Earnings call transcript: BioArctic Q4 2024 sees strong revenue growth

BioArctic, with a current market capitalization of $158.45 million, reported a robust performance for the fourth quarter of 2024, achieving net revenues of $101 million, with a significant increase in royalty revenues. The company is on track to become profitable in 2025, projecting a pre-tax profit of approximately SEK 1 billion. BioArctic’s stock showed a slight decline in aftermarket trading, reflecting a cautious investor sentiment despite positive financial developments. According to InvestingPro data, the stock has experienced significant pressure, falling nearly 76% over the past year, now trading at $4.42, well below its 52-week high of $26.62.

Key Takeaways

• BioArctic’s net revenues reached $101 million in Q4 2024.
• Royalty revenues increased by 38% to SEK 96.7 million.
• The company expects to achieve profitability in 2025.
• Significant milestone payments anticipated in 2025, totaling $130 million.
• Stock experienced a 1.36% decline in aftermarket trading.

Company Performance

BioArctic demonstrated strong financial performance in Q4 2024, with net revenues of $101 million, driven by robust royalty growth and strategic partnerships. The company is capitalizing on its innovative product portfolio, including Lecanumab, which has seen approval in multiple geographies. BioArctic is positioning itself as a leader in Alzheimer’s disease treatment, leveraging its brain transporter technology to maintain a competitive edge.

Financial Highlights

• Net Revenues: $101 million in Q4 2024.
• Royalty Revenues: Increased by 38% to SEK 96.7 million.
• Full Year Royalties: Approximately SEK 230 million.
• Cash Balance: SEK 780 million.

Outlook & Guidance

BioArctic anticipates a profitable year in 2025, with an estimated pre-tax profit of SEK 1 billion. The company expects to receive milestone payments of approximately $130 million, with $100 million from Bristol Myers (NYSE:BMY) Squibb and around $30 million from Eisai. Analyst consensus from InvestingPro suggests potential upside, with price targets ranging from $5 to $7, though they don’t expect profitability this year. InvestingPro subscribers have access to 10+ additional exclusive insights about BioArctic’s financial health and market position. BioArctic is also exploring new indications and expanding its infusion capacity, aiming for broader market expansion by 2026.

Executive Commentary

Gunilla Oswald, CEO of BioArctic, stated, "BioArctic is now entering a new era, which I call BioArctic two point zero." She emphasized the company’s expectation of profitability this year and onwards. CFO Anders Martin Leff highlighted that "2026 will be a very exciting year to follow," reflecting optimism about future growth and market opportunities.

Risks and Challenges

• Increased R&D Expenses: Expected rise of 50-80% in 2025 could impact short-term profitability.
• Market Competition: Growing competition in the Alzheimer’s treatment market.
• Regulatory Approvals: Pending European Commission decision on Lecanumab could affect market expansion.
• Economic Conditions: Global economic uncertainties may influence investment and consumer spending.

Q&A

Analysts inquired about the potential MSA indication for exidabnumab, milestone payment expectations, and European launch timelines. The company addressed competition and market potential, highlighting its strategic initiatives to maintain a competitive advantage.

By focusing on innovation and strategic partnerships, BioArctic is poised for continued growth, despite facing challenges in regulatory approvals and market competition.

Full transcript - Bioage Labs Inc (BIOA) Q4 2024:

Conference Moderator: Welcome to BioArctic q four report twenty twenty four. For the first part of the conference call, the participants will be in listen only mode. During the questions and answer session, participants are able to ask questions by dialing key 5 on their telephone keypad. Now I will hand the conference over to CEO, Gunilla Oswald and CFO, Anders Martin Leff. Please go ahead.

Gunilla Oswald, CEO, BioArctic: Good morning, and welcome to Biotic’s presentation for the fourth quarter of twenty twenty four. Next (LON:NXT) slide, please. I’m Gunilla Aswel. I’m the CEO of Biotic, and I will share today’s presentation with our CFO, Anders Martin Loeb. Our Chief Commercial Officer, Anna Kaja Gremblad, is also here for the q and a session after the presentation.

Next slide, please. Bioartic is listed at NASDAQ Stockholm large cap and this is our disclaimer. Next slide, please. Today, I would like to start with this slide, which I believe says a lot about the current status of Bioartic. First of all, I continue to be very excited about our BRAIN transporter technology.

We had a very important event in December with the first license agreement that was signed, including the BT technology, and that was with Bristol Myers Squibb. It’s now pending the HSR clearance process. I think this is very important also since it gives an external validation of our platform as well as it opens up for further partnerships. The second part I want to mention is exidabnumab, which started phase two a during the first quarter of last year, fourth quarter of last year, and is progressing really well. All patients have already been completed their screening phase for the low dose part of the study.

Thirdly, lekambi sales continue to increase and more and more patients are getting access to the treatment. We believe this is just the start and continued development of more convenient dosing and more convenient diagnosis we’ll continue to drive the growth going forward. Based on these achievements, BioArctic is now entering a new era, which I call BioArctic two point zero. And that’s based on that we now have continuous revenues with royalties quarter by quarter are they increasing. And we’re not any more dependent on the very irregular milestones.

