Nanoform Q1 2025 Report Presentation
Introduction
Henri von Haartman (Director of Investor Relations):
Good afternoon all and a warm welcome to Nanoform's first quarter 2025 report presentation. My name is Henri von Hartmann and I'm your Director of Investor Relations. Today our CEO Edward Hæggström, CFO Albert Hæggström, Chief Commercial Officer Christian Jones and CDO Peter Hänninen will present to you.
This presentation is webcasted through Investor Caller and there's also the possibility to call in and listen by phone. The presentation slides that are shown throughout the webcast can also be found on the website in the investor section. After the presentation we will hold a Q&A and it's possible to ask questions by calling in.
We will today start with introduction and key business highlights, then financials, then commercial performance. And we conclude with our product kernels. With these words, our CEO and founder Professor Edward Hæggström.
Key Business Highlights
Edward Hæggström (CEO):
Thank you Henri and welcome also on my behalf.
I want to start with this. This is a bag full of Enzalutamide. For the registration batches we have made hundreds of thousands of pills. This is nano enzalutamide, 160 milligram. Other people can't really do it and I like these kind of very concrete things.
About our key strategy. Basically we propose that all pharmaceutical ingredients should be storm mapped. That gives them an opportunity to come into the nanoforming domain. We work with customers and partners to enable novel and existing molecules to become new and improved medicines. We show by doing this, a conservative industry, the power of nanoforming. Right now we are talking a lot about product kernels. This is our way of showing that we can actually place new medicines, improved medicines, on the market.
Here you can see that we work both with originators and with generics companies. What's important to us is that we work with global large pharma, with mid-sized and specialty pharma, and with biotechs. The product kernels we talk a lot about will entail development partners and commercial partners. It's important that already in 2027 we may have our first product on the market. This is for us to show that we are a partner that one can work with in a comfortable way.
Nanoform has four proprietary platforms:
The AI lets us pick the best candidates and set the knobs. The small and large molecules are the two large parts of the pharma industry. And here we talk a lot about high drug concentration and high drug loads and the commercial options that give various entities in the industry. The nano formulation is the way with which we go from small to something that actually helps the patient. This is very important right now.
I want to dwell on this slide a little bit. This really talks to what we have done during the first quarter. So there will be a lot of talks about the licensees and the supply agreements. We start to see a mosaic emerging in the industry. When all is said and done, this really shows that there is a clear and perceived commercial value that the CESS process provides. The same can also be said for our biologics process.
There is a growth in new customers and new products and Christian will talk more about the details of that. I'm very proud to talk about 100 kilo nano salutamide nanoformed for the registrational batches and the pivotal clinical studies. Of course we are all exciting and waiting for the readout from that.
A new patent was granted in the United States for CPans. This is a way for us to control amorphicity and crystallinity of the assets that we produce. Peter will talk more about this with you today.
We have been working a lot and we continue to work on cost leadership. I believe strongly that when you provide a new cool technology, if it is also the cost leader, it becomes a very, very strong position for us and the partners we work with.
As said, we expect Nano Enzalutamide to be the first nanoform medicine to reach the market with a planned launch in 2027-2028 in the US and EU. Albert will talk to you a little bit about the midterm targets and then he will talk to you a little bit about the capital markets day.
So Q1 has been strong for us both on the deal front, on the cost leadership work, and also on our service on the POC projects. Now I hand over to Albert.
Financials
Albert Hæggström (CFO):
Thank you, Edward.
As Edward said, we have had a very strong start to the year. Remember, our core business is to work with our partners' assets and then in addition to that we have the product kernels where we show the industry the power of our nanoforming. It's a way of making the industry move faster towards nanoforming. But our key business, our core business, is the assets of our partners.
Here you can see that year to date, meaning January to May, we have signed 10 plus one deals and that is clearly more than last year's three plus one. And that means that on the right hand side you can see the rolling 12 months. We are actually now for the first time above 30 on the rolling 12 months, way past the previous peak a few years back when the market was very different and the funding situation was very different. We are very happy about this, that despite bear market in the biotech sector, we are able to grow and grow quite fast. So now we are already above 30 on an annualized basis or rolling 12 months basis of new projects coming to us.
