Orexo AB (publ)

go ahead.

Thank you very much and welcome to all of you dialing into this first quarter presentation. So the first quarter for REGSO, it feels strange, but it feels a little like it's been less eventful, at least compared to our fourth quarter, where we both had legal settlement and also a larger legal restructuring of our balance sheet. I think this year has started very much in line with our expectations. We did know that there were some challenges from the commercial side and the changes of Medicare system, of Medicare policies in the US. We were, of course, unaware of all of the macro volatility that we have seen, but here it actually feels like we have been insulated at least so far from a lot of the changes that has been happening on a more geopolitical and macro basis. And I'll come back to that a little later. Moving into the presentation, first of all the legal disclaimer and a short presentation of the agenda for today where I will talk a little about the summary of the quarter, go through some business updates. Frederik will take us through some of our financials and legal overview before I will finalize with some of our value drivers for the company. So a short update on the quarter. We started the quarter the year with a positive EBITDA, which is very much in line with our guidance for the year and how we ended last year with positive EBITDA. It's quite natural in the way we're running the business that we see some volatility between quarters, not at least driven by inventory changes at the wholesalers. as the amount of money that we're rolling through the system in the US is significantly higher than our net revenues. Our gross revenues is more than twice that number. So it has a big effect is the inventory levels of the wholesalers, payment of rebates and others. But we do expect to have a quite consistent positive EBITDA during the year. And we start the year with a slight positive number, despite having some headwind during the quarter. Actually, we forget that today when we're seeing the dollar weakening to the Swedish kronor, but the first two months of the year, we had a quite high dollar exchange rate, which was translating into both on revenues, but also on the cost side had some impact. We saw a stable revenue in both Swedish krona and US dollars compared to last year. We actually have a slight increase, very much driven by lower decline in inventory. Those of you who were with us a year ago remember how we saw a quite dramatic change in inventory levels during the first quarter. We have seen that this year also, but not to the same extent as last year, which then in a year over year comparison is advantageous for this year. We also raised the prices in the beginning of the year, which helped us a little for the quarter. When you look at the cash flow, which is an area we have a significant focus on, we are quite pleased to see we have a positive cash flow from operations. Frederick will talk to that. At the same time, we do have a decent amount of our capital is sitting in US dollars, and that is measured on the last day of the quarter, and as the US dollar has weakened substantially to the Swedish kroner in the end of the quarter that had a negative impact on our total cash position. Without that decline of the US dollars, we actually would have had a positive development in our cash position quarter over quarter. OX640, which is really where we had a lot of focus and a lot of expectations, we have seen now after our second clinical trial, successful clinical trial. We have seen more and more partner interest and we have several companies in the data room doing a due diligence and then we hope that will translate into more concrete negotiations during the summer and hopefully also a partnership agreement a little later this year. I will say that all of these discussions like we have experienced before also with this product. In the end, it takes two companies to agree before we have a signed contract. So there's always a risk in the process. But we have a very good interest in the asset right now and in particular following the second pass to clinical trial. OX124, we have been struggling with the testing that we need to do to solve some of the issues highlighted by the FDA. It's one component to the nasal device that we've been waiting for. We now have a strong expectation that it will be delivered early in Q3, that means early in July, and then we can start doing the testing which would enable us to file a year later. I will come back to some of that dynamic and some of the balancing act we have to work on when we look at OIS 124. Then all of the headlines, I think this, as I said, we feel a little insulated to all of the geopolitical and macro headlines that we've seen following the change in administration in the US. We know the new administration is highly focused on fentanyl opioid use disorder and treatment, so we don't think there will be any changes to the worst. On the contrary, we actually saw last time Donald Trump was president that there was some good initiatives on the opioid use disorder treatment that we hope we can see also this time not only following trying to reduce the source of fentanyl but we also hope to see some initiatives to improve access to treatment but for subsoil and take the more concrete is subsoil is fully manufactured in the us so we don't see any exposure to tariffs into the u.s market this is a u.s manufactured product since the start All of the main excipients are sourced in the US for the US market. It's packaged in the US. So we don't see the tariffs will have any impact on SOPSOT. On the contrary, we actually think that some of our competitors have manufacturing outside the US and that could of course help us a little in the competition. In Europe, we have sourced the European product in the US. There is still supply even this quarter from the US to Europe, but we are setting up the manufacturing or our partner in Europe, Accor Pharmaceuticals, are setting up manufacturing in Europe and we expect at least with the next big supply early next year would come from the European manufacturing and also mainly rely on locally resourced excipients. From an exchange rate perspective, it has been very dramatic to see the Swedish krona strengthening to the dollar with more than 10% during the quarter. uh but from an orexo perspective we have a lot of our our cash in our expenses in us dollars which basically mean that