Earnings call transcript: Orexo AB Q2 2025 revenue beats forecast, stock dips

Orexo AB reported its financial results for the second quarter of 2025, revealing a significant revenue beat but a mixed market reaction. The company achieved total revenues of 180 million SEK, surpassing the forecast of 135.5 million SEK. Despite this performance, Orexo’s stock fell by 6.17%, closing at 20.3 SEK. With a market capitalization of $72 million, InvestingPro data indicates the stock is currently trading below its Fair Value. The decline in share price suggests investor concerns over broader financial metrics and market conditions, though the company maintains impressive gross profit margins of 87%.

Key Takeaways

• Orexo AB’s Q2 revenue exceeded expectations by 32.8%.
• The company’s stock price fell by 6.17% following the earnings release.
• Gross margin improved to 93%, up from 89% in the previous period.
• Negative EBITDA of SEK 10.1 million highlighted ongoing financial challenges.
• U.S. business EBIT showed strong performance with a 31% margin.

Company Performance

Orexo AB’s overall performance in Q2 2025 was characterized by a strong revenue beat, driven primarily by its Subsol product, which accounted for 96% of total revenue. Despite this, the company experienced a 23% revenue decline year-over-year, attributed to negative foreign exchange impacts and a non-recurring rebate payment. The improvement in gross margin to 93% indicates operational efficiencies, yet the negative EBITDA underscores ongoing financial challenges.

Financial Highlights

• Total Revenue: 180 million SEK, exceeding the 135.5 million SEK forecast.
• Subsol Revenue: 114 million SEK, representing 96% of total revenue.
• Gross Margin: Increased to 93% from 89%.
• EBITDA: Negative SEK 10.1 million.
• U.S. Business EBIT: SEK 36 million with a 31% margin.

Market Reaction

Despite the strong revenue performance, Orexo AB’s stock declined by 6.17% in the wake of the earnings announcement. This market reaction may reflect investor concerns over the company’s negative EBITDA and overall revenue decline of 3.62% over the last twelve months. The stock’s movement contrasts with the revenue beat, indicating a cautious investor outlook. InvestingPro analysis reveals several additional insights about Orexo’s financial health and valuation metrics, with 6 key ProTips available to subscribers.

Outlook & Guidance

Looking forward, Orexo AB maintains a positive full-year EBITDA guidance, focusing on maximizing Subsol revenue and achieving FDA approval for its iCipri product. With a defensive beta of 0.56 and a healthy current ratio of 1.73, the company appears well-positioned to pursue its growth initiatives. The company anticipates market growth of 2-5% and targets Subsol net sales between USD 50-55 million. For deeper insights into Orexo’s financial health and detailed valuation analysis, InvestingPro subscribers can access comprehensive research reports and advanced metrics. Strategic initiatives include expanding the MorphoX technology platform and partnering for the OX-640 product.

Executive Commentary

CEO Nikolay Sorensen emphasized the company’s cost-conscious approach to maintaining healthy EBIT contributions. He acknowledged the challenges posed by ongoing investigations but expressed confidence in resolving these matters. Sorensen highlighted the importance of ensuring patient access to Orexo’s products as a key company priority.

Risks and Challenges

• Continued negative EBITDA poses a financial risk.
• Revenue decline due to foreign exchange impacts and one-time payments.
• Potential regulatory challenges in product approvals.
• Market saturation and competitive pressures in the U.S. market.
• Macroeconomic factors affecting currency and market dynamics.

Q&A

During the earnings call, analysts inquired about NEFI’s market uptake and the development strategy for OX-390. The company clarified the impact of a one-time rebate payment and confirmed ongoing partnership discussions for OX-640. These discussions highlighted strategic priorities and potential growth areas for Orexo AB.

Full transcript - Orexo AB (ORX) Q2 2025:

Conference Moderator: Thank Now I will hand the conference over to CEO, Nikolay Sorensen and CFO, Fredrik Jarsten. Please go ahead.

