Good afternoon, everybody. Welcome to Xbrane's Capital Markets Day. This is our first Capital Markets Day in our new premises here at Campus Solna in Stockholm. My name is Anette Lindqvist, and as the CFO and also Head of IR, it's my pleasure to guide you through the next couple of hours. Some practicalities before we start. We would welcome questions and any feedback that you would like to give us. We'll end the sessions today with a Q&A. We sincerely hope for good questions. You will see two windows on the screen. One is the speaker, and one is the presentation. In the bottom left corner, there should be a button named Write a Question. Please use that feature for later. With that, I would like to introduce the first speaker of the day, Xbrane's Chairman of the Board, Anders Tullgren. Anders has a Master of Science degree in pharmacy from Uppsala University and brings more than 35 years of experience from the global biotech pharmaceutical sector. Anders has had senior executive roles in multiple countries, including the U.S., the U.K., Germany, France, and the Nordic countries, having worked both for AstraZeneca and Bristol Myers Squibb, to name a few. Today, he's an appreciated member of several international boards, and he's been the chairman of Xbrane since 2015. With this, please, Anders. Thank you very much, Anette, I'm very excited to be here together with all of you and to the senior management team of Xbrane to talk about Xbrane and also what we have done so far but also the journey ahead of us. There's three things we will focus on today. First is talking about Xlucane, our first product, and I'm very happy to say that last week we actually had the last patient's six months visit. That means that we are in line to actually be presenting the top-line results from that study mid-year, and then the filing for Europe and the U.S. end of this year, and the planned commercial launch towards the end of 2022. The second thing we want to talk about today is our investment in R&D. We are doing a significant upgrade of our R&D capacity, that is also, of course, one of the reasons that we're moving into the new facilities at Campus Solna. We will talk more about that and also our new target to develop one new biosimilar candidate per year moving forward. The third point we want to talk about today as well is that we do this additional investment in R&D, but we also, of course, is calculating on the revenue for our first product, Xlucane, and this together will make us cash flow positive. That's our ambition, at the operational cash flow positive by the end of 2023, early 2024. Let me go to the first slide. If I can have the first slide. Okay. In on this slide, we can see that it all started with actually the LEMO technology. This was a scientific breakthrough from Stockholm University. The company was founded back in 2008 based on this technology. This technology, we'll talk more about this LEMO technology, but in principle, what it means is that you can get out more proteins. You have a higher yield. What is the consequence of a higher yield? That is actually that your production cost can go down. When it comes to this biosimilar market, this is of course very important to stay competitive is that you can have a very low production cost. We will come back to that. That was a scientific breakthrough that led to the formation of the company. In the beginning, the company was actually working with major pharmaceutical companies, like a fee for service. We helped them with our LEMO technology to develop their biologic products. After a while, there was, of course, a question about could we not do this ourselves? Instead of going for a novel biologic, we said, why not go for the biosimilars? The biosimilar market or a company working in that market, it's interesting because you need a very high level of science, and at the same time, you actually have a lower risk than what you have when you produce a novel product. Martin will talk more about that. We think it's a very interesting market. You have to be very careful of choosing the right biosimilar products. For some of them, there is a couple of biosimilars. From other biologics, there is many. You have to be very strategic in that choice. The first product we choose was Xlucane. We started with a preclinical program. We moved it into a major clinical trial with 583 patients called Xplore. That is the study where we are waiting for the top-line results in mid-2021. The company also developed a strategic partnership and commercial partners. The first agreement we signed was with STADA in 2018. STADA is a major German generic and biosimilar company with more than 10,000 employees. They were looking for biosimilar targets. They did a thorough due diligence of Xbrane. We signed an agreement in 2018. The agreement, in short, is that we are responsible for the preclinical and clinical research and also the scale-up of the production and the production capacity. They will do the commercial launch with their major salesforce around the world. The way that we did that partnership was also very strategic because we formed a sort of joint venture. We, as a small company growing very fast, could also piggyback on their experience when it comes to clinical trials, when it comes to production, supply chain, and all of this. In 2020, we signed another agreement with Bausch + Lomb, one of the major eye companies in the world, for the U.S. market. We have very good commercial plans, and together with them, we are, of course, now planning for the commercial launch of Xlucane at the end of next year. When it comes to the company, we went out on the Nasdaq. We did an IPO back in 2016, and you can see from this slide is the development of the market cap. In 2019, we went up to the main market small cap. Today we have a market cap of around SEK 3 billion. If I now can have my next slide. Here we can see the biosimilar market and the projected growth in the biosimilar market until 2025. You can see on this chart that we are actually growing 25%. This is one of the markets with the highest growth in the pharma market. The overall global pharma market, within this year's, the projected increase in revenue for the overall market is only 2%-3%. If you compare that with 25% in the biosimilar market, it is a very interesting segment to compete in. The other thing is that we are quite unique. In the Swedish stock market, there is probably more than 100 life science companies. We are the only one that's focusing on biosimilar, this fast-growing market segment. Our vision is to become one of the global players here. There is other companies like us in the U.S., in Europe, in Asia, but we want to be one of the leading company, and that's another vision that we have. The second thing is, of course, which is always one of the most important thing, is to build your teams, build your competencies. Of course, we also need new facilities, and that's why we today want to introduce the new facility as Campus Solna. That's an opportunity as we continue to grow, attract very important scientists, and growing the company. The third point here on the chart is actually how we are going forward. What we're going forward with is the launch of Xlucane, generating revenue. The second thing is actually to be investing in the R&D, and you can see from the chart to the left, we are continuing to investing more in R&D. We're planning to do that. Because of the revenue that we can get from Xlucane, we feel confident to have an ambition to be operationally cash flow positive by the end of 2023 or beginning of 2024. This is a little bit of a snapshot of where we are as a company, where we're heading, and I want to leave it back to Anette and the team for going into more of the details of our journey forward. Thank you. Many thanks, Anders, and I'm sure that there will be some interesting questions for you later. With that, I would like to welcome Xbrane CEO, Martin Åmark. Martin has been our CEO since 2015, and you will share some insights into the biosimilar market and also on the Xlucane, give us a status update. Martin holds a degree in industrial engineering and an MBA from INSEAD, followed by a successful career as a management consultant with Bain & Company, working primarily in the life science and pharmaceutical sector. With that, welcome, Martin. Thank you very much. I'm very happy to be able to arrange this Capital Markets Day and be able to spend a little bit more time with all of you who are investors or considering to invest into Xbrane. Although circumstances are as they are, and we do it in a virtual manner, I really would like to urge you to try to make the most out of it and ask as many questions as possible to us. We should try to clarify that and have a discussion around it when we come to the end. First of all, since we have a little bit more time, I wanted to go through maybe in a little bit more depth than I typically do, the market that we operate in, the biosimilar market. If we look at the pharmaceutical market, it's typical to split it up in two distinct segments. We talk about small molecules, which are produced chemically, and we talk about biologics, which are much larger molecules, and they are produced via so-called recombinant DNA technology. They are so complex in the structure, so large that they cannot be produced chemically. If you want to get an analogy of the difference in terms of size and complexity, what you see on this picture, a bicycle versus an airplane, is something which resembles the difference in complexity. If you look at the biological market, it currently represents 40% of the global pharmaceutical market, and it significantly outgrows the small molecule market. We're looking at some 10%, 15% annual growth in the biological segment. If you look at a small molecule market, as many of you know, when the patent goes out on an originator product, which has a small molecule as active ingredient, we talk about generics. We can produce an identical copy of the active ingredient and come out with so-called generic post-patent expiry. In the biological world, something similar has to exist, of course, and the similar concept is a biosimilar. This is because these molecules are so large and complex in