Camurus AB

STO:CAMX

Earnings Call Transcript 2019-Q3

[Fredrik Tiberg, President, CEO & Director]

Thank you, and welcome, everyone, to today's call where we will present on our significant progress during the third quarter as well as on the important updates from the U.S. last night. Before we start, please take note of our forward-looking statements. So today's agenda includes third quarter highlights, progress on the Buvidal launch in EU and Australia. We'll update on the U.S. approval of Brixadi and also on our advances in the R&D pipeline. We'll finish off with some key takeaways and, of course, a Q&A session. With me in today's call is Eva Pinotti-Lindqvist, Chief Financial Officer; and Richard Jameson, Chief Commercial Officer. So let's start with third quarter business highlights. So Slide 4, please. We had indeed a very positive third quarter with significant progress with Buvidal in the EU and Australia as well as in our key pipeline programs. Our third quarter revenues increased by 105% to SEK 40.2 million in Q3 compared to the same quarter last year. Product sales were SEK 19.5 million, 73% higher than the previous quarter, due to accelerating Buvidal growth. We continue to open up new markets and gained new pricing and reimbursement approvals in 5 additional markets. In the U.S., in July, the Federal District Court ordered the FDA to reconsider Braeburn's application for full approval of Brixadi. Last night, we received decision from the FDA, which I'll come back to briefly in the next slide. We also continue to build our already strong scientific evidence base with the completion of the treatment in the DEBUT and UNLOC-T clinical studies. It is really exciting, I think, and I'll also talk about that later in this presentation. We had good progress in our pivotal program for CAM2029, with the start of the Phase III long-term safety study. So we now have 2 Phase III studies ongoing in acromegaly. Finally, we signed a new license agreement with Ra Pharmaceuticals for long-acting zilucoplan FluidCrystal injection depot, which further demonstrates the utility of our unique and validated technology. We continue to guide total revenues in the range of SEK 130 million to SEK 160 million for the year. We have product sales in the range of SEK 70 million to SEK 90 million. So back to last night's news. We finally received a response from the FDA on the ongoing legal processes in the U.S. Firstly, we received a positive confirmation that FDA had granted Braeburn Citizen's Petition and that the orphan designation for Sublocade is now revoked. Braeburn now has a clear timetable for launch of Brixadi in the U.S., and as you know, this will trigger a SEK 35 million milestone for Camurus. The FDA did not change their decision on the 3-year exclusivity for Sublocade ending November 2020. This is unfortunate, however, we do not expect this to have a significant impact on the market potential for Brixadi over time. We do have a strong and clearly differentiated product, which is getting fantastic feedback from the market all around. So that's the situation in the U.S. Let's move over to Camurus' market and the significant progress we have had with the launch in the EU and Australia. For this, I will pass over the presentation to Richard Jameson. Please, Richard.

[Richard Jameson, Chief Commercial Officer]

Thank you, Fredrik. Can we move on to Slide 7 please now. So as many of you know, we designed weekly and monthly Buvidal to fit with current clinical practice, while addressing many of the unmet needs faced by patients with daily medication such as the burden and stigma of daily dosing and that need for safeguarding against misuse and diversion. On Slide 8, we can set -- we can see we set a clear launch strategy for EU and Australia based on timings for final regulatory steps on the pricing and reimbursement approvals in each market. The launch of Buvidal in our Wave 1 markets is progressing well, with a focus on the many differentiating attributes of Buvidal to establish it as a new first-line treatment option in opioid dependence. And I'll come back to this in a moment. We have now launched in 7 markets with our high-performing teams and effective distribution in place and now have the first national clinical guideline published in Australia. So in more detail, on Slide 9, we can see progress on the launch. We've already covered the significant increase in revenue between Q3 and Q2, driven by the uptake in our Wave 1 markets. We've now got an estimated 2,500 patients currently on treatment with Buvidal, with strong sales in Finland, growing sales in Germany, Sweden, Denmark and England. And progress was made in Q3 with 5 additional markets we expanded to with the pricing and reimbursement approvals of Buvidal, in Australia, in Norway, Scotland, Wales and Northern Ireland. And we're seeing excellent patient uptake in the early stages of these markets. The very positive feedback from patients and health care professionals continues, and it's inspiring to hear the significant contribution that Buvidal is making to people's lives. So if we move on to Slide 10. We're seeing in-market and patient physician responses are well in line with our robust and growing scientific evidence both for Buvidal, including a high retention rate in treatment and excellent patient feedback, as I've mentioned. We're seeing an increasing number of publications on this real-world evidence across the markets. And at this stage, I'll hand back to Fredrik to talk about our medical and scientific progress. So we'll move on to Slide 11.