we have this kind of natural hedge and doing some simulations we believe that about 80 of the impact on net sales when you come down to ebit has been dampened by by the um But the exposure to US dollars on our cost base. When it comes to below EBIT, you come into the financials and that's where we have impact from our cash balance. But also a quite high cost for the company is the interest payment on our corporate bond. And they're, of course, in Swedish kronor. Main profit contributions come in US dollars and we're paying interest rates in Swedish kronor. There is some exposure to the payment on the corporate bond. But overall, we have a much less exposure to the US dollar as one could believe just looking at our top line, which is more than 90% of that is coming in US dollars because also a significant share of expenses are US dollars denominated. it comes to our development program, both OX124 and OX640 has a much more international supply chain than what we have for SOPSOL, where we have some parts manufactured in Europe, some parts are manufactured in Canada, and then the final packaging is in Canada. So that, of course, could have some impact by the tariffs. We think over time, I'm still I'm quite liberal and believe that we should hopefully find ways so that we have more or less free trade, in particular when it comes to pharmaceuticals. I think there's a lot of benefits to society and health. without any trade barriers and tariffs. So I'm an optimist in the sense that I believe that Canada, US, Europe will find a solution that will mitigate more dramatic tariffs. But we are monitoring this quite closely. We are talking with our manufacturers to see what kind of scenarios and mitigating activities could we do. under certain conditions. But right now, without any clear answers on what tariffs could come, it's very hard to make any investments and initiatives. But we're following this quite closely. Another area that is a concern, I think, has been some of the turmoil on the FDA. We'll see. I think there are some more positive notes coming up from FDA just the last week about some of the activity levels, maybe a more pragmatic view on some classes of pharmaceuticals which could help increasing the pace of drug approvals, at least in some categories. But we have during the last quarter seen some variation in the response type. Some responses have taken much longer than what we have been used to. Other responses have gone relatively fast, just as we're used to. So there are some uncertainty about how the FDA would work with the changes that are made to the agency. But over time, again, I'm an optimist. I find that there will be solutions to this. But right now it's, of course, depending on issue and topic and who we're talking to there have been some delays we have seen of course the financial market has been very volatile even though the last few weeks have been positive but we have seen that and we're talking to our international advisors and business development and m a corporate finance we have seen that the market is slowing down there's been some hesitance to enter into larger deals because it's Right now, there's an uncertainty about what kind of investments are needed, for example, to avoid tariffs or to start up manufacturing in the U.S. How will tariffs impact the market potential in the U.S.? And of course, also the general capital market has been a little tough for the life science sector the last few months. We have, however, in our partnering discussion with 640, not seen any impact of this. And the companies that we are talking to have not brought this up as a concern. Our U.S. commercial business, we have seen from a financial perspective, a quite stable start. As I said, we have slight growth in U.S. dollars and Swedish kronor. We do see Q1 is normally a weak quarter. And the main reason for that has historically been high deductibles and also some formulary changes. for the high deductibles have in particular been hitting us quite hard as our largest payer for a long time has been United Health Group and they are applying high deductibles more than anyone else. And that actually means that in the beginning of the year, the high deductibles are reset. So the patients have to pay out of pocket the full amount for the pharmaceuticals. And as the price gap between Subsol and the generic versions of Suboxone have increased. Then, of course, that price gap is becoming more visible for the individual patient, which could lead them to take a generic at least for the first few prescriptions of the year to avoid the high deductibles or to avoid paying the full price of a branded product like Subsol. So we have seen first quarter has been traditional volatile both for Subsol but also for the general market. This year, we also had a change in Medicare policy in the beginning of the year, which had some impact on volume. We have seen in particular one payer, which is also our largest Medicare payer, Humana. There are two impacts. One is that we've seen volumes go down because Humana have for some of the patient groups been promoting generics, and they do that by increasing the copay that the patients have to pay to get subsolid. But also due to this new rebate policy, some of the Medicare players and Humana, one of them, have also negotiated a new rebate system, new rebates for Morexo. So we have both seen a lower price and also some decline in volumes for Humana during the first quarter. That said, Humana has been very highly rebated because we had this exclusive agreement with them previously. And the impact in volume is much lower when you get down to net sales because the rebates have historically been quite high. So the actual net contribution for prescriptions coming from a Humana patient has not been even closely as high as the impact on the volume. And you see that when you see our sales is stable, whereas the volume decline a little, some of that is due to Humana and Humana volume decline is less costly on a sales perspective due to high rebates. We have also seen United Health Group as they do all every year. We are still reimbursed, but in the beginning of the year, the United Health Group patients have more exposure to the full price of SubSol, which have had some impact in this first quarter. Then finally, last year, this time I was talking a lot about inventory. We have seen, as we've seen every year, inventory goes down during the first quarter, but not to the extent