their structure that you cannot come up with an identical copy. You come up with something which is highly similar, and you demonstrate it to be highly similar analytically and clinically, and therefore it's called biosimilar, but it's launched post patent expiry of the respective originator product. That is what we do. We develop biosimilars. We like this segment. It allows us really to develop products quicker, cheaper, and with lower risk than if we were to be doing novel drugs. It typically takes us six to seven years to develop a biosimilar. We need to invest approximately EUR 100 million into such a program, but we do it at a significantly lower risk. For example, when we're going to phase III, we typically stand a 95% probability of getting to market approval, and this is judging by the history of biosimilar development programs. That stands in contrast to similar success rate of a novel biological drug, which is approximately 50%. The risk when we go into phase III is really reduced and really much, much, much lower than if we're talking about the novel biological drug. The process, just to give you an idea, when we start the preclinical development of a biosimilar, what we do is that we procure on the market several batches of the originator product. We analyze it, we set up a production process internally, we then look what we get in terms of the protein, we can demonstrate it to be highly similar, analytically speaking, with 20 or so different analytical methods compared to the originator product. As per the regulatory framework, we need then to demonstrate that the product also is similar from a clinical perspective. We do that, typically speaking, in first phase I trial, where we need to demonstrate bioequivalence, then a phase III trial in a well-selected patient population where we need to demonstrate equivalent efficacy and safety compared to the originator. That's the rough development process. Also what we like with the biosimilar market is that this product has been received very well by the market. You can look at the so-called penetration curves here. That is to say, the volume market share of the biosimilars respective to their respective originator product over time from launch, and in Europe on the left-hand side and the U.S. on the right-hand side. We can see both now in Europe and the U.S., actually, in the most recent launches, that biosimilars took 40% volume market share at month 12 compared to the respective originator product. That is really quick uptake, and you need to take into consideration here that we're talking about markets which typically are several billions of euro. These are big markets, big products, which the biosimilars are introduced to. As an average for all these situations, we've seen two to three biosimilars per originator product, and that has resulted in a price discount of some 20%-40% compared to pre-patent expiry pricing of the originator. It's a really strong market uptake, and we're very happy to see now that we've seen almost a paradigm shift in the U.S. during 2020 with some really successful launches which resembles more the experience we've had in Europe. The reason that we actually see so few biosimilars per originator product, two to three biosimilars, that is because this is a market with high barriers of entry. There are three main things we need to consider here. First, the competencies and the capabilities required to develop a biosimilar in the first place. You need to have the competencies with regards to cell line development, with regards to fermentation, purification, analytics, and so on. Not so many companies globally have all those competencies under one roof to be able to do this. The second thing is the need for technologies which allow for what Anders described at the beginning, high yield, which then translates into low cost. More important in some segments than others, but generally speaking, important, of course. If you are a pure-play developer, like we are, you need to be able to find a way to the market, to the patient somehow. You need to have the capability to outlicense or partnering up with companies engaged in commercializing the biosimilars. Now, I do believe that we have a proven track record, what we've done with Xlucane. We have developed a biosimilar from cell line, soon to approval. It's in phase III. We'll talk more about that later. We have a patented platform technology, which David will talk more about today, which gives us significantly higher yield compared to standard systems. Therefore, also a low production cost. We have established partnerships with great companies that are going to take our first product to market in STADA and Bausch + Lomb. We need to mention a few things here. With regards to our platform technology, which we call LEMO, it has been demonstrated to give a significantly higher yield compared to standard system. What is yield? Well, it's gram of target protein per liter fermentation media, what we get in the process. You need to imagine that we have the cells which are expressing the protein in larger fermentation tanks. We go to a contract manufacturer, and we pay a fixed cost for occupying that site at a certain time, at a certain scale. Of course, if we can get five grams instead of one gram of the target protein we have as an active ingredient in our biosimilar, then it has a radical impact on the unit cost per syringe of bio, 5x yield can lead to 80% cost reduction for the drug substance. That's very meaningful. That's a very powerful technology that we have as a foundation for all our development programs. It's a really interesting market development now. The market is predicted to grow at some 25% per year coming five years. It's a really rapidly growing market, probably one of the fastest growing segments in the pharmaceutical market, and really sound growth drivers behind. On the one hand, of course, patent expirations of multiple blockbuster biologics within this timeframe, increased usage of the biosimilars by physicians and patients. Over time, since we've had biosimilars on the market in Europe since 2006 and in the U.S. since 2015, an increased knowledge and understanding of biosimilars, and also the fact that we have had biosimilars so long time on the market without any severe adverse events. It really gives an increased acceptance to be using these products instead of the more expensive originator drugs amongst physicians and patients. Also, of course, the pressure from the payers who ultimately are paying for the pharmaceuticals. There's a strong pressure from them to be driving towards the most cost-efficient alternative. We are, of course, tapping into this market. We're doing it in an ecosystem, and we are engaged in the so-called development of biosimilars. We take products from cell line to approval, but we do not have the infrastructure or capability ourselves to sell and market the products. For that, we partner up with larger pharmaceutical companies like we've done with, for example, STADA for our lead product, Xlucane. What we need to consider with regards to what we need to get right in our development programs in order to be able to strike such partnerships are the following things. We need to select wisely the products we go for. Biosimilars where we believe that there's going to be a great desire or need amongst the pharmaceutical companies engaged in sales and marketing of biosimilars, and also limited competition from a development perspective. We also, of course, need to make sure that we have all the capabilities to take the product to market, and we are credible in doing so. We want to be a credible partner. It's like almost buying a house, which we, in a way, are selling when we put the foundation. If we're talking about doing a partnership deal at the preclinical stage, we need to be credible with regards to that we're going to be able to finalize the house in time. We need to plan our programs and initiate our programs in such a manner that we can bring the biosimilars to market almost at day one post patent expiry. We need to ensure low supply cost, and to an extent is possible, we need to be incorporating certain value add into our developments, which can be done still for biosimilars, considering the device, shelf life, and so on and so forth. We're acting in an ecosystem, and we are a developer, and we're really seeing the larger pharmaceutical companies as our customers and doing partnerships with them for our respective programs. Our current portfolio then consists of Xlucane, our biosimilar to Lucentis, which we're going to spend quite some time on in the next section of this presentation. Pre-clinically, and we'll mention them towards the end of the presentation, we have a biosimilar to CIMZIA under development, and a biosimilar to Opdivo under development. I think for all these programs, we have selected products to go for where we believe that we can strike these key success factors we discussed on the previous page. We shall be able to be there day one. We shall be able to have an attractive and low-cost production, and we shall be able to incorporate somehow some value add into the programs as well. Okay. That was a little bit more in depth on the biosimilar market. Let's then shift to our lead program, Xlucane. Xlucane is then a biosimilar to the eye drug Lucentis. It's a drug used in treatment of several severe eye diseases, mainly age-related macular degeneration, but also a disease called diabetes-related macular edema, which affects 1%-3% of individuals affected by diabetes, so also in the working age. Essentially, what happens is that the central field, visual field, is blurred out or blacked out, which of course leads to an inability to lead a normal life for the ones affected. It's a disease which really affects the lives of many people. We estimate it to be some 18 million affected eyes globally by this disease. This is a big disease, and 5 million or so across Europe and the U.S., 13 million in the rest of the world. You can see from the graphs here on the right-hand side, a high proportion of the affected eyes actually goes untreated with regards to being treated with anti-VEGFs, which is the standard treatment of biologics to be used for these