Oncopeptides AB (publ)

Welcome to Oncopeptide's Q2 Earnings Call for 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 Sophia Higas and CFO Henrik Bergentoft. Please go ahead.

Hi everyone and welcome to the presentation of Oncopeptides report for the second quarter of 2025. This is our standard disclaimer. I'm Sofia Hegis, CEO of Oncopeptides and I'm joined by our CFO Henrik Bergentoft who will give a financial update in just a few minutes. Let's start with the highlights from the quarter. Q2 was an eventful quarter and we took strong steps forward in Europe. We reached net sales of 19.2 million SEK. That's up 45% compared to Q1 and 135% versus last year. It's worth to point out that this is our third quarter in a row with more than 30% growth. Germany continues to perform well. Spain and Italy has been moving faster than expected on regional access and the positive clinical experience generated has already now been translated into real world publications that is supporting our launches. Momentum has carried into the summer too. Sales in July were three times higher than July last year. As August is a vacation period in most of Europe, we believe a strong July to be especially important. Another big milestone from outside of the quarter, PEPAXTI is now included in the EHA-EMN guidelines. This is an external validation of PEPAXTI's position in the treatment landscape and the recognition from leading experts that support us to build awareness and adoption. The amount of real-world data following the increased use of PEPAX-D in Europe is increasing, and we are pleased to have announced that studies from Spain and Italy will be presented at the IMS Congress in September, showing PEPAX-D's effectiveness and tolerability in the everyday practice. Outside of Europe, we continue to progress in Japan and we have received non-binding offers from two partners and are in advanced discussion with one. I will come back to Japan in more detail soon. To make sure we can keep building on this momentum, we've announced the rights issue of up to 150 million SEK. That will give us financial flexibility we need as we continue towards cash flow positivity in 2026. I will now hand over to Henrik to speak more about this and give a general financial update.

Thank you so much, Sofia. As the company has communicated since the release of our year-end report in February, we have been exploring various alternatives to financially support our plan to cash flow positivity towards the end of 2026. After a thorough analysis of our options, the company today announced the rights issue of 150 million SEC authorized by the AGM in 2025 and decided to be guaranteed up to 130 million SEC. The funds rates will be strategically used to ensure the ongoing commercial operations for Papaxity in Europe, executing the core company target aimed at achieving positive cash flow by the end of 2026, requiring an average quarter of a quarter sales growth of approximately 30 to 40%. Additionally, the proceeds will help advance the company's preclinical project portfolio and enhance business development opportunities. The commitment from the main owner HealthCap along with certain members of the management and the board of directors underscores confidence in the company's fundamentals. Notably, the company has demonstrated robust growth with three consecutive quarters exceeding 30% sales growth. And we are also actively negotiating a license agreement in Japan, all of which reinforce the long term positive outlook. This financial summary highlights the key performance metrics over the recent periods, showing a strong upward trend in net sales with a 45% growth compared to Q1 2025 and a 135% increase from Q2 2024. This marks the third consecutive quarter with a quarter-over-quarter sales growth of plus 30%. Despite this growth, operating expenses have remained stable compared to the previous quarter and are significantly lower than last year, reflecting the improved cost efficiency. Overall, the quarterly results demonstrate that the company is successfully scaling revenue while managing expenses carefully, positioning itself for profitability towards the end of 2026. In examining our operating expenses, we see the results of focused cost management. Sales and marketing costs have only slightly increased, reflecting our focus on efficiency, as we now see complete commercial organizations in Spain, Germany and Italy. General and administrative costs have seen a temporary increase in the quarter, mainly related to efforts in evaluating the most optimal financing for the company, as we saw the result of today. Research and development expenses has deliberately been decreased. Still, we continue to advance our preclinical portfolio. The measurable drop in costs from last year indicates our commitment to maintaining a lean operation while still investing in future growth. This slide focuses on the company's liquidity status. Highlighting a cash balance of 70 million SEK at the end of the second quarter, the cash position aligns with the company's expectations and communication that reaching cash flow positive requires additional financing. In line with what we have communicated today with the announcement of rights issue of 150 million SEK. To strengthen the liquidity, a short-term credit line of 20 million SEK has been utilized during the quarter, providing flexibility and time to secure the optimal financial solution for the company. Importantly, after today's launch rights issue, the company anticipates maintaining a sufficient liquidity position until it reaches positive cash flow by the end of 2026. This outlook is based on the company maintaining an average quarter over quarter growth rate of approximately 30 to 40%. This marks the end of that financial presentation and now I hand over back to you again, Sofia.

