Arecor Therapeutics (LSE:AREC) — Investor Presentation

0:01 Good afternoon, ladies and gentlemen. Welcome to the ARECOR THERAPEUTICS PLC Interim Results Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged. They can be submitted any time via the Q and A tab that's just situated on the right hand corner of your screen. Please just simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company will review all questions submitted today and publish responses where it is appropriate to do so, and these will be available via your Investor Meet company dashboard.

0:33 Before we begin, I would like to submit the following poll, and I would now like to hand you over to CEO, Sarah Howe. Good afternoon, Sarah. Great. Thank you, and good afternoon, everybody. Thank you for joining us today. So, my name is Sarah Howell. I'm the CEO of ARECOR, and I'm joined today, by Susan Lather, who's our CFO. And we'll talk you through today the interim results for the six months ending June 30, 2023. So I'll just draw your attention very briefly to, our customary legal notice. So by way of background at ARECOR THERAPEUTICS, for those of you that may be joining us for the first time today, we're very much focused on improving patient care by enhancing existing therapeutic medicines such that they're safer, more effective, and easier to use. And we do this by leveraging our innovative and proprietary formulation technology platform, Aristat. And we use this platform to develop these enhanced and differentiated versions of existing therapeutic medicines.

1:42 So during this slide, really, what I want to talk you through is the vision for the business and how we see generating value and growth for the business. And our vision ultimately is to transform patient care by bringing these enhanced medicines both ourselves and with partners to market and in doing so, building a large self sustaining biopharmaceutical company. And if we really walk through those, elements of the value, generation here and the value build. So if we start on the left hand side, this is our what we call our more early stage pipeline. So this is a combination of, early stage r and d and our in house proprietary products and also our pre licensed technology partnerships with pharmaceutical companies. So starting with our proprietary pipeline, we have an in house proprietary portfolio of what we call specialty hospital products.

2:34 So these are products that are existing, that are already used within the hospital setting, but they're inconvenient to use in some way. And we're very much focused on an area where these products are live flies powders that require a complex reconstitutional mixing procedure prior to use. And we use the Aristat technology here to develop stable liquid ready to use or ready to administer versions of these products. So, essentially, they're ready to go at point of care. Now we're developing these products ourselves internally. And, at the point of IPO, when I ARECOR IPO ed, in the middle of twenty twenty one, part of our use of proceeds there was to really build and initiate this platform. So we phased in products since that time, and we've been working on developing these ready to use formats of these products. And we've made great progress there. So we have a number of products, those that we initiated earlier on in that life cycle where we've applied the ARRESTAT technology.

3:34 We've been able to demonstrate that it's a good fit, and we can indeed enable these difficult to achieve, ready to use formats of these products. And we've been very busy filing IP there. And really moving forward then as we develop those data packages and the IP, the upside potential comes through partnering here, and we'd be looking to enter into, product licensing on a milestone and royalty generating basis, very similar to the deal that we've already entered into for one of our specialty hospital products with Hikma Pharmaceuticals, and I'll talk about that later. So that really has the potential then to move assets from that pipeline up this value chain through into, milestone and royalty bearing partnering agreements.

4:20 And then on the technology partnerships, this is where pharmaceutical partners come to ARECOR looking to achieve something special. They're essentially looking to achieve a, differentiated product profile that they've not been able to achieve themselves internally. So these are revenue revenue generating partnerships from day one. So our pharma partners will pay ARECOR to perform that initial development work. So that's essentially us applying the ARRESTAT technology to deliver these enhanced profiles. We will then develop a data package which demonstrates that the target product profile has indeed been met. And at that point, our partners have the opportunity to take that formulation and, importantly, a license to ARECOR IP and further forward into developments and commercialization.

5:09 And this is under a technology licensing model, which, again, tend to be milestone and royalty bearing. So, again, there's upside potential from these technology partnerships. We've entered into three additional partnerships so far this year. The the last partnership was with a top five global pharmaceutical company, and, these would then have that future upside, opportunity. And then as we move to the right here and up that value chain, we have our clinical, development portfolio in the diabetes space. So we have two insulin based products. Here, we're developing a very rapid acting insulin, a t two four seven, and a highly concentrated rapid acting insulin, a t two seven eight.

5:55 And I'll talk about these in a lot more detail later in the presentation. And, here, we're able to use the ARECIST technology platform, but here we're looking at, improving clinical outcomes for patients. So we're looking at improving the clinical performance of these insulin products compared to the gold standard insulins that are available for patients today. So here our strategy is to develop, clinical data packages to prove the superiority of these insulins compared to those gold standard insulins to demonstrate the benefit to the patients. And also, of course, to drive then key data packages and valuable data patch packages to drive high value partnering. And our strategy is to partner these for late phase development and commercialization.

6:44 And we'd anticipate given the clinical differentiation here in the market size for targeting greater than $6,000,000,000 market, that the any deal in these areas across our insulin portfolio would be transformational for ARECOR. And then we have our our licensed partnerships. We have three products under license. These are products that incorporate the Aristat technology and have been fully transferred to our partners. So the further developments and commercialization of these products is completely under their control. However, they're under, license agreements with ARECOR, again, milestone and royalty based there. And these really offer that with both near term revenue generation potential from achievement of licensed milestones, and I'll talk about these in some more detail also.

