Breakthrough in Asia with a fourth royalty agreement

Key figures in TSEK unless otherwise indicated  Apr-Jun 2020 Apr-Jun 2019 Jan-Jun 2020 Jan-Jun 2019 Jan-Dec 2019
Net turnover 2,425 3,028 4,357 8,263 11,737
Operating profit/loss -5,819 -2,800 -10,800 -2,532 -11,774
Cash flow for the period -9,697 -4,584 -13,429 -7,391 36,106
Earnings per share (SEK) before full dilution -0.82 -0.38 -1.37 -0.31 -1.68
Cash and cash equivalents 75,727 45,659 75,727 45,659 89,156
Equity 99,220 61,893 99,220 61,893 108,794
Number of shares at period-end 7,776,000 6,776,000 7,776,000 6,776,000 7,776,000
Number of royalty agreements** 3 3 3 3 3

**Number of agreements at the end of the period. One further royalty agreement was signed after the end of the period.

Significant events 1 April – 30 June

  • Amneal joined as a new partner in the development of Iconovo’s project with generic Symbicort. Amneal is taking over all obligations under the current agreement from CBC. The project will proceed according to plan.
  • The ICOcap capsule inhaler has become CE-marked for use in clinical trials and can be purchased directly from Stevanato, which is the manufacturing and distribution partner.
  • The Chinese Patent Office issued an Intention to Grant notification regarding a patent for the inhalation platform ICOres. The European Patent Office, EPO, issued an Intention to Grant notification for the third European patent for the ICOres inhalation platform (which is already covered by three approved Swedish patents and two European patents). The patents describe the technology used in Iconovo’s many customer projects, including generic Symbicort.
  • Iconovo only anticipates a limited impact from COVID-19 currently and in the future. The company has the required goods in stock, and sales are not physical. The greatest impact expected to occur is some delay in development in the event that company employees fall ill.
  • Gunnar Gårdemyr was elected to the Board at the Annual General Meeting. Gunnar has a degree in economics from Lund University and over 35 years of experience in the pharmaceutical and biotech industry. Previous positions include CEO of Targovax AS, SVP Commercial development/M&A at Nycomed, Global marketing director at Ferring.

Significant events 1 January – 31 March

  • Orest Lastow took the role of company Chief Technology Officer (CTO), and Johan Wäborg was hired as the new CEO of Iconovo. Orest Lastow, who is one of the co-founders and one of the largest shareholders together with the company’s Board Chair, previously combined the position of CEO and CTO. He will now devote all of his time to the role of company CTO. Orest is the inventor behind Iconovo’s three inhaler platforms and will now focus on the development of the new ICOpre platform.
  • On 11 March 2020, an Extraordinary General Meeting was held which decided on an incentive programme and the issue of 200,000 warrants to the future CEO. Subsequently, there was subscription of 200,000 warrants for a total of SEK 1,224,000.
  • The European Patent Office, EPO, issued an Intention to Grant notification for the second European patent for the ICOres inhalation platform (which is already covered by three approved Swedish patents and one European patent). The patent describes the technology used in Iconovo’s many customer projects.
  • The European Patent Office, EPO, issued an Intention to Grant notification for the first European patent for the ICOone inhalation platform (which is already covered by two approved Swedish patents). The patent describes the technology used in Iconovo’s vaccine project.

Significant events after the end of the second quarter

  • Iconovo has signed a regional know-how licensing agreement with BNC Korea Co Ltd. The agreement gives exclusive rights to manufacture, market, sell and distribute two capsule formulations together with ICOcap in the territory. The deal has a milestone value of TEUR 550 and additional future royalties of a medium single-digit percentage of sales.

A word from the CEO

Our fourth royalty agreement
On 8 July, we had the pleasure of announcing that we have now entered into our fourth royalty agreement with the company BNC Korea based in Seoul, South Korea. With this agreement, we make an important entry into the Asian markets with a partner who knows these markets. An important component is also that it relates to two different formulations, Seebri and Ultibro generics. Some of the development work was already carried out previously. We can therefore expect a faster development phase and that the product will thus be ready for launch when the patent expires. The deal entered into corresponds to 15% of today’s global market, which means that the remaining 85% of the global market is open for licensing.

High activity through COVID-19 times
I took over the CEO position in April, in the middle of a period when COVID-19 took off everywhere and forced us all to begin living very different lives. At Iconovo, we quickly realised the severity of the situation and implemented all recommended efforts and restrictions. Our employees are our most important resource, and we care about keeping each other healthy. We have not had any impact from the illness thus far, and we will continue following the recommendations of the Public Health Agency of Sweden and the Swedish Ministry for Foreign Affairs this autumn.

