Moberg Pharma AB (publ)

Hello and welcome to the Mobag Pharma conference call. Throughout the call, all participants will be in listen-only mode and afterwards there will be a question and answer session. Just to remind you, this conference call is being recorded. Today I'm pleased to present the CEO, Anna Jung. Please begin your meeting.

Thank you and hello. My name is Anna Jung and I'm the CEO of Mobag Pharma. I also have our VP of Finance, Mark Beveridge, with me on this call today. I'm happy to present our interim report for the fifth quarter since we had a prolonged year, July to September 2020. You can find the report on our web page and there you can also find a PowerPoint presentation that I will be using as the basis for this telephone meeting. So I will start on page three in that presentation with the brief introduction to mobile pharma. So we're a Swedish pharmaceutical company that based our products on drug delivery of known substances, which reduces time to market and development risk compared to traditional drug development. And our lead program is MOB15 against onychomycosis, nail fungus. the global sales potential of $250 to $500 million annually. And based on the outcome of the two P3 trials on more than 800 patients where we met their primary endpoints, we have sufficient data to file for registration in EU. We are thus targeting filing during next year, and based on average processing time for one and a half years, we expect approval early 2023. which would enable launch by the end of 2023. For the US, we will discuss with FDA, but we believe that one additional study is needed. It would be very similar to the North American study that we already completed, but with a shorter dosing regimen, enabling even stronger claims and higher complete surates. And when it comes to partnerships, we have partnerships in place for some of the major markets, including EU with our partner Bayer, the world leading OCC on this fundal treatment under the brand name Kermesen, and Taisho for Japan, as well as the market leading in dermatology in Korea, Donku, and the CIFER for Canada. In total, our partnerships include milestones of $120 million in addition to payment for product sales, We have a tried and tested model where we work with strong local partners that take responsibility for and invest in marketing and sales versus we take responsibility for development and production and deliver the finished product. And of course, this is a model that does not tie any capital with the exception of U.S. where we want to build our own present targeting projects. And this is actually not the first time we take a nail fungus product to the market. This company was founded in 2006, and by 2010, we launched Carousel Nail, our first-generation nail product in the Nordics. In total, we sold Carousel Nail via partners in 30-plus countries, and we are an own-sale company in the U.S. We built this to a $440 million franchise that we divested in 2019 for a total of $1.4 billion for each chromosome. Now we want to repeat exactly the same journey again, this time with our second-generation male-founded product, MOB15, that has an even greater potential. Turning to page six, and the significant events during this period. During this summer, we received top-line data for EU, where we met the primary endpoint, showing non-inferiority versus cycloperox, the most used topical drug for onychomycosis. And after dialogue with our partners, we have now a key path forward, targeting to submit a marketing authorization application in EU in the second half of 2021. We have also strengthened our management team with the recruitment of Cindy Wong, who used to be head of global clinical development at Merge, and also has a background at CMO at QNED. and have senior positions as regulatory authorities both in Sweden and Australia, something that can be also useful for the next phase for MOP15 when we're now entering registration discussions. And to date, our operations have not been significantly impacted by COVID-19. And we also have two new that we announced last week, the spin-off and lifting of Obuti, and also a fully guaranteed financing for MOB15. And I will talk more about that on the next slide. So on page five, since we now have a clear strategy to take MOB15 to market, that has been agreed upon with our partners, we can now choose a suitable financing solution. And the Secured Rights Issue that was announced last Friday means that we have a long-term financing secured from 2015, covering both the registration work and fees for the registration in Europe, as well as one additional clinical study for the US market. So we have therefore decided to conduct a fully guaranteed rights issue of around 150 million Swedish, pending approval by EGM. Board and management will invest, as well as our main shareholder. We have also some new shareholders participating, such as Nynämbörd and Fora Klepto. Once this rights issue is completed, we will terminate the current convertible note agreement. So if we look at the timetable, The final terms will be announced by November 27th. And we will have an EGM approving this transaction by December 1st. And then the subscription period will be December 7th to 21st. So basically this will be done by Christmas. Starting to page six, In addition to MOPI theme, we