BioArctic AB

Good morning and welcome to Biotic's presentation for the first quarter of 2024. It's very exciting times for Biotic with Lekembe which is originating from Biotic. Lekembe is the first and only disease modifying treatment for Alzheimer's disease with a full approval so far in the US, Japan and China. There will be three key messages today. I'll talk about the Lekembe sales which we see is increasing. The infrastructure has been established to a large extent in the US, and the launch goes now into the next expansion phase. The second part is that the LECANOMAB regulatory processes continues with more approvals, and China was approved early this year, and more submissions are also being filed by ASI, including a subcutaneous auto-injector file. The third aspect and key message is also around the rest of our portfolio, which is progressing really well. And we have made our first agreement on a project which is utilizing our brain-transported technology. And I'll talk more about all this here today. Next slide, please. I'm Gunilla Osvald, the CEO of Biotic, and I will share today's presentation with our CFO, Anders Martin Lööf. And Anna-Kaja Grönblad, our chief commercial officer, is also here for the Q&A after the presentation. Next slide, please. Biotic is listed at NASDAQ Stockholm large cap, and this is our disclaimer. Next slide, please. Biotic focus on disease-modifying treatments for neurodegenerative diseases. And we are now on the market in Alzheimer's disease, and we are preparing for phase two in Parkinson's disease. These are areas where there is a huge unmet medical need and very large patient populations that we aim to help. We have a great organization with highly skilled scientists and drug developers with vast experience. And we're now building a commercial organization to prepare and we are preparing for commercialization together with our partner ASI in the Nordic region. We have a broad portfolio. building on the success of Lecambi with very selective antibodies for Alzheimer's disease, Parkinson's disease and ALS. And we also have the very encouraging brain transporter technology, which helps us to get the antibodies better into the brain. I'm very encouraged by that. Our portfolio is exactly where the science now is evolving quickly. We're also well financed. We have approximately one billion Swedish crowns on the bank. And finally, the fact that our science and company leadership throughout the years have been given numerous awards validates our innovation and global leadership position within neurodegenerative diseases. We also got some new awards during this quarter. Next slide, please. So a lot of things have already happened this year. The year started with the approval of Lekembe in China, where ASI is planning for a launch in July. In Europe, it was disappointing that the scientific advisory group meeting was annulled due to process issues that was not depending on the cannabis. So the scientific advisory group meeting has to be rescheduled. At the Alzheimer's and Parkinson's Congress earlier this year, there was a very positive atmosphere with a lot of excitement in the field of Alzheimer's disease and Parkinson's disease. and with regard to the blood-brain barrier technology. Bioartic and Professor Lars Landsell presented new data on leucanoma, further supporting the unique binding profile with lower CAA binding, which is linked to lower incidence of the side effect AIA, if you compare this with competitors. ASI presented more data supporting the leucamber disease modifying properties and more data suggesting even better effects if you start early with a treatment in early Alzheimer's disease, as well as data supporting the subcutaneous as a more convenient administration alternative for Lecambi. ASI has submitted a supplementary application to the FDA for less frequent dosing intravenously with leucanumab. And earlier this week, ASI also initiated a rolling application to the FDA for Lecambi. with regard to the subcutaneous autoinjector for maintenance dosing. Bioartic and ASI have entered into a research evaluation agreement regarding BAN 2802, which is an Alzheimer's project utilizing our brain-transported technology. And this is then the first agreement done utilizing our technology, and I expect more to come. Biotic was included in NASDAQ Stockholm's new ESG Responsibility Index, which we also are happy about. 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 be established as a new standard of care for Alzheimer's patients. A lot of things is happening around the world, and if we start with the US, where it is approved and broadly reimbursed since July last year. ASI has here also submitted two files for more convenient maintenance dosing, a supplement application for less frequent IV dosing, and a new BLA for subcutaneous autoinjector administration for maintenance treatment. The launch is ongoing and now progressing into the next expansion phase. In Japan, LeCambi was approved in September and launched started late December and it's progressing really well. In Europe, as I said, we're waiting for the new scientific advisory group meeting and that will be followed by a CAG opinion meeting. And we're hoping, of course, for a positive opinion and a European Commission approval late Q3. In China, approval was granted in January and EISA is preparing for a launch in July. LECANOMAB regulator files are being reviewed in many parts of the world right now and we're hoping for several positive responses during the coming months. So I think it's a very exciting time. Next slide please. The launches are also progressing now in a very good pace. So if we start with the US, where a lot of work has been done