Release Date: August 28, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Ximluci saw a 40% growth in net sales in Q2 2024 compared to Q1 2024.
- Positive feedback from EMA on the Xdivane program, streamlining the clinical development plan.
- Successful scale-up of production processes for both XB003 and Xdivane.
- Regulatory alignment with FDA for the qualification of a new reference standard for Ximluci in the US.
- Cost-saving measures have started to show positive impacts, with administrative costs decreasing.
Negative Points
- Received a Complete Response Letter from FDA for Ximluci, delaying US market entry.
- Termination of the partnership with Biogen for XB003, requiring a new commercialization partner.
- High development costs for biosimilar candidates, particularly in oncology, posing financial challenges.
- Dependence on successful out-licensing of XB003 and Xdivane to bridge financial gaps.
- Significant cash burn with SEK 100 million operating cash flow in Q2 2024, leading to a reduced cash position.
Q & A Highlights
Q: Do you have any insights from where you stand right now from start down the product sales so far into Q3?
A: No, not beyond that. The trend we've seen last couple of quarters is continuing. We're not seeing any changes from that trend and as previously communicated and guided, we are expecting to see between 20% and 30% quarterly growth, and I think we're following that trajectory.
Q: How would you advise us to look at sort of the OpEx base moving forward here in to H2?
A: Just following the total OpEx gets, of course, a bit complicated because we have kind of the savings as we just presented, and those were in the areas that we described last year. So the majority was salaries, personnel costs and also consultants and also then all other slow-moving movements driven by personnel. Then we have had other things that are taking up a portion of the OpEx. We are continuing with the FDA process, and we have even had some back charges and also from lowest cost resulting from the share emission. So just looking at the OpEx line, gets us all savings are represented very difficult to follow because some move upwards and some down. I think the alternative cost would be then even higher if we haven't done the savings, if you like.
Q: In a scenario where out-licensing processes are not reached, how should we think about how much cash would potentially be needed until Q2 2025 when you think you will be cash flow positive from Ximluci?
A: Management, together with the Board are, as always, looking at different financing options for the business, and we continue to do so, although, I think we communicated clearly that our main focus now what we want to accomplish is to successful out-license these programs and the upfront payments bridge from a financial perspective to Q2 2025. Now when it comes to the financing gap to Q2 2025, I think we have some optionality, if you will, with regards to what we do and do not do, I think, particularly when it comes to the two programs, if your ambition to continue at full pace or if they are discontinued in case unsuccessful out-licensing. So there are some flex there. So I don't think we can come with a firm number there now. It's just dependent on strategy in that case, we choose to deploy, particularly in relation to those two programs.
Q: Which one would you say is the most likely to be out-licensed from where you stand right now? And also what sort of deal structure would be preferable?
A: They both are running at par, so I couldn't tell which one is most likely. We have the ambition to do both, and there are some counter-parties we're talking to who are interested in both. So that's our mission. It's hard to say otherwise, which one is most likely to be out-licensed in time. When it comes to the deal terms we are targeting, we are of course, targeting to get an upfront contribution, which somehow reflects the investments we've done so far in the programs and the value of the programs, which altogether should bridge us financially speaking to Q2 next year. That's one thing we're trying to accomplish. The other thing we're trying to accomplish here is that the majority of the upcoming development expenditures should be carried by a partner to limit we can only take development responsibility. But from a financial perspective, we want to be cautious to undertake further commitments to invest in, for example, clinical trials and so on and so forth. And beyond those two points, we are trying to maximize the whole structure, and I guess, particularly the back-end to get as much out of the final opportunities as possible because we still do believe very much in both these two programs, we believe they have a very, very good potential.
Q: What's the measurement that you can take out to further reduce costs?
A: The majority of our cost base is really related to kind of the three biosimilar candidates, often tied up by contractual obligations to contract manufacturers. That's really where the majority of the spend is. And we have ongoing negotiations with them, what we can face differently, what we can move. So that is not something that we have worked with for quite some time now. Second, we are, as I mentioned, slow moving costs, and that's reduced kind of personnel-related costs in all aspects. We have introduced travel restrictions, education restrictions. We are questioning every consultant and also that we have then moved down in our headcount target then from 93 to 71 in total. So I think that everyone and I would like to emphasize that we have, all our employees behind us here that everybody is questioning whatever they can to reduce the cost base and some we get immediate impact of and some other areas are slightly slower like the rent, et cetera, et cetera.
Q: What is the progress of the prefilled syringe? When can we see a prefilled syringe both in the U.S. and in Europe?
A: It's progressing according to plan, and we stick to the plan that the prefilled syringe could be or should be launched, provided approval, of course, in Europe next year. When it comes to the US, we need to get back post expected approval for Ximluci in the US, Q2 next year, then we need to get back on timing of the prefilled syringe.
Q: What's in the break clause with Biogen regarding XB003? Could Xbrane receive a further milestone payment from Biogen relation to the successful scale-up of the drug substance and how much could that payment be?
A: This is a question I don't think we can or should comment publicly. But we are committed to follow the agreement with Biogen, and we expect them to also follow the agreement. But more than that, I don't think we can comment at this stage.
Q: What was the real reason why Bausch & Lomb terminated the contract and also then the reason why Biogen left and would choose to leave? And also if Xdivane or XB003 was so attractive that the only pillar biosimilar known why did Biogen decides to terminate such an attractive opportunity?
A: If we start with Bausch & Lomb, and this is now a while back. And those of you recall it, we had the webcast immediately after that news was released. And the feedback or information we got from Bausch & Lomb at that stage was a strategic revision where they decided not to engage in biosimilars, to have a new CEO coming in, and they took a decision to focus solely on novel eye drugs and not to engage in biosimilars. If you come to Biogen and the feedback we received on our end from Biogen was that they went through and those of you who have followed
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
