BioArctic AB

STO:BIOA B

Earnings Call Transcript 2024-Q1

[Operator]

Welcome to BioArctic Q1 Report 2024. [Operator Instructions] Now I will hand the conference over to CEO, Gunilla Osswald; and CFO, Anders Martin-Lof. Please go ahead.

[Gunilla Osswald, executive]

Thank you. Good morning, and welcome to BioArctic's presentation for the first quarter of 2024. It's very exciting times for BioArtic with Leqembi, which is originating from BioArctic. Leqembi is the first and only disease-modifying treatment for Alzheimer's disease with a full approval so far in the U.S., Japan and China. There will be 3 key messages today. I'll talk about the Leqembi sales, which we see is increasing. The [indiscernible] has been established to a large extent in the U.S. and the launch goes to the next expansion phase.

The second part is that the lacanumab regulatory processes continues with more approvals and China was approved early this year and more submissions are also being filed by A5, including a subcutaneous auto injector file.

The third aspect and key message is also around our -- the rest of our portfolio, which is progressing really well, and we have made our first agreement on a project which is utilizing our [indiscernible] technology. And I'll talk more about all this here today.

Next slide, please. I'm Gunilla Osswald, the CEO of BioArctic, and I will share today's presentation with our CFO, Anders Martin-Lof, and Anna-Kaija Gronblad, our Chief Commercial Officer, is also here for the Q&A after the presentation.

Next slide, please. BioArctic is listed at Nasdaq Stockholm Large Cap, and this is our disclaimer.

Next slide, please. BioArctic focus on disease-modifying treatment for nevrogenative diseases, and we are now on the market in Alzheimer's disease, and we are preparing for Phase II in Parkinson's disease. These are areas where there is a huge unmet medical need and very large patient populations that we aim to help. We have a great organization with highly skilled scientists and drug developers with the vast experience, and we're now building a commercial organization to prepare and we are preparing for commercialization together with our partner Eisai in the Nordic region.

We have a broad portfolio building on the success of Leqembi with very selective antibodies for Alzheimer's disease, Parkinson's disease and ALS. And we also have the very encouraging brain transporter technology which helps us to get the antibodies better into the brain. I'm very encouraged by that. Our portfolio is exactly where the science now is evolving quickly.

We're also well financed, and we have approximately SEK 1 billion on the bank.

And finally, the [indiscernible] and company leadership throughout the years have been given numerous awards validate our innovation and global leadership position within nevrogenative diseases. And we also got some new awards during this quarter.

Next slide, please. So a lot of things has already happened this year. The year started with the approval of Leqembi in China, where Eisai is planning for a launch in July. In Europe, it was disappointing that the Scientific Advisory Group meeting was annulled due to process issues that was not depending on lecanemab. So the Scientific Advisory Group meeting has to be rescheduled. At the Alzheimer and Parkinson's Congress earlier this year, there was a very positive atmosphere with a lot of excitement in the field of Alzheimer's disease and Parkinson's disease and with regard to the blood-brain barrier technology. BioArctic and Professor [indiscernible] presented new data on lecanemab, further supporting the unique binding profile with lower CAA binding, which is linked to lower incidence of the side effect, i.e., if you compare this with competitors. As presented more data supporting the Leqembi disease modifying properties and more data suggesting even better effect if you start early with the treatment in early Alzheimer's disease as well as data supporting the subcutaneous as a more convenient administration alternative for Leqembi.

Eisai has submitted a supplementary application to the FDA for less frequent dosing intravenously with a can. And earlier this week, Eisai also initiated a rolling application to the FDA for Leqembi with regard to the subcutaneous auto-injector for maintenance dosing.

BioArctic and Eisai has entered into a research evaluation agreement regarding BAN 2802, which is and also a project utilizing our brain transporter technology. And this is then the first agreement done utilizing our technology and expect more to come.

BioArctic was included in Nasdaq Stockholm's new ESG Responsibility Index, which we also is happy about.

