Xbrane Biopharma AB (publ)

to X-Brain Biopharma's presentation in relation to our financial report first quarter of 2025. My name is Martin. I'm the CEO of X-Brain and I have with me today Jane, our CFO. So we will go through an operational update in relation to the quarter. I'll start with that and then Jane will take over and go through a financial update and then we will open up for questions both via those calling in and also over the chat. So big event during the quarter was our agreement with Alvotek to sell one of our programs XB-003 are by similar candidates to SIMSIA as well as parts of our organization the part which is engaged in laboratory activities as well as the actual development lab which we have established here in Campus Solna close to Karolinska Institute. This was a very important transaction for us. It puts us in a better financial position. We are getting a total proceed of 275 million Swedish crowns and with that we are going to be able to um repay some of our current debt including the outstanding convertible bond of about 150 million swedish crowns as well as certain accounts payables in relation to our manufacturing partner for this specific program xp003 and We are also reducing our fixed cost base as we are reducing our organization. We're going to have approximately 25 employees post this transaction, and we believe we are going to have a fixed cost base of about 40 million Swedish crowns annually. So yeah, very important transaction force and it's going to close end of May. So the transition of the employees is going to be active beginning of June and the proceeds is also going to come to HSpring in the beginning of June. Okay. What this does to us is that we are going to be able to be fully focused on particularly Ximilusi, our Lucentis biosimilar by a similar candidate. That is going to be our primary focus during the coming years and we're going to be very much oriented towards trying to optimize our cash flows with these two assets and await initiating development of further by similar candidates. until we potentially comes in a position with financial resources which allows that. So a snapshot of XimLuce here. As you probably know, this is our Lucentis Biosimilar we developed together with Stada. Was approved November 2022, launched in March 2023 in Europe. And it's now launched across 23 countries. The last country where the product was launched in March was France. That was the last of the five big European countries. It's also launched in a few select markets outside of Europe. And we have ongoing regulatory processes together with Stada in a few other Middle Eastern Asian countries as well. And the arrangement we have with Stada is essentially a 50-50 deal where we receive 50% of the profit contribution generated of sales of the product. So the net sales minus production cost minus sales and marketing expenses on Stada's side, right? We get 50% of that. We can move to the next slide and I think first quarter was a good quarter. We've seen historically quite strong quarterly growth from a volume perspective around 20% last quarter, jumped up a little bit in Q1 to 36% volume growth versus Q4. But there is some volatility in the growth dependent on launches in certain countries and specific orders from different countries. So I think we shall expect an average going forward of about 20% on a quarterly basis. As a consequence, the profit sharing that came in also jumped up a bit in relation to Q4. I think we had close to 20 million Swedish crowns coming in as a profit share from Stata during this quarter. And the volume market share, if we look at the month of March, was about 7%, and that is considering Lucentis and Lucentis Buy similar so the Renovisumab market so seven percent volume market share across that European market we can look at the table in the bottom corner here yes some scenario analysis if you will what different volume market shares would mean in terms of profit sharing and that is assuming average net sales price from start-up to customers as we saw in 2024 and also the average sales and marketing expenses as percentage of net sales as we had in 2024 now these numbers are fluctuating a bit due to mix effects as in since pricing is somewhat different across different countries and also due to specific sales and marketing activities in specific countries in the quarter in 2024 the volume market share on average was at about 2.5 percent so that corresponds to a profit share of 36 million Swedish crowns or so and now as you can see we're a little bit above the five percent you can see in the table but five percent would mean about 70 million Swedish crowns on an annual basis and I guess our ambition still is that this product should be able to reach a level of 25% volume market share as we've seen that biosimilars to other biological drugs have taken collectively about 75% of the volume of the originator now we have two other biosimilars on the market so 25% would be the fair share if you will But as you know, those of you who have been following us, the sales ramp up has really been slower than what we initially anticipated due to more educational activities required due to Lucentis biosimilis really being the first biosimilis in the ophthalmology segment and also biosimilis calming In vials, while as the originator, the majority of the sales of the originator is in the previous syringe, which provides a certain benefit to the clinics in terms of time saved in the administration procedure. Now we are working on a previous syringe as well. planned for submission during the course of this year to EMA for European approval. So that's a snapshot of Ximilucia Europe. We can speak a little bit about the US. We have an ongoing approval process with FDA. The BLA was resubmitted in December last year but FDA requested certain additional documentation from one of our manufacturing partners that was completed mid-April and the review was then initiated by the FDA we do expect to get the basulfadate communicated mid-May according to existing procedure FDA shall communicate the basulfadate 30 days post submission of a resubmitted BLA So if they judge that they have all documentation to formally initiate the review, we should get the besufer date mid-May. And we will communicate that to the market as soon as we receive that communication. We have a partner in the US, Valorum Biologics, and they are making the proper preparations to be able to launch the product as soon as approved. And the US market, we're quite excited about. It poses a significant opportunity. 