Oncopeptides AB (publ)

Hi everyone and welcome to this presentation of our report for the first quarter of 2024. This is our standard disclaimer. With me I have Henrik Bergentoft who will give a financial update. Before that I will go over some key points for the first quarter, additionally some events in the second quarter. This given that we are reporting late in the spring due to our recent rights issue. I will then come back with an update of our European commercialization process and next step value drivers. Starting off with some key highlights, we have already communicated the revenues for the first quarter, which arrived at 5.1 million SEK. This is comparable to the revenue in Q4 of last year. The sales in the first quarter were influenced by seasonal effects, which we anticipated as in line with the development for the full late stage multiple myeloma market this season. We have communicated that we expect an acceleration of sales in 2024 to reach profitability in 2026, which is still valid guidance. During the quarter, we reached a major milestone in our market access efforts as we received a positive opinion from the Spanish Pricing Authority, Post the period, we received the final confirmation for national reimbursement. And since May 1st, PEPAXTI has been available in the country. And we have even seen our first order from a Spanish hospital, which is a proof of the high unmet need in Spain for PEPAXTI. I will come back to Spain and our next steps there in a short while. Another milestone I wanted to highlight is how we have taken a step outside of Europe with our partnership with Vector Pharma for the MENA region. Before I hand over to Henrik, here is a reminder of all key events of the first quarter and in addition some in the second quarter. One significant event that Henrik will speak to in a few minutes is the rights issue that we announced at the end of Q1 and which was recently finalized. Let me take this opportunity to thank all of our shareholders for your support throughout the process. I would also like to welcome any new shareholders that might be listening in. And with that, I would like to hand over to Henrik for a financial update.

So thank you, Sofia, and move to the next slide. We're starting off with an overview of the profit and loss statement for the first quarter compared to the same period last year. where I want to point your attention to total sales and total cost, both metrics pointing in the right direction, meaning that we are showing sales increase compared to last year, and we are doing so with cost control, demonstrated by the fact that we see a lower total cost compared to last year. In summary, this quarter very well summarizes our strategic plans onwards, with sales growth combined with cost control. Now, if we move to the next slide, we take a closer look at our operating expenses. Research and development costs amounted to 28 million SEK in the quarter, down from 30 million SEK last year. No clinical studies are currently ongoing, and where the phase three study ocean was completed during the third quarter of 2023. Also, during the third quarter of 2023, refunds of 43.5 million SEK were received regarding final settlements for complete study, which positively affected the cost during 2023. Corresponding refunds will not occur during 2024. Marketing and sales cost amounted to 28 million SEK compared to 23 million SEK last year. The increased cost relates to the ongoing commercialization activities in Europe, which Sofia will describe further later in the presentation. Administrative cost during the quarter decreased from last year to 18 million SEK compared to 22 million SEK last year. Combined, this gives us a cash flow from operating activities of minus 67 million SEK in the quarter. From cost and cash flow, let's move to the next slide for our liquidity position. And our cash position at the end of the first quarter was 105 million SEK compared to 178 million SEK by the end of 2023. Of course, very important to point out here is that the rights issue now completed in May 2024 amounted to 340 million SEK before issue cost will increase our liquidity position during the second quarter. And as communicated, the liquidity position after the rights issue is estimated to last until we are cash flow positive at the end of 2026. And with regards to the rights issue, let's move to the next slide. And the completion of the rights issue was announced separately on May 6th. And here's a summary of the outcome of that. So in total, we raised 340 million SEK before issue cost. These funds will mainly be used to support the commercialization of the tax in Europe until the company is profitable towards the end of 2026. Also, to progress pipeline assets and partnerships discussions in the rest of the world. The subscription rate amounted to 94%, where we could see a strong commitment from a couple of our main shareholders, among others, the two different health cap funds and also the Red Mile Group, and also from the board of directors and company management. The updated ownership after the rights issue will be published a couple of days after the end of May 31st, meaning next week. Also, as a direct consequence of the rights issue, as press released separately this morning, The increased number of shares requires an adjustment to the warrants awarded to the European Investment Bank as is part of our current loan facility. That was all on the financial now, so back to you again, Sofia.

