BioArctic (BIOA) Q3 2024 earnings summary

Executive summary

• Pipeline advancing with strong progress in brain transporter technology and initiation of phase II-A for exidavnemab in Parkinson's disease; focus remains on neurodegenerative diseases with global collaborations, notably with Eisai for Leqembi.

• Leqembi sales and royalties increased significantly, with over 60% higher royalties compared to the previous quarter, driven by growth in the U.S., Japan, and China, despite slower U.S. uptake due to infusion capacity bottlenecks.

• Leqembi approved and launched in multiple countries/regions, including Hong Kong, Israel, UAE, and Great Britain, with ongoing regulatory reviews in 17 more; EMA and TGA issued negative opinions, with re-examinations pending.

• Solid financial position with cash and short-term investments at over SEK 800 million, supporting continued R&D and project advancement.

• Early pipeline projects in Alzheimer's, Parkinson's, ALS, and enzyme replacement therapies progressing, with validation of Brain Transporter technology in preclinical and non-human primate models.

Financial highlights

• Royalty revenues from Leqembi reached SEK 69.8 million in Q3 2024, up 64% sequentially and 3,200% year-over-year.

• Net revenues for Q3 2024 were SEK 76.6–77 million, down from SEK 208.8–209 million in Q3 2023 due to absence of milestone payments.

• Operating expenses increased to SEK 95 million, with R&D accounting for 72% (SEK 68 million), nearly double year-over-year.

• Operating loss was SEK 26 million for Q3 2024, compared to a profit in Q3 2023, reflecting the absence of milestone payments.

• Cash and short-term investments at period end: SEK 804–804.5 million.

Outlook and guidance

• Expectation of continued royalty revenue growth as Leqembi sales expand globally, with profitability anticipated in coming years.

• No milestone payments expected in Q4 2024; potential milestone from E.U. approval would occur in 2025.

• R&D costs projected to rise 35%-40% in 2024 versus 2023, driven by advancing clinical programs and commercial build-up.

• Eisai revised FY 2024 Leqembi sales forecast downward to JPY 42.5B, but mid- and long-term outlooks remain unchanged.

• Awaiting CHMP opinion on lecanemab in E.U.; potential European Commission approval within 67 days if positive.