Good morning and welcome to the Q2 2022 Earnings Call. All participants will be in listen only mode. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Gunilla Osswald, CEO. Please go ahead. Thank you. Good morning and welcome to BioArctic's Presentation from the Second Quarter. I'm Gunilla Osswald, and I'm the CEO of BioArctic, and I will share today's presentation with our CFO, Jan Mattsson. I will give an update on lecanemab and some recent highlights. Lecanemab is progressing really well, and the marketing application for an accelerated approval has been accepted by the FDA, and they have granted a priority review. I think it looks very promising for lecanemab, and it's very exciting time for us with the phase III readout of the Clarity AD study coming closer. We also have a potential for an accelerated approval in the U.S. within six months. I will, of course, talk more about that here today. Next slide, please. BioArctic is listed at Nasdaq Stockholm Mid Cap, and this is our disclaimer. Next slide, please. BioArctic is a unique Swedish biopharma company, and our focus is to improve lives for patients with brain disorders. I think that we are unique based on four different areas. The first one is that we focus on R&D of innovative treatments for brain diseases, where there is a high unmet medical need, like Alzheimer's disease and Parkinson's disease. These diseases affect large patient groups and their relatives, and it comes with large costs for society. There is a high medical need for disease modifying treatment affecting the underlying disease and slowing down the disease progression, and that is what we focus on. We have a great organization with very experienced and engaged coworkers, and we have important, fruitful collaborations with universities and our strategic partner in Alzheimer's disease, Eisai. We have an attractive and well-balanced project portfolio with projects spanning from early discovery all the way to phase III and now also in the regulatory process. We have partner projects that generate revenues by milestones, where our strategic partner carry the costs for clinical trials, and we have earlier fully owned projects with substantial marketing and out-licensing potential. The fourth aspect is that we are well financed with a strong cash position with about SEK 750 million from the bank. We have valuable collaboration agreements with big pharma like Eisai. We are looking forward to the EUR 15 million milestone linked to the BioArctic submission of lecanemab in the U.S. In summary, I think that BioArctic is a dynamic and very exciting company with a huge potential. Next slide, please. BioArctic has a rich and well-balanced portfolio, and as I said, we focus on brain disorders. Our fully financed partner projects like lecanemab in Alzheimer's disease and early innovative projects with great potential for the future is encompassing the portfolio. As you can see, Alzheimer's disease is our largest area. Of course, lecanemab is a key project. It's the most advanced program, and it is now under regulatory review in the U.S. by our partner, Eisai. In parallel with that, Eisai is progressing two large phase III programs, and I'll talk more about that today. I think that even if our first step with the first disease modification like lecanemab is successful, there is still a large medical need for more treatment options and for combination of therapy. Therefore, it's very important to continue the research with more projects. We have five early Alzheimer's disease modifying programs, and those are including two, which we have combined with our BrainTransporter technology. In Parkinson's disease, our partner AbbVie took a strategic decision during the quarter to terminate the collaboration on our alpha-synuclein portfolio. We are now working actively with AbbVie to transfer the projects back to BioArctic with the aim of finding a new partner to progress the projects to patients. In other neurodegenerative indications, our ALS project, which is targeting TDP-43, another protein which is aggregating in this patient population. This project is progressing really well thanks to our technology platform and our vast experience from Alzheimer's and Parkinson's projects. This has progressed so quickly now that we have already started humanization of antibodies. With regard to our blood-brain barrier technology, as you know, I think this is very exciting part, and this is also progressing really well. We have now combined this technology with several of our internal projects. We will continue to apply them to more internal projects, and in the future, it could also be applied to other companies' antibodies or proteins on an exclusive license basis. I think that lecanemab is, of course, very, very important for BioArctic. I also want to point out that BioArctic is more than lecanemab, as you can see in our portfolio. Next slide, please. We have a long-standing and successful partnership with Eisai. It started back in 2005, and we have two license deals and several research collaborations. At the end of the second quarter, we have EUR 151 million remaining to be received, and we are now looking forward to the EUR 15 million milestone, which is linked to the lecanemab regulatory submission acceptance by the FDA in the U.S. I'm also happy to say that our research collaboration with Eisai has been extended further. If we come all the way to the market, then we can expect royalties of high single-digit value. This could be of substantial value for BioArctic if you consider how large the patient population is around the world. We also have the option to market in the Nordics, and this is something we are very much looking forward to, and we are building this organization. We have been collaborating with AbbVie in Parkinson's disease since 2016, and we have received $130 million. We are now working actively with AbbVie to get our