Lund, December 21, 2020. Iconovo AB (publ) today announced that the company has signed a development agreement with Monash University for the development of inhaled oxytocin in ICOone®. The agreement verifies the suitability of ICOone for use with innovative pharmaceuticals. Monash University’s Institute of Pharmaceutical Sciences (MIPS) is leading the development project supported by a research agreement with Janssen Pharmaceutica N.V., part of the Janssen Pharmaceutical Companies of Johnson & Johnson, and ongoing support from long term partner GSK.

The agreement gives Monash an exclusive global right to use ICOone with oxytocin to prevent postpartum haemorrhage in women giving birth. The agreement has a staged technology access fee of €900,000 that will be triggered by milestones in the clinical trial stage of the project where the first out of three milestones will be paid as an exercise fee to license the device subject to a positive Phase 1 trial that is planned for 2021. In addition, Monash will pay Iconovo for commissioned development work through milestones that are yet to be defined. Royalties from sales over a 20-year period from launch will be in the 5 – 10 % range, as previously communicated for similar agreements.

“We are excited to be contributing with ICOone and our inhalation know-how to such an important medical innovation. There is a huge need to ease administration of oxytocin so that these unnecessary and tragic deaths can be reduced all over the globe. In this project, we all come together to make great things happen,” said Johan Wäborg, CEO of Iconovo.

“For Iconovo, this project will broaden our experience to include innovative development and we look forward to many more such projects where we can use our inhalation experience. It sends a clear signal that these innovation-focused partners see ICOone as a promising inhaler for innovative applications. We are very pleased that we now have commercial royalty bearing agreements for all Iconovo’s three platforms,” continued Johan Wäborg.

Currently, injectable oxytocin is used to prevent postpartum hemorrhage (PPH) after childbirth. It is recommended by the WHO that women should receive an injected dose of oxytocin during the third stage of labor to prevent PPH. An inhaled formulation can provide important advantages such as ease of use, cheaper transport and storage without cold chain and no handling of used needles and syringes. It is particularly important in parts of the world where infrastructure is less developed, like in rural parts of Africa or Asia. To remove the need for a cold-chain and the management of hazardous waste will be a great cost reduction and potentially help eliminate disease spreading by infected needles. Iconovo estimates that there are 115 million live births in the region of interest, whereof 65 million are in rural areas with the greatest need. Iconovo believes that the product will be used in 15 – 20 % of live births in rural areas. In the future there is a possibility that also other markets like USA and Europe will open for inhaled oxytocin as a safer, non-invasivealternative to injections.

“This is an exciting opportunity to expand this collaboration between industry and academia to develop an important healthcare innovation that aims to address a critical unmet medical need,” said Monash University’s Professor Michelle McIntosh, who has pioneered the inhaled delivery of oxytocin. “There is a massive ripple effect when a mother dies – it's a very significant burden for these families and communities, and we are committed to bringing gold-standard care to all mothers.”

ICOone is a single-dose inhaler designed for ultra-low manufacturing cost and easy operation. In these areas, ICOone is particularly suitable since it can deliver one dose at a low price-point and with a mode of operation that requires a minimum of training. Therefore, ICOone supports the potential of delivering an inhaled oxytocin product at an affordable price point comparable to other uterotonic options available in low- and middle-income countries.

About PPH
PPH, a condition of excessive blood loss after birth, is the leading cause of maternal mortality globally, resulting in an estimated 60,000 deaths per year, overwhelmingly in resource-limited countries. Most deaths resulting from PPH could be avoided if access to suitable medical innovation were available. It is effectively managed in developed countries using the gold standard therapy, oxytocin, a manufactured form of a natural hormone. Accessibility to quality oxytocin in resource-poor countries is, however, limited as current products are only available in an injectable form requiring supply and storage under refrigerated conditions and trained personnel to administer the product safely.

About ICOone®
ICOone is a unique, patented dry powder inhaler for single use. The smart design generates an ultra-low manufacturing cost combined with simple and discreet use. It is particularly suitable for short-term treatment and as-needed use as it provides an unsurpassed low treatment cost and price point for treatments with a low number of doses. The simple design also enables patients and caregivers to learn how to handle the inhalers with minimal training. ICOone can deliver large inhalation doses that are well protected against moisture, an important factor for many biomolecules.

About Monash University’s Institute of Pharmaceutical Sciences (MIPS)
MIPS has formed an alliance with a number of industry partners, including Janssen Pharmaceutica N.V., part of the Janssen Pharmaceutical Companies of Johnson & Johnson, and GSK, as well as philanthropic organisations such as the McCall MacBain Foundation, to develop a novel, temperature-stable formulation of oxytocin. The 2020 QS World University Rankings by Subject ranked Monash University number two in the world for Pharmacy and Pharmacology. The University has also retained a long-held position as Australia’s and the Asia-Pacific’s number one University for Pharmacy and Pharmacology, and since the subject rankings were introduced in 2011 has consistently ranked in the most elite group of Pharmacy and Pharmacology programs worldwide with an average top ten ranking.