Nikolay Sorensen, CEO, Orexo: Thank you very much, and welcome to all of you who have taken your time at this busy day with a lot of other reports coming out and also a beautiful summer day at least in the afternoon in Uppsala, Sweden. I will take you through the report today together with Fredrik as said, and I’ll just jump over to the agenda. So those of you who’ve been listening in before, you’ll know we will start with a business update. I will go through The U. S.

Commercial products under development. Fredrik will take us through the financials, and we will round up with a slide about where we see some of the future value drivers and focus areas for the company, including opening up for question and answers. So a brief overview of the quarter. I can’t hide that the quarter came out disappointing compared to what we expected. And and the prime reason for this is the onetime rebate payment that we have flat.

It’s about SEK 9,000,000 or $900,000. That, of course, has a direct impact on both net sales and our EBITDA. And also in the quarter, we have seen the dollar has declined significantly compared to the first quarter, which is giving us a headwind on the tops top line. That said, I I do think there are some positive elements in the report when we go a little deeper. For example, Subsol, when you look at quarter over quarter, excluding this onetime rebate payment, we actually have a positive development quarter over quarter in US dollars.

So that is ignoring the foreign exchange rate and also the non time nonrecurring rebate. We also see that the profit contribution from our US business is increasing, and that is both looking in local currency. It’s also when we take away the depreciation where we have due to the impairment we did on two assets in the end of last year, There are less depreciation this year. But even excluding that, we see a good cost control in our U. S.

Business. From a cash flow perspective, we are quite stable in the quarter. We did sell off part of the corporate bond. That was the same amount that we had to pay for the rebate approximately. So even here, if we look away from the rebate payment, we are on a relatively stable basis quarter over quarter and where we also have some negative effect from the currency.

ORIX one hundred twenty four has been a long story where we have been waiting for some critical components for the nasal device. And we finally got delivery of that late in this quarter, and we’re now able to start the testing that’s required by FDA. So that is really good news for the company. And also on OX-six forty, we have continued, decided on the final formulation. We’re now starting the process for up upscaling of manufacturing, and we have very healthy discussions with potential partners for OH six forty.

And we have reaffirmed our 2025 numbers despite the setbacks we had on both currency and the nonrecurring rebate for the full year. One thing that continues to follow us as a pharmaceutical company is, of course, the geopolitical factors. And I just heard this morning that there are new discussions about tariffs coming in that Donald Trump will announce later this month in a low level, he said. But I will highlight that for Sub Salt, it has no impact because we are manufacturing Sub Salt in The US for The U. S.

Market, and we’re just about to set up or our partner, Accord Pharmaceuticals, is just about to start manufacturing for the European markets in Europe. Our Morfox pipeline is primarily relying on manufacturing in Canada, and that could, of course, have some impact on the tariffs long term. But there are time, at least on the week six forty and others, before we are launching, and there would be ways for us to mitigate the impact of these tariffs, I’m sure. Then one of the highlights in the quarter, which have gained a lot, it’s like just after the quarter finished, is what’s called the big beautiful bill in The U. S, and that’s around Medicaid, where there’s been a lot of discussions about the impact on Medicaid volumes.

We do anticipate that there will be some impact on the volumes, which could both impact volume, but it also it could also impact the quality of care that is offered by specific Medicaid payers. What, however, is is worth noting is that the implementation of the Medicaid changes is going over time. That means that the full implementation will take several years before you will see the full impact. Then some of the payers might decide to act act on the changes already now, but we do see that the full implementation is going to take time. And there are several other sources of financing in the opioid addiction space, which has not really been activated.

We have talked about them a lot, but we haven’t really seen the impact yet. That’s coming from the opioid settlements or what’s called the abatement funds where we have more than $50,000,000,000 sitting, which should be earmarked to treat opioid addiction. And maybe this is the time when you can actually start digging into that pile of money. But I will also notice that Medicaid is very important for us and for the market, but the rebates that we’re paying in Medicaid, that’s high. It’s something you see on the sales numbers for this quarter that we see some negative impact on price because we have some good development in some of the large Medicaid payers, but we’re paying a higher average price on Medicaid.

