Q2 2021 – First commercial DTx

contract signed with

a large healthcare provider

 

The second quarter of 2021 showed some positive operational highlights in both our Digital Therapeutics (DTx) business and US Pharma. In DTx, I’m pleased to announce we’ve among others reached a commercial agreement with Trinity Health North Dakota. As a result, vorvida® and deprexis® are now also available for
patients at their healthcare centers and hospitals. This is a major milestone and is already now an inspiring model for other healthcare providers in the US. In our US Pharma business, it was confirmed that ZUBSOLV® is available for patients within Medicaid in Kentucky since July 1, representing a growth opportunity for our lead
pharma product.


DTx – Commercial progress, but new marketing hurdles in consumer sales

Orexo’s response to the growth in mental health issues among healthcare workers during the Covid-19 pandemic was to make our digital therapies vorvida® and deprexis®, for alcohol misuse and depression respectively, available to them free of charge. One example is Trinity Health North Dakota, and on the basis of positive feedback from their healthcare workers, we have signed a commercial agreement also giving their patients access to vorvida® and deprexis®. The agreement is an important milestone for Orexo and I´m impressed by all the work Trinity Health has spent over the last eight months establishing new internal processes to implement our DTx with their existing treatment plans and obtain reimbursement from their largest insurance partners. The success with Trinity Health has led to additional contracts in NYC and St Louis and helped advancing discussions with much larger health care providers in the US.

During the start of the quarter we adjusted our marketing activities and targeted social media promotion, which led to some increase in sales. However, new guidelines from the social media platforms, effective in April, made targeted promotion of products associated with substance use disorder and mental health more difficult due to ethical and stigma concerns. This has limited our ability to expand these efforts and we’re now developing new cost efficient promotional concepts to reach people suffering from alcohol misuse or depression. One of these new concepts is our partnership with Sober Grid announced this week enabling us to better reach our target groups.

At the center of the DTx strategy is obtaining evidence of the efficacy of our digital therapies in comparison with other treatments. This requires us to apply similar scientific rigor to digital therapies as we do to our pharmaceuticals which will be essential to differentiate our digital therapies enabling market access and appropriate regulatory classification by the FDA. This makes the real world evidence study in collaboration with Magellan Rx and the extensive pivotal study for modia™, our digital therapy for opioid use disorder, central to our long-term commercialization strategy. The real world evidence study will start to include patients early in Q3 while the pivotal trial started enrolling patients in the quarter. The pivotal trial will run into H2 2022 and we expect the total investment will reach a level of approximately USD 9 million.

ZUBSOLV® - US Pharma´s EBIT contribution maintained
on a high level 

We’re convinced the market for buprenorphine/naloxone treatment will continue growing with the US economy recovering, easing of Covid-19 restrictions and federal initiatives to expand access to treatment. The overall market growth was 8 percent with the Public market being the main growth driver. In Q2 the core market for ZUBSOLV®, the commercial segment, saw low single digit growth and is yet to recover as we had anticipated. One explanation is probably people with opioid dependence are a further away from the labor market than the average American and the effect will come with a delay. With a continuous increase in patients suffering from opioid use disorder we expect the commercial segment to show accelerated growth.

As expected and foremost as an effect of high comparison numbers due to former exclusive accounts with Humana and United Health Group the sales of ZUBSOLV® versus Q2 2020 has declined. However, when comparing to Q1 2021 the sales are stable and we have maintained a good EBIT contribution. To accelerate the development of ZUBSOLV® and see growth, we’ll need to see the commercial segment recover to stronger growth numbers, and we need to see positive impact from the market access improvement in Kentucky.

We’re looking forward to launching modia™ in the US during the fall, enabling commercial synergies by designing a new product offering that compliments ZUBSOLV® with modia™. I believe this will be welcomed among existing and potential customers and opens new avenues for new creative types of commercial agreements.

OX124 – based on a novel scalable intranasal
formulation technology

When starting the development of our lead pharmaceutical project, OX124, a rescue medication for opioid overdoses containing naloxone, the target product profile was a product which was faster than the existing alternatives, more powerful and with a longer duration. Solving this equation led to the development of a completely novel and unique intranasal formulation technology that today is the backbone for both OX124 and OX125, our rescue medication containing nalmefene. At the announcement of the Q2 Interim Report we are days from starting the pivotal study for OX124. We’re also analysing other active ingredients that may benefit from this novel intranasal formulation technology and we’ve initiated in vitro testing of some of the most promising. Positive results will provide Orexo with opportunities for new development projects.

Summary and Outlook

The multiple operational milestones we’ve reached during Q2 pave the way for new income streams and growth opportunities. Developing agreements with large and established healthcare providers for our digital therapies is fundamental for Orexo’s growth, equipping us with the reference cases we need to expand the business. For ZUBSOLV®, the market access win in Kentucky is the first in Medicaid for a while and, together with the commercial synergies from modia™, brings the potential to set ZUBSOLV® apart from competitors.

My colleagues and I are looking forward to the second half of 2021 where we expect to see even more progresses for Orexo that enable us to make a difference to patients.

Uppsala, Sweden, June 15, 2021


Nikolaj Sørensen
President and CEO

 

1 Average weekly prescriptions for ZUBSOLV®, where all prescriptions are normalized to a
size of 30 tablets

2 Oct. 2019 - Sep. 2020