Hansa Biopharma AB (OTCPK:HNSBF) Q3 2022 Earnings Conference Call October 20, 2022 8:00 AM ET
Company Participants
Soren Tulstrup – President and Chief Executive Officer
Donato Spota – Senior Vice President, Chief Financial Officer
Conference Call Participants
Christopher Uhde – SEB
Adam Karlsson – ABG Sundal Collier
Douglas Tsao – H.C. Wainwright & Co
Zoe Karamanoli – RBC Capital Markets
Johan Unnerus – Redeye
Dominic Rose – Intron Health Research
Operator
Hello, everyone, and welcome to the Hansa Biopharma Interim Report for January to September 2022. My name is Daisy, and I’ll be coordinating your call today. [Operator Instructions]
I would now like to hand over to your host Soren Tulstrup to begin. So, Soren, please go ahead.
Soren Tulstrup
Thank you, Operator. Good afternoon, good morning, and welcome to the Hansa Biopharma conference call in the third quarter of 2022. I’m Soren Tulstrup, CEO of Hansa Biopharma. Joining me today is our CFO, Donato Spota; and Hansa’s Head of Investor Relations, Klaus Sindahl.
Today, we’ll discuss the progress we’ve made during the third quarter of 2022 and review our near-term milestones. The presentation should take roughly 15-minutes after which there will be an opportunity to ask questions during a Q&A session.
Please turn to slide two. Please allow me to draw your attention to the fact that we’ll be making forward-looking statements during this presentation and you should therefore apply appropriate caution.
Now please turn to slide three, and an overview of Q3 highlights. Back in July, we executed a $70 million non-diluted financing transaction with NovaQuest Capital Management, strengthening our existing cash position to support the continued development of transformative drug candidates based on our unique antibody-cleaving enzyme technology platform and the commercial launch of Idefirix in Europe. With this cash injection from NovaQuest and our current cash on hand at the end of the third quarter Hansa’s cash run rate current expense through 2024.
On the operational side of things, our launch activities and market access efforts for Idefirix in Europe continues to progress as planned. A growing number of transplant clinics in countries where reimbursement has been granted are becoming clinically ready-to-use Idefirix and initiate therapy, and in parallel with this, we are also gaining market access in additional countries. Thus, during the third quarter, we are pleased to obtain positive reimbursement decisions by payers in both Poland and Scotland as dialogues continue in other countries where HTA dossiers have been submitted. Total revenue for the third quarter amounted to SEK67 million, including SEK20 million in product sales. Donato will cover the financials in more detail later.
As discussed in previous calls, it has been a priority of ours to work with the relevant European healthcare providers to put supernational guidelines in place for desensitization therapy and we’re very pleased therefore to see the publication in the journal Transplant International of the first international guidelines for desensitization treatment of highly sensitized kidney transplant patients by the European Society for Organ Transportation. We will cover these guidelines in more detail on the following slide.
In addition, I’m pleased that we could announce during the third quarter the first patient treated in our new European post-approval efficacy study of Idefirix in highly sensitized kidney transplant patients. This patient was treated in Barcelona, Spain with a reported successful outcome. In the U.S. enrollment in our pivotal trial and kidney transplantation, the so-called ConfIdeS trial is progressing according to plan with 39 out of the target of 64 patients now enrolled across the U.S. Randomization of all patients is expected to be completed in the first half of 2023 with BLA submission under the accelerated approval pathway anticipated in 2024.
As for our AMR clinical development program, we look forward to the first data read-out from our Phase 2 study later this year, following the completion of enrolment back in the spring of 2022. With respect to our GBS Phase 2 program patient enrolment is ongoing and we currently have enrolled 20 out of the target of 30 patients in this trial. Further measures will be implemented to accelerate recruitment in the coming months and we expect completion of enrollment in the second half of this year or first half of 2023.
Last, I also want to highlight that Hansa was recently certified as a great place to work for the third consecutive year. This certification reflects our successful efforts over the past years to not only build and maintain a high performance team, but also to create a rewarding and stimulating workplace for our employees.
Please turn to slide four. We’re very pleased with the continued progress of our market access efforts. During the third quarter, we secured positive reimbursement decisions in both Poland and Scotland to highly sensitized kidney transplantations. The recommendation by the Scottish Medicines Consortium follows the recent past due recommendation from NICE for Idefirix in England, Wales and Northern Ireland expanding access for eligible patients across the U.K.
In Poland, we’re also very pleased working with our partners at Medison to have recent agreement with the Polish Ministry of Health. As a result of this agreement Idefirix has now become the first and only product approved and reimbursed for the desensitization of highly sensitized patients in Poland. This decision to reimburse Idefirix fall’s last year’s inclusion of Idefirix onto the list of technologies with a high level of innovation by the College Medical Fund. Market access has now been secured in nine European countries, including Germany, France and the U.K., while market access procedures continued to progress in eight additional countries, including Spain and Italy.