Thank you, Henrik. I will now give an update on our European commercialization followed by an update on our next step value drivers, meaning the geographic expansion for PEPAXTI to the rest of the world and our pipeline. First, a recap of some of the key investor highlights of our European commercialization. We have a fully approved drug for treatment of an incurable disease that provides an expanding market opportunity valued at 1.5 billion SEK. Since our last quarterly update, we have enhanced our efforts in Austria, we have gained access to Spain, adding further potential and diversity to our revenue stream. And we are now fully financed to reach our profitability goals by the end of 2026. To understand the future, let me remind you briefly of the past. 2023 was the year when we started to gain clinical experience in Germany and enter the partnership for Greece. We sold at low volumes and saw a positive trend quarter by quarter with close to 90% growth between the third and fourth quarter. Based on our past, we had to launch while we got dressed. At the end of the year, we had, however, managed to recruit the full German team. We negotiated the price successfully in Germany. We started to gain clinical experience, raise awareness, as well as initiating some critical activities, such as working to launch a real-world study. Even though Germany is a market that is taking time to unlock, it serves as a good potential, and we are confident we will be able to capture that over time. In 2024, we expect an acceleration of European sales by growing in Germany and adding Spain to our revenue stream. The fact that we have managed to agree on a price that reflects our innovation in these two major markets and that we are managing to attract talent with both experience and network within our field is creating a solid foundation for this acceleration. When PEPAXI is used, we get the same feedback from all countries. The clinical experience is in general positive, which is continuously strengthening the position for papaxi as an important treatment option for late-stage multiple myeloma patients. This may sound given, but it is not always the case, as many drugs come along with cumbersome administration schedules, a lot of side effects, and reduced quality of life. One of the focus multiple myeloma congresses, COMI, just took place in Paris. And we can see a great shift in how PEPAXTI is positioned by key opinion leaders and how the interest is increased for the full platform of peptide-dried conjugates due to the unmet need for PEPAXTI's combination of efficacy, manageable tolerability and not least maintained quality of life. There is a similar unmet need in other geographies, which is why we see interest from partners around the world to take PEPAXTI beyond Europe. we have taken an important step to enter a partnership agreement with a member company of the World Orphan Drug Alliance, Vector Pharma. This partnership will allow us to provide patients in the Middle East and North Africa with PEPAXTI on named patient sales basis. If we look at the launch sequence in Europe, let me remind you that while we are of course working to pull through all four phases, it is the first two launch phases that will contribute to our profitability goal. I will come back to a more updated look at where we are in the various countries. The business model for our European case is based on a global approach with strong support by the headquarter here in Stockholm and only adding local resource needed without duplicating any efforts in the headquarter and in the countries. In addition, we have a low cost of goods for Papaxi, which concludes the opportunity for an effective and profitable business. The EBITDA margin on a country level during peak sales, we estimate above 50% and we estimate to reach break-even within two years in each country. These are the different steps in the market access process. And as a reminder, the timelines and in particular the review and negotiation phases are country-specific and at large controlled by payers. If we look at where we are in the various countries, we have added Austria to the countries with healthcare access. And we have previously been able to sell in Austria, but the inclusion in hospital list, which we achieved during the first quarter, is now enabling for HCPs to prescribe. Due to this important step, we have since April an MSL working for oncopeptides focused on Austria. We have also started price negotiations in Norway and just recently we took the first step in those negotiations by making our first offer for a price. This offer was rejected by the Norwegian payer body. It is common practice that payers reject the first offer and this means that we will have to require a new round of negotiations before a new decision can be made. While it might look dramatic sometimes looking at various government summaries of meetings, this is a completely normal part of the market access process. And we commonly do not get a yes, but rather no at first. This doesn't mean that we are ending the process in the country. The negotiation is sometimes only a dialogue between the company and the payer and sometimes made official, which triggers questions about what we intend to do. And I want to