Welcome to Cinclus Pharma Q2 Report 2025. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answers 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. Please go ahead. Hello and welcome to Cinclus Pharma's Second Quarter 2025 Earnings Call. As already introduced, I'm Christer Ahlberg and I'm the CEO of Cinclus Pharma. With me today is our CFO, Maria Engström, and Head of Corporate and Business Development, Jesper Wiklund. We will present the latest developments from the second quarter 2025 and the upcoming news flow, after which we will be happy to answer any questions you might have. Before we begin, I would like to share a quick reminder with our listeners that during today's call, management may make forward-looking statements that involve known and unknown risks, uncertainties, and other important factors beyond the company's control that could cause the company's actual results, performance, or achievements to be materially different from the expected results, performance, or achievements expressed or implied by such forward-looking statements. Please have a look at that. With those formalities out of the way, let me begin with a high-level overview of the company, including key business updates and investment highlights before we go into other activities in this presentation. What you know about Cinclus Pharma, I mean, we are a Swedish pharma company, or late-stage development company, headquartered in Stockholm and listed in Stockholm, Nasdaq Stockholm. We have the global rights for our lead candidate, Linaprazan glurate, where we have outlicensed and we have partners in Asia with Synmosa and sub-licensed partner in China with Shanghai Pharma, and the recent partner with Zentiva in Europe, who will come back more about that in the future here in the presentation. Linaprazan, as you know, is the next generation of PCABs and definitely a potential, a superior potential to become the best-in-class with a unique 24-hour acid control. PCABs, as you're aware of, is the first innovation and mode of action in the gastric and acid-related disorders in over 25 years. We, as a company, and our development is focusing very much on the high unmet medical need in patients suffering from severe erosive GERD. These patients are treated by specialists, the gastroenterologists, and that enables us to have a specialty commercial focus, which has many advantages in this area. It also gives us a blockbuster potential. Our unique prodrug gives us a unique pharmacogenetic and pharmacodynamic profile, leading to this 24-hour acid control. That gives us a very strong competitive edge and advantage compared to the old standard of care, proton pump inhibitors, PPIs, and the first generations of PCABs. We have very fast onset, a long duration, and a unique 24-hour acid control that gives us superior healing in half the time compared to anything else. Our ambition is also to deliver superior symptom relief. We have already delivered very good data in the phase II study, and we are now ready to start the phase III trial. We are expecting the last responses from the authorities near term. Thereafter, we are ready to go to initiate and start up the study. Everything is according to plan. As we see it, and as we have discussed earlier, we have a very much scientifically but also clinically de-risked development program with already proof of concept. We have very good phase II data delivering good efficacy and also good safety data. This is the final step now going forward with the phase III trial. The first study that we will initiate now is the first out of two healing studies that need to be done before a potential approval. It is also interesting to look at the market. PCABs, the first generation, is growing globally. We see that it has been launched in 30 countries globally and is definitely gaining traction in erosive GERD and symptomatic GERD, but also in the erosive GERD guidelines, which is definitely important. We see them in the guidelines in Asia. We also see them in the guidelines in the U.S. lately. From a sales point of view, we also see very good growth in Japan, close to $1 billion. South Korea, more than $200 million in sales, is growing significantly there. We also see a very good start for the first PCAB on the launch in the U.S. In South America, there is very interesting growth of sales, but also from a pricing point of view with $2-$3 per tablet, which is very good and healthy pricing. We also want to give you a little bit more information about the treatment. The key to success in this area is to control the acid production. The longer you can control the acid production and have a pH level above pH 4 in the stomach, the better chances you have to heal the patient. There is a linear correlation here. If you can keep the pH above 4, 100% over the 24 hours during a longer period, you know that you will heal the patients. This disease is caused by acid. What you do is to reduce it or get rid of it, and then you will heal the patients. It's not more complicated than that. Therefore, we think it would actually be interesting to plot the latest data from clinical studies into this line, as you can see in this linear line. If you do that, as an example here in the next slide, you can look at, for instance, the latest phase III trial from Linaprazan, where they actually also have an acid control, peak acid control approximately on 85%. On the CND patients, eight weeks, they delivered approximately a little bit more than 90%. That's spot on into the line here into the correlation that we already have shown. In the same study, they compared themselves with Lansoprazole 30 mg, and they have 66% acid control. If you look at the healing on these patients, eight weeks, it's also spot on the line in the correlation here. We know the latest PCAB in the U.S. and in Asia is Vonoprazan. They have less acid control than Linaprazan, below 80%. We expect them to be around 80% of healing. It is very much perfectly fit into this