Thank you, Henrik. Let's now take a look at the commercial side. We have a strong momentum in all our key markets, Germany, Spain and Italy. Drivers are clear. positive clinical experience and peer-to-peer recommendations, increased awareness among prescribers, and now guideline inclusion that further supports positioning. Following the inclusion in the EHA-EMN guidelines, we have added the strongest possible validation of how PIPAXTI should be used from top multiple myeloma experts across Europe, which is an important direction for prescribers in all of our key markets. We do expect such a strong and clear guideline for PEPAXTI to continuously support our growth momentum. We continue to build oncopeptides from PEPAXTI sales in Europe with a market potential of 1.5 billion sec annually. On top of that, we are working to add revenue from other geographies where our partner in South Korea continues with the regulatory pre-review process. Our Voda partners continue to work for name patient sales. And our main focus is to conclude a deal for Japan. Finally, we have a promising pipeline consisting of two different platforms with global opportunities and potential for multiple disease areas and indications. Japan is a very attractive opportunity as approximately the size of Germany, swift pricing, confirmed path to regulatory approval and support from top multiple myeloma experts. In February, we announced that the company is involved in partnership negotiations for Japan. These negotiations with well-established, sizable Japanese pharma companies for the licensing of PEPAXTI for the Japanese market continues and we are still advancing discussions with one highly reputable partner and have in total two non-binding offers currently. We are in due diligence process at late stage and the non-binding offer is in line with market practice, which includes upfront and milestone payments and double-digit royalties, with the partner assuming all costs related to regulatory activities and commercialization in Japan. I wish to point out that the partnership negotiations are non-binding at this time, and there is no assurance that a binding agreement will be entered into or the timing thereof. As for the timing, I repeat what I've said before. Deals of this type commonly takes time to conclude, in general up to around nine months. We are aiming to close the deals as soon as possible. We will, however, take the necessary time to conclude a win-win deal which in turn will secure a solid partnership that will be able to realize the value PEPAX-D can bring to all important stakeholders, obviously including patients and shareholders. We will of course keep the market posted as to close a Japanese deal would be a landmark event for oncopeptides. Our major efforts in Europe is currently put on our key markets, which stands for 50% of the potential and includes Germany, Austria, Spain and Italy. These markets together can take us to profitability at the end of 2026 with a growth of 30 to 40% per quarter. As for the rest of Europe, we continue to work with market access and are in dialogue with several partners to be able to realize the full potential of Europe over time. In Europe, we have treated more than 400 patients since EMA approval in 2022. We have in general generated a positive experience that is triggering real-world data publications from physicians and in turn support peer-to-peer recommendations, which is one way for us to drive our launches. As already mentioned, the updated EHA and EMN guidelines is in our wanted position with 1B recommendation, which further strengthens endorsement and awareness, which is needed to keep our growth momentum. If we look at the overall map for Europe, the greatest visible change in Q2 versus Q1 is how fast we have moved in Italy. We do see a good momentum across and I will now give you more details into the different key markets. Germany remains our largest market and continues to grow steadily. Market research performed in July 2025, including 70 of our target prescribers, demonstrate that unprompted awareness and willingness to prescribe are both increasing significantly compared to the last research we did in September 2024. Furthermore, the research confirms that HCPs with hepatic experience gain confidence and perceive the drug even more positively than HCPs without experience. This may sound given, but certainly isn't, as many drugs within multiple myeloma comes with a great promise on efficacy. More difficult to treat side effects than HCPs and patients have anticipated. And this means that in general, PEPAXTI is standing out as a drug that is commonly a positive surprise, and it's great to see how that is now being confirmed by both real-world evidence and market research. In addition to a positive perception among regular prescribers, German investigators and KOLs have started to submit study proposals to us as they wish to generate evidence with PEPAXTI. This demonstrates curiosity and belief in PEPAXTI and is promising not only for the launch of PEPAXTI but for the future of the full PDC platform. What do we then need to do to keep the growth momentum in Germany? We