For further information, please visit https://www.monash.edu/pharm/research/pharmaceutical-sciences.

Iconovo announce that the capsule-based dry powder inhaler ICOcap® has been submitted to U.S. Food and Drug Administration (FDA) by partner Stevanato as Type III Drug Master File. New customers to ICOcap® can now reference this DMF submission when developing their drug-device product for the US market. This FDA submission follows a receival of CE-mark in European Union for clinical trials with ICOcap®.

”Stevanato is doing a great job in getting the ICOcap® inhaler globally ready for pharmaceutical companies to develop their products with ICOcap®. Now they have managed to take major steps in two of the largest markets in the world. US, the largest pharma market in the world, is a crucial market to be in with ICOcap®”, says Johan Wäborg, CEO for Iconovo.

About ICOcap

ICOcap is a patented capsule-based dry powder inhaler with a one-piece-design and improved handling features making it easy-to-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.

At the Annual General Meeting of 8 May 2020, it was resolved that Iconovo shall have a Nomination Committee consisting of four members representing the four largest shareholders as of 30 September 2020.

 The Nomination Committee for the 2021 Annual General Meetings consists of:

Mats Johansson;

Hans Karlsson Höiden, appointed by Orest Lastow;

Stefan Berger, appointed by Eiffel Investment Group;

Johan Lundgren, Chair of the Nomination Committee

The Nomination Committee’s overarching responsibility for the 2021 Annual General Meeting is to present suitable candidates for the positions of Board Chair, Board members and auditor (s) of the Company, and to propose their remuneration.

 The Nomination Committee shall prepare proposals in the following matters to be submitted to the Annual General Meeting for decision:

proposal for Chair of the AGM,

proposal for the number of AGM-elected Board members and, where applicable, number of auditors,

proposal for remuneration to non-employed members of the Board and to non-employed members of the various committees of the Board,

proposal for remuneration to the auditors,

proposals for election of Board Chair, other members of the Board and, where applicable, auditors,

proposals for guidelines for appointing members to the Nomination Committee and for the Nomination Committee’s assignments,

proposal for remuneration to the members of the Nomination Committee.

 

Shareholders who wish to submit proposals to the Nomination Committee can contact the Nomination Committee by email at Johan.Lundgren@zenitdesign.se.

In order for the Nomination Committee to process received proposals with sufficient care, these should be received by the Nomination Committee by 1 March 2021.

LUND, 17 NOVEMBER 2020

BOARD OF DIRECTORS

Good progress in customer projects

Key figures in TSEK unless otherwise indicated  Jul-Sep 2020 Jul-Sep 2019 Jan-Sep 2020 Jan-Sep 2019 Jan-Dec 2019
Net turnover 5,754 3,474 10,111 11,737 11,737
Operating profit/loss -2,304 -2,036 -13,104 -4,567 -11,774
Cash flow for the period -3,640 -4,908 -17,069 -12,299 36,106
Earnings per share (SEK) before full dilution -0.25 -0.26 -1.62 -0.57 -1.68
Cash and cash equivalents 72,087 40,751 72,087 40,751 89,156
Equity 97,245 60,125 97,245 60,125 108,794
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** 4 3 4 3 3

**Number of agreements at the end of the period.

Significant events 1 July – 30 September

  • 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.
  • The United States Patent and Trademark Office issued an intention to approve (Notice of Allowance) a patent for the ICOres inhalation platform.

Significant events 1 January – 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.
  • 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 potential impact would be 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.
  • Orest Lastow took the role of company Chief Technology Officer (CTO), and Johan Wäborg was hired as the new CEO of Iconovo in April. Orest Lastow, one of the co-founders, is one of the largest shareholders together with the company’s Chairman of the Board. Orest 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 Chinese Patent Office issued an Intention to Grant notification regarding a patent for the ICOres inhalation platform. 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, two European patents, and one Japanese patent). The patents describe the technology used in Iconovo’s many customer projects, including generic Symbicort.
  • 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 third quarter

  • Iconovo recruited a Director Project Management and a Director Alliance Management. These roles will focus on customer needs and enable the delivery of high-quality customer projects in a planned, efficient manner.

A word from the CEO

Strongest quarter in three years
During the third quarter, significant progress was made in the projects, and several milestones were achieved and could be invoiced to Amneal and Intas. Sales for the quarter amount to SEK 5.8 million, making it the strongest quarter in three years.

Generic Symbicort
The Amneal project with a generic version of Symbicort in ICOres is now in its final phase and work with the final milestones will take place in the next quarter. The final technical delivery will then take place at the beginning of next year and the customer will begin pharmacokinetic studies. The purpose of the studies is to verify that our product gives the patient the same uptake of drug as the original product.