7:32 And then as we build towards that large self sustaining company as they come to market and offer more sustainable and predictable commercial revenue streams from royalties or equivalent there. And we are anticipating first product eighty two twenty, to be in the on the market in the not too distant future. And, again, I can talk a little bit more about some of the milestones around that product. And then from the commercial side of our business, many of you may know that we acquired a commercial company, Tetris Pharma, in August of last year. So we've just come past our first year anniversary, and they're a sales, marketing, and distribution, company for specialist hospital products.

8:17 And the rationale for acquiring, Tetris was twofold essentially. First and foremost, they had license rights to a key product at Gluo. This is a ready to use glucagon product. It's for the treatment of severe hypoglycemia in people with diabetes. So it's like the EpiPen for diabetes there. So we saw a real patient need here for a easy to use, ready to use product in a emergency situation in a patient population that we know well. That's this is people with diabetes that are taking insulin. And also with Tetris, it offers us the optionality moving forward. If there are products within our portfolio, such as our specialty hospital portfolio where it makes sense to take those to market ourselves in The UK and Europe, we can do so through our Tetris Pharma commercial arm there. So it offers that optionality to retain more of the value as we're growing this large self sustaining business. And, again, I'll talk about the progress of Tetris, shortly, but we're seeing certainly sales growth across a BlueO there and confidence in that continued growth moving forward.

9:31 And then as we move towards the licensed partnerships coming to markets there, obviously, once they're on market, that offers us more predictable and sustainable recurring revenue streams from those royalty bearing license agreements, that we have in place.

9:49 So just looking very briefly at the portfolio because I've I've covered a number of these elements on the previous slide, and I'll talk in more detail around our proprietary portfolio and partnered programs here. So as I mentioned, we have a portfolio of, derisked and diversified in house partner programs and also, in house proprietary programs, sorry, and also partnered programs. So our strategy for our in house proprietary products is to take those closer to market to generate the data packages, whether that be clinical in the case of diabetes or nonclinical in the case of our specialty hospital products, and take those close to market to high value inflection points and then to partner on these to bring them to market. And as you can see in the diabetes space, they will be looking to gain market share with a partner in that existing $6,400,000,000 marketplace.

10:44 I'll talk about our licensed, partnership shortly and some of the near term and longer term milestones, that we, have against those license agreements that are in place there. As I mentioned, the technology partnerships, these are prelicensed, have that opportunity to move over to a milestone revenue generating technology license agreements. We've entered into three this year. That brings us to a total of 11 since the IPO, and that really validates the strength and need of the technology. And Xeris with the Agluto product there, we're seeing strong growth of Agluto and those revenues representing now significant proportion of the Tetris pharma sales. So talking through the operational highlights, so this includes highlights up to the end of the end of June, but also some post period events here. As I mentioned, what we've been really pleased to see is very significant progress across our licensed partnerships. So these are fully in the control now of our partners. Obviously, we have close relationships with our partners here and follow, the developments of these products very closely, They're fully funded in the full control of our partners.

11:56 Now AT three zero seven is a ready to use specialty hospital product. It started its life as an in house proprietary product at ARECOR, and we subsequently licensed this to Hikma under a milestone and royalty bearing agreement. Earlier this year, Hikma took on full development and commercialization responsibility for this product. So this is now fully funded as well by Hikma Pharmaceuticals. And really importantly, very recently, they had a very positive pre IND meeting with the FDA, and this confirmed that a t three zero seven can be developed under the five zero five b two regulatory pathway. And this is important because it's an abbreviated development pathway to market, so it derisks the development of this product and gives us certainty of the development steps that need to be taken to file for approval there. It's also important because we have assumed across our in house proprietary portfolio of specialty hospital products that they can also follow this five zero five b two pathway, And this is certainly validation of that assumption via the FDA. So further derisks and and strengthens some partnering package for that, pipeline of specialty hospital products that we have under development.

13:14 Then for eighty two nine two, this is, again, a product. It's a novel therapeutic in development by inhibits who are Californian biotech listed on NASDAQ. They have initiated a registrational enabling clinical study for this product. So they anticipate this being the last clinical study required prior to them filing for approval of this product. And this also, incorporates the ARISTAT technology. And the next license milestone under this agreement is on first patient dose in this study. So we would anticipate this happening within 2023 there. And also just to note, Inhibrix, closed a $200,000,000 private placing in August of this year, so last month. And this was to fully fund the development of this product, both this clinical study, and they're also going to initiate a further clinical study in a new indication.

14:14 So this shows great progress for this product and getting much closer to market again under a license agreement with ARECOR. And then as I mentioned, the first product that we'd anticipate coming to market is AT two twenty. We, this is by similar products.

14:30 The partner at this stage is, undisclosed, but we would be expecting them to gain regulatory approvals for this product in the coming, months. Subsequent to that, there'd be commercial launch, which would lead to recurring, royalty royalty streams. Of course, the timing of this and strategy around the lead time between approval and launch, sits within the control of our partner. But I think what's key here is given the stage of, development there, it's we would see this as low risk, with this coming to market. And I've talked about the technology partnerships. In terms of the in house, proprietary portfolio, again, I'll talk about this in much more detail. We're currently in the middle of a clinical study for AT 278, and I'll talk about the details of that.

