BioArctic (BIOA) Q2 2024 earnings summary

Executive summary

• Leqembi (lecanemab) sales are accelerating with strong launches in the US, Japan, China, and approvals in eight geographies, now covering over 80% of the expected market; new approvals include South Korea, Hong Kong, Israel, UAE, and Great Britain.

• Regulatory progress includes FDA submissions for less frequent IV and subcutaneous dosing, a rolling BLA for an auto-injector, and a negative CHMP opinion in the EU with re-examination ongoing.

• The pipeline is advancing, with phase IIa for exidavnemab in Parkinson’s disease set to start in Q4 and a research evaluation agreement for BAN2802 signed with Eisai.

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

• Financial position remains strong, with a significant cash balance and expectations of profitability from 2025.

Financial highlights

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

• Leqembi global Q2 sales reached JPY 6.3 billion (~$40 million), up 120% from the previous quarter; royalties doubled sequentially and increased seventy-fold year-over-year.

• Operating loss for Q2 was SEK 76 million; net loss was SEK 68 million, both improved from Q2 2023.

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

• No milestone payments received in H1 2024; prior year included SEK 391.1 million in milestone revenue.

Outlook and guidance

• Eisai forecasts Leqembi sales to grow from $30 million in 2023 to $360 million in 2024, with a fivefold increase expected by 2026; royalties projected to reach SEK 400 million from Q2 2024 to Q1 2025.

• Profitability is expected from 2025, regardless of EU approval.

• R&D and total costs for 2024 are expected to increase by 30%-60% over 2023 due to project progression and commercial build-out.

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