Calliditas Therapeutics AB (publ) Q2 2024 Earnings Call Transcript

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August 13, 2024

There are 5 speakers on the call.

Operator

Welcome to Calidya's Q2 2024 Report. The participants will be in listen only mode, and there will be no Q and A session after the presentation. Now I will hand the conference over to the speakers. Please go ahead.

Speaker 1

Thank you very much. Welcome to our Q2 2024 report. My name is Rene Aguiar Lukander, CEO of Kalida Taz. And I'm joined today by Richard Phillipson, Chief Medical Officer Frederick Johansen, our Chief Financial Officer and Maria Thornsen, President of North America. Next page, please.

Speaker 1

I'd like to draw your attention to the disclaimer notice, which covers forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 as amended. And I refer to our public filings, including those containing risk factors. Next page, please. So I'd like to review some of the key events in Q2, which included the conclusion of our Phase 3 study in Effigard, with a readout of the open label extension from which we reported 9 months efficacy and safety data similar to that observed in the active arm of the Phase III trial for those patients who were retreated with nephicon after 15 months of observation. In April, we reported our positive top line data from our Phase II proof of concept study in head and neck cancer with a lead product candidate from our novel and unique NOx inhibitor platform, setonaxit.

Speaker 1

This shows statistically significant impact on both progression free survival as well as overall survival. We also were granted a new patent by the USPTO for the treatment with setonaxent in cancer with expiry in 2,039. In May, our partner, Everest Medicines, launched neficon in China, and EMA issued a positive opinion for full approval of Kympaygo in Europe. We also participated in several important conferences where we present additional data, which Rachel will cover a bit later in the call. Next page, please.

Speaker 1

In the quarter, there was an offer announced by Sahikasai. So on May 28, Sahikasai announced a public cash offer for all shares in Kalinitas for SEK 208 per share, valuing the company at approximately SEK 1,200,000,000. The tender is presently ongoing with the last day announced to be August 30, subject to any potential extensions. The offer is recommended by the Board and around 45 percent of shareholders have entered into undertakings to accept the offer subject to customary conditions. Next page.

Speaker 1

So with regards to commercial highlights of Q2. So from a commercial perspective, this quarter was a record quarter in terms of revenues, with $46,300,000 of net TR PAYO revenues, representing 90% growth over the same quarter last year. In addition, we saw record enrollments with 750 new enrollments and continued strong growth in new prescribers. The strong demand we're seeing is very encouraging and we continue to see demand in the market for TROPEO with summer seasonality seemingly being less pronounced this year in comparison to last year. The team has during the quarter undertaken a very substantial number of P and T committee meetings and the vast majority of major plants have now updated their rules to align with the new label.

Speaker 1

We are expecting the full approval and this kind of reduced market access friction to continue to drive TRYPEA revenue growth for the year. Revenues from partners in the quarter amounted to SEK 49,000,000, representing growth of close to 300% compared to last quarter as Netfecom was launched in China also in May. Operating profitability for the underlying business, excluding those costs related to the offer by Asahi Kasai, for the quarter came in at SEK 70,000,000, enabling us to reach our target of achieving operating profitability in the quarter. This excludes costs related to advisory services and provisions for incentive plans in connection with the Tsai Kasai offer amounting to approximately SEK 102,000,000 taking us to an overall operating loss for the quarter of SEK 31,500,000. Achieving operating level profitability is a goal we were hoping to achieve and targeting in Q3, and we're obviously delighted that we reached this target already in Q2.

Speaker 1

With regards to cash, we were almost cash neutral for the quarter with cash burn amounting to approximately SEK 700,000 or SEK 7,000,000. We believe that we'll be continued to be profitable on operating level for the remainder of the year, excluding any deal related costs based on continued revenue growth from Terpeo and the Nephicom franchise as

Speaker 2

a whole. Next page, please.