15:21 We've presented our phase one clinical data in type one diabetic patients earlier this year during the summer at the American Diabetes Association. This is the leading diabetes congress, and it was very well received and generated a lot of interest there. And as I mentioned, we've made key development progress across our specialty hospital and portfolio in the next phase for us for the, the most advanced of these assets would be to move towards partnering there, which brings the upside of milestone royalty bearing agreements. For the Aglue products, so on the commercial side of the business, we have launched Aglue now an additional three EU territories in 2023. So we've launched in Austria, Norway, and Denmark, and that's in addition to The UK and Germany where we've launched in 2022.

16:12 So it's now available in five territories. And we've also, entered into a commercialization agreement, with Goodlife for the Benelux Region, and our main target there would be The Netherlands. So we look forward to them launching, and we expect them to launch in The Netherlands in the first half of twenty twenty four.

16:32 And finally, on IP, we continue to make great strides across our intellectual property portfolio. It's obviously core to our business in protecting the technology and also the proprietary products that we're developing using the technology. We have more than 75 granted patents, now in major territories, and we've had five additional patent grants so far in 2023, including key patent grants across our diabetes portfolio, AT two forty seven and AT two seventy eight. So perhaps talking in a little bit more detail about our, licensed partnerships. So firstly talking about, AT three zero seven, so our ready to use specialty hospital product with HICMA. As I mentioned, they took on full development rights, earlier this year. And since they have made really great progress, they've had this positive meeting with the FDA. So that's the regulatory and development pathway confirmed.

17:29 And now looking forward, there are additional license milestones in the near term under that license agreement with HICMA. And then ultimately, when this product comes to market, it would be under a royalty bearing agreement. Now we have talked, previously, Elizabeth, about framing the the value opportunities for these and for our in house proprietary products where we are taking the investment with filing the IP. It allows us to drive higher value licensing deals here, and Hickman certainly falls, into that, bracket there. So we look here for royalty percentages in the region of the mid to high single digit to double digit, royalty streams of product sales, and Hikma certainly fits into that, category there. So we're very much looking forward to the continued development from Hikma.

18:24 And ultimately, we hope for a successful commercial launch of that products. We we see that as really driving, value and, of course, recurring revenue revenue streams

18:36 to the ARECOR business. And then just quickly on the the other two partnerships at AT two twenty, this is important because we do expect this to be the first product, that would come to market incorporating the technology. There is an additional, license milestone payments under our license agreement with our partner prior to that recurring royalty revenue stream. And we will update the markets, of course, once this has been achieved and then ultimately move forward into which will give more clarity on the time frame of that recurring royalty stream associated, with that product. And then for a t two nine two, as I mentioned, Inhibrix have initiated that registration enabling clinical study, and the next license milestone payment to ARECOR is on first patient dosing, which we expect this year.

19:31 And Inhibrix have, publicly announced they expect a initial readout from that study to occur in late twenty twenty four. So I think if they keep to those timelines, you'd be looking at 2025 there for submission for regulatory approval. So that product again is progressing now much closer to market. So to talk in a little bit more detail about our diabetes products. So, you know, diabetes is a pandemic and, you know, we believe it will remain to be the case. There are around five hundred and thirty seven million adults living with diabetes. And at ARECOR, we're very much focused on a specific area here, specific treatments, and this is around mealtime insulins.

20:17 And we're looking to develop the fastest acting and most highly concentrated fasted acting insulins. And this is to meet very specific unmet patient needs, here, and to really deliver improved treatment options,

20:33 for these patients. So if we talk about the two products, our first product is a t two four seven. So this is we've taken existing insulin. We use the Arostat technology to reformulate this, and we're focused on accelerating the absorption post injection so that we have a faster acting insulin that can bring down blood glucose,

20:56 for people with diabetes much faster. It's at the standard concentration that, is used today, a 100 units per mil. And, really, the aim for a t two four seven is to be the fastest acting insulin that can enable this transformational fully closed loop artificial pancreas system. And I'll just spend a couple of minutes talking through what that is and what the challenges are here. So this system is a system where the, individual wear a continuous blood glucose monitor that measures their blood glucose at any point in time. This this reading is then fed to an algorithm which calculates based on that blood glucose reading how much insulin the individual needs to keep their blood glucose within their healthy target blood glucose range, which is automatically delivered via the insulin pump.

21:46 Now these systems are in use today. All of this hardware and technology is available and available commercially, but they're called hybrid closed loop systems. And the reason it's hybrid is the challenge around mealtimes because when we eat food, our blood glucose rises very rapidly. And the fact is even those best in class insulins that are available for patients today are not fast enough acting to counteract that very swift rise in blood glucose in real time. So what this means is around meal times that the patient instructs the system to give them a large single dose or a bolus dose of insulin to manage their blood glucose around meal times. So really with a t two four seven, what we're looking for here is a much faster acting insulin that can counteract that swift rise in blood glucose even at meal times and allow the patient to stay in this fully closed loop system.

22:42 So essentially, the system is controlling their blood glucose and doesn't need their intervention. So this really lowers the burden for patients, which shouldn't be underestimated. It's a significant burden managing diabetes on a day to day basis. And it also, looks to improve the outcomes of the patients. We know that when they're in that closed loop system that their outcomes are improved. And we have, I've not got the data, within this presentation, but I've presented it previously. We've conducted two phase one clinical studies for AT two forty seven comparing against those gold standard insulins today. So insulins from Novo Nordisk, which are rapid acting and ultra rapid acting, and we've been able to demonstrate superiority of a t two four seven so that we've demonstrated that we have indeed accelerated that absorption of insulin post injection.