Since we are not dependent on any deliveries from other parts of the world that have been in lock-down, our technical and laboratory work can continue unhindered. Our projects are on time.

However, we are indirectly affected by the fact that we, as a globally-oriented company, have many existing and potential customers in countries with a lock-down, making some processes and administration work slower.

An unexpected upside for us is that it has been possible to hold many active discussions regarding business development, and it has been much easier to convene meetings. Compared to a normal quarter, you could say that Q2 has been extremely active. It is clear that new customer acquisition is usually more effective when you can meet face-to-face. While we are maintaining our momentum with a lot of virtual meetings, we look forward to being able to hold physical meetings as soon as possible.

We are growing
During Q2 and the summer months, we completed two recruitments of great importance for the upscaling of our operations. One Sr. Mechanical Engineer and one Formulation Scientist will start this autumn. We also initiated recruitment of two positions intended to help make the commercial aspect of our operations strong. We need one project manager to coordinate new projects, and one person with commercial drive to secure important collaborations. Our ambition is to become very good at being close to the customer, proactively initiating dialogue, following up, capturing opportunities for additional sales, and seeking new customers to secure contracts that fit well with our strategy. We expect to complete these recruitments in Q3 and for the individuals to step into their roles around the turn of the year.

Other progress during Q2
In Q2 2020, we were able to invoice two milestones under the Amneal project. Having Amneal back in the Symbicort generic project feels really great, and we can tell from their commitment level that this project is of great strategic importance for them as well. In addition to this milestone, some ongoing development work for other customers was also taken up as income.

ICOpre development work intensified during Q2. Over the summer months, we were able to select one of the three successful concepts as the best alternative. Going forward, development work will now focus entirely on this concept. ICOpre is equivalent to GlaxoSmithKline’s Ellipta inhaler, which is currently used for five different products. The development of ICOpre is a major strategic step towards developing a quality product that can capture some of this market, which is expected to reach over USD 5 billion annually by 2024. Patent protection for the first product disappears in 2025, and the market will then open up to generic versions. At that time, we will be ready with an inhaler that is based on proprietary technology and can thereby be used to launch generic products.

The ICOpre venture was identified at last year’s strategy days and now constitutes an important strategic venture going forward. Development of this new platform is now in full swing. This year, we will look at how Iconovo can grow and develop long-term to maximise value and utilise our unique expertise.

This autumn, we will continue to work with the implementation of our existing customer projects, and we will continue to work hard with business development to strike new deals.

Everyone is now back from holiday with their batteries fully charged, and we can look forward to an active and eventful autumn.

Johan Wäborg

Iconovo has been recognized as a leading solution provider of drug delivery devices by Medtech Outlook when the magazine listed 10 companies that are at the forefront of providing drug delivery device solutions and impacting the industry. Iconovo is profiled in the MedTech Outlook special edition of Drug Delivery Devices.

www.drug-delivery-device.medicaltechoutlook.com/vendor/iconovo-an-experienced-partner-for-the-development-of-inhalation-products-cid-866-mid-96.html

Orest Lastow, CTO and Founder of Iconovo was interviewed by the magazine to describe why Iconovo is a leading provider of inhalation products to the pharmaceutical industry.

“Iconovo represents inhalation experience that is only matched by a handful of companies in the world. I’m really happy that the Iconovo team gets global recognition for these efforts.” says Johan Wäborg, CEO of Iconovo.

United States Patent and Trademark Office has announced the intention to grant a patent (Notice of Allowance) regarding Iconovo’s inhalation device, ICOres. Iconovo has previously granted patents in Sweden, Europe (EPO), Japan and China. The new patent covers the technology used in many of Iconovo’s projects like generic Symbicort©.

United States Patent and Trademark Office has announced the intention to grant a patent (Notice of Allowance) regarding Iconovo’s inhalation device, ICOres. Iconovo has previously granted patents in Sweden, Europe (EPO), Japan and China. The new patent covers the technology used in many of Iconovo’s projects like generic Symbicort©.

“USA is the biggest market in the world. With a granted patent in USA we can now intensify our global business development. This patent means that ICOres has broad international patent protection, which increases the value of our product portfolio”, says Johan Wäborg, CEO.