And that leads to that we’ll get more stable finances, and we expect to be profitable from this year and onwards. Our Brain Transporter platform has been validated, and we have a strong partnering interest, which could potentially lead to several partnerships in the future. And our alpha’s nuclear portfolio with exidabnumab and BT2238 is also receiving a lot of interest among external partners. Next slide, please. Bioartic is a global pioneer in neurodegenerative disorders.

And we are among world leaders as innovators in two different areas. The first one is in generating highly selective antibodies targeting aggregated forms of misfolded proteins, for example, Alzheimer’s disease, Parkinson’s disease and ALS. The second part is our brain transporter technology, which helps biological treatments come better into the brain and coming closer to the target. Our business model focus on innovation of new treatments for neurodegenerative disorders and the blood brain barrier technology, where which also makes us now also be a platform company. An important part of our business model is partnering, and we see three types of partnering.

The first one is for large indications like Alzheimer’s disease and Parkinson’s disease, where our aim is to license the project to a strategic partner before phase 2b or at least before phase three. For orphan drug indications, Biotic can drive our programs longer and potentially all the way to the market. For our brain transporter technology platform, we can also partner with companies that want biologics to get increased brain penetration. Next slide, please. And I will continue on that path and talk about the license agreement with BMS, which is a key event for BIARCTIC.

It’s a global license for our pyroglu A beta antibody program, which includes BAN fifteen oh three and BAN twenty eight zero three. BAN twenty eight zero three is also utilizing the brain transporter technology. And the license was signed December 19. We had several interested parties and BMS were fast and committed with a very good offer. And as I have said before, we are discussing with different potential partners.

And if we find the right partner with the right proposal, we will partner. And in this case, it’s a very good strategic fit for both parties. It came a little bit faster than I had expected. BMS is a great partner for the pyroglyabeta program with patients in focus. We are now preparing for BMS to take over the projects, but we have to wait for the agreement to be cleared by the HSR process before the agreement can be concluded.

This is our largest agreement that has been signed so far and one of the largest ones globally for such an early project. The agreement includes US100 million dollars upfront and another US1.25 billion dollars in milestones, plus tiered low digit tiered low double digit royalties on global sales. Importantly, Biotic retains all other rights to the brain transporter technology outside of the para g wave beta field. So I think that we can utilize this for, several future potential partnering agreements. Next slide, please.

The BRAIN transporter platform continued to progress well and according to plan. We had in our plan that we were going to present validation data at the last quarter last year, Q4, and those data demonstrate rapid, broad, and deep bearing distribution by utilizing the transferrin receptor. And this could then lead to increased effect, decreased side effects, lower dose, and more convenient dosing. I think that the next generation treatments for CNS will most likely include a blood brain barrier technology. We continue to evolve our BT technology with different ways of engineering depending on which the target is, if the target is extracellularly or intracellularly or if we want to come into the lysosome in the cell or outside the lysosome but still in the cell.

So it’s different ways of engineering the brain transporter. We have a versatile platform which can be utilized across modalities. We have started with antibodies and enzymes, and we are now also looking into other modalities such as antisense, oligos, etcetera. We experienced great interest at JPM in San Francisco in January and continues with several discussions regarding potential future partnerships. And we are excited about the discussions, but of course, we expect these discussions as always to take some time.

It’s important for us to find the right partner with the right terms and the right commitment. Next slide, please. Another great achievement, the fourth quarter last year was that exedadnimol, our alpha synuclein program, started phase two a in Parkinson’s disease patients. And we are also now exploring the potential to include patients with multiple systemic atrophy, MSA. The study is progressing very well, and the low dose part of the study is already fully recruited.

And then there is three months dosing and then follow-up. We are now preparing for a safety interim review on the third quarter this year before progressing into the high dose part. And we expect full study results first half of next year. I think that our alpha synuclein program is very exciting, especially based on two different things. One is that we have a highly selective antibody, and to our knowledge, it’s the most selective antibody which is binding strongly to the pathological forms of alpha synuclein while sparing the physiological monomeric forms.

And the second aspect is that we see several opportunities for indications going forward. For example, in Parkinson’s disease, Parkinson’s disease dementia, Lewy body dementia, prodromal Parkinson’s disease, and multiple systemic atrophy. And all data that we have generated so far, really support further progress. So really exciting about this program. Next slide, please.

Then let’s turn to Lekembe. The number of patients treated with Lekembe continues to grow, and it’s more than twenty thousand patients treated by now. And I think it’s reassuring to hear that the clinical safety experience is on par with what was reported in the phase three program. If we start on the regulatory side, Lekembe is now approved in 10 different geographies with Mexico and Macau added now in January. Regulator review are also ongoing in 17 additional markets and regions, including the European Union.

In EU, CHMP gave a positive opinion the November 14, and we were waiting for the European Commission decision in January. But the European Commission has asked the CHMP to consider two questions regarding information on the safety of lekanumab that became available after the adoption of the CHMP opinion in November, and whether this may require an update of the opinion, and to consider whether the wording of the risk minimization measures in the opinion is clear enough to ensure correct implementation. Our partner, Eisai, who are driving the regulatory process, they believe the existing information is clear and sufficient to address the questions. And we now expect the CHMP meeting the February to address these questions. We are looking forward to the response from the European Union.