Next slide, please. Leqembi is the first disease-modifying treatment for Alzheimer's disease with a full approval in the U.S., Japan and China. And it's on its way to be established as a new standard of care for Alzheimer's patients. A lot of things is happening around the world. And if we start with the U.S., where it is approved and broadly reimbursed since July last year. Eisai has here also submitted 2 files for more convenient maintenance dosing, a supplement application for less frequent IV dosing and a new VA for a subcutaneous auto-injector administration for maintenance treatment. The launch is ongoing and now progressing into the next expansion phase. In Japan, Leqembi was approved in September and launch started late December, and it's progressing really well. In Europe, as I said, we are waiting for the new Scientific Advisory Group meeting and that will be followed by a [indiscernible] meeting. And we are hoping, of course, for a positive opinion and European commission approval late Q3. In China, approval was granted in January and Eisai is preparing for a launch in July. Lecanemab, regulatory files are being reviewed in many parts of the world right now, and we are hoping for several positive responses during the coming months. So I think it's very exciting times.

Next slide, please. The launches are also progressing now in a very good pace. So if we start with the U.S. where a lot of work has been done by Eisai to prepare the market and establish a pathway together with hospitals and infusion centers, et cetera. There is a strong momentum with 97% of the 100 integrated delivery networks, which is groups of hospitals and so forth. And Eisai is now expanding their focus to the top 150 IDM.

I think it's great that prescribing facilities has been established in a broad way and can be found across the U.S. Many prescribing physicians have gone through a trial period and they are now in the expansion phase. We have heard that some facilities are confirming more than 200 cases of the Leqembi treatment.

It's also reassuring to see that the real world evidence when Leqembi is being used in clinical practice. That shows that the signed effect area is in line with the results of clinical trials as described in the U.S. packaging side. I think that shows that Leqembi seems to be used safely and in the right way in clinical background.

So in summary, now when the pathway has been established to a large extent, Eisai takes the launch to the next stage, and that is the prescription expansion phase. Eisai and [indiscernible] Biogen are strengthening the go-to-market structure, with the aim of providing tailored information regarding 3 things. The first is, of course, regarding Leqembi. The second is regarding reimbursement and support for patients. And the third is around system efficiency in order to shortening time for treatment. More and more patients cannot benefit from the treatment of Leqembi in the U.S.

Next slide, please. If we then look at Japan, the launch is progressing even faster than expected here with fast establishment of the diagnosis and treatment pathway at 600 facilities within 4 months of launch, I think that's very impressive. I think it's further impressive that the Japanese launch is even including Eisai's initial targets. And it's clear that the broad sector of promotion activities towards health care professionals are efficient.

We then look at China. The launch is planned for July. And here, China is a bit different. And that is, for example, that will initially be a focus on the private market. Furthermore, Eisai will be leveraging on already established online health platforms and the diagnosis, the streamline diagnosis will mainly be utilizing blood-based biomarkers. And that, I think, will be very important and key drivers for diagnose and grow.

Next slide, please. Eisai also continues to develop lecanemab. And the first approval in the U.S., Japan and China is for Leqembi intravenous administration, 10 milligrams per kg biweekly, and that is both for initiation and maintenance treatment. The file is also under regulatory review in many other regions, as I've said. In order to increase the convenience for the patient, Eisai has now also made 2 applications to the FDA for more convenient maintenance dosing. After the initiation phase, then the maintenance phase could continue with IV monthly [indiscernible] as described in the supplementary applications.

The other application was a rolling submission under Fastrack designation. And that was initiated by Eisai earlier this week, and that is regarding a subcutaneous injection with an auto-injector with a fixed dose of 360 milligrams for maintenance dosing.

The next step, which will be very important, is when the subcutaneous auto-injector can be used both for initial and maintenance treatment. And here Eisai has initiated discussions with the regulatory authorities.

I think that Leqembi long-term penetration will also be supported by simplifying diagnostics with blood-based biomarkers. And I think it's reassuring to see how well the blood-based biomarkers are evolving over the world.

Next slide, please. I think it's great to see how Leqembi brings value to patients, caregivers and society. Leqembi has been studied in a broad patient population with early Alzheimer's disease and have shown consistent and distinct efficacy intake. I think it's very encouraging to note that data from the Low Power Group, which is then very early stage of early Alzheimer's disease that they suggest a potential even greater treatment benefit. And that is then when you start the treatment at an early stage of my cognitive impairment. So early start and long-term treatment bring greater benefit for patients. Reports of the signed effect are from the real-world clinical practice are consistent with what was observed in the clinical trial as described in the U.S. packaging side. Most 3 parts are non series as symptomatic and occur early in the treatment. I think this indicates that safety can be appropriately monitored. The low levels of antidrug antibodies further enables maintenance treatment effect for Leqembi.

