BioArctic AB (publ)

Welcome to BioArctic Q2 Report 2025. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound key 5 on their telephone keypad. Now I will hand the conference over to CEO Gunala Oswald and CFO Anders Martinloff. Please go ahead.

Thank you. Good morning and welcome to BioArctic's presentation for the second quarter of 2025. Bioartic is now entering a new era. It's an era of profitable growth and I think it's signified by yet another strong quarter and a lot of activities throughout the different parts of the business. We see increasing Lecambi royalties and we are very pleased with the new partnership with Novartis. It's the third partnership utilizing our brain-transporter technology, and it's the first of its kind. And I'll talk more about that in today's presentation. Next slide, please. Biotic is listed at Nasdaq Stockholm large cap, and this is our disclaimer. Next slide, please. I'm Gunilla Asvold, and I'm the CEO of Biotic. And today, I will share the presentation with our CFO, Anders Martin Lööf, and also with our Chief R&D Officer, Johanna Felting, and our chief commercial officer, Anna-Kaja Grönblad. Next slide, please. I will start our presentation, and I will be giving some key highlights. Next slide, please. But before I do that, I just want to do a high-level introduction to Bioartic, if we have any new listeners today. Bioartic is among world-leading innovators in precision neurology. We have two different platforms. The first one is innovation and generation and development of highly selective antibodies that are targeting aggregated, misfolded forms of toxic proteins like leucanumab or leucanbin and exudanumab. The second part is utilizing our brain transporter platform in innovative ways in order to deliver antibodies and different modalities better into the brain. In today's presentation, we will talk more about both selective antibodies like Lekembe and Exidabnema, as well as the brain transporter technology, which we have utilized now for all our internal targets. And it's also now being used for external projects. And an example of that is the JustSign deal with Novartis. Next slide, please. During the second quarter this year, we held our first Capital Markets Day. And there, I presented our ambitions for 2030. And we have already started to deliver on our ambitions. And I'll just go through them briefly. The first one is Lekembe to be established as a treatment for Alzheimer's disease. The second one is balanced and broader pipeline with projects in all stages of development. And the third one is additional successful global partnerships. And this is an area which I enjoy and engage heavily in. And the fourth one is, of course, also very important to be profitable with recurring dividends. And Anders will come back to this later during the presentation. Next slide, please. So as I said, we have already started to deliver on our 2030 ambitions, and I will tell you how. If we start with Lekembe, it's well on its way to be an established treatment for Alzheimer's disease. Thanks to our partner ACI and their great work, Lekembe is now approved in close to 50 countries and also in Europe since the 15th of April this year. The European launch has been initiated this week with Austria started this Monday. And Germany is preparing for initiation of launch on Monday, next week, 1st of September. Our partner, ACEI, has submitted the HTA dossier in the four Nordic countries, Sweden, Finland, Denmark, and Norway. And at the world's largest Alzheimer Congress, which was held in Toronto in July, more very encouraging data was presented. It was a great Congress with about 10,000 participants with a lot of positives in the field. There were many presentations on Lecambi, including long-term data over four years treatment showing increased benefit over time. And real-world data for Lecambi being used in clinical practice was also presented, both from the US and from China. And here data showed that the benefits and the safety profile were in line with the phase three results, which also is very encouraging. ASI also presented data with the subcutaneous administration of Lecambi. And this supports a great opportunity for patients to administer Lecambi in an easier way by getting the injection by an auto-injector at home, for example. I think it was a very positive meeting with a lot of hope for patients. There was also reporting on blood-based biomarkers and their great progress and a launching of guidelines for them. The second aspect I want to talk about is the pipeline and that we are growing with further projects in development and the projects are progressing well. An example of that is Exidavnimab, our alphas-nuclein antibody, which is currently in phase 2a. And during the second quarter, it passed its safety evaluation and has now progressed into the next part of the study with higher doses. And that is now both in Parkinson's patients and in MSA patients. And so we are broadening indications for Exidavnimab. We're also very happy that we got orphan designation in both the U.S. and in EU for Excedamnumab with regard to the MSA indication. We have also broadened our portfolio, linked to the New Deal with Novartis, with a new neurodegeneration project with Brain Transporter, which of course is their project, but we are supporting. Then we come to partnerships. And here we said we should do additional successful global partnerships. And as I said, I'm very happy with the new collaboration with Novartis regarding an undisclosed target for never degenerative diseases. We will re-engineer their antibody to include our brain transporter technology, enabling a better penetration into the brain. Our brain transporter collaboration that we had previously, and which is ongoing with ASI on BAM 2802, is progressing according to plan, and the tech transfer of VAN 2803 to Bristol-Myers Gribbs is on track. It's also great to see that we have continued strong interest for our brain transporter technology. Our financials are strong, and we are highly profitable with record royalties, as well as the European regulatory milestone from ASI during the second quarter. And the new agreement with Novartis will bring further on an upfront of 30 million US dollars to Bioartic. Next slide, please. I'll just talk a little bit also about the agreement with Novartis, which is our third agreement to include our brain transporter technology. And it is the first one where another company brings their cargo antibody for us to re-engineer into a new antibody to introduce our brain transporter technology. I think this agreement shows that Bioartic now is also a platform company. Importantly, the brain transporter platform is Bioartic's proprietary technology. And in our business model, we're making deals linked to different targets while keeping the platform to ourselves. Novartis agreement encompass one undisclosed target for neurodegenerative disorders. and it is distinctly different from our other collaborations and targets. The Novartis agreement starts with a generation and evaluation phase, after which Novartis has the option for a full license. Bioartic is entitled to 30 million US dollars upfront, and the total deal value of this agreement is up to 802 million US dollars plus mid single digit royalties if the product reaches the market. The three agreements we have so far with the brain transporter technology platform are all with antibodies. But I also want to mention that we are investing and expanding our efforts into other modalities as well, where we also would like to see better brain penetration. in order to have a better efficacy. We have further business development discussions ongoing, and we aim to establish more collaborations in the future. But we have to realize that these kinds of discussions take time. Next slide, please. So by that, I will now hand over to our chief R&D officer, Johanna Felting, for an update on the R&D.

