Orexo AB (publ)

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Welcome to the conference call. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answer session, participants are able to ask questions by dialing star five on their telephone keypad. Now I will hand the conference over to the speakers. Please go ahead.

Good afternoon, everyone on the call. So I'm pleased here to report our first quarter of 2026. Together with me today, I have Fredrik Jastein, who will go through the financial results of the report. As you know, this is the first report that we have without SobSol, and that, of course, has a significant impact on the way that we are presenting the data and also the length of the presentation, as we don't have the commercial asset with us anymore. So a short summary of where we are right now. We sold, and this has been a quarter which has been one of the most intensive from a work perspective from most of us together with the end of last quarter due to the transition of software. As you know, we sold that on the last day of 2025. But of course, most of the transition activities have been

been for a while. Thank you.

We have in the end, during the quarter, we have, of course, a lot of these activities have led to a reduction of cash position because we're paying a lot of fees. We redeemed our corporate bond, and in the end, we have a reduction in cash position. We are on the balance sheet right now, which is actually attributable to Dexel because we're running their accounts receivables. All in all, I think the transition with SobSol has been very successful. It has been very smooth. There's been no interruptions in the sale of SobSol in the market in the US. collaboration with Dexcel have been running smoothly, and we're quite pleased to see how the sales of SOPSOP has continued after Dexcel took over, which is good for Rexel and the earn-out that we're anticipating next year and the year after. When we look at our development programs, we have seen a steady progress according to the plan, so both ICIPRI is on track for filing later this year. OH640 is on track for starting a clinic or initiating a clinic trial, nasal allergy challenge study in the end of the year. And also, OX390 is making good progress, and we have an ongoing in-debut date study where we expect the results to come here in the second quarter. In addition, we've been working on expanding the use of Amorphox, in particular, into the GLP-1 space, where we have one nasal program ongoing, but we also, based on some feedback and interest, we're also testing whether this could support an oral formulation. And we'll come back to that in more details. So just to remind those of you who have been following OREXO, the way that we're looking at the business right now is basically in three arms. One is that we're working in what we call exploratory. That's early stage programs where we haven't set a full development program and timeline. where we're using the Amorphox technology into new areas, such as peptides, so the GLP-1 agonist, or vaccines. We have the other leg is our development program. That's when we have a set timeline. We are planning for clinical trials and all the way up to submission to the regulatory authorities across the world. And here we have three programs today. And then we have our last leg, and that is when we're partnering our technology and basically making Amorphox amorphic technology available for other companies' programs and where they can use that to accelerate or to improve the properties of their programs. On the first area, the Xplore, the big focus during the quarter has been on the GLP-1s and in particular on semaglutide. We have expanded now into an oral formulation where we're looking to see if by combining By using the unique properties of the amorphous particle, we can basically combine the hemagglutide peptide or other peptides together with excipients that can improve the bioavailability of the peptide when it comes into humans. We are planning for the first in vivo studies on this during the summer. On vaccines, we have been looking a lot to start up collaborations in particular with other parties than just Avera. And we are in good progress to expand into new key opinion leaders and in particular within academia to see where we can basically test a broader span of vaccines together with our technology. Finally, we have our proprietary development programs. As I said before, ICPRI, everything is on track for the submission that we're planning for in Q3. So as you know, we have to redo some of the stability studies in the final manufactured process, we can say. So right now, everything looks like we can submit according to plan. For OX640, a lot of the focus during the quarter has been on setting up manufacturing processes in Canada together with our contract manufacturer. and that is required to have this commercial final commercial product is to be used in the pivotal trial that we're planning for in the end of start to initiate in the end in the fourth quarter or end of this year we've also been working on human factor studies and when you're working with human factors that's how humans are going to use the actual device the way to do that is for formative human factor studies and instructions for use. And we've been doing that during the course with good success. That means that we are then ready to start the real human factor studies that are going to be used for the regulatory submission when we want to. And then finally, on 390, we are now working with our first NVEVO study, weighting the results in this quarter. We're also planning for a Type C meeting with the FDA that we've been planning together with BARDA, and that is with a big focus on our non-clinical plans. So that Type C meeting is with the FDA. So all in all, all of these programs are doing steady progress and basically follow the plan for this quarter. When it comes to the partnering, that's one way our technology is to be used by other partners. And as you know, we've talked about that several times. We have been working with quite a few, both smaller and larger companies to test the feasibility of Amorphox. We now need to move some of these programs into more concrete partnerships. And we are in dialogue with some companies about programs in different phases where we will get coverage of our expenses and also programs that are intended to lead into a longer term partnership of program development. But as we said multiple times, it's very hard to forecast when these agreements will be in place. It takes two companies to get to a conclusion, but we are working hard to expand this pipeline of programs. Then I'll lead, Frederik will lead us into the financials.