When we then look at the revenue, we also see a new high there. When you look at the first quarter you can see that something new has come up and that is other operating income. You can also see it on the rolling 12 months. And that is when we are now starting to move into a situation also where we get other kinds of income, not just for working projects, but we also start to get exclusivity fees and all kinds of fees where we don't necessarily do the work now, but it's for previous work where we have created kernels, so we have created IP value. And these can in the coming quarters and years also be milestones.
The situation is still such that we are a little bit looking into how they will in the long run be booked. But now we are starting to book them in the other operating income where we previously only had booked some grants from Business Finland. But we are very excited about the fact that we are now starting to get these exclusivity fees, also other operating income. And as you can see we are clearly past now the previous peak in the fourth quarter of 2022.
This also means that because we are getting income both from revenues but also from other income, the cash burn is clearly diminishing. And you can see that in the first quarter our cash burn was 4.4 million versus 6.2 million last year the same quarter and for example 8 million in 1Q22. And that means that annualized to the right hand side 17.7 million. And that can be compared to our cash balance which is more than 37 million. And we also don't have any debt. So we are thinking of it like this, that we clearly have more than two years of runway even with today's burn rate. And we expect the burn rate to go down basically in a trend that we have seen already, might be even faster if we get bigger milestones. But we believe that we have a very strong balance sheet and we have ample cash to fund ourselves until we are cash flow positive.
And so I can just say as an example, that year to date, we have clearly had more cash paid to us by clients than we have booked revenue. And this is something that we are sort of expecting potentially to continue now when we start to get these exclusivity fees and upcoming milestones. So we are in a strong position.
Potentially my most interesting slide, many investors have of course asked us about when do you talk more about the deals and when can you talk about and when do you announce them? And now we are going out for the first time with a little bit of numbers. And we are also showing you what kind of very broad work we have been doing.
So we have got estimates for roughly 40 markets where our potential partners have given us estimates for how much could nano enzalutamide demand be for it. We have talked with dozens and dozens of companies in this in different countries and we are now happy to inform you that on the four core market of Germany, France, Japan and the US we already have the term sheets agreed. Several other markets we have continued already for some time to talk about or negotiate the term sheets. And then we have many, many countries where we have already initiated discussions based on what we have seen so far and what we have agreed upon so far.
We now are comfortable to say that the total financial potential for the nanoenzalutamide project - and this is of course for Nanoform and our own concept partners, Nanoform owns 25% of the project - we see potential development milestones from now till launch of 10 million plus, potential sales milestone after launch of 25 million plus. For certain regions or certain countries, we have a profit share even post launch.
And all in all, when you look at this, the estimates we are given is that nanoenzalutamide is planned to have market share between 10 to 30%. And this would indicate potentially more than 1,000 kilo peak demand annually. And this is of course a very significant part of the total market today. When you look at the originator product extending, one factor that also varies between the countries is that the supply price between the markets and whether we have a profit share or not varies. But we are very proud of the deal mosaic around this. Everybody in the team in nanoform and in their own concept have done tremendous job. Many of our partners and in the industry have done lots of work on it, thought about it and we are very proud of where we have come already.
Now then, if you go to the other kernels, we started by informing you about the nanoenzalutamide. Then came nano apalutamide. There Nanoform owns 100% of the project. And we are in term sheet negotiations with many potential partners, both in Europe, both regionally or whole of Europe, US and globally. And we will inform you more after we have term sheets agreed or deals signed. Of course we have learned a lot from the nanoensalutamide project and that we can utilize in nanopalutamide. Many of the partners naturally might be even the same companies we are talking to.
And then the final product kernel that we have talked publicly about, Nano Enkorafenib, and there we today came out and said that we have now term sheets agreed with two specialist investors. They will invest 3 to 5 million in the development of the kernel. This investment will finance the clinical development of up to commercialization of the kernel. And nanoform will not put in money into this, but we will put the kernel into the new company that is to be established. And the pre-money valuation of that kernel has been set at 5 million. And in addition to that, Nanoform can receive the normal sort of low single digit million milestones and up to mid single digit percentage royalties.
