BioArctic AB

Good morning and welcome to Biotic's presentation for the fourth quarter of 2024. Next slide, please. I'm Gunilla Oswald. I'm the CEO of Biotic, and I will share today's presentation with our CFO, Anders Martin Lööf. Our chief commercial officer, Anna-Kaja Grönblad, is also here for the Q&A session after the presentation. Next slide, please. Biotic is listed at Nasdaq Stockholm large cap, and this is our disclaimer. Next slide, please. Today, I would like to start with this slide, which I believe says a lot about the current status of biotic. First of all, I continue to be very excited about our brain transported technology. We had a very important event in December with the first license agreement that was signed, including the BT technology, and that was with Bristol Myers Squibb. It's now pending the HSR clearance process. I think this is very important also since it gives an external validation of our platform, as well as it opens up for further partnerships. The second part I want to mention is Exidavnamab, which started phase 2a during the fourth quarter of last year, and it's progressing really well. All patients have already been completed their screening phase for the low-dose part of the study. Thirdly, Lecambi sales continue to increase, and more and more patients are getting access to the treatment. We believe this is just the start and continued development of more convenient dosing and more convenient diagnosis will continue to drive the growth going forward. Based on these achievements, Bioartic is now entering a new era, which I call Bioartic 2.0. And that's based on that we now have continuous revenues with royalties. Quarter by quarter, are they increasing? And we're not any more dependent on the very irregular milestones. And that leads to that we get more stable finances and we expect to be profitable from this year and onwards. Our brain transporter platform has been validated and we have a strong partnering interest, which could potentially lead to several partnerships in the future. And our Alphas Nuclein portfolio with Exidavnamab and BT2238 is also receiving a lot of interest among external partners. Next slide, please. Bioartic is a global pioneer in neurodegenerative disorders. And we are among world leaders as innovators in two different areas. The first one is in generating highly selective antibodies, targeting aggregated forms of misfolded proteins, for example, Alzheimer's disease, Parkinson's disease and ALS. The second part is our brain transporter technology, which helps biological treatments come better into the brain and coming closer to the target. Our business model focus on innovation of new treatments for neurodegenerative disorders and the blood brain barrier technology, which also makes us now also be a platform company. An important part of our business model is partnering, and we see three types of partnering. The first one is for large indications like Alzheimer's disease and Parkinson's disease, where our aim is to license the project to a strategic partner before Phase 2b or at least before Phase 3. For off-and-tag indications, BioRT can drive our programs longer and potentially all the way to the market. For our brain transporter technology platform, we can also partner with companies that want their biologics to get increased brain penetration. Next slide, please. And I will continue on that path and talk about the license agreement with BMS, which is a key event for Bioartic. It's a global license for our pyroglu-A beta antibody program, which includes BAN1503 and BAN2803. BAN2803 is also utilizing the brain transporter technology. And the license was signed 19th of December. We had several interested parties and BMS were fast and committed with a very good offer. And as I have said before, we are discussing with different potential partners. And if we find the right partner with the right proposal, we will partner. And in this case, it's a very good strategic fit for both parties. It came a little bit faster than I had expected. BMS is a great partner for the PyroGyve beta program with patients in focus. We are now preparing for BMS to take over the projects, but we have to wait for the agreement to be cleared by the HSR process before the agreement can be concluded. This is our largest agreement that has been signed so far and one of the largest ones globally for such an early project. The agreement includes 100 million US dollars upfront and another 1.25 billion US dollars in milestones, plus tiered low double-digit royalties on global sales. Importantly, Biotic retains all other rights to the brain-transporter technology outside of the PyroGWay beta field. So I think that we can utilize this for several future potential partnering agreements. Next slide, please. The brain-transporter platform continues to progress well and according to plan. We had in our plan that we were going to present validation data at the last quarter last year, Q4. And those data demonstrate rapid, broad, and deep bearing distribution by utilizing the transferrin receptor. And this could then lead to increased effect, decreased side effects, lower dose, and more convenient dosing. I think that the next generation treatments for CNS will most likely include a blood brain barrier technology. We continue to evolve our BT technology with different ways of engineering, depending on which the target is, if the target is extracellularly or intracellularly, or if we want to come into the lysosome in the cell or outside the lysosome, but still in the cell. So it's different ways of engineering the brain transporter. We have a versatile platform which can be utilized across modalities. We have started with antibodies and enzymes, and we are now also looking into other modalities such as antisense, oligos, etc. We experienced great interest at JPM in San Francisco in January and continue with several discussions regarding potential future partnerships. And we are excited about the discussions, but of course, we expect these discussions, as always, to take some time. It's important for us to find the right partner with the right terms and the right commitment. Next slide, please. Another great achievement the fourth quarter last year was that Excedavnimal, our Alphas Nuclein program, started phase 2a in Parkinson's disease patients. And we are also now exploring the potential to include patients with multiple systemic atrophy, MSA. The study is progressing very well and the low dose part of the study is already fully