Yes, thank you, Nikolaj. So starting with the P&L for continued operations, which following the divestment of SubSol US. As of this quarter, we do not longer follow up on a segment basis. The divested SubSol US business is presented in the report as discontinued operations in note 10. On net revenues, $5 million for the quarter, we have lower ABSA royalties following the trend we've seen for a while now as individual countries' royalty agreements expire. We had higher EDWA royalties, though, from higher partner states in Canada, and we had lower subsoil ex-U.S. revenues, explained by ABSA. Minimum this quarter and lower than last year and that's mainly due to lower marketing related costs for ISIPRI and lower DMHP activities. At higher legal fees seeking a settlement in the DOJ investigation R&D costs, also higher, following high cost for development, which That's following the early redemption of the corporate bond. Partly upset, though, by higher interest rates. And for discontinued operations, and that's mainly explained by the risk fraction cost post-section. People that left as a result will remain . okay for continued operations of 528 million SEC and that the absolute majority is a consequence of the early redemption of the bond so during the quarter we exercise our right to

our own account so the average person has a negative impact on 19 million dollars

was payment of provisions for outstanding rebates related to subsole sales in 2025, and also following obligations in the subsole agreement related to rebates. Furthermore, we had positive changes in working capital from collected subsole sales related receivables from 2025. In addition, under the Transition Services Agreement, following the divestment, ORECSA continues to collect sub-sol revenue during the first year. And it had a positive effect of 2,000,000 SEK on working capital in Q1. This is how we paid back to Dexel. cash flow from the continued operations in the 7.3 million, mainly from severance and other transaction-related deduction costs. So after adjusting for positive FX effect of 9 million SEC, that meant a decrease in cash and cash equivalents of 526 million to 386 million, out of which 52. And with that, back to you, Nikolaj.

So as Fredrik said before, we have So,

Sorry for the delay. This is the operator. We will continue soon trying to fix the sound problem.

Thank you. Thank you. Thank you.

We're six days before the start of the . And we try again here, we were just disconnected. Sorry again for that. So our expectations here is for work 640 that we'll have a clinical trial start or the pubertal trial starting in the end of this year with the result early next year, but also the manufacturing of the clinical trial material is incredibly important in pharma development. And that's something that we'll do now during the second quarter. We are waiting for the in vivo study results and that of course is very important for us to get into the next stage together with BARDA. The collaboration with BARDA is going very well at the moment and I think we have a very constructive discussion with BARDA about how to optimize the development. and how to run the timelines moving forward. And we are, of course, also looking forward to the Type C meeting with the FDA. We think this project is incredibly important for the U.S. government and for the strategy of combating opioid addiction and death in the U.S. Finally, we have our GLP-1 agonist and our vaccines. We're expecting to have some additional in vivo studies in the whole formulation, and we also continue to work with the nasal formulation which, if positive, could lead into the first human studies next year. And parallel with all of this, we are working with all kinds of partnerships, both on a technology basis, on a knowledge basis with academia, but of course also with pharma companies where we can have co-development programs in one shape or form, either them basically using our technology or getting access to our own programs We are looking for a partner for ICIPRI, and we think it's a good trigger to have the filing ready in the US. So we are starting this process right now, week 640. We will also be looking for a partner, and I think here the manufacturing and meeting the timeline of the clinical trial in the fourth quarter is an important milestone. And with that, I will close the presentation and open up for Q&A. So I open for Q&A.

If you wish to ask a question, please dial star 5 on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial star 5 again on your telephone keypad. The next question comes from Klaus Palin from D&B Carnegie. Please go ahead.

Hello, and thank you for taking my questions, even though I want to mention that I didn't hear that much of the presentation. So excuse me if my questions have already been addressed. But I wonder, Q1 2026, how typical quarter is this for the new OREXU, if we exclude what you're doing with the OJ for the moment?

Sorry, I can't hear you.

So if you can hear us, we are trying to dial up using another number. Great. I can hear you. Can you hear us now?

All right. So maybe different perspectives on that question, Claes. But if I address it from a cost perspective, so obviously we're in the transition period and costs within discontinued operations obviously related to transition. but also in the continued operations, we are affected by additional costs in relation to the transition. Now, if we look at a sort of normalized OPEX annual and deducting those extra costs, so to say, then we would say estimate an annual OPEX Assuming also that the projects that we are running now, so an annual OPEX excluding also depreciation of 250 million SEK. It's an estimate, Klaus. Yeah, sure. That's fine. So that's the angle, but you said also in relation to the DOJ

Yeah, if you could provide some granularity about that would be great, of course. I don't know what you can say.

I would say we can't say that much more right now. It's a difficult process, not at least due to personnel change of the DOJ or uncertainty about who is leading from their side. But we have an ongoing dialogue and it is our clear ambition to try to close this. So we are navigating our way through the Department of Justice to find a way to get to a settlement.

Okay, perfect. And with my last question then, I just wonder if you could provide some timeline when you think that the face-out will be completed of the divested business.