conditions. A high degree of untreated patients, which is due to high pricing of the originator products in combination with lack of, or restrictions in reimbursements, different in different parts of the world, of course. We look at the eyes being treated, Lucentis, of course, is one of the drugs, but then also EYLEA, which is a similar drug from pricing, safety, efficacy, and usage perspective, but also the cancer drug Avastin, which is used off-label for these diseases. It is done because it can be done at a lower cost, but also at the cost of an elevated safety risk. Both the high degree of untreated patients and a high usage of off-label Avastin really gives us the message that this market is in need of more cost-efficient alternatives. It's an interesting prospect to bring a biosimilar to this market. That is what we are doing with Xlucane. Xlucane is in an ongoing phase III trial, and it's a big trial. We've recruited 583 patients with age-related macular degeneration across 15 countries, 135 clinics. It's a big trial. The objective with the trial is to demonstrate equivalence from an efficacy perspective and from a safety perspective. Now, as Anders mentioned in the beginning, last patient had its month six visit last week, and we are going to present top-line data mid this year on the back of an interim readout we did when last patient reached month six in the treatment schedule. We're also going to submit the regulatory submission to EMA in Europe and FDA in the U.S. on the back of this interim readout. We're targeting Q3 for EMA in Europe and Q4 for FDA in the U.S. Counting on a 12-month regulatory process, we expect to have the approval in place second half of 2022, allow for a launch by our two respective commercialization partners. Looking at the market here, if we look only at the on-label products, which is what we can follow, it's a market of EUR 10 billion. It's a very sizable market, and it has been growing with some 10% per year last couple of years. It had a dip in 2020 due to the COVID-19 pandemic, I'm confident that this long-term growth trend will continue as the COVID-19 pandemic is getting under control. It's a big market, Lucentis constitutes some EUR 3 billion of that market, EYLEA EUR 7 billion. These are really similar products from an efficacy, safety, pricing, and usage perspective. We believe that Lucentis biosimilar, generally speaking, can tap into this full EUR 10 billion market. As I said initially, Avastin is used in an off-label manner, but at the cost of an elevated safety risk. I think we have two great partners to take the product to the market and to the patients. We have a co-development arrangement with the German generic and biosimilar specialist STADA since 2018, and we're very happy with this collaboration. We have worked very intimately throughout the development up until this point, and also maybe more intensively now than ever in preparing for filing. I'm absolutely confident that STADA will do an excellent job in commercializing Xlucane across Europe, Middle East, and select Asian countries. They know how to do this. They have a handful of biosimilars on the market already. They have proven commercial success with many of these products, and they have a dedicated team across these different territories that is prepared and able to take the product to market. I think we have a good commercial arrangement with STADA. It's a deal which essentially entails a 50/50 split of the development costs and also of the profits to come from sales eventually. For the North American market, we have a partnership with the eye specialist Bausch + Lomb, and we're very happy with that partnership. Bausch + Lomb is known, of course, for the eye care product, but also is getting stronger and stronger in the prescription drug segment towards the eye segment. What is great here with Bausch + Lomb as a partner is that they have the infrastructure put in place already. They have salesforce which is targeting already roughly 2,500 eye clinics currently procuring and administrating Lucentis in the U.S. today. They have a great branding towards ophthalmologists. They participate in all the conferences and congresses where the ophthalmologists participate. They have the infrastructure set up to efficiently market and sell Xlucane. It's more of a plug-and-play situation where I'm confident that they're going to be able to slot in Xlucane into their existing portfolio and be efficient and successful from day one. Here is a more traditional license arrangement put in place where they paid an upfront upon entering the arrangement, and then there are going to be milestones on approval and launch of the product eventually, and then there's a gross profit sharing mechanism put in place. Okay. What we said already two years ago, I believe, we put the stick in the ground and we said that we're going to generate EUR 100 million annually from Xlucane into Xbrane, three years after the launch of the product. We felt confident back then in that target. We feel even more confident now considering how the development has progressed and where we are now from a development perspective, also having added Bausch + Lomb into the picture. This really rests upon only looking at and addressing the current Lucentis market of roughly EUR 3 billion and an ambition to take 25% volume market share at a price discount, which over time, not saying at the first year, but over time could go down to 50% of the originator product pricing pre-patent expiry. If we deduct the production cost and sales and marketing cost and agreed-upon profit splits with our partners, that's when we get to the EUR 100 million of expected net income generation. It's really net income into Xbrane as a company. Meaningful commercial upside in this product, and we even do believe that there's an upside beyond that in, on one hand, taking market share from EYLEA, as I said initially. EYLEA is a product with similar efficacy, safety, usage, and pricing as Lucentis, and it's a bigger market. It's a little bit harder to put the finger on exactly how big this could be, but it's a meaningful opportunity to also nag into that market. The same goes when it comes to the off-label usage of Avastin. I am personally convinced that we will see a shift in volume from off-label usage of Avastin into Lucentis biosimilars due to it being products which are on-label and limits the risk that the ophthalmologist has to take in terms of using an off-label product, superior safety profile, and also coming fit for the purpose in prefilled syringes for easier administration. I see an opportunity there also, and then of course, looking at the rest of the world, where it's more a question about actually driving an increased penetration of the treatment as such, and that has to be done, of course, at a sufficiently low price. I do believe that that's possible to do with Xlucane, given the low production cost that we have. Okay. That was a little bit about the biosimilar market and Xlucane. I then want to hand over again to Anette for the next point on the agenda for today's event. Thank you very much, Martin. Xlucane is really an exciting prospect, and that readout is getting really close. Now it's my pleasure to introduce one of Xbrane's first employees. David, you started already in 2010, is that correct? Yes. Now you are Head of R&D and also our Chief Technology Officer, and that's what you're going to elaborate a bit on today. You have a PhD in expression and targeting of proteins in E. coli, and as I said, you represent the platform technology, which is a key enabler in Xbrane's strategy. Please. Thank you very much. Yes. At Xbrane, we have a toolbox. That toolbox is our platform, and the platform consists of lots of tools. All these tools we can use when we develop our biosimilar. When we use our tools that we developed here at Xbrane, we can really get high yield and low cost biosimilars, exactly like Anders and Martin explained. How is a biosimilar developed and produced? First of all, as you can see on the picture, there is a gene construct. This gene construct is really the blueprint for the cell. This blueprint describes everything that the cell needs to know to produce this biosimilar. This blueprint is introduced into the host cell, and this host cell could be either E. coli cell or a mammalian cell. The host cell can be seen as a factory for the production of the biosimilar. The blueprint, together with the host cell, is then grown in bioreactors. In these bioreactors, it's very important to keep the cells happy. If the cells are happy, they grow better, and they produce more of the biosimilar. Once the cell has produced the biosimilar, then it's important to purify away all the other proteins that the cell has manufactured at the same time. Of course, it's a living cell, so the cell also need other proteins except for our biosimilar to be able to function. It's purified in the downstream department at several different steps. Once you have the purified protein, then it's analyzed by the analytical team to make sure that the quality of the biosimilar target is good. It has to be very similar to the originator molecule. The analytical team is also aiding the other teams to make sure that the process is guided in the correct area so we can know what to achieve and what to make better in the process development. At Xbrane, we have several different tools along every way of the process. For the gene construct, the blueprint, we have several different ways to control the expression. We can control the expression with our LEMO promoter system and also with the Rhamex System. On the next slide, I will go through more about the LEMO system and how that works. We can also increase the expression with translational initiation sequence and translational initiation regions. We have also optimized signal sequences and codon optimization. Once we have developed and optimized the gene construct here at Xbrane, it will be put into a host cell, and we have also developed and optimized the host cells. Here in-house, we have a library of specialized E. coli cells, and these cells are really perfect for the gene construct that we have developed. A really good blueprint, a very good host cell is then grown