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Nanexa AB (publ)
5/2/2024
It is time for a report interview with the drug delivery company Nanexa. They are the headquarters in Uppsala and with the world as their market, they have released their report for the first quarter of 2024. We will hear how the business is going and I say welcome to the CEO David Westberg and CFO Björn Svanström. Welcome.
Thank you.
How would you describe the first quarter?
It's been a quarter that has gone very fast, so to speak. We've had a lot to do. We work very hard i vårt samarbetsprojekt med Novo Nordisk och vi jobbar stenhårt också i vårt i vårt eget projekt Nex 22, en månadsprodukt av liraglutid GLP-1 för typ 2 diabetesbehandling och vi har ett antal partnerprojekt som vi lägger mycket tid på också. Det är de tre projekten som vi fokuserar på kan vi säga. So it has been a good start, I think. We will come to a comment about a delay on the 22th, but we can take it then.
You have improved the result considerably. Björn, what does this have to do with it?
It's a combination of both revenue, where we have good activity in the partner project, as I said, and that makes us work up revenue in them. And then we also have savings. We have been very careful with the costs. As we communicated before the change of year, we are working very actively to keep up with the costs to be able to survive as long as possible with the money we have. So it's a combination of both.
That's always good. And with that, we're going to let in the first of the three working analysts. We will start with Alexander Krämer from ABG Sundahl Collier. Please go ahead Alexander with your questions.
Yes, hello and first of all thank you for taking my questions. My first question actually revolves around the next 22 as we learned a few weeks ago, it's a bit delayed. Could you provide more color on the path forward for the next 22 phase one study in 2024? Once it's up and running, how long do you expect the recruitment to take and the different steps forward?
That's definitely a relevant question. Even though we have a delay from the approval from the German authorities, we expect to have an approval from them during June, that's the latest. and get started with the first dosing of the patient right after that there is a slight delay but we have everything prepared to start it as soon as we as we get an approval and as i mentioned that is what we recently have have reason to expect during at latest i'll say june So counting on that we will start dosing as I mentioned and this is a dose escalation study and we expect to have results from several of those dose escalations during second half of this year. So we will be able to get very much relevant data from the study during 2024 and that we believe is quite important. Then we will from those data decide how to proceed going into 2025 whether we go into and use phase 1b study directly or if we do first maybe a preclinical study again to tweak the formulation a bit and then proceed into sort of a final PK study before entering the or the preparation actually for out-licensing, I'd say we'll start already from when we have the data from this study. But going forward, we don't want to get any lags, I should say, in the development of the drugs. So we'll plan going forward. And then most likely the phase three study will be something that will be done together with a partner. That is how we foresee it.
Okay, very interesting. And I have two more questions. One question is about, in the report you have mentioned that you have high hopes for one of the collaborations for one of the partner projects. And could you elaborate here on what type of data you have generated so far and also maybe which kind of molecule this project concerns? Because in the past you have talked about small molecules and also the opportunity in biologics.
So I might disappoint you in how much I can say, but because that is, of course, regulated by the agreement we have with the company. But I can say it's one of the larger companies in the world that we're working together with. It's a small molecule. I can mention that as well. And it has an application that's slightly different than just a regular sub-Q administration. And the data they have seen or we have seen together in the evaluation is very good PK data. And they've actually also looked at an efficacy parameter and seen that that works very well as well. But I have a hard time going into exactly what parameter that is. So I'll leave it there. And we still have a good process with that company. But if and when a continuation of this will occur, it is hard for me to say at the moment.
Okay, very interesting as well. And my last question concerns actually the financial part. So maybe it is maybe for Bjorn. So you wrote also in the report that your financial runaway will last for another 12 months from the submission of the report. So basically from now. And my question would be if this guidance includes or excludes anticipated revenues from the ongoing partner projects. So from the Novo project and or also other projects.
Okay, we include the evaluation projects that we're doing with Novo and this other customer and others as well going forward. No major deal included in that scenario.
Okay, great. Thank you. Then I'm looking forward to the CMD next week to hear some updates and thank you very much for today. All right.
Thank you, Alexander Krämer. I'll ask one more question before we let the next analyst in. New discussions are taking place with new partner projects. In that case, the most interesting question is, what are your capabilities to handle them?