emphasize to all of you that should we decide to move out of a country, we will ensure to communicate that clearly. As for France, we expect to submit the value dossier and initiate the cost-effectiveness benefit review followed by a discussion in the next few days. Regarding Germany and Greece, we continue to see great progress with continuous positive feedback from the field and our confidence and focus remained unchanged for these markets. The biggest step taken is of course Spain and I wish to give you a better understanding of where we stand and are heading towards. We have reached market access in Spain in five months and to put that into context, The average approval time in life science in Europe in Spain reported is 611 days. That is more than 20 months. And our competitors in the same position as us took up to 24 months to conclude. This means that we have achieved national reimbursement in record time. And I think it speaks to the competence and our strategy and our ability to succeed with concluding price negotiations and market access processes across Europe. To add to that, PEPAXTI has been available in Spain for doctors in urgent need of the drug since May 1st. And even though we do not have regional access, we are already seeing the first patient treated just weeks later. While we are glad to see the drug fulfilling this large unmet medical need and that we can already through special procedures help some patients, we will expect to see more material sales taking place the second half of this year as we are working to achieve regional access. Spain is a market with high potential for oncopeptides. We have more than 1500 patients in our target population. We can compare this to Germany with a target population of around 2,500 patients. There are two important differences to point out between Germany and Spain. Germany is a more scattered market with thousands of customers prescribing drugs to multiple myeloma patients compared to hundreds of customers in Spain, which in that sense makes Spain a more centralized market to work with. From PEPAXTI perspective, the great difference is the clinical experience with more than 100 patients treated in Spain in our clinical development program and 16 sites having gained experience through our studies. This compared to zero in Germany at launch. I was recently in Spain to meet with the full team and I also met with media. I am proud to see the strong team we managed to recruit how far they have come already in preparing the launch, and I am truly excited to see the interest from media in our company and drug. Looking forward, we'll continue to build out the team with more commercial competence and ensure we continue to build onto the robust clinical experience we already have in Spain. This by real-world data generation and advancing our science in partnership through investigator-initiated trials that are in fact already running. We will of course also spend time attending and presenting at congresses, an important way to build further awareness and understanding of papaxity among Spanish physicians. The multiple myeloma treatment landscape is rapidly evolving with different types of immunotherapies being launched. The development of the landscape is confirming the need for a drug like papaxity in the later lines. All of our competitors are focused on moving towards earlier lines of treatment. And for example, CAR-Ts are now already approved in this setting. This due to better efficacy and tolerability earlier on. This means that late stage patients who commonly have an already exhausted immune system and are in need of a different treatment approach, we have the opportunity to take a strong position with PEPAX-T. Finally, I want to spend a few minutes on our next-step value drivers. We continue to see China and Japan as our most viable non-EU markets, and we have also added South Korea to our prioritized Asian markets. This is due to that we already have patients studied in South Korea, which we hope can facilitate a shorter regulatory path than in other Asian countries. Looking at the rest of the world opportunities, this map illustrates both the potential in new markets assessed outside of Europe through partnership in yellow, and also our capability to make these opportunities materialize. As we have recently done in Middle East and North African region, I am looking forward to see more countries going yellow and orange on this map as we progress. Having more countries where we sell pepaxti not only adds revenue, but it also diversifies our revenue stream and make us even more solid. When we have announced the rice issue and explained where we are planning to focus our efforts, we have been very clear that our European commercialization is the focus, but equally clear that we plan to keep progressing our pipeline to ensure that Oncopeptides remains a full biotech company, providing shareholder value both in the present and in the future. Our short-term efforts on advancing our spike platform towards an investigational new drug application is going well and continues and we are currently in the process of selecting a drug candidate. With that I would like to say thank you to everyone for listening and hand over to the moderator for any questions.