as we saw last year. And Frederik will come back to that a little later. And based on that and based on this first year starting in line with our expectations, we have not changed any of our guidance for the year. Just a little exemplify some of the volume changes. As you can see here in the graphs to the right, you see this dip down, which is actually a bit more dramatic. We saw the same in 2020, but that was kind of similar to when COVID started hitting us. But we did see a decline across all retail segments. We saw a little increase in institutional. We normally don't talk about retail and institutional because institutional is quite small, but This quarter, they actually increased a little, which is compensating for the full market. But the retail segments, commercial, Medicare and Medicaid, which is dominating the market, we saw a negative growth in all of these three segments and that have an impact on the total market and of course, also translate into an impact on SOPSOLV. We have seen that, as you can see, just following the Q1 nearly every year, we have seen that dip a little more dramatic this year, but then it's gone back to growth and we believe the same will happen this year. So to our pipeline and products under development, OX124, last quarter, we had some uncertainty about the timelines. I think most of that uncertainty is gone, but I want to see that we have all the components in-house before I can say that we have solved the full problem. But we do know that our manufacturer of the components have now successfully gone through the validation of their manufacturing equipment. And that means that they can start to manufacture the components we need to do the testing that is required by FDA. One of the things that we need to balance doing this is our time to market. We can go through faster, try to come through the testing faster. That will have a negative impact on the shelf life we will have at launch. And it also increases the risk at approval because FDA has not specified exactly how much stability data they want to have to both approve and also to give us a certain amount of shelf life. So we have to take this, should we go fast risk to have a short shelf life at launch, have a high risk to approval, taking a little longer time to get more stability data, increasing the risk, increasing the chances of approval, but also increasing the amount of shelf life at launch. And while we right now won't go all the way, we're not taking the fastest path to approval because we actually believe we can have a positive impact on the overall shelf life by actually including some of the accelerated as something we use in the pharmaceutical industry that we can accelerate the stability data by increasing the temperature. It's easier to get that through the approval before the actual approval and after approval. So right now our expectation is to file in the mid of 2026 and that will then lead to an approval, hopefully during the second half of 2026 and launch early 2027. Quite slower than we anticipated first round, but I think we have the process under control. We have the steps that we need to take under control. And by taking a little more shelf life or stability data into the file, we also think that the regulatory risk is quite low. Long term, it's been very suboptimal to be in the situation where right now we have ordered this component we need from the nasal device already at the time of the complete response in July last year with expectations of supply in August, September. Now we are here nearly a year later, we will get the supply. Part of the issue is that our manufacturer has moved to a new version for the one commercial product in the market using this nasal device. And even OREXO for our OH640 project have moved to the new device. So we are looking at a plan to move over 4x124 to this new device also. The differences are minimal. It's more about the handling for the patients than the actual critical part of the device. That means the nozzle and the compartment where we have the powder. So we are moving that way. We don't see that we'll have an impact on the timeline right now, but I would just highlight that as a mitigating activity to reduce our supply risk in the future. Again, just as a caveat, in the end, this is up to FDA to approve. And I can't guarantee how FDA will look at this as we have received relatively vague guidance on what's required in terms of stability data to get a certain label in the end. OX640, we concluded in the beginning of the quarter, so we include that in our Q4 report for last year, but it was finished in the first part of the year. Our OX640 study, we also seen our competitor, the first liquid nasal device on the market has been launched with some success, even though I think that there was some expectations to an even faster uptake in the US market. That said, we saw the same with Naloxone when it first came. It took time before it took off, and today the nasal Naloxone is dominating the market. We have seen a good interest from large international companies in OH640. We have several companies looking at the asset right now. We are in concrete discussions with several companies, and based on that, we're quite optimistic that we can reach an agreement during the year. but as we've seen before with week 640 you need to have a signed paper before the deal is done so of course there is some some risk to the process but we have a good interest from several different companies and i think that give us comfort in in the process and the future for week 640. Then we announced right after the closing of the quarter, we had some good data in a rat study, in a deeper study for our collaboration with Abira, where Abira is a very innovative Swedish biotechnology company focusing on a new types of vaccine platform. We took their platform and formulated an amorphous. We compared the powder formulation with a liquid formulation and we saw that there was no difference. Using a powder comes with a lot of different advantages. For example, that you can avoid the cold chain that is otherwise needed for this. platform. And we think this is very strong data, both for us and for Avera. So something that we can use both in that collaboration, but also something that we are happy that we're able to present to other vaccine companies as a proof of concept of how Amorphox can be used in large molecules like vaccines. Then to our financial and legal, I will let Frederik

