Hello, everybody, and welcome to our webcast in relation to the Q2 report 2026 of Xbrane Biopharma. As usually, I will go through an operational update of the quarter and then Jane will go through a financial update.

We'll start off with Ximluci, our biosimilar to Lucentis which is on the market in Europe and commercialized by our commercialization partner STADA. Those of you who have followed us know the arrangement, we share the profit contribution 50/50 of the sales of Ximluci, and it's currently launched across 24 countries in Europe and a few countries in the Middle East.

It's a sizable market opportunity we are addressing, €5 billion steadily growing, although facing somewhat increasing competition in relation to biosimilars to Eylea gradually coming to the market in Europe as well as in the US. Looking at the current quarter, we are still at a market share around 7% from a volume perspective.

We're releasing this Q2 report quite early, we haven't received the final data actually for the quarter in relation to units sold and so on and so forth, but 7% volume market share as of April 2026. What you can see from the financial figures in the report, we have resumed shipments of final goods to STADA during the quarter and that is expected to remain during the remaining quarters of the year.

Accumulated, we have now a profit sharing of 127 million Swedish crowns. We are also, as we've been discussing before, working intensively to reduce the production costs across a multitude of different measures we're going through, and we expect that this will have a significant impact on the production cost which is going to be realized from 2027 and onwards.

As you can see also from the financials, although we had some one-off effects on the quarter on the production cost side, there is an improvement potential in the gross margin and we expect that these production cost measures will impact the gross margin positive. We have an inventory also, as we've had for for some time, it is at a level of 175 million Swedish crowns and of drug substance as well as drug product and finished goods, still a quite sizable inventory on our balance sheet which gradually now is being converted into cash as deliveries to STADA is resumed.

In relation to the regulatory process with FDA in the US, as those of you who follow us might recall, we received a complete response letter in October last year. It was related to observations at one of the manufacturing sites being involved in the production of Ximluci.

Now brand name in the US is intended to be Lucamz, but it's still the same product, Lucentis biosimilar candidate. The production site has now, which is a contract manufacturer to Xbrane, has now worked through all these observations and the related actions to remediate these observations, and all the documentation has been sent to the FDA which resulted to us resubmitting the BLA to the FDA in April this year, and we now have a BsUFA date or decision date in October this year.

We hope of course that we this time can get an approval for the product in the US, and we are in parallel now making the proper preparations for a launch of the product in the US, provided an approval of course. We're making preparations together with our partner Valorum, which is going to commercialize the product in the US.

Then moving over to Xdivane, our biosimilar candidate to Opdivo. We're quite excited about this program.

It's going through very intense development phase right now, both on whole CMC side which is related to process validation on both drug substance and drug product side and also the ongoing clinical trial. We are targeting a submission of a BLA to the US FDA during the course of next year, and everything is moving according to plan to be able to achieve that.

Quite excited about this program. We believe it to be substantial potential given the size of the market and the originator product and also the level of competition in relation to the size of the opportunity.

Then I wanted to spend a few minutes also on Xdarzane, our biosimilar candidate to Darzalex. Here we entered into co-development agreement with the CDMO Joinn Biologics a few weeks ago.

This is, I think, quite interesting development and a possibility for us to be able to take a step forward in the development of Xdarzane without having to invest into the product right now. Just some background information: Xdarzane, then biosimilar candidate to Darzalex, it's a product being used in treatment of multiple myeloma, a form of cancer, sizable product, sales of $14 billion in 2025.

Patent goes off 2029 in the US and two years after in in Europe. As far as we can tell, there are in total four development programs of biosimilar candidates to Darzalex, I would probably say given the size of this opportunity, also quite low level of competition.

Here it's also, the product was initially launched, as said, intravenously administrated product, but a lot of the volume has now moved over to subcutaneous subcutaneous administration formulation, and our development here is targeting both these formulations. Few words about Joinn Biologics then.

It's a global CDMO based in US and China, have a sizable production facility in China with significant capacity on the drug substance side, and we believe with the ability to produce at competitive cost levels which is crucial of course for any biosimilar development. Some words about the structure of this arrangement: so essentially Joinn will continue based on where we are at in this development, and Joinn will develop the production process and demonstrate analytical similarity, do all analytical development work and demonstrate analytical similarity versus the originator.

That's the first step really, and that's under Joinn's responsibility, and provided a successful outcome on that step in the development, the parties Xbrane and Joinn will co-own the program. Then Xbrane will lead the efforts to find a suitable commercialization partner for this program, and then take the further steps into clinical and regulatory development, and our ambition is of course to get the majority of those steps financed by a commercialization partner, while as the steps related to scale-up, process characterization and validation, and eventually commercial manufacturing will be performed by by Joinn Biologics.

We're quite excited about this agreement and this collaboration and actually the possibility for us to continue this program without having to invest significantly into the program at this point in time. That was a brief operational update, and I'm leaving over to Jane for a financial update.

Yes. As you might have read in the report, the revenue for the quarter amounted to 46.8 million Swedish crowns, whereof 46.6 Swedish million crowns relate to shipments resumed of finished goods to STADA.

