Xbrane Biopharma AB (publ)

of the Q4 report 2024. My name is Martin. I'm the CEO of X-Brain and I have with me our CFO, Jane Benjamin. And let us go straight into an operational update from the quarter. and after that Jane will go through the highlights from a financial perspective and then we will wrap up with a Q&A. Most of you are probably aware of our general business. We are in the space of developing biosimilars and the slide here shows our biosimilar portfolio. It is addressing originator sales of about 26 billion euro annually. So a sizable market opportunity we are addressing. The first biosimilar we developed was a biosimilar to the Hydraglucentis. It's called Ximilusi and it's approved in Europe since late 22 and launched in march 2023 by our commercialization partners data and we are going through a regulatory review process with fda for an approval in the us then we are developing a buy similar to cynthia 2 billion euro tnf inhibitor used in treatment of psoriasis and rheumatoid arthritis Quite unique program. We are the only one or one out of very few developers of by assembly candidates to SIMSIA. And we believe that can be a great opportunity for us and a future partner. Here we're going through an out licensing process. We'll talk more about that. We have the ambition to close an out licensing deal within the close or near term future here. Then ExDevane, it's our bisimilar candidate to Optivo, which we recently partnered up with Intas in a global co-development commercialization deal. We're very happy with that. And this program is now going full speed ahead towards clinic in a timeline that goes towards approval and launch up on loss of exclusivity in the U.S. December 28th. We'll talk more about this program and this deal with Intas later. And then we have early stage development of by Ximly candidate to Darcel X in the portfolio. Let's start with a snapshot of Ximilusi X-US sales, if you will. The product is now launched across 21 countries, out of which 19 in Europe. You can see the map here on the left hand side, the countries in which the product so far has been launched. We are together with our partner Stada seeking approvals also outside of Europe with main focus on Middle East and select countries in Asia and we hope to be able to get approvals across a few other countries during the course of the year and subsequently be able to launch. We see continued strong growth from a volume perspective of the sales from starter to end customers. We've seen 20% quarter-to-quarter growth last quarters and that's also the growth level Q4 versus Q3 2024. We're very happy to see that the sales trajectory is now following our forecast. There's though still a huge potential for this product across the European market. This is a market of about 5 billion euro if you think about anti-VEGFs for ophthalmic purposes. So that is to say Lucentis and Lucentis by Simulus but also Ailea, Evabustimo and other products with same mode of action. And Ximilucia has now only a 3% volume market share if you look at the random business map market. So that is to say, Lucentis and Lucentis biosimilars combined. And as those of you who follow us know, we have higher ambitions than this. We've seen other biosimilars collectively take up to 60-70% of the originated product over the course of couple of years now sales penetration of biosimilars to Lucentis has been slower than for many of these other biosimilar situations but we now see that the acceptance of biosimilars in the ophthalmology community in Europe is improving and it is all moving in the right direction and needless to say is a huge potential if we are able to get to its start take this three percent volume market share up to what we initially were hoping for, 25% volume market share. We're happy to see that Simulus is currently the second biosimilar from a market share perspective across Europe, Lusentos Biosimilar. And all in all, during the course of 24, we generated 63 million Swedish crowns in revenue. from Simulusi and Jane will talk more about the financials, but an important point to make here is that this comes solely out of profit sharing from sales of the product. We have made no shipments of product started during the course of 24. As you maybe recall, we did substantial shipments during the course of 2023, which constitute the bulk of our revenue generated during the course of 2023 but now it's solely profit sharing. So I think it's all moving in the right direction across Europe and we're confident that we're going to continue to see this growth trend during the course of this year and onwards to get towards the levels which we originally were anticipating. Now, moving over to the U.S., the U.S. still poses a very significant market opportunity for us when it comes to Ximilusi. It is about 10 billion US dollar market. Again, if you look at anti-BGFs or ophthalmic disorders, including ILEA and other products with the same mode of action as Lucentis. As you may recall, we have a partnership with Valorum Biologics for commercialization of XymLuci in the US. This agreement is currently being renegotiated and as a consequence of this and I think maybe Jane will talk a little bit more about that. The upfront payment is going to be reduced on the benefit of higher royalties. So I think it improves our earnings potential or royalty potentials in the long-term perspective when it comes to similar to the US. Now getting over to the regulatory process, we resubmitted the BLA. late last year and we've since had communication with the FDA and FDA is currently requesting some additional documentation from one of our contract manufacturers which is now being submitted to the FDA on a gradual process and it's all going to be submitted when we come to April and when we get there FDA are going to decide on a so-called BESUFA date or a decision date and also determine whether or not a re-inspection of this production site is going to be required or not and that will also dictate the review process for FDA. We still are hoping on a mid-year approval, but we are going to have to get back to all of you in April once all the documentations requested by the FDA are submitted and a BESUFA date is set. But we still believe in the market opportunity or opportunity for Eximilusi. There's one biosimilar to ILEA launched so far, but the bulk of the ILEA biosimilars are held back by a formulation patent, which, of course, poses a meaningful opportunity for biosimilars to nag into the ILEA market. And we do believe, due to the reimbursement structures under Medicare Part B, that interactions of new by similars in a certain segment it creates a good opportunity to take additional market share due to the whole mechanism of reimbursement first year being set on the basis of the back as you're not going to have an average sales price at that point in time So we're excited about the use opportunity and we're working hard to navigate through towards an approval and of course working closer together with Valorum to make the proper preparations for subsequent successful launch. Now moving over to ExDevane, our Optivo by Simile candidate. As we talked about during the course of Last year we were in the process of trying to identify and tie up a good commercialization partner for this program and we're very happy the way this ended up with a licensed deal with Intas. Intas is an Indian biosimilar developer. They have been developing a handful of biosimilars, which are all launched in the European market via their European sales arm accord. And they have a very strong position, I must say, across Europe. A third of all oncology injectables are being sold and distributed by accord in Europe. So they have a very strong position within oncology in Europe. They're now establishing themselves in a very meaningful way in the U.S. in preparation of launch of Extivain. As some of you maybe saw, they acquired Coherus, PEG-filgrastim, Biosimilar to kind of set the start of that infrastructure within oncology biosimilars in the U.S. So we're very happy with this collaboration and what it entails is that we're sharing the development responsibilities. INTAS are going to be responsible for the clinical regulatory development, which then is a substantial investment, as most of you know, to carry through the required clinical trial. and Exprin is responsible for certain additional CMC related development activities including process characterization and validation. Intas paid it up from 10 million euro we have upcoming milestones of another 3 million euro and then there is a profit sharing scheme post launch. So we do believe that this program is going to contribute in a very meaningful way to ExBrain's income generation from 2029 and onwards. Looking at this from a timeline perspective, we have done all the preparatory work to be able to initiate the clinical trial. We have scaled up to clinical commercial scale. We have confirmed analytical similarity versus the reference product, and we have produced the clinical material. So, joined together with Intas now, we are gearing up to be able to get this trial initiated. As we've talked about before, we have a streamlined clinical program agreed upon with both EMA and FDA. which makes us comfortable that it's going to be executionable within the time frame of or leading up to a BLA submission Q4 2027 and then leading to an approval Q4 28 so that this by similar candidate can be launched in the US upon loss of exclusivity. Opdivo as you Some of you know, is expected to reach peak sales of 14 billion US dollar. Significant portion of that is in the US. And given the size of this originated product, I think we see rather limited by similar development activity. we believe that xDivane is going to be one out of four or five bisimilars to Optibo, which makes it a very meaningful income generation opportunity for us. And then moving over to XB-003, our bisimilar candidate to SIMSIA. And as I mentioned in the beginning, Simsea is a TNF inhibitor with 2 billion euro sales, roughly. It has a niche position within the TNF inhibitor market. It's a market of about 40 billion euro. And of course, we've seen quite a few biosimilars on the other TNF inhibitors. But despite that, Simsea is holding up its position. And that's given its niche within pregnant and breastfeeding women. which is actually a sizeable niche within these indications. And what's exciting here is that we believe we can be the only buy similar to Simsia up on launch. And of course, that makes the whole situation more favorable when it comes to discounts versus reference product you need to offer in order to drive a meaningful volume market share. so this is a very exciting opportunity we believe and we've done some great progress I think in the development it's very difficult to develop and manufacture by similar where high production yield is required in order to get to commercially viable cost picture we've been able to reach what we believe is required thanks to our patented platform technology and we have had initial advices from both EMA and FDA which makes us feel comfortable with the analytical profile of our biosimilar candidate and as you know we are working hard now to out-license this program and find a suitable commercialization partner as we did with Intas for Extivain and we are in Promising discussions with, I would say, due diligence have come to an end when it comes to the leader in this whole process. And we are on track towards being able to close a deal during the course of this quarter. So that's clearly our ambition and target. So we hope to be able to get back with positive news in that direction within the near-term future. With that said, I'm probably going to hand over to Jane for a financial overview of the quarter.