projects back with the ambition of driving the project forward with a new partner. I think that we have a great business model, and our strategic partners finance the extensive clinical programs, whereas we finance the more innovative and less expensive preclinical phases and increase the value of the products before partnering. We have a great track record of delivering high-quality innovative projects. Next slide, please. Some key events during the second quarter and recently. We start with Alzheimer's disease and lecanemab. The FDA recently accepted Eisai's biologic license application and granted priority review for lecanemab for the treatment of early Alzheimer's disease. This is under the accelerated approval pathway, and it's based on the rolling submission which was completed in the beginning of May. We now got a PDUFA date of 6th of January 2023, so early next year, which means that we will get FDA's response within the coming six months. A modeling that Eisai has done has also been published in Neurology and Therapy, which suggests that lecanemab could delay progression to Alzheimer's dementia by several years. If we look at Parkinson's disease and BAN0805, BioArctic has received an additional drug substance patent in the U.S. for BAN0805 for Parkinson's disease. Now we have patent expiry by 2041 with potential for extension to 2046, which is great. AbbVie has terminated the collaboration, and we are now working actively to transfer the project back with the aim of finding a new partner to drive the project forward to help Parkinson's disease patients in the future. As I said, with regard to ALS and ND 3014, our TDP-43 project is progressing really well, and I'm so happy to see how we can utilize our technology platform and our vast experience in development of antibodies that are targeting different kinds of aggregating proteins. The humanization of antibodies has already been initiated, which I think is great progress. Next slide, please. If we look at lecanemab's broad late-stage clinical program, we can see that our partner, Eisai, is strongly committed to lecanemab. This broad clinical program encompasses several different studies. The most important right now is, of course, the Clarity AD Phase III confirmatory study in early Alzheimer's disease. The patient enrollment was completed in March last year, and we have 1,795 early Alzheimer's patients who were included in the study. On top of this, there is 100+ Chinese patients including, which also is important for a future Chinese regulatory application. The study is progressing really well, and we have a low discontinuation rate. Almost all patients who are there at 18-month treatment continue into the open-label extension study after the 18-month treatment. Eisai will have the 18-month data available during the fall of this year, so I think that is really super exciting times ahead. It's also great to see that in the Clarity AD open label extension study, the patients who progress there will now also be able to have a subcutaneous injection formulation, to be evaluated. I think it's important to have the subcu formulation in the future since that is more convenient for patients. It's a really good alternative to the IV, infusion. The Phase II-B open label extension study is also ongoing in early AD, and here now new data is coming along continuously. All data reported so far at different congresses. Further strengthened and confirmed the positive Phase II-B results with profound amyloid clearance from the brain and continued low frequency of the side effects ARIA-E. Eisai has now also started a new thing in this open label extension study during the quarter, and that is to use blood biomarkers to evaluate a reduced frequency of administration up to every third month. That's also a very interesting thing to see how maintenance dosing could be done in an optimal way. The other phase III program in pre-symptomatic Alzheimer's subject called AHEAD 3-45 is comprising of two different sub-studies, and it's driven by Eisai together with Alzheimer's Clinical Trials Consortium in the U.S. This is a global study around the world. The DIAN-TU NexGen study is for individuals with dominantly inherited Alzheimer's disease, and the study started early this year. In this study, lecanemab is being used as a background treatment in combination with tau treatment or placebo. That's also exciting to see a combination trial being progressing now with lecanemab. I'm really looking forward to the progress of this impressive broad program that Eisai is driving in Alzheimer's disease. Next slide, please. I also wanted to mention something about the disease modeling, which is published in Neurology and Therapy recently. In this modeling, it suggests that lecanemab could delay the progression of Alzheimer's disease to dementia by several years. This is an important way to describe the long-term effects of lecanemab. Since the clinical studies normally are only about 18 months treatment, and the treatment for the patients in the future will, of course, be much longer. Therefore, it's really important to do some disease modeling. The results from this modeling based on the phase II-B data shows that there is a potential, clinical value of lecanemab for patients with early Alzheimer's disease. It shows how it can slow the rate of disease progression and delay progression to Alzheimer dementia with several years and keep the patients at the earlier stages for much longer. It could also reduce the need for institutionalization care. This model will be updated when the Clarity AD results are available later this year. Next slide, please. Lecanemab has the potential to lead the paradigm shift in the treatment of Alzheimer's disease. I think that we have a high likelihood of success based on the positive and consistent results that we saw in the phase II-B study, that all the data that we have seen coming from