Speaker 1

Following the quarter, so in July, we reported our positive data from our Phase IIb trial in PBC primary biliary cholangitis with both the 12 1600 milligram dose is achieving statistical significance in terms of the primary endpoint. This was a heavily pretreated population, making this outcome even more rewarding. Richard will cover this in more Richard will cover this in more detail shortly. Also in July, Kinpega was granted full approval for the treatment of primary IgA in adults by the European Commission, which also triggered a €10,000,000 milestone payment, which will be recognized in Q3. With that, I'd like to hand over to Richard, who will take us through the PBC data to discuss.

Speaker 3

Thanks very much. Renee, next slide please. And the next slide. So I'd like to start by giving you a summary of the recently announced results of the TRANSFORM study of setonaxib in primary biliary cholangitis or PBC. As a reminder, this was a Phase 2b study evaluating patients aged 18 years older with a confirmed diagnosis of PBC, a serum alkaline phosphatase level of 1.67 times the upper limit of normal or higher and the liver stiffness of 8 kilopascals or higher as measured by FibroScan.

Speaker 3

In this double blind placebo controlled study, patients were randomized to 1 of 2 doses of setonaxib or placebo. Patients randomized to setonaxib received either a 1200 milligram daily dose administered as 800 milligrams in the morning and 400 milligrams in the evening or a 16 100 milligram daily dose administered as 800 milligrams twice daily. Treatment was administered for 24 weeks and the primary endpoint was change in alkaline phosphatase at week 24 compared to baseline. Next slide. We screened the 178 patients, of whom 77 patients were randomized.

Speaker 3

The demography and baseline characteristics of the trial population were representative of the target patient population and the treatment arms were generally well balanced. It is worth noting, as Rene has already said, that this was a heavily pretreated population at baseline. 43.4% of patients were receiving dual therapy, that is UDCA plus a coliva or UDCA plus a fibrate, and 13.2% of patients were receiving triple therapy of UDCA plus or coliva plus a fibrate. Next slide. With respect to the primary endpoint change from baseline in the ratio of alkaline phosphatase at week 24, there was a statistically significant difference for both dose comparisons versus placebo.

Speaker 3

The 1600 milligram dose group, there was a 19% difference compared to placebo. And for the 1200 milligram dose group, there's a 14% difference compared to placebo. Again, it's worth noting that although week 24 was the time point for the primary comparison, significant changes were observed from week 8 onwards. Next slide. We also observed favorable This is encouraging as clinically relevant changes in liver stiffness are typically detectable by FibroScan over a minimum of a 52 week observation period.

Speaker 3

Next slide. So in terms of safety, treatment emergent adverse events were balanced across the treatment groups overall. 76% of Setanaxa patients and 85% of placebo patients experienced at least one treatment emergent adverse event, but most of these were considered unrelated to treatment. Serious treatment emergent adverse events occurred approximately at similar rates in the cetanaxypin placebo treated patient groups with 12% of cesenaxyp patients and 11.5% of placebo patients experiencing serious treatment emergent adverse events. And events leading to study treatment discontinuation occurred in 14% of Sesamax of patients and 7.7% placebo patients.

Speaker 3

When we look at the adverse events occurring at a frequency of 10% or higher in the overall study population, then it's noteworthy that nausea, headache and pruritus actually occurred at a higher frequency in placebo treated patients. Afralgia and fatigue both occurred at similar frequencies in the combined Sesanaxit treatment group and placebo treated patients. And nasopharyngitis occurred at a higher frequency in the combined setanaxit treatment group compared to placebo. So in conclusion, the primary endpoint for the study was met, Statistically significant reductions in alkaline phosphatase was observed in both sezonaxit arms versus placebo from week 8 onwards and actually from week 4 onwards when we looked at the 2 active doses combined. We saw favorable improvements in liver stiffness at 24 weeks in patients treated with cetinaxib compared to placebo, and cetinaxit was generally well tolerated.

Speaker 3

So now I'd like to move on and provide a brief update on the company's activities at ERA EDTA this year. So next slide. So at ERA EDTA in May, which was held in Stockholm, Caligitas gave an oral presentation on the real world challenges associated with the use of systemic glucocorticoids in a U. S. IgA nephropathy cohort.