slide. So on page 15, we look at our revenue. And if we start by looking on the top part of the page, you can see that our total revenue in Q1 for the group amounted to 146 million. And of that revenue, SubSol within US Commercial is the main contributor with 133 million or 91% of total revenues for the quarter, which is slightly up year over year with approximately 3%. And as you can see in the waterfall graph on the bottom part of the page, the growth in subsoil US net revenues is primarily a result of lower reduction of wholesaler inventory effect amounting to 7 million SEK. It's a positive USDFX impact of 3.6 million and the price increase on subsoil products from the beginning of the year. The demand for subsold in net revenue terms is though lower year over year with approximately 7% reflecting the traditionally challenging Q1 due to formula changes and reset of patients deductible as Nikolai described earlier. Subsold sales in USD were very similar to Q1 last year at 12.5 million US dollars. If we look at the distribution of other revenues in HQM pipeline, again, we had significantly lower abstract royalties accrued based on lower expected sales following the gradual decline as we have seen when the agreements for abstract royalties for individual countries expire. Also commenting on SubSol ex-US revenues for the quarter were much higher than last year, which is explained by higher sales of tablets to Accord from a one-time build-up of their inventory that is awaiting approval of their own manufacturing capacity of SubSol for the ex-US market. Going forward, the low margin product sales of tablets to Accord is expected to be exchanged with increasing high margin royalties from Accord on their own sales. Going to the next page, our P&L, we are happy to conclude that we had a good start to the year in relation to our EBITDA in Q1, which landed at a positive 5.9 million, following higher net sales and stable operating costs compared to last year. The increase in COGS is to a large extent explained by negative FX effect within US commercial and unfavorable production costs for subsoil US, giving us a slight reduction in gross margin year over year from 90% to 88%. Besides that, the increase in COGS is also a result of the higher ex-US subsoil sales to accord in this quarter. If we look at our operating expenses in Q1, they were very much stable compared to the same period last year, mounting to 131 million. In the quarter, we did have some higher legal expenses within admin due to the DOJ investigation, but they were more than offset by low costs for the IP litigation that we had last year. The decrease in R&D costs was mainly a result of lower amortization costs for the impaired intangible assets in Q4. But partly offset by some high costs for OX640 and the Amorphox platform. Average USDFX rate strengthened year-over-year from 1039 to 1068 in Q1. In general, that had a positive effect on costs in the P&L, but the FX effect was though negative with 7 million from revaluations of foreign currency balance sheet items, reflecting a weaker USD FX rate of 10.02 at the end of the quarter. Total FX effect on EBIT was a negative 11 million. Total EBIT amounted to minus 5.2 million. In that number, depreciation is lower by approximately 10 million for the impaired intangible assets. EBIT contribution from our US business amounted to 44 million SEG for the quarter, which is a margin of 32%, an improvement from 25% last year. Moving to the next page on cash flow, we had a strong quarter in terms of cash flow from operating activities of 33 million, primarily a result of a major positive change in our working capital of 43 million, partly offset by negative cash flow from operating earnings. We paid interest on the bond of 11.5 million. That's 1.2 million higher than last year. and within non-cash items change in provision which is payer rebates and returns showed a negative effect of 12 million sec due to the timing of payments of these payer rebates total cash flow for the period ended up at plus seven million sec that was also impacted by minus seven million from amortization of lease liability as well as the effects of the closing of the Gazinta transaction that we signed in Q4. That had a positive impact of 90 million in Q1 on working capital, but then offset in its entirety by a negative 90 million impact on investment activities. And then adding an FX effect on that on cash of 11 million, that adds up to the decrease in cash of 4 million SEC since end of Q4. We should not forget that we also have 30 million exposure in our own bond as a potential source of funds. next page show financial outlook for 2025 stating we expect market growth two to five percent subs on net sale in within the interval of 50 to 55 million us dollars opex interval of 460 to 500 million sec and finally group ebta to be positive for full year now with the actuals presented today and the explanations given we can conclude that these metrics are reaffirmed And finally, comment on the FX rate assumptions going forward. The financial outlook 2025 is based on a forward-looking assumption of a USD versus SEC exchange rate of 10.50. And the average USD versus SEC exchange rates during Q1, as you heard, was 10.68. Going forward, volatile market could lead to changes in the exchange rates. So in a currency sensitivity analysis, including a 10% decline in this FX rate, the negative impact on US commercial net sales will be dampened at the EBIT level from a natural hedge on the cost side covering over 80% of that reduced net sales. And with that, back to Nicolai for legal updates.