10 billion US dollar market if you consider the full retinal anti-VEGF market. So sizable market, a lot of things happening though. We have, of course, Lucentis and the Lucentis biosimilars. We have a big chunk, which is ILEA, where biosimilar entrance have initiated with Amgen's product being launched. We do believe that the other ILEA biosimilars are going to be held off until mid-27 due to waiting out certain IP. So it's a dynamic marketplace and we hope of course that we together with Valorum are going to be able to capture a portion of initially of course they're on a business market but also nagging to the other part of the market including ILEA since we hope for a launch prior to multiple ILEA biosimilars coming to market but also to be able to take part of current Avacyn off-label usage So again here one can play around a little bit with certain volume market shares which one could think about from a scenario perspective and also average selling price and this leads us to believe that profit sharing of between 120 to 220 million Swedish crowns for X-Brain could be feasible on an annual basis. and we do hope for an approval during the course of this year and then a launch during the course of next year after Valorum having a Q code approved and in place so that's probably an update about Simlucin, we can move on to Extivain. Extivain is then our Opdivo biosimilar candidate. Opdivo, B1 inhibitor, immune oncology drug, sold for about 9 billion US dollar last year, expected to be selling for 14 billion US dollar in 2028. And December 28 is a loss of exclusivity and opens up for potential entrant of biosimilars to Opdivo. what we see currently, ongoing clinical trials by Sandoz and Amgen when it comes to Octivo biosimilar candidates, and probably we expect that we'll see something coming in from Teva as well. But given the size of this originated product, we feel that the competitive pressure from a biosimilar perspective is limited. And we do believe in a scenario that we could be one out of four biosimilars on the market in the US upon patent expiration. We're very excited about our partnership with Intas. Indian pharmaceutical developer, strong knowledge in development of biosimilars, have a handful of biosimilars approved in Europe. Accord is the fully owned sales and marketing subsidiary of Intas, very successful in commercializing pharmaceuticals across Europe. A third of all oncology injectables actually in Europe are being sold by Accor. So they've made a very strong footprint across Europe and now making very strong inroads into the US with the recent acquisition of Coherus PEG filgrastim biosimilar. So we feel we have a very strong partner for this program. For those of you who don't remember, this entailed an upfront payment of €10 million, which came in last year and developed milestones of €3 million during the course of the development. X-Brain's development responsibility lies within CMC related activities, process characterization and validation of drug substance and drug product side, which entails an investment of about 200 million Swedish crowns net of commercial material being produced in the process and interest development responsibility lies within the clinic which is a sizable investment and we I do expect initiation of clinical trial during the course of this quarter. We made all the preparations with regards to documentation for the IMPD, production of the clinical material, and interns have signed up at Global Zero for running this trial. And we do believe that this clinical trial can be done in a timeframe that allows for BLA submission Q427. It's a trial which includes 340 patients within melanoma. We believe that's feasible to be able to recruit in this time frame. And we're very much targeted on, together with INTAS, a Q427 submission, which would allow a launch by loss of exclusivity in the U.S. Yeah, we're quite excited about this opportunity. If we look at the US and we can look at penetration curves and pricing curves on the left hand side. So this is essentially the collective market volume market share of the biosimilars versus the originated product over time from launch of the first biosimilar. We can see that oncology products have had an average penetration of 75% versus the originator three years post-launch. And it has been quicker for these kinds of products, which goes via Medicare Part B and are sold via the hospital channel in comparison to by Simrace Goon via the pharmacy channel where We have the pharmacy benefit managers, which has a quite strong position in the US. And then, of course, pricing varies quite a lot from the molecules we've seen historically, but it risks down towards discount versus the originated pre-patent expiry pricing of about 40 to 70%. So if you play with the numbers again, in kind of different scenarios with different volume market shares and different discounts on the pricing side, we do believe that this by a similar candidate has a substantial upside potential for expense could lead to annual profit sharing of above a billion Swedish crowns. size but of course dependent on what you choose to believe in with regards to volume market share and discount to the regionator. But as I said initially we do feel that the competition from other biosimilar developers given the size of this molecule is quite limited. Okay so that was a brief operational update so then I hand over to Jane to go through the financials.