That means that some of these patients who might lose the Medicaid insurance move over to commercial insurance, we actually only need a percentage of these patients to move before we will have a neutral impact on our EBIT level. Then on foreign exchange, it’s something that, of course, is hitting us quite dramatically with a change. I think we started the year with an exchange rate to the dollar with SEK 11 per dollar, and we ended the quarter here with SEK 9.5. So that is a dramatic decline in in the value of the dollar. The positive part is that if you actually look at the financials and and on our operational expenses, then we have nearly a a full natural hedge.

This there is some of course, we will lose some money as a lot of our a lot of our EBIT is coming from US dollars, but about 80% of this effect is basically neutralized by having most of our expenses in dollars also. So and that’s just looking, for example, at The US US results. It’s nearly on the decimal the same result as it it was last year. And and that is then you can say this year, actually that number include the onetime rebate payment, which is going straight down to that bottom line. Last year, we we had some depreciation of about the same amount, which is not there anymore.

So we have actually mitigated a lot of the decline on EBIT from our U. S. Operations by on the top line by lower expenses. Then to U. S.

Commercial market. What we’re pleased to see is that we actually see the market is growing faster here in the second quarter than what we’ve seen for a while. It’s up at 4% growth. It is because we are seeing actually, say here, that Medicaid segment is stagnating. That is true.

But it has actually gone from being negative to we now see some growth in the Medicaid segment. And the commercial segment continued to show some quite healthy growth, even despite now seeing Medicaid growing. So now we have the two largest segments, both growing, Medicaid a little slower, but we are actually seeing negative growth. Where we see a decline is in the cash segment, and that’s where we have the non insured patients. The Subsolve quarter over quarter, we have a relatively neutral development or it’s flat basically, where we have seen growth in Medicaid.

We actually see some growth in commercial also, but we’re seeing a continuous decline in UnitedHealth Group and in Humana. And Humana, it’s actually a combination of two. It’s both the previously exclusive contract with Humana, but we’re also seeing that Humana Medicare, where there’s a new rebate system, that has changed some of their policies, which is increasing the co pay for some of the patients when they want to get subsolved, which could make some of them switch to a generic version. So what are where are we to expect from Subsol? I think the good part here is that we have we see the market continue to grow, and we actually believe that the market will continue to grow.

And that is despite the change in Medicaid. And why do I see that? First of all, we are now seeing a slight acceleration in market growth. That’s, I think, is based on a continuous large unmet medical need. We also see that there are available funds, which by far exceed the amount of money coming to this specific disease areas that we could see reductions in Medicaid.

So this is a question, how do the states, how do communities act when they see funding to Medicaid go down? Will they use some of these opioid settlements to basically backfill for this specific patient segment, which could neutralize some of that effect? And when we come to Subsol, I think there are two elements. One is on the top line, and there we’re, of course, pleased to see quarter over quarter slight or some increase in the Medicaid segment, slight increase in the commercial segment, then we have some decline in the previous exclusive contract, which is more or less neutralizing the effect. But also seeing on a dollar basis, we see some increase in the Sub business.

And on the EBIT margin, and this is really important for us, is to continue to work on the profit contribution for Sub salt. And here, we are if we exclude the onetime rebate payment, then we’re going to see the EBIT margin increase to nearly 40% in our U. S. Commercial business. So we are very cost conscious in the way that we’re approaching to ensure that we have a continued healthy EBIT contribution.

And we’re quite pleased to see our core markets, that is what we call the open segment, where we have good coverage in both Medicaid and commercial, is showing a good development in this quarter. And we’ve decided to reiterate our guidance for subsol for this market, which mathematically will show you that we need to see a little increase in our sales for the second half to meet the net sales guidance, but we think that is within range. Then coming to the products under development. We now have the device components for OX124 or now what is iCipri. So we have a name, a trade name registered for weeks until fall.