23:36 Now the second product that we have in development insulin product is a t two seven eight. So this is very highly concentrated, rapid acting insulin. So this is at five hundred units per mil, so it's five times the standard concentration of insulin that's used today. And the reason that we're developing this product is that there are growing number of people with diabetes who require high daily doses of insulin. Now a majority of these at the moment are type two diabetics and with high BMIs, but we're seeing an increase in number of people with type one diabetes who are requiring high daily doses of insulin. And this is linked to BMI, so linked to, weight and obesity, which we're seeing rising significantly.

24:23 And there's not really a good insulin option

24:25 available for these patients today. They have two options available to them, which both bring compromises. They can use one of the gold standard rapid acting and ultra rapid acting insulins. So this gives them good blood glucose control, albeit not as good as you would achieve with a t two four seven, but they also require to inject high volumes of insulin and multiple injections multiple times a day simply to get their high doses on board. Or they can select the only very concentrated

24:58 u five hundred. So it's five hundred units per mil same concentration as a t two seven eight insulin. This is a product from Eli Lilly. It's called Humulin RU five hundred. So this gives them the benefit of reduced injection volume and fewer injections per day. However, it's an intermediate acting insulin, so it's a slower acting insulin, which means there's a compromise on blood glucose control, particularly around meal times there. So with eighty two seven eight, we're basically saying that you can have the best of both worlds here. You can have lower injection volume, fewer injections a day, but no compromise on blood glucose control because it will be as fast acting as those gold standard insulins that are available today. And also with AT two seventy eight, what we're really excited about is the future. We very much see the future moving towards these very small miniaturized body worn patch pumps, for people with diabetes. So these are insulin pumps that'll be worn on the body that

26:00 they wear for a longer period of time again. So these insulin pumps, are available today. There are insulin patch pump available for patients, but they're much larger than the the image you're seeing on the screen today. And there's a real drive from the, device companies, so the insulin pump companies, and they talk very publicly about this around moving towards miniaturized devices and extended wear. At the moment, the insulin pumps are used in three day cycles,

26:32 and they're they're talking about moving towards seven to ten day wear and also making them as small as possible because the size of these insulin pumps is a barrier to use for many patients. And it's a particular barrier for type two patients as well because they generally need more insulin, so they need to have more insulin on board on their pumps, and they don't want to be wearing or carrying with them a large insulin pump. And, again, those device companies see a transition of type two patients over to insulin pump therapy as a very underpenetrated market. In The US, less than five percent of type two diabetics currently use an insulin pump. So there's a significant opportunity there. But the key here is if, to enable a very small longer wear pump, it means you've got to get your much more insulin on board in a much smaller volume.

27:26 And AT two seven eight is the only highly concentrated rapid acting insulin in development. And the reason it's the only product in development is this is a particularly difficult profile to achieve. We've achieved it with the Aristat technology. We also have a really strong, patent portfolio with protection out to 2037 for the techniques that we've used to deliver this product profile. So then in terms of clinical validation for a t two seven eight, we have performed one clinical study in type one diabetic patients where we compared a t two seven eight to NovoRapid.

28:05 So NovoRapid is Novo Nordisk, a hundred unit per mil insulin, and it's rapid acting. It's on the market today. And $827.08 is a five times concentration here, but also rapid acting. And in that first clinical study, we showed that it was non inferior to NovoRapid in type one diabetic patients. And in fact, we showed superiority in the first sixty minutes. So we got more insulin on board and a superior blood glucose lowering profile compared even to NovoRapid's hundred unit per mil insulin. Now the current clinical study is really important because it's in type two diabetic patients with high BMI. So these are overweight and obese patients. So it's really the first primary target patient population that would really benefit from a profile such as a t two seven eight here. And we're comparing a t two seven eight, again, against NovoRapid in this type two patient population, but also importantly against Eli Lilly's product, Humulin RU five hundred.

29:10 So it's against the two treatment options that is available for this patient population today. And what we would expect to see here is against NovoRapid that it's despite that fivefold increase in concentration that is equivalent in terms of PKPD profile here and against human in RU 500, which has a slower profile, but it's superior there. So really demonstrating the benefits of this product. Oh, and I should say, we'd be, looking to report headline data from this study in the first quarter of twenty twenty four. So just, circling back to Tetris Pharma, and then I'll hand over to Susan to talk through the financials here. I mean, I've I've covered a lot of this. So Aglura is now available in, five territories across The UK and Europe. We expect, a further launch in The Netherlands in the first half of twenty twenty four, and we're really seeing that growth of Agulouos with it now representing a significant proportion of those tetra sales, which really puts us in a good place to drive that continued growth and confidence in the growth of this product moving forward.

30:25 You may all have also seen, if you're following us in our business update over the summer, that's who's the current, managing director of Tetris will be leaving the business later this year, and we are in the process of interviewing a a really high quality shortlist of candidates for this leadership position at Tetris. And here, what we're really looking for is somebody with a proven track record of, commercial sales of specialist products, such as Agluo, across, Europe as well as The UK. And I'm really pleased with the the candidate shortlist that we have, and I'm sure, in the not too distant future, we'll be able to announce who will be, taking on the leadership of the Tetris business and driving that business moving forward.