Speaker 3

And we also presented a poster describing the outcomes of a matching adjusted indirect comparison of EGFR in patients with IgA nephropathy treated with Nethicon or sparsentan. And we also sponsored a symposium entitled Clinical Markets in IgA nephropathy is all proteinuria the same and this was chaired by Professor Jonathan Barrett. In the latter poster presentation, we used patient level data from our NEFICARD Phase 3 trial and trial level data from the sparsentan PROTECT trial in IgA nephropathy to estimate the relative effect of Neficon with optimized RAS inhibition compared with sparsentan on the absolute eGFR change from baseline at 9, 12 24 months with common comparators of optimized resin inhibition for nephigard and irbesartan for the PROTECT study. The results from the anchored comparison showed statistically significant favorable effects of nefikon with optimized RAS inhibition versus varsentan on EGFR for all time points analyzed as shown in the figure in the slide on the right. These results suggest that neficon with optimized RAS inhibition may preserve kidney function to a greater extent than sparsentan and provide support for nephicon as a disease modifying therapy in IgA nephropathy.

Speaker 3

So I'd now like to hand over to my colleague, Maria Twonze.

Speaker 2

Thank you very much, Richard. Next slide, please. As you recall, in Q1 2024, we had our strongest quarter since launch with 705 enrollment forms. In the Q2 of 2024, we continue to see a very strong demand for Tarpeo with 750 enrollment forms received by our patient services hub, Tarpeo Touchpoints, another record quarter. During the Q2, we also had 343 new prescribers, and we now have over 2,300 health care providers who have prescribed Tarpeo.

Speaker 2

We believe the strong demand we are seeing is a result of our full approval, our new label with the removal of the UPCR criteria and physicians recognizing Tarpeo as a disease modifying agent that treats the disease at the source, reducing the pathogenic IgA. As mentioned, our total sales for Tarpeo in Q2 was $46,000,000 another record quarter. Year to date net sales for Tarpeo is $73,000,000 And as a result of the strong performance, we are raising our full year guidance to $165,000,000 to $185,000,000 for the NetEcon franchise. Next slide, please. In the Q2, we launched our new promotional campaign, highlighting the full approval and shining a light on Tarpeo's EGFR data.

Speaker 2

As you know, Tarpeo is the 1st and only FDA approved product to reduce the loss of kidney function. As mentioned last quarter, we've been spending time educating U. S. Payers on the new label, and I'm pleased to report that we now have seen significant changes on key commercial plans. Over 80% of U.

Speaker 2

S. Lives covered by commercial plans now have policies aligned with our new label and removed UPCR completely or reduced to seraphone date. In Q2, our medical teams also participated in multiple scientific congresses where they presented scientific data and engaged with key opinion leaders, including the National Kidney Foundation and the 61st ERA Congress, which was held in Stockholm, Sweden in May. Next slide. We are very excited at the opportunity ahead of us.

Speaker 2

We've already seen the positive reaction to the full approval of TRPEO. We will continue to educate U. S. Health care professionals on TRPEO's position as a disease modifying cornerstone treatment of IgAN. In October, we will participate in the ASN Congress, and we also look forward to the rollout of the CDU guidelines in the fall.

Speaker 2

We expect the guidelines will include Herpail and also broaden the definition of the at risk population. And as mentioned earlier, we've seen a significant impact on payer policies in Q2, and we will continue to educate U. S. Payers to ensure more plans reflect the new TRPAIO label and secure broad access for patients. Next slide, please.

Speaker 2

Finally, the IGEN treatment paradigm is evolving and addressing the source of the disease is crucial. TRYPEA does that by targeting the production of pathogenic IgA. As shown in the diagram, there are no other approved treatments that work in the same way. Majority of health care providers view TARPEO as a disease modifying agent that treats the disease at the source, reducing the pathogenic IgA. In market research, health care providers further state that the primary reasons they choose Tarpeo are for its efficacy in reducing UPCR, significant eGFR data, favorable tolerability profile and because Torpeo is treating the underlying cause of IGAS.