line. Looking then into our drug, we have 96% acid control. If you just put it on the line there, we are coming then close to 100% healing. This is an interesting analyze to do. I just wanted to give you that information now. This is just that's the reason why we think the biomarker with acid control is so important in this case. That gives us an indication of what we can expect in the future. Summary then of the key events for the quarter. Jesper will tell you much more about the strategic alliance and license agreement with Zentiva, which gave us a deal value of EUR 220 million in total, but also with very good royalty of approximately 20%. Jesper will give you more information about that shortly. We also have received a waiver from both EMA and FDA for the requirement to conduct pediatric studies of Linaprazan glurate for the treatment of Helicobacter pylori infection, which is, of course, gives us a better possibility to deliver that and make it more effective and faster. Also, during the quarter, it has very much been clarified from FDA that an indication with H. pylori gives five years data exclusivity extension in the U.S. for all indications for the substance if you go with H. pylori as the first indication. That's a good clarification, absolutely. We also have published the phase II results demonstrating high healing rates. I mean, we are actually delivering 93% healing for the severe patient in four weeks. We also deliver 100% of healing of the partial responders after the PPI treatment. This is, of course, very supporting in the continued development of Linaprazan glurate. Also very promising, I would say, in relation to what I just mentioned about the acid control. We have also participated in the biggest congress, DDW, in San Diego during the quarter, where we have presented new data confirming the potent and acid-blocking properties of Linaprazan glurate and the promising result from the optimized tablet formulation that will now be used in the phase III and as well in the commercialization later on. It's interesting to look at the market now. It's getting more and more interest within the specialists about erosive GERD. We have been the main sponsor of the gastroenterology conference organized of specialists in this area. That was in France. That was focusing on reflux diseases, which is, of course, a very good sign for the future. The specialists are starting to focus on this. With that, I stop and hand over the word now to Jesper. Okay. Thank you, Christer. The partnership that we did with Zentiva, it's for the commercialization and manufacturing of Linaprazan glurate in Europe. We outlicensed the European rights in this deal. Most importantly, we really view this as a strategic alliance. It's very much a very important transformation of the company of Cinclus and our capabilities if you look at it from a capability point of view. We now have, together with Zentiva, our partner, who we already have developed a very close working relationship with, we now possess every single expertise, every single thing that you need to develop, register, and commercialize this product in Europe. We have this at the level which any company that would be involved in this area would be very happy to have. It's a very, very strong set of capabilities that we have together with our partner. This now maximizes both the likelihood of the development success, but also registration, approval, and commercialization. It's really a de-risking from a commercial, from an operational point of view, of the probability of us actually reaching the market and being successful in the market in Europe. A few words about Zentiva. Zentiva is a very successful company now in Europe. They were formerly a part of Sanofi, were divested, were actually bought by Advent International in 2018. Advent, which is, as everyone on this call, I'm sure, knows, one of the world's really foremost and leading private equity companies, acquired essentially the manufacturing and generics business of Sanofi in 2018. They have since then, together with the management team of Zentiva, really created a very, very strong, operationally successful, execution-oriented company that has now a commercial presence in all relevant European markets. They have a special focus in gastro and metabolic diseases. It's really a perfect partner for us in terms of both where they are in their development and in terms of where they are commercially focused. We can say a few words here also about Zentiva and in terms of how this was very much a validation for us of what we're doing and of the commercial value and the future positioning of our product. We know, of course, because there's no other PCAB that's currently being developed or being registered and being prepared for commercialization in Europe, we know that Zentiva looked at every single PCAB. They chose ours after a very significant due diligence. They were really in there and looking for well over six months. It was an extremely thorough due diligence, turned over every single stone. At the end of that, they came out and decided to go with us, not because we're the furthest along, because we're not, but because we're the best. They really believe in Europe that you need to have something that is truly, truly a step forward and truly addressing the unmet medical need to have a strong commercial future to be able to get the pricing, etc., that one needs in Europe. If we look at the deal value and some of the numbers, as Christer already mentioned, it's a EUR 220 million total milestone deal, which is a very good number. These are divided up in Development milestones and in Commercial milestones. Most importantly, though, if you, as we do, believe in the commercial future of this product, we have a very attractive royalty rate. It's clustered around the 20% mark. It's a staggered royalty starting slightly below and ending slightly above 20%. If one considers the profitability of a product like this in the European