also have the BookBeat project, where to facilitate financing of further development and capture the value in the project, we last week also announced the intention to spin off and list the assets in a separate company, Uncle Sanj. We now have a dedicated team to BookBeat, led by the CEO, Pico Thompson, with extensive experience as CEO of drug development companies in similar development stages. while using the know-how from the mobile team, as well as involving the original inventors behind BUSPI. Next step for BUSPI is a phase three trial in Europe, and OncoFrench is now planning for such a study. To finance this clinical study, as well as OncoFrench other operations until clinical data can be reported, around 60 million in financing is needed. And for that reason, Erik Karlsson Bank is engaged in the financing and also to list the company at MassTax First North's growth market during the first quarter of 2021. The plan is to distribute on percentage lexafia, which means that there will be no tax event triggered by the distribution. And we're planning for that for each 10 shares that someone owns in the Moogard Pharma, our shareholders will receive one share in Oncophage. Turning to slide seven and our clinical data, this graph shows the relationship between mycological cure rates and complete cure rates for the current onychomycosis drug including also the outcomes in our two phase three trials. The North American trial achieving 70% mycological cure and the European trial achieving 84% mycological cure. These data are world leading. It's a higher mycological cure rate than anyone would have expected, but it's not translated. into complete cure rates. And as you can see, all of our competitors, there is a clear linkage between a high mycological cure, that's said to be killing the fungus, and a normally looking nail, that is the complete cure, combination of mycological cure and clinical cure, where the physician shall not see any abnormalities of the nail surface. After dialogue with key opinion leaders, we have a clear explanation around why our mycological cure rate does not transform into the complete cure rate that we would expect. And that is driven by the vehicle in our product, where the vehicle enables large amounts of turbanafil to be transported through the nail and kill the fungus this transportation takes place by increasing the water level increasing the hydration of the nails a side effect from this increased hydration is that the nails will be temporary whitened by the increased water content in the nail. And once the water content has normalized, then the nail will return to normal. So then we won't see this whitening effect anymore. But that was the explanation for why we didn't get such a high complete cure rate as one would expect, given the high mycological cure rate. Because as you can see, reward-beating when it comes to actually killing the family. Basically, all of our topical competitors have a mycological cure rate between 30 and 50 percent. And the only one that is on par is really oral terbinophen. And there you have the side effect issues with the damage and so on. So a solution to this problem is to reduce the treatment period to two to three months instead of treating daily for a full year. By doing that, we're convinced that we will receive sufficient amounts of Ternophen through the nail. We have a few data points that support this, and one of them is BioXa. where we see that we get 40 times higher levels of turbanesine under the nail compared to oral treatment. So we know that we will get sufficient amounts of oral turbanesine to under the nail where it's needed. We also know that oral turbanesine that's treated for 14 months and that is sufficient to kill the fungi. And we do have So we know that three months will be sufficient. We also have actually quite a lot of data on the vehicle itself because MOB15 is actually built on the know-how from Kerasal Nail, our first generation product, and it's very similar. MOB15 is in essence 89% Kerasal Nail and 10% Tegna Thin in London. a few helping substances as well. So we've sold more than 15 million units of carotid nail on the market and we have very few side effects reports and even fewer when it comes to this whitening of the nail. The reason for that is that it's dose dependent. So you don't see it if you treat for two to three months and we also have clinical data on cattle and mares supporting that. And in reality, patients don't sleep one day for a full period of a year. We see that from our competitors, prescription information from our competitors as well, where all of the topical alternatives on the U.S. market, they're prescribed for one day for a full year. But if you look at the actual number of scripts per patient, we see that the actual number of scripts corresponds to an average treatment per patient for two to three months. And then people simply give up. So we think that this product, in practice, patients will use it exactly like we want them to use it. But to be able to do this claim fully, We, of course, need to show this in one additional phase three trial for the U.S. market. For Europe, we can go directly into registration based on the current data. So now I'm moving on to page eight, where we have this clear development path for MOT15, because now we have a clear