Welcome to Cinclus Pharma Q3 Report 2024. For the first part of the conference call, the participants will be in listen-only mode. During the Q&A session, participants are able to ask questions by dialing pound key five on their telephone keypad. Now, I will hand the conference over to CEO Christer Ahlberg and CFO Maria Engström. Please go ahead. Thank you very much. Welcome to this webcast, Q3 Report for Cinclus Pharma. Today we will present the events that we have had ongoing during the last quarter and also update you on some topics on the company overall. Let's start and just give you a short summary, a short background on what we are focusing on in Cinclus Pharma. We are developing linaprazan glarate, the next gold standard in healing of severe erosive GERD. That is what we are aiming for. We actually do have the new generation, next generation of PCAB, where we are targeting healing of the severe patients in eGERD, where we also see the unmet medical need, the greatest unmet medical need. We have a superior acid control, where we actually were going to show you more about that today. We also have a very fast onset and the fastest time to steady state. The superior acid control is crucial to heal the most severe patients, where you need 24 hours acid control. We also have already shown in clinical trials, in our phase II trial, that we actually have very good healing data, also in comparison with the active comparator of a PPI, where we have more than five 0% difference delta in healing on the severe patient groups in four weeks, which is extraordinary, I would say. We are ready to start the phase III. You will learn more about that today. We are estimating to have readouts of the healing data in 2026. Despite we are focusing on the severe patients, we actually definitely have a blockbuster potential in this substance in this target population. We also will talk a little bit more about our IP today, which is very strong, and that definitely is beyond 2040. And also with good data exclusivity opportunities as well, both in EU and U.S. So let's start then with some updates also on the time frame and what we are working on. We managed to do the IPO before summer in June, 20th of June, which gave us the possibility to fund the first eGERD phase III study, which we will have first patient in next year. And the healing results will be presented in the mid-2026. That is the ambition. Based on this very important milestone of readouts of the healing data, we will go for the next financing round to finance the second phase III trial, as well as the H. pylori program that we are now also looking into. When it comes to ambitions we have, of course, we are all the time working on finding ways to accelerate the time plan and to initiate these trials as fast as possible. And that is a challenge we have on everyday business, and that's what we are working on. But this is how it looks currently, the time plan. Let's go then in just the description of the market overall. We are confident that PCABs will take over after PPIs, the same way as we saw PPIs took over after H2 blockers many years ago. We can see the pattern in the market where PCABs have been launched, especially in Asia, where you can see that in Japan, the only PCAB is now the market leader. And they passed Nexium, and they have sales close to $1 billion annually, only in Japan. We can see another strong market in Asia, South Korea, where we have two PCABs on the market with sales, and they have an annual sales approximately of $250 million only in South Korea, which is a population less than Germany, and with a price level of a little bit more than $1 per day in treatment. We can also see in other markets in Asia, India, we have many different labels of vonoprazan and PCABs actually taking over the market. U.S., you know, you have seen vonoprazan. Phathom have launched vonoprazan this year, and they have a very strong sales growth quarter- to- quarter, and they reported more than 100% growth in sales this quarter three versus quarter two. So it looks promising. Step by step, they're taking improvement in sales progress. We can also see other markets where we have seen launches of PCABs. In Latin America, we have in Mexico, Chile, Peru, good price levels there, actually higher price levels there compared to Asia. In Asia Pacific, we can see, as I mentioned, more than Japan, South Korea, we also have launches in China. We have also in the Philippines, Malaysia, and Pakistan and Bangladesh. So PCABs are coming. Now you can see that we have seen the first launch in Western world as well with U.S. No PCABs in Europe yet, and we have the possibility to become the first one there. We are working on it, and we will see more PCABs coming into this market as well. Let's go into the key events during the quarter and the periods after the post-quarter. I will start to focus on the presentations we did in the UEGW in Vienna, the biggest European gastro congress, where we presented our PKPD data from the recent study where we measured pH. I will give you some summary slides from that. This is quite kind of unique that you get the possibility to present phase I trial in a congress like this. So that shows the importance of the data that we have. I think it's also important to remember when we're talking about linaprazan glarate, it's a prodrug of linaprazan and the treatment of acid-related diseases. linaprazan glarate, we have six phase I studies and one phase II trials, totally approximately 500 individuals treated. We should also remember that we have with linaprazan, the active metabolite, more than 2,500 individuals treated as well. So in total, more than 3,000 individuals have been tested with linaprazan or linaprazan glarate. So it's a very strong background. And these results from the phase II have been actually very promising healing results, which is the primary