That is also a very good question. There are discussions about at least two or three new feasibility studies with new partners that we have not worked with before, but which are also on the list of the 15 largest pharmaceutical companies in the world. Do we have the resources to have them? Yes, I would like to say that we have. That said, we will still focus hard on the NEXT22 and NOVA Nordisk project and the other partner projects we are talking about. But there is always room for more to do. We will have resources for that.
Thank you. With that, it is time to let in Johan Widmark, who is an analyst at Emergers.
Here you go with your questions, Johan. Thank you very much. Hi. I was going to start by asking about these questions and clarifications regarding NEXT22. Can you tell us a little more about what kind of questions it has been about?
Absolutely, I can go into that briefly. In a normal examination process, there are two parts that the authority examines. Part one is about the clinical study itself, how it is set up and the information for the patients who will be involved and so on. And then there is one part that is about the product itself that is to be tested. And in this first round, when we sent in in December, we got approved for on the clinical part, part two, as it is called. And in part one, there were a number of clarifications that the researcher wanted to have on a number of issues, and we sent in answers to them, and there were no difficult questions at all. But the researcher sent in another four questions Minor questions, I would say. But for some reason, as we understand, it has to do with the new IT system that the authorities have been working on for half a year. So the portal was to send in the answers, even if they were clear. It didn't work. There was no way to send them in. Which was quite frustrating and probably not what the investigator had in mind either, because he or she wanted to get an answer to the question. But it didn't work, so for formal reasons we had to send in the application completely and completely again. So that's what it looks like. And now we are waiting for approval from the new application and we expect no new questions on the clinical part. It was approved earlier. On the product part, there were a number of new questions. It was a bit surprising that we got new questions. We have sent in answers to those questions. The authorities now have a time limit to go through our answers and approve them. We see in front of us that they will most likely do that. I hope that was the answer to your question. Yes, thank you.
Then you also write about the partner projects, that the freedom profiles achieve the desired profile and that the effect data also has a satisfactory result. After this type of failure in a partner project, Can you describe in general, I understand that it is different for different companies and partners, but what is the natural next step here? What is it that makes these projects go or not go further? What happens then?
In discussions or, shall we say, evaluations in these big companies and In some cases, the next step is to expand the feasibility agreement with another, smaller study before you want to make a bigger decision. In other cases, it goes directly to some kind of decision. The natural continuation there is that there will be either a larger development agreement or that you go all the way to a license agreement or a combination of those. Then these decision processes are, as you know, it is complicated and the company has, what is it called, Yes, long processes often require this type of decision. So you have to have some respect for that, unfortunately. But the natural way is that there will be a larger development agreement. Alternatively, a license agreement immediately. Okay.
And you have had these partner projects going for a while and have probably managed to get rid of a couple that have come to an end and so on. And are there any cases where a larger company, that is, you have had a project with a partner that has not become anything, but that the same company has come back with another project and initiated a new project with you?
Absolutely, there have been situations where they have tested a substance, in some cases it is a model substance to begin with, and then you want to go over and test a sharp substance. Sometimes they come with two different substances that they want to test directly, so it's a bit different.
So you can say that there have been other things with the project than just the fact that Pharmacell did not fit?
Yes, absolutely. As we have said, I will try to get into that a little more now on Tuesday when we have this capital market day where I hope we get some time to be able to develop this type of questions. So we have, I would say, in all evaluations we have carried out, we have fulfilled the requirements that that the company we work with has set. Then you have to remember that many times we are competitive and they evaluate many different, or several different, it doesn't have to be many, but maybe a couple of different systems. And in some cases, the strategic priorities within these companies are changed. I would say that Even though we are getting closer and closer, so far there has not been any real development agreement. It does not depend on Nanexa and Pharmacels properties, but rather on internal strategic decisions in these companies.
One last question regarding the capital market day, which was announced relatively early on, less than ten days, maybe a week. Can you just tell us something about how the thoughts have gone here and what we have to look forward to on the capital market day?