Iconovo announced July 8th that a regional licensing agreement had been signed with BNC Korea regarding the development of two inhalation capsule formulations for generic Ultibro® and Seebri® for ICOcap®. The agreement gives BNC Korea exclusive rights in a territory consisting of Korea, Japan, China, Taiwan, Russia, the CIS Countries and the Southeast Asian Countries (including Turkey). The deal has a milestones value of EUR 550.000 whereof EUR 150.000 is to be paid as an access fee. Iconovo estimates that most of the value will be in future royalty payments and not milestones payments.

Ultibro® and Seebri® are approved for the treatment of COPD. Ultibro® Breezhaler® generated sales of USD 427 million and Seebri® Breezhaler® generated sales of USD 121 million according to the 2019 annual report of Novartis. In the announcement from July 8th the share of global sales 2019 was estimated to 25%. Iconovo’s new changed estimate is that approx. 15 % of global sales 2019 comes from the territory that is licensed to BNC Korea (territorial sales 2019 of approx. USD 82 million for both products instead of earlier communicated EUR 140 million).

Taking a dynamic view on the business opportunity Iconovo estimates that Asia and the BNC territory gradually and substantially will increase the value of the business over the 20-year royalty term. High population growth in Asia is a strong driver as it is corresponding to approx. 40-50% of the total global population increase for the next 10 years (UN, World Population Prospects 2019). Additionally, this part of the world is seeing strong economic growth with increased health expenditure per capita enabling more people to prioritize healthcare.

The remaining territory, still available for licensing, represents approx. 85% of the Ultibro® and Seebri® world market. In 2019 this market corresponded to a value of approx. USD 466 million, whereof Europe is the largest opportunity.

Iconovo is in an advanced stage of the development of the capsule formulations, thus believes that its future partners can launch in the first wave of generic products, later to be followed by late comers to the market. Iconovo believes that a feasible market share for its licensed capsule products is 13 – 20% based on normal order-of-entry models in the pharmaceutical industry considering the higher replaceability between generically approved products[1]. The market uptake speed is slower for generic inhalation products than for generic tablets. Iconovo expects that 80 % of the peak market share can be reached after 2 years on a country-by-country level[2], although the launches may happen over a number of years thereby lowering the consolidated regional uptake speed.

Iconovo is entitled to royalties on net sales of BNC Korea and their net sales will be affected by the number and sub-licensing terms agreed with their distributors. Royalties from future sales will be a mid-single digit percentage of sales, depending on country and distribution setup.

In addition, Iconovo will be entitled to royalties from Stevanato based on the separate sales of the ICOcap capsule inhalers, but it will be a lower value as the cost of the each ICOcap inhaler is a small share of the overall market price.

About ICOcap®
ICOcap is a robust capsule-based dry powder inhaler with a unique grip-friendly one-piece hinge design that ensures ease of use. It is currently designed with a low flow resistance but can be customized to a flow resistance of choice. ICOcap™ is available from Stevanato.

About COPD
COPD is a combination of inflammation in the airways and destruction of the lung tissue. The disease progresses slowly over many years and the main cause is tobacco smoking. Patients with COPD have difficulty breathing, and experience fatigue and a lack of energy. There is no cure for COPD, and the treatment goal is to try to stop further deterioration and destruction
of the pulmonary alveoli. According to WHO, COPD was the third most common cause of death in the world with 3 million deaths. The number of people living with COPD worldwide was estimated to be 251 million.

About BNC Korea
BNC Korea Co., Ltd was founded in 2007 and is enlisted on KOSDAQ market in Korea. The company has been developing biologicals and pharmaceuticals which have differentiating characteristics meeting unmet medical needs in the disease treatment market. Also, the company has been operating business in the field of medical device like HA Filler, tissue restoration material and wound healing agents and biopharmaceuticals like botulinum toxin strain type A for aesthetic purpose. Currently, the company has been establishing manufacturing facility for pharmaceutical of oral dosage form and injectables.

More information about the company can be found at https://www.bnckorea.co.kr

BNC Korea Co.,Ltd is based in Daegu and Seoul in Korea. Manufacturing site is located at Daegu and Sejong city of Korea.