Those of you working in the pharmaceutical industry will know that this is a very hard one to get a name approved by FDA. You have to use letters and and spelling that is is unusual. And we have tried several name and combinations with because of the small size of the cylinder where we have the device in, we have been trying to look for for name which is six letters and six letters, and that’s basically what we have succeeded with ICPRI. So we have a conditional approval of this new brand name, and we will, moving forward, refer to ICPRI rather than AWICS 124. We are, as I said last quarter, we are now ready to both move on the to start the testing that is required by FDA, but we’re also looking to move to the same device as we’re using for OX-six forty, which will reduce supply risk in the long term for iCIPRI.

For ORIX six forty, which is really where we believe we have our a significant potential value generator for the company. We have established manufacturing. We have existing manufacturing capacity right now, which would be able to ramp up and basically launch for global supply of ORIX six forty. It has been FDA inspected for ORIX 124. Our entire supply chain has been FDA inspected and has been approved for ORIX 124.

If you recall, the reason we got the complete response letter on ICPRI was due to the actual device and not due to the supply chain. We are the only one who have a powder manufacturing, established commercial manufacturing line, and we think that’s a good advantage as there are other companies in earlier states than us working on a nasal powder. And we are actually together with our supply our contract manufacturing, we are securing that there are additional capacity ready to meet a global supply, which we think we know that one of them is is building up a new facility that you can see in the corner here, and that could be ready as early as 2026. And over time, the increased capacity will help us to improve COGS and also ensure that we have enough capacity to meet the demand both for Wix one for ICPRI and for ORIX six forty. Then where are we in the process right now?

So we have done during the quarter here, we have made the final decision on the dose and the formulation, and we have now initiated the tech transfer to our contract manufacturing partners, the same ones as we use Forex for ICPRI, I have to learn that name. And what we will then start up basically in the end of this year is to start manufacturing clinical trial material and do the full upscaling, getting all of the data ready or the batches ready to collect the data that is needed for FDA approval in the end. And, again, remember when we did our OICS or ICPRI application, this is actually where we got some we we were asked by FDA to ensure that we manufacture in commercial scale with all of the batches that we use for stability data. So now having that in place is giving us a great advantage for our o x six forty process. In parallel with this, we have some good discussions with both global and regional partners, and this is a very intense process for a small company like Orexel.

So we are working over the summer in this process, and hopefully, we can get to an agreement later. I will say because a lot of you will ask what is the timeline for an agreement. I have learned that you have an agreement the day that the ink is dry on the bottom bottom line of the contract, and this is a little where we are right now. We have some very good discussions with partners, but I’ve also learned that you don’t have a contract before we have a final signature on the contracts from both parties. So we will have to have some patience, but I think there’s no need for concern in this process at the moment.

Just to take a little brief view on why do we believe this is such a great opportunity, I actually took the liberty to compare with NARCAN, which I think is a good analog to use. And as you know, we have been in this market with opioid use disorder. And what better analog to use than one that we really know? And and in 2015, we had the first nasal spray brand named NARCAN was launched by an Irish company, Adapt Pharma. In the beginning, this was really slow.

We saw very little uptake in the first year. Adapt had to build up their commercial capabilities in The U. S, which I think happened during 2015 and then ready for broader launch in 2016. And when we looked at some of the sales numbers, it was quite meager in the beginning. But Adopt Pharma and their future partners did a fantastic job of both expanding the market.

So the retail growth was within a few years several 100%. On top of that, you also took market share. So today, more than 90% of this market in The US is based on a nasal spray and not an injectable. And if you just look at the the end of of twenty sixteen, the multiple in sales up to the peak year before we had generic entrants for NACA was more than 10 times growth. So looking at where with Nefi, I think they had $7,000,000 in sales in in the first quarter, and that was the first quarter of sales.

