Formycon AG, with a market capitalization of €460 million, reported a significant drop in revenue for the first quarter of 2025, recording €5.3 million compared to €17.7 million in the same period last year. Despite this, the company maintains a strong cash position and is optimistic about future revenue acceleration in the latter half of the year. The stock price fell by 3.08%, reflecting investor concerns over the current financial performance. According to InvestingPro analysis, the company maintains good financial health with strong liquidity metrics.
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Key Takeaways
- Q1 2025 revenue decreased to €5.3 million from €17.7 million year-over-year.
- Stock price declined by 3.08% following the earnings release.
- Formycon anticipates significant revenue growth in Q3 and Q4 2025.
- The company remains focused on its strong R&D platform and pipeline execution.
Company Performance
Formycon AG’s performance in Q1 2025 was marked by a notable decrease in revenue, attributed mainly to reduced milestone payments. The company, however, continues to focus on its strategic partnerships and product pipeline. Approvals in Canada and the UK for FIB22 Otafi and the expansion of FIB-202 into new markets highlight Formycon’s ongoing efforts to strengthen its market position.
Financial Highlights
- Revenue: €5.3 million, down from €17.7 million year-over-year.
- Adjusted EBITDA: €11.8 million.
- Cash Position: €33 million.
- Equity Ratio: 58%.
Market Reaction
Following the earnings announcement, Formycon’s stock price fell by 3.08% to €24.35. The decline in revenue and the cautious outlook for the first half of the year likely contributed to the negative investor sentiment. The stock has declined nearly 48% over the past six months and is currently trading closer to its 52-week low of €19.18. Based on InvestingPro Fair Value analysis, the stock appears undervalued at current levels.
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Outlook & Guidance
Formycon has provided full-year revenue guidance of €55-60 million, with expectations for significant revenue growth in the third and fourth quarters of 2025. The company is also exploring potential licensing deals and continues to advance its clinical trials. Analyst consensus remains optimistic, with a "Buy" recommendation and significant upside potential from current levels. The company maintains a healthy current ratio of 2.8x and operates with minimal debt at just 3% of total capital.
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Executive Commentary
CEO Stefan Blombitza emphasized the company’s focus on biosimilars, stating, "Biosimilars have come to stay. There is a gigantic number of biologics out there." He also noted, "We target to turn into EBITDA profitability ideally as early as next year," highlighting Formycon’s commitment to financial growth.
Risks and Challenges
- Revenue dependence on milestone payments and royalties.
- Market competition in the biosimilars sector.
- Potential policy changes affecting drug pricing.
- Litigation risks in the US market.
- Execution risks in pipeline development.
Q&A
During the earnings call, analysts inquired about the Phase III waiver trend and its implications for Formycon’s pipeline. Discussions also covered potential US market disruptions and the impact of drug pricing policies on future revenue expectations.
Full transcript - Formycon AG (FYB) Q1 2025:
Conference Moderator: Good afternoon, ladies and gentlemen, and a warm welcome to the Formicon AG Earnings Call of Q1 twenty twenty five. At this time, all participants have been placed on a listen only mode. The floor will be open for questions following the presentation within the conference call, so please dial in. Let me now turn the floor over to your host, doctor Stefan Blombitza.
Stefan Blombitza, CEO, Formicon AG: Yeah. Thank you for the introduction. Good afternoon, good morning, and also from our side, warm welcome to the international participants of today’s earnings call. We appreciate, as always, your attendance and also your interest in Formica. Earlier today, we issued a press release with detailed insights on our Q1 figures 2025.
If I may summarize in a nutshell, another strong operational quarter and financial numbers, although at this early stage only indicative, in line with our Q1 expectation and thus confirming full year guidance. We want to use this call today as an opportunity to provide additional context on both the operational achievements and the financial performance of the first quarter as well as giving you an outlook on the period to come. Anders Bilder, our CFO, and me will guide you through the key facts in a comprehensive presentation. And Nicolas Mikulczyk, our CVO, and Andrea Seidl, CSO, will chime in to answer any questions that are on top of your mind in the Q and A section. As usual in those settings, I have to start, of course, with a legal disclaimer that today’s presentation and discussion might contain forward looking statements, which are based on our current expectations and subject to risks and uncertainties that might lead to material differences to the estimates given here.
Let me start with our growth path. So after a strong 2024, we could tick all important boxes in a very reliable manner. And also 2025 started, operationally well advanced, but with headwinds from The US market, which affected the whole industry and specifically Formica. Those unexpected setbacks can never be excluded, but two at nearly the same time are kind of unique and triggered intense stock market reaction on the basis of an anyhow generally pretty volatile environment. And that exactly happened at the start of our transformation period.