Thank you. So I'm very pleased that I don't have to update about patent investigations. And we're not down to one process in the US, but that does take a decent amount of time because it's the subpoena and investigation that was started soon five years ago. We have been seeking a settlement in the late later part of last year, but due to the change of the administration and that the US prosecutor who's leading each of the offices in the US is a political appointed person, there's a gap in that decision making. And right now there's only an acting US prosecutor in place in the office that leads the investigation and that slows down the process. But we are trying to find a resolution and have an active ongoing discussion. We are still convinced and have not been presented by any convincing evidence that we've done something wrong. We have been working very diligently with our work in the US, including external legal advisors, regulatory advisors to review all marketing material. that we've been promoting and we can't see that we've done anything that is severely wrong or wrong at all in the marketing of SOPSOT. But the process is taking a lot of efforts and we are working to find a solution to this. Summing up on the future value drivers, we, of course, are working intensively to both maintain sub-solid revenues. We knew that first quarter is always a challenge, in particular comparing to the fourth quarter the year before, which traditionally is one of our strongest quarters. We expect the same development this year and we did see the first quarter going down a little but compared to last year actually being very stable. Looking at our growth drivers then weeks one to four is of course important. Now I'm getting some comfort that we have the process under control where we until recently didn't really have a fixed state of supply but now it feels like we're getting quite close to be able to get the missing components and that will be important to drive additional sales. Then, of course, milestones and variances both from our existing projects are important. But in particular, coming into our new projects like OH640, we think that could become a highly valuable product for the company in the future. So growing revenues and profit contributions. continue to work to improve access to treatment is important for us to see. And that's in particular in the US context, how do we get reimbursement both for soft soil, maintain the reimbursement we have and also get reimbursement for new products. And then Amorphox is really where we think there's a lot of unlocked value potential. both partnering with other pharma companies to co-develop new products, just like we've done with Abera, we've done with several other companies, tested Amorphox on their molecules, and every time Amorphox have actually scientifically delivered on the expectations. We are looking at the partnering of OX640 and have good interest as I talk to, but we also work on other areas to see how we can apply Amorphox on new products. And we did announce in the quarterly report a new project we call OX390 that is an opioid use disorder where we are testing a new treatment of a synthetic illicit drug that is growing in the US. But before we take it in, into these kind of presentations, I would like to see it takes a few steps forward in the development and also in the discussions with the U.S. authorities. That said, we will open up for questions and thank you for listening to this presentation.