After the dilution of these in full investments, let's say if we go to the upper end, Nanoform will own between 40 and 50% of the project. And here the idea is that after this work is done, the company Brufmed, the idea is to find commercialization partners, just like with Nano Enzalutamide, to take it further and to the market. But we are very proud of the fact that we informed the market about this kernel in the previous quarterly report. And now we are already in a situation where we can talk about the next step.
So all in all, product kernels are... The interest is very big and we are very proud of what we have achieved so far. But this is only the beginning. If we then go to near term business targets for '25, they are all on track as you can imagine. And with that I turn over to Christian.
Commercial Performance
Christian Jones (CCO):
Thank you, Albert.
Now I'll take you through the commercial progress that we've made year to date. So I think the overarching message is that the global pharma industry sees significant value in both our small molecule technology and our biologics technology.
In the small molecule space, it's all around improving the bioavailability and creating a single pill or a smaller tablet strategy. And that of course can support pharma companies to launch their products as single pills or single tablets to provide patient benefit but ultimately also to provide competitive differentiation and an enhanced patent and IP capability for those companies.
And of course in the large pharma space increasing the drug load which could enable products that are currently on the market as IV infusions to be delivered as subcutaneous injections. It can also mean again the patient benefit but also the competitive differentiation for many of the large pharma and key biotech companies that are developing proteins, peptides, monoclonal antibodies.
We've seen a real uplift in the number of projects signed so far. Year to date we signed 11 and we'll take you through some of the details shortly and increased the number of customers. And that being said, we've also added another major pharma company to our list of the top 20. We're now working with 12 of the top 20 pharma companies and we're delighted to support their projects as they develop new and exciting drugs for patients.
And Takeda continues to positively represent nanoform and the value that we're creating. And if you will recall, last year Takeda presented at the DDF conference (Drug Delivery and Formulation conference) in Berlin and that was on high concentration biologics. This year in approximately two weeks time they will be presenting on Nanoform's technology in the biologic space for respiratory delivery of the A180 protein.
We've also been delighted to receive another grant from the Bill and Melinda Gates foundation to work on multiple projects. And as we've expanded our footprint and our reach globally, we signed an exclusive sales distribution agreement with our partner CBC for the Japanese market. So they are actively selling our services and product developments in Japan and that's been a very successful partnership so far.
So as we look at the number of customers we're now at 56, three new in Q1 and four year to date and the number of projects four in Q1 and 11 year to date. I think given the market conditions, economy, etc., I'm very proud to see the growth, the continued growth on the commercial front with Nanoform.
The last slide that I will present today just shows you the mix that we have of our pharma and biotech partners. Some key names there that really see the value in what Nanoform is doing, in what we're hoping to provide value for patients. And I think it's exemplified by some of the product developments and the product kernels that we have spent the last year or two developing. And Peter will take you through now some of those developments.
But ultimately the sooner that Nanoform can take products onto the market, it will build and accelerate the confidence with major innovator pharma to adopt Nanoform's technology for their potential launch strategies for their new molecules and blockbuster drugs. With that, I'll hand over to Peter.
Product Kernels
Peter Hänninen (CDO):
Thank you and welcome to all on the call on my behalf as well.
To follow on to what Christian was saying and on our strategy around these product kernels, this is really in order for us to further accelerate the adoption of our technology offering by the industry that we have initiated these internal developments. This is also to show in practice to the industry what our technology can enable for their products across a range of delivery routes and for both small and large molecules. And then each of these of course also has the possibility to become in itself a commercially attractive partnering opportunity for us. And this is of course what we are already seeing as well.
Most recently with the announcement around Nano Enkorafenib, a development we publicly announced only some three months back. And we are very proud to welcome these two specialist investors who want to partner with us to provide a more patient centric and sustainable version of this important cancer drug to patients.
For Nano Enzalutamide, we look forward to the pivotal trial that is starting early Q2 as communicated and we just completed the manufacturing of the registrational batches for this and are very happy with this milestone for Nanoform as a company as well.