Absolutely. Actually, we feel that there is a lot to tell that may not reach the height of a press release. A lot has happened in Annexa in the last two or three years, where we have achieved great success, as I now describe in these agreements and evaluations that we have made with partner projects and partner companies. So we want to make sure that during a longer period of time we can go into and describe what has been done and how we see the paths forward and what opportunities we have. We were exposed by a neutral consulting company at a conference in the US last year as one of three very interesting drug delivery technologies. and companies and technology to keep an eye on. And there is a reason for that. And maybe we can expand that reason a little bit on the capital market day. So actually, I also want to go in a little more on NEX 18 and NEX 20 and describe the results from there. Our decision now is to focus on these others, NEX 22 and Novo Nordisk, and why we have made that decision. The possibility to present a little longer where we are today and also the possibility for more questions from the audience.
Okay, we look forward to that. Thank you very much.
Thank you very much, Johan Widmark, Emergers. And with that, it's time to let in the third analyst, who is RedEyes' Fredrik Thor. Please go ahead with your questions, Fredrik.
Yes, thank you. Johan, I had a question, it came in quite recently, about Amgen, which has announced a drug, or has advanced a drug against Obesitas. Can you perhaps comment on that a little, and in general, how you see It increases the interest for pharmaceutical companies to address obesity and could affect the potential position of Nexos.
Amgen is one of the companies that invests in this. There are many more that do. This market is so gigantic. Many will try to enter this market in different ways. Amgen has a project that targets a one-month product, which is interesting. From there, it is also a clear sign that it is important to have a longer profile, a more infrequent treatment. This is something that patients are asking for, it is a medical need out there. That project, I'm not going to talk badly about the project, because I think others should do that, but I can just mention that it is an antibody. with some GLP-1s attached to the antibody. It is a rather complex molecule and a substance that will need to be given very high doses to be able to cope with this weight loss that corresponds to what VEGOVI and others have. So yes, they put a lot of effort into it. It is possible that they will succeed. I don't know, but I think it will be a very expensive product and that it is a very high dose will also cause a lot of problems for them, I think, in the future.
So Pharmacel says
Pharmacel stands out very well. We take already existing substances and make them for a one-month trial. In our NEXT22 case, it is liraglutide. When we have shown that we can make a one-month trial on liraglutide, the market opens up as well. so that we can make a one-month project out of other GLP-1 or GLP-1 GIP substances. And there are a number that are given either daily or weekly today, where the potential for a one-month project is very high. So the NEXT22 project is really a door opener for that type of project. It does not take away the value of the project itself, but it increases the potential that you can use this technology as a platform, not only for the substances that are on the market today, but there are many in the pipeline, such as GLP-1, GLP-1 GIP and others. You can look at any company, both Lenovo and Lilly and Amgen and other companies have a number of substances like this. We think that we offer a very simple way to create a platform for the company that one day chooses to sign a license from us for Pharmacel, then this will be a good journey, we think.
My last question is, I was thinking about the fact that NEX 18 and NEX 20 are being paused or are not developed so much right now. From a competitive perspective, how does that affect the fact that they might be paused for two years? Is it something that affects how competitive they will be? Thank you, Fredrik.
That's a good question. I would say that it doesn't affect much. Of course, time for the market is always very important. But it is especially important when you come up with a completely new mechanism, a completely new molecule that is going to break the ground for what already exists on the market. And that is not an X18 or an X20, but it is an improvement of that substance, that product. that already exist today as backbone treatment, both for myelodysplastic syndrome and for MDS. So these new substances that come out, they are documented with azacetidine for the NEX18 case and lenalidomide for the NEX20 case as backbone treatment. And so they will be approved in their label. product label in the US, if you look at it, it will say that this should be taken as an add-on treatment with lenalidomide or with azacetidine. So that the market will remain and it will come and so there is no train that we miss in this way, it really is not.
Thank you, that was my questions.
Thank you very much, Fredrik Thor on Redeye. With that, we will raise some of the initial questions that have come in during the broadcast. Let's start with this one, I turn to Björn. Last year at this time, it was said that the company was financed over the year and a bit into 2024. Now you are a bit into 2025. If I heard correctly, what is it that speaks for that the market cannot expect an emission given that the financial positions are more or less the same?
