Hello, and very welcome to DNB Carnegie Small and Micro-Cap Seminars. My name is Klas Palin, healthcare analyst at the bank. We will now start today's presentation, which will be Orexo. With me is CEO Nikolaj Sørensen. Very welcome. Thank you very much, Klas. Please go ahead with your presentation. Thank you very much. Pleased to be here. Today is also marking a little special day for Orexo. For those of you who have been following the company for a while, you know that we have been having an overhang with the Department of Justice in the U.S. This morning we could go out and announce more details about the progress in our negotiations with the Department of Justice, which mean that we are quite close to have a final agreement. I will come back to that a little later. It is also an exciting time for Orexo. We are in a transformation for the company, moving from a situation with ZUBSOLV in the U.S., which our own product, we sold that end of last year. Now we are moving into become more of a platform company, working with a pipeline of our own projects, but also working with the platform as a service or in partnership with other companies. What are the investment themes for the company? We are transforming into what you say, a scalable platform company. The basis for that is the AmorphOX platform. It is relatively unique because we have tested this in more than 20 different molecules, from small molecules to large molecules. For us to test a new molecule is not a significant amount of work. It takes just a few weeks of work for a scientist in our labs to do the first initial formulation to see, does this actually work? So far we have not found a molecule that we have not been able to test in the AmorphOX platform. That means we can offer the unique properties of the AmorphOX platform to other companies to help them creating a more stable bioavailable product, and I will come back to what that means. Orexo have been in the business since mid-1990s, and during that time, we have taken several products to the market all by our own. So we know what it takes to take a pharmaceutical product from idea to the market situation. We also done a lot of business development agreements, selling our products, out-licensing our products. We know what it takes to be a life science company who actually reached a commercial stage in comparison to a lot of other companies who are more stuck in the R&D situation. We have shown for the AmorphOX platform, we can use this both in terms of small molecules, which are quite easy, but also very sensitive large molecules like proteins used in vaccines. We can use it in different delivery methods. We are primarily testing it in nasal, but we are actually right now running an in vivo study together with an industrial player for an oral semaglutide product. To see, can we improve the bioavailability even in the oral route of the AmorphOX platform. We have a late to early stage pipeline, three products, and what we have is in anaphylaxis, so that is allergic shock. It is a big market. It is right now, last year it was a little north of $3 billion globally. But we also have two other products, one in opioid overdose, which we are planning to file with the FDA just within weeks from today. So it is very close to the market. And we have another one that is financed quite dominantly by the American authority BARDA, which will go to the market in about five to six years. We have several activities that are happening right now, and we will come back to that. We both have our, for example, the product that we are filing is within a few weeks, but we are also working actively with business development with our different, both our platform, but also with our product, which I am sure will be strong catalyst if we can announce positive progress on that. What is AmorphOX? AmorphOX is the center of what we work, and it feels like it's just one application, but it's more like a process and a technology. It has a lot of patents. We have patents, as you can see, those of you who know about patents, is that they normally are for 20 years. But we actually have patent applications sitting in right now that would take us all the way to 2047. On top of the patent, we also have process knowledge that is very difficult to copy. We're using standard equipment, but we're doing process changes, and we're doing small tweaks to the standard equipment to be able to have a very homogeneous powder in the amorphous state. And we've seen that if you just change that back to pure standard equipment, you will fail to produce a powder that meets the specifications. And we've done that, as I said, in more than 200 molecules, more than 500 batches. That means that we're produced internally at Orexo. We tested this in clinical trials, and we have not seen one clinical trial where the bioavailability of our technology is not superior to other alternatives. We have not seen any side effects from the technology. And then, of course, the API, depending on which one can have their own profile. And we have today a pipeline where we have two products that are likely to reach FDA approval within the next one to two years. Finally, we have our engineering, which is quite interesting. If you look at, just follow, of course, like you, I'm sure, follow other Swedish pharmaceutical companies and see what are the reasons for not meeting the timeline