Please turn to slide five. In early August, the European Society for Oregon Transplantation announced the release of the first set of guidelines targeting the management of highly sensitized kidney transplant patients. This first phase of the ESOT guidelines represents the first international consensus on a management pathway for highly sensitized patients and articulate the variability in definitions, approaches and outcomes as well as the perceived success of HLA-related transplantation. These guidelines provide a new clinical practice tool for healthcare professionals to help achieve the best possible outcomes for highly sensitized kidney patients, and I expect it to be a key driver of harmonization in the approach to transplanting highly sensitized patients.
An expert working group led by Professor Nizam Mamode, Professor of Transplant
Surgery previously at Guys and St Thomas Hospital in London and other leading experts in the transplantation field has been instrumental in driving this project. The second phase, which is now ongoing, will focus on the first experiences and patient outcomes as a knowledge and practice within today’s growth within the transplant community.
Please turn to slide six and a review of our ongoing clinical programs. As highlighted in the beginning of this call, we could recently report the first patient treated in our European post approval efficacy study of Idefirix in highly sensitized kidney transplant patients. The patient, a 54-year old Spanish man with chronic end stage renal failure, due to a malformation of the urinary tract that required dialysis since 1984. After two unsuccessful transplantation attempts in 1991 and 1996, the patient’s immune system became sensitized and his antibody levels were very high, making it impossible to find a compatible donor for all these years.
In May 2022, the patient received Imlifidase treatment followed by kidney transplant. After five months, the patient continues to be followed up on an outpatient basis and does not require dialysis. As for our AMR program, we look forward to announcing later this year the first data readout from our Phase 2 study in kidney transplant patients with active and chronic active antibody mediated rejection episodes. AMR is a large indication with a high unmet medical need with AMR episodes occurring in 5% to 7% of patients post-kidney transplantation and with a significant risk of patients losing graft function.
In highly sensitized patients, the frequency of AMR episodes is even higher and there’s currently no approved treatment for these rejection episodes. The primary endpoint of the Phase 2 study is to investigate how effectively Imlifidase therapy reduces the amount of donor specific antibodies in comparison with plasma exchange therapy in patients who experience an active or chronic active antibody mediated rejection episode after a recent kidney transplant. A secondary endpoints [TSA] (ph) levels kidney function and graft survival will be measured up to 100 days to 80 days after treatment. Based on the data from this study, we’ll determine the path forward for Imlifidase in the AMR indication.
With respect to our TBS Phase 2 program, we’ve implemented several significant initiatives to increase enrollment rate as the trial has been impacted by the pandemic in various ways, including a shortage of IVIg, as well as reduced capacity and availability of staff across a number of trial centers. We believe we will see an acceleration in recruitment due to these initiatives, as well as additional measures that will be implemented in the coming months. Also, we expect high infection rates to be seen as we approach the winter season leading to increasing incidence of GBS. Completion of enrollment in the GBS trial is anticipated in the second half of 2022 or first half of 2023 with first high level data readout in the second half of 2023.
In anti-GBM, we plan to commence a pivotal Phase 3 study of Imlifidase before year-end as communicated earlier. The new global study will enroll 50 patients across sites in the U.S. and Europe. Last, in the U.S. our pivotal ConfIdeS trial in kidney transplantation is evaluating Imlifidase as a potential desensitization therapy to enable kidney transplants in highly sensitized patients waiting for disease donor kidney through the U.S. kidney allocation system. Enrollment is progressing according to plan with 39 out of the target of 64 patients now enrolled across the US. Randomization of all patients is expected to be completed in the first half of 2023 with BLA submission under the accelerated approval pathway in 2024.
Please now turn to slide seven and a summary overview of our pipeline. As depicted on this slide, we’ve successfully developed a broad clinical pipeline in both transplantation and autoimmune diseases. In addition, we have exciting preclinical projects ongoing in cancer and anti-drug antibodies, as well as in the very promising field of gene therapy, where preclinical studies with Imlifidase led by our partners from Sarepta Therapeutics and AskBio are progressing as planned.
Regarding Sarepta, we’re pleased to observe the recent progress of the SRP-9001 program to treat ambulant patients with Duchenne muscular dystrophy as Sarepta announced during Q3 that it had submitted the BLA to the U.S. FDA under the accelerated approval pathway. This is indeed also positive development for our collaboration with Sarepta where Imlifidase is being investigated preclinically as a potential pretreatment or inactivation of neutralizing antibodies ahead of Sarepta’s gene therapy and very good progress has been made in the past period.
With this overview, I’ll now hand over the call to Donato, who will take us through a review of the quarterly and half year financials. Donato?
