Saniona AB (publ) (SANION) Earnings Call Transcript

Hi, and welcome to BioStock Studio, where today we will be doing a live Q&A session with Saniona. Saniona is, of course, focused on developing treatments for rare central nervous system and metabolic diseases. They have recently strengthened their financial position through a collaboration with Acadia. And today, we will be talking about the strategy and the vision for the future. But before we do that, we have to set the format. We have 30 minutes. And we've had some questions by e-mail already, but you can send questions in during the session through YouTube's chat function. I will see them here on the iPad. But do bear in mind that there is a short delay between you pressing send and me seeing it on the screen. I should also say that we have had a lot of questions already, so I don't think we will be able to answer all of them today, but the questions that are left unanswered in this session will be addressed by Saniona at a later stage. So with the format in place, let's turn to the 2 gentlemen who are here to answer your questions. It's CEO, Thomas Feldthus; and John Haurum, who is a Board member and will be appointed Chairman of the Board at the next General Meeting. Welcome.

Thank you.

Thank you.

And I thought, as we have you here, John, could you start by telling us a little bit about yourself and what attracted you to Saniona.

Yes, I've been following Saniona for many years, partly, of course, because Thomas and I go back -- so I started my career in the biotech industry as the Chief Scientific Officer in Symphogen that Thomas and I was a co-founder of. So we've worked together for many years. And Thomas has, of course, in his tenure at Saniona, occasionally talked about Saniona, so I followed it and been really excited about the company and bought some shares over the years. And then last summer, I had some extra time and offered Thomas to join the Board, and I'm very pleased about that.

And he accepted?

Yes.

So getting straight putting you on the spot here, could you summarize Saniona's strategic priorities for the coming next 3 years?

Yes. So we -- on the back end of the deal with Acadia, we now have a solid financial position. And so the main strategic objective of the company now is to prosecute our 3 leading programs, get those ready for clinical trials or into the clinic and then build value in those programs. They're in the ion channel area that Saniona is an expert in, but we also have tesofensine, which is also a strategic objective, of course, to prosecute and we'll be doing that by a careful focus on internal activities. We will build our research activities with our partners and then use that to also continue our business development activities.

So turning to you, Thomas. You've talked a lot about Saniona having a strong history of partnerships. Could you elaborate on how collaborations fit into your strategy?

Yes, this is a major -- partnership is significant part of our business model. And we have -- it's also part of our success story. The latest deal with Acadia is probably one of the 10 largest deals in Swedish biotech. And it now provides funding for the next 3 years where we can take these programs forward. We -- over the years, we have raised income SEK 750 million and actually made a profit of SEK 150 million to SEK 200 million through periods where we have followed this model. And this -- at the same time, this has enabled us to bring -- run 5 clinical studies and 2 preclinical programs, build our pipeline from scratch and also create some significant valuable deals with future upsides. And this demonstrates the effectiveness of this model, I believe, and also our ability to capitalize our science. So this is a key element in what we are doing.

So if we look specifically at business development, what will the focus be there?

So in the coming period, I would say it's divided into 3 areas. First, we will focus -- we will start with our internal pipeline discussions. So the 3 programs we're developing, we will reach out to companies. And the goal here is to create interest among companies, so they are lined up when we have completed the Phase I study and the time for replicating the Acadia deal is there.

I have a question here from an investor that have asked whether an exit within the next 2 to 3 years is a preferred strategy, assuming that the Phase I studies are successful of course.

Let me just -- I think this is -- that's you, John.

So on the exit question, it's important to understand that our companies are typically not exited as being sold, but rather they get acquired when certain stars have been aligned. And therefore, for Saniona, that's not really a strategy for us to pursue an exit. Rather, the strategy is to really focus on building value, create value in the pipeline and also create value through partnerships which, of course, is sustained by the value created in the pipeline. Therefore, looking at exit, that's a shareholder objective. It's not really a company objective. But of course, as we build value, it's -- you can't rule out that someone would come along and be interested in the company as a sort of whole entity. And as shareholders, we are not opposed to that. And of course, we are focusing on building value that potentially could create that opportunity in the future. But it's not a company objective as such.

Your focus is that partnership...

Our focus is really on unleashing the value that we see in the platform and that we see in the individual programs that we have, and drive those into a clinic and through clinical development, focus on tesofensine also. We're reluctant to be specific about what will happen with tesofensine because we have the major milestone that needs to happen first, the approval that we are expecting. But until we have that, we are reluctant to talk much about the strategy about tesofensine afterwards. But of course, that's part of our value creation story also.