That’s quite equal to what you had, Neil, in the full year for the first full year that NARCAN was in the market. Or it’s actually, I think, it’s more than the first full year if we take 2015 with us. So it’s very hard for me to see that we don’t have we’ll see a rather similar development in the epinephrine market even though that nefi is taking some time to get the same dominance. And we hear exactly the same objections by some of the doctors. Are we really certain that this work?

We are quite happy. We know that injectable works. But the convenience factor of these nasal sprays is so superior to an injectable. So it’s very hard to see that this market is not going to take the same journey as we have seen with with NACA. And I will say that OX six forty is much more differentiated to the other products in the market than what we have for ICPRI.

ICPRI has some of the same qualities, but due to the sensitivity of epinephrine, those qualities are much more transferable into the epinephrine market than it is for the naloxone market, which is a relatively stable molecule. Then onomorphics, as you know, this is a product that one of the things that we have really done is we can do some very precise particle engineering. So we can use this for a broad range of APIs. It’s very stable. We have validated in several human human trials, so we know it’s very high bioavailability.

We have some strong IP. And and it’s really a work for us is how do we expand the use of Amorphox. And during the quarter, we have also done some strategy work internally to see where do we see the focus for the company in Amorphox. And here, we have three areas. One is that we, of course, want to advance our internal rescue medication.

So Icepri, OX-six forty are really the focus. OX-three ninety, we introduced that last quarter. It’s a new product for overdose with an illicit drug in combination with opioids. These are the sweet spots where we are putting efforts behind right now. OH125 is ready to accelerate if we see that the market evolves for nalmefene products in The U.

S. And then we’re looking into large molecules because some of the properties that we have for Amorphox are really designed nearly for large molecules. A lot of large molecules today has to be injected. They require refrigeration, some of them even being frozen. They’re quite poor stability.

And all of this is something that we see is ideal for our powder formulation. So what we are working on now is, first, together with a partner like Abira Bioscience to generate data that we can share with Abira is is on a very exciting vaccine platform. But we have other data from other partners. Some of them is public like SOBI, but we have also others which are nondisclosed where we’re generating data. And for us, it’s now about how do we generate more scientific data on these these large molecules, which would enable us to reach partnership with even large organizations.

And then we see that there is a we have a a bandwidth limitation. So we are looking to find partners, I think, primarily from the contract development and manufacturing organizations, CDMOs, where we can actually reach a broader base of of customers to see how we can utilize their MorphoS in in more partner with more companies. So it’s a combination driving our own projects where we right now focus on rescue medications. We think there’s a big opportunity in large molecules, but also work more closely with some external partners to get an even broader and accelerated reach for the Amorphose platform. That takes us into the financial section, and I’ll leave the word to Fredrik.

Fredrik Jarsten, CFO, Orexo: Thanks, Nikolay. On Page 18, we look at revenues. If we start by looking at top part of the page, you can see that total revenues in Q2 for the group landed at 180,000,000. And the bulk of that, 114,000,000 or 96%, came from subsol within our U. S.

Commercial business, which is down then with approximately SEK 34,000,000 or 23%, primarily as a consequence of the negative FX impact of SEK 12,000,000. We had lower demand in net revenue terms and then this nonrecurring rebate payment we talked about earlier, which had a negative impact of SEK 9,000,000. If we look at other revenues within HQ and pipeline, again, Absa royalties were lower following the trend we’ve seen as individual country royalty agreements expire. But we did see higher Edvard royalties, thanks to stronger sales in Europe. On the downside, Subsol ex U.

S. Revenues were lower mainly because we didn’t have any tablet sales to our partner Akor Healthcare this quarter, and that’s compared to SEK 8,000,000 in Q1. That followed a onetime buildup of inventory in anticipation of starting manufacturing in Europe. If we instead focus on the quarter over quarter development of sub sub revenue, The waterfall chart on the bottom part of the page shows that contrary to the year over year trend, that net revenues in local currency increased slightly by 2%, excluding this nonrecurring rebate payment. The growth is primarily then driven by a modest increase in total demand in net revenue terms, approximately 0.5 percentage point as shown in the first three and then further supported by significant positive inventory stocking effect of SEK 7,000,000 during the quarter.

