Release Date: July 17, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Zubsolv revenue growth rebounded strongly from Q1, showing positive alignment between sales to pharmacies and wholesalers.
- Positive EBITDA for the third consecutive quarter, indicating financial stability.
- Successful completion of a new human factor study for OX124, addressing one of the FDA's concerns.
- Orexo AB (ORXOY, Financial) is rated in the top 5% of companies assessed by EcoVadis for sustainability.
- Continued progress in the AmorphOX pipeline, with impressive stability data for large molecules.
Negative Points
- OX124 approval and launch timelines have been delayed due to additional data requests from the FDA.
- Decline in Abstral royalties expected as contracts in key markets expire.
- Increased legal expenses related to the DOJ investigation in the US.
- Continued low growth in the buprenorphine/naloxone market, impacting overall demand.
- Potential risk to Zubsolv revenue guidance due to wholesale inventory adjustments and Medicaid disenrollment.
Q & A Highlights
Q: You mentioned that you have initiated launch preparation for OX124 in Q2. Should we expect such costs to remain going forward given the update you have given for FDA and the process?
A: We have recruited a seasoned manager to lead the OX124 work, and she has been working on market analysis, testing concepts, and brand profiling. There will still be costs associated, but they will be lower in the second half compared to a situation where we had received an approval today. Recruitment of sales personnel will likely be delayed until we have more certainty about the timelines for resubmitting the updated data to the FDA.
Q: You mentioned that the review period following a resubmission could be either two or six months. Could you elaborate on these two alternatives?
A: The FDA has not issued specific guidance on the difference between two and six months. It depends on the amount of work needed and the number of parties involved. The new data required makes it hard to predict the review time. The amount of data we submit will define whether it falls into the two or six months category. We will know more about a month after submitting the answers to the FDA's questions.
Q: Regarding the Sun appeal process, you previously expected the hearing to be in mid-2024, but now you don't have a date. Is there a reason for this delay?
A: The delay is due to the workload of the Federal Circuit and the number of cases being appealed. Additionally, there have been renovations of the facilities, reducing courtroom availability. There is nothing specific in the case causing the delay; it's more about the Federal Circuit's capacity.
Q: With the modest delay to OX124 and Indivior cutting their OPVEE guidance, what is your expectation for accessing government contracts for OX124? Also, is SEK100 million enough for a new product launch year, or would you need to raise further capital?
A: We believe OX124 is well-suited for institutional buyers, including government contracts. We are testing different marketing and positioning concepts. Regarding cash position, Q2 had non-recurring financial expenses, and our cash flow is volatile. We are working on business development agreements expected to generate income. We also have SEK30 million in the corporate bond that we could float if needed.
Q: For OX640, you plan to do an exploratory Phase 1 study in Q4. Would you proceed with this study if a partner is not on board by that time?
A: Yes, we would proceed with the study even without a partner. It is a relatively small exploratory study, and we believe it is important to show the product's properties in allergic rhinitis patients. This will help ensure we choose the right dose for pivotal studies and manufacturing next year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