And I really hope that European patients can get access to Lekambi soon. In January of this year, the FDA approved less frequent maintenance dosing intravenously every fourth week. This means that after eighteen months treatment, patients could reduce their dosing to once a month for the maintenance phase. I think this is a great step since it is important to continue dosing to get the most benefit for the patients. Also after that, the plaques have been cleared.

In January, the FDA also accepted the new application, the new BLA for the subcutaneous auto injector with maintenance dosing. And the PDUFA date has been set to the August 31. If we then look at the development side, the AHEAD three forty five, the phase three study, completed recruitment mid October. And this study is for presymptomatic Alzheimer’s disease, which means individuals with elevated levels of amyloid deposits in the brain, but they do not yet have any symptoms. They will receive treatment with, naclanumab or placebo for four years.

During the latest Alzheimer Congress called CTAD, Eisai presented new data from the phase three CLARIG AD study, further supporting early and maintained treatment. Data presented at CTAD suggests that initiation of lekembe in early stages of the disease can support clinical stability and even improvement in many patients if you start very early. I think this is positive news for the AHEAD three forty five study, which will evaluate the possibility to prevent or delay onset of Alzheimer’s disease. Long term data over 36 from the open label extension study were also presented at CTEND suggesting continued benefit over time and the importance of continued treatment even after plaques have been cleared and to maintain the suppression of the Alzheimer pathology. This makes the less frequent maintenance dosing a benefit for the patient.

I think it was also reassuring to hear that the clinical safety experience in clinical practice is on par with what has been reported in the phase three program. And if we look at the commercial side, as I said, we have more than twenty thousand patients on lekembe treatment globally, and the number of patients that are getting access is constantly increasing. And Anders will talk more about this. Next slide, please. I want to point out three major things that could broaden the use of lekambi and accelerate the uptake of Lekambi.

The first one is subcutaneous auto injector, which I think will make it much more convenient for the patient. And the first BLA has been submitted for maintenance dosing with the PDUFA date, as I said, late August. Thereafter, Eisai plan to submit a supplementary BLA for subcutaneous water injector administration for the induction phase as well. The subcutaneous administration will make the treatment much more convenient for patients and caregivers with at home administrations and with less requirements and lower costs for administration compared to intravenous administration. The second aspect is simplified diagnosis based on blood based biomarkers.

Today, blood based biomarkers are being used for screening, and then they should be confirmed by PET or CSF. Within the next year, we believe that blood based biomarkers will also be accepted as confirmational. And this will be making the diagnosis considerably simplified and increasing the opportunities for primary care diagnosis. The third aspect is to broaden the indication to even earlier stages of Alzheimer’s disease. As I alluded to, we did a head three forty five study in pre symptomatic individuals even before the symptoms appear.

But the individuals have elevated levels of amyloid beta in the brain. So I think lekembe has huge opportunities to help many patients. And we expect the uptake to be more rapid, especially from 2026 and onwards. Next slide, please. So in summary, our portfolio is progressing really well, all the way from very early innovative discovery and all the way to helping patients on the market with these devastating diseases.

And today, I have highlighted Lekembi, exedavnimab, our Paraglue A beta programs, and our BT platform. And I’m really pleased to know that Bioartic’s innovations and research with high quality is being recognized externally. Next slide, please. And then I will hand over to Anders Martenlev for the financial summary.

Anders Martin Leff, CFO, BioArctic: Thank you, Gunila. I will then start to focus on the Lekambi sales. As you can see here on the the slide, the global sales for the fourth quarter of twenty twenty four were 13,300,000,000.0 yen that corresponds to $87,000,000 I. E. A 33% increase from the third quarter twenty twenty four.

So we now really see a solid development. And of course, if you compare year over year, it’s more of a tenfold increase. So we are in a rapid growth phase. For us, this means that the royalties increased by 38% from the third quarter to SEK 96,700,000.0 or, for the full year, we recorded roughly 230,000,000 Swedish in royalties. This is primarily then driven by The US expansion.

It’s it’s now in line with the updated forecast that Eisai issued in their last quarterly report. The US sales was 7,700,000,000.0 yen corresponding to $50,000,000,000, which means that the sales grew by 31% over the q three numbers, and we’re now up to 13,500 patients. As you may recall, Eisai described the problem with an infusion capacity bottleneck in the last quarterly report, and now that problem is being resolved. The capacity has been increasing rapidly. So so the 6,000 patients that Eisai hinted were waiting for treatment due to capacity issues are now being included at a very rapid pace.

So so now they’re up to 3,500 patients, so so they are really working hard to to resolve that problem. Over time, the infusion capacity will also become less of a problem. Already now, maintenance therapy, as as Gunilla mentioned, is approved in The US with with using infusion. So that reduces the number of infusions for patients that have been on treatment for a long time by by fifty percent. But also, even more importantly, the subcutaneous version removes the need for for infusions entirely.

And we expect that to be approved for maintenance therapy in the third quarter of this year, and ASI has guided that they also expect induction therapy with the subcutaneous version to become approved in the first half of next year. So all in all, we believe that that the growth will continue in The US in in 2025. And in 2026, there will be much stronger focus on the primary care sector. And ASI has started preparation for that already in now in 2025. So so we will see a shift moving over more to to to general practitioners in the primary care sector going from specialists only.

