, please. Lecambi is the first disease-modifying treatment for Alzheimer's disease with a full approval in the US, Japan, and China. And it's on its way to establish a new standard of care for Alzheimer's patients. If we start with the US, It was approved and broadly reimbursed in July last year. ASI are now also preparing for a submission for less frequent maintenance dosing and for subcutaneous administration. And that submission is planned to go into FDA during this quarter. The launch is ongoing and more and more hospitals and physicians are ready to administer Lekembe. EISA just reported that approximately 2,000 patients are treated with Leukemia and approximately four times as many are waiting. If we then look at Japan, the launch started in December following the price and reimbursement decision and already about 100 patients are on treatment and approximately 300 are already confirmed for treatment. If we look at Europe, We're waiting for the Scientific Advisory Group meeting, and then we expect a CHMP opinion this quarter. Assuming a positive opinion from CHMP, that would then lead to a European Commission decision during the second quarter. If we look at China, the approval was granted in January and launched its plan during the third quarter this year. The Candidate has also a regulatory file being reviewed in many different parts of the world. And we look forward for responses from, for example, Canada and Great Britain. So I think it's very exciting times for Biotic and for Lecambi. Next slide, please. The launch of Lecambi in the US is steadily progressing, and we see some different examples of that. For example, about 70% of the top IDNs in the US have now approved Lecambi. And about 55% have now started to order Lecambi to treat patients. Approximately 4,000 neurologists or Alzheimer's disease specialists have established a diagnostic and infusion pathway and are ready to prescribe Lecambi. The amyloid pet tracers are more broadly reimbursed by CMS since mid of October last year. More patients are now utilizing this opportunity to confirm amyloid instead of CSF something. Lecambi is now broadly reimbursed in the U.S., and approximately 90% of people who are potentially eligible for Lecambi treatment are reimbursed. Biogen has also announced that they will focus on Lecambi and supply resources for co-promotion together with ASI in the U.S. So I think we can conclude that there are several important and positive steps towards increased possibilities for access of Lecambi to patients with early Alzheimer's disease in the US. Next slide, please. Lecambi usage can further be supported by simplified diagnosis. And here I'm really happy to see the progress of the blood-based biomarkers. They already now started to be used in triage testing And that is a way to see which patients that have biomarker evidence for Alzheimer's disease. And then those could potentially then benefit from treatment. And I think in a couple of years time, it's expected that the blood-based biomarkers can be used as confirmatory tests for Alzheimer's pathology. Simplified treatment and more convenient administration is another really important part. And ASI preparing for maintenance dosing once a month with intravenous administration and for subcutaneous administration with an autoinjector and plans to file those submissions to the FDA later this quarter. Further progress can be done with indication expansion. And here we are thinking about, for example, preclinical Alzheimer's disease, where ASI are exploring leucanumab in individuals before they have any symptoms, so pre-symptomatic individuals. but they have increased levels of amyloid deposits in the brain. So I think it's very exciting times and great opportunities for many patients to benefit from Lecambi treatment. Next slide, please. Lecambi is, of course, of interest, of the main interest maybe, but biotic is more than Lecambi. So the fourth quarter highlights for the rest of the portfolio, there are a couple of things I really want to mention. And that is that our brain transporter technology progressed very well. And we have now nominated two candidate antibodies as potential disease modifying treatments for Alzheimer's disease. And what we see for those antibodies is they have increased penetration into the brain. So by utilizing our brain transporter technology, we get a rapid, broad and deep distribution of the antibodies into the brain. And this could potentially lead to even better efficacy and better tolerability with lower doses. So I think this part is very exciting. If we then look at our Parkinson's program, Exidavnibab, that's our selective alpha-synuclein antibody, in a similar approach as leucanumab, but for alpha-synuclein. Here we are preparing for a phase 2a study that is called EXIS, and that is planned to start during the fall. The aim of that study will be safety and tolerability in pharmacokinetics with exploratory biomarkers. Next slide, please. So to summarize our portfolio, we work in Alzheimer's disease, Parkinson's disease, ALS, and utilize the brain transporter technology. And our most advanced program is, of course, the CAMBI, which is now, as I said, on the market in the US and Japan and approved in China and in regulator review in many other countries. And the subcutaneous formulation is soon to be fine. And the pre-symptomatic phase three study ahead of Z45 is ongoing. On this slide, you can also note the progress of the two Alzheimer projects combined with the brain transporter technology. And when they get the candidate drug nomination, they get BAN names. So I want you to see the names BAN 2802 and BAN 2803. So we can conclude that our portfolio is progressing well. Next slide, please. So by that, I will hand over to Anders Martin Lööf for the financial summary.