Donato Spota
Thank you, Soren. Please turn to slide eight. In the first quarter of 2022, we have seen again very solid revenue with product sales amounting to SEK23 million, revenue recognition under our agreements with Sarepta and AskBio increasing to SEK44 million and total revenue amounting to SEK67 million. Overall, this is reflective of the continued good progress in market access expansion across our early launch markets and the progress with our partnerships within gene therapy.
The Q3 increase in revenue recognition under our gene therapy partnership agreement is mainly driven by the AskBio collaboration, where Hansa has been having increased contributions in Q3. For the fourth quarter, we do not assume the same level of increased contributions.
Looking at the September year-to-date performance, total revenue for the first nine months of 2022 amounted to SEK124 million, of which SEK66 million or 54% result from product sales. While SEK55 million of revenue is recognized under the Sarepta and AskBio agreements and SEK2.4 million related to the [indiscernible] license. Although still on low levels, this represents an almost seven-fold year-on-year increase in total revenue and a ten-fold year-on-year increase in product sales, again confirming our commercial progress.
Over the past nine months, we’ve continued to make significant progress regarding pricing and reimbursement and broadening our hospital sales pace across markets. However, we do still expect that sales remain volatile between quarters until we have established a foundation for repeat business at hospital level through positive outcomes in the first patients now treated.
Please turn to slide nine. For the first nine months of 2022 SG&A expenses amounted to SEK254 million, compared to SEK225 million for the same period last year. In the fourth quarter, SG&A expenses amounted to SEK83 million, which continues to be roughly on par with the levels seen during the previous quarters.
R&D expenses amounted to SEK254 million for the first nine months of 2022, compared to SEK163 million for the same period last year. For the third quarter R&D expenses amounted to SEK91 million, compared to SEK61 million for the same quarter last year. The increase in R&D is mainly driven by the ongoing ConfIdeS study in the U.S. our post approval study in Europe and preparations for our pivotal Phase 3 program in LGMD and DMCs. Further, we have also increased our investments in our second generation NiceR program as we move the lead candidate closer to a potential first clinical study next year.
As discussed at previous earnings calls, investments in R&D and our pipeline activities across all four franchises remained a high priority as it underpins the company’s long-term value creation strategy. Net loss amounted to SEK463 million for the first nine months of 2022 and SEK154 million for the third quarter. The increase over last year primarily reflects our increase on investments, partly offset by increased sales and revenue.
Please turn to slide 10. Cash flow from operating activities amounted to minus SEK129 million for the third quarter of 2022, which compares to minus SEK132 million for the same period in 2021. For the first nine months of 2022, operating cash flow was minus SEK393 million, compared to minus SEK365 million for the first nine months of last year. Under cash position, again, September was SEK1.2 billion, including the proceeds from our structured debt financing with NovaQuest as alluded to — by Soren earlier. We expect that this will finance our operations through 2024.
I’m now handing back to Soren for his final remarks.
Soren Tulstrup
Thank you, Donato. Now please turn to slide 11. As discussed, we continue to demonstrate solid progress across our business operations and clinical program activities, as we build an advanced pipeline of valuable drug candidates for rare immunologic diseases. During the first nine months of 2022, we achieved solid revenue growth, despite an overall challenging market, including continued negative impact from the pandemic, increased geopolitical uncertainties and inflation.
Looking at the milestones for the remainder of the year and the years to come, we’re very encouraged by the demonstrated potential of our unique antibody-cleaving enzyme platform as we continue our journey towards becoming a global leader in rare immunologic diseases.
As discussed, we anticipate communicating a first high level data readout our Phase 2 study in AMR before year-end. The data from this study will inform our decision-making regarding the path forward in the post transplantation setting. In Anti-GBM, we anticipate commencing this year as well a new pivotal Phase 3 study of Imlifidase in 50 patients across the U.S. and Europe.
As far as NiceR is concerned, our next generation enzyme program for repeat dosing scenarios,
we expect INDenabling tox studies to be completed towards the end of this year with the potential to move this program into the clinic early in 2023. In our U.S. ConfIdeS study, we expect to complete enrollment by year-end as previously communicated, while randomization of all patients is aimed for completion in the first half of 2023 with a BLA submission under the accelerated approval pathway in 2024.
In GBS, we expect to see an acceleration in enrollment of patients due to a number of initiatives we’ve implemented, as well as higher infection rates as we approach the winter season and we expect enrollment to be completed in the second half of this year or first half of next year.
Please turn to Slide 12. This concludes our presentation and we would now like to open the call for questions. Operator, please begin.
Question-and-Answer Session
Operator
Thank you very much. [Operator Instructions] Our first question is from Christopher Uhde from SEB. Christopher, your line is open. Please go ahead.