endpoint in the future phase III as well. The old formulation we had, we actually have done phase I trials on this. And I think it's important to remind you also about the biomarker, which is pH, that you actually need to have acid control, meaning pH about four over the 24-hour period. And that is a very, very strong biomarker. If you can reach close to 100% coverage over the 24 hours of pH control, you know that you will heal the patients. That is, and what we have shown before with our old formulation, which was used in the phase II, we saw that we have approximately a little bit more than 90% acid control, which by itself is very encouraging and good. But now we wanted to test our new formulation, which will be our commercial formulation as well, and will be used in the phase III trial. And what we have tested here, we have measured the pH levels day one and day 14. And that has been the study objective to show the acid control here. And we have tested in different doses and different dose regimes. And the results, what you can see here is that we actually even, I mean, we had a very good acid control in the old formulation, but with this new formulation, we are outperforming that significantly. What you can see where we have marked the circle here is on 50 mg twice daily, where we're reaching 96% acid control over the 24 hours, which is outstanding, I would say. Very good results. This is the dosage we will use for the phase III trial and also our ambition to use for the commercial approval later on as well. As you can see, this is unique data. 96% acid control is good. You can see that we actually can reach close to 100% if you go up in doses. We have a balanced risk-benefit, and we have picked the 50 mg twice daily as our optimal dose for the future. As you see, we have a very good dose response with this new formulation, a very strong formulation in this case. Going further then, other news from other events from the quarter. We have new patents in new areas, in new territories. And I think I wanted to give you a little bit of an update on our strategy when it comes to IP and protection of the substance. And in this slide, we're trying to describe what kind of strategy we have. But when it comes to the patents, the composition of matter patent, that is valid, that will expire after the extension in both U.S. and Europe, will expire approximately 34, 35. So that is the main patent. On top of that, we have already now an approval of an additional patent, a polymorph patent in U.S., valid until 2042. We have another formulation patent approved in Europe until 2040. We are working on developing a minefield when it comes to IP and patents. So there are more polymorph patents pending in U.S. We have additional amorphous patents pending. We have new formulation patent, which will be our commercial formulation patent pending. We have use patents pending, and we will have more patents coming up where we will apply for. So what you can see is that we have, I would say, a very strong minefield beyond 2040 when it comes to patent protection in both Europe and in U.S. So that is by itself very, very strong. And then normally in Europe, you get when you have an approval of a product, a new substance or a new usage of an old substance, you get 10 years regulatory data exclusivity, meaning that no generic company can use your clinical data as reference during this time. So in Europe, we will have, estimating that we have an approval in Europe by 2029, we will have additional data exclusivity there during the next 10 years, no matter what patents. But that's Europe. When it comes to U.S., you normally get five years regulatory data exclusivity from the day of the approval. But in this case, we also have been granted from FDA, QIDP grant that gives us additional five years of data exclusivity. And that comes with a product if you have H. pylori as first indication. And that is something that I know that this has been ongoing discussion for now with our colleagues at Phathom Pharmaceuticals. And they have been questioned whether you get the five years extension of the entire product or if you get it only for H. P. indication. What it has been all historically, and that's quite clear, all our advisors in U.S. tells us that this comes with a substance if you have this indication as first. And then the other follow-up indication will follow that exclusivity. And there is no reason for us to believe something else for the time being. But no matter what, I would say that we have a big difference compared to Phathom. We have a very strong IP situation with a minefield of many different patents, which will be very complex to come through for a generic company with or without data exclusivity. And I think that is the message I would like to give today. And also just estimate that you only get five years in U.S., even though we don't think that is reasonable to think. There is a big risk that this generic company will interfere in our patents anyway. And that, of course, will be an amended litigation process during that time. And the generic companies cannot launch a product under that kind of litigation process a nd that normally takes 30 months to get. No matter what, even though they are not infringing our patents, which I think they will, there is no way that a generic company can get to the market closer than seven and a half years after our registration. So that is also, but we are confident that our IP portfolio, our IP minefield is very strong. And that is valid until beyond 2040. Okay, I stop there. I suppose we will have more questions on that later on. Let's also look into another important news here regarding the pediatric study plan, which we have now received an agreement with EMA. So we have now everything in place that's needed for the pediatric plan. And actually, also, that is something you need to have to have a chance