by ASI to prepare the market and establish the pathway together with hospitals and infusion centers, etc. There is a strong momentum with 97% of the 100 integrated delivery networks, which is groups of hospitals and so forth. And ASI is now expanding their focus to the top 150 IDNs. I think it's great that prescribing facilities have been established in a broad way and can be found across the US. Many prescribing physicians have gone through a trial period and they are now in the expansion phase. We have heard that some facilities are confirming more than 200 cases of Lecambi treatment. It's also reassuring to see that the real world evidence when Lecambi is being used in clinical practice That shows that the side effect ARIA is in line with the results of clinical trials as described in the US package insert. I think that shows that Lekembe seems to be used safely and in the right way in clinical practice. So in summary, now when the pathway has been established to a large extent, ASI takes the launch to the next stage, and that is the prescription expansion phase. ASI and their partner Biogen are strengthening the go-to-market structure. with the aim of providing tailored information regarding three things. The first is, of course, regarding Lecambi. The second is regarding reimbursement and support for patients. And the third is around system efficiency in order to shorten time for treatment. More and more patients can now benefit from the treatment of Lecambi in the US. Next slide, please. If we then look at Japan, The launch is progressing even faster than expected here, with fast establishment of the diagnosis and treatment pathway at 600 facilities within four months of launch. I think that's very impressive. I think it's further impressive that the Japanese launch is even exceeding ASI's initial targets. And it's clear that the broad spectrum of promotion activities towards healthcare professionals are efficient. But then look at China. launch is planned for july and here china is a bit different um and that is for example that that will initially be a focus on the private market furthermore asi will be leveraging on already established online health platforms and the diagnosis the streamlined diagnosis will mainly be utilizing blood-based biomarkers And that, I think, will be very important and key drivers for diagnosis and growth. Next slide, please. ASI also continues to develop Lecunma. And the first approval in the US, Japan, and China is for Lecunme intravenous administration, 10 milligrams per kg biweekly. And that is both for initiation and maintenance treatment. The file is also under regulatory review in many other regions, as I said. In order to increase the convenience for the patient, ASI has now also made two applications to the FDA for more convenient maintenance dosing. After the initiation phase, then the maintenance phase could continue with IV monthly, 10 milligrams per kid, as described in the supplementary application. The other application, was a rolling submission under FOSTRAC designation. And that was initiated by ASI earlier this week, and that is regarding a subcutaneous injection with an autoinjector with a fixed dose of 360 milligrams for maintenance dosing. The next step, which will be very important, is when the subcutaneous autoinjector can be used both for initial and maintenance treatment. And here ASI has initiated discussions with the regulatory authorities. I think that Lekembe long-term penetration will also be supported by simplified diagnosis with blood-based biomarkers. And I think it's reassuring to see how well the blood-based biomarkers are evolving over the world. Next slide, please. I think it's great to see how Lecambi brings value to patients, caregivers and society. Lecambi has been studied in a broad patient population with early Alzheimer's disease and have shown consistent and distinct efficacy and safety profile. I think it's very encouraging to note that data from the low tau group, which is then very early stage of early Alzheimer's disease, that they suggest a potential even greater treatment benefit. And that is then when you start the treatment at an early stage of mild cognitive impairment. So early start and long-term treatment bring greater benefits for patients. Reports of the side effect ARIA from the real-world clinical practice are consistent with what was observed in the clinical trial as described in the US package insert. Most reports are non-serious, asymptomatic, and occur early in the treatment. I think this indicates that safety can be appropriately monitored. The low levels of anti-drug antibodies further enables maintenance treatment effects for Lecambi. The improvement in dosage and administration is important for continued treatment. And as I just described, ASI has filed for both IV and subcutaneous maintenance treatment. in a more in a better way for the patient the subcutaneous autoinjector will be a great improvement for patients to enable easier administrations at home and this will also be less burden on health care of course the ongoing phase three study ad 345 is for preclinical ad and now we're talking about very early stages of alzheimer's disease this is before the subjects have symptoms. And this study could potentially lead to a further expansion of indication into the even earlier stages of Alzheimer's disease. And this could also potentially further expand the clinical benefit for the subjects. So I think that Lekembe brings a lot of value for many. Next slide, please. But I want to emphasize that even though Lecambia, of course, is of main interest, biotic is more than Lecambia. And I want to mention two other pipeline headlines. The first one is