Christopher Uhde
Thanks very much for taking my questions. I had a couple on the question program and then one on the gross margin. So I noticed you listed a live donor trial, which seems really exciting. Can you give us a little bit of details about — I’m just thinking about what extent? Because it’s 12 patients and an academic center running it at the moment, so to what extent is this adaptable or what opportunities [Technical Difficulty] in your R&D program? That’s the first question, yes.
Soren Tulstrup
Well, so what we have is we’re looking at rebound of total specific antibodies essentially, which is a small trial that we’re running. If you look at the broader opportunity to expand the label to also include living donor scenarios. Obviously, there’s quite some potential in that indication. You wouldn’t have — this would actually acts, of course, then organs and donors to the pool and therefore it’s market expansion very much. And so it’s certainly something that we’ll be pursuing at some point, but the path forward to getting this into the label has not been determined at this point in time.
Christopher Uhde
Right, okay. And then for AMR, obviously, you have a readout coming up pretty soon. I just wanted to hear what your take is on how good [plex] (ph) is in this population in terms of lowering DSA? And if you can talk about the sort of the extent to which there’s an overlap between highly sensitized and the AMR populations in terms of DSA levels, inflammatory response. I mean, just trying to gauge, you know, obviously, a complex issue, but to what extent is there a cross read between success in desensitization and AMR?
Soren Tulstrup
Yes. So if we look at the way plex works versus the way Imlifidase works and the results in terms of lowering donor specific antibodies, you would expect to see a faster and more complete production in general in patients undergoing Imlifidase therapy, compared to plex therapy. So plex is part of the standard-of-care currently. And if you look at it overall, standard-of-care is something that can manage the majority of patients, but there’s clearly a number of patients where you need efficacy faster and above what you can get with standard-of-care. So clearly, there is a high unmet medical needs and in our discussions also with key opinion leaders and clinics, that is something that is clearly recognized.
So then you asked about the overlap between high sensitized patients and AMR. And in AMR effects approximately 5% to 7% or so of all kidney transplanted patients. And the majority of these events happen in the first six months. There is a higher incidence in patients who are highly sensitized, so highly sensitized patients represent a larger proportion of these patients than less sensitized moderately sensitized patients. So again, given this, we do expect that, certainly hope that we’ll have benefit in the Imlifidase arm versus the plex arm, as far as the primary endpoint is concerned.
Christopher Uhde
Thanks. I just have — coming back to the plex has — to what extent has it been quantified? I mean, the amount of DSA reduction, what extent has it been quantified? And what’s the consistency like across studies that have done that?
Soren Tulstrup
Well, there is quite some variability there and really depends on the specific end centers and the specific circumstances. So I can’t give you any specific number, but certainly this is something that has been started and part of considerations prior to, you know, designing and initiating the study.
Christopher Uhde
Okay, thanks. And then lastly on the gross margin, so does the COGS for the quarter include Idefirix used in trials. And I guess, you know, just kind of trying to get it why it’s at the level that is at and when do you start enjoying scale?
Soren Tulstrup
I’ll hand over to Donato for this. But if you look at the margin in general, obviously, it has to do also with the production of batches right where there’s quite some variability there. But Donato can you take this?
Donato Spota
Yes, absolutely, so to the first part of your question. Christopher, no the cost of goods do not include material that are used in clinical studies. That’s not how the accounting is running. The reason why you can see a gross margin, which is actually pretty variable across the quarters, if you look on quarter-by-quarter basis, and maybe appears a bit higher as indeed as Soren, I know, started with you — committing to. I mean we are manufacturing batches, we are obviously, manufacturing those batches on a commercial scale that takes into account where we want to be in a few years from now.
And obviously, this is relative to the sales that we’re seeing right now. This is obviously more costly than where it’s going to be when we are more on a — well, you know, reached kind of peak sales levels or close to the peak sales levels. So this is really an effect that — and is hitting the P&L now during the launch phase, but we’ll lean out going forward. So that’s not representative of what the cost of goods are going to be in a few years from now.
Christopher Uhde
Okay. Thanks so much.
Soren Tulstrup
Thanks, Christopher.
Operator
Thank you. Our next question is from Adam Karlsson from ABG. Adam, your line is open. Please go ahead.
Adam Karlsson
Hi, thanks for taking my questions. A couple on AMR as well, if I could. So kind of building on a previous question in terms of the level of antibody reduction, you’d expect to see in AMR patients using Imlifidase. Is there any reason sort of mechanistically or other? Why this would be sort of materially different from the level of antibody reduction we’ve seen already in the approved indication and in desensitization? Or I guess, if I’ll try to put it another way or yes, I think I think maybe that’s the best way to put it. Yes, that’s the first question.
Soren Tulstrup
Yes, thanks. Thanks, Adam. And the answer is no. Essentially, we would expect to see the same level of reduction in the same pattern, if you will, in terms of how fast the reduction that takes place as we’ve seen in highly sensitized patients being ready for kidney transplant.