In Japan, we saw a really strong development. Japan has been been a really strong market from the very beginning. The sales were 4,100,000,000.0 yen in the fourth quarter corresponding to $27,000,000 Strong 49% growth over the third quarter. And as you can see, the number of patients is more than half of the numbers in The US even though Japan is a much smaller market and the drug has been on sale for for two quarters less in in Japan. So so really, really strong development there.

And there you can see that that that Eisai has already started, promoting toward directly to consumers to raise awareness about mild cognitive impairment and to promote early diagnosis. And I think that is the way to go also in The US, and that’s the development that we expect to start in The US as well. China is also very strong. It may seem that that it’s not growing since the the sales of on the fourth quarter were roughly the same as in the third quarter coming in at 1,300,000,000.0 yen or $8,000,000 However, the sales in the first quarter of sales in China, which was the third quarter, were probably a little bit stronger than the underlying demand as there were some inventory buildup. So all in all, I would say China is moving really well.

The underlying demand is increasing and we will continue to see solid growth there even though ESA is only selling towards the private market, but that’s still a significant market. To conclude, we believe that ESA is on track to reach their financial year forecast of 45,500,000,000.0 yen. That is for the period that started the in the second quarter of twenty four and that will end end of March ’20 ’20 ’5. That then will correspond to $280,000,000 And as you can see from from the accumulated sales in the first three quarters of that period that were at 29,600,000,000.0 yen or $194,000,000 they need to generate roughly as much sales in the coming quarter as they did in the last quarter to reach the forecast, and we believe that they will continue to grow. So we believe there is a very high likelihood that we will actually beat their forecast.

Going forward, as Yanila mentioned, we believe that we will see continued growth in 2025, but really it will be incredibly exciting to follow what will happen in 2026 when when the blood based biomarkers really make a dent in in the diagnosis process and the subcutaneous version becomes available so so that the patients can take the drug at home or in a much easier way with the healthcare practitioner than they do today with infusion. So we believe that 2026 will be a very exciting year to follow. We then turn to the next slide looking a little bit more on our figures. Starting on the left hand side, you see that our net revenues were $101,000,000 for the quarter. Historically, as you can see, they have been fairly lumpy and it has been smoothing out a little bit now when the royalties are growing.

I’m happy to say that it will be lumpy again since we will start to generate quite significant milestones in 2025. We have already said that we expect a $100,000,000 upfront payment from BMS that will be recorded in its entirety when when the agreement is closed. We’re also expecting some milestone from Asia, so we could probably expect some 30% more than we expect from BMS by by milestones from A side. So all in all, I would say in that sort of $130,000,000 range for 2025. Over time, the recurring revenues will increase, but but not done in 2024.

You see there was this 1,970,000.00 in in q four of this year. They will continue to grow, but they they will be smaller than the milestones in 2025. The co promotion revenues will also start growing over time, but probably not to a significant level in 2025 as the launch in The Nordics will most likely take place in the beginning of twenty twenty six rather than in 2025. If we then turn to the costs in the middle graph, you see that the operating expenses increased to 143,000,000 in the fourth quarter. R and D was roughly 67% of that.

And the total cost for 2024 were SEK459 million. That’s actually a little bit lower than we guided for the year. And that is due to the fact that there were some CNC costs that we did not that did not occur in in towards several years since we entered the deal with BMS. So so, I guess that that’s beneficial that that we were lower than than our forecasted costs. For twenty for ’20 ’5, we do expect the cost to increase.

Our project portfolio is progressing well. We spend more on on our clinical trials and CNC programs, so we expect the cost to increase by roughly 50 to 80% in in 2025. It’s really hard to make a good estimate, so we will have to come back to that. But but if I would guess today, we are, I would say, in the 50 to 80% increase range. Looking then at the operating profit, our operating loss was CHF 53,000,000 for the fourth quarter.

But as Gennila mentioned, we are expecting to be very profitable in 2025. And if you if you put the numbers together, the the the pretax profit for 2025 should be in in the neighborhood of roughly a billion Swedish, which is a really, really strong result for a company like ours. If you then turn to the next slide, some more details. You see the net result for the fourth quarter was 31,000,000. That’s roughly 20,000,000 better than our operating loss.

So that’s primarily due to down to the financial net of roughly 10,000,000 and and the negative tax effect of 12,000,000. If you look at the cash flow in the middle graph, it was roughly in line with with the result. Typically, it’s usually a little bit worse than a result since since we have accounts payable that continue to grow with the growing royalties since there’s a lag between the payments and and the recording of the revenues. But but this time around, we did not see that effect. But going forward, we still expect to see the cash flow would be trailing the net result.

And on the right hand side, you see our cash balance. We ended the year with roughly SEK $780,000,000 in cash. We, of course, expect that position to grow significantly in in 2025. So we will end 2025 with the with an even more solid position, so we can really focus on doing what is right long term for the company and and, sort of focus on the right projects and focus on entering the right deals. As as Gunilla mentioned, we will partner our programs if we find the right deals, but we don’t have to.

And and that’s a significant strength that I’m really happy to have as a CFO of this company. So with that, I will hand word back to Tugnila for some closing remarks.