regarding the brain transporter technology. At the Alzheimer and Parkinson Congress, it was highlighted that active transport of antibodies into the brain is seen as the next big step for neuroscience. Our proprietary brain transporter technology continues to progress very well. And 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 tolerability and with lower doses, of course. I want to emphasize three of our projects utilizing this technology. First, the two Alzheimer's programs, BAN 2802, where we now have signed a research evaluation agreement with ASI as the first agreement utilizing our brain-transported technology and expect more agreements to come here. The second project is BAN 2803, which is a pyroglue A-beta antibody utilizing the brain-transported technology. This looks very promising, and we have increased our investments here and we progress this project actively towards the clinical stage. In Parkinson's disease, the project called PDVT2238 is an alpha-sucline antibody with the brain-transported technology. It's developing really well, and we are progressing actively towards a candidate drug nomination. Next slide, please. The other highlight of our pipeline that I want to mention here today is regarding our alphasnuclein program. And at the Alzheimer's Pakistan Congress, again, encouraging data on alphasnuclein treatments were presented, as well as great progress on diagnosis and biology linking into alphasnuclein. This further supports our alphasnuclein programs, both Excedagnema as well as 2238. Exidabnevab, which is our selective alpha-synuclein antibody, where we are preparing for phase 2, and the phase 2A study is called EXIS. And that is for Parkinson's patients, and we plan to start dosing late this year. The aim of this study will be safety and tolerability in pharmacokinetics with exploratory biomarkers, including seeding amplification assay and digital biomarkers. The study protocol is currently being finalized through interactions with regulatory authorities. The drug project is now available, and the studies plan to be performed in Europe with the first patient's plan to be dosed, as I said, late this year. Next slide, please. So just to summarize BioAstrix portfolio in Alzheimer, Parkinson, ALS, and the brain-transported technology, our most advanced program is, of course, Lekembe. But I want to emphasize again that biotic is even more than it can be. And after the Alzheimer and Parkinson's Congress, we can again conclude that our portfolio includes exactly the targets and trends where science is breaking now. And I'm pleased to see the continued progression of our projects here and how well it's being developed. Next slide, please. And then I will hand over to Anders Martin Lööf for the Financial Summit.

Thank you, Gunilla. If we turn to slide 15, As Gunilla has already mentioned, the launch is progressing really well, and now we're starting to see that in our financials. The global Acambi sales were 2.82 billion yen in the quarter. That's roughly 200 million Swedish, or $18 million. That represented a 170% increase over Q4 2023. On that, we get a royalty rate of 9% on global net sales. In addition, we get 1% more on U.S. sales and 1.5% on ex-U.S. sales that we then pass through to our apartment lifehack. So the 21.3 million in revenues that we recorded during the first quarter, that includes the pass-through warranties that we pass on. But you see a very, very steep increase, so quarter over quarter. And this growth is likely to continue during the year. The U.S. launch is now in the expansion phase, as Camilla mentioned. ASI and Vardian are increasing their sales force to drive sales, not only in the larger hospitals, but now in their satellite clinics. We have seen a strong start in Japan. The pathway has been established at 600 sites, but more and more sites are coming online. So we'll see very steep growth there as well. And a launch is planned for China in July, and that will further support the growth during the year. If you turn to the next slide, you can see that ASI has, for the very first time, issued a forecast for near-term sales. And they are predicting more than a 10-fold increase in sales of the Cambie from 2023 to 2024, going from 4.3 billion yen, roughly 300 million Swedish in 2023, to 56.5 billion yen, i.e. 3.9 billion Swedish in 2024. The lion's share of the market will come from the U.S. So 77% is expected to come from the U.S., but already 18% is expected to come from Japan. For us, this would then correspond to royalty of roughly 400 million in recorded revenue or roughly 360 million net after the royalties paid out to LIFAR. And in the coming year, this is likely to continue. We have briefly mentioned that the subcutaneous maintenance formulation is likely to be approved in 2025. We will also see subcutaneous formulation for initial treatment, and ASI indicated that that could be approved in 2026. We're also seeing the implementation of lab-based biomarkers starting already this year in China. It's happening in Sweden, and we expect that to continue all over the globe. And all of this lowers the barriers to treatment. So when ASA has predicted what's going to happen mid-term, they are expecting roughly a five-fold increase in sales from 2024 to 2026. And in their revenue simulation that they presented in March, they said that they would have revenues of 290 billion yen, so roughly 20 billion Swedish or $1.9 billion in 2026. So we are really just in the beginning of the growth phase for Likambi. If you then turn to the next slide, I'll go through our numbers for the quarter. On the left-hand side, you see that our first quarter net revenues were 30 million. That's quite a big drop from a year