Speaker 2

And as you've seen from our strong results reported today, Torpeo is becoming a cornerstone treatment for IGAP. With that, I will hand it over to our CFO, Fredrik Johansen, to discuss our financial results. Fredrik?

Speaker 4

Thank you, Maria. I will now present to you the financial overview for the Q2. And as always, all numbers presented to you are SEK 1,000,000 unless otherwise stated. To start with, we report SEK559,800,000 in net revenues for the quarter. For the same quarter last year, we reported net revenues of $269,400,000 Tarpeo net product sales for the quarter amounted to $493,400,000 or $46,300,000 which is a reported increase of 90% from the same quarter previous year.

Speaker 4

The remaining $66,400,000 in revenues in the quarter are related to our partnerships, primarily from royalties from Southern Everest and shipment of products to Everest. For the same quarter last year, we have partnership revenues of $10,100,000 Our total operating expenses for the quarter amounted to 530 $7,800,000 compared to $330,300,000 for the same quarter last year. Included in the operating expenses for the quarter are expenses related to the SAICASA offer and expenses related to provisions for Social Security contributions for incentive programs due to the increase in our share price, this totaling SEK101,700,000 These costs are distributed over R and D, sales and marketing and G and A. The cost for research and development increased by $31,700,000 in the quarter to $120,700,000 compared to $89,000,000 for the same quarter previous year. Besides the previous mentioned provisions for incentive programs, the change in the period primarily relates to increased costs for Nefcon manufacturing scale up.

Speaker 4

The cost for sales and marketing increased by CAD61.5 million in the quarter to CAD253 1,000,000 compared to CAD191.5 million for the same quarter previous year. The increase is primarily related to scale up of the sales and marketing of Terpeo in the U. S. Following the full approval and also the mentioned provisions for the incentive programs. The cost for G and A increased by €89,600,000 in the quarter to 100 and €166,800,000 compared to €77,200,000 for the same quarter previous year.

Speaker 4

The increased cost for G and A primarily relates to the mentioned provisions for incentive programs and advisory fees related to the public offering from Assai Cafe. We made an operating loss in the quarter of $31,500,000 compared to an operating loss of $75,200,000 for the same quarter last year. As mentioned by Ronnier, excluding the expenses relating to the Asai Kase offer and expenses related to provisions for Social Security contributions for the incentive programs due to an increase in the share price. We report an adjusted operating profit of $70,200,000 in the second quarter. The cash flow used in operating activities in the quarter was $7,000,000 compared to $163,000,000 for the same quarter previous year, And this leaves us with a net decrease in cash in the first in the second quarter of $11,200,000 and we continue to have a healthy cash position of $797,300,000 at the end of the quarter.

Speaker 4

That was all for me. Thank you. And back to you, Renee.

Speaker 1

Thank you very much. Next slide, please. Thank you. So obviously, as we reported, Q2 was financially strong with positive progress of our pipeline. But some of the key takeaways, obviously, we had a record quarter in terms of net product revenues from Tarpeo, terms of posting $46,300,000 for the quarter as well as for the Nephicom franchise achieving approximately $53,000,000 for the quarter.

Speaker 1

We also achieved our target of operational profitability excluding the advisory costs and incentive program provisions as stated. We also was our partner, Stata, was granted full approval of Comtego in Europe by the European Commission. And also saw a new patent issued by the USPTO covering cetronaxib in terms of treatment of cancer with expiry of 2,039. As Frederic has said, we have a strong cash position and obviously saw an almost neutral impact on cash for the quarter. And we are expecting continued strong demand for Torpejo for all the reasons that Maria described.

Speaker 1

And as mentioned, in terms of our revenue guidance for 20 24, we're updating that, reflecting these growth expectations. And so the revenue guidance for 2024 is updated to be $165,000,000 to $185,000,000 And with that, this concludes our Q2 2024 presentation. Thank you very much to all for listening in.

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Calliditas Therapeutics AB (publ) Q2 2024
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