market and you think about what 20% of net sales means, we are getting a very significant portion of the profitability of this product. It's really a very sort of sharing of both the profits and the entire commercial future of the product. Importantly for us, of course, also is that we had close to EUR 20 million, approximately $20 million in upfront and near-term payments, EUR 13 million of which were received as an upfront payment. We already have received that. EUR 5 million will come once we have delivered the first set of phase III data. As mentioned also, we retain full commercial rights outside of Europe, particularly the U.S., of course, not in the territories that we've already outlicensed to Synmosa, but over the rest of the world, we retain full commercial rights. If we take a step back and sort of consider, what does this deal, what do these numbers guide us to or tell us about what a future deal might look like or what is the commercial value of this product in the U.S., which is, of course, the large remaining market that we have still 100% control of? We know that there's a multiple, sort of the sales potential in the U.S. is a multiple of the sales potential in Europe. That's one very strong thing to consider. The second is that this deal that we now did was done with phase II data. We were able to demonstrate and show the phase II data. Based on that data, Zentiva, after this thorough due diligence, decided to do the deal. When we go out to look for commercialization partners or commercialization options based on the phase III data, which will be the next time that we do go out, we will then have phase III data and we will have the remaining market being multiples higher than this current market. We believe that this indication gives you some sort of guidance about what the future might look like if we were to do a deal for the U.S. rights. As an indication also of the importance of that to our company, if we were to do a deal for the U.S. rights, that in and of itself could be sufficient to fund, more than fund, the entire development program all the way to approval. That's one potential way that we can finance the entire development program. Given the fact that we already now have enough resources and financing, etc., to see through this first phase III trial, that could put us in a very interesting position from a financing point of view. Okay, good, Jesper. Should we go or anything else you wanted to mention? No. No? Okay. We go into the financials then. Yes. Thank you, Christer. The highlights for the quarter, cash at the end of the period ended up at SEK 589 million, including, of course, the out-of-form payment from Zentiva of SEK 12.4 million post-withholding taxes withdrawal. The R&D expenses ended up at SEK 54 million, of course, driven by the phase III preparation, which were a little bit higher in this quarter. That included the CMC activities and also the completion of some pre-clinical studies. The R&D expenses as a percentage of OpEx was 86%, which was higher than the average over the past eight quarters. We also saw a slight increase in the number of employees, which are now 20, and we have also, on top of that, 17 in-house consultants ending up at a total of 37 coworkers. If we go to the next slide, where we see the year-over-year financials, the net sales was SEK 34.1 million compared to last year. That is then reflecting the part of the upfront payment from the Zentiva contract, as we recognized as income for the quarter. The remaining part of the upfront, which in total was SEK 35.1 million, will be periodicized during the course of the phase III study. The operating expenses was SEK -42.7 million compared to last year. As I already mentioned, that was due to the phase III preparation, a little bit higher this quarter, and also including the CMC activities and the finalization of the pre-clinical studies. The G&A was also higher, and that was due to a one-time transaction expense for the Zentiva deal of SEK 18.5 million. EBIT ended up at SEK -8.6 million compared to last year, and that was reflecting the higher OpEx, but also the portion of the upfront payment recognized as income. Financial net SEK +0.3 million compared to last year, reflecting interest income on cash, but offset by unrealized losses of current liabilities. Tax, as described in earlier calls, is due to corporate and cantonal tax in our Swiss affiliate. Net profit then ended up at SEK -8.1 million compared to last year and impacted by the one-time transaction expense from the Zentiva deal, but also the revenue income from the upfront and the higher R&D expenses. If we go to the balance sheet then, other current assets, SEK +27.4 million compared to last year. It mainly is prepayment to the CRO. Cash SEK -95.8 million compared to last year, reflecting the Zentiva deal cash distribution, but also the phase III higher spending for the quarter. Non-current liabilities, a new item here, and that was positive or increased SEK 63.8 million compared to last year. That relates to deferred revenue recognition from the Zentiva contract beyond one year. The current liabilities is, for the same reason, increased with SEK 33.9 million compared to last year, and that is tied to the short-term portion of the Zentiva contract liability. If we go to the next slide, we can see our shareholders at the end of June. The picture is pretty much the same as last quarter. We have our founders in the top and also our IPO cornerstone investors still with us. With this, I hand over to you, Christer, again. Okay. Thank you, Maria. Here you have some important dates for your diary. Also, with that, I will continue to the Q&A session. 