Xbrane Biopharma AB (publ)

Come to our webcast in relation to our quarterly report for the third quarter of 2025. My name is Martin. I'm the CEO of Xprint Biopharma and I have with me today also our CFO Jane. So we will, as we usually do, start to go through the operational highlights of the quarter. and then Jane will go through the financial highlights and then we will have some minutes for Q&A towards the end and you can ask questions either via the audio function if you've called in or via the chat okay So we'll start with Ximluci, our Lucentis biosimilar, which we have partnered up with Stada, currently launched in 24 countries, out of which 20 in Europe and four in Asia, Middle East. It's quite straightforward collaboration where we are essentially sharing the profit contribution 50-50 from the sales and marketing of this product and just to have a look at the market situation to start with so this is a buy similar to Lucentis active ingredient Ranibizumab and we have beyond Xymlusi three other biosimilars to Lucentis on the market so you can see that there's a dark blue part on the bottom that's Lucentis the originator as well as the Lucentis biosimilars on the market And then if we consider the broader class of drugs, retinal anti-VEGFs, we also have the regenerative product ILEA, as well as Vabysmo. And then we have a certain off-label usage of the cancer drug Avastin. All in all, this is a market of about 5 billion euros. um across europe and it has been growing with some seven seven percent per year um in volume and 5.5 in value and we're seeing quite a lot of developments in this market it's a sizable market and it is growing um but it's also so that um the new product launched by Roche is taking market share in the overall market and in the ILEA space we're going to see Biosimilars coming in to the market starting from the end of this year and onwards. If we look at Ximilusi and the performance of Ximilusi we had more or less a constant volume Q3 versus Q2 and that is volume that Stada sold to end customers and market share from a volume perspective was also retained at about eight percent then again that is the market share within the cannabis market so versus Lucentis and the Lucentis biosimilars Simlusi is the market leader amongst the biosimilars in Italy and Germany and we are Having quite of interest in dialogues with our partner Stada right now. I think there are good opportunities for continued growth during next year. There are a couple of exciting tenders where Stada is going to participate. So we do believe that the growth is going to be resumed during next year. and we also resumed shipments of product to start at this quarter and that will continue in the coming quarters coming five six quarters as far as we have had that forecast if you will and Total profit generation accumulated so far about 150 million Swedish crowns. And we also do have an inventory of drug substance, mainly when it comes to eximulus of about 170 million Swedish crowns, which now, as Shipmaster's Dollar is being resumed, is being converted into cash continuously. Then, switching over to the US, as most of you probably know, we unfortunately faced a delay with regards to FDA approval. We received a so-called complete response letter to our application from the FDA. that was quite generic in terms of stated reasons for not being able to approve the application it mentioned that it was due to unresolved observations at one of the manufacturing sites and what then happens is that the site which is a contract manufacturer we don't have our own manufacturing site so this is a contract manufacturer and therefore also FDA is conscious about keeping confidentiality not revealing information to us that is not they're not permitted by the contract manufacturer to reveal to us so the site will receive more information soon they haven't received it yet last time we saw section information coming five days post CRL so we do expect that information to come yeah these days essentially There it will be more information from the FDA what specific observations from the inspection they did end of August that they felt were unresolved by the responses the production site submitted. We really need that information in order to be able to put down the foot with regards to timing of resubmission of the BLA. We do believe though that we are looking towards a resubmission first quarter of next year. That is based on essentially the corrective actions which are ongoing at the production site following a few of the observations from the recent inspection by FDA are going to be finalized in the beginning of next year and then we do believe that that is going to be able to trigger a resubmission but then again we really need this information from FDA to be able to confirm that timeline. It is then six months review timeline expected from a resubmission until BESUFA date and hopefully this time around an approval. So we understand of course that many of you are disappointed about this and we are as well very disappointed about this outcome. It is absolutely not what we expected or had hoped for. But we really now have to wait for further information from FDA, fully understand the issues they see, and then work together with our contract manufacturer for swiftly resolving these issues and go towards a resubmission. Then switching gear to our next event program by a similar candidate to Opdivo. and still as far as we can tell this is one out of four biosimilars to Optivo currently in clinic and we do believe we have a timeline which is going to permit a launch in the US day one so to say so immediately post patent expiration that is December 2028 and we can we can note here we can go to the next slide that the clinical trial is initiated by our partner Intas we are on our end going through our development responsibilities of doing the process characterization and validation, which is a key element, of course, of an application. And I think if there's one big lesson to draw from our issues with regards to Ximilusi and the FTA, it is that you should really make sure to work with manufacturing sites and contract manufacturers with a long history of successful FTA inspections and a long time supply of product to the US market. We've made sure to do that for this program. We're working with one of the largest contract manufacturers globally and sites with a long history of successful FTA inspections and currently supplying product to the US market. So we're making all we can together with our partner INTAS to carry this development through so that we can make a submission to the FDA fourth quarter of 27 to allow for an approval end of 20 by the time of loss of exclusivity by the originator and this is very sizable opportunity for us we do believe. We do believe it could generate a billion Swedish crowns annually to explain based on how historical oncology biosimilars have performed in the US and based on the profit split we have agreed with our partner So very sizable opportunity for us. But of course, it hinges a lot upon a timely approval first in the US. So that's what we're fully focused on. But I do believe that we have a timeline and a setup now which allows for that. So quite excited about this program, actually. OK, so with that said, I'm going to hand over to Jane to go through the financials.