in the bioreactors. In the bioreactors, we have very good understanding for how to make them be happy and to thrive. We optimize the cell growth, we design the growth media, we add nutrients, and we also control the feed rate, which also controls how quick the cell grows. Once our upstream team has developed the process, it is then for the downstream team to develop the downstream process, the purification methods. As Martin pointed out, the purification process is usually several different steps, normally three to four different steps, and each of these steps has to be really optimized for the target protein. We have a very good analytical team with really good equipment and very good knowledge. They guide both the upstream team and the downstream team to make the process perfect. Without our analytical team, the other teams are essentially blind. Analytics and to have analytics in-house is really key. The analytical team is also analyzing and characterizing the biosimilar once it has been purified. This is done, as Martin mentioned, with between 30 and 40 different methods. You need to look at every angle of the biosimilar to make sure that it is as similar or very similar to the originator, otherwise it will not be approved. This is very important that it is very similar. The toolbox at Xbrane is currently protected by two approved patents, and we also have 11 pending applications. Our LEMO technology, it really enables us to get high yield at a low cost. How is this done? What you can see on the upper part of this slide is the standard setup. In the standard setup, you have the blueprint, the gene construct, it's put into a host cell, and then you start manufacturing your protein of interest in the bioreactors. This is done in an on/off fashion. Either you produce a lot of it or you don't produce anything. For many targets, this is not beneficial. What happens then is that lots of the target protein actually ends up in toxic protein clumps, and very few of the proteins that you want to express are properly folded. The protein has to be properly folded to be functional. In our LEMO system, we use our LEMO promoter, and we put our gene construct into the LEMO promoter system. We put this into the host cell. Again, the host cell is like a factory. Then we don't have an on/off system anymore, but we have what we call a dimmer switch or an assembly line control mechanism. If you see this as a car factory and the cell is really the car factory and the cars are all the proteins, we can control the speed of the assembly line. If the speed of the assembly line is too high, you will end up with lots of toxic protein clumps. In the LEMO system, we can really control the assembly line speed, and therefore, we can really control how much each cell is producing at a certain time point. The cells are much more happy in the bioreactors. If the cells are happy, they are also producing more protein. With the LEMO system, we can make sure that the protein quality is very high. Several different studies have shown this, independent studies. We know that for different targets, we can get anywhere between three-fold to 12-fold more protein with the LEMO system compared to the standard setup. This, of course, leads to low cost and high quality product. Another more recent example is with our Xcimzane Program. We have used several key technology of our toolbox. The tools that we have used is first for the blueprint, the gene construct. We have used the Rhamex promoter system, several different signal sequences, and the signal sequence has been optimized. The signal sequence is like an address tag in the cell. The protein ends up in the right place of the cell to fold properly. Again, folding is key because correct folding means good quality. We have also optimized the translational initiation region to make sure that we can produce as much protein as possible. This gene construct was introduced into a E. coli cell. What we had done with that was to do strain engineering. We have gone into the chromosome of E. coli and removed certain enzymes. These enzymes would otherwise degrade our biosimilar, and therefore we managed to remove these. First, we identified which enzymes we should remove, and then we removed them from the chromosome. Now we have a strain that is optimized for this target that is not degrading the target. In the process, we then used design of experiments. In design of experiments, you can look at several different parameters at the same time and make sure that whatever you do, if you change one parameter, it does not influence another parameter in a negative way. This enables us to make maybe 10 or 11 experiments instead of 110 experiments. With our 10 experiments, we still get more information out about the system and how to optimize it compared to if we would run 110 experiments without a design of experiment. This has really paid off. What we can see is that if we use the standard system from the originator that produces CIMZIA, with our system, we can get 4x-5x times the yield. Our toolbox is really helping us to give a high yield, and this, of course, will lower the cost for the biosimilar. We're currently expanding our platform to mammalian cells, and the reason why we move into mammalian cells is that we want to develop more targets. What you can see in this slide is on the left side, we have the yield, and on the x-axis, we have the number of tools that we have used, the number of Xbrane tools that we have used in the mammalian cells. For our first target in mammalian cells, Xdivane, we teamed up with a CDMO. This CDMO has developed their own cell line, their own gene construct, the blueprint, and also optimized the process for the last 15 years. We used a number of tools in combination with their setup. Again, they had developed this for 15 years. We could immediately see a significant increase in the yield with our setup compared to the setup that we ran in parallel, which was only their setup. We can immediately see very good progress in our development. For the next target, we are currently developing our own expression vector. This can be seen as a bigger blueprint. We have several different factors that we put into this expression vector, and we expect to get an even better effect from this to get a higher yield. Beginning of next year, we will also be able to scale up at 200 liter scale, this is very beneficial for us. If we can scale up to 200 liter scale, we can produce more material for biosimilarity studies. This will be at a lower cost, we are also not so dependent on other service providers. For the future, we are also looking into our own mammalian cell line. Again, this will add into the tools that we can use, and we expect an even higher yield than. The future is very exciting for Xbrane. Thank you very much, David. Yes, one of these days, even I will be able to fully comprehend the complexity around this. As for our next speaker, our Deputy CEO, Siavash Bashiri. You've also been with the company for a very long time. You started already in 2012, and then you came from a Master of Science in Molecular Biotechnology from Uppsala University. Today you will share with us, take us through the Xbrane's broader capabilities and show a virtual tour of the biotech lab. Welcome. Thank you, Anette. I will have the pleasure to tell you a little bit more about the new facility, also show you a virtual tour explaining what David presented just recently. Xbrane's new facility is based at Campus Solna, just outside of Stockholm. This is a 2,000 square meter facility where we can take on the full biosimilar process development from small scale to what David told, to a 200 liter pilot scale. With this new facility, we have now expanded into mammalian cell lines, and we can start developing CHO cells and also process development. As many of you might know that many of the future biosimilar targets are monoclonal antibodies, which are produced in CHO cells. With this new facility, we have expanded 10-fold in our scale. As David mentioned, this helps us to not rely on external service providers for upscaling development, but also we can use internal for our own biosimilar studies. With the new facility, we have also invested in the latest analytical tools, which gives us a better insight in our process development, where we can much easier and faster identify any discrepancies between our biosimilar and originator, where we can adapt the process to it so that we are as similar as possible. With the larger facility, we can work much faster, but more importantly, we can develop several targets in parallel. I will now show you a virtual tour from this facility. Campus Solna is a leading Swedish life science initiative to create one of the world's leading life science clusters. Here you will find one of the world's leading medical universities and one of the world's leading university hospitals, the New Karolinska. With this, also a lot of Swedish biopharmaceutical companies have moved in here, and it is our pleasure to be also part of it. Here you can see what David told. A host cell put into a bioreactor where we, in parallel, can check different processes and then identify the optimal process that gives us the highest yield and the best quality. When we have identified the best process, we can start the upscaling activity in our own labs. David also mentioned that when you are producing proteins in these living cells, there are other proteins that you want to get rid of, and what you do is to purify them. All proteins have different characteristics, and you can separate them based on different attributes, such as size, charge, or affinity. These proteins are then flowing through these type of columns, and they will then travel at different speeds. Here you can see that with these different peaks are different proteins eluting at different times. Collected in this fraction collector based on the time you know that are eluted. With this new facility, we have also invested heavily in new analytical equipment. With this, we have the capability to identify the correct amino sequence compared to the originator. We can identify that they have the same folding, the same structure, but also to see that they have the same functionality, that