Yes, hello. So I will be speaking a little bit about the financial of the first quarter of 2025. So the revenue amounted to 93.2 million Swedish crowns, which corresponds to a gross profit of 52.9 million Swedish crowns and a gross margin of 57%. And the revenue is generated from product sales of Ximlusi corresponding to 46.6 million Swedish crowns and also outlicings in sales amounting to 46.6 million Swedish crowns, which is directly connected to the agreement with Intas that was signed in the last quarter of 2024. And so the sales corresponds to a volume growth of 36% versus the last quarter of 2024. And the average volume growth since launch amounts to 29% for Ximilusic. And the administration expenses amounts to 11 million Swedish crowns and the R&D expenses amounts to 46.8 million Swedish crowns, whereof 24 million Swedish crowns have been capitalized in connection with the ExDevane program. As you all know, we have signed an agreement with Alvotek to divest part of the R&D The R&D department of X-Brain and the XB003 program, which means that the expenses for R&D will be significantly decreased after the second quarter. And the cash position at the end of the first quarter amounted to 25 million Swedish crowns. And the operating cash flow amounted to negative 69 million Swedish crowns, which is mainly related to sales of inventory items and decrease of accounts payables and also of accounts receivables.

Yeah, so key takeaways from the Q1 report 25 for X-Brain. Revenues of 93 million Swedish crowns. Continued strong growth for Oxym Lucid in Europe. And then the Albrecht deal, which we've talked quite a lot about. Priorities going forward, of course, navigating through the FDA process for Oxym Lucid to get an approval during the course of this year. Get clinical trial for X-Divane started. And then continue to support our partners when it comes to sales and marketing of XM Lucy. That's really where our focus lies. So with that said, we can probably shift over to Q&A. And we first welcome any potential questions from participants calling 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 Dan Akshuti from Pareto Securities. Please go ahead.

Hello and thank you for taking my questions and congrats on the progress and turnaround. Just two questions. One is a bit on suppliers and how they have been kind of willing to postpone some of the payments that should go to them and how you think about financing now going forward post-May, post cash receivables from Alvatech. And also with regards to Ximluki, I mean, the financials are fluctuating a lot because of all the deal structures. But is it a way to look at what is actually coming from the profit sharing is to kind of take the note too in the report there where we have the license revenue of 46, product sales 46, and we take the COGS away so that it's around 6 million that is actually actually coming from the profit sharing part, not from the shipment of product to Stada and then getting paid for it. Sorry, thank you.

Yeah, so let's start. Yeah, we worked very actively during the last 12 months or so with our or three of our main manufacturing partners with regards to different agreements on deferred payments and they've been very accommodating and understanding of our situation we have all intentions now to settle all this debt in June essentially when we get the proceeds from the transaction with Alvatec and then we need to look at what would how we should self-finance the company from that point onwards. We have a very much reduced fixed cost base, as we talked about, about 40 million Swedish crowns, and now we feel that profit sharing coming in from Ximilus in Europe covers that by some margin. At the same time, we need to make a substantial investment into Ex-Divane program as I mentioned that net of actually the value of material that can be commercialized is at about 200 million Swedish crowns but then also we have an inventory coming in or on Ximilusi which we expect to be able to convert into cash during the course of 26 and 27 and that is at about 180 million Swedish crown so all in all it nets out but there are some imbalances in cash in and cash out if you will so we need to find a proper way to finance the business and make sure that it balances out but over a time period from now essentially up until launch of Extivain in 2018 or so. We do expect that it will all balance out. Coming to your question on the profit sharing, so I can comment a bit on first quarter. We had a profit sharing coming in in cash terms now of about 20 million or close to 20 million Swedish crowns. But then at the same time, we made a shipment of finished goods to to start during this quarter and there and as you remember we do that at cost but there are some discrepancies in the kind of the average at cost supply price and the true to be accounted for cost for the specific shipment that was done and I think that we had there we had a small negative figure if you will which leads to this number you I think rightly calculated based on the figures in the Q1 report so that's probably my call maybe Jane want to clarify something no that is right also and the shipments that are made to Stada currently have already been prepaid by Stada

in 2023. So that is still being settled with those shipments coming in currently. By the end of this year, that will have been settled in full and we will actually be able to receive proceeds in terms of cash coming in from those shipments. Any other questions?

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

So hello, everyone. I just have a few short ones. So the first one, will we be able to see a fair representation of the new company in cost space after the now in Q3? Then I would also like to know if there is an update on the negotiations relating to the upfront from Balloran that we spoke about last quarter. And also, if you could have a few words about the PFF and the news there. Thank you.

Sure. Yeah, I think in Q3, the Q3 report shall portray a fair picture of the organization post the Alvatec transaction. As we said, the Alvatec transaction is going to be closed end of May. So it's kind of two months in Q2 of still the old X-Brain, if you will, and one month with the new X-Brain. So Q3 will be a fair representation. That's correct. Then we had a question about Valorum. Yes, we're going to, together with Stata, pick that negotiation up again now when we hopefully get the timeline cleared from the FDA with the communicated BESUFA date. So as soon as we have that, we have the intention to pick that up again and we'll make sure to communicate to the market as soon as that is settled. And then. Yeah, the pre-filled syringe. We're still working on the development of the pre-filled syringe. We're going through, if you will, the last validation step of validating the outer sterilization of the syringe, which is a requirement both from EMA and FDA actually. And we're targeting a submission to EMA during the course of this year as a variation to the existing approval. And we'll make sure to get back as well as soon as we're there.

All right.

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

I don't know if there is a mistake here, but we see no questions coming in over the chat. That's somewhat surprising because we typically have quite a few questions coming in over the chat, but we can see none now. So probably what we will do is that if there's kind of a technical glitch here and there are questions coming in over the chat, we'll have to respond to them in written format and put that up over the web page. No questions. Okay, then we close the call and thank you very much for participating.

Thank you.