recruited. And then there is three months dosing and then follow up. We are now preparing for a safety interim review on the third quarter this year before progressing into the high dose part. And we expect full study results first half of next year. I think that our alphas-nuclein program is very exciting, especially based on two different things. One is that we have a highly selective antibody and to our knowledge is the most selective antibody, which is binding strongly to the pathological forms of alphas-nuclein while sparing the physiological monomeric forms. And the second aspect is that we see several opportunities for indications going forward. For example, in Parkinson's disease, Parkinson's disease dementia, Lewy body dementia, predominantly Parkinson's disease and multiple systemic atrophy. And all data that we have generated so far really support further progress. So really exciting about this program. Next slide, please. Then let's turn to Lekembe. The number of patients treated with Lekembe continues to grow, and it's more than 20,000 patients treated by now. And I think it's reassuring to hear that the clinical safety experience is on par with what was reported in the phase three program. If we start on the regulatory side, Lekembe is now approved in 10 different geographies, with Mexico and Macau added now in January. Regulator review was ongoing in 17 additional markets and regions, including the European Union. In EU, CHMP gave a positive opinion the 14th of November last year, and we were waiting for the European Commission decision in January. But the European Commission has asked the CHMP to consider two questions regarding information on the safety of leucanumab that became available after the adoption of the CHMP opinion in November, and whether this may require an update of the opinion, and to consider whether the wording of the risk minimization measures in the opinion is clear enough to ensure correct implementation. Our partner, ASI, who are driving the regulatory process, they believe the existing information is clear and sufficient to address the questions. And we now expect the CHMP meeting the last week of February to address these questions. And we are looking forward to the response from the European Union. And I really hope that European patients can get access to Lecambi soon. In January... Of this year, the FDA approved less frequent maintenance dosing intravenously every fourth week. This means that after 18 months treatment, patients could reduce their dosing to once a month for the maintenance phase. I think this is a great step since it is important to continue dosing to get the most benefit for the patients. Also after that, the plaques have been cleared. In January, the FDA also accepted the new application, the new BLA, for the subcutaneous autoinjector with maintenance dosing. And the PDUFA date has been set to the 31st of August. If we then look at the development side, the AHEAD 345, the phase 3 study, completed recruitment mid-October. And this study is for pre-symptomatic Alzheimer's disease, which means individuals with elevated levels of amyloid deposits in the brain, but they do not yet have any symptoms. They will receive treatment with leucanumab or placebo for four years. During the latest Alzheimer's Congress called CTAD, ASI presented new data from the Phase 3 Clarity-AD study, further supporting early and maintained treatment. Data presented at CTAD suggests that initiation of Lekembe in early stages of the disease can support clinical stability and even improvement in many patients if you start very early. I think this is positive news for the AHEAD 345 study, which will evaluate the possibility to prevent or delay onset of Alzheimer's disease. Long-term data over 36 months from the open label extension study were also presented at CETAN, suggesting continued benefit over time and the importance of continued treatment even after plaques have been cleared and to maintain the suppression of the Alzheimer pathology. This makes the less frequent maintenance dosing a benefit for the patient. I think it was also reassuring to hear that the clinical safety experience in clinical practice is on par with what has been reported in the phase three program. And if we look at the commercial side, as I said, we have more than 20,000 patients on Lekembe treatment globally. And the number of patients that are getting access is constantly increasing. And Anders will talk more about this. Next slide, please. I want to point out three major things that could broaden the use of Lecambi and accelerate the uptake of Lecambi. The first one is subcutaneous autoinjector, which I think will make it much more convenient for the patient. And the first BLA has been submitted for maintenance dosing with a PDUFA date, as I said, late August. Thereafter, ASI plan to submit a supplementary BLA for subcutaneous water injector administration for the induction phase as well. The subcutaneous administration will make the treatment much more convenient for patients and caregivers with at-home administrations and with less requirements and lower costs for administration compared to intravenous administration. The second aspect is simplified diagnosis based on blood-based biomarkers. Today, blood-based biomarkers are being used for screening, and then they should be confirmed by PET or CSF. Within the next year, we believe that blood-based biomarkers will also be accepted as confirmational, and this will be making the diagnosis considerably simplified and increasing the opportunities for primary care diagnosis. The third aspect is to broaden the indication to even earlier stages of Alzheimer's disease. As I alluded to with the AHEAD 345 study in pre-symptomatic individuals. even before the symptoms appear. But the individuals have elevated levels of amyloid beta in the brain. So I think Lekembe has huge opportunities to help many patients. And we expect the uptake to be more rapid, especially from 2026 and onwards. Next slide, please. So in summary, our portfolio is progressing really well, all the way from very early innovative discovery and all the way to helping patients on the market with these devastating diseases. And today I have highlighted Lekembe, Exidavnema, our Pyroglu-A beta programs and our BT platform. And I'm really pleased to know that Bioartic's innovations and research with high quality is being recognized externally. Next slide, please. And then I will hand over to Anders Martin Lööf for the financial summary.