our protein binds the same way to the target that it wants to inhibit. With this internal capability, we have also the possibility to much faster get the results compared to before, where it could take several months to get data. We can now get it in a matter of weeks. We can also, with this new equipment, do more in-depth analysis, where we get more data point compared if we would do it externally. For example, you can see here on the next sequence where we, sorry, with this equipment, the LC-MS, we can, with one machine, identify four different attributes in a single protein, the size, the mass, the structure, and the folding. With this, we have enabled a much faster development here at Xbrane and also a greater knowhow in our process development. Xbrane has also grown tremendously from when I started almost nine year ago, when we were only two people, me and David sharing a lab bench, to now, where we can take on the full biosimilar development. From the cell line to clinic to an approval. We have had the opportunity to recruit from best of two worlds, from Swedish and international biopharma colleagues with leading pharmaceutical development knowhow, but also top talents from universities with specific research within future technologies within biopharmaceutical production. This is also a knowledge intense industry, and we have at Xbrane been able to maintain a high scientific background within our company, where over 38% of our employees holds a PhD degree. We have had also very easy to recruit, that's due to our reputation within the Swedish biopharma, and it's also reflected by our employee net promoter score, where we have a score of 42 compared to the industry average of six. This is a measurement on employee satisfaction. I believe that to create a great company, you cannot only rely on great technologies. I think you need to have also a sound culture within the company. This might be perceived as corporate lingo, but compared to others, this has been developed specifically by Xbrane employees. This makes it much easier to recognize but also adhere to. I believe that the combination of the team, our culture, and the technologies will make us becoming a world leading biosimilar developer. Thank you very much, Siavash. Thank you. As a newcomer, I can certainly certify that Xbrane has an excellent reputation on the market. Martin, could you please take us through the next steps in our strategy in becoming a world leading biosimilar developer? Thank you very much. Thanks to David and Siavash. I hope that you all enjoyed getting a little bit more into depth on the platform technology and also seeing our newly established biotech lab. I really do believe that we have a strong role to play in society in a broader sense. Biologics have really been proven to be revolutionary with regards to treating several important diseases. We've talked about anti-VEGFs in treatment of several eye diseases, so revolutionary. They're also the field of immuno-oncology, where the so-called PD-1 inhibitors have been able to treat cancers which before were untreatable. Also when it comes to autoimmune disorders, also biological drugs have been able to provide treatments which can bring people back to pain-free lives. This really have been revolutionary treatments, but there is an issue with accessibility due to high costs of the originator products. This is a statement you see on this slide from the previous Head of FDA, Scott Gottlieb, less than 2% of Americans use biologics, but they account for 40% of total spending. There is an issue with accessibility in the U.S., but also in many countries in Europe and not talk about the rest of the world. This is an unsustainable situation. We can look at the 17 sustainability goals of the United Nations, where this directly hits two of them in an important way. There is an issue here, and Xbrane's purpose is really to bring about the change and to being part of enabling greater health equality globally and being able to bring people back to healthy lives by providing affordable biologics in terms of biosimilars to the market. This purpose, we talk a lot about the purpose internally here in the organization. I really do believe that's the fuel that really powers this R&D engine, which we have set up, which in a way consists of the platform technology we have, which David described, the team that we built, and also the facility. All these things together provides the foundation for a continued development. The purpose, in a way, is really the fuel coming into this engine. Let's spend some time on our next coming programs here, our biosimilar to CIMZIA, Xcimzane, and also our biosimilar to Opdivo, Xdivane. CIMZIA is a TNF-alpha inhibitor. It's used in treatment of mainly rheumatoid arthritis and psoriasis, and it's a product with sales of EUR 1.8 billion, so sizable product. Patent expiry 2025. The product really has been growing with some 10% per year up until now, and it's due to a niche within this field. It's the only TNF-alpha inhibitor demonstrated clinically to be safe for usage by pregnant and breastfeeding women. It's an important niche constituting some 10% of rheumatoid arthritis cases and 20% of psoriasis cases. It's an important subsegment of the market, if you will. What makes this really interesting for us is that it seems to be so that we have the only biosimilar development program ongoing globally with regards to a biosimilar candidate to CIMZIA. The reason we believe lies in the requirement to get to a very high yield to come to a commercially viable production cost and also to be able to produce this product in installed fermentation scale capacity around globally. As David mentioned, this is thanks to a platform technology. We have four to five times the yield, what we believe, compared to the originator, and this is really now at the threshold which we set out when we started this development, where we need to be to be able to do this at a commercial viable production cost. Essentially saying that we need to be able to withstand a 50% price reduction versus the originator pricing and still be able to generate 80% gross margin. We are at that level, we believe now. When it comes to the fermentation scale, typically these products, or the scale that you can be producing the products at is 3,000 liters - 5,000 liters. If you are going to produce at that scale, you also need to have a high yield to produce the volumes required by the market. The originator works at a much larger scale, but those really large scale fermenters are not many around in the world. You need to also have a high yield in order to be able to produce the product at the installed capacity of fermentation scale existing. That's an exciting program, and then next one is Xdivane, our Opdivo biosimilar. Opdivo, of course, is a bigger product, EUR 6 billion of sales annually, and 2028 patent expiration. Here also, we do believe we have a high yield and low cost process set up. We are on track to take this product to market by the time of patent expiry in 2028. We do believe that we're one of the frontrunners compared to other biosimilar developers in this space. This also makes this interesting. We are convinced that we're going to be successful in terms of partnering up with a suitable commercialization product even for this program and make it a commercial success. Looking ahead here, because we said that we are now going to initiate one new development program per year. Let's talk a little bit about our target selection process. We set up a couple of criteria which we're looking at in selecting the next targets to go for, the next biological drugs to do a biosimilar on. The first one really is time to patent expiry, where, as we talked about earlier, it takes us six to seven years to develop a biosimilar, and if we shall be there by day one post-patent expiry, we really need now to look at the biologics with patent expiration 2028 and onwards. That's really the first criteria. The next one is technical feasibility. We should be able to, technically speaking, develop a biosimilar to the product and also preferably have a significant competitive advantage in our platform technology. We want to go for products where there is an issue with accessibility, where there is a high unmet medical need, and we can do something for the patient in terms of providing a more affordable option. Also to make the business case to work, we are looking for products with beyond EUR 1 billion of annual sales. Just to give a glance on the left-hand side here, naturally speaking, in selecting our next target to go for, we are looking at products with patent expiry 2028 onwards. You see here a couple of exciting products which have patent expiration in that timeframe. I think when we look at only the window 2028 to 2030 patent expiry, there is a combined sales of biologics of some EUR 30 billion. It is a segment with a sizable product going off patent. Really, we believe that Xlucane now should provide the blueprint for our upcoming development programs. Of course, as David and Siavash have described, with our continually evolving platform technology and the new facility, we shall be able to do things faster and better than before. Fundamentally speaking, Xlucane provides the blueprint. Just to give a rough picture of that development program, we start, of course, with a preclinical development process where we had an approximately yearly development spend of some EUR 5 million annually. We had a co-development arrangement, as we talked about, before going into clinic. We are then doing the clinical phase, which also coincides with the commercial production of the biosimilar product in order to generate the needed data from an analytical comparative perspective for filing. We had spend of some EUR 15 million annually throughout the clinical phase, and then the regulatory process, which is what's coming later this year, of course. That's somehow a blueprint for looking ahead and what we want to do with our programs going forward. We want to do the preclinical development, and we want then to seek partnership with companies that are going to be able to commercialize the product. We want to do that at that stage because then we can get some co-funding