Gunilla Oswald, CEO, BioArctic: Thank you so much, Anders. And then we’re coming to the final part of the presentation with upcoming news flow and some closing remarks. Next slide, please. So if we look at our upcoming news flow, during this quarter, we are eagerly awaiting the HSR clearance process for the BMS agreement. And of course, we hope for a positive outcome to be followed by an upfront payment of 100,000,000 US dollars.

We are also eagerly awaiting a CHMP response at the February, and we are looking forward to more regulatory responses. Next important congress is ADPD in Vienna in April. And there, we look forward to presentations on both lecannumab and also on exedadnimab. We are also preparing for our first capital market day, June 2. And then during the third quarter, we are waiting for more regulatory responses and the exedadumab safety review and progression into the high dose part of the phase two a study to follow that.

So then we go to the next slide, and I would like to summarize today’s presentation by saying that our pipeline is progressing really well. And, we have very encouraging brain transporter data that has been presented and generating a lot of interest. Lecambi is now approved in 10 different geographies, and the sales of Lecambi continue to increase. Royalty revenues continue to grow and it’s gratifying to see that we’re helping more and more patients. And thirdly, our financial position remains strong.

We have almost, 800,000,000 Swedish krones in cash, and we expect to be profitable this year and onwards. Next slide, please. So by that, I thank you for your attention, and we’re happy to take some questions.

Conference Moderator: The next question comes from Joseph Hedden from Rx Securities. Please go ahead.

Joseph Hedden, Analyst, Rx Securities: Good morning. Thanks for taking my questions. Firstly, to Anders, just on the milestones, just hoping to clarify there. Was that you’re saying you expect in the ballpark of US130 million dollars is available overall and so that includes the BMS upfront payment and then presumably the EU approval milestone, but also possibly a sales milestone in there?

Anders Martin Leff, CFO, BioArctic: Yes, that’s correct. I messed it up a little bit. So yes, we are expecting $100,000,000 from BMS and then roughly, well, a third of that in addition from Eisai. So you’re correct. We’re expecting a sales milestone and a regulatory milestone from Eisai.

Joseph Hedden, Analyst, Rx Securities: Okay. Brilliant. That’s great. And then possibly just on now that we’ve had a couple of weeks since finding out there were additional questions after the positive CHMB, have you been able to find out what additional kind of safety information that came out that has been referred to by the European Commission? What was the new emerging data after the CHMP?

Gunilla Oswald, CEO, BioArctic: So I don’t think we should comment anything about an ongoing process. So we just have to wait now and stay tuned and wait for the review. But I think, I mean, what we have been reassured by Eisai is that there is no new safety signals that the current information and the data which is available should be able to address the questions.

Joseph Hedden, Analyst, Rx Securities: Okay. Thanks. And then just lastly for me, when you’re talking about the BMS deal and congratulations, it’s a fantastic deal. You said several parties were interested. So where are you seeing the interest there?

Is that specifically in the pyroglutamate antibody portfolio or is it for programs involving the brain transporter technology specifically?

Gunilla Oswald, CEO, BioArctic: I would say both. And what we see now is continued interest both on our BRAIN transporter technology to utilize that together with other companies’ assets. And for example, also for our alpha snooplin portfolio, where we have exedadumab and we have also an antibody combined with our brain transporter technology that we call 2,238. So I would say

Joseph Hedden, Analyst, Rx Securities: both. Okay. That’s great. Thanks, Gunilla. Thanks, Anders.

Gunilla Oswald, CEO, BioArctic: Thank you, Josef.

Luisa Mercado, Analyst, Van Laansotte Kempen: Hi, team. Thank you for taking my questions. Maybe the first one in terms of The next question

Conference Moderator: comes from Luisa Mercado from Van Laansotte Kempen. Please go ahead.

Luisa Mercado, Analyst, Van Laansotte Kempen: Hi, team. Thank you for taking my questions. Maybe to start out, you mentioned the costs over $20.25. Could you elaborate a bit in terms of where do you expect to, of course, redirect the stream that you will have from the royalties and the BMS deal? What are your priorities within your pipeline?

Anders Martin Leff, CFO, BioArctic: So, yeah, if I start a little bit, I mean, we focus, of course, on the most, sort of the most fully developed program that we have in our pipeline. And when we get closer to to the clinic, then we will start to to generate significant CMC costs. And then, of course, we are running one clinical program, the the for prexedadumab, and the cost for that will continue to increase. As for what other program we we can engage in in the future, we would probably come back a little bit more on our capital market state to see what we do in the future. Maybe, Yanilda, want to comment on more than that.

Gunilla Oswald, CEO, BioArctic: Yeah. No. But I think definitely, I mean, exedadagnumab, when you are in clinical stage, that costs a bit more than being in in the early discovery stage. And then also, I mean, we have another really interesting program we haven’t talked about today, which is also Alzheimer’s, the next generation Alzheimer’s program that we are evaluating together with Eisai, BAN two thousand eight hundred and two. That’s also a very exciting program that we, of course, will continue to invest in.

