Moberg Pharma AB (publ)

STO:MOB

Earnings Call Transcript 2021-Q1

[Operator]

Hello, and welcome to the Moberg Pharma Q1 report. [Operator Instructions] Just to remind you, this conference call is being recorded. Today, I'm pleased to present CEO, Anna Ljung. Please go ahead with your meeting.

[Anna Ljung, Chief Executive Officer]

Thank you. Hi. My name is Anna Ljung, and I'm the CEO of Moberg Pharma. I also have our VP of Finance, Mark Beveridge, on the call today. We're happy to present the Q1 report, and you will find the report on our website. And there, you also have a PowerPoint presentation, and that's the presentation that I will be basing this telephone meeting on.So I'll start on Page 3 in that presentation with an overall. So we're a Swedish pharmaceuticals company that bases our products on drug delivery of known substances, which reduces time to market and development risk compared to traditional drug development. And our lead program is MOB-015 in onychomycosis, nail fungus, and there we see a global sales potential of $250 million to $500 million annually. We recently finalized 2 large Phase III trials on more than 800 patients, and we met primary end point in these trials and have sufficient data to file for registration in the EU. And we're targeting such a filing during this autumn.Based on average processing times of 1.5 years, we expect approval early 2023, following with the launch by the end of 2023. And we're not doing it all by ourselves. We do have partnerships in place for, I would say, all the major markets except U.S. So perhaps the 2 most important ones are EU, where we have Bayer as a partner, the world leader in OTC antifungal treatment with the brand Canesten, and also I want to highlight Taisho for Japan. And in total, our partnerships include milestones of $120 million in addition to payments for product sales. And this is not the first time we're taking an onychomycosis product to market. We have a tried and tested model where we work with strong local partners that take responsibility for and invest in the marketing and sales, where we're responsible for the development, production and supply. And this is a model that does not tie capital, with the exception of U.S., where we want to build our own presence targeting podiatrics. And in parallel to preparing this EU submission, we're planning a meeting with FDA, which we believe one additional study is needed for the U.S. It will be very similar to the one that we have already conducted, the North American study, but with a shorter dosing regimen and thus enabling stronger claims and higher complete cure. On Page 4, the significant events during this period were really focused on registration preparations, and they're progressing according to plan. The most important step forward during this quarter was that we received final comments on our pediatric plan from EMA. And our goal remains unchanged, to submit this registration application during the second half of this year and to be able to launch by the end of 2023. We also secured additional funding during this quarter in January. We did a fully subscribed [ rights ] issue without using any guarantees. And that also meant that we could terminate the old financing agreement with Nice & Green, and that was terminated without cost for the company. We did strengthen the international -- intellectual properties during this quarter as we were granted a patent from OTC India in addition to the other patents. We basically have patent protection until 2032 in all major markets. And we are also working very actively with our global trademark portfolio, where we own both domains and trademarks for several brand names to enable this global registration that we're preparing. So we're filing in each territory with Moberg's brand name. Then, of course, in territories where we have partners with strong branding, those brandings will be used on the market, but the registration [ runs ] in both we own. And we also finalized the spin-off of BUPI. That was completed by the listing of OncoZenge that took place in February via this Lex Asea divestment, where the shareholders of Moberg also received shares in OncoZenge. Looking at our financials, this spin-off also resulted in a positive earnings effect of SEK 25 million, and they're included in the total profit. So that explains the high total profit for this particular quarter. Turning to Page 5. First, let's note that 1 out of 10 people suffer from nail fungus. There's really no good treatment alternatives available today. Also, the most effective treatment is oral terbinafine, so the same molecule that we're using, but we are applying it topically. Using oral terbinafine is associated with risk of liver damage and interaction with other drugs. And in our Phase III, MOB-015 showed 70% to 84% mycological cure killing the fungi, and this is substantially higher than reported for other topical treatments, that has levels of 30% to 54%, and it's on par with oral terbinafine but with 1,000x less drug in concentration in plasma. And these are ideal characteristics of an efficacious topical drug with no systemic exposure. Turning to Slide 6. When comparing our data to competitors, this graph shows the relationship between mycological cure rates and complete cure rates for current onychomycosis drugs. The pattern seems a little bit different between the U.S. competitive market and the EU competitive landscape, but essentially it's the same, where you have a clear [ correlance ] between mycological cure and complete cure. We do have a world-leading mycological cure, better