need to continuously build on the positive experience with real-world publications and peer-to-peer exchange. We need to continue to broaden our prescriber base and we need to ensure that our positioning in fourth and fifth line are solidified. Let me explain what I mean with that. Drugs that are being launched in the late stage commonly enter into last resort positions if the physician have no experience from before. This means that they try the new therapy when they have no other options left. And this happens with every launch in the setting to a different extent and has partly been the case in Germany for PEPAXTI, which is one of the reason together with the scatteredness of the market behind the slowness that we have seen in the past. Our fieldwork has been and is still focused on ensuring the right position for papaxity as the patients in fourth to fifth line are less rare and respond even better than in later lines. Getting out of last resort and into the fourth line segment will support growth. This is data from our latest market research showing willingness to prescribe in fourth and fifth line. Fourth line is our ultimate position and the research concludes that overall we do see significant progress from 47 to 82% of the 70 HCPs taking part who say that they may or will prescribe PEPAX-D the coming six months. In the segment of office-based physicians, we have moved from 42 to 79% for willingness to prescribe in the fourth line and in the group of hospital-based physicians from 52 to 87%. These results are truly encouraging for our sales growth in Germany, the second half of 2025. Looking at our prescriber base, we continue to grow with 10% in Q2 versus Q1. Having said that, majority of sales previous quarter comes from repeat customers, and we still do have a great potential to capture by broadening our customer base. If we look at sales for Germany quarter over quarter, we are starting to see a really good geographical spread, but there are still a lot of potential across. Berlin for example is an area that has been really difficult to unlock and usually that's the case in many launches due to this region being quite conservative in treatment options. But we do now see progress and step by step we are adding more accounts this quarter. As mentioned, we do see a very encouraging progress in Italy with faster regional access than anticipated due to broad positive clinical experience ahead of launch. We now have 80% of regional access unlocked at hospital level with only two high potential regions left. Experience already ahead of launch has resulted in an RVD publication from Italy already now with a poster presentation accepted by the IMS Congress. IMS stands for the International Myeloma Society, which is a professional organization dedicated to advancing research, education, and clinical care in the field of multiple myeloma worldwide. And their annual meeting that is exclusively focused on multiple myeloma attract all the top experts and many dedicated multiple myeloma physician. meaning it is, at least in my view, the best and most focused multiple myeloma meeting during the year, and the acceptance of the real-world data to IMS is both important and impactful. Moving to Spain, we have managed to gain higher level of access than anticipated, now having 97% regional access secured. It's a clear success for our team to reach this coverage within this timeframe, And to ensure we can capitalize on that reach, we have signed a strategic partnership with SD Pharma to complement our efforts and broaden physician reach to be able to capitalize on this fortunate access situation. The positive clinical experience in Spain is confirmed by that we also there do have a real world data publication submitted and accepted by the IMS Congress. Our pipeline efforts are still focused in pre-clinic for both the PDC platform and the spike platform. We have three assets that we are moving step by step towards investigational new drug status. OPD5, which is a sister molecule to PEPAX-D, for which we do see a global opportunity, not just within multiple myeloma, but also in other indication addressing high unmet needs, such as, for example, glioblastoma. For our immunotherapy platform focused on NK cell engagement, the SPIKE platform, we are currently focused on exploring the potential in autoimmune disease. Oncopeptides is demonstrating a strong growth momentum with three consecutive quarters of double digit sales growth and a clear path to profitability by the end of 2026. PEPAXTI is fully approved and reimbursed in key European markets representing a market potential of about 1.5 billion SEK annually, with a projection to reach peak year sales in all of our key markets by 2028 and with patent protection until 2037. Beyond Europe, we are progressing with the partnership discussions in Japan and have already secured global agreements in other regions. Finally, our pipeline, including next-generation peptide-dry-conjugates and our spike NK-cell-engaged platform, offers significant long-term value in oncology and beyond. And with that, I would like to conclude the presentation and open up for questions.