And then also the brain transporter. I mean, that’s an area where we invest and we’ll continue to invest. Because as I I try to explain, I mean, there is a lot of opportunities for this technology. And there is so much more we can do, also with our programs, but also to prepare this technology for other modalities and so forth. And then we haven’t talked today about our TDP 43 program, but that’s also a very important program, both with naked antibodies, but also combined with our brain transporter technology.

And then, I mean, the GKs program for Gaucher disease, where we are opening up the avenue also with enzyme replacement therapies. So I think that we have some really, really interesting programs at different stages in our portfolio. And then we will, of course, look at expanding when we have more money.

Luisa Mercado, Analyst, Van Laansotte Kempen: Okay, perfect. That’s very clear. And maybe a final question. In terms of so you mentioned the blood based biomarkers that should be approved as very soon or somewhat soon and could be confirmational as well. Could you expand a bit here in terms of what do you expect of how this will be combined, of course, with all the other methods of diagnostics and confirmational, of course?

Yes.

Gunilla Oswald, CEO, BioArctic: So I think right now, I mean, they are already used for screening and in different kind of triaging systems. So I mean, if you have a clearly a strong result, then you know that you have amyloid pathology. And if you don’t have it, then you know it’s something else. It’s not Alzheimer’s disease. So it’s especially in those in the middle, where you need to have the conformational part through PET and and CSF or CSF, I mean.

But I think now also more and more data is is coming in, and they’re working on, I mean, both the regulator processes and use the guidance and so forth. That will also then help with the confirmatory part directly. And I think that would be very important because that opens up. So then you’re not dependent on PET scans and PET centers and so forth. You are not dependent on doing CSF sampling and lumbar puncture.

So I think that will open up the possibilities for a much, much more broad spread. So I think this is a really important part, and I’m so pleased to see that it’s going faster than I thought some years ago, and it’s really progressing so well. And there are several companies who are developing blood based biomarkers. And of course, we are agnostic to which one it is, but I mean, there are several coming that can help to simplify the patient journey.

Luisa Mercado, Analyst, Van Laansotte Kempen: Okay, Claire. Thank you for taking my questions. That’s all.

Gunilla Oswald, CEO, BioArctic: Thank you so much, Lisa.

Conference Moderator: The next question comes from Rajen Sharma from Goldman Sachs. Please go ahead.

Rajen Sharma, Analyst, Goldman Sachs: Hi. Thanks for taking my questions. So, firstly, just on exidabvenumab, sorry, in MSA. Could you maybe just kind of talk to your rationale for exploring the drug in that setting? And then also could you just kind of help us understand specifically what it is you’re exploring?

Is it still dosing? Or is it just trying to gain additional confidence in the mechanism? And then secondly, when would you expect an update on a on a go forward decision there? And then I have a follow-up for Anders as well.

Gunilla Oswald, CEO, BioArctic: Yeah. So if I start then with the exedadumab, I mean, we are really pleased to see how the progression of the phase two a study in Parkinson’s disease, how that is evolving. And we started with the low dose first, and then we will do an evaluation of the safety in Q3. After that, we will then go to a higher dose in Parkinson’s disease. And we are also thinking about then, going into another panel with MSA patients in order to prepare for different to open up more possibilities for phase two b.

And as I said, I mean, I see several possibilities for phase two b. Could be Parkinson’s disease. It could be Parkinson’s disease dementia. It could be Lewy body dementia. It could be preclinical Parkinson’s disease, and it could be MSA.

So what we are doing is really preparing ourselves for different opportunities for Phase 2b and onwards.

Rajen Sharma, Analyst, Goldman Sachs: Okay. Thank you. And then maybe just to clarify on that then. So if you decide to progress in MSA, for example, does that mean you won’t progress in some of the other indications or is it could you potentially do multiple indications with the drug?

Gunilla Oswald, CEO, BioArctic: So I think, I mean, there are multiple opportunities. And I think that we will follow, of course, the whole field of alpha synuclein, but there are many possibilities. And we have also then, of course, I mean, we have axedavnumab and we have also the next generation, 02/1938, with brain transporter. So we see different opportunities for for, or different possibilities to to drive in in several indications. And we are at the moment reviewing different opportunities and different pros and cons with different indications.

So we will come back to that. And also it depends on, of course, if we are doing this ourselves or if we have a partner at that stage.

Rajen Sharma, Analyst, Goldman Sachs: Okay. Perfect. Thanks, Gunnar. And then I just had a follow-up for Anders on expenses in ’25. Anders, I think you said 50% to 80% growth in 2025 on expenses.

So could you just kind of help us understand what gets you to the bookends of that range? And then maybe if you could just discuss expectations for tax in 2025 as well? Thank you.

Anders Martin Leff, CFO, BioArctic: Right. Now so, well, most of the increase will of course then come in R and D And and it’s very, very hard to to to, give a proper forecast for for r and d cost because it really depends on how fast our programs evolve. So we we may have a guess in the beginning of the year and then things start to go faster in some projects and slower in other projects and has a big, big effect on on the costs. So so I don’t really want to go into too much detail because then I will just be wrong because things will really evolve during the year. So so but but expect most of it to to come in in r and d, most of the increase.

But and for the tax, yes. If we, for example, would make a pretax profit of 1,000,000,000, we will pay roughly 200,000,000 in tax for for for 2025. So so we will be paying taxes, and it will probably be in that range that I mentioned.

