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Edited Transcript of CAMX.ST earnings conference call or presentation 7-May-20 12:00pm GMT

Q1 2020 Camurus AB Earnings Call

Lund Jun 3, 2020 (Thomson StreetEvents) -- Edited Transcript of Camurus AB earnings conference call or presentation Thursday, May 7, 2020 at 12:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Fredrik Tiberg

Camurus AB (publ) - CEO, President, Head of Research & Director

* Richard Jameson

Camurus AB (publ) - Chief Commercial Officer

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Conference Call Participants

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* Harry Thomas d'Alton Sephton

Jefferies LLC, Research Division - Equity Analyst

* Peter Sehested

Handelsbanken Capital Markets AB, Research Division - Research Analyst

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Presentation

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Operator [1]

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Speakers, please begin.

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Fredrik Tiberg, Camurus AB (publ) - CEO, President, Head of Research & Director [2]

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Thank you, and good afternoon, everyone, and welcome to our Q1 results presentation. I hope that you are all well and safe in this unprecedented time, also as what I think is one of our strongest reports in our history.

But before going into that, I would like to alert you to our forward-looking statements on Slide 2, which I'll leave you to read in your own time.

So going to Slide 3, please. With me today are Eva Pinotti-Lindqvist, our CFO; and Richard Jameson, our Chief Commercial Officer. We will cover the Q1 overview and update on the very positive developments we have had with Buvidal. Also talk about the progress in our pipeline and partnerships and leave you with some key takeaways from this first quarter.

So please go to Slide #4. As you may have seen, we have achieved some very promising results this quarter. We delivered a very strong sales performance, driven by acceleration of Buvidal patient uptake. We did progress our pipeline and enter into new commercial and R&D collaborations and credit to our teams, both very agile and resilient during this uncertain time. They have also worked to ensure our operational excellence and I think delivered a standout Q1 result.

Next slide, please. So on Slide 5, here, we can review our financial performance. We made very significant and positive progress in Q1. Our revenues ended at approximately SEK 50 million, with Buvidal sales constituting almost SEK 49 million. It is a 340% improvement versus the same quarter last year. As can seen in the figure, the quarterly sales actually increased strongly as well by 60% versus Q4 last year, driven mainly by the increasing share in our -- shares in our existing markets. Looking at the cost side, our OpEx increased by 18% mainly related to the costs of our Phase III study in acromegaly. But overall improved by 10%, up at a healthy cash position, in line with our plans of just shy of SEK 300 million.

So with that, I think we'll move over to Slide #6, and I would just like to say a few words about the impact of COVID-19, the pandemic, on our business operations and R&D pipeline. We'll come back to this later on, as you will. So in terms of the business operation, so far, they have been going according to plan. Our supply chain has been largely unaffected by this situation. And we are, of course, very closely monitoring the situation to ensure that we can supply our clinics and patients with products in a timely manner.

Looking at the pipeline, we do see some impact. Of course, most clinical sites have -- do not recruit patients at all. So we -- the study, to some degree, temporarily stalled at this moment. To address that, we have actually refocused a lot of our resources to other time-critical activities, including focusing on rapidly developing the autoinjector and implement that also in the clinical programs. And also another secondary effect of the COVID crisis has been that our Phase II study for CAM2043, our long-acting treprostinil in Raynaud's patients has been postponed to the second half of this year. However, overall, I think we are doing very well. And as Richard will introduce you to -- we're progressing very nicely with Buvidal in our market.

So let's go to Slide #7. And we will then -- I'll ask Richard here to take over and give you an update on the very significant progress we have been seeing with Buvidal. So Richard, please?

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Richard Jameson, Camurus AB (publ) - Chief Commercial Officer [3]

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Okay. Thank you, Fredrik. Firstly, I'd just like to say, as we've shared previously, we still continue to get great feedback from both patients and health care professionals about the positive impact Buvidal is having for patients, and we continue to hear many inspiring case histories, especially as the numbers in treatment grow significantly.