to submit the application also for the adults later on. So that is now ticked off, and it's also an important milestone. And this work was started up in 2023, and now we have, I mean, the approval in our hands, so to say. And of course, we are obliged to do something, not only a plan, but we actually need to do, we need to execute a study on children, 100 patients, to investigate safety and efficacy in the same way as we have done for the adults. And we do not need to start that up before the submission. I mean, we can start it up after the submission in Europe for the adult indication. So I think this is a very good agreement with the EMA, and we are happy to tick that off. And actually, it also gives us an opportunity to expand the approval later on also for children. Okay, other events that have been of importance during the quarter is that you have seen that we have signed and we have chosen PSI CRO as our main CRO for the eGERD phase III trial. And as you understand, we are working hard together with them now to set up all the sites, to get the sites ready to be recruiting patients in next year. And also the good thing is that we have also now secured the manufacturing of the products that will be used in the study with our contract manufacturing partner, Lonza, in their sites in U.S. So everything is set for the drugs and the supply of the phase III trial. But also a good thing to know here is that batch sizes are so big, and they are more or less in the same size as the commercial batch sizes later on. That's also very good evidence that this looks very promising also from a commercial production later on. That's also good milestones to tick off during the development process here. With that said, we also mentioned in the report today that we have developed our management structure, and we have an executive, a very experienced executive management team. The recent member is Margit Mahlapuu, who joined the company just during the quarter here. As an R&D Director, she has very long experience in development, and she will be a very good asset for us. With her experience, we are even more confident that we can deliver these clinical studies and the development of the products all the way to approval. That's good. I think I stop there and hand over. One more point I just wanted to mention also. Now when we're getting into the phase III trial here and getting closer to the market, of course, an advisory board is getting more and more important. And I would say our global advisory board is very experienced. I would say that these are the people that are most well-known in the market, and they are really supporting us and giving us very good advices now during the next, I mean, both historically, but also in the future here. So I'm very proud to have this group supporting us. Okay, let's go into some figures. Maria, I hand over to you. Thank you, Christer. So some key figures for the quarter then. The cash in bank ended up at SEK 644 million compared to the last quarter of SEK 685 million. So a decrease in cash flow of approximately SEK 40 million. That is, of course, due to the fact that we are up to speed for the preparation of the phase III trial, as Christer just said. Our coworkers were 29 people in Q3, and back in Q2, we were 26. 12 of these 29 are employees. The rest are in-house consultants. The R&D spending of our total operating expenses went back to a level of 81%, which was equal to the level in full year 2023. In Q2, we had dipped down to 56% due to the one-time IPO expenses, which, of course, is classified as admin expenses. Some comments on the income statement here. The net sales were zero, and also in comparison period, we're awaiting the approval here in China of linaprazan glarate. The G&A expenses were down compared to Q2 2024. Of course, in Q2, as I said, we had this one-time IPO expenses. So now we're down to a normal level. The R&D expenses are up a little bit compared to Q1 and Q2. And that is, of course, since we are up to speed with the preparation of the phase II trial. Last year was a little bit higher because we had more studies ongoing. The financial net is now positive due to gains from or interest gain from cash in bank. And the net result then were back on the same level as Q1 2024. So ending up at negative SEK 36.5 million. Cash flow, as I said, negative SEK 40 million approximately, in line with our plans. And cash ended up at SEK 644.3 million. Going to the liability side in the balance sheet, we have lower total non-current and current liabilities compared to last year. And that is basically because of the shareholder loan that was converted into equity in connection with the IPO. The tax liability is in total SEK 40 million, and we're paying that off since we moved an IP from our Swiss affiliate back in 2022. We also have our shareholders end of September. Still, the IPO Cornerstone investors are on the top 15, and so is our founders. So there are basically no change there. I think I hand over to you, Christer, again. Yes, then. Yes, to summarize what we are aiming for and our aspiration. I mean, we are developing a product here and with a next-generation PCAB with the ambition to have an eGERD indication, all grades. And that is the ambition when we're starting up the phase III. But the focus will be for the where we have the unmet medical needs, the severe patients. Thanks to our unique acid control, we're expecting to have superiority in the label, both in healing and in symptom relief in half the time. We also expect that we will heal and relieve them from symptoms in half the time compared to what you have in other PCABs in the market in Asia. That is a unique product developed for the severe patients. With this uniqueness in acid control, we also estimate that we can also achieve a unique product when it comes to eradication of Helicobacter pylori, delivering as high as