for the clinical development and also have a commercialization partner engaged in the process from that point onwards. That's perfectly feasible and doable in the biosimilar world because we can do it on the back of analytical comparative data, which demonstrates high similarity, analytically speaking, to the originator product. By looking at that, you can judge the clinical risk to be very limited, and we have found that commercialization partners are willing to step in at that point in time. Coming back to the statement which Anders did at the beginning of the day, where we now put forward an ambition to become cash flow positive late 2023, early 2024. When we say that, we mean it on a monthly basis, and we mean operating cash flow, just to be clear. To walk this through a little bit, to explain to all of you our thinking here. First of all, we talked a lot about Xlucane and the commercial prospects we see with that product, and we do believe that this is a product which shall generate some EUR 100 million as net income to Xbrane three years after launch in 2025 and onwards. We have as an ambition to initiate one new development program on an annual basis. We believe we can do that with the setup we have now with this new facility and also the team we've built. We want to partner up our programs at the preclinical stage, as we did with Xlucane, using really Xlucane as the blueprint here. In doing all this, we are also confident that we shall be able to become cash flow positive on a monthly basis end of 2023, early 2024. We can look at the right-hand side here just to illustrate how we envision this to pan out. If we look at 2025. We expect them to be running two clinical programs, which then would cause a development expenditure of some EUR 30 million combined. We expect to have some three pre-clinical programs running and one in the regulatory phase altogether constituting development expenses of some EUR 20 million. EUR 50 million, roughly speaking, of development expenditure if we were to be developing such a portfolio at that point in time, again, using Xlucane as the blueprint for how this would pan out. If we have the EUR 100 million net income generation at that point in time, of course, we're going to be generating a healthy positive operating cash flow. We expect that we shall be able to hit the positive sign there sometime 2023 or early 2024 on a monthly basis. That's really the way that we reason and the way that we want to build this business. Okay. Up until that point in time, up until 2023, there are plenty of milestones to come. It's going to be healthy news flow from the company. On the one hand, driven by Xlucane, where we have top-line data, of course, coming up mid this year, and then filing in Europe and the U.S., and then ultimately approval and launch, of course. We expect to be able to do complementary deals in territories where we need additional partners to kind of create the full picture. We're talking about China, Japan, and Latin America. Our pre-clinical pipeline, where we have an ambition to close a deal with the commercialization partner for Xcimzane, our CIMZIA biosimilar, during the course of this year. Begin to take that product towards clinic during 2022, and then proceeding with our Xdivane program in a similar fashion. Okay. Coming to an end of the formal presentation here at the same picture which Anders presented in the beginning. We're really tapping into one of the fastest-growing segments in the pharmaceutical market, so 25% of annual projected growth coming five years. We now have the foundation to really take the next step in the company's development. We have the platform technology, which has evolved in a very good way lately, and we have the team put in place, and now the new biotech lab, which we've established here at Campus Solna. With these components, we really now put forward this ambition, which we've talked about today. On the one hand, with regards to Xlucane and income generation from that product to initiate one new development program per year, and that we are going to be able to do that and become a cash flow positive in the near-term future. We're talking about late 2023, early 2024. That is really an ambition for what we want to do with this company, how we want to build it. That's probably where the formal presentation today ends, and we are going to open up for questions. Thank you very much, Martin. Yes, this concludes the official program for the day, and we open up for questions. I would also like to say, before we start, that this presentation is recorded and will be published as soon as possible on our new website, which was really actually launched yesterday evening. Please don't hesitate to visit us at xbrane.com. With this, let me see. The first one is around our existing resources. Can you please comment on your cash runway based on existing resources? Sure. I can take that briefly. We went out of Q1 with SEK 240 million in cash, which we've communicated previously will take us to end of Q3 this year. Thank you. It's the same theme, I believe, for the next one. All the way to market, a biosimilar is expensive business. Xbrane aim one biosimilar per each year. How would these be financed? Will revenue from Xlucane would be enough? Yeah, exactly. I think that this picture, what we showed here is how we intend to make that happen. That we can, with the combination of early partnering up with commercialization partners and getting some co-funding of the clinical journey and income, of course, to be generated from Xlucane, can balance these things out to become cash flow positive within that timeframe. Thank you. This is a fairly lengthy one. May I ask that you take over, Martin? Okay. I'm going to read the question here. Firstly, a question on your PD-1 targeting biosimilar Xdivane. I guess the question can be applied to how you think in general when selecting a biosimilar candidate for the future pipeline as well. There are now seven FDA-approved PD-1s and more expected to be approved within the next year. Is a marketplace like that really suitable for a biosimilar with so many other proprietary molecules working on the same mechanism of action, and some patent expiration that will happen later than the first generation, like nivolumab? Is it not better with one or few which may reduce share of voice by the originator once patents expire, leading to price being more important to win share than otherwise may be the case? Secondly, talk about whether you would consider to integrate forward over time and keep marketing rights for certain regions and products or at if not marketing, keep rights further than preclinical stage, maybe past phase III to possibly extract more of the economical upside for Xbrane. Okay. Let's take the first part of that one, and I can just comment briefly, but then I think it's great that we have Anders on board who knows the market for PD-1s very well, I would say. I can say it like this. I rather do a biosimilar to Opdivo than a novel PD-1, considering the clinical investments that needs to be done into novel developments of PD-1s to get the proof of all the different indications. I do believe that Opdivo is a great choice here, actually. We will see when time goes, but I do believe there's going to be less biosimilar competition on that one than, for example, KEYTRUDA. I feel quite happy about the choice of product there. I can leave it over now also to Anders to elaborate a little bit further on this question. Thanks, Martin. We've been working with Opdivo for many years. I was actually also launching the products across the world when I worked for Bristol Myers Squibb and the PD-1 product has really revolutionized oncology treatment. What we have to remember with this product is that it's not just one market. Each indication, we started with melanoma, we went into lung cancer, and went into renal cancer. Each of these markets require their own documentation. There is a vast majority of indications that have been documented now, and more will also be documented as the program will go forward further. Opdivo and the other PD-1s will be very large products by 2028. I think everybody agrees on that. It could be in combination with other products. They will grow tremendously. Opdivo will be one of the products with most indications approved and therefore also a very interesting target for a biosimilar. Thank you, Anders. Just on the second part of that question, we can just mention that as we described now in this presentation, our current business model is to seek partnerships with commercialization partners that can take the product to market. We want to focus on what we believe we are best at, which is really the development of these products. Okay, I'm going to move on to the next question. Is there a risk that Xbrane's process delivers a superior product so that Xbrane is not a biosimilar but a biosuperior? Well, I can say like this, that what we do is development of biosimilars. If it's superior in any way from a clinical perspective, it's no longer a biosimilar and cannot follow the regulatory process of a biosimilar. We have to go into novel drug development and go through all the phases, clinically speaking, that a novel drug needs to go through. Our focus right now is really to be doing biosimilars. We can, as I alluded to a little bit in the beginning there, do things which can, on the margin, differentiate on the market. We can elaborate with a device. The syringe, for example, when it comes to Xlucane, we can elaborate on shelf life and a few other aspects to create few beneficial factors around the product to the physicians and patients, and this can be lifted forward from a sales and marketing perspective. Anyone wants to mention something? I think that the risk when we develop the process, the analytical team at Xbrane is really guiding us. When we develop the process, we make sure that we have a biosimilar and not the biobetter. We don't want to produce a biobetter at this stage, but the biosimilar. The analytical team is helping us optimizing the process for a biosimilar and nothing else. Okay. Next question. How is the situation with regards to getting the required talent and retaining it? Is there an increase in competition