Thank you so much, Gunilla. Next slide, please. So starting with an overview of our R&D portfolio, we have two world leading platforms as Gunilla described in precision neurology with cross program synergies. First, we have our antibody projects with highly selective antibodies targeting aggregated forms of toxic proteins intended for the treatment of severe neurodegenerative diseases with high unmet medical need. And then we have projects based on our brain transporter platform that delivers biopharmaceuticals better into the brain. And for those of you familiar with our portfolio, you will now note a new project in the portfolio, the NDBT8825. And that is the Novartis collaboration on a non-disclosed target in neurodegeneration, combining the Novartis antibody with the bioarctic brain transporter technology. We're very happy now to have three BT collaborations in the portfolio with distinct and different targets. And importantly, like Gunilla said, the brain transporter technology is bioarchitects proprietary and it will have possibility to generate more collaborations in the future. So to summarize the portfolio, our R&D portfolio is a combination of fully founded projects run in partnership with global pharmaceutical companies and innovative in-house projects and technology platforms with significant market and licensing opportunity. Next slide, please. So a major challenge working with brain disorders is that only a small fraction of the antibody or the biopharmaceutical administered via the blood enter into the brain. So the aim with our brain transporter technology is to improve the brain exposure, allowing for lower doses, improved dosing convenience, reduced manufacturing and cost of goods, and potentially also improved efficacy and better brain distribution. So we have a unique approach targeting active brain transport via the transferrin receptor. And this platform has been preclinically validated in non-human primates. showing an improved brain exposure up to 70 fold without affecting reticulocytes, which is a safety concern with this approach. And what we now are doing is that we are currently working with different modalities, as Gunilla described, such as antibodies and enzymes, but we are evolving the technology also to other modalities, such as proteins, peptides, or even antisense. And this will also bring new modes of actions and expand the target space in the brain. So the Brain Transporter Technology Platform unlocks an enormous potential, not only for internal projects, but external opportunities. And as Camilla mentioned, we see a high external interest in our platform. Next slide, please. So Exidavnimab is an antibody that selectively targets pathological alpha-synuclein aggregates while sparing the physiological monomers. Exidavnimab is in phase 2a in the EXIS study and this is a study with a primary endpoint safety and tolerability of Exidavnimab but we are of course also exploring a wide range of biomarkers both biochemical digital and imaging biomarkers And this is a very innovative study, I would say, and unique in its approach of including the right patients into the study. And we do this by a smell test and also a CSF seeding amplification assay to ensure that the patients included in the study have the correct diagnosis and have the alpha-synuclein pathology that we are targeting. And in June, we had a safety review after cohort one with Parkinson's patients supporting progression into the higher dose. And cohort two is now initiated both in Parkinson's and multiple systemic atrophy. So Exedabnimab is progressing well in phase 2A, and the study results are expected mid-26th. As Gunilla mentioned, Exidabnamab has reached orphan designation for MSA, which is a rare progressive neurodegenerative disorder, both in the US and in the EU. And following the EXIST study, we see several possibilities for further development in different synucleinopathies, such as Parkinson, MSA, or DLB. And we are currently evaluating and preparing for the next phase of development. Next slide, please. And as Gunilla mentioned, everything that we have seen coming out from the AAIC meeting in Toronto this summer has been very positive, especially when looking at the Lecambi data. ASI presented new data from the phase three open label extension study and new data from patients treated with Lecambi for up to 48 months are shown on this slide. And to start with the efficacy, treatment effects continue to expand compared to the natural course of disease shown by ADNI or BioFinder data. And another way of describing the efficacy is to talk about time saved or time that you stay in an earlier stage of disease. And in this analysis, time saved is up to 13 months after 48 months of treatment. And also in terms of safety, long-term safety profile continues to be in line with previous data. So next slide, please. So in addition to the full ClarityAD study results, subgroup analysis has also been done. And I would like to highlight this one in patients treated with leucanumab and patients that have a low tau. So this subgroup is likely to have an earlier stage of the disease. And they seem to benefit even more from treatment looking at the CDR somavoxes. And a large percentage of patients being unstable, being stable or even improving after 48 months. And this is, of course, very, very exciting data, but it's also smaller studies. We have to be mindful that this is a small population, but it shows the importance of starting treatment early on. And we are really looking forward to the head study results testing that can be in earlier AD patients. So next slide, please. So in addition to the presented long-term efficacy and safety data of leucanumab, important presentations during the Congress covered real-world evidence data from leucambi being used in clinical practice. These data confirm the clarity AAD phase 3 data, and it's very reassuring that the real-world evidence data is in line with the clinical study, both with regard to safety and efficacy. Also, ASI presented encouraging data on the sub-Q autoinjector maintenance treatment. And of course, a more convenient sub-Q dosing will allow patients to easily be treated at home, enabling continued treatment without visiting infusion centers. And Anna-Kaja will talk more about this. And also, in addition to the ASI presentations at AAEC, new guidelines for blood biomarkers were presented, and Anna-Kaja will talk more about this as well. So taken together, all of the data presented will help to expand Lecambi usage. Next slide, please. And I now will hand over to our chief commercial officer, Anna-Kaja Grönblad, for a commercial update.

