A quarter of setbacks and achievements

Zubsolv demand in terms of volume is stable in the ­quarter. However, as experienced at the beginning of the year, we have seen increased volatility in wholesaler inventories impacting sales negatively in individual quarters. The overall market growth has improved slightly to about 5 percent, primarily driven by double-digit growth in the Commercial segment, whereas Medicaid continues the negative trend seen since the middle of last year. 

The Commercial segment is the most important for Zubsolv sales, and growth in the Commercial segment is likely to have a positive impact on sales and margins over time. In the third quarter, the Zubsolv net sales grew in the Commercial segment also when including United Health Group and Humana. The net sales growth in Commercial to a large extent mitigates the decline in the Public segment. The decline in the Public segment is primarily explained by increased rebates in Medicare and Medicaid.     

Despite the delay in approval of OX124, the US team has continued to prepare for the launch and worked with multiple possible customer groups to further understand the potential value proposition of OX124. These learnings appear especially useful among patients who need multiple 4 mg doses to be revived. This is often required if a person has overdosed on illicitly manufactured fentanyl, which has an alarming prevalence in the US today. In addition, OX124 can play an important role in regions with cold winters as the data demonstrates it is resistant to freezing temperatures due to the AmorphOX® technology.

The EBIT contribution declined from our US operations due to lower sales and is expected to recover in the fourth ­quarter. The topline change is primarily explained by inventory fluctuations, adjustments in sales to ­institutions and also due to FX impacts. Costs in the US business have shown a minor decline comparing to last year. ­However, the EBIT contribution was negatively impacted by ­increasing non-repeating legal costs associated with the work to resolve the Subpoena investigation (for more information see Note 4). 

As communicated in the Q2 report, approval of OX124 will be delayed. This is caused by the FDA’s concerns with the results of the human factors study (HF study) and insufficient technical documentation of the final commercial product related to the device. During the quarter we have extensively reviewed the request from the FDA and submitted a briefing book to the FDA with a proposal on how to address their comments. Regarding the HF study, we have successfully ­updated the instructions for use and completed a new HF study with good results. We expect a final agreement with FDA on their data requirements during November, which will guide the timeline for approval. Unfortunately, it is ­evident that the resubmission of the data will be delayed into the middle of next year, provided the FDA agrees with the proposal and our suppliers and manufacturing partners can deliver according to the plan. The final timeline for approval of OX124 will be a result of the FDA’s review time, which will be communicated after the data submission is complete. 

We have continued to explore the ability for AmorphOX®, our powder-based drug delivery platform, to improve the drug delivery of larger molecules and have, during the quarter, generated additional data supporting longer term stability in protein-based pharmaceuticals. AmorphOX, can potentially address the issues seen with many ­biomolecules needing a cold chain, use of problematic ingredients to keep the product stable and high cost of goods. With AmorphOX, we can potentially open up for nasal delivery of many molecules that are currently delivered through injections. We are starting feasibility and proof of concept studies with several new partners, but they are still in early development and will need to pass proof of concept before starting a comprehensive development program. Most partnerships will cover part of Orexo’s development costs, but our ­ambition is a business model where Orexo participates in the upside from commercialization through royalties. 

Our discussions with potential partners for OX640 ­continue, and to strengthen the product profile we initiated a smaller exploratory study of OX640 in October. This study will improve our evidence of the impact on bioavailability of epinephrine in OX640 in patients with allergic rhinitis when comparing OX640 to an injectable in participants without allergic rhinitis. This is a question raised in several of the business development discussions and we know this data will be an important contribution to the overall business case for OX640. The result of the study is expected at the beginning of 2025. 

Due to non-recurring events, we have a temporarily ­negative EBITDA. However, we expect Zubsolv® sales in the fourth quarter to increase compared to this ­quarter. Looking into 2025 we are working with the board to identify ­opportunities to improve the financial results and to strengthen the equity of the company. We are making progress in business development around our AmorphOX platform and pipeline products and in addition to continued stabilization of Zubsolv sales, we are thereby confident we can strengthen our financial results in 2025.

A positive resolution of the legal processes, and ­particularly the patent litigation with Sun, is a condition to fully ­assess the value of our US business. When this process is ­concluded, we will need to define the best strategy to ensure our commercial opioid use disorder products and pipeline have a platform to thrive and reach as many ­patients as possible. In addition, our AmorphOX ­platform and its main potential is increasingly with partnerships outside our core commercial disease focus, which ­creates a natural need to assess the strategic options for the ­company.