for specialists with relevant biologic drug development experience? Maybe, Siavash, you touched a little bit on this topic in your part of the presentation. Do you want to elaborate a little bit for them? Sure. So far, we have been able to retain the specific talent and know-how within the company in terms of specialists. Also, I believe that we are one of the few growing and larger biopharmaceutical companies within the Stockholm region. That makes us a very attractive employer for many of the talents that are around the Stockholm area. David, you? No, we really try to be competitive, and we do that by lots of communication within the company, make sure that the entire company is seen as a team, that every member of the team is important, and that constant communication, so we make sure that everybody's happy. Basically, by doing this, we can attract other people to the company. Okay. Next question. What has driven the U.S. market the last couple of years after a relatively slow start versus Europe? Is it the stream of large products coming off patent, for example, Avastin and Herceptin, or have there been any changes to the federal level, for example, new FDA guidelines and so on and so forth? Previous state laws have, in many circumstances, blocked the interchangeability of biosimilars. Have there been any federal laws that have superseded the state law? Three, will Xlucane be fully interchangeable to Lucentis from day one? Okay. Yeah, as we showed on one of the pages earlier, we've really seen a shift in the U.S. biosimilar market in 2020. Indeed, biosimilars to Avastin and Herceptin performed very well and took 40% volume share at month 12 or so. I believe what lies behind this are, on the one hand, a couple of regulatory changes which have been put in place with regards to education of biosimilars, for example. I know that a lot more things are happening from an administration perspective on that end. Also, I do believe, as we saw in Europe, that it's just a factor also about an increased understanding and knowledge of biosimilars, and therefore also a willingness to go for the more cost-efficient alternatives. I think that these are the main factors coming together to create this shift. A related question may be that we all focus on the U.S. market size, but can you talk about how we see the market opportunity for Europe, Japan, rest of world being in relation size to the U.S.? Yeah, I think this question is specifically for Lucentis. Yes. Where roughly speaking, it's what we see 60% of the market if we think about anti-VEGF for ophthalmic purposes being in North America and the rest in the rest of the world. That's the rough split what we see. Yeah, another question is about interchangeability, just to clear that concept. There is indeed a guideline in the U.S. for interchangeability of biosimilars with specific clinical requirements. Now, we have not gone through that clinical journey for Xlucane, and it's actually more or less impossible, we believe, because it entails comparing the so-called pharmacokinetic pattern over time over several dosages, which becomes complicated since Lucentis is an intravitreal injection, resulting in a very low systemic exposure of the product. We are going to consider this when it comes to other upcoming programs, and it can be an important component, particularly if we're looking at a product which mainly is sold via the retail channel. Anyone want to add something on the? No Concept of interchangeability? Okay. Next question. Can we expect the announcement of new products within 2021? We've said we're going to initiate one new development program per year. It's not necessarily so that we announce it on exactly the day when we start, but we announce when we've gone through the first couple of steps in the development so that we feel comfortable about that we're actually going to be able to pursue that specific target in consideration. We will have to get back on this question and see whether it's going to be announced in 2021 or 2022, the next biosimilar we go for. Okay, next question. We consider annual sales of EUR 400 million that you mentioned as very conservative, considering the biosimilar sales observed in 2020 for Avastin and Herceptin in particular. What is the potential further upside that you see? At least Amgen might already hit blockbuster status in 2021 while addressing smaller markets compared to Xlucane anti-VEGF market. Okay, I alluded a little bit to this in the presentation already. Maybe I should hand it over to you. Anders, do you want to mention a little bit something, your thinking around this? Thanks, Martin. Yeah, we looked at this. As we said, if we look at the Lucentis sales today, we look at a price reduction of 40%-50%, and we look at the net income for Xbrane after we've taken out the cost and do the cost splitting, we come to the EUR 100 million as we presented. As Martin said, there is much more opportunity, and we have to also look at the huge unmet medical need. Martin talked about this as well. There is 50% of the eyes in the U.S. and Europe that are untreated. It's 80%-90% in the rest of the world. Of course, when you come out with a product that has a lower price, there will also be a volume increase, and we can also take from EYLEA. We are firm with our sort of base case of what we believe. Of course, as Martin said, we also think that there can be an upside on this opportunity for Xlucane, especially as we see that the biosimilar and the high-quality biosimilars, which has done proper phase III studies, have a faster uptake than what we have seen before. We are quite confident that trend will continue, and that's also why different independent companies are projecting a 25% growth of the biosimilar markets in the next five years. Thank you. Okay. Shifting to next question here. "Supporting positive top line data from Xplore phase III, who is taking the lead in marketing authorization application? Will you get support from STADA or Bausch + Lomb?" That's the first question. Since it continues with more question, I'll answer it because I otherwise probably forget. Yes, we get support from particularly STADA in the process of filing in Europe as well as in the U.S. Next question. "Do you believe there's sufficient time for BLA acceptance to approval? The average time between BLA acceptance to approval from all biosimilars approved in the U.S. market was 16 months, standard time is 10 months. To not miss a first-mover advantage in comparison to Formycon or Samsung Bioepis as you intended to file BLA in Q3 2021." Okay. We plan to file in the U.S. Q4 2021, as we said in today's presentation. The time for approval can be shortest eight months, it can be longer than that. I think actually 16.6 months must include some outliers on the longer end. I think that the average for biosimilars is more like 12 months last time I did the analysis. Provided we can get an approval in place Q4 2022 and allow for Bausch + Lomb to launch the product shortly thereafter, I think that we are within the same timeframe, let's say, as we expect our two competitors from a biosimilar perspective to come to market. Okay. "Given you claim to have a competitive edge in terms of production cost, what is your pricing strategy going forward? Will you act more aggressively on pricing in the market? Well, I can mention like this on this question, now that with regards to our partnership with STADA and Bausch + Lomb, they are actually responsible for the pricing, and they're going to dictate the pricing. Our production cost, of course, can allow for being more aggressive if one would choose during a period of time. I do believe that what we've seen so far in the biosimilar space is that prices have been set more like an originator pricing minus something rather than production cost plus something. Of course, I do believe that our partners view our low production cost as a way, an insurance for a long-term future, which no one really knows how it will develop, although that we believe that pattern will continue. Okay. Let's see here. Next question. If Xcimzane would reach the market as the only biosimilar to CIMZIA, could you say something about what price discount and market share you would expect? Okay. I think like this, Anders can develop further, that if we would be the only biosimilar to CIMZIA, price discount would be lower. We've seen it in biosimilar market as well as in generic market that what most strongly correlates with the price discount versus originator pricing pre-patent expiry is the number of competitors. If you're alone, it can be 10%-15% below originator and still generate a very significant market share. It's a different dynamic. I don't know, Anders, do you want to elaborate a little bit maybe on this question? No, I agree with you. I think it's too early to speculate on this. We also know that Xcimzane is one of the difficult to produce biosimilar. We don't know. Perhaps there will be other competitors. We have not gotten any indication from this, and I think our research team has done a fantastic job to optimize the production, and we feel very confident of moving forward with CIMZIA, and we think we have a good potential there. Okay. Next question. "When Xbrane says that the capabilities will be one biosimilar per year, is that one biosimilar in phase III each year or in preclinical?" Essentially what we mean to initiate one program, we start with the preclinical phase, of course, and then we move it along the development journey as we described in the presentation. Okay. Anette, you had some further questions? Yes. I think we don't really have covered this. Can you talk about the legal patent situation we face for Xlucane, whether there may be barriers put up around Lucentis, delivery technology, formulations, et cetera, or whether there's now basically zero legal risk remaining should Xlucane gain market approval? Well, what we can say is that we have done our so-called freedom to operate analysis, which essentially entails looking at the potential patent landscape surrounding a particular product and making sure that you know which patent you need to await expiry of or to circumvent somehow. We can mention that STADA, in their due diligence, have done the same