07-05-2025
Orexo AB (LTS:0H19) Q1 2025 Earnings Call Highlights: Navigating Challenges and Optimizing Growth
Q : Can you provide more details on the transition to the new device for OX124 and the timeline for this process? A : Nikolaj Sorensen, CEO: The transition to the new device for OX124 involves minimal changes, primarily in the handling of the device. We are starting the manufacturing switch now and do not anticipate major work. The timeline depends on FDA discussions, but we are using the delay in receiving the original device component to prepare for the new device. We expect minimal commercial implications and will update once we have FDA feedback.
The company experienced a decline in volumes for its main product, Subsol, particularly due to high deductibles and Medicare policy changes.
There are ongoing uncertainties with the FDA, causing delays in drug approvals and impacting timelines for product launches.
The strengthening of the SEK against the US dollar negatively impacted the company's cash position.
Orexo AB ( LTS:0H19 ) faced challenges due to changes in Medicare policies in the US, impacting volume and pricing.
The company is optimistic about reaching a partnership agreement for OX640 later this year, which could enhance future growth prospects.
Orexo AB ( LTS:0H19 ) has a natural hedge against currency fluctuations due to a significant portion of expenses being in US dollars.
Orexo AB ( LTS:0H19 ) reported stable revenue in both SEK and US dollars compared to last year, with a slight increase driven by lower inventory decline.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Financial Outlook for 2025: Subsol net sales expected between USD50 to USD55 million; Group EBITDA expected to be positive for the full year.
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Q: Is there any ongoing work for OX640, and what are the next steps for partnering? A: Nikolaj Sorensen, CEO: We are adjusting the manufacturing process for OX640 based on recent study results and preparing to upscale production. We aim to have a partner in place before starting full-scale manufacturing, as some partners may want more control over the supply chain. Discussions with potential partners are ongoing.
Q: Can you elaborate on the market position of Suboxone and the reasons for the volume decline? A: Nikolaj Sorensen, CEO: The volume decline is mainly due to United Health Group's high deductibles and Humana's changes in Medicare policy. These factors have historically impacted Q1 volumes. Despite a slight market share decrease, our market position remains stable, and we expect volumes to recover in subsequent quarters.
Q: How is the strategic overview of Orexo affected by market volatility, and what are the plans for potential partnerships? A: Nikolaj Sorensen, CEO: We are focusing on optimizing our R&D pipeline and exploring partnering strategies for Amorphox. While the market is volatile, we are not in a hurry to make strategic moves. We are open to discussions with companies interested in partnerships, but we are satisfied with our current US business performance.
Q: What is the outlook for Orexo's financial performance and cash flow management? A: Fredrik Jarrsten, CFO: We have a stable financial position with a focus on cash flow optimization. Our US business is profitable, and we are continuously improving cost efficiency. We expect positive cash flow from operations and are comfortable with our working capital position.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