Sometimes you have to take one step back to move two steps forward. Let me just say our R and D excellence and the track record of our development platform remain the solid foundation for our growth. And this is getting even more important in the light of the opportunity that the long awaited phase three waivers are opening up. So with the laser focus on excellence and agility, we continue executing stringently on our strategic plan and maximize our assets step by step on our growth trajectory. 2024 was tremendously important for Formica.
In pipeline execution progress, we could tick all the boxes and prepare the ground for the next ignition stage, which will then turn us into sustainable profitability after having two more products from our pipeline established in key markets. The recent commercial challenges and financial adjustments have an impact on this transformation period, but the overall positive outlook, the attractivity of our pipeline, and of our business model remains. We target to turn into EBITDA profitability ideally as early as next year. Coming to the milestones and the strong operational performance, which has contained already a lot of highlights in first quarter. We have been able to communicate a series of achievements throughout the year 2024, and this strong team performance continued in the first quarter of this year at the same pace.
Going to the details of the highlights. So FIB22 Otafi will be able to enter additional markets in Canada and UK after having received the approvals in the first quarter. And this will complement the launches, which were already successfully performed by Fresenius Kabi nearly simultaneously February and March in US and in Europe. For FFBTO3, our Eylea biosimilar, European Commission, and UK approvals put even more markets into a launch prep position. And to execute those launches, further commercial partnerships have been established with Teva, for instance, in Europe, and with Lotus for the Asia Pacific region.
And for FIP206, the Keytruda biosimilar, our clinical and regulatory teams continued the intense communication with The US agencies, provided data and arguments, which finally resulted in a written scientific advice that enables us to waive the phase three study completely. And this is another landmark and strengthens our position among the front runners in this attractive asset, on top of cost of investment savings of more than €75,000,000 over the next couple of years. As of January, Polycom is part of the TEGDAX, and the uplifting end of last year marks a significant milestone in the company’s capital market strategy while strengthening, of course, the company’s visibility. And this is a perfect timing to switch to the financial part, happy to hand over to Anush Bildner, our CFO.
Anders Bilder, CFO, Formicon AG: Yes. Thank you, Stefan. And, also, a very warm welcome from my side. And just upfront to reiterate on what Stefan just said, q one is as expected, and it is on track, with our planning as we had it in our year end planning anticipated. We can therefore confirm our guidance 2025 to just reiterate on that upfront.
Q1 twenty twenty five, however, is showing obviously less momentum than Q1 twenty twenty four, and this is mainly due to a change of our revenue structure, and therefore the continued transformation process into a commercial unit or in a commercially driven organization with strong focus on revenues going forward. Some parts of our revenues are fading out, while others need to ramp up or accelerate accordingly first, and that will take some time. And I’ll come back on the next slide, for more details on the breakdown on the revenues. But let’s stay on this slide for a couple of seconds. So overall, we do see a reduction of our revenues from 17,700,000.0 to 5,300,000.0.
Again, this was anticipated, and this is mainly due to some changes also in the milestone structure that I will show you on the next slide. Also, for the cost of sales, we have a separate slide prepared for you. However, overall on the cost side, also across R and D and other expenses, we remain fairly stable compared to the Q1 twenty twenty four, but also here observing some structural changes that I will comment on. With regards to EBITDA, we obviously see the consequences of the reduced revenue performance, and also with regard to the adjusted EBITDA, we noticed the weaker contribution into from the EBITDA on the one hand side while also having less impact on the earn out sorry, on the equity result from the bioag, which is also being reduced and therefore showing an adjusted EBITDA of 11,800,000.0. Capitalized costs are increasing significantly, and this is due to the fact that in Q1 twenty twenty five, we were still on full swing for phase one, and also partially for phase three of two zero six clinical trial activities.
So in essence, Q1 is affected by our changing revenue structure. Some revenues reduced while costs remained similar, simply to maintain our development of our broad product pipeline. New revenues just started in q one and still need some ramp up period. And therefore, the cost revenue ratio will change as we move forward into 2025, especially in the second half of the year. Now let’s take a look at the breakdown of our revenues and the respective structure.