Adam Karlsson
Okay, great. Thanks. And then on the study itself, it’s a small study, obviously, study patients, a lot of potential noise from some concerning factors as you are alluding to. Are we realistically looking at sort of from a statistical point of view sort of [indiscernible] results perhaps with a trend towards superiority? Or was the study powered to show statistical significance? And if so, could I draw you to comment on your estimate for the power calculation? What differences were you hoping to see and at what level of power?
Soren Tulstrup
Yes. I’m not going to comment on the last far your question there. But yes, I mean, it is obviously we do expect and hope to see superiority as far as the primary endpoint is concerned, which is really around how much donor specific antibodies are used and how fast, right? So it’s around what happens in the first five days and then we have a number of secondary endpoints looking at 108 — 180 days that includes donor specific antibodies, but also quite a number of endpoints related to graft function, so that’s essentially the setup right here. Initially, look at donor specific antibodies immediately after therapy and then there’s this 180 day follow-up.
Adam Karlsson
Okay. No great. And previously, you’ve said that there might be potentially depending on the, I guess, the strength of the data the possibility to take that to regulators and see if it would be sufficient for filing. Now that we’re getting close to that readout, are you able to offer any more, you know, specifics on what you’d need to see or sort of qualitatively anyway? What might make you feel confident enough to discuss our regulators?
Soren Tulstrup
I mean, obviously, you would have to see what the response of regulators is. But I would say that it would be expected that we would have to run a larger and longer term trial to get this into the label. I think this is — if you look at the field versus what has happened in the past. It has been quite challenging to run these larger and long-term studies in AMR. And so currently there is essentially no approved therapy, right? There is standard-of-care and that’s what’s there. So what we’re currently focused on is really generating encouraging data, so that this can kind of be part of the information package available to, you know, clinicians in the field, as a plan for therapy.
And then clearly based on the dialogue or dialogues that we going to have with regulatory authorities based on the first set of data here from this Phase 2 trial will determine what the path forward is, what a potential Phase 3 trial would look like and so on. So that’s I hope your responds to your question there.
Adam Karlsson
No, that’s very helpful. Thank you. And maybe a brief final question then on, I mean, we’re getting towards the end of 2022 headcount as you were showing stable and an operating cost fairly stable quarter-over-quarter now. Could you comment on sort of what we should be thinking at high level on the trajectory of SG&A and R&D costs looking into say 2023?
Soren Tulstrup
So I’ll hand over to Donato to have him chime in here on this. But overall, I mean, we are building up the organization, but you’re not going to see massive expansion, but there will be some continued buildup of the organization. And then as far as R&D costs are concerned obviosuly, you know, we have the ConfIdeS trial, we have the Anti-GBM trial getting rated, right? And GBS is ongoing as well, and we might initiate at some point additional trials, but we do not expect a significant increase in R&D cost. But over to you, Donato.
Donato Spota
Yes. I think you’ve given the answer. I think we would be expecting somewhat of an increase on the run rate versus Q3 this year. But really as Soren mentioned, I mean, really something which is very much under control. Obviously, there’s two aspects which is a bit difficult to estimate. One is inflation, the other one is the FX impact. But generally speaking, we’re not — let’s say, we’re planning to gradually invest in the commercial space still. And then on the R&D side, we will have, obviously, I think, the most important impact is going to come from Phase 3 Anti-GBM, which will add a certain level, of course, on top of where we are today.
Adam Karlsson
Great. That’s very helpful. Thank you.
Soren Tulstrup
Thanks, Adam.
Operator
Thank you. Our next question is from Douglas Tsao from H.C. Wainwright. Douglas, your line is open. Please go ahead.
Douglas Tsao
Good morning and thanks for taking the questions and congrats on the progress. Just — I’m just curious in terms of investor data commercial performance, we started to see sort of a lot nice consistency in terms of several patients being treated each quarter. I’m just curious as to where we’re starting to see increased activity or what’s really driving it right now? Is it that we’re starting to see, you know, consistent flow in the original countries? Or has this been a function of, sort of, gaining reimbursement into new markets? Thank you.
Soren Tulstrup
Well, I mean, overall, it is a combination. So clearly, what we’re seeing right now is in France, for instance, there has been a good ramp up in terms of the early access program, there’s strong interest from quite a number of centers. And so they’re quite far advanced in terms of identifying patients and so on, so that we’ve seen good developments there. In the U.K., it’s still early days after the agreement with NICE and in dialogues with the National Health Service. There is quite a number of clinics there that are having internal discussions as to kind of the structure, who should be involved and so on specific approach. So we have yet to see kind of an impact from the U.K., but we expect that to be coming in the coming months.