the phase II-B open label extension study continues to strengthen and confirm the phase II-B result. The pivotal phase III study, Clarity AD, is designed to confirm the positive phase II-B result. Of course, all drug development is connected with some risk, but I believe that lecanemab has a high likelihood of success. We have the opportunity to be first with a full approval in the U.S., and the first disease modifying treatment for Alzheimer's disease in Europe and in Japan. The rolling BLA submission to the FDA under the accelerated approval pathway has been completed by Eisai, and the FDA has accepted the submission, and they granted a priority review, so we can expect a decision within six months. There is the potential for an accelerated approval in the U.S. already this year. As I said, we are looking forward to the milestone which is linked to the regulatory submission acceptance by the FDA. Most important is, of course, to get the full approval and the full regulatory applications like the BLA submission to the FDA, the MAA submission in Europe, and the jBLA in Japan. All of them are expected to be submitted by the first quarter of next year. Of course, assuming positive result in the Clarity AD study. There is the potential for a full approval in the U.S. next year and in Europe and Japan next year or the year after. I think that lecanemab seems to be the best anti-amyloid antibody with a great opportunity to differentiate versus other late-stage competitors based on four different aspects. The first one is that we have a unique binding profile that is selectively targeting the toxic forms of amyloid called protofibrils. The second is that we have a rapid and profound clearance of amyloid from the brain. The third is that we have seen an early onset of clinical effect in slowing of cognitive decline. And the fourth is that we have a better tolerability with a low frequency of ARIA-E versus competitors, even without titration. lecanemab is the only of the late-stage antibodies that is given by a full therapeutic dose from day one, and still we have a better tolerability than the other. We have then further development programs ongoing. The subcutaneous injection will be an important alternative for self-injections and more convenient administrations at home. The blood biomarkers is also making great progress in parallel with the therapeutics. Eisai is utilizing the blood biomarkers to screen patients in the AHEAD study and to explore less frequent dosing as maintenance after brain amyloid has been cleared. This is now being studied in the phase II-B early study. Other clinical studies in other Alzheimer's populations will also be interesting to follow in the future. I think in summary that looks great for lecanemab, but of course, nothing is ready until it's ready. I think that we have very exciting times ahead of us. Next slide, please. By that, I hand now over to our CFO, Jan Mattsson. Thank you, Gunilla. I'd like to start with reminding you that at present, our revenue consists of milestone payments and compensation from collaboration agreements, meaning that we don't have any steady revenues yet. Net revenues in the quarter amounted to SEK 4 million compared to SEK 7 million in Q4 of previous year. The SEK 15 million milestone payment will be recognized during Q3. Total costs in the quarter were higher than in last year, and costs will continue to increase as we continue to build a commercial organization and further progressing our expanded portfolio. Operating loss for the quarter was SEK 46 million compared to SEK 34 million same quarter of last year. Operating expenses are expected to be in the range of SEK 220 million-SEK 260 million for the financial year 2022 compared to SEK 166 million in prior year. The reason for the increase is the build-up of the commercial organization prior to the potential launch of lecanemab and costs for the expanded in-house project portfolio. Next slide, please. Cash balance at the end of the quarter amounted to SEK 752 million. Please note that this does not include the SEK 50 million milestone payment from Eisai, which will be received in Q3. Operating cash flow amounted to SEK -46 million during Q2, compared to SEK 29 million in Q2 of last year. Net result for the quarter was SEK -46 million compared to SEK -34 million last year. In summary, BioArctic continues to have a strong financial position. Next slide, please. Back to you, Gunilla, again. Thank you, Jan. Now some comments on upcoming news and closing remarks. Next slide, please. Now we are on slide 14. The upcoming news flow that we can expect. If we start with Alzheimer's disease, Eisai are progressing the broad clinical program for lecanemab, of which CLARITY AD is of course the most important. Here we will look forward to the top line results that will come during the fall. The rolling submission under the Accelerated Approval Pathway was accepted by the FDA in July with priority review, and we will get that response within six months. Data with lecanemab will, of course, continuously be presented at international congresses, and the next one we're looking forward to is AAIC at the end of July, beginning of August. This will be a hybrid meeting, partially virtual and partially on site in San Diego in the U.S. We are also looking forward to providing more information on our other projects when that is relevant. Next slide, please. I close by saying that BioArctic is built on great science. We have great projects, we have great partners, and great people working for BioArctic. Everything we do is with patients in mind. Our aim is to help patients with brain disorders, and I really think that we are on our way now to help Alzheimer's patients. I think that we have a very exciting year ahead of us. Next slide, please. By that, I say thank you so much for your attention. We are happy to take some questions. We will now begin the question and answer session. To ask a question, you may press star and then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the key. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we'll pause momentarily to assemble our roster. The first question comes from Joseph Hedden with Rx Securities. Please go ahead. Good morning. Thanks for taking my question. Firstly, on lecanemab, you've mentioned the low discontinuation rate in Clarity AD so far. I'm wondering if you could expand on that further. Can you make any comparisons to the phase II-B trial or other phase III programs that we've seen before, that'd be helpful. Thanks. Great question. Thank you so much, Joseph. I'm really pleased to see that in Clarity AD, the large phase III trial, where it was 1,795 patients who entered into the trial. The discontinuation rate has been around 14%, and I think that is low. When you do design a trial like this that should go with 18-month treatment, you normally expect about 20% discontinuation rate. The study is powered for 20% continuation rate. And if we then only have about 14, that means that the study is really well powered. I think that is really good news. And of course it was a bit higher discontinuation rate in the phase II-B study due to the different aspects that has been described before. I think this is really good news for the phase III trial. We expect a solid data set later this year. Okay, great. Just on the subcutaneous formulation, is that everyone who goes into the open-label extension is getting that or is it just a subset of patients are getting that as a periodic pilot study? I mean, it has just recently now during this quarter been introduced into the open label extension study. Those patients who came into that study previously got IV infusion. Now, some of those patients who previously has had IV infusion can now also get subQ. The patients who are now coming out of the IV of the 18-month treatment can get the subQ. That will be a good opportunity to compare IV infusion with subcutaneous injections in the open label extension study. Okay. What's your understanding of the regulatory situation with subQ? Has Eisai had any kind of discussions about what would be needed. Let's say that the IV formulation is successful as we hope it is. What do you think the FDA would ask for, to get an approval for the subcutaneous formulation? I know that in other rare areas, perhaps smaller cancer, smaller studies have been allowed, but nevertheless clinical trials are needed to back up a subcutaneous formulation where there's already an approved IV product. Yeah. No, thank you. It's a great question and that's at the moment under discussion with the authorities. I mean there is a phase I study that showed how it was well behaved in healthy volunteers and the bioavailability and things like that. Then that it was supportive of progression into a broader administration set, which now is ongoing in the OLE study linked to the Clarity AD. Eisai is having discussions with regulatory authorities about what is required for a supplementary BLA. The first BLA will be on the IV infusion, but then we hope that will be a supplementary BLA in the not too distant future with a subQ. The exact requirements are under discussion. Okay. Thanks. Perhaps if I could just ask one on the alpha-synuclein program. Do you have any timeline, expected timeline as to completing the handover from AbbVie of getting that back? Just on the financial side, I think there's about SEK 50 million or something around that region of deferred revenues to be recognized. Could we expect that in the third quarter accounts? Yeah. I'll let Jan answer the financial part. We are having discussions with AbbVie about details about the transition of the products back, and we are working in a very collaborative way with AbbVie. I think that will be happening this year in a really good way. Then I hand over to Jan for the financial question. Well, the AbbVie project will financially likely be closed during Q3, and this will mean that we will recognize a non-cash result. This is based on the provision that we have on the balance sheet of SEK 54 million. We could not give you an exact number as of now. We will come back to this during next quarter. Okay, great. That's very helpful. Thanks, Gunilla Osswald. Thanks, Jan. Thank you so much, Joseph. The next question comes from the line of Zoe Karamanoli with RBC Capital Markets. Please go ahead. Ms. Karamanoli, your line is open. You may ask your question. Hi. Thank you for taking my question. One question from me and with two parts please. As you prepare for the commercialization of lecanemab, can you describe some of the activities currently ongoing, and have you engaged with neurologists as part of the pre-launch strategy? If yes, I'm just curious, what's their feedback so far on potential use of lecanemab? Any color you can provide here would be very helpful. Thank you. Thank you so much. Great question. I think what I normally think about with regard to lecanemab, I mean, we are opening up a new era for the patients. We are coming with a new kind of treatment, a disease modifying treatment which doesn't exist yet, in the Nordic region. We are also thinking about that it's partially a new indication because we are going earlier for the patients, trying to treat at an early stage to save as much of the earlier years when they are having a more fulfilling life, for a longer time. To identify the mild cognitive impairment patients in a good way, that's really important to increase the awareness about that. It's an IV infusion that requires a bit of infrastructure and so forth. There is a lot of increasing awareness and preparing the society to be able to help the patients to take on this kind of treatment in a good way. There is a lot of work and activities that needs to happen and is happening. For example, we arranged a seminar at the