Yes. So we can see that the revenue in the fourth quarter amounted to 66 million Swedish crowns with a gross profit of 61 million, corresponding to a gross margin of 93%. On an annual basis, we see that the sales from outlicensed products amounted to 132 million Swedish crowns and 63.4 was generated from product sales. This resulted in a gross profit amounting to 180.5 million Swedish crowns with a gross margin of 91%. Total revenue for the year of 2024 reached 198.7 million Swedish crowns. The administrative expenses amounted to 10.1 million Swedish crowns for the fourth quarter and 40.1 million Swedish crowns for the full year. The main underlying expenses are related to personnel cost and normal activities. R&D expenses amounted to 80.8 million Swedish crowns for the quarter and 391.8 million Swedish crowns for the full year. The main activities are related to the upscale of ex-devane production volumes, the resubmission of the BLA to the FDA, and the scale up of production processes for XB003. 78.9 million SEIC has been capitalized on a full year basis. The operating cash amounted to 94 94 million Swedish positive for the last quarter of 2024, which comprises of 115 million Swedish from an upfront payment from the Intas Pharmaceutical Partnership for the Extivain deal, as well as achieved milestones from Biogen. For the full year, operating cash amounted to 133.7 negative million Swedish crowns. Cash from the investment activities accounts for negative 17.3 million Swedish crowns for the quarter and negative 52.2 million Swedish crowns for the full year, referring mainly to the capitalization of Ximluci and Xtivain development costs. From the financing activities, we have a positive 16.8 million Swedish crowns for the last quarter, which mainly corresponds to a bridge loan in the amount of 20 million SEK that was settled in January of 2025. Thanks.