And then we have, of course, Germany where we’ve had our reimbursement and overall market access and where again we’re seeing overall lots of interest and activity in terms of identifying patients. What is always difficult to again predict as we discuss in the past is how long it’s going to take for these patients that have been identified, put on a list in a specific center that is clinically ready and commercially ready to initiate therapy. How long it’s going to take to find an organ that will be offered to this patient, right? So but it’s good to see progress in Germany as well. And then we have, as we’ve discussed, we’ve seen activity in the Netherlands and you know, we had this, but this is from the post-approval. I think as we’re starting this patient, we have a couple now, one patient from Spain has been reported. So we are seeing kind of broad activities across Europe, primarily, of course, in those countries where we have access at this point in time.
Douglas Tsao
Okay. Great. And Soren, is it taking roughly the same amount of time to ramp up in these new markets and new centers as it did in the original countries that you’re in? Or are you able to shorten that cycle? Thank you.
Soren Tulstrup
Yes, I would say that it takes more or less at the same time. There’s obviously, kind of, interclinic variability here. But in general, I mean, they have to go through a number of steps, right? And one of the most complex really is after a patient has been identified to make sure that there is delisting of antigens, so that there is sufficient flow of organs to the center and to the specific patients so that you know, there’s a chance that a specific organ will be offered to that patient who’s top of the list. But in general, I would say, yes, it does require some time from being clinically ready to actually, you know, having a patient to transplant.
Douglas Tsao
Okay, great. Thank you.
Soren Tulstrup
Thanks, Douglas.
Operator
Thank you. Our next question is from Zoe Karamanoli from RBC Capital Markets. Zoe, your line is open. Please go ahead.
Zoe Karamanoli
Hi. Thank you for taking my questions. The first question is with regards to the Sarepta and AskBio revenue recognition. Can you provide some details as to what it relates to? And the progress in the preclinical setting? And are you still expecting entering to Phase 1 to the Sarepta collaboration in the first half of next year? That’s the first question.
Soren Tulstrup
Thanks. So I’ll hand over to Donato for the specifics around the revenue recognition. But just let me address the Sarepta question overall. So what we have been doing so far is preclinical work. And as I reported earlier during this call, we’ve seen good progress here. We don’t see an effort and the next step hopefully in the near future would be for Sarepta to make a decision as to whether they would take it into the clinic and that could happen. When they’re not too distant future as I said. And then as far as the revenue recognition is concerned, Donato, I’ll hand over to you.
Donato Spota
Sure. Hi, Zoe. So, you know, all of the accounting rules, the contributions that the company makes into a collaboration drives obviously the recognition of the revenue running to the P&L. And under the AskBio agreement, I mean, this — our contribution is basically dominated by providing innovative Imlifidase product and other materials on top of our, know-how, but the dominating factor in terms of over value, because that’s a lot shorter.
Obviously, as you know, a much shorter agreement with a feasibility, focused on feasibility at this point. The Imlifidase product and other material delivery is kind of the dominating factor here and that drives revenue recognition. So it’s much more on off approach and then we have on the Sarepta where our resource contribution and know-how contribution is actually the driving factor which makes it a much more stable quarter-on-quarter recognition, if that makes sense.
Zoe Karamanoli
Yes, it does. Okay, that’s great. Thank you. And then the next question is around recruitment and randomization for the Imlifidase trial, given the complexity at randomizing patients and availability of a suitable kidney organ. How should we be thinking the ramp up in the U.S. once Imlifidase will be launched? Will slow ramp up there as well, be a sensible approach, just interesting in your thoughts here.
Soren Tulstrup
Yes, thanks Zoe. So you’re right, obviously, there are complexities around making sure that there is a consistent and adequate flow of organs to the clinics participating in the ConfIdeS trial. And that’s a little bit of an art, you know, they have to, as you said earlier, they have to look at how they can deuce antigens to make sure that these highly sensitized patients are still getting organs offered. And we see that, that is happening with some delay after the involvement of the patients, it’s a question of months. What is good is that during this trial and through this trial, the centers, which are some of the leading centers across the U.S. they’re gaining very valuable experience in doing this, right? And so when we’re ready to launch hopefully in the U.S. in some years there will be this very, very valuable experience in the key centers in the U.S.
So we do expect a faster ramp up in the U.S., compared to Europe just because of this, but also of course because of the fact that in general you see a faster ramp up of transforming the drugs, very innovative drugs in the U.S., compared to Europe. At this point in time, we have 10 centers actually involved in the study and we expect to expand that to 15 or maybe even more. The 10 centers that we currently have in, I mean, there were 10% or so of the annual kidney transplant volume, so really very important centers. And we’re very encouraged by the interest shown by the heads and all the staff involved in these centers.
Zoe Karamanoli
Okay. That’s great. Thank you.
Soren Tulstrup
Thanks, Zoe.
Operator
Thank you. Our next question is from Luisa [indiscernible] from Kempen. Luisa, your line is open. Please go ahead.