the control. It's enough to use only one antibiotic in amoxicillin, a narrow spectrum antibiotic with very low risk of antibiotic resistance. And that is, if we can deliver, which we think definitely is a possibility, as good as eradication rate as the current standard of care or better with less antibiotic resistance risk, this is a possibility to become the future standard of care in this treatment. And that is, of course, a very interesting positioning to have. And that will be a difference compared to what you see in the pattern, how to treat this today, where you're going from a triple therapy to a quadruple therapy with using many different antibiotics, increasing their antibiotic resistance, having problem with compliance, safety, and antibiotic resistance. If we can, we definitely think it's possible to achieve what I mentioned, only using amoxicillin with a good eradication. We have an easy-to-use drug with good compliance, good safety, and also good eradication rate for the future. So I think this is two very interesting indications, which we are working on now and looking into for the future. I think I stop there and open up for question- and- answers here. So If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Alexander Krämer from ABG Sundal Collier. Please go ahead. Yes, good morning. Thanks for taking my questions. I have two. To start with the first one, you talked about your progress this quarter with your phase III preparations. What are your next upcoming milestones with your phase III program, and how and when do you plan to communicate these as we go into 2025? When it comes to the phase III program, That's my first question. When it comes to the phase III, eGERD, I would say that the first next step is, of course, first patient in. That is definitely something that we will communicate. And then, of course, there are other interesting ongoing discussions. But that is the question. That is the answer on that question. Okay, thank you. And my second question is around your international market opportunities that you talked about today. So are you planning to sign additional licensing deals there, given the strong position that you see in Asia? And the question would be if these licensing deals would be in markets such as Latin America or MENA regions. And if you are planning to do such licensing deals, how does the regulatory path look like in these emerging markets compared to the U.S., Europe? Would you need to wait for the full phase III program to finish? So which means until like 2028, or is it something that you are planning to license in these emerging markets, license out the linaprazan glurate in these emerging markets earlier? Well, I mean, of course, we are looking into That's the second question. Of course, we are looking into opportunities when it comes to out-licensing in all markets. Actually, I would say that in the U.S., we have decided to wait until we have the phase III trials, as we have informed you about before. But in Asia, we have a partner, as you're aware of, I mean, where they are focusing very much on China just now, but we have also ongoing discussions in South Korea there and looking into Japan as well. When it comes to MENA markets, we are in discussions with some actors here as well, so of course, that is on our radar and also including Europe, which we are also looking into possibilities to find good partners. That's something that we have ongoing, hopefully we will succeed there as well, and we are working on that. When it comes to approvals in markets outside Europe and the U.S., there are unfortunately few markets which we can rely on when it comes to accepting only Chinese data, which I mean, which we will have after approval there, so we will rely on the European and U.S. American studies. Many times, these markets are relying on the dossiers from either Europe or from the U.S., so what you should expect is that these markets will come hand in hand with Europe and the U.S. Of course, a licensing deal could happen before, but approvals most likely will go hand in hand with Europe and the US. Thank you very much. That's from my side. The next question comes from Oscar Haffenn Lamm from Bryan Garnier. Please go ahead. Hi, Christer. Hi, team. Thank you for taking my question. Oscar Haffenn Lamm from Bryan Garnier. Your line is now up. I was just wondering if you could update us on the progress in terms of... Can you hear me? Yes. Yes. All right. Hi, Christer. Hi, team. Thank you for taking my questions. So I was just wondering if you could update us on the progress in terms of the activation sites for the phase III and if you have already started doing some work on that front. Yeah. I mean, we are in the process now of I mean, I would say that we have identified all the sites, one of the sites that should be part of the study with some margin. And we are in site visits and site negotiation. And I mean, they are not fully activated yet, but we are according to plan when it comes to that. And I would say that the interest is high. And I think we have very good sites in place with good energy and possibility to recruit patients later on. So definitely, we are on plan, on target when it comes to the site selection here. But I would say that we are in a very intense... Maybe as a second question, if I may. Sorry. Okay, got it. Yeah, thanks. So maybe then my second question would be, I was just wondering if you could share your thoughts regarding the H. pylori trial, meaning if you could expect some kind of short phase I study already being conducted in 2025, for example. When it comes to H. pylori, as we have said, we are looking into the program there now, what's needed, and actually the next steps there. And definitely, we will come back to the plans for H. pylori in a separate call, actually. So that is, we are mapping that now, and we will come back to you on