[1] Kalyanaram 2008, InPharmation, IQVIA, Kremer 2008
[2] InPharmation

Iconovo announce that the company has signed a know-how license agreement granting BNC Korea Co Ltd the exclusive rights to use the know-how to manufacture the formulations and to market, sell and distribute the formulations together with ICOcap® in the territory. BNC Koreas has exclusive rights in a territory consisting of Korea, Japan, China, Taiwan, Russia, the CIS Countries and the Southeast Asian Countries (including Turkey). The license agreement covers two generic formulations, a generic Ultibro® Breezhaler® (indacaterol, glycopyrronium) product and a generic Seebri® Breezhaler® (glycopyrronium) product. The deal has a value of EUR 550,000 whereof EUR 150,000 is to be paid as an access fee. Royalties from future sales will be a mid-single digit percentage of sales depending on market.

Ultibro® and Seebri® are approved for the treatment of COPD. Ultibro® Breezhaler® generated sales of USD 427 million and Seebri® Breezhaler® generated sales of USD 121 million according to the 2019 annual report of Novartis. Iconovo estimates that approx. 25 % of global sales comes from the territory that is licensed to BNC Korea (territorial sales of approx. Euro 140 million for both products). The remaining territory is still available for licensing where Europe is the largest opportunity.

”Iconovo is looking forward to work with BNC Korea to bring these two products to market in a very important territory with over 2.7 billion inhabitants. BNC Korea is a regional dynamic company with fast decision-making and established distribution networks. With BNC Korea we are confident that the products can be advanced to market in a fast and effective way. We will work closely with BNC Korea using our combined knowledge to form a strong alliance. This agreement is a validation of our technology and will make an important first block in our continuing licensing efforts for the remaining territory.” says Johan Wäborg, CEO of Iconovo.

About ICOcap®
ICOcap is a robust capsule-based dry powder inhaler with a unique grip-friendly one-piece hinge design that ensures ease of use. It is currently designed with a low flow resistance but can be customized to a flow resistance of choice. ICOcap™ is available from Stevanato.

About COPD
COPD is a combination of inflammation in the airways and destruction of the lung tissue. The disease progresses slowly over many years and the main cause is tobacco smoking. Patients with COPD have difficulty breathing, and experience fatigue and a lack of energy. There is no cure for COPD, and the treatment goal is to try to stop further deterioration and destruction
of the pulmonary alveoli. According to WHO, COPD was the third most common cause of death in the world with 3 million deaths. The number of people living with COPD worldwide was estimated to be 251 million.

About BNC Korea
BNC Korea Co., Ltd was founded in 2007 and is enlisted on KOSDAQ market in Korea. The company has been developing biologicals and pharmaceuticals which have differentiating characteristics meeting unmet medical needs in the disease treatment market. Also, the company has been operating business in the field of medical device like HA Filler, tissue restoration material and wound healing agents and biopharmaceuticals like botulinum toxin strain type A for aesthetic purpose. Currently, the company has been establishing manufacturing facility for pharmaceutical of oral dosage form and injectables.

More information about the company can be found at https://www.bnckorea.co.kr

BNC Korea Co., Ltd is based in Daegu and Seoul in Korea. Manufacturing site is located at Daegu and Sejong city of Korea.

Stevanato announced in their industrial plan for 2020 – 2023 that they intend to invest almost Euro 400 million in manufacturing and R&D programs for drug delivery systems. A share of this investment will be allocated to the manufacturing of ICOcap®. This update follows the announcement May 27 that ICOcap® received a CE-mark.

Stevanato also recently launched a new product site to increase the visibility of ICOcap® underlining its position as an important product for the future, where Iconovo is featured as a service provider for customizations and formulation services.  

To find the press release for Stevanato’s industrial plan: https://www.stevanatogroup.com/news-events/press-releases/stevanato-group-planned-investments-under-the-2020-2023-industrial-plan-about-400-million-euros-to-finance-the-company-development/

To find Stevanato’s new ICOcap® site: https://www.stevanatogroup.com/drug-delivery-devices/icocap/

To read more about the CE-mark of ICOcap®: https://iconovo.se/capsule-inhaler-icocap-from-iconovo-ce-marked-for-clinical-trials/

Today, Iconovo released a briefing document on its homepage covering the market opportunity, patent situation, ICOpre® product features and partnering strategy. The objective is to be transparent to customers and investors regarding Iconovo’s perception of this product opportunity.

To find the briefing document, please follow the link: www.iconovo.se/products/icopre.

”ICOpre is the largest investment in the history of Iconovo and we want to share how we view this opportunity with investors and potential customers. We will keep our stakeholders informed about the progress in the development of ICOpre as we move forward. Iconovo is already investigating potential partnering interest with generic customers for this opportunity” says Johan Wäborg, CEO of Iconovo.