[Fredrik Tiberg, President, CEO & Director]

Well, thank you very much, Richard. It's very encouraging to see the progress of Buvidal in our markets and the positive, most importantly, I would say, the positive impact that we are having on patients and the -- all people in interest here. An important element of the success is the many scientific collaborations and strong partnerships that we have established with the treatment community. The high interest and support we are seeing from scientists across the world is reflected in our many publications and the study presentations of Buvidal at international conferences across our markets and internationally. And as an example, at the recent international meeting in Lisbon Addictions, Buvidal was featured in several oral presentations, one symposium on long-acting injectables and one plenary lecture. I think consistently in all these presentations -- in all these scientific congresses, we have had a number of oral presentations and high-quality presentations overall, including symposia. Next up now is ISAM in -- which this year is in New Delhi, India, where we have a big symposium on the launch progress in -- or on the progress of implementing Buvidal in Australia as well as new qualitative research on the effect of Buvidal in patients. So let's move to the next slide, Slide 12. So we have strong evidence base, which we are continuing to build in for Buvidal with important innovative clinical studies. So as I spoke last time, we are having 2 studies that are being finalized, one is the Depot Evaluation Buprenorphine Utilization Trial called DEBUT. It's a prospective, randomized, open-label trial, 120 adult patients, outpatients, randomized 1:1 to Buvidal versus standard of care. Here, we have database locked in October, and top line results will be delivered in Q4. And the primary objective of this study is to look at patient satisfaction, quality of life, health economical outcomes and other patient-reported outcome. I'm very excited about this study as well as the second study that is being completed in Australia, called UNLOC-T, where we have studied -- studying Buvidal in prisons -- 8 prisons across New South Wales in Australia and comparing the treatment of Buvidal with methadone. This study will deliver preliminary results in Q4 2019. And already, there were some very interesting presentations about the baseline data, for instance, at least on addiction. I think both these studies will contribute to our evidence for this treatment significantly in the future. So we can go to the next slide, please. So I think it's worth to note that Buvidal is only long-acting buprenorphine depot that has been studied so far head-to-head against standard daily treatment. And that we have demonstrated superiority, that's a very important differentiation. We are continuing this work through the randomized DEBUT study but, as I said, we have top line data coming in Q4 and the study in the prison setting, UNLOC-T versus methadone. So we're really creating a strong, strong evidence base here. And then in addition, we have multiple externally sponsored collaborations ongoing as well as investigator-sponsored studies, not only in Europe and Australia, but several studies being started out in the U.S. Next slide, please. So we'll go over from here, having discussed Buvidal, to looking at our pipeline. And we can go to the next slide, please. As you know, we have a diversified late-stage pipeline in a number of chronic indications, including pain, endocrinology, oncology and cardiovascular disease. In chronic pain, we are preparing meetings with health care -- health authorities for our planned MAA submission first half of 2020. And for our long-acting octreotide for acromegaly, we now have 3 Phase III -- 2 Phase III trials up and running. Next slide, please. So CAM2029, we believe, has the potential to address very important unmet needs in acromegaly and neuroendocrine tumors. CAM2029 had orphan designation in acromegaly, not in neuroendocrine tumors though, where this is the larger indication. This could be the first octreotide depot for self-administration by patients, significantly improving convenience and also reducing overall health care costs. Also, through the 5 times higher bioavailability and faster onset, there is a potential for improved efficacy in both acromegaly and NET. And in addition to those 2 indications, we are actually doing an additional number of promising indications and disease areas for CAM2029. The market is substantial currently. Somatostatin analogs are selling for more than USD 2.6 billion, and they've had a steady market growth for the past 20 years, as you can see. Going to the next slide. I think this is very interesting. We have, over the last -- course of this quarter, done a lot of interesting market research, or actually commissioned it to a third party both for acromegaly and NET. And as you can see, there are substantial markets for both indications, and we have sized this market depending on the profile or the properties of the product as well as the clinical data. So we have 3 different scenarios: One where we have our prefilled syringe setup only; as well as one where we have also the autoinjector included; and the third scenario including both the autoinjector and the superior efficacy endpoint from the studies. Depending on these different scenarios, we have estimated potential peak sales in the range of SEK 300 million to SEK 1.26 billion, depending on product profile. So as you can see, this is a very significant opportunity for us, one that we are now looking very much into where we have done significant progress on the clinical side. Going to the next slide, please. So this is the current program. We have already completed 3 Phase I studies, both single and multiple dosing, 1 II -- Phase II study, which provided very positive indications of efficacy, both in neuroendocrine tumor patients and acromegaly. And we have also now then started 2 Phase III studies, 1 placebo-controlled Phase III study in somatostatin analog responders and 1 open-label, long-term safety study taking allcomers, both new-to-treatment patients and switch patients from the Phase III study. In addition, we are -- we have done much of the planning of the next Phase III program, and that has been progressing well. Regulatory submissions for acromegaly will come in the transition between 2021 and 2022. Next slide, please. So Camurus, we are actually building an endocrinology franchise based on CAM2029, but also related somatostatin analog assets that we have in development. Our lead indications are acromegaly and NET and, as you saw, we have a very significant market potential in both indications. But we are also looking into both a third and a fourth indication here. In addition to that, we are also -- we have conducted a Phase -- successful Phase I program for pasireotide FluidCrystal depot and are also working with a somatostatin FluidCrystal depot. Both have interesting potential due to a different somatostatin receptor interaction profile. So with that, we can go to the next slide, please. In addition to our significant program -- progress in the Phase III program for CAM2029, we have also seen some interesting progress in our collaborations and partnerships. We have an ongoing Phase II study with setmelanotide FluidCrystal weekly subcutaneous depot, which is being developed by Rhythm for treatment of genetic obesity disease. And aside from that, Rhythm actually reported positive Phase III data for their daily formulation in both POMC, which is proopiomelanocortin, patients and LEPR deficiency patients. And that report was delivered in August 2019. So we have strong support for efficacy of setmelanotide in these indications. In addition to that, we signed a new license agreement with Ra Pharma, directed at complement-mediated disorders, and it is zilucoplan FluidCrystal SC depot, a long-acting formulation then, for treatment of generalized myasthenia gravis as well as immune-mediated necrotizing myopathy and other serious complement C5 mediated disorders. We have preclinical proof-of-concept here, as you can see in this graph here. And we are preparing -- or Ra is rather preparing for start of clinical studies next year. The license agreement was signed in July 2019. And interestingly, later on, in October, Ra was actually acquired or agreed to be acquired by UCB for USD 2.5 billion, which was a significant premium over the current share price. So with that, I think we can go to the last slide here in our presentation. We have had a very productive, as you can see, and eventful third quarter. We have made good progress in all key areas, have shown very robust growth in EU and Australia, driven by increasing patient shares and really great feedback from patients and good launches in new markets. We have received new reimbursements in key markets, and new applications are progressing. Brixadi is now on track for a 2020 launch in the U.S. We have 2 Phase III acromegaly studies of CAM2029 initiated, and plans for neuroendocrine tumor studies are progressing, alongside an autoinjector development. Preparations of CAM2038 for chronic pain MAA submission for H2 progressing. And we have had good collaborations and also new license with Ra Pharma. In addition to that, we also have new patent filings from -- for our FluidCrystal technology platform and a number of interesting new drug candidates in the early pipeline. Our net revenue increased by 105% during the quarter to SEK 40.2 million. Operating loss was SEK 77.4 million. And our cash position at the end of the quarter was SEK 192 million. So with that, I am happy to open up this call for questions together with my colleagues here, Richard and Eva Pinotti-Lindqvist. Thank you for listening.