Unidentified Analyst
Hi, yes. This is from Jacob — for Jacob from Kempen. Thank you for taking my questions. I wanted to first ask what do you expect in terms of Idefirix sales to be like in the last quarter of this year? And also a second question, when do you expect to complete the post authorization study?
Soren Tulstrup
Thanks for those questions, Luisa. So we are not providing any guidance for sales in general and certainly not by quarter. What we have said is that you should expect quarterly sales to be quite volatile from quarter-to-quarter, because this is not again, this is not a chronic therapy, right, where you have certain number of patients and then you have new patients and you have patients that are flowing out. And then you have a certain base that is growing with a certain cadence.
Here you have one-off therapy in very limited number of patients with a product that has a very high price tag, optical price tag. And so it won’t be volatile from quarter-to-quarter. What has been very encouraging is to see activity over the past few quarters, the consistency, right, and that there seems to be now by a consistent pattern. But again, we wouldn’t expect over the next quarters again to see quite some volatility . And as I said initially, we’re not providing any sales guidance at this point in time, because we would not — I mean, that would be wrong.
Then the second question you asked was, so can you just repeat the second question?
Unidentified Analyst
Sure. When do you expect to complete the post authorization study?
Soren Tulstrup
Yes. So that we — I mean, we have to complete it by the end of 2025. And there is no urgency here, we have reported the first patient you know, in this study, we currently have a couple. We need to enroll 50 patients and so there is a number of years to do this. As we’ve discussed in past calls, this is a great way not just to generate data, but also to, of course, make sure that the centers get experienced within 50 days. But there is no urgency from our point of view other than that we need to set complete the trial by the end of ‘25.
Unidentified Analyst
Thank you. Just one more question. Could you maybe provide some guidance on when in 2024, do you expect your cash runway to go to?
Soren Tulstrup
In what year, Sorry?
Unidentified Analyst
So you said it’s your cash runway —
Soren Tulstrup
[Multiple Speakers] cash runway. We said — yes, so the cash runway we’ve set takes us through 2024.
Unidentified Analyst
And, you know, maybe more specifically?
Soren Tulstrup
Donato?
Donato Spota
No. Unfortunately, I’m not guiding the number specifically. I mean, there’s so many factors that depend what will be this depends on. But I think overall, we believe according to comp plans that through 2024, we’ll have cash runway with the existing cash.
Unidentified Analyst
Okay. Thank you very much.
Soren Tulstrup
Thanks, Luisa.
Operator
Thank you. Our next question is from Johan Unnerus from Redeye. Johan, your line is open. Please go ahead.
Johan Unnerus
Thank you for taking my questions and also thank you for some good questions earlier. So basically more or less some follow-up. First, on the AMR setting, could you remind us and give us a flavor of what to expect in the current standard-of-care in terms of the success rate or the ability to save this episode when they thought to happen, so to speak.
Soren Tulstrup
Well, if you look at hard endpoints in terms of graft survival and graft function and so on. In general, I mean, standard-of-care has a relatively good track record in terms of managing these episodes. Still, there’s quite a number of patients that end up losing their graft right? And have, you know, damage and so on that will impact the durability and life extension of the graft. So there’s clearly, as I said, an unmet medical need in this field.
Johan Unnerus
And is this also related to the level of sensitive type among the patients is it sort of a more problematic graft survival among more highly sensitized patients?
Soren Tulstrup
Yes. So what you see is, as I said, in general, 5% to 7% of all kidney transplanted patients have these episodes, sometimes more than one. But there are — if you look at the highly sensitized patients, there it’s reported as high as 40%, 45%. What we’ve seen in our long-term follow-ups study from Phase 2 so far is also 38%, if I recall correctly of our patients had these episodes of AMR. Again, they’re in general manageable using standard-of-care, but there are still a number of patients that lose their graft.
Johan Unnerus
Yes. After 12 or 18 months or and is that proportion also higher among highly sensitized patient?
Soren Tulstrup
Yes. Well, if you look at our own data, no, that’s not the case. But in general, as I said, there are more highly sensitized patients that have these episodes. I cannot say that highly sensitized patients suffering these episodes have a higher graft loss incidents than other patients, I certainly haven’t seen those data.
Johan Unnerus
Okay. And there is probably some level of the transparency in terms of how to pay extra contribution from collaboration. There is a run rate of some SEK4 million or SEK5 million. But this quarter it was more obviously. And you alluded to that there could be expected some activity over the next six to 12-months. Could you give us a little bit more flavor of what to expect on that side?
Soren Tulstrup
No. So, I mean, what we’ve reported as far as the Sarepta collaboration is concerned is that we’re eligible for milestone payments up to just shy of $400 million and we’ve not specified, kind of, the specific milestones or communicated any expectations around the timing and so on. As far as buyers is concerned, this is a different collaboration agreement in that it’s a feasibility focused collaboration, both the clinical feasibility and clinical feasibility studies will be implemented. And we haven’t qualified for a $5 million upfront that was paid of course and then we’re just recognizing this based on us as to now to talk to specific activities. But the Sarepta collaboration, we have not been more granular than just the total amounts.