The improvement in dosage and administration is important for continued treatment. And as I just described, Eisai has filed for both IV and subcutaneous maintenance treatment in a more -- in a better way for the patients. The subcutaneous auto-injector will be a great improvement for patients to enable easier administrations at home, and this will also be less burden on health care, of course. The ongoing Phase III study, A345 is for preclinical AD, and now we're talking about very early stages of Alzheimer's disease. This is before the subjects have symptoms. And this study could potentially lead to a further expansion of indications into the even earlier stages of Alzheimer's disease. And this could also potentially further expand the clinical benefit for the subject. So I think that Leqembi brings a lot of value for many.

Next slide, please. But I want to emphasize that even though Leqembi, of course, is of main interest, BioArctic is more than Leqembi. And I want to mention 2 other pipeline pipelines. The first 1 is regarding the brain transporter technology. At the Alzheimer and Parkinson's on Congress, it was highlighted that active transport of antibodies into the brain is seen as the next big step for neuroscience. Our proprietary brain transporter continued technology continued to progress very well. And by utilizing our brain transporter technology, we get a rapid, broad and deep distribution of the antibodies into the brain. And this could potentially lead to even better efficacy and tolerability and with lower doses of course. I want to emphasize 3 of our projects utilizing this technology. First, the 2 Alzheimer's programs, BAN 2802, where we now have signed a research evaluation agreement with Eisai as the first agreement utilizing our BrainTransported technology and expect more agreements to come here.

The second project is BAN 2803, which is the PyroGlu A Beta antibody, utilizing the brain transport technology. This looks very promising, and we have increased our investments here and we've progressed this project actively towards the clinical stage.

In Parkinson's disease, the project called PD-BT2238 an alpha-synuclein antibody with the brain transporter technology is developing really well and we are progressing actively towards a candidate drug nomination.

Next slide, please. The other highlight of our pipeline that I want to mention here today is regarding our alpha nuclein program. And at the Alzheimer's Parkinson's Congress, again, encouraging data on alpha-nuclein treatments were presented as well as great progress on diagnosis and biology, linking into alpha-synuclein. This further supports our alpha-nucleon programs, both Exidavnemab as well as 2238. Exidavnemab, which is our selective alpha-synuclein antibody, where we are preparing for Phase II and the Phase IIa study is called EXIST. And that is in -- for Parkinson's patients, and we plan to start dosing late this year. The aim of this study will be safety and tolerability in pharmacokinetics with exploratory biomarkers including seeding, amplification assay and digital biomarkers. The study protocol is currently being finalized through interactions with regulatory authorities. The drug project is now available and the study is planned to be performed in Europe with the first patients planned to be dosed, as I said, late this year.

Next slide, please. So just to summarize, BioArctic's portfolio in Alzheimer's, Parkinson, ALS and the BrainTransporter technology, our most advanced program is, of course, Leqembi, but I want to emphasize again that BioArctic is even more than they can be. And after the Alzheimer and Parkinson Congress, we can again conclude that our portfolio includes exactly the target and trends where science is breaking up. And I'm pleased to see the continued progression of our projects here and how well it's being developed.

Next slide, please, and then I will hand over to Anders Martin-Lof for the financial summary.

[Anders Martin-Lof, executive]

Thank you, Gunilla. If we turn to Slide 15. As Gunilla has already mentioned, the launch is progressing really well, and now we're starting to see that in our financials. The global Leqembi sales were JPY 2.82 billion in the quarter. That's roughly SEK 200 million or $18 million. That represented a 170% increase over Q4 2023. On that, we get a royalty rate of 9% on global net sales. In addition, we get 1% more on U.S. sales and 1.5% on ex U.S. sales that we then passed through to our partner LifeArc. So the SEK 21.3 million in revenues that we reported during the first quarter that includes the pass-through royalties that we have some. But you see a very, very steep increase quarter-over-quarter and this growth is likely to continue during the year. The US launch is now in the expansion phase, as Gunilla mentioned. Eisai and Biogen are increasing their sales force to drive sales not only in the larger hospitals, but now in their satellite clinics. We have seen a strong start in Japan, the pathway has been established at 600 sites, but more and more sites are coming online. So we'll see very good growth there as well. And a launch [indiscernible] for China in [indiscernible] that will further support the growth during the year.