We also continue to progress well with our Nano Apalutamide project as mentioned, towards GMP and a first human pharmacokinetic study as well as in parallel with a number of partnering discussions.
As Albert mentioned, we also recently added another biologic development into our pipeline which is a Nano GLP-1 that we are exploring for inhaled delivery.
As a reminder, amorphous solid dispersions, or ASDs as they are commonly known, is really the technology that has enabled a past generation of poorly soluble drugs. ASD Based Medicines is a group of approximately 50 products on the market today selling for an estimated $50 billion annually with hundreds estimated to be in development. One of the drawbacks with ASDs is the low drug load leading to a high pill burden. This is an area which we can effectively address with our nanocrystalline formulations as shown on this slide.
We were also pleased to recently receive, as Edward mentioned, a granted patent in the United States for the formulation platform that we use for our Nano Enzalutamide, Nano Apalutamide and Nano Enkorafenib programs and which together with the nanoparticles that we manufacture with CES enables the significantly higher drug load in the product as compared to the ASD based formulations.
This is a slide that I'm personally very excited about. We believe that the future for biologics is in subcutaneous delivery due to the evident benefit for both patients and healthcare systems. And we are one of the few companies and technologies in the world that can enable this for higher dose biological products.
Through high concentration suspensions, we have demonstrated the ability to reach 400 to 500 milligrams per milliliter concentrations with acceptable injection forces using a standard syringe. As you can see on the slide, the growing customer interest towards this technology speaks to our customers sharing our view on the importance of moving from IV to subcutaneous delivery. And we will be very excited to see where this takes us in the near future. But with that, I will now turn back over to Henri.
Q&A Session
Operator:
If you wish to ask a question, please dial Star 5 on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial Star 5 again on your telephone keypad.
Question from Christian Glennie (Stifel):
Hi guys, can you hear me all right?
Nanoform:
Yes, thanks.
Christian Glennie:
Thanks for the questions. Maybe starting on Nano Enzalutamide and the partnerships there. I guess the, I guess as you see it, the sort of, you know, sounds like you've got multiple potential partners here in multiple different markets. Is there a benefit to that sort of strategy over maybe going with a sort of bigger regional player? That maybe simplifies obviously the negotiations and things like that. But yeah, just some thoughts about and how you're sort of managing obviously what is quite an active sort of BD program you've got here. That's the first question.
Edward Hæggström:
Thanks for the question. And I think there are two answers to it. First of all, it's a little bit legacy. The way our sort of work started that became then the first kernel that has resulted in countries sort of being dealt with on a country by country basis.
I also think it's part of us sort of figuring out, okay, what's the difference between going country by country and going more globally? As you correctly alluded to the good parts with going country by country is that you can locally optimize. The bad parts with going country to country is that you need to manage a larger portfolio.
As you can see from Apalutamide, Nano Apalutamide and Nano Enkorafenib, it may be that moving forward we'll have fewer single countries.
Albert Hæggström:
I could add that this is also about the resources. So because we have the resources of the three partners in the onconcept consortium, it makes it easier to go country by country and really pick the best one for each country. And we are really proud of the partners we have chosen for the single countries. We really believe that they are the best ones.
When we go Nanoform only, for example, with Apalutamide, it is probably logical that we might search for bigger areas with fewer partners. But let's see how it turns out. But we are very happy with the mosaic and it of course helps us that we have three partners who have been doing this for 50 plus years.
Christian Jones:
Maybe I could just add something there as well. Albert, all products are different and all products require a different sales strategy. And sometimes it's good to have in country specialists that have the relationships with the prescribers and the doctors and the physicians and the key opinion leaders.
So certain countries benefit from having a more focused approach. As you know, there obviously is benefit also to having larger partnerships with more of a blanket approach, sometimes for deals. But for Nano Enzalutamide it made sense to do it in this way.
Christian Glennie:
Thank you, that's helpful. Maybe would I be able to draw you on thinking about sort of peak revenue or peak sales potential here as you're calling out that sort of market shares that might look at sort of 1000kg plus of ingredient or product at peak demand. What might that translate to in terms of revenues to Nanoform, presumably. And that's aside from royalties or profit shares, I guess.