Thank you, Gunilla. I will then start to focus on the Lecambi sales. As you can see here on the slide, the global sales for the fourth quarter of 2024 were 13.3 billion yen. That corresponds to $87 million, i.e. a 33% increase from the third quarter of 2024. So we now really see a solid development. And of course, if you compare year over year, it's more of a tenfold increase. So we are in a rapid growth phase. For us, this means that the royalties increased by 38% from the third quarter to 96.7 million Swedish. For the full year, we recorded roughly 230 million Swedish in royalties. This is primarily then driven by the U.S. expansion. It's now in line with the updated forecast that ASA issued in their last quarterly report. The U.S. sales were 7.7 billion yen, corresponding to $50 billion, which means that the sales grew by 31% over the Q3 numbers. And we're now up to 13,500 patients. As you may recall, ASI described the problem with an infusion capacity bottleneck in the last quarterly report. And now that problem is being resolved. The capacity has been increasing rapidly. So the 6,000 patients that ASI hinted were waiting for treatment due to capacity issues are now being included at a very rapid pace. So now they're up to 3,500 patients. So they are really working hard to resolve that problem. Over time, the infusion capacity will also become less of a problem. Already now, maintenance therapy, as Gunilla mentioned, is approved in the U.S. using infusions, so that reduces the number of infusions for patients that have been on treatment for a long time by 50%. But also, even more importantly, the subcutaneous version removes the need for infusions entirely. And we expect that to be approved for maintenance therapy in the third quarter of this year. expect induction therapy with the subcutaneous version to become approved in the first half of next year. So all in all, we believe that the growth will continue in the US in 2025. And in 2026, there will be a much stronger focus on the primary care sector. And ASA has started preparation for that already now in 2025. So we will see a shift moving over more to general practitioners in the primary care sector going from specialist only. In Japan, we saw a really strong development. Japan has been a really strong market from the very beginning. The sales were 4.1 billion yen in the fourth quarter, corresponding to $27 million. Strong 49% growth over the third quarter. And as you can see, the number of patients is more than half of the numbers in the U.S., even though Japan is a much smaller market and the drug has been on sale for two quarters less in Japan. So really, really strong development there. And there you can see that ASA has already started promoting directly to consumers to raise awareness about mild cognitive impairment and to promote early diagnosis. And I think that is the way to go also in the U.S., and that's the development that we expect to start in the U.S. as well. China is also very strong. It may seem that it's not growing, since the sales on the fourth quarter were roughly the same as in the third quarter, coming in at 1.3 billion yen or $8 million. However, the sales in the first quarter of... of sales in China, which was the third quarter, were probably a little bit stronger than the underlying demand as there was some inventory buildup. So all in all, I would say China is moving really well. The underlying demand is increasing, and we will continue to see solid growth there, even though ASA is only selling towards the private market, but that's still a significant market. To conclude, we believe that EISA is on track to reach their financial year forecast of 45.5 billion yen. That is for the period that started in the second quarter of 2024 and that will end of March 2025. That then will correspond to $280 million. And as you can see from the accumulated sales in the first three quarters of that period, that were 29.6 billion yen or $194 million, they need to generate roughly as much sales in the coming quarter as they did in the last quarter to reach the forecast. And we believe that they will continue to grow. So we believe there is a very high likelihood that we will actually beat their forecast. Going forward, as Yanila mentioned, we believe that we will see continued growth in 2025, but really it will be incredibly exciting to follow what will happen in 2026 when the blood-based biomarkers really make a dent in the diagnosis process and the subcutaneous version becomes available so that the patients can take the drug at home or in a much easier way with the healthcare practitioner. than they do today with infusions. So we believe that 2026 will be a very exciting year to follow. We then turn to the next slide, looking a little bit more on our figures. Starting on the left-hand side, you see that our net revenues were 101 million for the quarter. Historically, as you can see, they have been fairly lumpy and it has been smoothing out a little bit now when the royalties are growing. I'm happy to say that it will be