Thank you, Gunilla. If we look at the next slide, starting with the number of patients that are currently on Lycambi, you see that in the graph on the left hand side. As you can see, the trend started to pick up a little bit after PET was broader covered by Medicaid in the US in October. And you also see there was a small plateau in around December. But after New Year's, it seems like the trend is picking up quite well again. So as I stated last week, I think it was that there were 2000 patients on treatment last week of January. They also stated that it would be somewhat challenging to reach their target, the stated target of 10,000 patients towards the end of March. However, they also stated that there are around four times as many patients waiting to begin treatment. So 7,000-8,000 patients that are currently in the waiting line to start treatment. And when asked how long does it take to get them on treatment, ASI stated, well, generally, they start treatment within one to three months. So I think it's fair to assume that fairly soon there could be 10,000 patients on treatment. It's very hard to predict in which month, but everything is going according to plan in terms of underlying factors. And as Gunilla stated, more and more hospitals are coming online. And the largest hospitals that have the most patients are already up to some 300 patients. And there are only a handful of those. And now more and more hospitals are coming in line. So the number of patients that are in the waiting line are growing really fast. And as Gunilla stated, ASI is now chipping in too, and they will help ASI to further increase. Sorry, Biogen is helping ASI now to further increase the pace. I think it's also important to remember, it's exciting to talk about what month will we reach 10,000 patients, but in the long term, It's really not that important. The important thing is when we look at the long-term potential and mid-term, ASA is expecting some 100,000 patients in 2026. And that's a really big number. But longer term, you should also remember that 100,000 patients in the US, that's roughly 1% of the Alzheimer's disease patients in the US. So the potential is much, much larger than that. If we then turn to the next page, you see the Lecambi royalties for us, and we should clarify that the royalty rate that BioArctic gets is 9% on global sales, but the recorded number that you see on the left-hand side also includes an additional 1% on US sales and 1.5% on ex-US sales that are then passed through to LifeArts. So net for biotic, we get 9%, but the numbers you see on the left-hand side are slightly higher, but some of it passed on to Life Park, which is a partner that helped us humanize the antibody back in the days. And as you can see then in the graph on the left-hand side, basically royalties are tripling quarter by quarter. And I do believe that that is a trend that could continue. As you saw, the Q4 sales of Lecambi in the US were $7.2 million. But already in the last week of January, the weekly sales were $1.5 million. So that's roughly 150% higher than the Q4 average already in January. And as you understand, if that trend continues, you will see very high growth rates continuing into 2024. So all in all, we are progressing well towards the 10,000 patients. And we have already stated earlier that if we would have 10,000 patients on average during a quarter, that would roughly equate to some 50 million in royalties. So that could give you some hint on where our revenues are trending, because we cannot give you a proper forecast, unfortunately. You should also see some sort of positive impact from Japan and China towards the end of 2024. believe that they would have some 400 patients at the end of Q1, 5,000 patients at the end of Q4, and 7,000 patients at the end of Q1 next year. And the list price in Japan is fairly high. It's around $20,000. So that should give us a significant contribution. And in terms of China that Gunilla mentioned, the launch will happen in Q3. And ASA is expecting some 1,500 patients already at the end of the year without proper reimbursement. The patient numbers will, of course, be higher when it's properly reimbursed. But before that, the price is probably higher than the US price. So that should give us a significant contribution in 2024 as well. If we then turn to the next slide, looking at the net revenues on the left, the revenues were fairly low in Q4, 11 million. But for the full year, we grew to 616 million. That's mostly due to the four milestone payments that we received totaling 52 million euros. But also the two new revenue streams are starting to contribute. Royalty was 7.3 million Q4, 10.2 million for the full year, co-promotion 1.9 in the fourth quarter and 5.5 for the full year. We do expect to see a shifting mix for the next year. We are expecting a milestone if we get approval in the European Union, but the milestone revenues will be lower 2024 than they were 2023. And royalties, well, that's the thing that is really hard to predict. But as you can understand, the mix will be more tilted