And for FLT2O2’s milestones, which were deferred, we can see that these are fading out as planned because all relevant milestones have been achieved in Q3 twenty twenty four, and therefore we cannot recognize any further milestone in this report. That’s a significant portion that we still reported in Q1 twenty twenty four. For FIB-two zero one and FIB-two zero three, cost reimbursement is reducing to maturing products. Also, this was as anticipated, and during the year of 2025, this will become even more obvious with less charge of the cost that we can pass on to our colleagues. For FIB-two zero one royalties, as already indicated, we see reduced performance in the first quarter of this year simply through the eroding prices in The US, also for the reason why Zandos took the product off the market after Q1 twenty twenty five.
For FIB202 royalties, this is new, and after just one month of or sales and marketing in The US and also starting in Europe, we see a first slight impact here, but again, please bear in mind this is just one month of performance by our partner Fresenius Kabi. So during the course of 2025, the revenue positions will change in structure and hopefully will also become more diverse as we move on. I mentioned that also with regard to the cost of sales, we do see a change in the structure, and here I would like to draw your attention in particular to the change of the cost for FIB202 because what we have basically since the last quarter of twenty twenty five is from now onwards or from there onwards, a regular amortization of the product since it is marketable, which means we do recognize roughly 6,200,000 amortization per quarter, which is of course not cash relevant and which is also not EBITDA relevant. However, it has to be recognized in the COGS or cost of sales. The rest basically is fairly stable, but therefore we also have in return less development cost, which we, still showed in Q1 twenty twenty four.
However, we do remain with roughly $5,000,000 of cost for 02/2002, which is in context of the auto injector of commercial efforts, and also aiming for further approvals that we are working on. Just briefly on some KPIs on our balance sheet. Most of them basically have already been explained indirectly on the previous slides. So the change in the total balance sheet volume by roughly 19,000,000 is mainly due to the net result and working capital, and the net result again also includes obviously the amortization of 6,200,000.0 for FIB-two zero two. The same is then true with regards to the net result for the equity, which is also reducing accordingly, and liabilities slightly increasing, which is mainly due to earn out obligations that have been accrued and some some working capital activities.
The equity ratio remains fairly stable and on a high level at 58%, and on the very top bottom on the right, showing a cash position of roughly 33,000,000 at the end of the quarter. So what does this mean for our cash flow and for for our working capital? First of all, it is important to mention that we have a positive, more important, of 9,100,000.0 from operating activities, very different to to last year, and this is mainly due to trade receivables from our partner, Fresenius Kabi, plus some prepayments that we have received. That’s clearly a positive. And I already mentioned the investing activities, which is the capitalized cost after TCOS in the context of the development of our FIB206, mainly phase one and phase three clinical trials.
Overall, we have consummated that as a net effect of that of roughly 9,000,000, which again brings us to the 33,000,000,000 at the end of the quarter. These €33,000,000,000 do not contain any drawdown of the still fully available shareholder loan of up to €48,000,000 which we have not made use of at this point in time. Looking at the right hand side, the translation from the cash and cash equivalents into the working capital, is mainly, current receivables that have been reduced. And on the revenue accruals, this is mainly in context with 02/2002 and 02/2003 going forward. So let’s summarize on the guidance and on the financial part.
The numbers basically remain unchanged, as mentioned before, and again, the structure of our cost and revenue ratio is expected to change during the course of 2025, especially during the second half of the year with increasing revenues that we anticipate following the ramp up of FIB202, showing more quarters and hopefully also growing in Europe and in The US, plus some potential licensing activities that we are working on and aiming for. And therefore, consequently, the EBITDA as well as the adjusted EBITDA in Q1, look already quite close to our full year guidance at this point in time. However, this is going change during the course of the year, so that’s why we confirm the guidance as is. That said, revenue was or is expected in Q1 as we planned. The EBITDA is also on guidance here on track.
Same is true for the adjusted EBITDA, and I think we are looking at a solid cash position and liquid reserves based on our current cash position plus the potential shareholders. Briefly looking at our shareholders and our share as such, there have been no major changes in our shareholder structure being recorded to us. This means more than 52% of our shareholder structure remain with our top four shareholders. Our liquidity increased significantly compared to q one twenty twenty four. So just as an example, in the first quarter of twenty four, we saw seven seventy five shares trading for the third quarter.
In the same period 2025, we saw more than 5,000,000 shares trading, which is an increase of more than 500%. And the average daily trading volume across all floors in twenty four q one was at 12 k versus 82 or 83 k per day in the first quarter of twenty twenty five. Most analysts remain with a Y year to date, so also not a lot of change here yet, and, therefore, we continue to be very present at future conferences. And our CEO Stefan has the great pleasure of traveling to the spring forum already, tonight or tomorrow morning and will be available for you, in Frankfurt. And with that said, I hand over to Stefan.