Yes, absolutely. We are Q2 2025. We work with the partner projects and the possibility to realize significant revenues through them. That is the primary goal. If that does not succeed, then we need more money. But there is a lot ahead. You have to be tactful and see how the situation is on that market in that case. When it can work and when it fits from a business perspective and try to time that. But right now the focus is on the operational, on the partner project and to try to realize significant revenues there.
That is the explanation. Thank you for that. Then we take this question. When can we expect to know about the agreement that was signed, Q4 2022, which has not been disclosed due to the agreement? When is it expected to be finished or come so far that you can communicate or comment on it?
Now I have to think, what did you say? Repeat the question.
The agreement that was signed in Q4 2022, which was not commented on due to agreement, when do you think you can do that? Good question.
It is very difficult to say the times. I would like to avoid saying the times, because they will be misinterpreted anyway. I understand the question, but I actually fit it, because it comes when it comes. In all our projects, we approach that point when we When we get contracts. And then it will be very good.
Yes, exactly. When we have such a substantial contract, then we have to, for market reasons, also communicate more about the counterpart and so on, which company it is about. But before that, it is very difficult to get through it with these larger companies.
Yes, I understand. One more question that might lead to a silly answer. In the presentation of the Q3 report, you mentioned, David, that there were a few more of the Novo Nordisk and AstraZeneca that are doing really well with a lot of interesting data. And then you said that you hoped to be able to return with information at the end of the year or at the beginning of next year, that is, now. Since we haven't heard anything about this, we're wondering what's going on.
Yes, absolutely. It can be linked back to the answer I mentioned earlier. We have a partner project where we've got both great PK results and great effect results in this case. We are still working in that process. As I have said a few times, it is impossible for a small company to control how big companies make their decisions. We have delivered very good results to them and made sure that they have a very good decision base. That much I can say. Then we have to wait until they make a decision.
We equip ourselves with patience.
Yes, sometimes you have to do that, unfortunately.
You have previously said that the result for NEXT 22 has bearing on your project with Novo Nordisk. How is the delay of NEXT 22 and possible final results in cooperation with Novo Nordisk affected?
I would say that it does not affect at all. We will get results from this study within the time frame for what Novo Nordisk has to evaluate our technology, so it does not affect at all.
Thank you for that. And also a question about NEX 22. Both NEX 18 and 20 have in case 1 shown local skin irritation. How do you avoid that in NEX 22?
That is also a good question that I thought we would come in on a little bit on the capital market day and describe. NEX 22 is a much more potent substance and the dose that is needed for a one-month deposit is therefore also extremely much lower than for NEX 18 and NEX 20. That is the simple answer, part of the answer, and the other part is that it is also a an API that has been given subcutaneously for many, many years and with very good results. So there is quite a lot of safety data on that substance. If you look at Azaceterin, we knew from the beginning that it is a highly irritating substance, but we still made a judgment that it would work Now we ran into some injection site reactions that caused us to stop the project or the study and have communicated a possible way forward with a solution to this problem and I will talk a little more about it then also on the day of the capital market. So there we will be able to handle it and we will be able to handle it also for NEXT20 when we start those projects again. But we have good conditions to manage it. There will always be some type of injection site reaction when you work with long acting. It doesn't matter what system you have. There will always be a small one, but it's important that it's acceptable. And we assess that it will be.
Thank you. We end with ordinary questions here. Question then, what have we investors to look forward to during the current quarter and H2?
There is a lot of focus on this, as I told you earlier. Next 22, that we get approval to run the study, that we get started with the study. We will see if we can come up with results in the fall. We will have to work on that. So there are a lot of positive results to communicate. We have good expectations for contracts that I hope we can deliver during this year. New valuation agreements. As far as Novo Nordisk is concerned, I do not think we will be able to communicate much, unfortunately. But I am very sure that this collaboration and this project will go very gallantly during this year. We have a very close relationship and close collaboration with the development group that we work with at Novo Nordisk. I see all the possibilities that it will succeed.
Thank you very much. Then we look forward to it and we look forward to the capital market day. Thank you David and Björn for your contribution. Thank you. Thank you to all of you who have watched and see how the development has gone in the second quarter here in about three months. Welcome then.