Well, thank you, Johanna. Well, as Gunilla mentioned earlier, Lecambi, as you can see, has now been approved by 17 health authorities globally, covering 49 countries, of which the latest approvals since the last quarterly report were in Thailand, Saudi Arabia, Qatar, Kuwait, and Bahrain. Meanwhile, in the US, we are eagerly awaiting the FDA decision any day now on the subcutaneous autoinjector for the maintenance dosing. And ASA is also planning to shortly thereafter submit the application also for the initiation treatment for the same autoinjector. Anders will soon comment more on the actual sales, but in short, Lekembe is growing steadily in the different regions and markets. And in the US, we can see that the usage of both blood biomarker tests and PET and CSF testing is increasing, indicating that more patients are being investigated for Alzheimer's disease. As for the European Union, after the European Commission approval in mid-April, it's really exciting news now that Austria launched earlier this week on Monday and that Germany is planning to launch next week, Monday. These are usually the early launch countries where there will be a gradual rollout of the expected launches in the European Union throughout 2026 and into 2027. following the regulatory requirements and their national pricing and reimbursement processes. In France and Spain, on the other hand, there is an opportunity to provide Lecambi sooner through an early access program, and this will probably be in place in the last quarter of this year. As Gunilla mentioned, in the Nordics, ESA has submitted the dossiers to the authorities in four of the Nordic countries for the health technology assessment, which is the start of the whole pricing and reimbursement process. And there are no fixed timelines for these processes, but we're aiming to launch in the Nordics next year in 2026. Next slide, please. So I would like to come back to what Johanna referred to earlier regarding the development in this field presented at AAIC in July, both in regards to blood-based biomarkers and also Leukembis competitive edge and growth opportunities thanks to the subcutaneous autoinjector. Firstly, I think that the fact that we now have both clinical practice guidelines from the Alzheimer's Association in place in the U.S., and the first blood test approved by the FDA in May, which was the Fujirebio test, and there are probably more to come soon, this clearly offers a simplified diagnosis pathway. In the future, the usage of PET and CSF will probably decrease, which also means less cost and infrastructure needs for the healthcare. As an example, also here in Sweden, the Sahlgrenska University Hospital also offers clinics the possibility to analyze blood samples in phosphatidyl 217 since July this year. This will clearly simplify, as I said, the diagnostic flow, since it will be easier to evaluate which patients need to be investigated further, while other patients can have the results much quicker if their cognitive issues are not due to Alzheimer's disease. In the future, it can also be used in the primary care as a triaging tool, detecting patients earlier, improving the referrals, i.e. making sure that the right patients are referred to the specialist clinics. Secondly, I already mentioned the subcutaneous autoinjector. This also offers a choice for both the patient and the healthcare professional to choose which treatment option is best suited for that specific patient. Not only could it be a freedom for the individual to self-inject at home, but the usage of the autoinjector will also free up infusion capacity at the hospital and mean less cost for payers. EISA expects that the potential approval of the subcut initiation treatment could come in the first half of 2026. And finally, the four-year study mentioned ahead, 345, with more than 1400 people with pre-symptomatic Alzheimer's disease, was fully recruited in October last year and offers new opportunities, both for the science to evolve, but also for the potential growth for Lekembe. So it's really exciting times ahead. Next slide. So, and then just a few words on the Nordics, where we have been gradually building a team of very experienced and knowledgeable, and I would say very motivated pharma professionals. We're about 20 people in the commercial operations team at BioArctic, working very closely with our colleagues at ACI. And since the European Commission approval, we have onboarded some additional field-based people that can help prepare the healthcare for the coming launch. We have supported ASA in the HTA submissions and will continue to do so in the upcoming price negotiations. Our objective is to help optimize the early AD patient journey and the infrastructure and educate on the value that Lekembe brings. We have engaged in several collaborations with healthcare mentioning only a couple here such as the EU prominent project and the real AD study in Sweden. We can now also promote Lecambi proactively in three of the four Nordic countries, and we experience a big interest from the healthcare professionals in learning more about the field and Lecambi. And next slide. So just in my final slide, I have just selected a couple of additional examples of initiatives that we have prepared to roll out in the Nordics to support our launch. On the left-hand side, you can see the HEP web portal called Campus Alzheimer, which will be launched in Sweden in the coming week and in the coming months in the rest of the Nordics. The education need is big, and so we have strived to create a hub where Nordic healthcare professionals can find all the relevant and updated information about the diagnosis and treatment of Alzheimer's, new research findings, training opportunities, upcoming events, etc., Also on the right-hand side, you can see the invitation to what is expected to be an annual high-quality Nordic educational event in Stockholm, happening only in one week's time. This has been organized together with an external scientific steering committee who has put together an excellent program. So all in all, we are very excited to enter this new chapter in Alzheimer's disease with the expansion of Leukemia globally and with the launch of Leukemia in the Nordics. And with that, I hand over to Anders for a financial comment.

