Release Date: August 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Revenue for the second quarter increased by 60% from SEK5.1 million to SEK8.2 million, marking the best month on record in June.
- Pepaxti has shown strong early interest in Spain, with the first sale announced in May and positive feedback from Spanish doctors.
- The company has expanded its market access efforts in France and other European markets, with a value dossier submitted in France.
- Oncopeptides AB has signed an agreement with Veld Pharma GmbH for named patient sales in Africa, focusing on South Africa.
- The company has a strong cash position of SEK383 million at the end of the second quarter, bolstered by a successful rights issue.
Negative Points
- Despite the revenue increase, the company is still far from profitability, which is targeted for 2026.
- The market access process in Europe is controlled by payers, making the timeline for revenue generation uncertain.
- The company has no ongoing clinical studies, and future clinical trials for OPSP1 are not included in the current financial plan.
- There is a significant increase in noncurrent assets and equity due to the restructuring of the patent portfolio, which may affect financial stability.
- The company's profitability plan relies heavily on sales from specific European markets, and any delays in market access could impact financial targets.
Q & A Highlights
Q: The sales growth was quite good at 60%. Is that due to pent-up demand from the flu season since you had flat sales growth between Q4 and Q1? Could that be some patients who waited?
A: It's difficult to speculate on exactly where it comes from. But if we look at the overall market that we could see declined slightly in Q1 as we reported when we then stayed flat. We can see that we are growing more than the overall market in the second quarter. So I would argue it is a true positive trend. (Sofia Heigis, CEO)
Q: Could you say something about how many cycles are typically given to a patient?
A: Pepaxti is given once a month. The average number of treatment cycles is around four to five in our clinical studies. It's too early to give an average on all patients, but around 70% of all patients are continuing to the second cycle. We have doubled the number of patients continuing on three cycles or more between the two quarters. (Sofia Heigis, CEO)
Q: Which do you think would be the next market to be activated after Spain? Would that be Italy?
A: We are discussing with payers in Italy, Ireland, Norway, and the Netherlands. The timelines are largely controlled by the payers, so I would like to refrain from commenting on that. But it is those markets that we are counting on launching in our profitability plan. (Sofia Heigis, CEO)
Q: When will OPSP1 be ready for a clinical trial?
A: OPSP1 still has some preclinical work to be done, including tox studies and CMC work. If we move with speed, you can see clinic within a couple of years. However, our current financial plan does not include any clinical trials, and we are looking into different opportunities on how to finance such a trial. (Sofia Heigis, CEO)
Q: You predicted to be cash flow neutral or to make a profit by the end of 2026, and your current cash position should support that. Is that with or without the EIB tranches?
A: Excluding any additional EIB tranches. So any of that would come on top of our current liquidity plan. (Henrik Bergentoft, CFO)
Q: I noticed you had a quite large increase in noncurrent assets of around SEK500 million, which was also the same increase more or less in equity. What's that? Is that deferred tax liability?
A: I think you're referring to the parent company balance sheet. That's a restructuring of our patent portfolio that we have done internally, moving our patent portfolio from the parent company to a fully owned subsidiary on an arms-length basis. This transaction only affects the parent company and doesn't affect the group's financial position or profit and loss segments by any means. (Henrik Bergentoft, CFO)
Q: Could you give us a little bit of a flavor of how large the differences between April and May and June has been and what we should see is sort of a 60% quarter-over-quarter growth? Is that realistic, for example, for Q3 as well? Or could it even be more?
A: I hesitate to comment on monthly sales and compare the different months due to the simple fact that Pepaxti is administered once a month. But we do see a clear positive trend in the activity in the field. We get more and more KOLs support, and we even unlock university hospitals in Germany. All signs from Germany are positive, and we will also have Spain as a stronger addition in the coming quarters. (Sofia Heigis, CEO)
Q: When you think about the markets where you will sell the product during the second half of this year, are there any of the additional markets that could potentially be added to the sales mix during the second half of this year? Or is it primarily Germany and Spain that we should focus on?
A: It will be primarily Germany, Spain, and then, of course, Austria and Greece. It's not impossible that we could onboard another market already this year, but we should count on more markets supporting with significance more during 2025. (Sofia Heigis, CEO)
Q: Your peak sales guidance changed from SEK1.5 billion to SEK2 billion to now at least SEK1.5 billion. Why is this change?
A: There is no change to the market potential. It stays at SEK1.5 billion for the European market. (Sofia Heigis, CEO)
Q: Your profitability guidance includes a SEK400 million sales level. What additional investments do you expect are needed in terms of sales and marketing and R&D to be able to reach your peak sales guidance?
A: We will add local resources needed to those countries as we unlock more countries. From sales and marketing, it's primarily the launch activity costs as well as the building of the teams in markets such as Italy. On the R&D side, the cost base will not increase. (Sofia Heigis, CEO)
Q: Can you elaborate on the US market after the FDA decision to withdraw? What options are you considering as a next step?
A: We believe there is an unmet need for PDC in the US. We are assessing which of our PDCs would be suitable for that market and how we would go about developing the PDC for the US market, most likely in partnership. This is an ongoing discussion between the management and the Board. (Sofia Heigis, CEO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