that. But of course, when it comes to H. pylori, as you mentioned, what we already now see is that we, of course, need to look into finding the perfect dose for H. pylori in the eradication. So that is the first step, but that should be enough from a regulatory authority perspective to do only in a phase I trial. The next one, and then after we have that dose finding study in place, you can go directly to a phase III trial program. So you can actually skip to phase II, which is the standard when it comes to H. pylori as well. And the phase III program, as you know, it's a kind of a short two-week study program with two-week follow-up. And of course, you need to have two confirmative studies. But of course, it's another size of the study when it comes to financing a two-week study compared to a longer study. But I will come back on more exact plans for this. Okay, got it. Thank you. That was all on my side. The next question comes from Arvid Necander from Carnegie. Please go ahead. Good morning, and thanks for taking my questions, a couple if I may. So first off, on what seems like some pushback from the FDA when it comes to GAIN exclusivity for Voquezna, do your legal expert see any factors that could separate Voquezna and LG from previous cases when the FDA has granted GAIN exclusivity? Do you, for example, believe that the decision to include another API in the drug packaging for Voquezna for H. pylori could have mattered, or is this irrelevant? I'll start there. I mean, of course, you can always speculate here. But I mean, but the normal way is, of course, when you apply for a QIDP grant, you also state what kind of package you're going to have and specifically. And so that is quite clear. I suppose they have stated that as well as we have. I don't know if it could have affected that they actually had, I mean, eGERD and H. pylori were more or less launched the same day. They were reapproved, as you remember. H. pylori was approved first from FDA, and then it was stopped due to the nitrosamine pollution. And then when they had reapproval of H. pylori, that was the same day as the eGERD. I don't know if that could have affected. At least it affected the launch strategy where they only focused on eGERD and didn't do anything on H. pylori. I don't know if that has an impact on the value or the valuation from FDA. Could? I don't know. But overall, looking into the regulation here, it's quite clear with our advisors telling us if you have the first indication including the QIDP grant, that should be then that is for the data exclusivity you get is for the product. And if you prolong that, if you have an extension of that, that will come with the product and not with the indication. So that is quite clear. And we have seen examples of that in the past. But obviously, it's not totally clear for everyone. But if we will have another situation, we will definitely make sure if we go with H. pylori in the U.S. that we have a good margin to launch H. pylori first, and then as a follow-up indication, eGERD will come. So that is, of course, something that we need to make sure that, that should not be a question mark, that the order of the indication will be differently. In this case, you had two indications more or less at the same day. But I don't know if that has any effect or not in this case. But I mean, we cannot do more than what the regulation says. And of course, follow this closely and the actions that we will see most likely FDA will take accordingly to make sure that they are following this. But as I said, I think we are in a totally different position with a very strong IP setting with good patent situation for our substance. And that is in contrast to what we see with FDA. Great. Thanks for sharing that. And then secondly, just on the approval process and partnership in China, how much visibility do you have on the overall progress and regulatory dialogue? And when do you expect this drug to be approved in China? Our partners, Sinorda, they have had ongoing dialogue with the Chinese authorities. And it's under evaluation by the Chinese authorities. They don't have the same transparency, of course, when the date is coming. But still, we have the belief that this could come before that. I I mean, that is still our plan, that this should come before the end of this year. So no other information is stated neither from the Chinese authorities or from our partner. But I mean, it's not like the U.S. where you get the specific date. Okay. Thank you very much. Those were all my questions. Yeah. Great. Thank you. As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. Any other questions? We have some questions in the queue. I'm looking at that now. Yeah, we have some questions regarding China. I think we have already responded to that approval date. If we get an approval by the end of this year, then you normally have a reimbursement process thereafter. And that could take up to a year. So we should not expect any huge sales during 2025. The sales will come after the reimbursement approval. And that is the normal way of doing it in China. When it comes to licensing discussions, as I already mentioned, we are in dialogue with many different companies in different regions. And we are working there hard to get that forward. And you will know when we succeed, so to say. So yeah, that is what I can say, and of course, when it comes to the development steps we are looking into now. We do everything that's possible now to accelerate and work as hard as possible to deliver this as fast as possible when it comes to the first phase III trial, but also when it comes to financing for the next trials that we have in plan. Any other questions? Okay. Otherwise, I stop there, and thank you for your time. I wish you a great day, and we will stay in touch, and you will hear more from us in the future. Thank you for now. Thank you. Bye-bye.