The Chinese Patent Agency has announced the intention to grant a patent regarding Iconovo’s inhalation device, ICOres. Iconovo has previously granted patents in Sweden, Europe (ERPO) and Japan. The new patent covers the technology used in many of Iconovo’s projects like generic Symbicort©.

“China is an enormous market and this patent gives us protection of a very important and fundamental function in ICOres. To have a granted patent in China is crucial when doing business development. This additional patent strengthens our international intellectual property and increases the value of our product portfolio”, says Johan Wäborg, CEO.

Iconovo announce that the capsule-based dry powder inhaler ICOcap™ is CE-marked for use in clinical trials. ICOcap™ is now available for customers to use in clinical trials that develop capsule-based formulations and can be bought from Stevanato, the manufacturing and distribution partner of Iconovo. The CE mark is applied in conformity with the requirements of Directive 93/42/EEC as a Class 1 Medical Device in collaboration with our partners Stevanato Group and their affiliate Balda Medical GmbH.

”Getting the CE certification mark for ICOcap™ takes Iconovo and Stevanato one step closer to commercial sales of this uniquely designed capsule inhaler. The inhaler can now be sold for use in clinical trials. This is not only of importance for Europe but also for the rest of the world since the CE marking globally is considered as a sign of quality.” says Johan Wäborg, CEO for Iconovo.

About ICOcap
ICOcap is a robust capsule-based dry powder inhaler with a unique grip-friendly hinge design that ensures ease of use. It is currently designed with a low flow resistance but can be customized to a flow resistance of choice. ICOcap™ is available from Stevanato for quick product launch and competitively priced off-the-shelf supply.

Iconovo AB today announced that the ICOres™ budesonide/formoterol project (generic Symbicort®) will be transferred to the global partner Amneal Ireland Limited from CBC Corporation (India) Private Limited. Amneal Ireland Limited will take over all existing obligations of CBC under the current agreement. The project will continue according to plan.

The ICOres budesonide/formoterol product has already been tested in a pilot clinical pharmacokinetic study in healthy volunteers (communicated in July 2019). The results showed excellent correspondence with regards to budesonide and slightly higher values with regards to formoterol for ICOres. The results are currently being used to finalize the remaining development work, to fully match ICOres to the original product.

The value of the global budesonide/formoterol combination market is about $2.5 billion annually. Iconovo is developing its multi-dose reservoir inhaler ICOres™ and a dry powder formulation to treat asthma and chronic obstructive pulmonary disease (COPD).

”Iconovo welcomes Amneal as a development partner for our Symbicort® project. As we are closing into making larger investments in the project, we feel that Amneal is best positioned to support the project with the required resources and give certainty to the development track. It is a key priority for Iconovo to reach the patients in a timely manner to benefit from the turnover related royalty payments to the company. We look forward to working with Amneal on this exciting project.” says Johan Wäborg, CEO for Iconovo.

Amneal Co-Chief Executive Officer Chintu Patel said: “Developing a range of inhalation products remains an important element of Amneal’s portfolio strategy. Amneal expects that combining Iconovo’s extensive experience in inhalation development with Amneal’s capability to bring complex generic medicines to market will set this partnership apart.”

About ICOres
ICOres is a flexible multi-dose dry powder inhaler with feedback features developed by Iconovo. It features two separate reservoirs which allows for simultaneous inhalation of two different formulations that makes it suitable for combination products. Its intuitive handling, exact dose counting, and clear inhalation feedback helps the patient staying compliant with the treatment. ICOres is ready for commercial manufacturing making it the best alternative for pharmaceutical companies seeking a reservoir inhaler.

About Amneal
Amneal Ireland Limited is a fully owned subsidiary of Amneal Pharmaceuticals, Inc. (NYSE: AMRX) headquartered in Bridgewater, NJ., focused on the development, manufacturing and distribution of inhalation products. Amneal Pharmaceuticals, Inc., is a fully-integrated pharmaceutical company focused on the development, manufacturing and distribution of generic and specialty drug products. The Company has manufacturing operations in North America, Asia, and Europe, working together to bring high-quality medicines to patients primarily within the United States.

Amneal has an extensive portfolio of more than 225 marketed commercial products and is expanding its portfolio to include complex dosage forms, including biosimilars, in a broad range of therapeutic areas. The Company also markets a portfolio of branded pharmaceutical products through its Specialty segment focused principally on central nervous system and endocrine disorders.
For more information, visit https://www.amneal.com.