If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad.

Hello, good morning.

I have some questions. Let's start with the rights issue. Previously, you said a Japan deal would take you to cash flow positivity. Is that taking longer than you expected or do you think the upfront will be smaller or a combination?

Thank you. Good morning, Rikard, and thank you for the question. As we have communicated, we are negotiating a Japanese deal. it was one of the options for us to finance the company to conclude that deal as I said today we are continuing the discussions we are still optimistic about this deal and for us it's important to allow the time it takes to conclude the most beneficial deal for all different parties and that is why we now have decided to finance the company through a rights issue to ensure we have the flexibility and also stability to be able to conclude an optimal deal.

Yeah, sure. That makes sense. Concerning the amount you're going to raise, how much of that do you think is actually going to be invested into operations of the and how much will be over for other preclinical programs or other activities?

Thank you, Richard, for that question. And as we clearly state in the press release, this is the amount that we are raising to take our commercial operations in Europe to cash flow positivity in 2026, not factoring in a Japan-licensed deal. So, I mean, the answer to your question is if we are successful in concluding Japan license agreement, we will have more funds to invest in our preclinical portfolio.

All right. And you had relatively stable cost level quarter to quarter. Do you think it will continue relatively stable up until you become cashflow positive.

Thank you, Richard, for that question also. Yes, what we have been communicating is that the cost base that we are currently running at includes our commercial organization for our key markets, Japan, sorry, Spain, Italy and Germany being in place. so uh we will do we do not require additional increase of opex other than you could normally expect with you know inflation rates and such going up so the run rate for 2025 will more or less continue into 2026 until we are cash flow positive yes okay good um another

Another question about your presentation. Sofia mentioned increased willingness to prescribe the fourth and fifth line in Germany. But what is the most common line of prescription today? I guess it would be the last line or something. What does that mean?

The most common line is... Let me be clear on the facts before I give you our insights. So factually, we don't know the lines of all the patients all the time. But the insights we have, which is on majority of our patients, is that they are today commonly prescribed in fifth line with the physicians that has some experience and in fourth line with physicians that has more experience than maybe one patient. First time prescribers are commonly prescribed in fifth line plus meaning that can be from fifth line to whatever line. And that is due to how the dynamic works in a specialty launch in late stage. So that's something that we have foreseen and that's what we've been working hard on this. And we are really happy to see this positive progress now that more and more prescribers are really also as first time prescribers actually starting in earlier lines. So this is a promise for the future.

And just one last question. Do you think a growth of above 30 percent quarter on quarter is realistic in the near time as far as you can see ahead?

So while I don't want to comment on sales trajectory going forward, I mean, if you look at our past sales, you can see that the quarterly sales can vary between the different quarters and every quarters comes with some specifics right having said that um we have three consecutive quarters now with strong growth and this is the trajectory that we are looking at to continue up until the end of 2026 to become profitable great thanks for checking my questions thank you so much

As a reminder, if you wish to ask a question, please dial pound key 5 on your telephone keypad. There are no more phone questions at this time, so I hand the conference back to the speakers for any written questions or closing comments.

Thank you. And there's a few written questions. We'll start from the top. First question, you mentioned a heavy increase in sales in July, 200%. Can we assume that July standalone is close to the full Q2? How much did you sell for in July 2025?

So thank you, Martin, for posing your question. So let's stay with the information that we have released, and that is sales on quarterly basis. The reason for not, in general, releasing specific sales figures for a month is because that doesn't make sense with the treatment like Papaxity. As you may know, pipaxity is administered every fourth week. It can be delayed a bit based on the status of the patient. And this means that the monthly sales is not really representable. You have to look at the quarter to be able to see a trend. So that's why we only kind of release quarterly sales in general. The reason why we now commented on July is because we are announcing rights issue today and we wanted to be as transparent as possible and share as much information as possible that we have as of today. And if we then focus on your question, so what was sales for July 2025? We have not reported sales for July, but sales for the full quarter, if we look at Europe, was 7.5 million SEK.

Next question. What is the average cost for a patient using Propaxity in the current markets?

So thank you, Claes, for that question. So when you price a drug, you have a list price in all the different markets, and then you have confidential discounts in some of the markets. And you don't comment on these confidential discounts as that is a competitive disadvantage. So what I can comment on is that Germany is a market where we do have a list price and where there are no kind of hidden discounts. And in Germany, we have the list price of just about 7,000. So for Germany, the monthly price of two vials is around 7,000 euros.

Next question. How much of the 150 million planned to be raised through the rice issue will be taken by management and board?

so we have in the press release we've announced that there is an intention from certain members by management and the board and i don't want to comment on anyone but myself but i'm happy to share my view so i will definitely take my at least my prorata which is what i currently can subscribe to and i have a great confidence in oncopeptides and that this is a good investment for me and then i of course have henrik our cfo in the room so i would like to hand over to you

Yes, thank you, Sofia. And I can only echo the statement from Sofia that I will at least take my Prorata share. And I can also remind you of the fact that there's a next nine so-called short prospectus released on August 28. Well, this will be very transparent, i.e. who from management and board of directors signed up for their Prorata shares.