Yes. So the revenue for the quarter was picked up again with shipping to Stada. And the total revenue of shipped products amounted to 10.7 million Swedish crowns. And the received profit sharing amounted to 9 million Swedish crowns. However, there was an adjustment made to... We expected profit sharing with minus 10 million Swedish crowns, which made the total net revenue amount to 10 million Swedish crowns for the total quarter. We expect to pick up more shipments during the coming quarters, and some of the shipments have been delayed in the third quarter, which is the reason also that the the revenue from the shipment was a little bit lower than expected. We have some ongoing reductions on measurements to reduce our production costs together with our partner Stada, and those will be materialized during the coming years. So the expenses of the new experience, so to speak, have been reducted as we had anticipated. The administration expenses amounted to 8 million Swedish crowns for the third quarter, and the research and development expenses amounted to 10 million Swedish crowns, whereof 2.8 million Swedish crowns are referring to amortization of our intangible assets. So, all in all, we have the fixed cost amounting to approximately 11 million Swedish crowns on a quarterly basis. We also wanted to visualize the cash position as of the end of the third quarter. We concluded a directed share issue in July, which provided 240 million Swedish crowns prior to transaction costs of 19 million. We also repaid the short-term loan of 22 million Swedish crowns, as well as our accumulated accounts payables that had been built up during the end of 2024 and the beginning of 2025. And the amount of that accumulated accounts payables was 91 million Swedish crowns. And we had some production costs. related to the FDA inspections as well, amounting to 4 million Swedish crowns. And also the profit sharing, as I mentioned, amounting to 9 million Swedish crowns positive. The fixed cost amounts to 11 million Swedish crowns and consists all in all of salaries, consultant cost, IT, basically everything that keeps the show going, so to speak. The development costs of our current program amounted to 27 million Swedish crowns, and we have some other cash flow items of non-recurring kind amounting to 5 million Swedish crowns, which gave us a closing cash balance of 94 million Swedish crowns. So basically, yeah, the operating cash flow amounted to 49 million Swedish Pounds and the cash at the end of the period amounted to 94 million Swedish Pounds.

Yeah, so the key takeaways from the quarter, XM News are currently being present in 24 countries. Constant volume growth versus Q2, but we do see opportunities which we are working together with Stada on for growth to resume coming into next year. Delay in the FDA approval of Ximluci, as we discussed, with the potential resubmission first quarter of next year and then new basulfadate Q3 next year. Extivain, ongoing clinical trial and development on track. towards day one launch and title share issue that we conducted as Jane described. What we now are focused on of course is to work with our contract manufacturer on Ximilusi and with the FDA to get towards a resubmission and eventually an approval of Ximilusi in the US. work together with Stada for continued penetration of the European market when it comes to kesimlusim. We are also working on several production cost reduction measures together with Stada so that we Over the coming years, we're going to be able to bring down production cost. And then, of course, our development responsibility in relation to X-Divine, consisting of process characterization and validation. These are our priorities for the remainder of this year and next. So with that said, we can shift over to Q&A. And I guess we start with the potential questions from listeners calling in.

If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Philip Enison from Red Eye. Please go ahead.

Hello, everyone. So I just wanted to start on volume growth as you mentioned. There was no volume growth from Q2. Could you just expand a bit on this trend on the decline?

Yeah, it was constant volume Q3 versus Q2. Essentially, I think this depends on the one hand, competition in the general market, the Reginator and the other biosimilars. We do see an increased price pressure, if you will, in that market, so that's one part of it. and there's an element which goes to active work particularly by Stada to participate in new tenders to be able to unlock a new volume something which takes time but according to the forecast we have together with them we are looking towards 2026 with Yeah, quite significant growth compared to 25. So I would read it as a temporary decline in the growth, if you will. Okay, good, good.

And the second one then on the profits bit, can you again clarify what it was in Q3 and also the 10 million adjustment just to make it a bit clearer?

Um, yeah. Um, So when this goes back a little bit, probably to how we do revenue recognition. So we shipped the product to Stada. And for that shipment, we expected 10 million Swedish crown profit sharing. But then there was 10 million also for kind of supply price, which is according to Cox. And then we also needed to do an adjustment of expected profit trying to come from product already shipped to Stada. So that resulted in a negative 10 million. Am I describing that correctly, Jake?

Yes, that is correct.

Okay, good. And also just a clarification. As I understood, there's been no news from the FDA. Has there been any new dialogue with the contract manufacturer that you could shed some light on?

We are keeping a continuous dialogue with the contract manufacturer. However, they have not received any further information from the FDA. We do expect that to come these days, essentially. Last time, we had a five-day time period between complete response letter and the so-called PAL letter that is coming into the site following a complete response letter.