than any topicals and on par with oral terbinafine. And the complete cure, we will adjust that rate [ via ] a new dosing regimen. A shorter treatment time has the potential to increase complete cure rates, and this is based on our very high mycological cure rate and that we get 40x higher levels of terbinafine in the nail bed compared to oral terbinafine. So we know the 3-month treatment with oral terbinafine is effective. And we also know that the onset of the antifungal effect is more rapid from MOB-015 for oral terbinafine. So by reducing the treatment, we're reducing this hydrating effect that creates this whitish discoloration that is temporary but is the reason behind our low complete cure rate. So reducing this hydration effect reducing the impact of the clinical cure assessment at week 52. So of course, we think that it will not only be used for our U.S. trial but also to strengthen claims worldwide. Turning to Page 7. We have recently received final comments on our pediatric plan from EMA, and we see a good chance of coming to agreement with authorities on a realistic pediatric plan with a clinical study including less than 30 children, and this study will not start now, it will start later. But we're expecting a final decision from EMA this autumn. Given the discussions that we have had, we do believe that it's possible for us to do a full registration, and also called 8.3 route, and obtain data exclusivity. And this would give us up to 10 years of data exclusivity from first market approvals and to complement our existing patent protection in all major markets up to 2032 (sic) [ 2023 ].And it's really this approval by the pediatrics committee that sets a timetable for our plan to submit the registration application in -- during this autumn. And we expect it to be approved within 18 months. So we are planning for a launch by the end of 2023. And for the U.S., we're planning for this meeting with FDA after we have a little bit less to do in the European setting. We have that assumption that one additional study may be needed for registration in the U.S. I'm turning to the next page, looking at that study, it's really about shortening the dosing regimen but keeping everything else from the Phase III study that we recently completed in the U.S. And of course, from a patient perspective, it's a huge benefit, not only -- not having to have a daily dosing for a full year but instead having daily dose for 2 to 3 months and then just follow up once weekly. And we also see this rapid improvement that further strengthens our case. So in the Phase III, actually 75% of the patients saw improvement already at the first follow-up. So I think overall, the profile on MOB-015 is really that this is the only topical alternative that will compare to oral treatment when it comes to efficacy, but without the safety issues. So we believe that this could take a market-leading position with being the treatment of choice. Turning to the financial part of this report. On Slide 9 you'll see our financials. There are no surprises in the figures, I would say. Cost of operations are in line with previous periods. We're capitalized, investments in MOB-015, but as the studies are finalized, these investments are very limited. And the cash position at the end of this quarter is about SEK 150 million, much thanks to the rights issue that was finalized in January. And then in February, BUPI was spun off, we have this distribution of shares in OncoZenge and the successful IPO, 100% on the first [ note ]. The spin-off also resulted in a positive earnings effect of SEK 25 million to Moberg Pharma, so that is included in the total profit in Q1. The total profit for us in Q1 ended up on SEK 19 million. On Page 10. In summary, we have an exciting journey ahead, delivering on EU submission this year, receiving feedback from FDA and initiating the additional EU study. I think these milestones are very important and expected to create significant value as they enable launch in EU by the end of 2023 and commercialization in the U.S., the largest and most important market, as well as strengthening claims globally. These are key steps in our journey to make MOB-015 the future market leader in onychomycosis.I'll stop there and happy to open up for questions.

[Operator]

[Operator Instructions] And we have a question coming from the line of Mats Hyttinge from Redeye.

[Mats Hyttinge, Analyst]

Just a very short question on that EU. You really seem that you have -- still have the EU on track on the time line, that is what I want to confirm, that there's no changes to the time line. You're still -- it's pretty much the same as before, right?

[Anna Ljung, Chief Executive Officer]

Yes, it's exactly the same time line. We're aiming for this registration during this autumn. And then if you look at the average approval times, they're about 1.5 years. So that's what we're expecting, and then it could be shorter, it could, of course, also be longer, but we're calculating with us having an average application, so approval early 2023 and then launch straight thereafter, basically.

[Operator]

[Operator Instructions] And we have no further questions at this time. Speakers, please go ahead.

[Anna Ljung, Chief Executive Officer]

Okay. Thank you. Then I just want to thank everyone for listening in. And of course, if you have additional questions, don't hesitate to reach out to me, send me an email or give me a call. Thank you, everyone, and have a good day.

[Operator]

This now concludes our conference call. Thank you all for attending. You may now disconnect your lines.