and what comes again and again. It's actually in manufacturing. We have a lot of focus on life science, on clinical trials, but it's actually the ability to manufacture and meeting the requirements has become a higher and higher hurdle. And we now have a process for our AmorphOX platform set up in Switzerland and Canada that have been FDA inspected and meets the FDA requirements. So what is happening at Orexo? We have moved from selling off our U.S. entity together with a lot of employees, we got $91 million plus an earn-out of up to $16.8 million. First payment of that will be next year, and the other one comes the year after. Right now, just looking at the sales, if you had access to ZUBSOLV sales data in the U.S., you will actually see they are slightly ahead of our sales last year. Dexcel have expanded the field force in the U.S., and it looks like that gives them some result on sales. The good thing by that is that increases the share of the earn-out that we will receive. After that, we have been in this restructuring phase, and that has been quite significant. It's kind of untangling the organization that has been moved to Dexcel. It's laying off people in both Sweden and the U.S. It is exiting existing supplier contracts in the U.S., both with our digital business that we closed down a year ago, but also with everything from office leases and others in the U.S. And then it's about the balance sheet, because what happens in the U.S. is that you're supplying product to the market, and we actually still have ZUBSOLV product in the market in the U.S. that was sold by Orexo. When the rebates coming in from that, Orexo still has to pay that, and we can monitor which package has been sold when. Same if some of the pharmacies are returning the package, they can do that in the U.S. That will also go back to Orexo. That is fading dramatically right now, and we expect that most of that will be gone after Q3. Then finally, the big thing for me has spending countless of hours, both late nights and weekends, to resolve the Department of Justice investigation. Those of you who have been following us know that in July of 2020, we had a subpoena issued by the Department of Justice, and that has been following the company since then. It is an immense pressure on management. It is an immense pressure on the company and on the stock price, I am sure, just looking at how the stock price popped up today with a few percent is showing the uncertainty, anxiety. We now reached a settlement agreement in principle. That means that we have talked to the Department of Justice. We have an agreement about the head of terms. There are some details that still needs to be negotiated, but we do not see any risk of the major terms moving around. The big uncertainty right now is a little around the payment schedule. We have two employees also who are subject for the same subpoena, and they are doing their own investigation. Even though we know the head of terms, they are individuals, and they can do their own negotiation. As all of you who have been employees know that if there is a civil settlement, then Orexo will indemnify that. But then there are certain circumstances around that we need to investigate before we can clarify that. The employees are covered by an insurance, so we will make an insurance claim for whatever number comes out of these two employees' settlement. This came out this morning, and it is a significant progress and takes a lot of burden on me and a lot of my fellow management colleagues at the company. What we can focus on now is moving the transformation into this global leadership in amorphous powder. I would say we are already there. It sounds a little, okay, you are a very small company, but looking at other companies who have been struggling to find that amorphous state, it is very hard to get something that is stable. We are there right now. We have projects that are getting very close to a value inflection. We have one, as I said, going into FDA in just a few weeks. We have another one that is entering into the most important pivotal trial here during Q4. Then we are working with partnerships around the amorphous technology. We have had several partnerships. Those who have been following us, we have gone out with partnerships during the years, and not that many of them have converted yet into something that is a true partnership with big payments to Orexo. We have ongoing partnerships. We have new partnerships all the time, companies that are testing. What is tricky, to be very transparent, is that for us to do a partnership with the R&D department is relatively easy because they understand the value of this. Moving over to the actual commercial situation takes a longer time, and that is more of a timing issue. We have some quite interesting, not at least from a scientific perspective, partnerships coming up with our AmorphOX technology. One of the things that we can that I think some of the companies we are talking to recognize quite fast is we have a heritage. We have brought four products to the market. We have made partnerships with quite substantial players in the history, and we have taken products from Orexo. We have led the market approval in more than 25 markets. The basis for the future is this AmorphOX technology. It has been eight years on the way. It is both the manufacturing process for emergency products