With the technical delivery completed at the beginning of next year and an assumption that the studies will be positive, we can assume that launch in European countries should be possible from early to mid-2023. This timepoint will also mark the start of royalty income for Iconovo from this product.

Important new agreement
In early July, we were able to announce a new customer agreement with BNC Korea. In connection with signing, a technology access fee of EUR 150 000 was paid. The agreement relates to the development of generic formulations of Seebri and Ultibro, which will be used in our ICOcap inhaler.

It is an important agreement for several reasons. Having active customers and business in Asia will help us establish more projects in this part of the world. The contracted territory currently has about 2.7 billion inhabitants, and they are increasing sharply in both number and purchasing power. In the near future, this part of the world may drastically increase its need and consumption of inhalation drugs. The territory currently accounts for approximately 15% of global Seebri and Ultibro sales, which means that the remaining 85% is left as an opportunity for a new contract.

The agreement also serves as verification that a model with early in-house development of certain interesting formulations makes our projects even more commercially viable. Since this leads to a more finished product, it will also be easier for the customer to enter into an agreement.

Other progress during Q3
Our ICOres project with Intas also made good progress in Q3, with subsequent invoicing of milestones. The Intas project will enter a new phase at the beginning of next year, when a period of technical delivery begins. We expect the entire project to be fully delivered by the end of 2022.

COVID-19
COVID-19 has had minimal impact on Iconovo and the work with our projects is progressing according to plan. In business development, it is also possible to maintain a high level of activity through virtual meetings. We look forward to and are planning to reconnect with our customers via physical meetings as soon as possible.

Investments for increased capacity and customer focus
We have recently made many investments that will help us expand our capacity, put further focus on project implementation, and make us even better in attracting new customers.

During the period July-October, we appointed four new highly qualified people: a formulation specialist, a mechanical design engineer, a personal responsible for commercial partnerships and customer relationships, and a senior project manager.

We are also building efficiency and capacity through several investments, including adaptation of the quality system to meet the requirements of the US Food and Drug Administration (FDA), acquisition of modern HPLC equipment, and setup of two new formulation labs. The new labs will lead to higher capacity and efficiency. At the same time, several patents, design protection and trademarks have also been registered. Last, but not least, we are making investments in the development of the new ICOpre platform according to plan.

I consider the investments we are now making, absolutely necessary in order to help the company grow, keep up our pace, and increase our commercial success.

Our investments affect our cash flow, but at the same time are balanced by good invoicing. We are currently well capitalised and had SEK 72 million in cash and cash equivalents at the end of September. At our current burn rate, our capital is estimated to last just over 3 years. This takes us into a period when we are expected to receive royalties, which will provide good profitability in the company.

Optimistic about next quarter
We are now keeping the same high pace in our delivery of current milestones for the rest of the year. We therefore expect to be able to invoice to the same extent in Q4 as we were in Q3.

Johan Wäborg, CEO

Iconovo announces two new recruitments to increase focus on customers’ needs and to deliver their projects in an effective and high-quality manner. With a growing project portfolio and many projects in a very active late phase, Iconovo has made appointments to two new positions that will contribute to an increased capacity for delivering new as well as existing projects.

Iconovo has accordingly appointed the following two new Directors.

Nina Bladh, PhD; has been appointed to Director Project Management. Nina has 25 years of experience in the development of pharmaceutical products. Her previous position was Director CMC Regulatory Affairs at Camurus, Lund, where she has gained considerable experience in taking pharmaceutical combination products to registration and launch. Prior to Camurus, Nina worked 16 years at AstraZenca including project management positions and work with inhalation products. She obtained her PhD in Physical Organic Chemistry at the University of Lund in 1995. Nina will primarily be responsible for leading customer and internal development projects.

Måns Österberg Widerstrand has been appointed to Director Alliance Management. Måns has a broad experience from the pharmaceutical industry. He started his career as a pharmaceutical scientist, later to lead manufacturing and R&D departments while the latest 11 years has been spent in advisory and customer relation roles with KOLs and B2B customers, such as Key Account Manager at Thermo Fisher and Head of Global Generics Sales at Polypeptide. Most recently, Måns held a position as Senior Scientific Advisor Allergy at Thermo Fischer. Måns will be responsible for the alliance management of current customers, follow our projects to market, while developing the business relationship with the customer. He brings a general strengthening of the commercial abilities of Iconovo.

”With joy I can today announce that we have appointed two persons in two newly created key positions. Nina and Måns brings a lot of experience that is directly applicable and complementary to the competence we have in Iconovo today. This is an important investment at a time when we move our existing projects towards final delivery. With these new positions we can intensify our commercial efforts and goal-oriented continue to secure new contracts with customers”, says Johan Wäborg, CEO at Iconovo.

Johan Wäborg, CEO at Iconovo, presented Iconovo at Erik Penser Bank’s Company Day 24 September where he gave the story of Iconovo covering the business model, products and how Iconovo will generate royalty income as the projects mature and gets launched into the market.

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