Moving to the next page, the P and L. We just discussed the decline in net revenues. Excluding the nonrecurring rebate payment of SEK 9,000,000 and the FX effect of 12,000,000, net revenues would be 136,000,000 instead. And that though represents still a 12% decrease compared to Q2 twenty twenty four. The weakening of the US dollar has, of course, also positive effect on our US denominated cost, approximately 65% of total expenses.

The six significant decrease in COGS, as you can see, is largely attributable to this favorable FX effect within US commercial, SEK 8,000,000 actually. But the decrease in COGS was also from somewhat improved production cost for Sub Sol. As a result, gross margin increased from 89% in Q2 last year to 93%. If we look at our operating expenses in Q2, which came in at SEK 131,000,000, we’re pleased to see that our cost consciousness is still paying off. OpEx is down 14% compared to last year.

Now, of course, about SEK 3,500,000.0 in total of that reduction came from a weaker U. S. Dollar. But we also saw lower cost from performance perspective across the board. We had lower selling expenses, mostly related timing of prelaunch activities for o x one to four or iZipri, lower admin costs mainly from reduced legal fees, and we had lower r and d costs.

The drop in r and d is largely due to lower amortization of the impaired intangibles that we did in Q4 last year. But some of that was offset by increased development costs for OX-one 124 or ICPRE. With the effect on sales of the weaker USD and the nonrecurring rebate payment, EBITDA was negative for the quarter with minus 10,100,000.0. And total EBIT came in at minus SEK 21,500,000.0. Now that figure includes about EUR 10,000,000 in lower depreciation following the impairment of intangible assets.

If we look at U. S. Business specifically, as Nikolay said, EBIT was EUR 36,000,000 for the quarter even after absorbing the onetime rebates effect. That gives us a margin of 31% and a solid improvement from 24% a year ago. And excluding the negative impact, the margin would be 39%.

Moving to next page, cash flow. We reported a positive cash flow of 3,700,000.0 for the period. After adjusting for a negative FX effect of SEK 1,500,000.0, that gives us an increase in cash and cash equivalents of SEK 2,200,000.0. And in that, operating cash flow was slightly negative, mainly due to the SEK 9,000,000 again in nonrecurring rebate payment, but financing activities contributed positively, primarily from the sale of SEK 10,000,000 in nominal value of Orexel’s own bond, and that was done with intention to finance this unexpected rebate payment. So by the end of Q2, cash and cash equivalents stood at SEK 121,000,000.

And just to remind you, we still hold SEK 20,000,000 in our own bond, which could serve as an additional funding source going forward. The financial outlook on the next page, that states that we expect market growth of 2% to 5%, net sales of Sol interval of USD 50,000,000 to USD 55,000,000. OpEx excluding depreciation expected SEK $460,000,000 to SEK 500,000,000. And finally, as we said, group EBITDA still expected to be positive for the full year. And with the actuals presented today and explanations we have given, we still maintain that these metrics are reaffirmed.

Back to you, Nikolay. So thank you,

Nikolay Sorensen, CEO, Orexo: Fredrik. So very short legal update because there’s not that much to to report. We have this subpoena issued by the Department of Justice in The US or the DOJ investigations. We can also call it. It’s been ongoing now.

We have our fifth anniversary. It’s very surreal, but that is how it is. It’s been going a little off and on for that period of time. There have been some activities in the quarter. But what has slowed down the process, we’re quite certain that that does have a negative impact in timing, is the appointment of new US prosecutors.

I just heard that the new US prosecutor for the district that is investigating Orexo has been appointed earlier this week. So hopefully, that can accelerate the process. We are looking for resolution of this. We still believe that the investigation has no merit, but we also realize that these kind of processes often result in some kind of resolution between the two parties. Finally, our future value drivers.

