Stable commercial business in a 
volatile market 

During Q1, we saw a small decline in market volume compared to the last quarter and a slowdown in the overall market growth for buprenorphine/naloxone products in the US with a low single-digit growth rate of 2 percent. Zubsolv^® sales in USD were similar to Q1 last year, supported by a price increase at the beginning of the year and lower inventory reductions. The increased price compensates for higher rebates and lower demand in the Commercial segment and in Medicare, where the new pricing and rebate system was implemented from January 1, 2025.

In the Commercial segment, the decline during Q1 followed a similar pattern to previous years, where patients required to pay the full list  price opt for cheaper generic alternatives when their deductible is  reset. In addition, wholesalers reduced their inventory levels which also is a seasonal impact of the new year. In Q2 we anticipate the inventory levels to normalize, which will have a positive impact on sales. We’re working intensively to optimize the profit contribution from our US commercial operations, and we’re pleased to see a significant improvement in EBIT margin to 33 percent (25). We’re also expecting additional improvements in COGS during 2025 and in the years ahead, which, in combination with other cost optimizations, will support improved profit contributions from Zubsolv.

We’re continuing to work with our legal advisors to find a resolution to the subpoena and the Department of Justice (DOJ) investigation that was initiated in 2020. We maintain the position that Zubsolv has been promoted in a compliant and responsible manner, but due to the associated uncertainty we are seeking a resolution. However, the recent change in the US administration may delay the process. 

For OX124, our rescue medication for opioid overdose with naloxone, we have worked extensively to address the issues raised by the FDA. Unfortunately, we have not yet received the necessary components of the nasal device from one of our suppliers to start the commercial manufacturing and initiate the necessary testing. After the initiation of the development of OX124 a new version of the device has been developed, which is used for our epinephrine product, OX640. The new device is easier for patients to use due to its improved handling and it is available today. To mitigate future supply issues, we intend to move  OX124 to the new device, and in combination with the review of the supply chain due to trade policy changes, this might cause some additional delay. Any device change will be discussed with the FDA to determine the best approach for transitioning to the new device. 

The quarter started with the announcement of positive results from the second clinical trial in healthy volunteers with OX640, our AmorphOX-based development program of a new nasal epinephrine product for the treatment of anaphylaxis. The study strengthened the evidence for the impact of epinephrine bioavailability in OX640 in patients with allergic rhinitis. In addition, data also provided more information about the dose required to ensure we have a competitive product. I’m delighted that these results confirm OX640 has the potential to be the gold standard for nasal treatment of anaphylaxis and it’s encouraging to see increased interest from potential partners.

Turning to our collaboration with Abera Bioscience to develop nasal powder vaccines based on the AmorphOX technology, I’m pleased to report that we reached the first important scientific milestone right after the quarter closed when we announced positive in-vivo proof-of-concept data. 

The results highlight how our proprietary powder-based drug delivery technology, AmorphOX, can be used to formulate powder-based vaccines with transformational potential for patients and healthcare providers worldwide. 

Expanding the potential applications of our AmorphOX technology is integral to our strategy and we’re already moving into a new pre-clinical project, OX390, where we’re exploring the development of a rescue medication to treat patients overdosing with a certain combination of illicit drugs. We’re communicating closely with the US authorities on this project, and we’ll seek a development collaboration 
with these authorities should the pre-clinical project meet the expected requirements

Except for the positive results from the OX640 study, 2025 started without any significant events. However, our financial results are in line with our plan of reaching a positive EBITDA, for the full year. Zubsolv continues to show stable financial development, and our R&D projects  are making some progress. The main operational setback is the continued timeline uncertainty in the OX124 project due to issues with 
the nasal device.

For our current operations in the US, we have no impact from potential tariffs, due to manufacturing in the US and continued dedication by the new administration to address the opioid epidemic. We continue to assess our business to determine the best strategic path forward to optimize the value to our shareholders. The market environment is a factor in this assessment and in an environment with high uncertainty we have significant focus on cost optimization and how to improve cash flow over time.

Finally, a reasonable start to 2025 from a financial perspective, despite  a volatile market environment. We anticipate stronger results in the coming quarters as the effects of inventory reductions are reversed and as we expect to see improved market development for Zubsolv.