towards royalty and then milestones for 2024. The operating expenses increased to 90 million in the fourth quarter and to 367 million for the full year. I think the largest contributor to the increase in the fourth quarter were the personnel costs, mainly driven by a milestone-related bonus. For 2024, the costs will increase. Gunilla mentioned that we have now selected two CDs and that we are approaching phase two for Exedavnemab. So it's fair to assume that the R&D cost will increase substantially. And I think that's really, really positive that we're now accelerating our pipeline. And we will also have further cost increases for our commercial organization that is preparing for the Nordic launch. So I think it's fair to assume that we will have a cost increase of something like 30 to 50% in 2024. But we will not give you a proper forecast at this point because everything is sort of dependent on how fast things develop and the royalties for the camping i think it's also important to highlight on the right hand side we actually made an operating profit of 253 million in 2023 which is very very positive for us and that helps us if you look at the next slide if you look at the cash balance we ended the year with the cash balance of 1.1 billion swedish that's roughly three times the the cost of 2023. So if we kept going as we did in 2023, we could keep going for three years without any revenues. The cash flow was very positive in Q4, even though the result was not that strong. That's mainly due to a payment that we received for the milestone related to Japan. And on the right hand side, you see the net result. The net profit was 229 million. We paid some 47 million in tax that gives us an effective tax rate of 17%. That's due to the fact that we had some tax losses carry forward that we used in the year. We don't have any less. So the effective tax rate, if you are profitable going forward, would be more like in the 21% range. So, all in all, we are in a very strong position. If we're profitable or not in 2024, that will largely depend on the Lecambia rollout. If things go great, we will be profitable. If it's somewhat slower, we may make a small loss, but we can handle that as well. However, from 2025 and onwards, we really see that things will start to improve and we expect to see a lot of profits in the coming years from Lecambia. With that, I hand the word back to Gunilla for some closing remarks.

Thank you so much, Anders. So we're coming to the final part of the presentation with some closing remarks and upcoming news flow. Next slide, please. So our upcoming news flow, if we look at this first quarter, we're looking forward to the next big congress for Alzheimer's disease and Parkinson's disease, which is in Lisbon in March. And there will be more presentations on L-acanema, both from Bioartic and from ACI. ACI are also planning to file the submission for subcutaneous administration of the water injector and for maintenance dosing in the US. In Europe, we are looking forward to the Scientific Advisory Group meeting, which is planned later this quarter. And then, of course, we hope for a positive CHMP opinion, and if so, we could expect the European Commission decision and EU approval next quarter. Other potential approvals could come in Great Britain and Canada, and later on in other countries as well. After summer, during the third quarter, ASI plans for launching of LeCambi in China. And during the fall, Biotic prepared to start the phase 2A study in Parkinson's disease with Exidamnema. And we're looking forward to being able to present some data on our brain transporter program at the end of the year. So I think it's a lot of exciting times ahead for Biotic. The next slide, please. So to summarize today's presentation, Lekembe is now approved in the US, Japan, and China. with huge patient populations with early Alzheimer's disease. We just look at this patient numbers. I mean, they are enormous. 10 million patients in the US, 6 million in Japan, 17 million in China. Of course, all patients will not get Lecambi, but even a small part of the population will be huge. And I think it's very gratifying that we will be able to help many patients. The launch is steadily progressing and sales are starting to pick up. and it will be exciting to see more and more patients being able to get access to Lecambi. Our pipeline is progressing well with our next generation Alzheimer's disease modifying projects together with the brain transporter technology and also our Parkinson's disease program preparing for phase 2a. Our finances are solid as we heard Anders describe with a profit of more than 250 million Swedish crowns last year And now we have more than 1.1 billion Swedish crowns in cash. And I think that's great. So we can focus on driving the project forward towards patients. Next slide, please. So just to end by saying that our aim is to improve the lives of patients with neurodegenerative disorders. And I think that we are very well on our way. Thank you so much for your attention. And we are happy to take some questions.