is very complex. It needs to meet a reliability of 99.999%. I just wonder how many of you knows of any other product that needs to have a reliability of 99.999%. That is quite difficult to set up that manufacturing process. We have done that, and that has been inspected by the FDA. That has caused some of the investments we have done during these eight years, which of course is developing the products also. It is very versatile. Where we see that we can move, it is quite easy to make it in small molecules. That is kind of typical pharmaceutical products. What gets complex is when you get into biomolecules and vaccines. Very unstable, very difficult to get bioavailability. A lot of them requires injection. We have shown that we can actually give it through the nasal, some of these biomolecules, in quite good bioavailability. Not at least as important is that we can also do that in room temperature. We have even tested some of the products, like some proteins used for vaccines, in up to 40 degrees Celsius, and they otherwise need to be frozen, and we have kept them stable. The focus that we have, I would say we are working in three arms. One is what we call Explore. That is when we are testing our technology on new areas like vaccines, like GLP-1 agonists, like semaglutide. It is simply to test the borders of where we are. We would like to do that in partnership with other companies. We have done that together with Swedish company, Abera. We are now working also with a U.S. company to test in the vaccine space. Very early stage, but still, it is very interesting just looking in the molecule that they have is something, if we can prove that that works, it will be transformative for how you can formulate vaccines. We have our Develop. This is our heritage from what we have done for the last few years. We have three projects, OX124 or Izipry, which is for overdose treatment, OX640 for anaphylaxis shock, and the one is for adulterated opioids, OX390, which to the majority is financed by the U.S. government. We are taking those to value inflection. The strategy moving forward is before we take a full-own projects, we would actually like to have more partners in place in an earlier stage to reduce risk and cost for the company. We are just simply taking our technology and say to other companies, like vaccine companies and others, say, "We have a technology. If you think this can create value to your proprietary projects, we are here to help you. We are doing tests together with other companies on this. Some of them very early stage, some of them a little more advanced. So our pipeline right now is we have in the exploratory phase, the one that we can disclose, we have the GLP-1 agonist, we have a vaccine. With the GLP-1 agonist, what is quite interesting is that we are working on an oral formulation, as I said, to test it in vivo. That means animal testing to see if we can improve the bioavailability. Those of you who have been following that space knows that Wegovy, for example, for Novo Nordisk, have a very low bioavailability. If you can improve that just a little, that will have significant impact on cost of goods, but also on the supply of the product, because right now, even though we talked about Novo Nordisk, and we see Eli Lilly taking more space, there is still more demand than there is supply of semaglutide. So if you can improve the technology, the bioavailability, meaning reducing the dose, then it has a significant meaning for players in the field. Then we have our own projects, and we went through that, and we have our launch products. I will come back to own projects in a short moment. We have our launch products that are partnerships. One is ZUBSOLV we sold to Dexcel, but just a reminder, we still have an earn-out of up to $16.8 million with ZUBSOLV in Europe. It is just being relaunched using the own manufacturing facility of Accord Healthcare. Why is that important? It is because it was really expensive for us to supply from the U.S. But now they have set up an own manufacturing in Europe that should facilitate for Accord Healthcare to sell ZUBSOLV in Europe. Then we have ABSTRAL and EDLUAR, old products still generating some royalties, but on a quite low level. If you cannot balance on one foot for 30 seconds, I beg you to try this. You do not need to train harder. You need seven minutes that count. Follow this seven minutes of Tai Chi every morning, all the way for one month. In one week, you will feel better. In two weeks, you will look better. In one month, your wife will not believe your results. Here is a printable Tai Chi workout plan made for men over 50. These beginner-friendly exercises take just seven minutes a day. Tai Chi helps men feel lighter, relieve back pain, and wake up with more energy every day. It is more than a workout. It is a game changer for your health and longevity. Get your printable and follow along. Chair Tai Chi, the kind of movement lazy men over 60 actually stick with if they want to feel stronger without going to the gym. I wanted to stay strong and keep my muscles active, but traditional workouts felt too hard on my body. A friend suggested this app, so I tried the chair Tai Chi program for men over 50, designed to build muscle strength. The exercises are gentle and easy, yet activate deep muscles and improve stability. After one week, my muscles felt more engaged. Two