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. The next question comes from Sameer Devani from RX Securities. Please go ahead.

Hi, guys. Thanks for taking my questions. I think I've just got a couple. Just coming back to OX124, It's obviously positive that you're feeling a bit more confident in when you're going to get this critical component. But I guess I'm slightly a bit more interested in the transition to the new device and what sort of work you would need to do that and how long that could take. I guess that's question one. And then just on OX640, just wanted to check whether there was any other work that's currently ongoing with that program. Was it everything that's now that you've done is in the data room. And that's what we'll go forward with in terms of partnering. Thanks very much.

So we want to force the device that is coming in, it's it's You need to look carefully to see what are the differences and how much work. We can use the existing supply chain. We don't need to make any major changes to the supply chain that we have right now. And we don't think that that will be a lot of work. We'll actually start that work right now. So we are about to receive batches of this new device so we can start. preparing that manufacturing switch before we get the final version of the previous device. The timeline is really up to discussion with the FDA. We know that there's one other product in the market called Vaximi, which is using the same device. they have moved and we can't really see that they have done a lot of work to do that transition to the new device. The critical part is that the actual change is into the handling of the device. It's the plunger that you're pushing on that has a different device. design compared to the the one that we've been working with with works 124 but the actual nozzle and the compartment which is the critical part and the way that the powder is sprayed out of the nozzle that mechanism is exactly the same with the new device so in a normal setting and we would not see this as any major work and we would not expect that fda would require any major analysis of doing this That said, we were quite surprised with some of the requests that we received at the complete response letter last year where they were asking for much more data than we and any of our advisor had expected. So before I can say anything around timeline, we need to get a response from FDA. But we're using the time right now that we got from getting a delay in these missing component in the original device to actually adapt and look at how we do from a manufacturing perspective with a new device. So to shorten that timeline, and I don't see that that has any commercial implications because we would be able to launch with a new device and then simply just switch as it goes along. There will probably need to be some changes to the instructions for use, but that should be minimal. So that's where we are. I think it should, in a normal setting, I would not see that as a dramatic change. But given our experience with FDA on these rescue medications devices, then we want to get that input before we can give a timeline. OX640, there is a work ongoing with some part of the work we did in the phase two study was looking at the doses. So we were looking at different dosing also in our last study, so our second study. And with that change, Based on the results, we have decided to change the dose a little compared to our first study, and that has some implications on the manufacturing process. So right now we are preparing to upscale the manufacturing that is ongoing and based on the results we have been adjusting a little the manufacturing process to adapt to a different dose than the one we had in the first study. But before we start the real manufacturing, we'd like to have a partner in place, partly because some of the partners we talk to are likely to want to take more control of the supply chain than what we would do if it was another partner. So we're waiting a little to see where we are, but there is work ongoing at the moment. I think that was the questions. Did I miss anything, Samir?

No, that's great.

The next question comes from Klaus Palen from Carnegie. Please go ahead.

Yes, hi there, and thanks for taking my question, or question at least. And I just wonder if you could elaborate a little bit further about the subsoil market position, because it seems like your volumes are down a bit more than the overall market, and is this due to seasonality, or should we expect sort of a, you're losing some market share?

So Subsol is down. But if you look at the main reason for the decline, it is Unite Health Group. And we have seen that in Q1 repeatedly since 2019. This is why we lose most of the market share from Subsol has been in Q1. And I think that's because it's when patients are reminded about the full price and see that they can Go for a script that maybe cost them $300 to $400 to a script that would cost them about $100. So it is a significant difference in price in the first quarter. And the other one is actually in Medicare, where Humana has declined a decent amount. Whether that will continue, I think with United, we have seen this every year and then has been flattening out. We even saw some growth in United one of the quarters last year after the first quarter. With Humana, it was really a change that was implemented here the 1st of January. Will that continue or not? We will see. But I will say Humana from a value per script has much less impact because of the rebate levels. In general, in the market, it's a little early to look at the trajectory. I think our market share has gone down, but it's a tenth of a percent during the quarter, and it's been relatively stable in the last part of the quarter and into the second quarter. So we haven't seen any changes in market in our formulary position has been maintained. So I think that is helpful for the rest of the year. So first quarter is volatile normally. And this year we have seen also that we're a little more sensitive when the market goes down and we tend to see that we actually have a little more impact than the full market. And the full market did go down this quarter. and we've seen that so many times in q1 and then it has bounced back in q2 q3 q4 and i don't really see a reason why that wouldn't happen this year okay great and maybe if i could add one more question about your strategic overview i i guess you you you alluded to that