path forward. where we're targeting submission in Europe during next year. And that would mean that we could get approval in Europe early 2023 and then launch together with our partner Bayer by the end of 2023. And we have chosen a registration route that could provide valuable data exclusivity for up to 10 years after the first market approval. And that is really what sets this timeline where we will find by the second half of 2021. And we will in parallel discuss with the FDA We will have an advice meeting after the pre-submission meetings have been completed with the regulatory authorities in the EU. But the assumption from our end is that one additional study is needed for registration in the U.S. And of course, that study showing this shorter treatment that I spoke about will of course not only strengthen the claims for the U.S., but the that could be used worldwide um switching to next slide on page nine um a bit more about this shorter dosing regimen um i may actually already have mentioned everything that is on this slide it's of course it's a huge benefit from from a patient perspective if you only have to treat for two to three months compared to having to treat one day for a full year. And that, of course, the fact that people do not treat for a full year, that affects compliance. So this is a competitive advantage, but going back to our real, our main competitive advantage, compared to all topical alternatives there are today, we have a much higher ability to kill the fungus. And for the oral, for all our, for vinofin, it's the same molecule, so we don't expect to be either better or worse on actually killing the fungus. But of course, we don't take the detour throughout the body. applied locally and therefore we avoid the taste issues that are linked to oral treatments yeah moving on to the financial part of the presentation slide 10. uh here you have the last four quarters and as as you can see we We have a cost base that has been reduced over these periods where we went from having the OTC business that was divested early 2019, and now we have a much slimmer organization to follow. And we will continue to work with this smaller organization, also divesting BUPI, Although the activity level going forward will increase when we're going into the registration phase. And if you look at the total assets row, you can see that our total assets have been consistent over time. It's roughly 22 million out of the total assets that are linked to BUPI. So that is the proportion that will be. um distributed to share owners and we don't expect any pnl effects uh by this distribution so it will only be the assets that will be informed and current cash is 30 million and of course with this ongoing right issue of 150 million there is no no going concern issues uh the With this rights issue, we will have the capabilities to conduct our activities as planned, and we will also terminate the conductable debt agreement, so going forward once this rights issue is finalized. And on page 11, to conclude the presentation, so we now have a clear path forward. where we believe that we can file for registration during next year, and that would enable a new launch by the end of 2023, based on our two pivotal phase 3 studies, in total more than 800 patients. What we will do in parallel is also to work with a third phase 3 study in the U.S. a phase three study that we feel has a very low risk profile and would enable superior claims with shorter treatment time and fully grasp the full potential of MOB15 on a global scale. We do have major partnerships in place with Bayer for Europe, with Taisho for Japan, Donkru in South Korea and Cypher in Canada. And we expect to work with this list and add more partners as we get closer to market as well. In total, these partnerships correspond to milestones of $120 million, and we will also get paid for delivered products. We have chosen to keep the U.S. rights by ourselves. It was a strategic decision that we did last time when we launched Careful Maine that turned out to be really successful. And we want to repeat that journey where we keep the U.S. rights. We will build our own market presence in the U.S. We will work with strong local partners elsewhere. Last time, we built this franchise and divested it for 1.4 billion Swedish kronas, and now we're targeting building something even bigger, and we look forward to doing that. I think I'll stop there, and I'm happy to open up for questions.

Thank you. If you do wish to ask a question, please press 01 on your telephone keyboard. If you wish to withdraw your question, you may do so by pressing 02 to cancel. There will now be a brief pause while questions are being registered. Just to remind everyone, if you would like to ask a question, please press 01 on your telephone keypad. You can withdraw your question at any time by pressing 02 to cancel. There will now be a further pause while any questions are being registered. And it seems we have no questions on the line. Please go ahead, Anna.

Thank you. Then I just want to thank everyone for listening. And of course, if you have additional questions, don't hesitate to reach out to either me or Mark. Thank you, everyone, and have a good day.

This now concludes our conference call. Thank you for attending. Participants, you may disconnect your lines.