So if we move on to Slide #8, Buvidal has accelerated in quarter 1 with more than 7,500 patients now in treatment at the end of the quarter, which is a 90% increase versus the previous quarter. Towards the end of the period, we saw this accelerate further as COVID-19 became a catalyst as policymakers, payers and health care professionals recognize the burden that -- the reduced burden that Buvidal brings to treatment settings and the benefits to social distancing and we've seen a number of ministerial policy changes that address this. And I think this is really emphasizing the paradigm shift that Buvidal is bringing to treatment right now.

We continue to see growth in our early launch markets, and now market leaders, in both Finland and Norway on a brand basis. The fastest growth in the quarter came in Australia. We now have more than 3,000 patients in treatment. And where towards the end of the quarter, the regulatory authority approved an extension of prescribers, from only those opioid specialists now to include GPs to treat the majority of patients. In other Wave 1 markets, that's U.K., Germany, Denmark and Sweden, we also saw increasing momentum in the first quarter as we gained access to both community and the criminal justice settings and addressed market hurdles, which I will discuss in the next slide. And finally, in collaboration with our partner, NewBridge, we saw the first patients treated in the MENA region as part of an early access programs.

So moving on to Slide 9. Well, we had significant success in the quarter, addressing some of the remaining access hurdles in the Wave 1 markets. In Scotland and Wales, respective policymakers and governments recognize the value Buvidal brings in the current crisis and have made additional funds available to support patients in order to access Buvidal. And you might have seen some of the wide media coverage on the news wires this has had over the last couple of weeks. In Germany, there was a change in the remuneration that doctors receive for prescribing, which creates a balance for the differences in medications, and this is expected to increase the penetration of Buvidal going forward. Buvidal has also become an important element in the outreach services in and the treatment community is implementing, for example, in Norway, in order to avoid travel at this time. And as already mentioned, has opened up, however -- we mentioned, it's opened up access in Australia to GPs.

Of course, as well as increasing the uptake in the wave markets, and I want to move to Slide 10 now, we're also on track for Wave 2 launches. We are in reimbursement discussions and negotiations in several countries and are well advanced for new launches into new geographies during the next 2 quarters. An example of this would be Austria, where there's a legislation change in the final stages that will allow injectable treatments for opioid dependence, and we are ready to launch as soon as that is finalized. In Austria itself, there's about 18,000 patients currently in treatment, so it is a large opportunity for Scandinavian countries put together. There are significant patient population that can benefit from access to Buvidal, of course, in the Wave 2 markets, and we're progressing with our expansion plans well.

And as you can see on the next slide, on Slide 11, EU and Australia are part of our global strategy for Buvidal where there is a very significant market opportunity with across the world about 3.5 million patients in need of treatment, a significant peak market potential. And we're working with our partners across other geographies to enable access to patients in new regions.

So at this point, I'll hand back to Fredrik, so he can give an update on where we are in the regulatory status there. So Fredrik, back to you.

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Fredrik Tiberg, Camurus AB (publ) - CEO, President, Head of Research & Director [4]

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Thank you so much, Richard, and we are now on Slide #12. So I would say that, of course, we do have a very clear global strategy for -- as a part of that market expansion that we are targeting, we have, during the quarter, submitted new regulatory files in our own market. So among one thing is that we submitted an MAA to the Swiss Agency for Therapeutic Products, Swissmedic, that just (inaudible) has been first quarter. And then we (inaudible) with the application in New Zealand. We're working with our partners in the Middle East, in the MENA region as well as in Israel, so NewBridge and Medison there. We have -- the first patient started treatment in an early access program in the MENA region, which is very important for us. We're working to improve the access throughout the Middle East and, of course, also North Africa eventually. And we also are working, of course, with NewBridge to expand the territory as much as possible. In the U.S., which is, of course, a very important market for us, we have a clear path with Braeburn, our partner, has a clear path to approval, the 1st of December. And with all the product requirement in place for that launch, Braeburn is now preparing for launch as soon as the application for approval is -- or the approval is in hand. So the 1st of December and shortly after that.

Moving to the next slide, Slide 13. We'll see that we are also working -- continuing to work with the evidence generation. In 2019, we had 6 peer-reviewed publications for Buvidal. We plan to publish also important results in 2020. There's a number of key results that are going to be submitted to peer-reviewed journals or are submitted this year.

