BioArctic (BIOA) Q2 2024 earnings summary

Executive summary

• Leqembi (lecanemab) sales are accelerating with strong launches in the US, Japan, China, and approvals in South Korea, Great Britain, Hong Kong, Israel, and UAE; EMA issued a negative opinion, with re-examination ongoing.

• Royalties from Leqembi doubled sequentially, driving revenue growth, though milestone payments were absent in H1 2024.

• Early pipeline projects, including exidavnemab for Parkinson's, are progressing with Phase IIa trials set to begin and a research agreement for BAN2802 signed.

• Financial position remains strong with SEK 890M in cash and short-term investments, supporting continued expansion.

• Three-year lecanemab extension data showed sustained patient benefit and maintained safety.

Financial highlights

• Q2 2024 net revenues were SEK 49.8M–50M, with no milestone payments; royalty revenue was SEK 42.6M and co-promotion revenue SEK 2.7M.

• Q2 2024 operating loss was SEK 75.8M–76M, an improvement from Q2 2023; net loss for Q2 was SEK 68M–68.4M.

• Leqembi global Q2 sales reached JPY 6.3B (~$40M), up 120% sequentially; US monthly sales doubled from April to June.

• Cash and short-term investments at quarter-end were SEK 890M, with negative operating cash flow of SEK 94M.

• No loans or credit facilities outstanding; strong net cash position.

Outlook and guidance

• Royalties are projected to reach SEK 400M from Q2 2024 to Q1 2025, with profitability expected from 2025 even without EU approval.

• Operating expenses for 2024 are expected to rise 30%-60% over 2023 due to commercial build-out and R&D expansion.

• EMA decision on lecanemab re-examination expected in Q4 2024; US regulatory responses for maintenance dosing anticipated in 2025.