Rajen Sharma, Analyst, Goldman Sachs: Thanks very much.

Gunilla Oswald, CEO, BioArctic: Thank you.

Conference Moderator: There are no more phone questions at this time. So I hand the conference back to the speakers for any written questions and closing comments.

Moderator/Question Handler: Okay. Thank you so much. So we’ve gotten a few written questions. I’ll start with one from Frederick Thor at Red Eye. And he wants to know if we’re planning any study with leukinumab in patients with Down syndrome.

That’s something we’ve been talking about in the past. Gunilla, maybe you can clarify.

Gunilla Oswald, CEO, BioArctic: Yeah. Thank you for the question, Frederick. So as you know, I mean, we have data showing that lecanumab binds to postmortem brains of Down syndrome, which is exactly what you would expect. And we are reviewing this opportunity and having discussions. This is the patient population where you should be a bit careful because they they have a higher risk of side effects, but also they have an opportunity to to get an effect.

So, yes, we have plans, but it’s not imminent. But we are definitely looking into this for the future.

Moderator/Question Handler: Good. Thank you. Then Nilsoketelin has written a bunch of questions. Some of them came early in the call. So I think we’ve answered most of them.

He he wants to know a bit about if we can say anything on the competition with Eli Lilly (NYSE:LLY). I think that might be something that we haven’t comment on. And and the subcutaneous, we’ve talked about the different adverse events, if we can say anything about that. But I think you mentioned, Gunilla, that they are in line with the phase three studies as far as what we’ve seen so far. But maybe if do you want to say anything on what we see in competition or what we’ve heard about competition yet by either Biogen (NASDAQ:BIIB) or ASI, what they’ve mentioned?

Do you have anything we can say? Not really, right?

Anders Martin Leff, CFO, BioArctic: Well, I mean, Eisei commented a little bit. In The US, they are, of course, seeing competition from Kiesendla. They are not sort of overwhelmed by the competition, but so it doesn’t have had as a really large impact on their sales. That was their comment. As for for the the trades or the products, how they are compared with each other, we won’t comment on that.

They haven’t been performed any any comparative trials, so we refrain from commenting on that.

Gunilla Oswald, CEO, BioArctic: I think one clear benefit for Lekampi will be in the future, the subcutaneous administration, for example.

Moderator/Question Handler: Yes. Payments from BMS to expect in 2025, Anders, I think you’ve mentioned the expectation there.

Anders Martin Leff, CFO, BioArctic: Yes. So we expect to get the upfront payment once HSR clearance has been achieved and the deal has been closed. So that could be recorded in the first quarter if everything goes to plan. So then we’ll record the full $100,000,000 Other than that, we’re not expecting to record any other revenue in 2025 from BMS.

Moderator/Question Handler: Thank you. And then, Danilo, you did mention there was a question here about the why not collaborate with Eisai regarding BT, but you mentioned

Gunilla Oswald, CEO, BioArctic: about Sure. So maybe I should clarify that. Yeah. Yes. We are collaborating with Eisai also on the brain transporter technology.

I mean, this technology can be utilized for many different programs. And, we have then the Pyroglube program has now been partnered with BMS, but we also have the BAN 2,802, which also is an undisclosed target for Alzheimer’s disease, disease modifying properties that we have combined with our brain transporter technology. And that is in a research evaluation agreement and a collaboration with Eisai where we are reviewing that program. So definitely.

Moderator/Question Handler: And additional potential BT agreements, I think you also highlighted as a great potential for the future. So, I think we mentioned that. Then we have a question here from Joel Blod, and he wants to know if we can elaborate a bit further on this CHMP meeting in February and then how long after such that meeting that we can expect a decision from the EU Commission and also when then if that could be when the sales could start in Europe following a positive decision from the EU Commission.

Gunilla Oswald, CEO, BioArctic: So I will start, and then I’ll hand over to Anna Kaja. So I’ll just say, I mean, the CHMP meeting, as I said, we now will be eagerly awaiting the outcome of their discussion at the February. And then after CHMP, the normal process is then that it goes to European Commission. And they, we expect them their response within sixty seven days. And, we just have to have patience and wait and and see.

So, that’s the process. And then when do we expect to start selling in Europe, Annalke?

Anna Kaja Gremblad, Chief Commercial Officer, BioArctic: Well, I think maybe something to add here is also that, of course, after the formal EC decision is the, you know, the clarification of the risk minimization measures with the cap and the pass. So it depends also a little bit on that when those are approved and and rolled out. So and usually, I mean, the first countries to launch in Europe, as you probably know, is in Germany and and Austria. But I think there’s a lot of question marks around the still steps that you mentioned. So it’s it’s it’s difficult to set a date, I would say, and I and it’s up to Asia, of course, to comment on that.

Gunilla Oswald, CEO, BioArctic: And then in The Nordics, when can Nordic patients have access on the data?