If you turn to the next slide, you can see that Eisai has for the very first time, issued a forecast for near-term sales and they are predicting more than a [indiscernible] increase in sales of Leqembi from 2023 to 2024, going from JPY 4.3 billion, roughly SEK 200 million in 2023, to JPY 56.5 billion, i.e., SEK 2.9 billion in 2024. The lion's share of the market will come from the U.S. So 77% is expected to come from the U.S., but already 18% is expected to come from Japan. For us, this will then correspond to a royalty of roughly SEK 400 million in recorded revenue or roughly SEK 260 million net after the [indiscernible] is paid out to LifeArc. And in the coming year, this is likely to continue. We have briefly mentioned that the subcutaneous maintenance formulation is likely to be approved in 2025. We will also see subcutaneous formulation for needle treatment. And Eisai indicated it's actually been approved in 2026. We're also seeing implementation of lab-based biomarkers, starting already this year in China. It's happening in Sweden, and we expect that to continue all over the globe. And all of this lowers the barriers to treatment. So when Eisai has predicted what's going to happen midterm, they are expecting roughly a fivefold increase in sales on 2024 to 2026. And in the revenue simulation that they presented in market said that they would have revenues of JPY 290 billion so roughly SEK 20 billion or $1.9 billion in 2026. So we are really just in the beginning of the growth phase for Leqembi.

If you then turn to the next slide, I'll go through our numbers for the quarter. On the left-hand by, you see that our first quarter net revenues were SEK 30 million. That's quite a big drop from a year ago, and we had SEK 393 million in revenues, but that's explained by the fact that we have 3 milestones totaling EUR 35 million in the first quarter of 2023, and there were no milestones take during this quarter. We are still entitled to more milestones. We are expecting a milestone when we get approval in the EU this year and in the following years, we are entitled to sales milestones in '25 and '26 and '27. So that will continue. But over time, the 2 new revenue streams will take over more and more. Right now, the royalty revenue was 21 million, co-promotion and 3 million, but over time, those 2 revenue streams will, of course, make up the lion's share of our revenues and that will increase the lumpiness of our revenues that -- and they're obviously very lumpy right now. But over time, it will be much more smooth.

If you turn to the middle graph, you see our operating expenses. And first, this is the first time you see them by function. So the total operating expenses increased to 101 million from 79 in 1st quarter. 75% of that increase comes from R&D. And in total, 63% of our operating expenses come from R&D, and that's an increase from last year when 59% of our R&D expenses came from R&D. On top of that, we have 12% of our expenses come from sales and marketing. Those 2 ratios will continue to increase. Our costs will increase during 2024 due to the fact that we are investing heavily into the programs, especially the ones that Gunilla mentioned, we're starting our Phase II trial for Exidavnemab later this year. We're also investing in our Alzheimer programs where we select candidate drugs last year and are now performing IND-enabling studies. We're also building up our commercial organization that will accelerate towards the latter part of the year. So we are expecting a continued increase. But more and more, larger and larger share with our cost would be from R&D and sales and marketing and SG&A.

On the left-hand side, you see our operating profit, which was negative. So it was an operating loss of SEK 73 million for the first quarter, which is roughly in with what we saw in the fourth quarter last year.

If we look at our financial position on the next slide, starting from the right-hand side, you see that our net loss was SEK 58 million, which is roughly SEK 50 million better than the operating loss. That is explained by a fairly strong financial net of SEK 15.7 million during the quarter. On the middle graph, you see on the other hand that the operating cash flow was weaker than our operating results and that is due to the fact that the royalty payments are lagging the royalty revenues by roughly 2 quarters. So in this quarter, we saw a 45 million increase in working capital and this will continue to increase when our royalties increase. So this lag continue but this has a very limited impact on our financial position. You see on the right-hand side that we have a cash position, including short-term investments of SEK 991 million. So we can continue to work long term to focus on advancing our portfolio in the fastest possible way without thinking too much of financials. Looking for the remainder of the year, I think it's unlikely that we will be profitable in 2024. But as royalties grow. I think there is a very high likelihood that we will be profitable again in 2025 and onwards.

That was all from my end, and I hand over back to Gunilla for some closing remarks.