And we also have very high ambitions in terms of presence at key conferences this year. As you know, the COVID-19 situation has led to a number of cancellations, but some key events have nevertheless been held. So we were present at the American Society of Addiction Medicine meeting in early April and presented new results on the dose dependence and dose-dependent efficacy of Buvidal and the importance of individualized treatment. We have 2 key presentations accepted for The College on Problems of Drug Dependence, which is maybe the year's -- one of the most important meetings in this space in the year. So that will -- that event was scheduled to be held in Hollywood, Florida, but we'll now be going into a virtual meeting.

So going to the next slide, please. Looking at the study and the further evidence generation. We have real-world studies, either completed or just started. I think it's worth to say that for Buvidal, we have now -- we will have soon core head-to-head studies against them. And I think that definitely separates us from any other developments in this space. So as I reported earlier in the year, our first study, DEBUT, that's Depot Evaluation Buprenorphine Utilization Trial, which was conducted in Australia, delivered and met primary and secondary endpoints of showing superior treatment satisfaction by patients. This one was accepted to CPDD and will be presented in June. The other important study that was completed in Australia is the UNLOC-T study, performed in the prison setting, which also met primary and secondary endpoints. And we can come back to that at the next occasion. We'll also be presented at the CPDD meeting.

In addition to that, we have also started together, and this is actually driven by the Centre of Interdisciplinary Addiction Research at Hamburg University. They have started a study looking at Buvidal head-to-head against standard-of-care, both methadone and buprenorphine. And this study will be a case-controlled study, so that one is trying to compare patients with very similar characteristics and look into both patient satisfaction, illicit use of opioid, but also, in fact, social participation and, of course, also cost effectiveness. So this will be a very exciting study. It's a 12-month study, and which will generate some very significant real-world evidence, we believe.

Next slide, please. So going over, as you know, Camurus has a very broad and diversified product pipeline. And our most advanced programs, which I will just quickly comment on here is the CAM2038, chronic pain program. And also our 2029, long-acting octreotide program in acromegaly and neuroendocrine tumors. Aside from that, I will say a few words about our partnerships and CAM2043, which is our long-acting treprostinil project.

So please go to the next slide. So a quick update here. On the chronic pain side, we actually prepared and have now conducted a pre-submission meeting with the EMA rapporteurs, in advance of regulatory submission planned for the third quarter. We've also done a lot of work around the product positioning and pricing in Europe. So that is advancing nicely.

In terms of 2029, acromegaly and NET, our long-acting octreotide project, we do progress there in the ACRO study, but as I said earlier, most sites do not test and we have now clear reasons relating to the COVID-19 crisis. So instead, we have refocused our activities to other important things, including fast forwarding the autoinjector development and conducting a bridging PK study for the further clinical development of that presentation. We also worked a lot around the NET program and align that with KOLs and authorities in the area.

In terms of 2043, our PAH and Raynaud’s program, we got clinical trial application granted by the English authorities for a Phase II study, and that study has also, due to COVID, been shifted from the second quarter this year to second half of 2020. Preparations are ongoing for the PAH indication.

Next slide, please. Our partnerships are also progressing. The Rhythm collaboration, we are waiting for the Phase II study, ongoing Phase II study to be completed, and we are expecting to see top line results during this year. And with Ra Pharma, the development of a long-acting zilucoplan for treatment of complement C5-mediated disorders, there we are progressing nicely with the preparations of clinical development, and we are expecting to start clinical studies -- or they are expecting, I should say, to start clinical studies in the second half of this year. In addition to that, we have actually started some new research collaborations with the international pharmaceutical companies during the quarter, two of these, and we will announce them in more detail when we are entering into clinical development or formalizing a license agreement along the lines.

So next slide, please. So with that said, I think it's time to look at some key takeaways from the first quarter of 2020. No doubt, we have had a very, very nice quarter, probably one of the best in our history, if not the best. Total revenues of nearly SEK 50 million, increase of 167% versus Q1 2019. Also saw a very, very strong rise in the Buvidal sales with a quarterly change of 60%. The uptake in terms of -- of course, the most important thing, I think, is that we get very positive feedback from both patients and health care providers, and already have 7,500 patients, of course now even more than that in treatment with Buvidal. We had a very important event in that general practitioners are now allowed to prescribe Buvidal in Australia. I think maybe it's worth highlighting that they represent approximately 70%, 75% of all prescriptions. So it's not a small share. It is a very important event for us. And this is on the basis of the report that we sent to the authorities showing that we had good control in the system and that the treatment was working well. In addition to that, as I said, we are expanding with the market authorization application to Switzerland. Pipeline is also progressing, chronic pain, and not the least, our activities with 2029 and our long-acting treprostinil.