So I just want to go a little bit back to the business because I mentioned 3 elements and you only get one of them. And the other one is that we also are in the coming period, apart from the 3 internal programs for lining up interest, then we have 2 programs for partnerships, Tesomet and SAN903, and we are going to continue working on that. And then also we have the research platform. And the point here is that right now, our entire research is fully funded through free research collaborations. And as they progress, then we will have a candidate selection. And then the partner will take over the program and take it through clinical development and then we get all the milestones through that. But this will also release internal resources at our end for new programs, and some of them could be in collaboration with partners. And therefore, we are still working on that. So we have these 3 elements going forward. And really what we want to do is we want a steady flow of deals in Saniona. So we are working actually on it. And we have made many types of deals over the time. We have made research collaborations. We have made licensing deals. We have had regional collaborations, and we have had spin-outs, 3 spin-outs in Saniona. And some of this, I've been talking a little bit about deals with -- John and I have made deals together before with Genentech in U.S. and Meiji in Japan. And John has made some very external ideas, I believe, in his previous company. And maybe you could talk a little bit about that.

Yes, I'm happy to, yes. So in the years 2012 to 2019, I was the CEO of a British biotech company called F-star. And there, we did -- during the time I was there, we did 4 deals that were all quite significant, either license deals or acquisition deals. And basically, we created asset-centric vehicles where we were then selling some of those programs that we had through equity deals and selling the programs in high-value deals that create a return to investors. And obviously something similar can't exactly be copied into Saniona's model because we are a public company. But the thinking behind looking at creative models for dealmaking is something that Thomas and I spent a lot of time talking about and that we want to continue. And it's especially with a platform company, which Saniona is. It's a platform around ion channels. It allows deals at different stages of pipeline value creation, so either early stage, as Thomas talked about, or later stage when they are into clinical development. And the value package is different each time. So this is something that we will have a lot of focus on going forward and use this kind of approach to also raise money for the company and through that create value for the shareholders.

Turning to look a bit at your projects. We're getting quite a lot of questions about tesofensine, in particular, which is not even your lead project, but you did release a press release yesterday that your partner, Medix, see a clear path. I think the wording was to -- in Mexico with hopefully towards an approval. And we have an investor asking if the information disclosed in that press release impacts your potential milestone and royalty payments in 2025 in any way.

Yes. Maybe I'll start and then you can continue. So obviously, the communication with the Medix reflects the relationship that we have with Medix and our understanding of the approval of tesofensine. And it's important for the shareholders to understand that we don't discuss the situation directly with COFEPRIS. Medix has the entire dialogue with COFEPRIS and we get reports from Medix about how they understand the situation with COFEPRIS. And some of the circumspection that there has been in our communication in the past, of course, reflects the fact that we don't know exactly how to interpret the messages from COFEPRIS. But we do believe after the latest communication that we've had with the Medix that the pathway for an approval now is very clear. COFEPRIS have requested a resubmission of the package in a certain format and there are some format aspects that they have requested to be amended in the resubmission. And Medix has made it clear to us that they will do that submission in February. There is no guideline on the time for the subsequent approval. So it's not possible to answer how much time it will take for COFEPRIS to then answer. But we have a feeling or an expectation that it won't be too long. So we are not talking about quarters. We're probably talking about months or maybe single -- like maybe just 1 month. We don't know for sure. So I don't want people to speculate too much on the timing of that actually because it's impossible to answer. But it's definitely more likely now that we will have a certain income from milestone this year. Royalties on sale will only happen after the launch, and there is a launch preparation phase that may push the actual sales into next year. It's impossible for us to quantify that time at the moment.

That was good because you actually answered the most common question we've had, which was if there's any indication of how long COFEPRIS will take, but that's impossible to say.

Well, I mean, there is no -- for the particular phase that we're in right now, there is no guideline on it. So therefore, there is nothing formal we can answer on. So it's only on our impression from hearing what Medix is saying. And therefore, it's a little hard to give specifics.

Yes. As I mean, Medix is very optimistic about the time lines. And they think that also the latency has an interest in progressing this and that they will sell aside of sources. And that's why they have some good expectation about that. But we can only refer to them, and we will not -- that's what probably [indiscernible] can go.

We also had a question saying that if tesofensine is approved and launched in Mexico during 2025, what is your strategy for expansion?

Right. So yes. So the next step would be to take a look at South America and Central America and where the Brazil is absolutely the most interesting market of size of it, both in value and people. And Brazilian companies, they typically have sales distribution all over South America. So it could be a regional deal in this context. And we are -- actually spokes have been in contact with several of the biggest companies in Brazil. And have ongoing discussions with them. And then the next step will be perhaps Southeast Asia. South Korea is a quite interesting market, and could be a gateway for other Asian countries. And there, we have been a couple of years ago two times in South Korea, where we have talked with them apart from business development conferences. And I think we could find a partner there who would be willing to make a bridge study to Asian population. So now tesofensine has been tested in Europeans and in South Americans and also in Japan actually, but that needs another bridge study. And that will be a 1-year study, and then you open up to new markets there. And finally, there's a significant change in the obesity market in the last couple of years. And we're also considering this, both for tesofensine and perhaps Tesomet also to see how we could position these products in this market.