The cost of goods sold amounted to 44.4 million Swedish crowns, which gave us a gross margin of 5%. The low gross margin is a result of a revised accrued profit sharing from STADA amounting to 5.5 million Swedish crowns and also an inventory adjustment amounted to 5.7 million Swedish crowns.

Had these adjustments not been made, the gross margin would have amounted to 26%, which is more in line with our current expectations. However, we are also, as Martin said, working on decreasing production cost measures and investing in those together with our partner STADA.

We're expecting that the sales will continue during the third quarter and also during the fourth quarter. The fixed cost amounted to 17 million Swedish crowns, whereof 7 million is related to administration cost and 10.1 million is related to R&D, out of which 2.7 million Swedish crowns are related to amortizations of intangible assets.

12.5 million Swedish crowns have been capitalized as intangible assets. As for the breakdown of the cash flow for the quarter, you can see that we have received 13 million from profit sharing.

We have put in 34 million Swedish crowns into the production of Ximluci, for which we have received revenue during the second quarter, but also revenue to come during the third quarter and fourth quarter. We have the fixed cost of 17 million Swedish crowns and received money from the sales of first quarter and the second quarter amounting to 21 million Swedish crowns, and invested in Xdivane amounting to 4 million Swedish crowns.

All in all, the closing balance for the quarter was 49.5 million Swedish crowns. The cash and the cash equivalent amounted to almost 15 million Swedish crowns, and the operating cash flow amounted to -4.8 million Swedish crowns.

Yeah. The key takeaways: constant market share from volume perspective of Ximluci in Europe, and we are working through, which is a key focus when it comes to Ximluci Europe now, to reduce the production cost, and we believe that these measures will have an effect 2027 and onwards and lead to significant reduction in production cost and improvement in gross margin.

Decision date when it comes to Ximluci BLA October this year, we hope of course for an FDA approval this time around and subsequent launch of the product in the US. Everything proceeding according to plan with Xdivane, targeted BLA submission during the course of next year, and co-development agreement signed with Joinn Biologics and ability for us to continue the development of Xdarzane.

That's really the key takeaways from this quarter. With that said, we leave over to any potential questions from listeners having called in.

Hello, Martin and Jane. Thank you for taking a few questions from me.

I have two to start with if that's all right. Firstly, in the report, you state an expectation of around a 50% production cost in 2027, which sounds like a lot.

Maybe if you could just elaborate a little bit on what you're doing to accomplish this?

It relates to a multitude of different process improvements really we're going through, it's not so much more we can say there, but yes, we do expect it to lead to significant cost reduction. This is really the key when it comes to biosimilars, generally speaking, as the market has developed, to ensure that you have a reliable and cost-efficient supply chain.

That's really what we're working through and ensuring now when it comes to Ximluci.

Yep. Just so would you say is this an early 2027 or late 2027 target for this to be done?

I think the effects will gradually be seen from mid-'27 and onwards.

Right. Then I also have another question.

This goes from a while back, but if I remember correctly, there was sort of a disagreement between you and Valorum relating to the upfront payment. You updated the market on this, I think it was end of 2024 or early 2025.

Has there been any updates on this topic since?

I think that there should not be an expectation on an upfront payment in relation to Ximluci in the US. It's still an ongoing discussion on the exact financials, but I think that's the right expectation to have.

Okay. Next stop then would be the BsUFA date and what happens there.

Exactly. Then, of course, income generation as a result of profit sharing from actual sales.

Right. Maybe a last one for me then: how good of a proxy would you say the Q2 cash flow is for the remainder of 2026 quarters?

Yeah. We have, as we've just said before and we write in the report, an expectation that we can sustain the business with our current cash position in a foreseeable future.

Then we are not counting in potential incomes from Ximluci in the US, but we are also not including repayment of outstanding debt as we foresee or expect that repayment of that debt could be done via proceeds coming from the US. If you take those elements apart, given that the sales of Ximluci is proceeding according to existing forecasts and our production of the product is proceeding according to existing plan, then we shall be able to sustain the business with existing cash position for a foreseeable future, meaning, of course, that we're fluctuating, or we're at least starting to generate at some point in time positive cash flow, right?

It will go a little bit up and down, but I think we're starting to come to a level where you can use, the cash flows being generated as a proxy for the future, yeah.

Okay. Good.

That was all for me. Thanks.

We have a written question.

Yes. "Can you please explain regarding license fee and will this increase in the future?"

These income streams are discrete in relation to specific agreements which we are making, and what can be seen historically is mainly license fee being paid for Xdivane from our partner Intas. Now, as we've mentioned, we are going to start an effort to outlicense Xdarzane, our Darzalex biosimilar candidate.

Should we be successful in doing that, it could result in further license fees, but apart from that, we have very limited license fees to come in from existing agreements. It's reliant upon us actually making new agreements where license fees are included for such an income stream to come back, if you will, yeah.

"Are there any changes regarding agreement with Valorum?"

I think we touched upon this one. It's an ongoing discussion, but I think we explained what should be the reasonable expectations in relation to at least a potential upfront, and yeah, but it's a point we'll have to get back to as soon as any formal changes are being done with that agreement, yeah.

Thank you all for calling in, and wish you all a good day, and should you have any further questions, please do reach out to us. Thank you.