31:13 So I'll just pass over to Susan now to talk through the financials. Thank you, Sarah. We are pleased to report that our revenue for first half twenty twenty three has increased by over 140% to $1,700,000 and this compares to the $700,000 that we recognized for the same period to 06/30/2022. Our other income from the NF8 UK grant also increased and that resulted in total income of CAD2.3 million, which was an increase of above 100% compared to the CAD1.1 million we reported for first half twenty twenty two. Our investment in R and D of CHF2.9 million was lower than first half twenty twenty two investment of CHF4.8 million. This was as we expected as our focus of expenditure in 2023 is on the ongoing clinical trial for AT-two seventy eight.

32:09 Last year's R and D costs included a US Phase one clinical trial for AT-two forty seven and costs for AT-two seventy eight ahead of initiating the current study. Our closing cash and short term investments at June 30 was $8,200,000 and post the period end, we received a $1,300,000 R and D tax credit for R and D expenditure in the year ended 12/31/2022. Just exploring a little bit more of our key financial numbers and certainly the showing here the doubling of total income and also our revenue is growing as well as broadening across formulation development, master revenue and pharmaceutical products.

32:55 Just to say that the revenue from the two new formulation projects that were signed post period, we announced one in July and one in August. Those revenues will be recognized from second half of this year onwards. The Hikma milestone was triggered in January and the pharmaceutical product sales represent the sales by Tetris Pharma and we've compared those against H1 twenty two pre acquisition sales, which were just below 600 ks. The loss after tax reflected our planned lower R and D expenditure and increased s g and a costs, including Tetris Pharma, which were nil in the prior period. Just to say that the r and d carried out within our group is all carried out within ARECOR, and the s g and a costs effectively represent everything that is not an r and d expenditure.

33:50 Cash in terms of net assets, cash and cash equivalents were boosted post the period end with receipts of that r and d tax credit, but also the reimbursement of no 400,000 of grant income for expenditure that we incurred in the first half of the year. Our trade receivables of 4,700,000 and payables and accruals of 6,300,000 include Tetris Pharma, which were not part of our reporting in the prior period ended 06/30/2022. Great. Thanks, Susan. I'll make just sure I was on. Yeah. So, really, this is a really close-up slide here to give a little bit of recap of some of those milestones we've talked about and a a bit of a longer term view here. So, hopefully, I think what you've seen through the presentation today is that we've made really significant progress across our in house proprietary product portfolio, our partner portfolio, and also now commercial operations here. So across that partnered portfolio, of course, we have the HICMA specialty hospital product, eighty three zero seven, you know, moving across to their, full control and development and investment here that the FDA meeting, there and that confirmation of the five zero five b two platform and very much commitment from Hikma now for the further development. And, ultimately, we hope commercialization of that product, and that's under a milestone

35:22 and royalty bearing agreement. You know, for a t two twenty, we still expect very much so that to be the first product on the market incorporating technology. We have that near term license milestone as well that's pre those recurring revenues. And then once on market, we move into that, more predictable and reliable, royalty generation streams there. And then within Hibrix, eighty two nine two, we very much expect them to be dosing, first patient within 2023. And then importantly, working through that clinical study, to set them up for, regulatory approval. Again, there are a series of licensed milestones, prior to those commercial, post commercial streams.

36:09 And then we can look to the future and see more products coming to market incorporating the technology. We do have, technology partnerships that are pre licensed with pharmaceutical companies as well that have the opportunity then that generate revenue now, but also the opportunity and real upside potential from licensing. And as I mentioned, for our specialty hospital portfolio, we've made great progress since we've been initiating those products. We're now in a strong position around filing IP. So we'll be looking as we go through the remainder of this year and certainly into 2024 at converting additional value driving licensing, so Hikma type deals with pharma. And then from the commercial operation side and revenue growth there, we see that continued growth sales of Aglua really providing us a strong platform for growth commercially moving forward.

37:05 And then I think if we look through into 2024 and beyond, I mean, clearly, for early twenty twenty four, we'll be very much looking forward to the clinical results from the AT two seven eight trial. That's important to further drive discussions that we have with, potential partners and also endocrinologists and really that pull and excitement around that product, which we are ourselves very excited about for all the reasons that we've talked through today to continue to expand our in house portfolio of products, provide those opportunities and those license opportunities for the future. And then with the anticipation of products coming to market such as AT two twenty, and then as we go towards 2025 and beyond additional licensed products coming to market, we start to see that build across multiple multiple products incorporating the technology then and that build of recurring royalty and equivalent revenue streams, which really allows us to realize that vision of building a large self sustaining pharmaceutical company.

38:13 So, this concludes the, formal presentation for, today, but, of course, happy to, take any questions that have been, submitted today. Sarah, Susan, that's great. Thank you very much indeed for your presentation this afternoon. If I may just jump back in there, and what I'll do now is just bring back up your cameras. Ladies and gentlemen, please do continue to submit your questions just by using the q and a tab that's situated on the top right hand corner of your screen. But just while the team take a few moments to review those questions that were submitted already, I would like to remind you that a recording of this presentation along with a copy of the slides and the published q and a can be accessed via your investor dashboard. Susan, Sarah, as you can see, we have received a number of questions throughout your presentation this afternoon.