lumpy again since we will start to generate quite significant milestones in 2025. We have already said that we expect a $100 million upfront payment from from BMS that will be recorded in its entirety when the agreement is closed. We're also expecting some milestones from ASI, so we could probably expect some 30% more than we expect from BMS by milestones from ASI. So all in all, I would say in a sort of $130 million range for 2025. Over time, the recurring revenues will increase, but not only in 2024. You see, the royalties were 97 million in Q4 of this year. They will continue to grow, but they will be smaller than the milestones in 2025. The co-promotion revenues will also start growing over time, but probably not to a significant level in 2025, as the launch in the Nordics will most likely take place in the beginning of 2026 rather than 2025. If we then turn to the costs in the middle graph, you see that the operating expenses increased to 143 million in the fourth quarter. R&D was roughly 67% of that. And the total cost for 2024 were 459 million. That's actually a little bit lower than we guided for the year. And that is due to the fact that there were some CNC costs that did not occur towards the end of the year since we entered the deal with BMS. So I guess that's beneficial that we were lower than our forecasted costs. For 2025, we do expect the cost to increase. Our project portfolio is progressing well. We spend more on our clinical trials and CNC programmes, so we expect the costs to increase by roughly 50-80% in 2025. It's really hard to make good estimates, so we will have to come back to that. But if I were yesterday, I would say we are in the 50-80% increase range. Looking then at the operating profit, our operating loss was 53 million for the fourth quarter. But as Gunilla mentioned, we are expecting to be very profitable in 2025. And if you put the numbers together, the pre-tax profit for 2025 should be in the neighborhood of roughly a billion Swedish, which is a really, really strong result for a company like ours. If you then turn to the next slide, some more details, you see the net result for the fourth quarter was 31 million. That's roughly 20 million better than our operating loss. So that's primarily due to the financial net of roughly 10 million and the negative tax effect of 12 million. If you look at the cash flow in the middle graph, it was roughly in line with the result. Typically, it's usually a little bit worse than our results since we have accounts payable that continue to grow with the growing royalties since there's a lag between the payments and the recording of the revenues. But this time around, we did not see that effect. But going forward, we still expect to see the cash flow trailing the net result. And on the right hand side, you see a cash balance. We ended the year with roughly 780 million Swedish in cash. We, of course, expect that position to grow significantly in 2025. So we will end 2025 with an even more solid position so we can really focus on doing what is right long term for the company. and sort of focus on the right projects and focus on entering the right deals. As Gunilla mentioned, we will partner our programs if we find the right deals, but we don't have to. And that's a significant strength that I'm really happy to have as CFO of this company. So with that, I will hand the word back to Gunilla for some closing remarks.

Thank you so much, Anders. And then we're coming to the final part of the presentation with upcoming news flow and some closing remarks. Next slide, please. So if we look at our upcoming news flow during this quarter, we are eagerly awaiting the HSR clearance process for the BMS agreement. And of course, we hope for a positive outcome to be followed by an upfront payment of 100 million US dollars. We are also eagerly awaiting a CHMP response at the end of February, and we are looking forward to more regulatory responses. Next important Congress is ADPD in Vienna in beginning of April, and there we look forward to presentations on both Lekanamab and also on Exedabnamab. We are also preparing for our first Capital Market Day, 2nd of June. And then during the third quarter, we are waiting for more regulatory responses and the Exidevnamab safety review and progression into the high dose part of the phase 2A study to follow that. So then we go to the next slide and I would like to summarize today's presentation by saying that our pipeline is progressing really well and we have very encouraging brain transporter data that has been presented and generating a lot of interest. Lecambi is now approved in 10 different geographies and the sales of Lecambi continue to increase. Royalty revenues continue to grow and it's gratifying to see that we're helping more and more patients. And thirdly, our financial position remains strong. We have almost 800 million Swedish crowns in cash and we expect to be profitable this year and onwards. Next slide, please. So by that, I thank you for your attention, and we're happy to take some questions.