Well positioned to advance pipeline to value inflection points

The transaction closed on New Year´s Eve and most of the transition activities were completed during the first quarter. From a people perspective this includes re- organization in the US, provisions and payment of severance pack ages, and accelerated vesting of long-term incentive programs for employees leaving the company. In addition, the divestment of Zubsolv US resulted in several changes to the balance sheet, with a significant impact on cash flow during the quarter. The most notable item was the redemption of the SEK 500 million corporate bond at the end of March. Payments of rebates and returns related to products sold by Orexo during 2025 also had a relatively significant impact on cash flow during the quarter. For the coming quarters, the cash impact from rebate and return payments is expected to be significantly lower. At the end of the quarter, cash amounted to SEK 386 million (of which SEK 52 million is attributable to Dexcel). This cash position places Orexo in a good position to finance the promising pipeline and advance our three focus areas; our development programs, exploratory research and partnered development, to the next value inflection. 

With our lead product OX640, an intranasal rescue medication for anaphylaxis, we are well positioned to take a leading role in a market that is on the verge of transforming from injectable to needle-free treatments. We are now entering the most intense and resource-intensive phase where we need to establish the commercial manufacturing line and initiate pivotal clinical studies. The first, a nasal allergy challenge study, is planned for Q4 this year and will be key to establishing the bioavailability of the commercial product. OX640 will be the company’s main investment over the next two years, with total external expenses estimated to exceed SEK 200 million. 

Our OX390 project, a nasal rescue medication for adulterated overdoses, is being developed in partnership with the US authority, BARDA. The project advances according to the agreed timeline. It addresses a growing public health challenge related to overdoses involving adulterated opioids, where existing rescue treatments are often insufficient. Current activities include the first in-vivo study of the nasal formulations and preparation for a type C meeting with the FDA with a focus on the non-clinical plan. 

The results from the final stability and reliability studies required by the FDA for Izipry™ are looking promising and we are planning for a resubmission in the third quarter, with potential approval in early 2027. Following the sale of Zubsolv US, the strategy is to find a commercialization partner for Izipry in the US. The market is very competitive with decreasing prices of the low-dose naloxone nasal rescue medication. This is expected to position Izipry in a niche segment, where its higher dose, strong bioavailability, and thermostable formulation offer clear advantages, particularly in regions with cold climates and a high prevalence of fentanyl related overdoses.

During the quarter, we have continued to explore potential for AmorphOX^® in peptides initially with a focus on GLP-1 agonists. The first study with nasal delivery was promising, but we need to continue optimization of the formulation to reach the desired bioavailability, especially for treatment of obesity where higher dosages are required. In parallel, we expanded our exploratory work to oral formulations, where applying the AmorphOX technology to combine peptides with supporting excipients in a single particle could improve their profile compared with oral products currently available on the market.

The AmorphOX technology has applications beyond what is feasible for Orexo to pursue and explore. There are many opportunities to be found in products under development where companies are struggling with stability of their product and/or the bioavailability. Orexo is working with some smaller and larger companies to test the feasibility of AmorphOX in their products and our ambition is to grow this portfolio of projects moving beyond the current state, for example feasibility projects. 

We have taken an important step forward to ensure the company has the capacity to develop our pipeline and products where we see significant long-term potential. I am certain the greatest value opportunities are in projects where Orexo maintain a central role from development to commercialization. This is also reflected in the capital allocation where our own projects take more than 80 percent of the investment in R&D. With the sale of Zubsolv we are well positioned to take our projects to important value inflections, which will be critical enablers to enter partnerships and if the opportunity is right also for Orexo to take an active role in the commercialization phase. Reaching the value inflection of our development programs is important to our ambitions for business development, to secure the financial capacity to advance our R&D focus areas and create shareholder value.

I want to show my appreciation to our employees in the US and Sweden who have been extraordinarily engaged and committed to Orexo during this transition following the sale of Zubsolv.