Thank you, Annika. If I start with the Lecambi development, we see very strong growth during the second quarter. The global sales increased to 23.1 billion yen, or $160 million, which represents a 57% increase quarter over quarter, or roughly a fourfold increase from the same quarter last year. This is partly due to a stocking effect in China, where sales were 7.7 billion yen, or $52 million, which is a 300% increase from the first quarter. And this is due to the threat of tariffs, which meant that large inventories were being built up in China during the quarter. But ACI has calculated that if you remove this stocking effect, that the growth in China would still have been 24%, or global growth would have been 20% if you remove that one-time effect. So all in all, the underlying growth is still very strong, and it was further boosted by this one-time effect in China. And if you look at the different markets, Japan, I would say, is still the strongest market that has come farthest along in the implementation of the Camby treatment. They're now well into the demand expansion phase with sales of $5.5 billion, $30 million. That's a 23% increase from the first quarter. And here they're already starting the second disease awareness campaign for mild cognitive impairment, which is the earliest phase where you can use Camby. they can be in this largest area where we believe growth can be seen in the future. And they have also been very successful in setting up a big network of 1,500 follow-up facilities that are collaborating with the sites where the patients get their initial treatment so they can be moved over to these follow-up facilities after roughly six months of treatment. And this is a pattern that the EISA is now replicating in the U.S. where we're also seeing solid growth, even though there is more competition in the U.S., where Lilly is very active. Sales only can be in the U.S. for 9.1 billion yen, or $63 million in the quarter. That's a 14% increase from the first quarter. And then, where some currency has wins, so a constant currency raise, that increase would have been 20%. And here, the market is growing fast. There is competition from Lilly, but Lilly is also helping to build the market. And the market growth is now expected to continue, and it will be further boosted by the initiation of usage for blood-based biomarkers for diagnosis and not just for triaging. So we do expect to see a continued market growth boosted by this. And here, EISA has now launched a targeted direct-to-consumer campaign, and they will spend more efforts on involving primary care. in the second half of this year, roughly what they have been doing in Japan quite successfully. And this will, of course, be supported by the approval of the subcutaneous version, which makes it much easier for the patients to take the treatment at home. And all in all, this means that the primary care segment will be much more active in the whole treatment chain. It will also be interesting to see what will happen in the EU. The camera is now launched in the EU for the first time. However, it will take some time before we see a significant impact of this as it takes a couple of quarters to establish the treatment as we've seen in the US and Japan. But it's, of course, very encouraging that we're now finally on the way in the EU as well. If we then turn to the forecast, I think that this very positive development that we see now means that Lecambi is fully on track to reach the forecast of 76.5 billion yen in the fiscal year 2025. And this is ASI's forecast that they have had the issue and it covers the second quarter 2025 until the first quarter 2026. And what we can see now is that they are above plan in several markets. For example, if we look at China, as you can see here, is expected to sell 9.5 billion yen in total in their fiscal year. And the sales in the first quarter of the fiscal year was 7.7 billion yen. So they just need an additional 1.8 billion yen in the coming three quarters to reach the forecast. And the same if you look at Japan and the US and calculate what growth do they need to reach the forecast. It's roughly 6% in both markets, and they're currently growing at roughly 20% in both markets. And there's really nothing that says that growth is going down significantly. Asia even stated that July, which is, well, the first month of this quarter that we are in right now, was the strongest month that they've ever seen. So all in all, we think there's a very high likelihood that the Cambria will beat the forecast when we close the year. If we then turn to our own numbers, our second quarter revenues were 392 million Swedish, which is quite a big increase from 50 million Swedish same quarter last year. And this is, of course, due to the milestone payment that we received with 20 million euros. But the recurring revenues are increasing and will continue to increase. As you see now, the warranty was 162 million in second quarter. Co-promotion still not that big, but as Anakai gets going during next year, we expect to see increasing co-promotion revenues as well. The Novartis upfront payment that we talked about earlier of $30 million will not be recorded fully this year. It will be recorded over the whole research collaboration phase of that project. And I would estimate that roughly 20% of the during this year. If we then turn to our expenses, you see that our operating expenses increased to 193 million from 121 a year ago, but roughly 32 of that is currency effect. So the underlying operating costs were roughly 161 million compared to 120 then one year ago. And we spend heavily on R&D and so 70% of our operating expenses are spent on R&D. For the remainder of the year, we do expect to see an increase compared to last year. I have previously stated that we expect operating costs of 2025 to be roughly 60% to 80% higher than 2024. We now see that it's going to be lower than that. So now we estimate that it's going to be roughly 50% to 70% higher than it was last year. If you then turn to the operating profit on the right-hand side, you see there was 179 million for the second quarter. It's a steep decline from the first quarter, but that was then heavily impacted by the $100 million upfront payment that was fully reported in the first quarter. I should remind you that the second half of the year will most likely be less profitable than the first half of the year, but we do expect that the operating profit for the full year would be above 1 billion Swedish kronor per year. On the next slide, you see our net profit on the left-hand side. The net profit was 97 million Swedish, which is roughly 82 million less than the operating profit, and that's then explained by negative financial net due to currency effects and accrued tax of 75 million. And in the middle graph, you see our whopping cash flow. More than 1.1 billion plus in one quarter. That will be hard to beat for the coming quarter. But that's of course explained by the 100 million received from VMS and the 20 million received from ASI during the quarter. So very, very strong cash position. 1.9 billion at the end of the second quarter. And that's the equivalent of roughly three years of underlying costs currently. So we have a very, very strong financial position and it will continue to strengthen during the last quarters of the year, since we will receive the $30 million from Novartis during the fourth quarter. So I expect to end the quarter with more than 2 billion Swedish cash in cash equivalents. With that, I hand back to Gunilla for some closing remarks.