Stefan Blombitza, CEO, Formicon AG: Yes. Thank you, Annie, for giving us a lot of more details on the Q1 numbers. Maybe just a bit back to the operational outlook. And as said in my introductory part, the teams really executed in full steam and delivered reliable across multiple areas in q one. And the next important milestones combined with attractive news flow are on schedule for 2025.
And just to give you a glance on what you can expect next to come. First of all, 02/2001, we expect approvals in LatAm, Latin America. And with that, we’re tackling a new geography with a high unmet need for affordable biologics. With the launch of a specifically designed high end technology of thermologic prefilled syringe, we expect to push in CYP2one adoption for markets in important European countries. And based on the CYP2O2 or TALFI approvals we received recently, the launches in Canada and UK are in the starting blocks to add revenue.
Two or three activities are focusing on closing important spots in the global map of commercialization partnerships across the main geographies, and we are going to list the secret around the molecule behind two zero eight. The latest very good news on the phase three waiver support our strong competitive positioning among the KEYTRUDA biosimilar developers. And combined with the advantage of a very well advanced recruitment in our phase one PK study, this creates an attractive licensing package and builds a good basis for partnerships, and starting those and implementing those already partly this year. And multiple interactions are being pursued as we speak. So in essence, you can expect that the operational momentum will continue generating further positive news flow as a lifeblood on our growth path.
So in summary, with three pipeline assets approved, two of which being marketed, and a strong and progressing pipeline, we were able to create a trust building track record, and at the same time, a robust platform for commercial partners that are seeking for an increasing number of assets and thereby similar sales pipelines, which are key in their strategy. This is enabling us to increase access to biologics to our partners and to play a leading role in this attractive growth space. We believe that we have all ingredients in place, a clear plan to adjust to any headwinds while taking the necessary actions to maximize our assets and to be fit for future. Biosimilars have come to stay. There is a gigantic number of biologics out there, and we are acting in the fastest growing segment of pharma, and we are diligently preparing the ground for the next stage of the formicum growth story.
With that, I want to conclude the presentation part. Thank you for your attention, and hand over back to the moderator for the Q and A section.
Conference Moderator: Thank you very much. Dear ladies and gentlemen, so if you are dialed in the conference call, please press 9 and then the star key now to state your question. I repeat, the combination is 9 and then the star key. If your name has been announced, you can ask a question. If you wish to cancel your question again, please press 9 So one moment for the first question, please.
The first question is from Christian Airman of Warburg Research. Over to you.
Christian Airman, Analyst, Warburg Research: Hello, everyone, and thanks for taking my questions. So I have just one at the moment. In order to reconcile the Q1 results of the full year guidance, could you give us or could you walk us through the quarterly sales and cost expectations, a little bit more detailed as you see them at the moment? Thank you.
Stefan Blombitza, CEO, Formicon AG: Yeah. Thank you, Christian, for your questions. I immediately pass on to Anno.
Anders Bilder, CFO, Formicon AG: Yeah. Welcome, Christian. Hello there. So first of all, as I said, to our total guidance, which is roughly for the top line in the range of 60,000,000, if you take the midpoint of our guidance range, then certainly the major part of revenues are expected for the second half of the year. We will see hopefully a further ramp up of the ’2 ’20 ’2 motography product from Fresenius Kabi in Europe as well as in The U.
S, then showing full quarters, while at the same time the volume of sold units should increase over time. So probably here during the last quarter we see the most significant impact from the backlog. And also from our overall expectations, with regard to potential licensing, also here we anticipate that most realistically this will be q four if things go well in q three, but in our internal planning, we have most of that in q four twenty twenty five. So this will certainly be our major product here, so to say, our major revenue drivers that we will see across the line. Over time, we hopefully will see some further impact from 02/2001 and ’2 zero ’3 from reimbursement, but that part will reduce.
However, as you could see already now, this is on a fairly low level, so it should not show a dramatic impact. So that the main key events are here to performance and potential partnering for our earlier stage products. On the cost side, you will certainly notice from a cash perspective to put that maybe upfront that we will have less invest into 02/2006, so our Ktruda biosimilar, which is focusing only quote unquote on phase one. However, this also comes with a significant commitment to push this clinical trial forward, so that you can basically assume kind of a flat or, parallel or ongoing cost structure compared to where we are right now going forward in the future quarters. And this is exactly also the reason why I said our performance will turn around a little bit here, having kind of a slow start in Q1, however, then accelerating into the next quarters.