[Operator]

[Operator Instructions] Our first question comes from the line of Peter Sehested from Handelsbanken.

[Peter Sehested, Research Analyst]

It's Peter from Handelsbanken. And congratulations on the uptake of Buvidal. I have 3 questions, if I may. It's regarding the development of CAM2029, the decision to go with an autoinjector, and how that decision will, let's say, impact the overall time lines for the program? Because I assume this is valid for both acromegaly and NET. And also with respect to NET, also a time line for that project as well? That was actually the second question. My third question, just an update on the milestone that you are actually expecting from Braeburn in case of approval in the U.S.

[Fredrik Tiberg, President, CEO & Director]

Thank you, Peter. Yes, so when it comes to the autoinjector development, that is going on in parallel with the Phase III program. And we are planning to have bridging studies. So will it be a bridging PK study. And -- so it will be according to the current plan available on launching acromegaly, and they will also be introduced into the NET development. So when it comes to the clinical trial in neuroendocrine tumors, we have been working very intensively together with our biostatisticians and key opinion leaders on the design of the program. We are intending to do a superiority study against active comparator, and I think we have good grounds for that. And currently, the time line for start of that study is somewhere, I would say, around the mid of 2020. And in terms of your last question, could you please repeat that?

[Peter Sehested, Research Analyst]

Yes, the last question...

[Fredrik Tiberg, President, CEO & Director]

Oh, yes, okay. Yes, so the milestones from Braeburn? So yes, I mean, the milestones on -- from Braeburn, they are, of course, due on approval. So we are expecting -- from a cash flow perspective, they will be slightly delayed, but we are expecting that on approval the end of this year -- or the coming year, of course, 2020.

[Peter Sehested, Research Analyst]

Yes, November 2020. But can't really remember whether you have communicated a size for that.

[Fredrik Tiberg, President, CEO & Director]

Oh, the size. So it's USD 35 million is the milestone payment for weekly and monthly approvals.