Thank you so much, Anders. So we're coming towards the end of today's presentation, and I'll just do some look at the news flow and some closing remarks. So next slide, please. So we just informed about the initiation of the Canby launch in Europe, which started in Austria this week and planning for Germany beginning of next week. We are eagerly waiting for the response from the FDA regarding the subcutaneous autoinjector for maintenance dosing in the U.S., where the PDUFA date is 31st of August. Our partner, ACI, is preparing for U.S. filing for induction dosing with the subcutaneous autoinjector soon thereafter. And we are hoping for an approval first half of next year. I think the subcutaneous autoinjector will be an important further treatment option, making the administrations much more convenient for patients and with less cost for society. We are also expecting further regulatory responses on the cannabis. The next countries for commercialization with early access in the EU is expected to be France and Spain. And we are looking forward to further European launches next year, including the Nordics, which, of course, is very exciting for us at Bayard. During the first half of next year, we also expect the Exedanema phase 2a study to be concluded and a decision on next steps for development. And there we see several different opportunities, as Johanma described. So in summary, we have a lot of exciting things ahead of us. And next slide, please. So some key takeaways from today's presentation is that Bioartic has now entered a new era, an era of profitable growth, and that is signified by yet another strong quarter. We see increasing Lekembe royalties, and we are very pleased with the new partnership royalties. We are starting to deliver on our 2030 ambitions, both with regard to Lekembe, which is well on track to become an established treatment in Alzheimer's disease, where we also have seen now further regulatory approvals, further launches, reassuring data, both from long-term treatment and real-world data, and continuously increasing revenues and number of patients that we're helping on a global level. The second part is Exidavnimal, which is progressing very well with a high-dose part of the phase 2A study being initiated in both Parkinson's disease and MSA patients. Our business development efforts continue to deliver with a third membrane transport partnership agreement signed. And this is, as I said, the first of its kind, which is expanding Bioartic also to being a platform company now. And the fourth part, that we have strong financials with yet another highly profitable quarter with record royalties and cash flow. So I think that the future looks very bright for Bioartic. with great hopes for many patients. So next slide, please. So by that, I say thank you so much for your attention, and we are happy to take some questions.