thing, and also Bausch + Lomb. We do believe that we have full understanding of the patent landscape surrounding Lucentis. In the U.S., we cannot outrule that there can be discussions with the originator with regards to the IP situation. We've seen that for pretty much all biosimilars seeking FDA approval, but we've also seen that it typically end up well. As far as I can see from the statistics, 70% of biosimilars that has been approved by FDA has also been launched close after approval. The 30 remaining percent are mainly HUMIRA biosimilars, which are held back with the settlements with AbbVie, the originator of HUMIRA, which lasts up until 2023. They eventually will come to market also, although it was delayed due to settlements. That's roughly speaking what we can mention. We can also say that we're happy that Bausch + Lomb will undertake the responsibility for the whole IP process in the U.S., and we're happy to have them to lead that. If I may add also that by having our own proprietary technology, we compared to maybe other competitors, doesn't need to rely on standard systems. We have a better freedom to operate position compared to many others by using our own technologies, I believe. I think Anders want to say something as well. Yeah, I think also part of our strategy is, of course, to put a lot of resources into research and development. We also have our own in-house IP lawyer. Working very close with the development team and also looking at it from this, because for a company like us, the IP is a very important strategic component of our strategy. I don't know, David, do you want to say a little bit about how that collaboration is with the research team? Because for me, that's very critical. Of course. Exactly what you mentioned, it's very critical. Also what Martin mentioned, we do freedom to operate analysis on everything that we do. Whenever we develop something, we have very close contact with our IP department to make sure that we keep to our policy to never infringe a patent. Very close collaboration with IP to make sure that no infringements take place. Okay. I had one remaining, but although I think that we might have already answered this, Martin, but it's basically if we can expect a EUR 60 million end market sales already in 2024 for Xlucane. Is that roughly the ballgame for 2024? Let's go back to your picture. Yeah, I think the picture what we have here illustrates this rather well. We can look actually at 2023, where we expect to be running one clinical program and then three preclinical. That, roughly speaking, would constitute a development expenditure of some EUR 30 million. If you were to take that down to a monthly basis, we're talking about monthly development expenses of EUR 2.5 million. What we've said here is that we shall reach operating positive cash flow on a monthly basis. That means monthly net income generation from Xlucane of above EUR 2.5 million. That's what we're saying. What is that then? Well, as we've shown on some previous pages, that would mean, roughly speaking, EUR 10 million of product sales, and that can be translated into, if you average out what we talked about with regards to prices to maybe some 30,000 patients-35,000 patients going on treatment with Xlucane. Put that in context with roughly 5 million affected eyes in Europe and the U.S., it's really something we believe is achievable. Okay. While we were speaking, a few more questions came in here. Given Xbrane seems to turn cash flow positive relatively soon, how do you look to Xbrane capital allocation policy going forward for the longer term? Anders, maybe do you want to comment on that one? I think, Martin, you can take that one. Yeah. No, we want to invest into programs which we believe are then going to generate returns which are superior to what otherwise could be received by our shareholders. That's what we want to do, we're going to seek for biosimilar targets which are as attractive as possible, coming back to the target selection process, which we talked about earlier today. As long as we see such attractive targets and have the resources and the capacity to undertake development for such programs. As we alluded to earlier in the presentation, there are plenty of attractive targets to go for if we now look at patent expiry 2018 and onwards. Our focus is to try to broaden our portfolio and do as many of those that goes through our selection process and allocate the capital to that. The next one on Bausch + Lomb. Yeah. Okay. Bausch Health is looking at its ownership of Bausch + Lomb and other of its assets. Is there a change of control clause in the agreement? How has the collaboration progress with Bausch + Lomb recently? No, there's not a change of control clause in the agreement, and I do believe that the collaboration has progressed very well. Far, we have, together with STADA, set up different working groups, working on development from a regulatory perspective, IP perspective, supply chain perspective. I think we have a good collaboration both with STADA and Bausch + Lomb. Okay, next one. On Xlucane market update. What end market sales does your forecast on cash flow positive by end 2023, early 2024 entail? How should we see the group operating cost, excluding development cost, develop over coming years? Okay, I think we answered the first part of that question just now. I think we answered that. Okay, thanks for the replies. Appreciate it. One last question. How Xbrane is going to finance after Q3? Okay. New share issue or other solutions? As we've done throughout the development of Xbrane, we have been looking into different sources of capital. We have been talking to equity investors, but also with debt investors. We haven't engaged with the latter yet, but we are engaged in such discussions now, and we're going to continue these discussions up until we come to that point in time, and then the board will decide upon the best financing strategy for the company. These are the two sources which we currently are, let's say, seeing as the sources bridging, from a financing perspective, Xbrane to cash flow positive stage. Okay. Can you tell us anything about the ethical study of Xlucane in the test period? I think this question relates to the blinded Safety Data Monitoring Board, which is done throughout Xplore, as is done with any clinical study, in order to catch potential abnormalities with regards to adverse events, which potentially would cause a more in-depth analysis and potentially even an early close down of the study if something would emerge, which would cause worries that the product would cause adverse events which are serious and beyond expected. What we can say now, that has been done, of course, and no such event has occurred. As a result, of course, the study is continuing. Okay. Next question. Samsung Bioepis have filed for approval to FDA and Formycon is in phase III for ranibizumab biosimilar candidate, same as Xlucane. Will it impact targeted revenue for Xlucane overall? The competitive situation with regards to Lucentis has been taken into consideration when we've done our forecast and projections and getting to this EUR 100 million. That's why we have an ambition to take 25% volume wise of the Lucentis market. That is considering biosimilar penetration, but also that we take our fair share, a third or so, amongst the different biosimilars expected to come to market on Lucentis. I think that if no other questions on. The common questions continues, which is very good. That's great. I saw two more pop up here. What is the current setup agreement you have with STADA on further drugs in the pipeline of Xbrane? We like very much the collaboration with STADA. STADA has been a great partner to us. We have had a great collaboration around Xlucane and back in, was this 2008, when STADA also decided to invest into Xbrane, we signed a so-called right of first refusal. We gave them a so-called right of first refusal on European license for our Xcimzane and Xdivane programs. That's the only kind of, let's call it, agreement we have put in place and which we also communicated at that point in time around other products than Xlucane in our portfolio. We're very happy with the partnership with STADA. We have a continued discussion with them, with things that we potentially could be doing together in the future, and we would love to partner up with them for other programs we have under development as well. Okay. Can you elaborate on the size of profit share in the deal with Bausch + Lomb? Answer is no. We decided not to disclose the actual exact figure with regards to the profit share with regards to Bausch + Lomb. We cannot communicate on that, unfortunately. Okay. That, I think, concludes the question as far as I can tell. Okay. Thank you very much. Please submit any additional questions that you might have to our IR mail at ir@xbrane.com or at our new website, xbrane.com. With this, a few final words. Anders, do you just want to say a few things? Yep. Thank you very much. Thank you, everybody, for listening in. Thanks to the team for the presentation. I think it comes back to what we said. We have the Xlucane product coming very close to having the top line results and the filing by the end of the year. We upgrade and we invest in R&D with one new program per year, and we are looking forward to have an ambition to be cash flow positive by the end of 2023, 2024. I think these were the key messages, and we hope for talking with you all soon again and give you a further update on the progress of Xbrane. Thank you very much. Martin? No, thanks a lot for everybody listening in to this Capital Markets Day. We hope that you found it fruitful and that you got a little better picture of Xbrane, and particularly now also hearing from our Chairman, of course, but also hearing from David about the platform technology and Siavash providing virtual tour of the facility. As Anette said, please come with any further questions that you might have. This presentation and the recording of this event will be put on our website within short. Okay if no one has other concluding remarks. Siavash, very good? No. No. No. Thank you. I think that then concludes this event. Again, thanks a lot for listening in. Thank you. Thank you.