Donato, do you want to add anything to this?
Donato Spota
Yes. I think one thing that we have been saying in the past is obviously that, you know, it’s rather backloaded and all of them have to burden our new phase, so days are more significant amount coming in terms of regulatory milestones, so upon filing and potential approval, and then also then, obviously, commercial milestones, sales milestones.
Johan Unnerus
Yes. I guess that’s what you should expect, especially if you were sitting on the outside of the table as you told. So thank you very much.
Donato Spota
Sure. Thanks, Johan.
Soren Tulstrup
Thanks, Johan.
Operator
Thank you. [Operator Instructions] Our next question is from Dominic Rose from Intron Health. Dominic, your line is open. Please go ahead.
Dominic Rose
Hi, this is Dominic from Intron Health. Thanks for taking my questions. I’ve got three, the third question is on [Technical Difficulty] number. Can you give us an update on when you can expect to see deferred revenues from that collaboration?
Soren Tulstrup
Sorry, I didn’t hear your question very well. Can you repeat that?
Dominic Rose
Sorry, I was asking on Medicine Pharma, can you give us an update on when we can expect to see the first revenues from that collaboration?
Soren Tulstrup
So the Medicine collaboration or agreement is focused on Israel and certain Eastern European countries. And you know, we have now secured reimbursement in Poland. We obviously need to see that implemented, but it is clearly a priority area for the system in Poland as I talked to, I cannot give any specifics around when we expect revenue to be coming there, but it could come in the near future. And then we have the product approved in Israel. And again, I can’t be specific here, but it wouldn’t necessarily take a long the time. But I can’t be very specific on this.
Dominic Rose
Okay. Thanks, and on the ESOT guidelines. I was hoping to get an idea of how important you think these could be in terms of driving your European sale? And also whether you think that Imlifidase could become the recommended desensitization option in the second phase of the guidance?
Soren Tulstrup
Well, we certainly think that they’re quite important for let us say the long-term commercial opportunity, right? To have these supernational European wide guidelines in place and certainly if they are quite specific as to the place of Imlifidase and they recommend use of Imlifidase that will be very helpful. First phase here has been helpful in that, it has engaged the key opinion leaders and the key clinic hits and academics across Europe that they have recognized that highly sensitized patients really have a clear problem and that the medical community needs to do something about it and that there’s now one additional option namely Imlifidase, so that’s really, really helpful in increasing the awareness across Europe. And it has certainly been very helpful to see this task force also engage internally with other clinics and ourselves, quite frankly.
Then we would certainly hope that based on positive experiences, we’ll — Imlifidase and as you know, several of the very early transplants haven’t taken place post the approval and also post gaining market access have been positive that this would lead to a benign wording around the place of Imlifidase in therapy. So we do think, as I said, yes, they will have clear positive impact hopefully, but more long-term or medium to long-term. But even short-term, it’s certainly helpful in increasing the awareness around the problem and the fact that the medical community needs to do something about it.
Dominic Rose
Okay. Many thanks. And finally on the — to go back to the AMR readout. Could you talk us through what options you think you’ll have for this program, wants to readouts positive. We’re also thinking about whether there’s the funding in place for a Phase 3? Thanks.
Soren Tulstrup
Yes, I mean, so clearly, one option again with good data hopefully would be to again, agree with the regulatory authorities on the path forward towards getting this in the label that would, you know, as I discussed earlier, like to include having to run a Phase 3 trial. We’ve seen in the past that they tend to be quite large and have a long duration. And all of this is something we need to consider, how would we — in this scenario best be able to get it into the label. But also, we’re certainly, as I said, looking to get positive data that can be published, so that it’s in the public domain, because this will inform decision making and thinking around how these patients are treated in general. So I hope that this helps.
Dominic Rose
Yes. That’s it. Thank you.
Soren Tulstrup
Thanks, Dominic.
Operator
Thank you. We have no further question. So I’ll hand back over to the management team for any closing remarks.
Soren Tulstrup
Thanks so much, operator, and thank you everyone for your interest in today’s call. As I hope you’ll see. This has been another solid quarter, we’ve seen solid progress in our launch activities and also clinical development programs. Looking ahead, we have some important milestones coming up. We’ve discussed the AMR readouts. Next year, we’ll also have the GBS readouts. We are getting ready to put NiceR into the clinic hopefully in the first half of next year. And we have some important decision making by our partner in the gene therapy space, Sarepta, as well as hopefully seeing progress with the AskBio collaboration also in the gene therapy space.
So exciting times, and I look forward — we all look forward to keeping you updated on coming progress. So thanks so much.
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