weeks in, my balance and core got stronger. After a month, I moved with confidence and strength again. All I had to do was open the app and follow along. Why do we think OX640 is interesting? This is for the anaphylactic shock. First of all, it is incredibly stable. It is a product that does not degrade whatsoever, and there is no other product for nasal or for injectable that have a similar profile. We have tested this in up to 50 degrees Celsius, and we do not see any degradation. If you look at even the Neffy product that is on the market right now, it degrades with somewhere 7%-8% every six months. So it reduces the effect. The same goes for EPIPEN. They reduces, if some of you, statistically, at least two of you should have an EPIPEN. But if you look at that, the expiry date is often less than a year when you get out of the pharmacy. We have an opportunity probably to take this to a product that is not sensitive to temperature. You can take it when it is cold, when it is hot, and it will be stable for several years. What is equally important is how fast it works. Now we have not done a head-to-head study, but if you should look at the curve for the nasal product that is on the market right now, which after a little slow start, actually a pretty good second quarter this year, you will see that our curve here, in particular the pink curve, is when we have tested this under what we call nasal allergen challenge. That means that we are basically creating an allergic reaction in the persons, people who are pollen allergic. So we blow in pollen into the nose, and then we see after we have a full reaction, you give them 640, and you see a very, very rapid effect. That is the pink curve. The same if you go for the red curve, we have a quite, even though it does not look that quick, but if you should look at Neffy, for example, you will see that the curve is actually much faster than the other nasal product in the market. What is most important is to get approval. We need to be at least as good as the black curve, which is in the bottom. The bigger risk we have is maybe if we go too high, is that we get up to levels where you will get some cardiovascular risk factors coming in. But comparing to the auto-injector EPIPEN, we are still below that, so we should be in a pretty safe spot from that perspective. Then we have Izipry. Izipry is a high-dose naloxone product. We are literally working on the file right now with the FDA. Everything has gone well in our refiling. We got a complete response letter a few years back because we needed to test to meet that reliability, not on the actual product, not on the clinical data, but that the device combined with the product does not lose its reliability over time. We need to do this, simply put it, and to accelerate it, we put it up to 45 degrees. Instead of room temperature, we use 45 degrees to have an accelerated stability. Then we have to test the devices that they still work as they should after three, six, and nine months. We are at that point right now, so we are ready to file it. The market in the U.S. is interesting because it has gone very much towards low dose, relatively cheap because they made it non-prescription. This is a prescription product, but what we see right now, in particular, the reports from Emergent who has a high dose, is that they actually see that the high dose is compensating for some of the loss on the low dose. There starts to be a high-dose market in the U.S., probably driven by very few people overdose with pure heroin or painkillers. They overdose with fentanyl, and you require normally two to three times the dose that you get with the prescription-free products that are on the market right now. Can you describe what type of product is it? Can you explain that? This is a naloxone product. Naloxone is basically binding to the same receptors as opioids. If you have an overdose of an opioid, the naloxone will basically knock off the opioids from the receptor and bind to the same receptor. Then the opioids will basically just run out of the body because the naloxone has a longer half-life than the opioids. You basically take, you get an overdose, and you can be literally close to be dead. Then you get naloxone, and a few minutes after, you can raise up. Then you get severe withdrawal symptoms because you basically knock off all of these opioids that are giving you a high immediately. Then you get, the receptors start working again and sending signals to the brain that you should breathe. What happens when you get an overdose for opioids is that you get the signals from the brain that you should continue breathing stops down to a level where you simply just stop breathing, and then you die. Then we have OX390. This is addressing a problem that is moving, that some people call the fourth wave of addiction in the U.S. I just saw the latest statistics. We see that people today are getting overdose with pure heroin or pure fentanyl is dropping, but they are mixing it with other products. One of the products they are mixing with is something called alpha-2 agonist. It is used every day by any veterinary clinics around the world to sedate animals. For some reason, that has been popular among addicts in the U.S. We see that curve is just on the rise. We've seen it started something called xylazine, and now it's something called medetomidine. We see now medetomidine