We expect the transition period to last some time after the first half of the year. I guess September, October would be a fair estimate. In that period we will face out in continued operations the people that are busy with the transition but then no longer needed. And with that end of the transition period, these continued operations for this year, there will be no costs or income in that. So yeah, that's a fair estimate, I would say.

Okay, great. Thank you. Thank you for taking my questions.

Sorry about the quality of the line. So unfortunate.

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

Yeah, hi, guys. I guess I've got a couple of questions, really, just, again, coming back to the transition and the $52 million SEC that's owed to Dexcel. And I'm assuming that's for returns and rebates only. So I just wanted, I guess, a bit more granularity. How much were the returns and rebates in Cube worth? Is that all for Q1, the 52 million, or should we be assuming and that will be paid in Q2? Is that correct?

Yeah, so there's different aspects to that as well. So the 52 million, that refers to Orexo collecting sales revenues from Subsolve. Obviously, that's just a pass-through. So the 52 million is not belonging to us. So that's the easy part. Now, in relation to rebates and returns, so we started the quarter with 155 million in provisions for rebate. Now, a big part of that is following, you know, separating an asset and we are to pay rebates for those assets that were there in 2025 and we have paid Also following the agreement, the purchase agreement, where we had commitments and provisions in relation to the agreement. So that has been dealt with during Q1 to a large extent. We paid, out of the 155 million, we paid 109 million in rebate. And that means that we have still left some 40 million in rebates to pay going forward.

Okay, that's very helpful, Fredrik. The 52 million in Q2, will there still be pass-through payments coming, or would Dexcel have taken it all over by then?

No, that would be taken over as we speak, but there would be probably new payments since this last for nine months, so there will be new pass-through money to clear to Dexcel. Okay.

Okay, that's fair enough. And then I guess my only other question is just on the Barda collaboration, and you mentioned obviously we're going to see some in vivo data in Q2. Is that a no-go-go point in the collaboration then? And if so, what sort of, what do you need to show for the collaboration to progress?

I think in all of the development, there is a continuous go, no go. If things are turning out in a very unfortunate way, then it would be a, you have to consider is this worth redoing? Should we redo the formulations? We're testing several different formulations in the in vivo study and should it of some reason all of them show no indication for nasal uptake, then there will need to be a new discussion with BARDA about how this is moving along. I think that comes continuously in all development programs. This one is a little unique because we are running other programs or have been running other programs in these early stages without sharing the information, but because we have an income, we're of course giving an update continuously on the BARDA partnership. I will say what we're testing in the INVIVO study is the nasal uptake, and there have been some evidence that the adipamasol, the active ingredient, is available for uptake through the nose. So we think that we have a good shot on goal here. But of course, should it turn out that there is no uptake, then it will need to be a new discussion with BARDA. Is it worthwhile adjusting the formulation? Is there other options? delivery methods that we should test or should the program not continue. But I think at the PAMASOL, as we went out that the R&D day is well researched and have been tested and is used daily and it's an area used across the world. So it's a well-documented API, but just not for humans.

Okay, that's great. Thanks very much for your help.

Thank you. We have a problem here. I'm really sorry about the sound. We recognized that when we got disconnected, so we have a few comments about that. My apologies. We need to go back and look at what we can do to address that next time to avoid the same thing happening. Then we get a question about what are the value triggers in near time. Delivering on our development program is, of course, what we have most control of and basically meeting the development milestones that we have outlined now with NVivo data from 390 that Samir was just asking about, our submission of ICIPRI, the continued development towards starting the 640 program in the autumn. I think all important data points. Also, in the data on GLP-1s, should that turn out positive, that would be an important trigger. And then on top of that, we, of course, have partnering discussions. And I have rich from experience, I would say it's very hard to put a timeline on some of these processes, but it's not because they're not ongoing. So there are partnering discussions ongoing and ongoing. different types of development programs. And should they come in, I would expect that that has a positive impact. And as I said, we are running negotiations and discussions as we speak. So we are, of course, optimistic that we will have some partnership that we can share. But time will tell. There's no deal until we have a signed agreement. But I do think it's quite important if you look at the overall market, there's also external drivers that can have impact. Taking the OH640, I would look at the transition or transformation of an injectable epinephrine market and how it's moving to get into nasal. So as you know, there are nasal alternatives available in Europe. Some countries in Europe, in the US just got approval, weeks ago in canada so this transformation going from from injectable and auto injectors into nasal i think is an an important value trigger uh since which 640 is relatively close by in in development terms and is a late stage quite low risk asset so i think that to recognize value in that will be an important value trigger With that, we have no further questions. And once again, my sincere apologies about the sound. Frederik and I, we could hear each other quite loud and clear on our side, but unfortunately, that sounds like it has not really gone through to all of you. We did have a lot of sound checks before we went into the conference, so something must have happened during the meeting. So my apologies for that. I will then invite you to listen to our future presentations and when they are, that's available on the homepage. Thanks a lot and goodbye.