We still see that Subsol is an important cash contributor to the company, so maintain revenue streams and maximize the value we can get from Subsol. It’s very important. Or if our to get FDA approval for ICPRE is, of course, very important for the company. And now with the delivery of the components, we are in a good position to accomplish this with a filing next summer. Then we do see it’s important, and a part of our business plan is to receive milestones and royalties for upcoming projects.

And here, we think ORIX six forty is the one that is most near term. But we also, of course, expect to see some royalties coming in from Sub Saharan Europe, for example, when they start manufacturing in Europe, which is really with the objective of becoming more price competitive in the European market. It is important for Orexel as a part of the company is to ensure that we have access to the patients and patient access to our products. So to continue to work with Subsolve and get expanded access is important. And the same when we’re launching iCipri in The U.

S. Will be a very important activity for the U. S. Team. Then on our MorphoS technology, I did highlight some of the focus areas for the company on rescue medications, also work with large molecules, both partnerships and and internally development of of scientific proof of concept, but also to start working more with, for example, CDMOs and other partners so we can have a broader reach of the technology in a faster pace than what we can with our relatively limited bandwidth in the company.

With that, I thank you for your attention and open up for questions. Thank you.

Conference Moderator: The next question comes from Samir Devani from Rx Securities. Please go ahead.

Samir Devani, Analyst, Rx Securities: Hi, Nikolay. Hi, Frederic. Thanks for taking my questions. I think I’ve just got two. And the first one I think is on LX-six forty.

I won’t push you in terms of timing for the deal, but I was just wondering your thoughts on Nefi’s uptake. It seems to be doing quite well according to the Scripps data that we can see. And I’m wondering whether that’s having any influence on your discussions. So that’s, I guess, question one, if you want to take that.

Nikolay Sorensen, CEO, Orexo: So I so we’re, of course, monitoring NEFI with the frequency we can. And I will say the NEFI uptake has been a central part of the discussions both before launch, after launch, the expectations from ARS Pharma has also been a topic. I think there has been a several factors that are following here is is one, of course, is is the deal value that was presented between the Danish company, E and K, and ARS. It’s also been the the market cap and valuation of of ARS, which has been relatively healthy. But in particular, the the prescriptions have been a topic.

And I think, here, this it is interesting because the the perception for companies who have we, of course, talked to all of the companies who have talked to to AIS Pharma, and and it appears that some of the initial communication to potential partners were more bullish than some of the numbers. But looking at the capital markets, I think the uptake has been been relatively good, in particular, comparing to to NACAN. And if I think the the most recent data that we don’t have access to on a regular basis, but also indicate that this is pointing in in a good direction. And that that is what we’d expect. But I will say that in this just between them getting approved and and launched, this was basically a recurring topic in all discussions we had with potential partners.

Samir Devani, Analyst, Rx Securities: Okay. Great. That’s great. And then the final question, just on OX390. I think this is the first time you’re talking about this product.

And I guess, I don’t know if you’ve disclosed what the active ingredient is. Maybe you can just help us appreciate how docs would recognize that a patient has taken a specific combination of illicit drugs? I’m just trying to understand why they would choose this over either the high dose or just standard NARCAN. Thanks very much.

Nikolay Sorensen, CEO, Orexo: So I we’ve we’ve decided so far not to disclose that many details about the program. I think it’s important for the company of of many reasons also in The US to show that we are pursuing some new and novel treatments, treating some of the drug combinations that are coming into the market that the health care and particular first responders find difficult to address. And I think the the way that you you would identify the patients is if you take some of the combinations we see right now is that the patient don’t get an effect of naloxone that you would expect. They might appear to be continuously sedated, and then you can start to suspect there could be other drugs involved into this. And one way to know what it is is actually when we talk to first responders is that certain combinations of drugs are well known to be very prevalent in certain areas.