38:59 And thank you to all of those on the call for taking the time to submit their questions. But, Sarah, Susan, if I may just hand back to you just to make your way through the questions, give your responses where it's appropriate to do so, and then I'll pick up from you at the end. Thank you. Great. Thank you. So I'll read out the questions, and then Susan and I will will answer these between us. I think people know that have listened in before. We like to answer every question, where we can, so we'll just work through these one by one. So the first question that was submitted is your insulin programs look very exciting. How can you accelerate the potential here given the size of the market? You know, firstly, I would say we certainly agree with you in terms of, those insulin programs. You know, they we now have clinical data across both products that really demonstrate their superiority compared with those gold standard insulins here.

39:54 I think in terms of, you know, the size of the market, it's a greater than $6,000,000,000 market, and it's really for us about generating that clinical data that proves we're meeting that unmet patient need, which would then give us confidence with the right partner in gaining market share within that, you know, very large patient segments and also, commercial market potential. You know, in terms of the acceleration here, we, you know, in parallel to conducting these clinical studies, we're, of course, engaged with the regulatory, the major regulatory bodies. So that's the FDA and also, the EMA, so the European regulators as well. And that's to approve our clinical studies, but also to discuss with them pathways and abbreviated pathways moving forward.

40:44 So we're confident here, as we're using existing insulin. And so the safety and effectiveness or efficacy of insulin is known that we can follow abbreviated pathways to market. The clinical data that we're generating effectively is to demonstrate that, we've got superiority. It's not to demonstrate that insulin itself works or is safe. That's already been demonstrated. So we're confident there. There's abbreviated pathways, to mark it. And we're also confident that in the hands of ARECOR that we can conduct as we've shown, you know, these key clinical studies, efficiently and quickly and generate this high quality data. So I think that the data from AT two seven eight is obviously a key milestone. It's a key value driver and really starts to broaden out and and significantly strengthen our package for either future studies or or partnering.

41:43 The next question is, given the progress you're making and the validation through the number of partnerships, why is the company so undervalued, and what can be done? I mean, I'll I'll I'll say a few words on this, and I'm sure Susan will have some thoughts as well. You know, what's within the company's control and, you know, Susan and I and and the leadership team here is delivering. And I think what we've demonstrated, you know, certainly throughout our life as a public company is that we're delivering the value and delivering what we have set out. So, you know, we're we're very clear on the progress that we make and the value milestones within the company.

42:28 And, you know, we would agree with that, you know, from the licensed partnerships. We we partner very carefully. So we partner with companies that are motivated to take the products incorporating our technology to market that have the capabilities and the funding to do so so that it is fully in their control. And I think we can see that through the progress that's been made across those products. And, you know, we really look forward to seeing these products come to market. And I think they're you know, once they're on markets, it'll start to demonstrate as well more publicly into the market the the value that can be generated in the recurring royalty streams within the business. I think then we look at, you know, what could be really transformational for the business, clearly, diabetes products there and our insulin products.

43:16 And, again, you know, we've generated key clinical data, generate you know, demonstrating superiority. We can see the market's very much moving towards, you know, a need much greater need for things like AT two seventy eight with the device companies moving towards patch pumps and bongal wear and miniaturization. And we know there's very much patient need there. Again, what's within our control is to conduct the right clinical studies. We take very careful advice on the design of those studies and the data generated from those. And I think, you know, we would ex we would hope that the results from AT two seventy eight, you know, will be valued and that we'll see the value of those. You know, then in terms of, you know, company company value in our market, the markets are difficult as everyone knows at the moment.

44:08 And I think the performance of of ARECOR's shares and stocks is is not out with of normal market conditions at the moment for, for biotech, companies. But, Susan, you might want to to comment a bit further on that. I'll just re echo what you've already said, Sarah, that it's it's a challenging environment. And what we what we can influence and focus on is setting up very clearly as we did at our IPO, our vision for the company and those value inflection points that we are looking to achieve and continue to report and to to do presentations like this to actually communicate the progress that we are making as part of that strategy. And, hopefully, that will then demonstrate why we value the company, And so that will then hopefully be reflected in our share price.

45:00 Thanks, Susan. So next question, can you expand on the outcome from the recent FDA meeting and ideas on next steps, timings, etcetera. So this is around, eighty three zero seven, which is, the ready to use specialty hospital product that we've licensed to Hikma. So, yeah, I think, you know, the main, aim and the main outcome from the FDA meeting there, which Hikma was the was the sponsor of, was to confirm that regulatory pathway. We've had this assumption, which was shared by Hikma, that this product could follow the abbreviated five zero five b two pathway to market, but, ultimately, you need the validation of that from the FDA, and they got that very clearly. So, you know, that's in terms of understanding now the next steps and derisking that program is significant.

45:52 You know, in terms of tie so the next steps, you know, really for, HICMA, which they're conducting is around manufacturing scale up generating the data that's required under that five zero five b two pathway, which again is very clear. You know, we would anticipate this is our I'm gonna give you our estimations now rather than HICMAs. We would anticipate there under that five zero five b two pathway that HICMA could bring this product to market in the 2025 to '26 time range. That's under a royalty bearing agreement for ARECOR. And that does fit in that as we, you know, anticipate the investment that we've made in our proprietary pipeline that fits in that high single digit to double digit percentage royalties on sales there. So, you know, that would be a significant value driver milestone for ARECOR.

