BioArctic (BIOA) Q3 2024 earnings summary

Executive summary

• Strong R&D pipeline in neurodegenerative diseases, with advances in brain transporter technology and initiation of exidavnemab phase 2a for Parkinson's disease patients; global collaborations, notably with Eisai for Leqembi, the first fully approved disease-modifying Alzheimer's therapy.

• Leqembi sales and royalties increased significantly, with royalties up 64% sequentially to SEK 69.8 million, providing a solid financial base and 9% royalty on global sales.

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

• Financial position remains robust, with cash and short-term investments exceeding SEK 800 million at quarter-end, 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 studies.

Financial highlights

• Q3 2024 net revenues were SEK 77 million, down from SEK 209 million in Q3 2023 due to absence of milestone payments; royalties from Leqembi reached SEK 69.8 million, up 64% sequentially and 3,200% year-over-year.

• Operating expenses rose to SEK 95 million, with R&D accounting for 72% of costs; operating loss was SEK 26 million, and net loss was SEK 20 million.

• Cash and short-term investments at period end were SEK 804.5 million, with negative operating cash flow of SEK 80 million.

• No milestone payments in 2024, compared to SEK 592 million in milestone revenue in the prior year.

• Earnings per share for Q3 2024 was SEK -0.22, with an equity/assets ratio of 84%.

Outlook and guidance

• Revenues expected to increase as royalty streams grow, with anticipated profitability in the coming years; no milestone payments expected in Q4 2024, but potential EU milestone if CHMP opinion is positive, with payment in 2025.

• R&D costs projected to rise 35%-40% in 2024 versus 2023 due to portfolio progression and commercial build-up.

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

• Subcutaneous Leqembi maintenance dosing application completed in US; potential approval by summer 2025.