That’s at least the plan. I’m sorry for the little bit extended answer, try to give you a little bit context here, but I hope that helps.
Christian Airman, Analyst, Warburg Research: Sure. Very much appreciated. And could you break down the split between licensing revenues and sales revenues a little bit more?
Anders Bilder, CFO, Formicon AG: No. Christian, I’m very sorry. We will not also for our partnering efforts, we will not go into more detailed guidance here. I think we said during H1’s year end process or presentation that we anticipate to be above the 30% revenue performance of the total expected revenues, and then closely followed by potential licensing, but clearly being below that, and then the remainder being performance from two one and two three contribution. That’s as as far as I can go, but everything else would be too detailed at this stage.
Christian Airman, Analyst, Warburg Research: Of course. Thank you very much.
Stefan Blombitza, CEO, Formicon AG: Yeah. Thank you, Andy. So in summary, pretty back backloaded the second half of the year.
Conference Moderator: All right. Thank you very much also from my side. Moving on to the next question then. The next question is from Ben Thielman of Berenberg. So over to you, Ben.
Ben Thielman, Analyst, Berenberg: Yes. Hi, guys. This is Ben from Berenberg. Hi from Frankfurt. A few questions from my side, if I may.
First question is, can you remind us, I know, how large was the milestone payment you guys received in Q1 last year? I couldn’t access the presentation. So sorry, if that was written down there.
Anders Bilder, CFO, Formicon AG: Okay. So the milestones that we received last year, actually, in Q4, we received payments of two milestones, namely so I’m referring now to Fresenius COVID relationship, namely approval of the FDA and approval of the EMA. There was two major milestones that were kind of locked in based on completing the successful part. And in Q1 twenty twenty four, we had deferred revenues of 11,200,000.0 out of these milestones being being recognized. Because in total, you may recall, it was total payments that we received from the newest carbon success based 60,000,000, which broke down at 10,000,000 when we signed the contract in early twenty twenty three and another 50, so to say, the deferred over three milestones approval or achievement of phase one, which also took place in the second quarter of twenty twenty three, and then the two later ones that I just mentioned in, q three, ’24 cash coming in, in Q4 of twenty twenty four.
Ben Thielman, Analyst, Berenberg: Okay. Okay. Perfect. And then maybe two more questions, if I may. Regarding the Phase III waiver, is that something if I now think about your very early stage asset, is that something we could see more often in the future?
Or do you think those that was now just very specifically to your biosimilar to Keytruda. I mean, there was quite, there was quite a free cash flow, positive impact, from waiving that, phase three. Any color on that, whether it’s likely that we could see that for your other biosimilars?
Stefan Blombitza, CEO, Formicon AG: Yeah. Maybe I start with that, Ben, and then Andreas might chime in with with more details. So in principle, we we will see that more often. That’s my my personal opinion, and you see that also with announcements. Number one, following our pramburlizumab strategy, waiving the phase three, which has been initiated.
Of course, we were the first ones to announce and to drive that forward, but we will see others to follow. And then, again, it’s as I always indicated, it’s depending and on the data package you set in. But in principle, there’s much more openness if the molecule fits, that the FDA will grant the waiver. And, we also see that supported by the EMA paper that has been published April 1, if I remember correctly, exactly stating the same obvious that it seems to be it’s more an exception to to have a phase three study, than than than the routine. So in a nutshell, the trend, yes.
Of course, you have to prove specifically that your data package is is solid.
Ben Thielman, Analyst, Berenberg: Okay. That makes sense.
Anders Bilder, CFO, Formicon AG: Maybe maybe one addition from my side to that because I I think I have an idea where you’re aiming at. So for 02/02 a, for instance, the phase three is not considered in our current planning. Purely, financially speaking.
Ben Thielman, Analyst, Berenberg: Okay.
Anders Bilder, CFO, Formicon AG: Which is also justified. We received from FDA also here positive feedback that we don’t need a phase three study for this molecule.
Ben Thielman, Analyst, Berenberg: Okay. And how is it for, for the other assets that you have in the pipeline? When you say that phase three, you didn’t factor in for that asset, did you factor in for the other ones, let’s say, two zero nine plus?
Stefan Blombitza, CEO, Formicon AG: That that’s too early to say. Of course, I mean, you you you approach Mhmm. The the agencies when you have a solid data package being close to the TPOS, the famous one. So as soon as you have a data package, you’re convincing them, then you go to the FDA, they ask for the scientific advice. As said, it’s more the default scenario than than than the than the exception to plan without a phase three.