If you wish to ask a question, please dial pound key 5 on your telephone keypad. To enter the queue, if you wish to withdraw your question, please dial pound key 6 on your telephone keypad.

Victor from Nordea, go ahead. Your line is open.

Yes, thank you for taking my questions. I have a tree from my side, please. So maybe first on the Novartis deal, I just wanted to see if you could elaborate how long you expect the evaluation of your brain transporter technology together with the antibody from Novartis to take before we could reach a stage when Novartis could exercise its option and perhaps what kind of data they would be looking at if it's preclinical or if they need some kind of more advanced data. Secondly, also with this one-time stocking in China that was announced for Lecambi in Q2, I just wonder if you heard from your partners if this could lead to lower sales in China in Q3 or Q4 or any other information on this? And just finally, I just noticed on your pipeline slide that I didn't see band 24-1 in Down syndrome. Just wanted to understand if this has been dropped from your development program or if it was due to any kind of commercial evaluation or if it was driven by any data you generated. Thank you.

Thank you so much, Victor. Three great questions. So we start with the first one with Novartis collaboration. So that is the first part is that we should generate the new asset and then do some evaluation work together with Novartis. And I think that period is it's preclinical and it's about two years. Your second question with regard to Lecambian China. I think Anders wants to comment on that one.

Sure. So, no, we don't have any specific details, but I think it is to be expected that sales will be significantly lower in the coming at least two quarters than it would have been without this stocking effect. So, at least that's a fair assumption, even though I don't have any full details to share.

And then your third question with regard to leucanumab or bound 24-1, leucanumab in Down syndrome. And it's definitely not dropped. It's just not on the slide anymore because we don't do so much work right now. But of course, Down syndrome is an important patient population that potentially also could benefit from leucanumab. So it's definitely still on the radar.

Okay, thank you. And just a quick follow-up on Novartis. When they do exercise or if they would exercise the option when data has been generated, could that trigger an additional upfront payment or would it just enable Novartis to take over the rights of the program and then pay you milestones further out?

So we're not disclosing details about the rest of the milestones, but I can say that there is a next milestone linked to if they exercise the full license deed. So that is also a milestone at that stage. But I'm not disclosing how big that one is. And then, of course, it's a normal approach to the rest of the milestones, development and commercial.

Okay, thank you very much. Thank you, Victor.

The next question comes from Joseph Hedden from RX Securities. Please go ahead.

Good morning. Thanks for taking my questions and congratulations on the Novartis deal. I just wanted to dig a little deeper into the deal. Is the target that Novartis is pursuing, is that a target that's related to one indication, or is it perhaps something that could span several neurodegeneration indications? And then could you say whether these are rare diseases or broader indications like Alzheimer's disease?

Yes, I really can't disclose much about that program, but I can say I think it's a very interesting target that can help many patients potentially. And it can be seven different indications, but I'm not going to reveal any details.

Okay, thank you. And then just on the research collaboration agreement with ISSAI where they have an option on a brain transporter candidate. Is that still progressing well and perhaps on track for a decision from them in 2026, I think, was the initial target?

So our collaboration with ISSAI is progressing really well according to plan, and that is with the water ban 2802 that you're talking about. And I cannot comment exactly on the timelines there, but it's progressing according to the plan, and it all looks good.

Okay, thanks. And then just perhaps a question on the rare diseases portfolio where you're using brain transport detect to look at candidates in ALS and Goucher preclinically. Just a question on the overarching strategy when considering these rare diseases. will you take these these candidates into the clinic um yourself um to to kind of progress them a bit further down the line before looking for a licensing deal or are these are these available for licensing straight away as kind of been your historical model apart from uh exadam at the moment thank you thank you so much another good question joseph

So I think based on that, we now have a strong financial situation. We have all possibilities. So, I mean, we could drive programs much longer, potentially all the way to the market when we talk about rare diseases. But we still have an open door policy that if we get a good deal proposal, we might partner. So it's a great strength for Biotic that we could partner, we don't have to partner, so we can do what we think is the best for the projects. And both of those, I think, are very, very exciting and rare disease indications with huge opportunities for us to potentially drive them ourselves longer.