So next slide, please. Looking at the outlook for 2020. We have already announced that we expect revenues in the higher interval of our financial outlook. And the main drivers of that is, of course, the fact that we are seeing increasing Buvidal market shares in essentially all -- strongly in all of our markets, we're seeing improved access and expanding into new markets. And also on top of that, being able to communicate strong and positive clinical data versus active comparators and standard of care. Looking at the cost side, going approximately according to plan. It's tracking a little bit below plan right now, but we expect this to increase as the situation with COVID-19 normalizes and Phase III clinical activities can be fully resumed and hopefully also accelerated.

So with that, I think we have said and given the main items of this update, and the next scheduled financial update will be the 16th of July 2020, our Q2 report.

So with that, I will just say thank you for listening, everybody, and are most welcome to come with any questions to us here in the team, myself, Eva and Richard. Thank you.

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Questions and Answers

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Operator [1]

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(Operator Instructions) And our first question comes from the line of Harry Sephton from Jefferies.

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Harry Thomas d'Alton Sephton, Jefferies LLC, Research Division - Equity Analyst [2]

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I'll start with 3 on Buvidal, please. So firstly, how are you seeing the marketing and distribution costs being affected by the current COVID-19 shutdowns? And how are you adopting your commercialization and launch activities in new markets for Buvidal? Second question would be, can you give us an update on the compliance rates for Buvidal, now that you're seeing a larger patient pool? And my third question, can you just give us a reminder of the key ways to market? I know that you mentioned you are preparing for launch in Austria in the second quarter. So can you maybe remind us what the approximate timings of the other key markets there?

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Fredrik Tiberg, Camurus AB (publ) - CEO, President, Head of Research & Director [3]

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Okay. Thank you so much, Harry. I will start with the -- in terms of the logistical question you were asking, I think we are not seeing any significant effects in terms of the costs for Buvidal. As you can see, we have quite a strong -- our margins are quite -- rather improving than going in any other direction. So that's clear. I cannot -- Richard, later on, can come back to the second question of how we are addressing the challenges in the market.

With regards to compliance rate, I assume you mean retention there?

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Harry Thomas d'Alton Sephton, Jefferies LLC, Research Division - Equity Analyst [4]

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Yes.

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Fredrik Tiberg, Camurus AB (publ) - CEO, President, Head of Research & Director [5]

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Yes. And I think that we have no updates on that. I mean, we do see very good retention generally as we do in the study. So it is -- we don't have any exact numbers, but I mean, our estimates are between 85% and upwards in terms of the continued retention. As you know, there is more difficult periods in Europe to actually track this, but that's the impression. And that's what we also can estimate from our in-house data, so to speak. So we do see high retention continuously, which is very positive.

And then I just leave over for Richard. Would you like to take the question about access to -- on the market and also the Wave 2 markets, please?

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Richard Jameson, Camurus AB (publ) - Chief Commercial Officer [6]

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Yes, of course. Yes. Harry, yes, so we're working quite actively. We've done a lot of digitalization of our materials, et cetera, so they were available for patient -- for physicians, sorry, when they need them. We're also doing a lot of virtual remote training programs as well for clinicians, particularly when they've identified and they want to start using Buvidal. So we're able to do that through the various media sources, Teams or Skype or whatever they have there. So we do a lot of that. We've done some educational webinars, et cetera, as well. So we're maintaining relevant level of contact. Obviously, physicians are very busy at this time and we're not -- [being able] to see them, but we're certainly there and reacting very quickly if somebody wants some training and then move forward. So that's going quite well.

In terms of the Wave 2 markets, yes. I mean, a lot of this depends on the negotiations of the reimbursement authorities, of course, and how long they take. And there has been some delays because of COVID in a couple of them because they just aren't meeting so frequently. But certainly, in the next couple of quarters, we expect movement in Austria, as I said, hopefully, Spain, Benelux and Italy as well. France will be probably a bit longer.