Of course, we will not select molecules in the portfolio selection only based on the assumption if we need a phase three or not. There might be exceptions to that, but the future planning for sure has to happen without phase three.
Ben Thielman, Analyst, Berenberg: Okay, perfect. Now I got it. That’s very clear. And then last question, and then I go back into the queue, would be a follow-up on Christian’s question, basically. I understand that you can’t give a lot of granularity for the remainder of the year in terms of quarter over quarter growth.
But if I just look at your guidance, the lower the floor is at EUR 55,000,000 on the top line. Now we have EUR 5,000,000 in the bid in Q1. Is there can you at least tell us if you are planning with a milestone payment in the second half of the year or even in q two? You don’t need to give a size, but is that currently part of the the guidance?
Anders Bilder, CFO, Formicon AG: Yeah. I mean, what what we currently have in there, and, again, that comes back to to what I refer to as licensing efforts that we are working on. And just referencing back here to the Fresenius Kabi deal from where we where we inked the deal in early twenty twenty three, where we, aside from the revenues, which has been, by the way, deferred, just as a reminder, the upfront payment of 10,000,000 at that point in time was immediately recognized, due to the fact that this was kind of taking notice of the work that had been done so far for the product at that point in time. And, obviously, typically and the policy depends on the end also on the partner, but, typically, you would structure a deal in a similar way that you try to achieve an upfront payment, which you can recognize immediately, plus agreement of future milestones plus later royalties, so which is the traditional three pillars of a licensing deal. In the end, you always need a partner on the other side.
That’s important to remind ourselves on, but that’s the structure that you could imagine, for instance.
Ben Thielman, Analyst, Berenberg: Okay. Okay. Perfect. That’s it from my side. Thank you, Stefan.
Thank you, Eno. Thank you to the team.
Stefan Blombitza, CEO, Formicon AG: Thanks, Ben.
Conference Moderator: Thanks a lot also from my side. All right. The next question is from Yi Chen of H. C. Wainwright and Co.
Over to you.
Stefan Blombitza, CEO, Formicon AG: Hi
Eduardo, Analyst Representative, H.C. Wainwright & Co.: there. This is Eduardo on for Yi. I was hoping to get a little color if you had a specific percentage of market share you expect two zero two to acquire relative to other competing Stilera biosimilars.
Stefan Blombitza, CEO, Formicon AG: Yeah. Thanks for that question. That’s, I mean, that’s of course, we have some assumptions, but we are not sharing those, and also Fresenius Kabi is not sharing those. So you you can expect that Fresenius Kabi, as they are doing successfully with Tyen at the moment, that they are contracting are in intense contract negotiations.
Nicolas Mikulczyk, CVO, Formicon AG: And
Stefan Blombitza, CEO, Formicon AG: as also communicated, it will be a mix of PBM contracts and commercial payer contracts, also with a clever mix of exclusive deals of considering volume and price, but the overall market share is is not something we would state. Donna, Nicola, if you wanna add something on that.
Nicolas Mikulczyk, CVO, Formicon AG: Yeah. That’s just just one point. I mean, that was what you said, Stefan. This is relating to The US, yeah, where the market only started really very recently except for one front runner who launched in in January, but everyone else launched around the same time as we did. So it’s really early.
So, in Europe, it’s a bit different. You know that we were, with our partners, we came a bit later than competition. What we can say is that in Europe, especially in very attractive markets like Germany, there is still a significant share, with the originator, so there’s still a lot, of share to be grabbed, even for Fresenius, came a bit later. So therefore, we are quite positive there. The same is true for a country like France, for example.
So the big markets in Europe, there is still quite some some work to be done to in intensify the shares of of biosimilars, and hopefully, Fresenius will be a strong player there.
Stefan Blombitza, CEO, Formicon AG: Yeah. Thanks, Nikola. And maybe, Jeff, as you mentioned, US and Europe, the difference. I mean, volume share is not always the the most important stuff here. I mean, you have profitable and less profitable deals.
The the majority or the main driver here is profitability and revenues to generate based on the net sales. That’s that’s the most important part to you.
Eduardo, Analyst Representative, H.C. Wainwright & Co.: Got it. Thanks. That’s really helpful. And do you have an estimated timeline for February commercial launch at this point in time?
Stefan Blombitza, CEO, Formicon AG: Yeah. Also that one, yeah.