is overtaking xylazine. Just like we saw with heroin starting up, and then fentanyl came 50 times as powerful as heroin, we see the same here. The new alpha-2 agonist that is mixed up with fentanyl is much more powerful. We got up to $51 million from the U.S. government to develop an overdose treatment against this combination of fentanyl and alpha-2 agonist. Here, there's literally very little risk from Orexo. Most of the project is paid by the U.S. government. Then finally, we have our semaglutide. We did a first nasal study where we saw much better uptake than what you saw with the oral. This is comparing with RYBELSUS 7 mg. You see we had a much higher uptake in the nasal spray. Okay, this looks fantastic, but to be true, the Wegovy tablet that are out there right now has actually much better bioavailability than RYBELSUS, which was the first tablet that were out there. We need to work on the bioavailability, and we're doing that. We would like to do that together with a partner, so we're looking for that at the moment. But we do have an industrial partner who have an idea that we could use our AmorphOX platform for an oral tablet and improving the oral bioavailability. So we're running in vivo study at that at the moment, which is early stage, so we will see. It's the first formulations that we're testing orally for AmorphOX. Then we tested a vaccine together with Swedish company, Abera, and where we saw the same immune response as they had with their standard formulation. But we have a much more stable product than they have, even though their product, when it's frozen, it's quite stable. Our business model moving forward, it is around. Right now, we got the money from ZUBSOLV. We are working with business development partnerships, and we're also looking at BARDA for additional funding. This is something. We get royalties from ZUBSOLV. We are looking to divest our projects that are getting into the late stage. Since we closed down our commercial operations, Izipry will not be launched by Orexo. Then we're looking to find partners who will fund the organization, help to fund the activities in the organization, and basically give us access to future royalties and milestone. So why Orexo right now? Basically, we're in a process ongoing at the moment with the partnering OX640. We're waiting for the results of the ongoing clinical trial. We have Izipry filing. Also something that we know from feedback from potential partners, these are important milestones, in particular in light of the complete response letter that we received before. We're expanding our AmorphOX partnerships simply to reduce cost initially, but also get a part of a future upside. Then we're looking to new growth areas where we can end up just like the GLP-1 agonist and other products in the same category. With that, I will open up for questions. Thank you so much, Nikolaj. If you have questions to Nikolaj, please raise your hand and I can hand you the mic. This is for the live audience and for the recording. I will start up with today's news, with the preliminary settlement. How satisfied are you with the terms, if you can comment on this? I am not satisfied at all because I do not think we have done anything wrong. We have had legal assessments throughout the period of launch. We had two different law firms looking into our conduct even before they started the process, saying that we are compliant. Every single marketing piece and training has been reviewed by external lawyers, and that we are now ending up in such a, I cannot say the right word that I am thinking, but it has been very cumbersome. I do not think we should pay anything at all. I was told when they started, "You will never get out of this without doing a settlement." Every lawyer I have talked to in the U.S. say they never close down. They want their money back for the money they have spent on doing the investigation. That is about where we landed, is kind of to cover the expenses of where they are. So in that light, I think this is acceptable, but I can never call it good. Compared to where we started that dialogue, we are a fraction of the settlement amounts that they started the negotiations on. What happens now in the process? What should we expect is the next step? We need to finalize some of the details we haven't disclosed. We also have two individuals who are under investigation, and they need to do their settlement agreements with the government. The government right now wants all settlement agreements to be done in parallel, so we need to wait for them to reach their settlement. We do have both emails and several conversations confirming these are the head of terms, so this should not move. What we disclosed today should not move. Okay. Perfect. You talked a little bit about the right value inflection points in your pipeline projects. If you just could comment a little bit about OX640. There's a lot of interest, of course, about this program from your shareholders. When do you think is the right time to partner, and where you could get the best terms out of such a deal? We have been looking for partners. As those who've been following us for a while, we have been very close to have a partnership in place. But for different reasons external to Orexo, that didn't materialize. We do get feedback from partners who are some of the typical companies that some of you tend