Almedalen Week, which is a huge happening in Sweden always in beginning of July for politicians and people around. We're doing things in order to prepare the community, the awareness, and of course also discussions with advisory boards and key opinion leaders and so forth as you just asked about. A lot of those activities is happening here at BioArctic. The feedback we have got is that if lecanemab continues to have the same kind of profile in phase III as we showed in the phase II-B study, there is a huge step forward for the patients. There is really a wish to get disease modifying treatments that can help the patients to have longer time in the earlier stages and so forth. But also key opinion leaders recognize the need for more memory clinics and to increase the awareness around. That's really what we are preparing for. A lot of activities are ongoing. A lot of activities are being planned in order to prepare for a successful launch of lecanemab. That's great. Thank you very much. Thanks, Zoe. For any further questions, please press star then one. Operator, if there are no other questions online right now, we've received two questions via email. Should I take those now? We have another question from the phone if I may take it. Okay. Please go ahead. One more. Sorry. One more. Yes. Okay. Do so. Thank you. Okay. Mr. Fredrik Thor from Redeye would like to ask a question. Please go ahead, sir. Hi, thank you. I think the Swedish connection was a bit problematic as well, so difficult. My first question was on the Clarity AD trial. I was wondering if you could expand a bit on how the trial is powered and what type of treatment effect you technically could show and still get a significant result. Thank you. Yeah. The study is powered to be a single pivotal study. There was a phase II-B study, as you know, with 856 patients that formed the ground. The study is powered for showing a kind of similar effect that we saw in the phase II-B study for effect on CDR Sum of Boxes. That's really the basis. In that previous study, we saw about 26% slowing of effect versus placebo in slowing of decline on CDR Sum of Boxes. That is like 0.4 on that scale. That's what it's powered for. Well, did you have a further question? Yeah. I guess like is there a lower bound of what type of treatment effect you could find and still get a significant result? Or should we expect results to be significant only if you get the similar treatment effect as the phase II-B trial? Yeah. No, I think, I mean, for the FDA, normally it's important to show a statistically significant effect. I think the study is really powered for that. I think it's also important to see the full clinical effect profile of the drug, CDR Sum of Boxes and the other clinical scales like ADCOMS and the ADAS-Cog. Also, what is part of really the first accelerated approval submission is to show the effect on how we can clear amyloid from the brain where we have shown that we have a very strong effect. Also of course safety and tolerability profile. It will be a combination of all of it. Of course, the primary endpoint is CDR Sum of Boxes, and that will be the first part to look at. Perfect. A final question from me if possible, on the Parkinson's project, BAN0805. If possible to expand a bit on the timeline on getting back the project and also, yeah, what the process will be like in finding a new licensing partner, how long that could take, how variable it could be? I wish I could tell you everything. Where we are right now, we are having very good discussions with AbbVie about the process and taking it back. We are preparing a lot of things. You know we still have some activities ongoing that will continue and so forth. We expect this to be a smooth transition during this year. We have already started interaction with potential new partners. You never know. I mean, this you need to have some patience. I know that this will take some time. I wish it was fast, but normal even though you have interested parties, it takes some time. You need to be patient. I'm not a very patient person, but I really need to work on this, and you need to do that as well together with me, unfortunately. I will let you know when I have something to say. Perfect. That's all from me. Thank you. Okay, thank you. Thank you, Fredrik. There are no more questions on the phone. Back to you for the written question. Okay, thank you. We received two questions from Patrik Ling at DNB Markets. The first one, well, I'll read the second one first, which relates to the question you just received, and I think you've already given the answer. It's, have you received any incoming requests from new potential partners for the PD project, BAN0805? The short answer is yes. We have a very good track record, since we have been delivering high quality innovative projects, and shown that we can deliver to partners. We have had contacts in our open door policy over the years of companies asking about this program specifically and for others as well. We have said that it's already partnered, but it's not the situation anymore. We are in having different activities at the moment, which is good. Thank you. The second question from Patrik. Is there an advisory committee meeting planned for lecanemab as part of the accelerated approval? If not, if the FDA would like to have such a meeting, how far in advance do they need to tell you about it? If there would have been planned an advisory committee meeting, that would have been announced when we got the priority review and the PDUFA date. The expectation is that there will not be an advisory committee for the accelerated approval process. Those were the questions we had written in. Thank you so much for a lot of great questions. By that, I would like to say, happy summer to everyone. I hope we will be able to enjoy some sunshine and some relaxation during summer period, and then we'll be back. Thank you so much.