ago when we had 393 million in revenues. But that's explained by the fact that we had three milestones totaling 35 million euros in the first quarter of 2023, and there were no milestones paid during this quarter. We are still entitled to more milestones. We are expecting a milestone when we get approval in the EU this year. And in the following years, we are entitled to sales milestones in 25, 26 and 27. So that will continue. But over time, the two new revenue streams will take over more and more. Right now, the royalty revenue was 21 million, co-promotion was 3 million. But over time, those two revenue streams will, of course, make up the lion's share of revenues and that will increase the lumpiness of our revenues. And they're obviously very lumpy right now. But over time, it will be much, much smoother. If you turn to the middle graph, you see our operating expenses. And first, this is the first time you see them by function. So the total operating expenses increased to 101 million from 79 in the first quarter. 75% of that increase comes from R&D and in total 63% of our operating expenses come from R&D. And that's an increase from last year when 59% of our R&D expenses came from R&D. On top of that, we have 12% of our expenses come from sales and marketing. Those two ratios will continue to increase. Our costs will increase during 2024. Due to the fact that we are investing heavily into the programs, especially the ones that Gunilla mentioned, we're starting our phase two trial for hexadalaminol later this year. We're also investing in our all-summit programs where we selected our candidate drugs last year and are now performing IND-enabling studies. We're also building up our commercial organization that will accelerate towards the latter part of the year. So we are expecting a continued increase. But more and more, the larger and larger share of our costs would be from R&D and sales and marketing rather than G&A. On the left hand side, you see our operating profit, which was a negative. So it was an operating loss of 73 million for the first quarter, which is roughly in line with what we saw the fourth quarter last year. If we look at our financial position on the next slide, Starting from the right hand side, you see that our net loss was 58 million, which is roughly 50 million better than the operating loss. That is explained by a fairly strong financial net of plus 15.7 million during the quarter. On the middle graph, you see on the other hand that the operating cash flow was weaker than our operating result. And that is due to the fact that the royalty payments are lagging the royalty revenues by roughly two quarters. this quarter we saw a 45 million increase in working capital and this will continue to increase when our royalties increase so this lag will continue but it has a very limited impact on our financial position you see on the right hand side that we we have a cash position including short-term investment of 991 million so we can continue to work long-term to focus on advancing our portfolio in the fastest possible way without thinking too much about financials. Looking for the remainder of the year, I think it's unlikely that we will be profitable in 2024. But as royalties grow, I think there's a very high likelihood that we will be profitable again in 2025 and onwards. That was all from my end and 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 the upcoming news flow, if we look at this quarter, the initiation of the US submission of licanumab for the subcutaneous autoinjector maintenance dosing under the fast track designation was just achieved this week. And we are hoping for an approval of licanumab in Great Britain. If we look at the next quarter, we're looking forward to the next big congress for Alzheimer's disease called AAIC, which is in Philadelphia during the summer. And there we will see more presentations on leucanumab and more interesting data. In July, ASI plans to launch Leukemia in China. And in Europe, we of course hope for a positive CHMP opinion after a new scientific advisory group meeting. And if so, then we could expect approval in EU during late Q3. And then during the fourth quarter of this year, we plan to start the phase two A study in Parkinson's disease with Excedavnima. And we're looking forward to being able to present some more data on our brain transporter programs. Other potential approvals of Lekembe could also come during the rest of the year. So I think it's a lot of exciting times ahead for biotic. Next slide please. So to summarize today's presentation, Lekembe is approved in the US, Japan and China with huge patient populations with early Alzheimer's disease. And even if a small part of the population will have treatment with Lekembe, that would be huge. And I think it's gratifying that we can help many patients. The launch is showing strong momentum now, and it will be exciting to see more and more patients being able to get access to Lecambi treatment. We're hoping for more approvals, and ASI continues with more regulatory applications and further development of Lecambi. Our pipeline is progressing very well, and the first brain transporter agreement has been signed. Our finances remain solid. We have almost one billion Swedish crowns in cash, which I think is great, so we can focus on driving the project forward towards the patients. Next slide, please. So Biotics' aim is to improve the lives of patients with neurodegenerative disorders, and I think that we are very well on our way. And I think it's extremely gratifying that we now can help more and more patients and their families. And by that, I say thank you so much for your attention, and we are happy to take questions.