Anna Kaja Gremblad, Chief Commercial Officer, BioArctic: So, and as you know, there we we have then the market access process with the, we are HTA countries, so we will have to start with the health economic evaluations. And when it comes to the, those timelines for hospital products, there is no exact timeline. So but based on on ACEI and ours’ experience, it’s usually around a year at least, and especially since this is a new treatment modality, which is coming for the authorities. So we expect that there will be, of course, a need to educate on the therapeutic area and that they will probably have questions on how to how to evaluate the effect, etcetera, etcetera. So so I think we shouldn’t underestimate that need to educate also the authorities and payers on this specific area, and and they can be.

So it will take some time and the

Gunilla Oswald, CEO, BioArctic: but we’re prepared for the questions for this. Thank you.

Moderator/Question Handler: Thank you. We have another question from Frederick, from Red Eye, and he’s wondering about the timeline of the BMS program. If we can say anything about that, when, you know, when do we believe that could reach the clinic and then potentially the market and, and anything we can say on on market potential or addressing patient population and if there’s anything that differentiate it from Lekambi in that sense when it comes to potential patient population?

Gunilla Oswald, CEO, BioArctic: So I can just say that, I mean, and now it’s, of course, up to BMS to drive this forward. We had in our plans to go into phase one next year, 2026. But, of course, it’s now up to BMS how they will drive this. They are very committed and have great plans for this program, but I will refer to to them to comment on that. But I see I mean, there is a huge market potential, both for, the for example, twenty eight zero three and for twenty eight zero two and for many others.

I mean, this is a huge patient population where there is a clear unmet medical need. I think Lecambi is coming and really being the first one to help out, but I think there will be more, and there is room for many different alternatives in the future. So, I think that’s my answer right now.

Moderator/Question Handler: Yeah. Good. Then we have a couple of questions here from RBC. And the first one is, do we believe that the maintenance approval, and I assume that that refers to the IV approval that came just now, will move the needle in any way for Lekambi when it comes to the launch? Or do you think it’s sort of wait and see for the induction dose of sub q before we really can see a difference in the market?

Gunilla Oswald, CEO, BioArctic: I think it is an important approval because the patients who have been on treatment for eighteen months, if of course, it’s good for them to be able to have less frequent dosing. So they want to continue dosing and getting the most benefit out of the treatment. So I think it is important. And then when they also then later on get the subcutaneous alternative instead, even more convenient. But of course, the most important one is when we have the subcutaneous auto injector also for induction, And that’s 2026.

But I think all of every approval is important. But the sub q will definitely, I expect, to move the needle.

Moderator/Question Handler: Yes. Thank you. And then beyond infusion capacity, which we know has been somewhat of a hurdle in The U. S, which now as Anders alluded to seems to be easing off, are there any other hurdles on getting patients started that we can comment on?

Gunilla Oswald, CEO, BioArctic: I mean, of course, there have been other challenges. For example, with the diagnosis side, if you are depending on on a PET scan and the reimbursement of PET tracers, which has also been solved to some extent. And also, people have gotten more and more used to doing CSF sampling and lumbar puncture. But, of course, the blood based biomarkers will really help here. So I think that is an important part, as an example.

And and I think what the blood based biomarkers already have helped to make sure that those patients who are coming for confirmational, through CSF or PET scan are the right patients and have not been diluted into patients who are not the right patients as a capacity issue. So I think that, I mean, step by step, there are several things happening. And, Anna Kaya, want to add?

Anna Kaja Gremblad, Chief Commercial Officer, BioArctic: Yes. I think also what we hear, both from The US market but also here in The Nordics is that I think the the quality of the patients being referred to the memory clinics also needs to be improved, I would say. Because if you look at some studies that has been done both in The US and and in Sweden is that the there’s only a fraction of the patients today at the clinics who are kind of eligible for a potential treatment. So so I think that this this is will be a important thing to work on for the clinics and for us in the future.

Moderator/Question Handler: Thank you. And then a question from from Peter Herma. How important do you consider the AHEAD three forty five study to be for the extended use of Lekampi in the long run. And it seems to him to be a very important study. And is there any he also talks about competitors.

Maybe we can just comment on if there are any similar studies ongoing as well.

Gunilla Oswald, CEO, BioArctic: So I’m really excited about the AHEAD three forty five study, especially when you look at the data that Eisai have presented from the CLARITY AD study when they look at the very early patients who have lower levels of amyloid in the brain, or if you look at those with low tau, for example. If you look at those patients who are at their very early stage, they seem to be have a quite high proportion of being stable or even improved. So I think in this ahead three, four, five study, by starting early, individuals who have the pathology but not yet symptoms. So think about if we can really push forward the time for when symptoms appear, or potentially maybe even stop. I think this is a very important study to follow.

And there are and I think ESA is doing a tremendous piece of work here together with the Alzheimer Clinical Trial Consortium who are driving the program. And they are really pioneering. There are other studies also in this area, since the whole field realized that it might be even better to go as early as possible. So I think this is really good for patients that we will be following. And then again, blood based biomarkers would be very important.

And they’re already utilized in the AHEAD study in the screening phase.

Moderator/Question Handler: Thank you, Gunilla. Thank you, Anders. Thank you, Anakaya. I think that was the last question that we have here, and there doesn’t seem to be any more people on the phone lines either calling in. So I think that concludes today’s call.

Thank you everybody for listening in and see you next time.

Gunilla Oswald, CEO, BioArctic: Thank you. Bye.

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