[Peter Sehested, Research Analyst]

Okay. Now that, that milestone is not available until a year's time, looking at your burn cash position, et cetera, I mean, you are flagging that you are delaying startup of some projects, Phase II starts, et cetera. But is there anything else that we should be aware of in terms of internal time lines? And can you finance all the time lines that you have flagged in your Q3 report with the current state of the balance sheet?

[Fredrik Tiberg, President, CEO & Director]

Yes. I just want to say, first of all, of course that -- I mean, we are keeping tight control of our finances. I think that's important to say. And I'll leave this over to my colleague, Eva, our CFO, please.

[Eva Pinotti-Lindqvist]

Yes. Right. Yes. I think we have a lot of potential and attractive development opportunities coming up. And with our growing revenues and the planned spend that we have, we are on track for positive cash flow late 2020. And for these attractive development opportunities, it might be, as you say, we obviously have limitations to finance these right now.

[Fredrik Tiberg, President, CEO & Director]

Yes. And all of them, that is.

[Peter Sehested, Research Analyst]

Okay. So you plan to be able to deliver on your current state -- milestones with respect to the pipeline with sort of the current cash and the projected cash coming in from revenues?

[Fredrik Tiberg, President, CEO & Director]

That's correct.

[Eva Pinotti-Lindqvist]

Yes.

[Operator]

And the next question comes from the line of Harry Sephton from Jefferies.

[Harry Thomas d'Alton Sephton, Equity Analyst]

I have 4, please. So firstly, on the Brixadi case, now that we have some clarity around when the monthly can actually be approved, what are your expectations around the potential for the weekly indication being launched ahead of that and any milestone payments associated with that as well. My second question. Clearly, in Finland, you've had extremely successful market. What has really worked for you there? I remember you've previously said that, that's particularly easy market access compared to maybe Germany and the U.K., but how do you think you can maybe replicate the success there in some of your other markets? My third question is, what is the latest in Australia following the AUD 40 million of investments in the PBS listing. Did you see any material sales there in the third quarter? And are you expecting that to significantly ramp up in the coming quarters? And then on CAM2029, you mentioned that you're also maybe looking to add some additional indications for that product. Could you maybe be a little bit more specific on those? Would those potentially be indications which are typically associated with somatostatin analogs? Or are you looking to have a differentiated indication there?

[Fredrik Tiberg, President, CEO & Director]

Thank you, Harry. Yes. On the first question with regards to the weekly and early -- potential early approval of the weekly, I just want to say that we got the news from the FDA very late last night. So we have not had a detailed discussion so far with Braeburn. I can say that they are seriously considering the option of launching the weekly early, but it's still subject to their review. But I think that should clearly be regarded as a possibility and a good one as well. But we will come back to that when we have some more clarity from our partner. With regards to Finland, I mean, yes, clearly it's a success in terms of patient share. And it's actually even a larger success in terms of market share, of course, because of the price difference between Buvidal and the current products on the market. So yes, that's a clear case. And we do see similarities on other markets. So already, we see both Norway, Australia are showing very similar trends. And I think those trends are due to the fact that you don't have a lot of hurdles in the market. Richard, do you want to comment that? Or...

[Richard Jameson, Chief Commercial Officer]

Yes. I mean, when we have reimbursements in Norway and Australia, it's under very central level, and then there's no price discussions at a local level at all. So we see rapid uptake in both those markets.

[Fredrik Tiberg, President, CEO & Director]

And yes -- and then to your question, do we have any material sales yet in Australia? All we can say is that it's picking up very nicely, I think that's the main message from us on that front. And finally then, in terms of potential additional indications for CAM2029. As you know, I mean, octreotide is being used in a range of different indications, and it's got demonstrated efficacy in a number of clinical studies. We have set, I should say, from start 10 potential indications, and we have narrowed that down to 4. I don't think that -- some of them are perhaps not obvious. We will not disclose that today, but we have done a very significant work together with an external partner. And we'll come back to that shortly. But I mean, some of them are definitely in the areas -- well-known areas and others are perhaps a little bit outside the beaten track. But there are significant opportunities -- market opportunities in those indications. And I think we have also mentioned some of them in our previous correspondence, is that -- I think for the time being, that's a good point. Anything else, Harry? Or you okay with that?

[Harry Thomas d'Alton Sephton, Equity Analyst]

No, that's extremely helpful.

[Operator]

[Operator Instructions] As there are no further questions, I'll hand it back to the speakers.

[Fredrik Tiberg, President, CEO & Director]

Okay. I just want to say then that, thank you, everybody, for listening in to this call. I think that we really thank you for you following Camurus, and we look forward to giving you updates as we progress here over the next quarter. It looks very promising, and looking forward to meeting you at the regular meetings, and also wish you a very nice weekend, everybody. Thank you.