it's perhaps affected somewhat about the volatility but is it possible to to say anything more about this process and where you stand i i think our our discussion is that we have done a lot of work on um

on in particular R&D pipeline, where should we put the focus? So there we will focus our amorphox efforts more on a certain size of molecules and certain types of molecules. We're looking at partnering strategies for amorphox and how that will evolve so that's something that we are in active discussions even potential partners on how we could how we could broaden the use of amorphous but before we get to the actual outcome I would like to see that we make some progress then it comes to more looking at the different assets in the company and and here We have no hurry. We have a profitable US business. Even though our gross margins were down a little, we actually see that our gross margins are likely to increase as we proceed. We continue to cost optimize. And I think a lot of this is basically if we see a value, for example, for parts of the business that is more higher in partnership in some shape and form with another company, We should look at that compared to go alone. But the go alone scenario from where we are, we have a quite stable business. We can still continue to work on our cost base to optimize expenses. And we have a good and stable US business. And I think this that we're not in a hurry but should there be opportunities for example where we can work together with another company in the us i think that's something that we we would consider but but right now i think the market is quite volatile and it's not the best time to do such a move

Yeah, I understand. Thank you so much for taking my questions. That's all from me.

Thank you. Any more questions?

More questions at this time. So I hand the conference back to the speakers for written questions and any closing comments.

So we have a question which came in as written, which is about R&D, which I think looks like that it's lower in our US commercial and higher in our headquarter. And whether that will continue. So R&D is, R&D is primarily, R&D we do in the US is connected to commercial products. R&D we do in Sweden and headquarter is all of our pipeline projects. Even though some of the projects are, in tight collaboration with the US. For example, our new project, OX390, is very close to the US authorities. It's very engaged, involves a lot of our US resources, but overall it's financed out of the Swedish headquarter. So when you look at R&D cost in US commercial, it's actually related to products on the market, for example, regulatory fees, some medical affairs expenses in the US where all pipeline projects are in Sweden, then you can say all pipeline projects that we are running is designated for the US market and in particular an opioid use disorder designed to the US market. Then there's a question about our networking capital. Maybe Fredrik can take that one.

Yeah, so there's a question on networking capital going forward and whether we need to tie up more capital in the business again. And as Nikolaj explained, we have a profitable business in the US. We have a fairly stable networking capital position. which obviously fluctuates with the working capital along the way but we feel quite comfortable at the moment and we are continuously looking at improving cash flow from a cost optimization point of view and obviously cash flow is the primary focus to us to improve.

And then there's a final question we got in writing here. Can you give an update on the process around potential sale partnership of US commercial? And as I said before, we're quite pleased with the financial performance, our US commercial business. But we also realized that having one product in the market is not optimal and there could be benefits to in some shape and form work with other companies to broaden the commercial base with more products. and get better economies of scale into the business in the US. There, the global market during this quarter has been slowing down that and since we are not in a hurry, I don't think we will This is not the time when you will actually go out and push for such a process. At the same time, I will say historically, when we have not had a patent litigation, there has been a continuous flow of interest from companies who would like to either work together with us in the US or have an interest in maybe acquiring rights to subsoil in the US. And I don't see a reason why that wouldn't happen right now. But at the moment, I think the volatility of the market makes that a little less attractive to put a lot of efforts behind right now. But I hope that what we're seeing in the global market, both in the financial market and with trade tariffs and others, will be a short term issue. And over time, we'll see a more stable market there. And clearly, the last few weeks have been a little more positive in that instance. So right now, the process is that we are open to have discussions if companies are interested, but we are quite pleased with the performance of our U.S. business so far, and it's a good contribution to our R&D that we're working with on our pipeline with Amorphox in particular. that we have not received any additional questions in the system that i can see and no more questions from people dialing in so i want to thank all of you to spend 45 minutes with us today and listen to our update of a relatively stable first quarter for the company but also with good optimism for the coming quarters in particular looking at some of these inventory changes that we always see volatility and the volume in the us market in the first quarter normally diminish in the quarters to come so thank you very much for your attention and