[Gunilla Osswald, executive]

Thank you so much, Anders. So we are coming to the final part of the presentation with some closing remarks and upcoming news flow.

Next slide, please. So the upcoming news flow, if we look at this quarter, the initiation of the U.S. submission of lecanemab for the subcutaneous auto-injector maintenance dosing under the Fast Track designation was just achieved this week, and we're hoping for an approval of lecanemab. If we look at the next quarter, we are looking forward to the next big Congress for Alzheimer's called AIC, which is in Philadelphia during the summer. And there we will see more presentations on lecanemab, and more interesting data. In July, Eisai plans to launch Leqembi in China. And in Europe, we, of course, hope for a positive CHMP opinion after a new Scientific Advisory Group meeting. And if so, then we could expect approval in EU during late Q3. And then during the fourth quarter of this year, we plan to start the Phase III study in Parkinson's disease with Exidavnemab, and we're looking forward to being able to present some more data on our BrainTransporter programs. Other potential approvals of Leqembi could also come during the rest of the year. So I think it's a lot of exciting times ahead for BioArctic.

Next slide, please. So to summarize today's presentation, Leqembi is approved in the U.S., Japan and China with huge patient populations with early Alzheimer's disease. And even if a small part of the population will have treatment with like. That would be huge. And I think it's gratifying that we can help many patients. The launch is showing strong momentum now and it will be exciting to see more and more patients being able to get access to leukemic treatment. We are hoping for more approvals and Eisai continues with more regulatory applications and further development of lecanemab. Our pipeline is progressing very well, and the first train transport agreement has been signed. Our finances remain solid. We have almost SEK 1 billion in cash, which I think is great. So we can focus on driving the project forward towards the patient.

Next slide, please. Well, BioArctic's aim is to improve the lives of patients with nevrogenative disorders, and I think that we are very well on our way. And I think it's extremely gratifying that we now can help more and more patients and their families.

And by that, I say thank you so much for your attention, and we are happy to take questions.

[Operator]

[Operator Instructions] The next question comes from Alistair Campbell from Royal Bank of Canada.

[Alistair Campbell, analyst]

It's great to see Leqembi gaining momentum in the U.S. Two questions, please. First of all, on AHEAD 3-45, just looking at the status on clinicaltrials.gov, it looks like that's now a primary completion around 2029. So I guess if you can give me an update on how recruitment is going and sort of what the time frame looks like for that? And frankly, if it reads out in 2029 gets on an April 2030. What sort of time frame do you have left to sort of get a commercial benefit from that given the contract in place? And then the second question is just simply on cash position. Given your potential milestones later this year, what do you feel about where the cash may end at the end of the year?

[Gunilla Osswald, executive]

Thank you so much for your questions. So if we look at the AHEAD 3-45 study in the very early Alzheimer's disease even before the sale treatment. The aim of this study is to have 1,400 subjects. I think that -- and the study is ongoing around the world, the majority in the U.S. but also in other parts of the world. I think the inclusion is going really well, and I hope Eisai is hoping to conclude the enrollment into this trial during this year. And then it's a 4-year treatment in this trial. And then we will wait and see for the results. But I'm really encouraged by the data that we have seen with very early patients of mild cognitive impairment that they seem to maybe have even more benefits. And then thinking about when this can be ready, it's -- I will not speculate exactly on when that can be and our patent expiry, including extension is around 2032. So I think there is still time for that. And then -- you also asked about more milestones and I hand that question to Anders.

[Anders Martin-Lof, executive]

Yes, you asked about the cash position towards the end of the year and assuming that we get approval in Europe, which we believe will happen during the second half. we're assuming that we will have a capital position between SEK 800 million and SEK 900 million towards the end of the year in Swedish.

[Operator]

The next question comes from Joseph Hedden from Rx Securities.

[Joseph Hedden, analyst]

Just referring to your news flow slide, in particular, the potential EU approval. I know some of the language used in terms of the Scientific Advisory Group. Could you just fit us in has this happened to your knowledge yet? And if it hasn't, do you have any idea when this could happen? Just trying to get a sense of what the risk to that time line still is? And then secondly, it's clear that blood-based biomarkers are quite important to Eisai's projections and it's something that you and I talk about a lot. I just wanted to get a does Eisai have any deals with providers of these tests in the space currently? Or is it -- has it got any proprietary technology? And also, are there any data on the real-world use of any of the available tests so far in the Leqembi launch?