So to summarize,

The fourth quarter, revenue generated of 66 million Swedish crowns during the quarter. Key highlights, the license agreement around Extervain with Intas. Progress of Ximilusi sales across Europe. Big launch in 21 countries and continuing to see a growth trend of 20% quarter by quarter. And overall, if you compare towards viewport 2023, it's a little bit more than 200% volume growth. And then resubmission of the BLA of Kissimmee Lucy to the FDA. And looking ahead during the course of this year, what we are really focused on now, as I said, to conclude an out-licensed deal with XP-003, to navigate through an FDA approval for Ximilucid, which is going to be branded Leucamze in the US, and to, together with Intas, initiate a clinical trial for Extivain. And then, of course, to work closely together with Stada to continue the strong growth trend of stimulus across Europe and additional territories. So with that said, we can move over to the Q&A and start to see if there are any questions on the ones who called in.

If you wish to ask a question, please dial pound key 5 on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key 6 on your telephone keypad. The next question comes from Chien Hun Lee from Pareto Securities. Please go ahead.

Hi, good afternoon and thanks for the update. I just have some quick questions regarding the account payables. They're 242 million SEK. Can you elaborate a bit on your payment schedules?

Thank you. Yes, we have agreed payment plans to three of our main suppliers which constitutes the bulk of these accounts payables where we made a certain payment just after year end so in January and we're now making gradual payments to these three main suppliers.

Okay, thank you. And maybe another question regarding the upfront payment from Intax. So the remaining part is expected to be recognized by Q2, is that correct?

Yes, it's going to be recognized up until May this year. Okay, all right.

Thank you very much.

The next question comes from Philip Enison from Redeye. Please go ahead.

Hello, everybody. Thank you for taking my questions. So I wanted to start on the Valorum topic. And can you explain why you haven't received the upfront from Valorum yet and what topics are the current negotiations on? Thank you.

Yes. So it has been related to ongoing refinancing or financing of Valorum, which has made an inability for them to pay the upfront as agreed in the license agreement. And then as a consequence of that renegotiation of the license agreement, has been initiated is yet not concluded but I do believe it's going to be concluded in the near term future which essentially is meant to create more financial room if you will for Valorum to carry through the preparatory commercial activities for an upcoming launch of this program, given the financial resources they have at hand. And as a consequence of that, significantly increasing the royalty rate for Experian and Stada.

Okay. So how about a few more? Could you also tell us what is your view on the U.S. running a VC mob opportunity in light of some of the recent statements?

I think we still view it as a very significant market opportunity. The volume is there definitely. I think what the Sandoz news shows is probably that the discounting has been a little bit higher than anticipated or pricing has been going down a little bit quicker than anticipated. And although I think they've said that they're going to go get back on the topic, I think our read on it is that they are withdrawing the product from the market to reintroduce it with kind of a reset ASP, if you will, which then determines a new reimbursement level. That's my read on the situation. And as far as I can tell, it's not impacting our overall view of the market opportunity. We still believe that Renebismab in itself, and then going beyond from that, the whole ILEA market and the current off-label Avastin market poses combined very good market opportunity for our product, Xyminus or Lukamsi, what's going to be branded in the US. Okay.

When can we expect the pre-filled syringe to be launched, really?