to mention to me in text messages and others, that we should partner with this company. They have asked to see data on the final formulation in a, what you call, a pivotal trial. In particular on the nasal allergen challenge, because that's where some of the other nasal products have had issues. So even though we have a lot of data showing our bioavailability, we have made adjustments to the formulation, we have made some adjustments to the dose, and the data we have, all of this, so we have several data points, but it's made by different formulations. Now they want to see one big study on the right formulation. That's what we are planning to start here in Q4 with results in Q1 next year. Do you find the interest about anaphylaxis nasal delivery treatments still strong out there in the industry, or has this faded a little bit as we have seen Neffy uptake is not perhaps that great that initially thought? No. I think that was one of the issues last year, is that when we were in negotiations, they came with a Q2 result or Q2 sales number in August last year, and that was compared to what they have set in partnership discussions because they have also been looking for partners. They were much slower. The development quarter-over-quarter was not that great, and people started to say, "Okay, they're investing a lot of money. They're investing close to $50 million per quarter in sales and marketing. Is this really going to fly?" I think that has been following a little that you haven't really seen this hockey stick develop yet. The quarter-over-quarter development Q3 was good last year, which is normally what they call back to school. It's normally a strong quarter. Q4 and Q1 this year were actually lower than the Q3 results. Even though you have a strong seasonal effect in Q3, when you're in a launch, you would actually like to see them grow even quarter-over-quarter. The Q2 numbers are very close to the Q3 numbers last year and were significantly higher than the Q4 and Q1. I think this is hopefully a start of a hockey stick of development, because if they can show growth on Q3 compared to Q3 last year, then that will be a big sign that they are now breaking through the ice. What is interesting to see in Europe is that they get a price premium approved in all markets. That's ALK, the Danish company who are promoting that. In the U.S., they also have a price premium to the EPIPEN. So there's clearly a value recognition from the payers. We have done market research, and we have not found any single respondent who do not prefer the nasal formulation if the products are equally effective. Do we have any questions from the audience? If not, then if you could just also describe a little bit your view on the commercial potential for Izipry. Izipry has been a little in a roller coaster because first we saw our biggest competitor, NARCAN, they lost their patent. Then we saw, first a few products, but then we saw a little landslide of new products coming into the market, then you got it OTC, so it means prescription free. That started to move, so the price point is getting down, but then you start to see more and more reports to say the standard treatment for first responders today is not to use one of those prescription free. They are using two or three nasal devices immediately, because they see that one is never enough when you overdose with fentanyl. So we actually start to see, if you can replace two or three with one, then you have up to three times the price of that one. That is interesting to see now in the U.S., there are two high-dose nasal products, KLOXXADO, and there is another one launched last year, and they actually start to take some part of the market and is mentioned explicitly, for example, from Emergent in their quarterly reports, who are promoting KLOXXADO. So I see the logic that why we took a high dose is you need a higher dose to reverse an overdose with fentanyl, who is that much stronger than heroin and painkillers. I start to see that in the market also. People recognize you need a higher dose. Even though the withdrawal symptoms might get higher, then at least the people have a higher chance of surviving. My final question, we are running out of time. Yes, what should we look out for from Orexo in the next six months that we could hope with some good news? Six months, we have Izipry coming in quite soon. We have OX640 results coming in early next year, and we have ongoing continuous partner dialogue, and hopefully, some of them can be made public, so in the sense that we go from exploratory to actually do something concrete with the companies, so say we have a development program together. So that is an ambition also. Then I would say if you take the early stage, then, of course, any data that we can show on vaccines and on GLP-1 agonist would be a significant upside, you can say. It is like an option. If you really make that, I think we can transform into something very different. The in vivo results of the semaglutide, I do not want to build up expectations, but if we do show good results, I think that is really good, but I would be a little cautious to build that into the valuation before we have seen the results. It is our first test ever in an oral formulation using the AmorphOX technology. Okay. Thank you so much, Nikolaj. Thank you. And thank you, the audience, for watching. Thank you for listening.