Albert Hæggström:
Great question and we are not yet giving you numbers for that. But you can of course think of it from a blanket point of view that the big markets what is expected of the pricing of the generic versus the originator. And that of course depends on whether it's a dual poly market, if the formulation patent holds or if it's not. And then of course it will depend on what is the pricing in the local market.
But all in all, I would say that it's very clear that Nano Enzalutamide already can be a very significant revenue generator and profit generator to all the partners, including Nanoform, and also for the ones that are distributing it locally. So everybody sees the potential and therefore the numbers that we mentioned now are quite significant already.
Christian Glennie:
Thank you. Then last question. Then I'll get back in the queue. In terms of biologics, it feels like that's something that is probably more along the lines of a large pharma originator type negotiation or partnerships, I guess just a bit more on what's the sort of commercial, you know, initially development and then commercialization strategy around the biologics piece. And do you, are there any of the big pharma contracts that you currently have already related to a biologics project?
Edward Hæggström:
Thanks, Christian. You had a lot of questions there. Let's see if I remember all of them. First of all, it's clear that biologics has a significant market pull. It's also clear that the high concentration propositions that we have both on biologics and the small molecules have a very good reception.
Thirdly, Nanoform gets attention of the originators both on the biologics and on the small molecule side. I think it has been faster to get strong attention on the biologic side, but it's there on both sides.
Then you had a fourth question which I didn't pick up.
Christian Glennie:
Major pharma contract, whether it's existing partnerships.
Edward Hæggström:
Yeah. So we have seen in several locations that something that has started from a small molecule work, collaboration, partnership has then evolved into something which is also on the biologics side. And Christian, maybe you can help me out. Have we seen it also the other way where we started biologics and then went into small molecules?
Christian Jones:
Less so that way. But I think, if I understand correctly, Christian, your question was, are we engaged with Major Pharma on the high concentration biologics? Is that correct?
Christian Glennie:
Yeah. And I guess, I think we know about Takeda. I guess the question is, are there others?
Christian Jones:
There are. There certainly are others. Yes.
Christian Glennie:
Okay, thank you.
Operator:
As a reminder, if you wish to ask a question, please dial Star 5 on your telephone keypad.
Henri von Haartman:
So, Christian Glennie, do you have some more questions? If you have, please present them.
Christian Glennie:
What else is needed on Nano Enzalutamide in terms of the pivotal trial? You've done your manufacture of the product, the batch, what else needs to happen? Have you contracted CROs? Presumably there's an ideally you would need some partnerships in place maybe to help either fund the trial or inform the design of that trial. I'm just trying to understand what things need to happen, given it's sort of, we're only really a month away from the end of the quarter.
Edward Hæggström:
Sure. So there are three things that needs to be put in place. One is of course, to have a CRO who plans the trial and executes a trial. Then you need to have the medicines. And that's of course, where Blue Pharma comes in from the own consortium. And then at some point post that trials, you need to compile those years that you need for filing for market permits to put it out there.
These are the three main components. And here, of course, the fact that we are working with the own consortium who are very experienced in doing these things and running these things helps us a lot in this endeavor. Anybody wants to add something?
Peter Hänninen:
I would just say that we have the relevant CROs all ready and looking forward to receiving the materials for the clinical trials.
Christian Glennie:
Can I ask, is the study likely to involve US sites and therefore also where you're at in terms of discussions with the FDA about the design of this trial?
Christian Jones:
Yeah, we're not providing information into the trial design or the operation of the trial at this stage, but we understand all the necessary obligations that are required to take this product to market in the US and indeed in other countries as well.
Edward Hæggström:
And I think, Christian Glennie, that we have earlier already reported that we have been in communications with FDA. So part of your answer, part answer to your question is yes.
Christian Glennie:
Okay. Thanks guys.
Operator:
There are no more questions at this time, so I hand the conference back to the speakers for any closing comments.
Henri von Haartman:
Thank you, operator. On behalf of Nanoform, I would like to thank all participants for today. If you have any more questions, just reach out to us at any time and we wish everybody great Tuesday afternoon and evening. Thank you and goodbye.