So in some geographic areas, for example, around Philadelphia, we know that the drug silosin is used. Now what I think it’s more than ninety percent of all fentanyls and others that are tested on the market or on the streets include silacine. And therefore, you would actually assume that silacine is part of any overdose in that geography. And that’s part of of how you could identify. So both you have a treatment path, and you I think you would always start using an opioid antagonist because that is the most life threatening overdose.

So that is naloxone or nalmefene. And then if you don’t get a sufficient effect, then you can go on and and test the other ones. And that, of course, come in with some safety work that you need to ensure that there are no serious side effects of of using this other rescue medication. But it is a little scary to see how how the ex the patients are experimenting with different kind of combinations or or the drug dealers are experimenting combining different drugs. And that actually makes the it’s a little helpless situation for some of the first responders that you don’t really know what they’ve been taking.

But there are there are ways to triangulate what it could be. I know that answer your question specifically, but I I think this is the thing that we have at the moment.

Samir Devani, Analyst, Rx Securities: The

Conference Moderator: next question comes from Klaus Palin from Carnegie.

Nikolay Sorensen, CEO, Orexo: So it appears like there’s a connection error here.

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

Nikolay Sorensen, CEO, Orexo: Since I think there’s an issue with with so we have some questions that have come in here. So why do you refer to the rebate as one off? And why would should we not expect that you will have to provide a rebate or accept a lower volume going forward? It is a one off because this is referred to to a volume that was sold back under the pandemic twenty twenty. So the rebate that we had to pay was an extra rebate that was, for some reason, was not captured by our vendor in The US and our US organization back in 2020.

And that was detected during a claims review that we did together with a new vendor during the quarter. So this is a it is a pure one off that we have from from that period. Then we have a question of about OH six forty. If we don’t have a partner in the near term, do we lose time because we can’t continue? And here, I am I would say that, yes, we we oh, it’s we we are right now, we have signed contracts to upscale our manufacturing.

So that process is in motion with or without a partner. So I think the next step, critical step, is basically for us to tech transfer from our pilot scale here in Uppsala to our partners that we have in Switzerland and Canada to start working on the OH six forty project. We’ll do that in with or without a partner. And I think this is basically what is supposed to happen during the next six months. So I don’t think a very close time is important for the partner.

Where we really would like a partner in place is for the pivotal trials, which are supposed to start in the mid of next year. And of course, the financing of the activities around OHK-six 40, it would be very good to get a partner in place. And I said, we don’t have a partner before we have a signature. And I can promise you, when we have a signature on a contract, you will know about it through a press release. But we have some very constructive and ongoing discussions with partners for week six forty, and we are quite optimistic that this process will end up with a contract.

Then it’s there’s a question about our shares and whether we we increased our number of shares. So just to see, Frederic, if you

Fredrik Jarsten, CFO, Orexo: can Okay. No. That’s I think he’s referring to the long term incentive program that we we have changed settlement method going from cash based to equity based, And, thereby, we have issued c shares that will be conveyed into ordinary shares as they are that that is paid out. But that is dependent on on how these incentive programs are successful or not for the individual.

Nikolay Sorensen, CEO, Orexo: Okay. And then we have a last question we have here is is around our OX six forty, and that’s also about the timing. And as I said, we are in a good constructive process with potential partners for week six forty. It’s something that will require time and efforts from me and most of my team during the summer. So this is what we will do when, hopefully, we’ll get some nice summer weather here the next few weeks, but we will be working on on due diligence and other partnering discussions.

And okay. We we understand that the questions by Klaus Palin is there’s some technical issues, but all of you can access his reports, which are public from Carnegie. I would recommend you to go in and read Klaas reports. You will see, I’m sure, both they will reflect both his questions and also the answers that we provide to those questions. With that, I want to thank all of you for taking your time here on a busy Witness Day and hopefully also a beautiful Witness Day where you are in terms of weather and that you can enjoy some time off during the summer.

Thank you a lot, and have a great day. Goodbye.

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