[Gunilla Osswald, executive]

Thank you so much, Joseph. Great questions. So first of all, with regard to Europe and the Scientific Advisory Group, it has not happened yet. We are looking forward to seeing how it evolves. And I think that these time lines that we have laid out, I think, is realistic. We don't know exactly when the different things will happen. But -- and really for a positive opinion here, so -- and an approval. So European patients also can get access to Leqembi.

Your second question with regard to the blood-based biomarkers, I think it's evolving really well. Our partner, Eisai, has said that they have different collaborations. For example, with C2N and with Sysmex and so forth. And I think you should ask them more about this. But this is what we know so far. And I think that as the Alzheimer Congress is, there is presentations every time about more and more solid data coming out of the blood-based biomarkers. And it's both about EBITDA [indiscernible] ratio but especially on the phosphotal biomarkers, which is evolving really, really well. So this is being utilized already here in Sweden in clinical practice, which is being tested as we heard China. It's also being used for triaging in other parts of the world in closing the U.S. So starting back I think it will be more used in a broader clinical setting in a couple of years. So it looks really good. It's already used also, for example, in the screening phase of the AHEAD study, where the first part is linked to a blood test. And in that screening phase in order to see and then it's followed by other biomarkers. So I really strongly believe in the blood-based biomarker that, that will really help also to make a broader finding on the right patients that can benefit from Leqembi.

[Operator]

The next question comes from Patrik Ling from DNB Markets.

[Patrik Ling, analyst]

Just maybe to start with a follow-up question to Joseph's question about the SAG meeting. You said that it hasn't happened yet, but has it been scheduled yet. So we know when it's going to be?

[Gunilla Osswald, executive]

So it has not happened yet. And we don't have all the details about how it and when it will happen. So we need to come back to that when we know more. But I think that Leqembi laid out, I believe, in those, but we have [indiscernible] more.

[Patrik Ling, analyst]

Okay. Great. Great. Then I actually had a follow-up on this research evaluation collaboration that you have with Eisai on BAN2082. Maybe if you could give us a little bit more color on what that actually includes what will happen? What are the time lines? When -- what type of valuations are you doing together and so on?

[Gunilla Osswald, executive]

So I think this is regarding the project called BAN2802, and that's 1 of the 2 Alzheimer's projects that we are investing heavily now and driving forward strongly, which is based on really selective antibodies combined with the brain transporter technology. And here, we have laid out for BAN2802, a very clear development program that we will share the costs with Eisai. And that's a program which is about 2 years that we will be doing and then preparing this project towards clinical stage. So I'm really enthusiastic about this project. And I'm also really enthusiastic. I've got the question. So what about BAN2803, does that mean that you're not driving that forward. And I just must say that BAN2803 also looks really encouraging. So I think it's a very strong position for BioArtic to have 2 very good programs, as it looks like utilizing the Brain Transporter technology for our coming patients, as well as that we also have it for Parkinson's disease and then also in the future for ALS and other parts.

[Patrik Ling, analyst]

Great. So first step now is a 2-year evaluation where you split the cost 50-50, I suppose?

[Gunilla Osswald, executive]

So I'll not comment exactly on how the split is, but we will share the costs with Eisai. And then after that, about 2-year period, then that will be an option for Eisai to going to a license deal. And that's, of course, what -- the aim is for most companies to start a project and do the collaboration.

[Patrik Ling, analyst]

Great. Then I also had a question about the EXIST trial. Maybe I missed that or maybe you can just remind me. Have you said anything about the potential size of that trial? How many patients you're going to include?

[Gunilla Osswald, executive]

No, we have not. And I think that the next Q report, we will review more information. It should just be I mean, managing expectations. This is a small study. And it's really safety tolerability, where we will be looking at 2 different doses than compared with placebo. But it's mainly safety tolerability and PK and with some exploratory biomarkers. So it's really a study which is preparing us for the next important step. And that is to select the indication or indications for Phase IIb, which will be the most important part where we will be exploring full efficacy.

[Patrik Ling, analyst]

No. Because the reason I ask is, I mean, if you plan to include patients with basically 5 different indications. My impressions before has been that you will have -- you will base on the results here, decide on where to continue with Phase II? And my thinking was that maybe you needed a reasonably large amount of patients in these different indications to be able to actually decide where to go next?