46:47 And the next question is what value proposition can a t two four seven potentially deliver? So, you know, a t two four seven is our ultra rapid acting, so very fast acting insulin here. So I think as we talked through through the presentation, this is really a product that brings the most benefits to type one diabetic patients who need that very precise control. And and, really, there's a real patient pull and drive around a really tight control of blood glucose, but clearly the burden and of the disease. So there's, again, very much a pull and a drive towards simplifying the management of diabetes whilst improving outcomes.

47:34 And, you know, to enable this artificial pancreas system, so this closed loop system would be a huge, development towards that step. It reduces the burden. It takes the day to day interaction and decision making out of the hands of the individual so they can essentially, you know, fit their pump and as much as they can forget about, their disease whilst really maintaining excellent blood glucose control and improving their outcomes. And as I said, there isn't an insulin on the market today that can close that loop. And with the data that we have for AT two four seven showing that superiority, there's a real opportunity there there that it can, enable and be that ideal pump insulin essentially for that patient population.

48:25 So the next question is what contacts, if any, have you had with Novo Nordisk and Eli Lilly regarding your insulin products? Are they interested in providing funding to ARECOR? So it's a good question. You know, we, have very close relationships with many pharma companies, as you know, from our technology partnering business. I mean, it's in the public domain that we're actually partnered with, Lilly on one of their proprietary products as well. So we have a great relationship with them. And I would add, you know, Sanofi also would be the third major pharmaceutical company that have, mealtime insulins on the market. So, you know, have a a high interest in this space. And so we have very close relationships with all of those companies. In in addition, the biosimilar companies and also the device companies as well. There are lots of different ways that these products can be brought to market and and different types of partnerships here.

49:26 And, you know, what I would say about the the major, the Novo, Lily, and Sanofi is that we do talk to them about the target product profiles, the patient needs. We share many leading KOLs that advise us as well as Novo, Lily, and Sanofi as well. And we're we're very clear on, you know, talk you know, targeting and working with those top tier KOLs. And, you know, Novo and Lily and Sanofi have all been very generous, actually, I think, in their their time and their interaction with us in advising around clinical study designs, the data they would expect to see because, ultimately, they're motivated to see improved products that they would then have an opportunity potentially in the future to be the partner that can bring them to market. So they want to make sure that the data packages would meet their needs there. So I'd say, yes. We have very close relationships with them.

50:21 We haven't approached them for funding on that question there. You know, there's pros and cons of taking funding from a strategic partner, of course. And at this stage, we, you know, we believe we're building significant competitive tension across those groups, and we want to be able to be free essentially to, you know, to drive the best partnering deal for us moving forward and not be tied early to a to a single partner. So the next question is when do you anticipate having to return to the market to raise additional capital?

51:06 So I'm gonna give you a high level answer, and then I'm gonna hand over to Susan for the detail. And, you know, from a a high level in terms of strategy moving forward, you know, we're sufficiently funded to deliver on the key and drive the key value milestones within the business that we've talked about today. So, you know, in terms of driving that value through our existing portfolio, completing planned clinical studies, etcetera there. So if we were to raise additional capital, it would be growth capital. It would be to look to expand our internal proprietary portfolio to ensure that we have a, you know, constant stream of opportunities at various stages of development that we can bearing through and ultimately then increase the number of products that can be bought through to the market and and drive value for the business. So very much be a strategy around growth. But, Susan, you might want to to add a little bit more color on that in terms of cash runway, etcetera.

52:06 Yeah. I I can talk about that as part of our management of working capital. And what I would say is that our post the period end, as you see, we actually received 1,700,000 of additional additional receipts. And so our closing cash balance at the end of June has been increased post period end. In terms of managing our working capital, we manage cash very carefully. Our cash flow forecasts include existing cash resources plus forecast receivables, and we use those to support planned target expenditure, including R and D. Our forecasts from a cash flow perspective only assume receivables from our existing contract and therefore new deals, and you've heard about new deals that we signed in the first half of those this year.

52:52 Those are an upside to our working capital management and modeling. As you would expect, we we we model downside scenarios and they are really more around the timing of receivables balanced with the expenditure that we plan to make. And in those downside scenarios, our cash flow forecasts extend to at least twelve months period from the date of the approval of these consolidated unaudited accounts. And as you will see in our interim statements, we've prepared our accounts and continue to prepare them on a going concern basis. Thanks, Susan. So the next question changing tack slightly here is when Tetris was acquired, was the need to change the CEO anticipated? So, you know, I think that, you know, we're really pleased. At first, I would say really pleased with the progress of Tetris Pharma and, you know, really the focus on Agluo and the growth of that product. So, you know, there's no issues there.

53:48 You know, I think in terms of the the current MD, Shavik, he's the founder entrepreneur of that business, and I don't think it's unusual to see as the business transition. Now it's really around commercial focus and operational and tactical delivery of the business to to see the founder CEOs move on there. So it's it's all been in very close collaboration or very amicable, there. And I think moving forward for for ARECOR, it really gives us that opportunity to hone in on that really specific expertise across The UK. But Europe as well, Tetra's very pry previously UK focused business across Europe so that we can really maximize and real realize the full potential of a Gluo product.