Nicolas Mikulczyk, CVO, Formicon AG: Yes. So still nothing concrete. Sorry. We are, really but within the next couple of months, few months, there will be in The US. There’s a lot of litigation ongoing still, not only for us, but also for other competitors.
And it’s really in the very next few months where where there will be, some outcomes of these litigation activities. And, therefore, I I believe we will get clarity on this within the next three, maximum six months, when the launch in The US can really happen. So far, there was one competitor announcing launch date, in 2026. But that’s yeah, we will have to see. It’s not completely the same situation as we have, so not a lot.
We can say more at this stage, but I hope that next quarterly results we can tell you more. In Europe, it’s a bit clearer. Also, there is still country by country. There is litigation ongoing, but, there the situation is much more, let’s say, predictable. We are quite optimistic that we can launch in Europe earlier than in The US.
But, again, we cannot say because it’s really country by country different, and it’s not yet absolutely clear. We are preparing everything. We have our approvals ready. We do whatever is possible in supply chain, but the exact launch dates, I cannot tell you. The SPC expiry though in Europe is in November.
So, but there is these other patterns which are built around, which we, yeah, we are still struggling in or fighting with in in certain court cases. But soon, we will have clarity.
Eduardo, Analyst Representative, H.C. Wainwright & Co.: Thanks so much. And then the final one regarding The US markets and possible disruptions. I’m curious how exposed you are with tariff policies. And then just this morning or last night, I think there was announcement, president Trump had expected to reduce drug prices to equalize, global prices. I don’t know if you would be as exposed in the scenario with the biosimilars, but kind of to get a perspective on your take on tariffs and possible price adjustments from from the federal government in The US market.
Stefan Blombitza, CEO, Formicon AG: Yeah. Maybe I start with that one. Very good question. Very, very recent announcement. So as you rightly say, I mean, it’s mainly addressing the originator prices that are double, triple as high as in Europe, for instance.
For biosimilars, that’s not the case. If look at The US biosimilar pricing, that’s pretty pretty on a similar level to to Europe average. But still, there is there will be an impact we expect. And, of course, it’s hard to predict how and to which extent those amount of measures will in the end be implemented. From our point of view, first assessment, there are risks as well as opportunities in those plans.
And number one, opportunities, of course, biosimilars are already an established tool to drive prices down. And Trump and as well as all the Republicans support market dynamics driven by competition, less by regulation. So fully supportive for biosimilars. And that’s what they stated in the first governance periods, but also repeatedly, and there are a lot of, two I think two dozens of Republican bills, against the PBMs and and to change the structure there and to support biosimilars. And if implemented efficiently and supported by the corresponding measures, the government savings from biosimilars can be very powerful and address exactly the problem he wants to address.
This is the high health care spend. And how does that happen? So far, a lot of indications went in that direction also from the Biden administration, but it just didn’t change a lot because the administration has to make sure that those price reductions that are happening already in the market to benefit the health care budget and the patients. And this is only possible by massively changing the PBM structure, which is according to the latest, report consuming more than 50% of the cost reductions already. And a change there will definitely then help to the biosimilars to really be very effective and and achieve what what Trump administration wants to achieve.
On the downside, of course, the risk is always as it’s already existing that the price pressure might even increase. But, again, I mean, we will we’re not talking percentage wise reduction. We’re talking net sales prices. And, this is the price pressure on the originator products goes even further. This is underlining the importance of our initiatives for cost leadership, and that’s that doesn’t change by whatever announcements.
So that would be my 5¢ if there is any or 10¢. Is there anything to add, Nicolas, maybe?
Nicolas Mikulczyk, CVO, Formicon AG: No. Just to emphasize again, I think that the the real the problem of the real high drug prices is mainly for branded products before expiry of the patent, yeah, so there’s really a massive, three, fourfold, higher prices. And on the generics of biosimilars, this is not the case. Of course, you have not every product everywhere the same, but to a far lesser extent, are prices higher for generics and biosimilars in The US, sometimes even significantly lower? So therefore, I think this is more something which affects the innovator industry, And even there, yeah, not so clear how how this can really change be changed because it hasn’t changed.
Many, many administrations before tried to change it, and it has not happened. So it seems to be something very difficult, and I’m not an expert on politics in The US, but, that remains to be seen. Will Trump really be able to tackle this topic, which is around since long, long time?
Eduardo, Analyst Representative, H.C. Wainwright & Co.: Got it. That’s really helpful. Thanks for all your your answers to the question.
Stefan Blombitza, CEO, Formicon AG: You’re welcome.