[Gunilla Osswald, executive]

Thank you for your questions. Then I will help to clarify. The next study that we are now preparing will be done in Parkinson patients. And that is, as I said, safety tolerability. And that is not the study as such will not include the different kind of patient populations, different indications. That will be decided based on several other things and not based on the data as such in this study. I mean for example, we'll be looking at competitors, which is also progressing in some of those indications. We will also look at where do we think we have the largest possibility to be successful with regard to biomarkers and clinical fixed endpoints and so forth. So I think it should be clearly expected that this Phase I package that has been done was a large Phase I package for single doses with both different doses and also IV and subcu and also different ethnicities and the Japanese patients and so forth. So -- but there has not been a multiple [indiscernible] those studies done yet. So that's part of the Phase IIa study. So it's really safety tolerability and a small study should be expected. And meanwhile, that study is ongoing, we will do a lot of strategic work, looking at the different indications that potentially could come after and select the best indication for Phase IIb. So it will only be Parkinson's disease patients in the Phase IIa study, the safety tolerability study. But that doesn't mean that it has to be Parkinson's disease patients only in the next step. It could be different indications. Did that have...

[Patrik Ling, analyst]

Definitely, definitely. I got it now.

[Gunilla Osswald, executive]

Thank you so much, Patrik.

[Operator]

The next question comes from Fredrik Thor from Redeye.

[Fredrik Thor, analyst]

My question, you maybe touched upon this a bit about cost development for '24. Could you elaborate on this? And is it the same as the 4, roughly 30% to 50% increase from the previous year?

[Anders Martin-Lof, executive]

Yes. We don't have an update yet. So we stand by our previous guidance.

[Fredrik Thor, analyst]

Okay. And my second question was about the subcutaneous dose and first off, the maintenance sales and then also the potential to have the initial dose also the subcutaneous. Could you explain kind of the difference between these 2? How much increase would you say for example, if the initial dose also going to be subcutaneous compared to only for the maintenance?

[Gunilla Osswald, executive]

I think, of course, it's a very good first step with the subcutaneous administration with an auto-injector like a pen. So I think that will be a really good step for the longer-term maintenance base, and that is what the submission that was just initiated was about. But of course, it's good that the alternative to start also with a subcutaneous auto-injector. And as you recall that -- you might recall that I said in the previous call that when Eisai presented the data, from the ongoing study with a subcutaneous auto-injector. That was even better exposure and even better reduction of flags with the subcutaneous formulation. So that's why there is, of course, a discussion ongoing about which dose should we use for the initiation phase, and potentially also adjust the dose for the maintenance space. That's the discussions which are ongoing. And in order to sort that out, that will then help to see when the initiation dose can be. But of course, that will really help the patients and be a very attractive alternative. So -- but I can't say exactly how much of the sales in the future, which is expected to be dependent on the other 1 or the other. I think it's really good to have different options and different alternatives for the [indiscernible].

[Operator]

[Operator Instructions]

[Oskar Bosson, executive]

So it doesn't seem like there are any telephone questions, but we have some questions -- written questions come in. So the first 1 was about approval in the EU, but I think you've already answered that, Gunilla, with the expected time line of late Q3 could be a time line we see right now. But maybe for you, Anders, to clarify a bit about the milestones you mentioned something about that. But maybe you can clarify how much we still have an expected milestones and when that could happen.

[Joseph Hedden, analyst]

Yes. Thank you, Oskar. Yes. So in total, we have EUR 84 million of outstanding milestones and we are expecting, as I said, a milestone when we get approval in the EU. We cannot communicate the exact size of that. But when we got to go in the U.S. we got about EUR 75 million. Europe is slightly smaller, so that will be [indiscernible]. The rest of the milestones are mine mainly sales related. So you can basically assume that they will happen during 2025, '26 and '27 spread out years. All that tariff is a milestone development that we're expecting.

[Oskar Bosson, executive]

Thank you, Anders. Then I see that we have a written question also on the Phase IIa study, but I think you've clarified that at length Gunilla in your response to Patrik. So maybe then a question -- 2 questions from [indiscernible]. First 1 is, if we could say anything about the patient number curve -- or a number of patients currently on Leqembi. And secondly, maybe a bit more explanation on the BrainTransporter technology and if that uses the [indiscernible] receptor, such life similar to what [indiscernible] shuttle or Denalis program does?