Next question. We have a lot of questions today. How big is the market potential in Japan?

So market potential is informed by population and it's informed by pricing and obviously market shares. And when it comes to Japan, we see that the potential, I mean, the population is slightly bigger than the German population, but the incidence, that is how many people that are getting sick in multiple myeloma is slightly lower. So when you look at the potential of Japan, it is fairly similar to germany despite the bigger population when it comes to pricing it's too early for us to comment on that but we of course made some assumption that is feeding into this conclusion that it's similar to germany and when it comes to market share we do see and believe and it's confirmed by the kols and also in the discussion with our partners that we do look forward to a 25 to 30 percent market share in the fourth line and beyond

I think the next question is more of a clarification on where we are in Japan. The question is, if you are able to close a deal in Japan, sorry, what would be the right deal? And why don't you think the current offers are deemed good enough to sign them at this stage? Assuming this is about Japan?

Yes. So here I would like to clarify what I said. So I never said that the current offers are not good enough, but when you do conclude a deal, it's like all negotiations. you dance to find the right terms. And those terms are both economical, it's legal terms to ensure that at the end of the day, you have a solid partnership that you can execute on.

Thank you. Next question. What is your estimate of SAK 1.5 billion sales in Europe as peak sales predicated on? Which countries with treatment lines?

So this is the addressable market opportunity for Europe if we would reach majority of countries and then we are originating this addressable market from the current price level that are already negotiated and then you look at the different markets, you set the price and you also look at the opportunity for penetration into the market as well as market shares. So it's basically all of Europe.

Thank you. Next question. What is the terms to use the next tranche of loan from the EIB? A question for Henrik.

Yes, so as we have communicated earlier that the tranche BNC 10 million euros plus 10 million euros comes with us fulfilling certain conditions and we have been clear that one of those is an uh and uh equity conditions and we can only now confirm that we do not meet that criteria uh still and we have already decided not to go into all of the specifics of that agreement in its highly back to japan uh what is your ideal timeline in regards to the japan deal when do you see that happening at the latest

So we don't wish to comment on an exact timeline and that is due to that we would like to secure that the negotiations can run to conclude a win-win deal. Having said that and what we have said before when it comes to the time it commonly takes. So we first informed the market that we started kind of moving into more advanced discussions late February. And these deals, as I said, I mean, the average timeline is somewhere around nine months, it can take six months, it can take 12 months, it can take longer. And our aim is to conclude this as fast as possible, but we will allow the time it takes to conclude the best deal possible. And that is in the long-term in the interest of the company. It's also in the interest of patients to ensure that we have a solid partnership that can be executed on. And it's also in the interest of the shareholders.

Thank you. Can the drug, Apaxti, meaning be prescribed in earlier lines than fourth and fifth, if prescribers so wish?

So, The rules and how physicians can prescribe a drug varies between the countries our label is going from. So the approval that IMA has given is going from the fourth line. And whether a prescriber can prescribe off-label is really due to its country specific and sometimes it's even regional specific. Because commonly and in general physicians at hospitals and at academic sites, they are more confident and have a better understanding and expertise to be able to prescribe off label, meaning that they have more trust then from management, et cetera, to do so. It's nothing that we can promote or talk about, but it is the decision of that physician. So the answer is that in general, yes, if the physician feel comfortable, if they have the right expertise and understanding, they can prescribe any drug however they want to. But if they need to stick to the label, which is sometimes the case in for example the office based setting in germany you need them to adhere to patients that are within our labor from fourth line thank you sophia and thank you henrik for answering those questions that was the last so back to you sophia for any closing remarks so thank you so much for all the questions i really appreciate your curiosity and your interest into oncopeptides And thank you for joining us today, for everyone also listening in. With three straight quarters of strong growth, with new guideline inclusion and a strengthened financial foundation, we are moving even stronger and energized into the second half of 2025. And we will keep executing with discipline, advancing our partnerships and reinforcing Papaxity's role as an important option for patients with multiple myeloma. With other words, we have a laser-strapped focus on generating value for our shareholders. And I wish to thank you all for the trust, for the confidence you demonstrate by investing in oncopeptides. So with that, I would like to wish you all a good day.