54:43 So the next question is how does the technology partnership service get promoted there? So, you know, this is where we are partnering with pharmaceutical companies, and they are coming to us with their own proprietary products there. So this is a really com combination now. You know, ARECOR has a, you know, much high profile, in the in the industry. We're well known. It's well known that we are able to deliver profiles that, you know, our large pharma partners have not been able to achieve themselves. A number of our current partnerships are with companies we've worked with previously, so they're coming back to us with additional products within their portfolio, which I think, again, demonstrates the reputation that we have, but also that we do deliver on these enhanced profiles that they're looking for there. We do have a business development group.

55:39 We bought Manjit in in April of this year as CBO. You know, his primary focus is is around our in house proprietary products and the value propositions around those and positioning those for partnering moving forward. But he also talks with those the very same large pharma companies that we're talking to about our in house proprietary products are also potential partners for us with across their proprietary product line. So there's a really good cross flow and cross sell, if you like, across that side of the business. But it's really driven now. We find pharma companies coming to us rather than the outreach from ARECOR. So the next question, Susan, will be for you.

56:27 There was no Agluto earn out payment. Does that mean that sales have taken off slower than anticipated? Okay. So the the targets were proposed by the ex Tetris Pharma shareholders. They were the sellers, and it was agreed as part of a contingent consideration at the time of the acquisition. And the targets reflected the sellers' view, their experience, and their assumptions. And and so the earn out was not triggered in the first period. That does not mean that sales haven't taken off or slower than we anticipate. As you've heard today in this presentation, the performance of Tetris Pharma post acquisition is in line with our expectations. Thanks, Susan.

57:17 So the next question is a company such as ScanCell has taken on board a major industry relevant US investor. They seem to have much deeper pockets and know how than UK investors. Is ARECOR talking to such investors? You know, I think they're obviously, you know, ARECOR again, we we spend our time networking with both pharma partners, industry experts, and, you know, the investor community is part of that. We do a large proportion of our business, our partnering businesses in The US, so we spend, you know, a reasonable amount of time out in The US as well there. I mean, clearly, you know, for US investors, there are a larger number of health care specialist investors in The US.

58:08 They would look to come in on a capital raise. You know, I don't think we'd anticipate US investors buying small volumes on market, but certainly moving forward as we move through our value propositions, if there were to be more significant capital raise, we would look there to diversify the the share register in our investor base as well. I don't know, Susan, if you want to add anything to that. No. I think that was good. I think that covers everything. So the next question and potentially the last so this is the last question. So if anybody's got a question, please please do add it in. Is so it's a follow-up question to the cash flow question.

58:56 So you have a twelve month cash runway, and we'll need to raise money before next June. I think maybe I'll I'll start with a high level again answer this. You know? And I think, you know, certainly on this, we our cash runway, you know, goes out into 2025, and that's based on contracted existing partnerships. So we incorporate into, you know, our operational forecast. We incorporate already converted partnerships, whether that be technology partnerships with pharma or our licensed partnerships there. So I think as we've talked about today, in addition to that, there is the upside potential from additional licensing, whether that be from technology partnerships converting or specialty hospital portfolio.

59:46 And then, of course, anything around the diabetes would be transformational. So, you know, for us, you know, raise in the nearer term would be around growth. Susan? Yeah. And and just to clarify, thank you, John. Thank you for raising the question if I wasn't clear because that as Sarah has just said, what what I was talking about was very much looking at downside scenarios as part of going concern. And and as you you may be aware, when you're doing going concern analysis as part of releasing your accounts, there's a lot of sensitivity and a lot of variables that you put in. And, actually, so we're not talking about I was not talking about cash runway. I was talking about, actually, these statements are prepared on a going concern basis, and we've been through that rigorous going concern analysis.

1:00:33 So thank you for clarifying. Sarah, Susan, if I may just jump back in there, thank you very much indeed for being so generous of your time then addressing addressing every single question that came in from investors this afternoon. And of course, if there are any further questions that do come through, we'll make these available to you immediately after the presentation has ended just for you to review to then add any additional responses, of course, where it's appropriate to do so. We'll And publish all those responses out on the investor meet company platform. But, Sarah, perhaps before really just looking to redirect those on the call to provide you with their feedback, which I know is particularly important to yourself and the company, If I could please just ask you for a few closing comments just to wrap up with, that'd be great. Yeah. So, I mean, firstly, thank you to everybody online today for your time and for the questions. I think it's always great to have a a significant number of questions as well, which helps us really get into the areas that we know you're all interested in hearing more. So thank you for that. And, you know, I hope what we've been able to show you today is, as I said, that significant progress the company's making across our derisk portfolio of both in house proprietary assets.

1:01:42 You know, we're really pleased with the progress across our partnered programs there in that future now, which is becoming much nearer term potential for products on market, incorporating the technology and also across that commercial operations of the business. So we think this provides us with a really robust platform for growth, and this is around bringing, as we said, improved products to patients that can really make a difference. That's the core purpose for ARECOR. But in doing so, you know, really building a large self sustaining biopharma company. So, yep, thanks everybody for your time today. We appreciate it. That's great. Sarah, Susan, thank you once again for updating investors this afternoon. Could I please ask investors not to close this session as you'll now be automatically redirected for the opportunity to provide your feedback in order the management team can better understand your views and expectations?

1:02:33 This will only take a few moments to complete, but I'm sure will be greatly valued by the company. On behalf of the management team of ARECOR THERAPEUTICS PLC, we would like to thank you for attending today's presentation. That now concludes today's session. So good afternoon to you all.