Oncopeptides AB (publ)

Welcome to this presentation of our report for the second quarter of 2024. This is our standard disclaimer. With me, I have Henrik Bergentoft, who will give a financial update. I will then come back to an update of our European commercialization process and our next step value drivers. But first, starting off with some key highlights. I am happy to announce that the revenue for the second quarter increased from 5.1 million SEK last quarter to 8.2 million SEK the second quarter. This is an increase of 60% compared to the first quarter. As June was our best month on record, I expect this trajectory to continue into Q3 and beyond. PEPAXTI has now been available in Spain since May the 1st, and during the same month, we announced the first sale of the drug. The early interest in PEPAXTI from Spanish doctors confirms that the positive clinical experience from our clinical trials is supporting the understanding of how PEPAXTI can help patients. And I look forward to see sales pick up once we have fully secured regional access the second half of this year. We have progressed our market access efforts in France by submitting a dossier and in parallel, the market access work continues in other markets. I will get back to our European plan and more details in a short while. During the second quarter, we announced that the first drug candidate based on the company's unique small polypeptide-based innate killer engagers, the Spike platform has been selected. as well as the inclusion of the first patient in our German real-world study aimed at generating important data in Germany, which will support the understanding of how real-world patients are treated and what difference Tepaxi can make for these patients. Finally, I want to mention that we recently expanded our Voda Alliance partnership by signing an agreement with Veldpharma GmbH for named patient sales in Africa with focus on South Africa. I will talk a bit more about that soon. But before that, let us focus on the financials. Germany is our first launch market and major contributor to the first year growth in sales of Papaxity. This graph shows the growth up until end of Q2. To increase sales with double digit percentages quarter over quarter starting at low levels do require hard work, but it's what we all expect. To continue over time is however not given in a crowded market like the multiple myeloma market, not least in Germany where physicians have access to all drugs either through commercial drug or through clinical trials. Sales data that we buy confirms that some of our competitors are struggling to grow at all, which makes our growth encouraging and is clearly based on that we are focused on a different patient population with a different product bringing value to patients. We still have a long way to go to profitability in 2026, but I am happy to remain on track. We continue to focus on penetrating the scattered German market where key to success is to generate a positive clinical experience, which we have been doing and are focused on continuing doing. We do not only get positive feedback from physicians, But the fact that close to 70% of patients are getting a second cycle demonstrates the value of capacity. And in addition, number of patients going on three cycles or more have doubled between the two quarters. Regarding customers, we are encouraged to see that we have a good mix of new customers ordering as well as old customers coming back. It's also important to note that we have doubled the number of vials ordered by university hospital in the second quarter versus the first quarter. This is a sign of the increased KOL support that we need in Germany, as KOLs do need experience to be able to recommend Papaxi to office-based physicians. We have a large and promising market in Spain, where we have now recruited a full team, and we are working to secure regional access. I'm happy to share that we are tracking according to our plans. PEPAXTI is well positioned in the patient population that is dominating the real world and that is the elderly and more difficult to treat patients. And due to this, it's an important milestone for us to have the first patient recruited in our very first study focused on our indicated population. HARBER is the name of the real-world study in Germany that we soon get the sister study Lagoon in Spain as we aim to capture the real world experience in all large markets. To support our journey to become profitable in 2026, we of course do need to add sales for more markets and I will get back to our progress in detail in a short while. With that, I would like to hand over to Henrik for a financial update.

Thank you so much, Sofia. So starting off with an overview of the profit and loss statement for the second quarter compared to the same period last year. Firstly, I want to highlight with regards to sales that last year includes reversal of a return reserve where underlying sales for the second quarter 2023 amounted to 1.9 million SEK compared to the 8.2 million SEK for the second quarter of 2024. That said, I want to point your attention to both total underlying sales and total cost, both metrics pointing in the right direction, meaning that we are showing a significant underlying sales increase compared to last year and also to prior quarter one. 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 plan of sales growth with cost control. Moving to the next slide, we take a closer look at our operating expenses. Our research and development costs amounted to 28 million SEK compared to 38 last year. Currently, there are no clinical studies ongoing, where the phase three study ocean was completed during the third quarter of 2023. Also during the third quarter of 2023, refunds of 44 million SEC were received regarding final settlements for completed studies, which positively affected the costs. Corresponding refunds will not occur during 2024. Our marketing and sales cost increased to 36 million SEK compared to 33 for the quarter last year. The increased cost relates to our ongoing commercialization activities in Europe, which Sofia will describe further in more detail in the presentation. Our administrative costs demonstrate our cost control ambitions, showing a decrease from last year 19 million SEK to 16 million SEK this quarter. And if we move on to the next slide, we will take a look at our liquidity position. So our cash position at the end of the second quarter was 383 million SEK. compared to 178 by the end of 2023 and 105 at the end of the first quarter this year. I want to highlight that our cash position includes a positive timing effect of in and outgoing VAT payments of 105 million SEK, with a corresponding negative effect in the coming third quarter. The rights issue was completed by May, and that net after rights issue cost infused 270 million SEK to our liquidity position. And as Sofia said, our current liquidity position is estimated to last until we reach cash flow positive by the end of 2026. And by that, I hand back to you again, Sofia.