Okay, thanks very much and congrats again.

Thank you so much, Josef.

The next question comes from Merth Beinvoort from Van Lanchet in Kempen. Please go ahead.

Hello, I'm calling in for Louisa from Talantvoort in Kempen. First, congrats on the Novartis deal. I had a few questions. Considering the Novartis deal, do you expect from here onwards to establish more deals using the prints transporter tech also as an option deal or more similar to the deal with BMS? Secondly, could you remind me what are the next steps for XeDevMap? And could you provide more color on what differentiates BioRTX brain transporter from other shelter technologies using the same transfer transporter? Thank you so much.

Thank you for three great questions. So the first one with regard to the brain transporter, I mean, this is our proprietary technology and I think that we can foresee several different opportunities in the future. We could foresee more deals like the one we did with Novartis, whether or not the company comes with their assets and want them to be re-engineered into a new asset which has better brain penetration. So I think that's one possibility in our business model. We are also working on other modalities and we're open to discussions for collaborating with others on other modalities as well. And we have then combined the brain transporter with all our internal targets. And that could potentially be deals more like the one with the Bristol-Myers Squibb where it was combined with one of our internal programs. So I think the beauty with Biotics portfolio and the approach that we're working is that we can drive ourselves or partner with our own assets. We can also now, since we are a platform company, work with other companies assets and improve them. Or we can do own further development of the brain transporter technology ourselves or together with others. So we have a lot of opportunities and great possibilities, I think, for the future, both with our own therapeutic targets and with our brain transporter technology. And maybe, Johanna, you want to allude a little bit to what's different with our technology versus others? Yeah, absolutely.

Thank you, Gunilla. So I think that, I mean, yes, we are working with the transferrin receptor and many companies are pursuing the same a target for active transport into the brain. And I think that's great because this target actually has clinical validation from the Tronte in the Mab Roche Brain Shuttle Program. What is unique with our approach is that we have done extensive screening and we have a lot of structural data that has made us identify a unique epitope on the transferring receptor that is different from the other companies as far as we understand it. And this epitope and the binding site then enable us not to interfere with the normal function and the normal transport function of the transferrin receptor. And also it's positioning our antibody, our therapeutic antibody, close to the cell membrane. And that is something that is very important, we believe, from a safety perspective and interacting and not interacting with reticulocyte that has been reported a potential side effect with this kind of approaches. So I think that we have a unique way of interacting with the transferrin receptor, enabling us to have a better safety profile. And we have seen great data in the non-human primate study with an almost 70-fold increase in brain exposure. So we think that we have a really unique approach in that sense.

Thank you, Johanna. Maybe you want to talk also about the exodamnema question?

Yes, so where we are heading. We are now eager to think about what's going to be the next step. There are several different opportunities there in terms of MSA, Parkinson's or DLB. We are looking into how the competitive world is evolving. We know we're encouraged for the target that Roche has pursued for us in USMAV into phase 3. and Lundbäck has pursued their Almanetug compound into the phase three in MSA, whereas Russia is going for Parkinson's. We see many opportunities there for further development.

I hope that answered your question. Thank you so much. Yes, thank you.

The next question comes from Natalia Webster from RBC. Please go ahead.

Hi, thanks for taking my questions. I have three, please. The first two just on Lekembe. The first one's fairly broad, just curious to hear a bit more colour on the progress you're seeing in infusion capacity in the US and the impact you've seen from recently approved blood-based biomarkers, and also how quickly you expect the sub-Q maintenance and initiation potential approvals to have an impact on adoption going forward. Secondly, if you're just able to comment a bit more about your expectations for the European launch, I appreciate it's early days and you said it'll take a couple of quarters to see impact, but curious if you're expecting to account to some of the challenges that you saw in the US around capacity and if there's anything you're doing at the moment that can help mitigate that. Thirdly, just on profitability, you've maintained your long-term ambition for sustainable profitability and recurring dividends. This year should be helped by milestones, but just wanted to check that you're still confident on reaching sustainable profitability from 2026 onwards. And also, if you're able to comment to what point you may expect to start paying dividends. Thank you.

Yeah, thank you so much.

