Building momentum for the next chapter

Since July 2020, Orexo has been engaged in a Department of Justice (DOJ) investigation, related to the commercialization of Zubsolv in the US. While the intensity of the process has varied over time, it has required significant legal costs, which Orexo will continue to incur if a settlement is not reached.

During the quarter we intensified our engagement with the DOJ, with the aim of reaching a negotiated resolution to the investigation. While no agreement has so far been reached, we are progressing constructively toward a conclusion and deem negotiated settlement the most favorable path forward. In our negotiations, we are seeking to structure any settlement such that it limits the near-term financial impact on Orexo, including through available insurance coverage and structured payments. However, even in such a settlement scenario with anticipated insurance recoveries, Orexo will also have to deploy a portion of its existing capital. Thereafter, additional financing will be needed to ensure we retain the full capacity to execute on our business plan and realize the value of the AmorphOX technology platform. Our long-term financing model remains anchored in business development through technology partnerships, milestone payments, royalties and program co-financing with partners including BARDA. To ensure we can resolve the DOJ investigation while preserving full capacity to execute our development pipeline, and to provide potential partners with confidence in Orexo's ability to deliver on its programs, we have engaged DNB Carnegie as our financial advisor to secure additional financing.

The EBITDA amounted to SEK -95 million in the quarter. The result was negatively impacted by the continued restructuring of the operation and organization as well as legal fees related to the DOJ investigation. In the quarter we agreed to terminate our agreement with GAIA and recorded costs related to cancelling our US supplier contracts. These non- recurring items increased administrative expenses by approximately SEK 20 million and will gener ate cost savings from Q3 onwards. Our net cash position is SEK 233 million as per 30 June 2026. Absent a settlement of the DOJ investigation, this is sufficient to fund the most advanced development programs to their next value inflection points i.e. FDA submission of Izipry™  and completion of the first pivotal study of OX640. 

The market for our lead product, OX640, continues to evolve, with increasing recognition and supporting data for a needle-free alternative to injectable epinephrine. This suggests that anaphylaxis treatment may be approaching a shift away from established injectable products that have dominated global markets for decades. Our market research shows strong value recognition of the OX640 product profile among physicians, patients and we believe OX640 is well positioned to compete in a sizable market for anaphylaxis treatment.

We have started to scale up manufacturing and will have the first batches of the final commercial products ready in Q4, 2026, and will initiate stability and reliability testing. The first pivotal trial, using the final product, is planned to begin in Q4. Both are key milestones and I am pleased to report that we are on track to meet the timelines for both activities and expect to have results from the pivotal trial in Q1 2027. 

The stability and reliability studies required by FDA for Izipry are to date meeting expectations and we are poised to resubmit according to plan in Q3, 2026, with potential approval in Q1 2027. The ability to address the FDA's requirements and proceed with a resubmission represents a critical milestone in our partnering strategy. As we complete the final analysis of the data supporting the resubmission, we are increasing our efforts to secure a commercial partner in the US.

For OX390 we completed the first in-vivo study of the nasal formulations with good results supporting nasal administration of the product. We also confirmed our non-clinical plan with the FDA and despite the active ingredient, atipamezole, being a well-known product in veterinary care, significant non-clinical studies are required before entering the clinical phase which is planned for 2028. 

We see strong opportunities to create value from large molecules through the AmorphOX technology, with GLP-1 agonists and vaccines representing our two primary focus areas.

We will conduct the next in-vivo study with semaglutide in Q3, to explore the ability of AmorphOX^® to improve the bioavailability of semaglutide in oral administration. Semaglutide is an excellent model substance due to the availability of both oral and injectable formulations and the data will be relevant for other GLP-1 agonists and peptides in general. We are pleased to have initiated an early-stage GLP-1 agonist scientific collaboration with an industrial player who is providing scientific advice to the study design, methodology and access to important excipients used on the formulation.

In vaccines, we are seeing an increased interest from vaccine companies to investigate the value of the AmorphOX technology and aim to start additional feasibility studies in collaboration with new partners during the second half of 2026. 

Following the divestment of Zubsolv^® in the US, redemption of the corporate bond and progress in resolving the DOJ investigation, Orexo has entered a new chapter as a business development and R&D company on the basis of our proprietary AmorphOX technology. Building on our leadership in powder-based drug delivery, proven development capabilities and strong partnership heritage, we are advancing our pipeline and working relentlessly to unlock the full potential of the AmorphOX technology.

Looking ahead, important value inflection points for OX640 and Izipry, combined with growing interest in the AmorphOX technology from external parties, represent significant value drivers for Orexo. With several key milestones expected over the next 6-9 months and a strengthened business development organization, we are well equipped to expand our network of strategic partnerships while continuing to build long-term value through our pipeline and technology platform.