Thank you, Henrik. I will now provide an update on our European commercialization, followed by an update of our next step value drivers, meaning our geographic expansion for Papaxi to the rest of the world and our pipeline progress. We do have many new shareholders following our rights issue, which is why I wish to repeat some of the basic facts about the European commercialization case. It's based on that Oncopeptide has a fully approved drug for a treatment of an incurable disease that provides an expanding market opportunity valued at 1.5 billion SEK. Our focus right now is growing sales in the markets where we have secured market access and adding diversity to our revenue stream by unlocking new markets and finding partnerships for our geographic expansion. These efforts are now fully financed for us to reach our profitability goal by the end of 2026. A short reminder of our business model, which is designed to allow for maximum cost effectiveness, providing high returns due to high margins and low cost of sold goods. Now, let's take a look at our launch progress in Europe. Our ambition remains to launch as fast as possible with a price reflecting our innovation, providing patient and shareholder value. In our profitability plan, we have counted on sales from Germany, Austria, Spain, Italy, Netherlands, and some in the Nordic. These are the different steps in the market access process. And let me remind you of that the timelines for the review and negotiation phases are country specific and at large controlled by payers. Our last quarterly update was held relatively recently and due to our belated Q1 report and since then we have seen holiday periods in Europe. We have continued our dialogue with payers on Ireland, Norway and in Italy. We have one major development to report, which is that we have submitted a value dossier in France, which is currently being reviewed by the payer. This review will conclude a cost effectiveness and benefit assessment and takes approximately six months. France is in our third launch phase due to how difficult it is to gain a reasonable price in France, but given the size and potential of the market and given the support and feedback we have gained from key experts on the unmet need for our medicine, we will do all we can to give French patients access to Pepaxity. As France is not part of our profitability plan, unlocking France ahead of 2026 would be an upside. In addition to Germany and Spain, the largest markets where we are currently selling, we also do see sales in Greece and Austria, which is following the logic of other markets. KOL support and positive clinical experience is generating demand. The multiple myeloma treatment landscape is rapidly evolving. In particular, more immunotherapies are being launched with focus on earlier lines of treatment, which is starting to get crowded. Just recently, one big pharma company announced that they are shutting down the development of their bite specific for multiple myeloma. And this is a sign of that the competition in this space is fierce. Unmet medical need in later lines for other mode of actions, however, remains due to immune exhaustion, which increase with increased treatment success in earlier lines. The patient population in the later lines is growing. And PEPAXTI with its different mode of action can take a strong position and make a big difference for these patients. Before we move to question and answers, I would also like to talk about our next step value drivers. And we have some exciting developments both on our partnership side as well as pipeline progress. As I mentioned in the introduction, we have just recently signed an agreement with a Voda Alliance partner covering Africa. This is a partner that is an expert on named patient sales in rare disease and very well connected within the country of multiple myeloma. Our partnership with Veldpharma, GmbH, we have the potential to request, to on request sell Pepaxi in the entire sub-Saharan Africa, but the focus and potential is in South Africa. We are working with named patient sales partnerships for a couple of reasons. First, we can expect to reach patients and see sales from between 6 to 12 months. It may sound long, but it's far shorter than if we would go for regulatory approval and regular market access. Second, the nature of name patient sales will tell us if it's worthwhile to invest in further commercialization, and we can pressure test the market through these partnerships without jeopardizing our focus from our core revenue stream, which is Europe. In markets where we rather believe in a good return of investment to immediately go for regulatory approval, we are exploring other types of partnerships. And during the second quarter, we have advanced our discussion with partners and regulators in additional markets with focus on Japan, China, and South Korea, which we believe remains the most promising. And we hope to be able to share news on progress in some of those in the near future. Let me spend some time on our pipeline. As you know, we have two technology platforms, the Spike platform and the PDC platform. During the second quarter, we selected our first candidate drug, OPSP1, from the Spike platform, which I wish to focus on now. Before I speak more about our construct, let's have a brief look at how natural killer cell engagement can be different from T-cell therapy. Immunotherapy means that we are utilizing the immune system to fight cancer and T-cell therapy is clinically proven and launched across many different tumor types, known to be very effective, but with the challenge and risk of severe side effects that needs to be carefully monitored and managed. To put it simple, this is due to two powerful T-cell activations. NK cell therapy is not yet clinically proven and natural killer cells are part of the immune system that is less easy to activate, which is also why there are mixed opinions if NK cell engagement will work as a therapeutic approach. What everyone agrees to is that if we manage to develop a drug with similar anti-tumor activity that is just as effective as T cell therapy, that medicine will most likely be better tolerated and easier to manage, which would be a huge patient and medical system benefit. The spike platform and OPSP1 has the unique property of being a small construct as it's built on the affibody technology. As you can see on this slide, it's a fraction of an antibody size wise. So why is that good? Well, We get the short distance between the spike binding interface and their targets, which put the natural killer cell in close contact with the tumor cell. This should be an advantage over antibodies as proximity is avidity, which translates into activity. Furthermore, it allows better tissue distribution benefit fitting solid tumor applicability, which has been seen to be a barrier with NK cells. We also see large tissue distribution, which again is an advantage over antibodies. And this enables pharmacokinetic properties that allows the immune systems to rest, counteracting immune exhaustion that is common and problematic with T cell therapy. We have today shown efficacy in the preclinical setting and having chosen our first candidate drug, we will now continue to progress our efforts in the preclinic with OPSP1 towards clinic. When we will be able to take the step into the clinic depends on a few factors, including the time it takes to finish the preclinical work, including tox studies and further chemistry manufacturing and control work on OPSP1. In addition, we need to secure financing for the first clinical study which is not part of our current financial plan and we are looking into different options including partnerships. This is a prioritized area for us and we will keep you informed as our plans are advancing. We are truly excited to progress our pipeline for the future. Our major focus as an organization here and now is however our European commercialization of PEPAXTI which will drive us towards becoming a profitable company towards the end of 2026. And with that, I would like to say thank you to everyone for listening and hand over to the moderator for any questions.