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Harry Thomas d'Alton Sephton, Jefferies LLC, Research Division - Equity Analyst [7]

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Okay. That's really helpful. And can I just ask some follow-ups actually on CAM2029? So you mentioned that there you potentially would look at some additional indications to the acromegaly and neuroendocrine tumors that you've already disclosed. I'm just curious how long you would expect Phase III for those indications to potentially take? Would they be more in line with the acromegaly studies, which are a bit shorter than the neuroendocrine tumor study? And then also just given the delay to some of the R&D activities, could we see some initial slowdown and reduction in the costs there as a result of some of those delays?

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Fredrik Tiberg, Camurus AB (publ) - CEO, President, Head of Research & Director [8]

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Yes. Very good questions. I mean in terms of the additional indications, it's more of the time lines of the ACRO study, definitely. So I think that we can conclude. I mean, of course, if this slowdown or, what should I say, a complete stall that we are seeing in some areas or some markets continues, that will impact our cost side, you can say, positively by having lower costs, of course. So it is dependent on how long we are going to be in this situation. And of course, also very difficult for us to predict. But, I mean, if there's anything that is the direction that things will be if this delay continues unexpectedly. We do already see some improvement in some clinics and increasing interest to kind of restart activities and recruitment. But it's very -- it's too early to come with any kind of confident estimates there.

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Operator [9]

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Our next question comes from the line of Peter Sehested from Handelsbanken.

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Peter Sehested, Handelsbanken Capital Markets AB, Research Division - Research Analyst [10]

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I have 2. One pertaining to the pain indication for CAM2038. I wonder if you could provide us some flavor. I mean how optimistic should we be about that indication and that sort -- how -- I mean we've just seen a strong uptake with Buvidal, but that's probably for COVID reasons. But for the pain, how should we think about that uptake? That's sort of the first question, i.e., how optimistic about potential and sort of term wise to realize that?

The second one, relates to your potential ambitions within the treatment of opioid dependency. If you get a milestone from Braeburn upon approval, your balance sheet starts to look, let's say, relatively robust. You might get appetite to do some business development. Is there -- are there any, let's say, opportunities that you see as particularly interesting to add on to this particular portfolio? Or if you were to do something, would it be within other disease areas and other compounds, novel stuff that you could bring into your pipeline?

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Fredrik Tiberg, Camurus AB (publ) - CEO, President, Head of Research & Director [11]

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Thank you, Peter. Yes, I will take those questions. I'll start out with the pain question. I think what is clear is, I mean, we recently had our discussion with the rapporteurs, and I think that discussion went without any surprises to our team, of course. So there was a generally very positive view and good alignment between the company and the authority. Of course, when it comes to the market, we are working -- we're still working with very -- with our models, internal models, and looking at -- I have earlier said that we believe the opportunity overall is of the same order as opioid use disorder, but slightly smaller. I mean that at least for the type of targeted population that we are intending to address. So I think it is of the order, but smaller than the opioid use disorder. And when it comes to the different markets, we expect the U.S. to, I mean, be the most significant, but also a market that will come in later than if we file in Europe or as we plan to file in Europe in the second -- third quarter of this year. So overall, we see the potential in Europe right now of around SEK 100 million to SEK 125 million in EU5. That's our current estimates and significantly [higher.]

When it comes to the second question, the opportunity of business development, I mean, we are always looking for new possibilities there. I think that you can conclude that the opioid use disorder area or opioid dependence area, there are some very attractive, interesting opportunities. But I think we will be looking also outside the core area here definitely and are already doing that. I mean we are looking to expand not only by our own development, but also through our business development efforts.

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Operator [12]

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(Operator Instructions)

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Fredrik Tiberg, Camurus AB (publ) - CEO, President, Head of Research & Director [13]

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Okay. If there are no further questions, I would like to thank everybody for attending this call, and we look forward to updating you again soon about our continued progress. And I also want to say that it's been a very nice pleasure at this time to show you the strong progress that our teams are contributing to. So thank you, and speak to you soon.