Okay, so next week then is a good guess.

Yes.

Good. And okay, so trying to understand the cost base a little bit, would you say that Q3 is sort of a good picture of the fixed cost base moving forward?

I would say that it's quite representative in terms of the fixed costs. Yes, I would. However, one must also remember that we have the maintaining obligations in terms of the development. And so the cash outflow is not just consistent with the fixed cost, but also with the development obligations that we are currently working on.

OK. And also one last, if I may. So previously we have been talking a lot about the pre-filled syringe and it was viewed as a key element to increase market adoption. Can we just get an update on the current status? And I mean, we haven't spoken a lot about it lately.

Yes. We still have it in development, but we need to clarify now if we need to revise the timeline somehow. We need to discuss that and get back with our partner's data. It's going to be dependent on the remaining investments when we together are willing to take those. so we need to get back on and expect the timing of you know submission approval launch of the previous syringe okay that was all for me thanks

As a reminder, if you wish to ask a question, please dial pound key 5 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.

Okay, so we have some questions here in the chat, so let us try to work those through. First one, are shipments to Stada being resumed in Q4 2025? Yes, we made a shipment, although a limited one in Q3, and the shipments are going to be resumed in Q4 and throughout 2026 as well. Okay, next question. Can you please clarify how much of the capitalized development cost as of Q3 relates specifically to the Extervain project and what the remaining expected expenditure is to complete the ongoing collaboration with Intas? So are you able to answer the first part of that, Jane?

Yeah, I think for the third quarter, about 65 million Swedish crowns were capitalized in relations to the Extervain program.

With regards to future expected expenditures to the program as we've been Discussing before, we estimate that to amount to about 200 million Swedish crowns net of commercial material coming out of that process. And our intention of financing that is via the inventory of Xim Lucy, which now gradually is being converted into cash as we resume product deliveries to Stada. Next question. And can you elaborate on main drives behind negative operating cash flow in Q3, given that report costs were around 26 to 27 million Swedish crowns, but total cash outflow exceeded 49%. Is this something we will see in the coming quarters? Do you want to take this one, Jane?

I would say that the reported costs are not really 26, 27. The bridge that I have tried to visualize of the outflow is not categorized in terms of costs and what is capitalized. However, I think that we will see less and less of negative cash outflow, provided that we have now reached a status where the outflow of the operating expenses is more or less equal to the incoming revenue on a quarterly basis. So I don't think that we will see more of that in the coming quarters. That is my expectation.

Can you explain why the shipments were delayed in Q3? So I think this was due to some delay in one of the manufacturing steps, if you will, so that one or two batches, which we thought would be shipped in Q3, instead are going to be shipped in Q4. Next one, given the current burn rate and the additional 60 million Swedish crown loan facility, how long is the company operational runway under current assumption? I mean, as per our current cash flow forecast, which then, of course, contains the expected prior shipments to Stada, our forecast that expected profit sharing from Ximilusi and so on. It tells us that we're going to be able to sustain throughout 2026 with the current cash position and in addition to this loan facility. Okay, next question. What measures are being taken to stabilize cash flow going forward? For example, through improved payment terms with starter milestone payments from interest or cost control initiatives? I would be saying all of those essentially. We are working on different angles as we've done in the past with Stada. we are working with Intas and our suppliers as well with regards to different kinds of solutions to improve cash flow and it's mainly I would say going forward important questions about timing of different in and out flows which we need to balance out but then cost control initiatives. I think we've done what we could now with regard to our organization post the transaction we did with Alvatech. We're down to a fixed cost base, as we discussed, of about 10 million Swedish crowns a quarter, which is what we expected. We are shifting out some consultants. but it's not that material in the whole context. I think we've done what we could there is more about balancing out development expenditures on different kinds of service providers, and particularly then in relation to the X-Divine program with inflow coming in then, as I discussed before, expected from Ximilusi, not only the profit sharing, but also as the inventory we built up is being converted into cash. Okay, next question. How about milestone from Intas? We received a milestone from Intas of about 2 million euro last quarter. And as per the agreement, it is remaining 1 million euro milestone to come. Then it's continued upon profit sharing to come post launch of the product. Goal of 20% market share in Europe changed. No, that remains. I think we have all possibilities with Ximulus and together with Stata to get towards 20% volume market share. So that ambition remains. Why is the previous range taking so long time? I think currently we're making some trade-offs, essentially mainly from a cash flow perspective with regards to when we're making certain investments, and I think that's why we're now delaying the timeline a little bit on the previous range. Next question. Will you buy OTC to increase shares? Will you buy OTC to increase shares? Are you getting that question, Jane? I'm not getting that question. Okay. We'll leave that one. Anyway, then those were the questions we received on the chat and we're then going to conclude the call again. I do fully understand that many of you out there are disappointed about this news coming in from FDA. We are equally disappointed over here. However, it's not much more to do than to get back at it and work together with the agency and the contract manufacturer in this case to resolve the issues and submit the application again so we hope that we are going to be able to provide some more clarity around those timelines coming weeks so with that said we thank you all for calling in and participating and wish you a good day