I think we start with Anna-Kaja and they can be questions, please. Yes, if I remember your questions right, it was about the US and the kind of development of the growth and and related also to the subcutaneous and what is has communicated is that we can expect maybe uh and kind of increase of the can be starting beginning of next year thanks to a potential approval of the subcutaneous auto injector for the maintenance treatment so it will take some time uh i guess through the through the system before that we can see that growth coming um and i think also mentioning the different state that we see from lab companies, it's encouraging to see that, as I mentioned, the usage of different blood-based biomarkers, but also PET and CSF testing increasing, which would indicate that the growth is really starting to expand for the usage of the Camby. And we haven't seen any, let's say, signs of decreasing growth also after Kisunla launching. So it seems to be good that you know we have two companies driving this need of changing the infrastructure and the patient journey through in a smoother way so I think it's encouraging to see that growth to continue and we expect it to continue even more beginning of next year.

And the blood-based biomarkers?

Yes and of course the blood-based biomarkers mentioned many times during the call already today I mean this I mean it's been talked about many years but now it's really happening so So this is really encouraging, but it will take, if I then go to the European launches, as I mentioned, there is this regulatory requirement to implement this CAP, controlled access program, so which needs to be done by a national level. And also that the different pricing and reimbursement prices are different in the European countries. So I think you will see the launches roll out gradually during next year mainly. But we know that there are a lot of quite a few centers already in France, for instance, ready to initiate. They can be used through this early access program. So it will take some time. We will probably see the same kind of infrastructure challenges as in the US. And we've heard from our A-psychologists in Austria, how they have worked on this. And what is a key takeaway is that you really have to be close to each hospital clinic because the challenges might be different from one hospital to another. And that's what we're doing also in the Nordics now, really visiting the main hospitals that we think will start to see what kind of challenges they have and how we can support that.

And then we continue to the profitability, Anders, those questions.

Sure. Yeah. So we have mentioned earlier that we expect to be profitable from this year and onwards based on the royalty revenues, especially from next year. And no, we haven't changed anything there. We still expect to be profitable from 2026 and onwards. As for dividends, I can't really answer to that. It's a board call. I said that the capital market state that I think it's likely to happen within one or two years, but it really depends on what happens, what it can be. And I do expect that our board would like to see that they are profitable on a sustainable level based on how much they can be worth before that happens.

Great, thank you.

The next question comes from Rajan Sharma from Goldman Sachs. Please go ahead.

Hi. Thanks for taking my questions. Also had one on the Novartis deal. So Novartis are also collaborating with Cyrenax on a brain delivery platform. And just wanted to understand how your technology compares to Cyrenax and whether the target that you're working on is different to that being explored by Novartis with Cyrenax. And then just a couple on Lakembi. So firstly, just on the Nordic launch, could you provide just a little bit more color on timing there? Is that likely to be in the first quarter of next year, or is it more likely at some point during the first half? And then the other one was just on subcutaneous Lakembi. What's your expectation for approval in Europe, and do you expect that to move the needle on some of the reimbursement decisions and discussions that you're having? Thank you.

Great questions. The first one will have a very short answer and I will not comment anything on Novartis. That's for them to comment on their other collaborations. And then we turn to Lycambi and the Nordics.

Yes, I mean, as I mentioned, there are no fixed timelines for these kind of processes. So we are expecting launches throughout 2026. So it's I can't kind of, it would be guessing from my side exactly when this will happen. So 2026, straight 2026.

And subcutaneous in Europe.

Yes. So, I mean, we're hoping that this will be a decision from ASI to also launch subcutaneous in Europe, but we haven't heard anything yet on that. And for the authorities to review, of course.

So not much more we can say there. So next question, please.

If Roger didn't have any more questions, we have a few that have been written, sent in. So I'll read them, and then maybe we'll help direct who should take them. So a couple of ones from Frederick at Red Eye. And he's asking in relation to the deal with Novartis, I guess, should we expect more auction or valuation agreements for the brain transporter platform when it comes to using external drug handlers? I think you've touched on that already, Gunilla.

Yes, and the answer is yes. But we cannot say anything about timing. I mean, you should be aware. I mean, these kind of discussions take time. But definitely, we have a lot of possibilities for the brain transporter in the future.

in different ways. Then maybe a couple for Anders. The stockpiling effect that we saw in China, have we had any indications of anything similar happening again, or is it likely just a Q2 thing? And then secondly, if you can talk a bit about the tax post in more detail. Well, if nothing extreme happens, I don't expect any similar effects in the future. However, There may be new initiatives coming from the US government that will have an impact like this. So if that happens, of course, I can promise that that won't have an effect on this. As for the tax recorded, well, it's based on an estimate of the profit per year, not the very exact estimate, but we have to do that according to the tax regulations in Sweden, and we're just following what we have to do. Good. Thank you. And then there was a question here from Peter, but I think we've already answered that. That was about the timeline for the evaluation of Ban 2802. And I think you already made a statement there, Camilla. So those were the questions we had online. And I don't think there are any more questions in the telephone queue either. So with that, I guess we can conclude today's call. Thank you everybody for joining and see you next quarter.

Thank you so much.