Conference Moderator: Thank you very much. The next question is from Alexander Galitsa I. The floor is yours. Over to you, Alexander.
Alexander Galitsa, Analyst: Good afternoon. Thank you for taking the question. I have just two. One is on q o two. Just wonder how you think how reliable you think is the 700,000 revenue for 02/2002 you’ve generated in the kind of in one month of q one.
Is this sort of a reasonable run rate you think that could be extrapolated for the full quarter in q two, meaning that the revenue would fall at least at around 2,000,000 or whether there are some preloading effects, etcetera? That’s the first one. And now the the second, the last one is for similarly. Just wondering to what degree similarly still played a role in you in your q one sales numbers for 02/2001? Thank you.
Anders Bilder, CFO, Formicon AG: Well, I can I can take it right away? Pleasure having you on the call, Alexander. And on your first call with regard to q two, honestly, I hope that the 700 ks is not a good guidance here, because we want and we need to be significantly, above as numbers continue to grow. That’s at least our expectation. In the end, Fresenius is in the driver seat here, but, probably also based on what what Nicolas said, we see, good headroom in Europe to to, further take shares from from the innovator or originator, and US obviously has to accelerate by by further contracting with partners here.
So we have higher expectations than just 2,000,000 for the next quarters as an average number. That’s quite clear. And on 02/2001, similarly, in our presentation, we have a little breakdown of the revenues, and you can see that we had a change here, basically, overall coming down from 1,900,000.0 from last year. Now contribution from 02/2001 similarly, now to, 600 k. So that is a significant reduction, and that is mainly or actually absolutely driven from the from the reduction in the pricing.
Obviously, that’s the challenging part coming from The US, not from from Europe, and this was, in the end, also the reason why Sandoz stopped marketing and sales activities after q one.
Alexander Galitsa, Analyst: Sorry. Just to clarify, you said 1,900,000.0 was similarly revenue q one twenty twenty four versus o six in 2025?
Eduardo, Analyst Representative, H.C. Wainwright & Co.: Yes. But did I give it?
Anders Bilder, CFO, Formicon AG: Yeah. But yeah. That’s that’s so similarly, it’s just US to be clear. That’s the branding for The US that I just used here. Sorry.
And speaking of total $2.00 1, that was 1,900,000.0 and 600 k a for for Q1 ops.
Alexander Galitsa, Analyst: Understood. Thank you.
Nicolas Mikulczyk, CVO, Formicon AG: I could just briefly add to your question regarding, 02/2002. So I yes, we do not expect this to be the run rate. Because it’s what is behind that number is we in the first quarter, we had now effective contribution to the revenues of Fresenius and subsequently to our royalties of only six countries. Not all of them started on the March 1, so really, yeah, staggered launch. And meanwhile, there are 11 countries have launched, so there’s also, of course, more countries coming in.
Plus, it’s pretty normal that you have it’s not something like channel loading or whatever. It’s really that we will see the increase of of market share, and with that increase of of sales and increase of of royalties for us over the course of the year.
Stefan Blombitza, CEO, Formicon AG: And also maybe you have to add. It’s it’s depending on the contract. Some kick in only later in the year. Although it signed or close to signature, it doesn’t add to revenues immediately. So that’s that’s yeah.
All we say is we don’t believe that this is the run rate. Yeah. And and it would be not not the right math to just take take that times 12. That’s not our expectation, as you write clearly.
Alexander Galitsa, Analyst: Sorry. Just one quick follow-up back to q o one. So the out of point 6 million revenue in q one, basically, largest chunk or the vast majority is just the revenue outside of The US. Is that correct? Maybe
Anders Bilder, CFO, Formicon AG: if So the the 0.6 total revenues for q one of this year is mainly coming from Europe and the rest of the world, and maybe roundabout one third from The US.
Alexander Galitsa, Analyst: Thank you.
Conference Moderator: Thank you very much. Dear ladies and gentlemen, there are no more questions in the queue currently. So last reminder, please press 9 and then the star key now if you wish to state a question. I repeat, the combination is nine star. Couple more moments, But the same, no more questions to be incoming.
So with that, I’m closing the q and a and handing the floor back over to the host.
Stefan Blombitza, CEO, Formicon AG: Yeah. And last task on our side is finally, of course, to to thank the operator, our investor relations team for the preparation, my board’s colleagues for supporting the q and a and the presentation, and especially everyone who was joining our earnings call. Thanks for your good questions and for your lively interest in Formicon, and looking forward to speaking with you soon.
Speaker 8: The recording has been
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