We're still working on the syringe and we are targeting to get towards an approval during the course of the year in Europe initially and then we need to take that further on into other territories such as the US subsequently.

Okay, and the last one if I may. and that is from a liquidity point of view, how far will your current cash take you?

Well, I think what we now need to do is that we need to get a deal done with XP003 during the course of this quarter, as we've communicated, in order to, via an expected upfront payment from such an arrangement, secure the company's need for its further working capital requirements.

Okay. Thank you for taking my questions up with updates.

Thank you.

As a reminder, if you wish to ask a question, please dial pound key five 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 and closing comments.

From the written questions, I see we have questions regarding the upfront payment, which you have addressed, and also a question with regards to the syringe, which has also been addressed.

And I can comment also, there's a mention about buy again. There was a milestone expected to come in of 5 million US dollar from Bayern. Subsequently, we had a discussion with them and agreed upon an immediate payment by half of that milestone. So that's why we took a credit loss also on 2.5 million US dollar in relation to that milestone.

Can you present some big differences and similarities between X-Brain and just Evotech? In which situation does X-Brain have a stronger position?

I think What we really have focused on from experience perspective and where I really do believe we have a competitive advantage is related to our platform technology, which I feel confident in that it provides us with a higher proactivity if you will or yield in the expression of the targeted antibodies and leading to a lower production cost and I think we can see at XB-003 or SIMSIA biosimilar candidate as a testament of that where we are the only one or one of the very few developers of a biosimilar candidate to SIMSIA where you really have a challenge in getting to high productivity or high production yields on a fairly difficult to produce antibody fragment in this case. So I think this demonstrates the potential of our platform technology and our focus. And I do believe that production cost is in this market going to be more and more important. And therefore, I do believe that X-Spring and our platform technology is going to become more and more relevant within the space.

So we have received another question with regards to Biogen. I think that was addressed.

Yeah, any other questions or? Something is coming in here.

A budget we addressed. Okay, will you publish a summary of Q&A after the meeting? Yes, I think we have done that in the past, but maybe not in the most reasonable or recent quarterly calls. But that we can certainly do.

Okay let's see here another question.

How will the out licensing of products affect the profit and loss this year? Well too early to tell we have certain revenues as we talked about from that from payment from Intas which is going to be partly recognized during the course of this year. we are hoping and expecting on an out licensing of XP-003 which we also do believe shall lead to revenues being recognized during the course of this year we also have milestone payments expected from Intas so we believe that out licensing or license fees generally speaking are going to contribute in a meaningful way to revenues during the course of this year and they come in that sense at 100% gross margin if you will so I think we'll have a quite good contribution from license fees during the course of the year it's hard to say at this point in time though exactly what amount it will be okay Let's see. I think there's another question on buy-in. Did we address that? Why the buy-in payment was halved? I think we came into certain dispute with buy-in with regards to to which extent the milestone had been completed or not. And I think in the light of that, we were also in need of rather quick payment and resolution. So that I think was the background to the agreement on taking an immediate payment of half of the milestone payment. We have addressed that. Are you planning to reduce your company costs? If so, how? we did a cost reduction program in end of 23 we introduced that one and we've seen the results of that during the course of last year and we are continuously after that looking very carefully at our costs but we need to balance that versus making progress on the respective different programs in order to be able to generate revenues and the income that goes across all the programs essentially so it needs to be balanced but we work very consciously looking at the cost picture

Good. Okay.

I think that probably concludes the Q&A. There's a question about cash flow, timeline of cash being cash flow positive. And actually, as you probably can see now, also fluctuates from quarter to quarter based on a slide which Jane showed where actually there was a positive cash flow during the course of Q1 but that was driven by by and large by upfront payments from Intas coming in so it's going to be fluctuating I guess actually based on certain such events but we're also seeing that the cash being generated from sales in Europe from Stada is progressing so that will contribute more and more in a meaningful way and also we have the expected upcoming approval of Kim Lewis in the US which also then is expected to contribute from a cash perspective in a meaningful way via milestone payment from a part of a loan but also prepayments of goods to be shipped so It's a little bit hard to predict at this point in time, so we're going to have to get back to this question. But it's also going to be fluctuating a bit during the course of the year due to this kind of event such as outlicensing.

Would you say that the Stada sales activities in the European Union for Oxymdus are progressing as planned?

not as they were initially forecasted upon launch but when we reset the whole sales plan Q3 2023 then that plan is now followed and we see volume growth which are in line with the expectations which were set back then

I think that was the last question.

Good OK, then we thank all of you who listened into this call and those of you who put forward questions we are as there was a question here. Going to put provide transcripts to the Q&A and put them on our web page. So with that said, thank you very much. And we're here should there be any further questions. Thank you.