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 Arvid Necander from DNB Carnegie. Please go ahead. Good morning and thanks for taking my questions. First off, very good to see that preparations are finally coming to an end. Just to clarify, I think last quarter you said the study would start in Q3. Is this still the target? Secondly, Ferring seems to have sort of shifted their strategy to focus more on GEIs, where they've had much better success. On the one hand, I guess this would be supportive of your approach. On the other hand, it could mean that Ferring secures a stronger position in this setting ahead of your launch. Could you perhaps comment a little bit on how you see this impacting you? Do you expect to be able to convert a meaningful share of patients already on Voquezna, or do you expect most patients starting treatment with L-g to be new prescriptions? I'll start there. Thanks. Yes. Okay. Let's start with the first question. That's very easy. Yes, we are still working on the targets. No changes there. As I said initially, we are expecting the last response from authorities near term, and thereafter, we are ready to go. Second question regarding, and definitely, we also have seen the change of the strategy within Ferring. We understand them because, of course, when you're starting up a new area after more than two decades of silence, you need to take it with a top-down strategy, starting up with a specialist and then spreading it thereafter to more general practitioners. That's how you do it in pharma launch. I understand that they are now starting to work towards that strategy. With that said, I think they will be successful, and that's good for us also. I mean, PCABs, that is, I mean, PCABs will replace PPIs eventually. You have seen it in so many markets. It's just a matter of time. What you can say about, I mean, of course, if they now go into our direction in our strategy with a more specialized strategy, then it's important to look into the market. The market is definitely big enough to feed more than one player, especially for two different reasons, I would say. If you can deliver the best-in-class, which we are confident that we can deliver with the best acid control, which we have discussed so many times now, that would give us a unique position among the specialists. When it comes to the market dynamics, even though there are so many patients that will relapse also with the Linaprazan treatment, we can also see in their studies that 25% of the severe patients are relapsing within six months with Linaprazan. There will be many different switch opportunities here for us, even though we're coming years after them, especially if we can deliver the best acid control, which is the holy grail for all specialists. They know that if you have the best acid control, then definitely that is something that they want to use, especially for a patient that's actually relapsing. We are not worried about that. We think, though, it's very important that Linaprazan and Ferring succeed in the U.S. It will take some time for them because they are developing the market again. That takes time, and it takes efforts and resources. That will take time. Nevertheless, we want them to be successful. Thank you very much for that. I'll jump back in the queue. Any other questions? The next question comes from Oscar Haffen-Lamm from Stifel. Please go ahead. Yes. Hi, team. Thanks for taking my question. First of all, congrats on the progress this quarter. My question would be around the upcoming phase III trials. I mean, you'll need to recruit 500 patients for this first phase III. You're still getting for top-line data released around 2026. Just wondering, what do you anticipate in terms of recruitment pace for the trial? Any past benchmarks or examples that could guide us in terms of pace or in that kind? Thank you. Of course, we have learned quite a lot about the pace from the phase II trial. We have learned a little bit from the challenges there. Therefore, we also have quite many sites, as you know, approximately 100 sites of a little bit more than 500 patients. We also learned from the pace in both Ceballos and Fadden's phase III trials. We are quite updated on the pace, how long time it takes. We are talking about a recruitment time approximately of a year, something like that. You can start to calculate 100 sites, 500 patients in a year. It's less than one patient per site and month in pace. I think we have a good margin. We are ready to start now with different motivational factors and actions to be taken to actually recruit as fast as possible. Okay. Very clear. Thank you very much. Any other questions? As a reminder, if you wish to ask a question, please dial the pound key- five on your telephone keypad. I can add, we have some questions. There are no more questions at this time. I hand the conference back to the speakers for any closing comments. No. Actually, we have some more questions in the live chat here. A question regarding timescale for commercialization in Europe. As we have said, we're expecting approval approximately in 2029, 2030 in Europe. We're expecting a launch by that, by Zentiva. We have another question regarding the difference in design of phase II and III. Regarding endpoints, I would say overall, the endpoints and the design, the phase II trial was a design of dose finding study. It's a little bit different, but the endpoints are similar. We are expecting to repeat the outcome in the phase II trial. That is what we are aiming for. In the phase II trial, remember that we actually already there delivered superior healing in four weeks compared to the PPI Lansoprazole. We are going to use the same comparator in this study. We're going to look at healing in four weeks, but also in eight weeks. That is definitely something that we just need to repeat as a result. We, of course, are adding up other endpoints. We're looking into symptom relief. We are also in different symptom reliefs as well, which, of course, will be important differentiation factors in the future. Overall, the phase II and phase III trials are similar, I would say. Okay? No other questions? I think we stop there. I thank you for your time. I hope to see and talk to you soon again. Thank you. Bye-bye. Have a nice day.