[Gunilla Osswald, executive]

Yes. I think the BrainTransporter technology is definitely using the transferring receptor in the approaches that we're utilizing right now. And they have a lot of similarities with both Roche and Denalis, but they also have some important differences that we will be able to communicate more later on. So -- and we are really encouraged by the Roche data that was presented at the previous Anime congresses, where they showed really impressive data. It's still early days, but it's the first clinical data that has been shown. And I think that really has made us focus and invest even more strongly in our brain transport because it really looks like the next generation of approach to get the antibodies better into the brain. So I strongly, as you have heard before, I believe in this, and there is a possibility for a better effect better side effect profile and lower doses. So it has some clear [indiscernible], but also some important.

[Oskar Bosson, executive]

And do you want to say anything about the patient numbers Gunilla?

[Gunilla Osswald, executive]

No.

[Oskar Bosson, executive]

And we don't know, I think is a correct answer.

[Gunilla Osswald, executive]

Exactly. So I think you have to reveal on what we said with regard to you saw the number of miles on the slide then so we're also about what we understand about the sales. We have to stay there for now.

[Anders Martin-Lof, executive]

Right. And I commented on this and said that they will not communicate patient numbers going forward because it's really, really hard to estimate actually the patient number is much better information to look at value the numbers and actual sales. So there will be no communication regarding that.

[Oskar Bosson, executive]

Maybe just a follow-on from Goldman Sachs and Ryan, about the branch transporter technology. He's wondering, Gunilla, if you can say anything about when this might enter the clinic? And also if the collaboration with Eisai regarding this BAN2802 program changes anything in the development plans that we have for that program or the other programs.

[Gunilla Osswald, executive]

So I think it's -- you know that we see denominated those 2 projects at the end of last year. And normally, when we do a [indiscernible] denomination, that means about 2 years to come into the clinical phase. So roughly, that's the time line. And then does the collaboration change any of the development plan? I mean that -- what it does is that makes us want to invest even more in all our brain transporter programs. And then we're also opening up the brain transporter thinking in a broader way also potentially for other areas, another company's projects for the future as well. So I think it really strengthens the position. So it does not mean that we are lowering the ambition in any of our projects. just the contrary that we are increasing our efforts in all our brain transporter linkage programs and in that technology platform as well.

[Anders Martin-Lof, executive]

Maybe we should clarify a little bit on the time lines for the research evaluation agreement. Gunilla mentioned that it would take roughly 2 years. But maybe we should clarify that you're thinking more towards the end of 2025 that will get the results not mid-2026. Because we are right now in mid-2024. So 2 years and now 2026, I think you were thinking from the beginning of '24 to the end of 2025. So roughly the same time frame as when we expect to become ready for [indiscernible] trials.

[Gunilla Osswald, executive]

Thank you, Anders.

[Oskar Bosson, executive]

Then 1 question from Peter, and that refers to AI and utilizing AI and pharma development. Can we say anything on our efforts in this area, Gunilla?

[Gunilla Osswald, executive]

Absolutely. I think it's really important to be part of the AI explosion. And definitely, we have some pilot projects ongoing at BioArctic, and it's definitely used typically in different areas of I think areas like imaging areas with regard to side effect profiles in the future and so forth. And also, there are initiatives ongoing also in clinical trials even though we are not utilizing it for right now for our own studies, for example, with where you can utilize AI patients. But I think this is an area that we are clearly watching and there is -- AI is built in so many different areas already today. So -- and I think it's important for us and all others to be in this, I think it will be a part. But it's really important how you do it and that you do it in a safe way and so forth, and you realize the opportunities but also mitigate some of the risks that are linked to AI. So I'll not go into any details more right now, but maybe we can do that in the future, tell you about some of the examples. But we are using it, and we'll be using it more in the future.

[Oskar Bosson, executive]

Thank you. I don't see any more written questions online. Operator, are there any more questions waiting on the phone? Doesn't seem that way. So I guess then that concludes our call today, and thank you, everybody, for listening in, and thank you Gunilla and Anders [indiscernible] being here for a presentation and Q&A. Thank you. See you next time.