This article first appeared on GuruFocus .
Release Date: July 30, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
-
Strong growth in recurring revenues, with net sales from CEPCELCA increasing by 23% and royalty income rising 46% overall.
-
Royalties from Sepzelka in the U.S. surged over 50%, reflecting strong commercial traction following the first-line maintenance launch.
-
European approval of Fetzelka in June 2026 opens a significant new growth source, with initial adoption in Germany and Austria exceeding expectations.
-
Positive operating cash flow of EUR 11.9 million and net cash of EUR 126.4 million, with debt reduced by 8% to EUR 43 million.
-
Pipeline progress includes PM54 and PM534 trials showing encouraging early data, with plans for registrational trials by 2028.
Negative Points
-
EBITDA dropped sharply to EUR 3.5 million from EUR 25.1 million year-over-year, due to non-recurring revenues in 2025.
-
Total revenues fell 3% to EUR 92.5 million, impacted by the absence of a EUR 20.7 million upfront payment from a 2025 licensing deal.
-
Selling and marketing expenses increased in preparation for the European launch, though expected to moderate in the second half.
-
Pricing and reimbursement negotiations across Europe are ongoing and uncertain, with full market access not expected until late 2027.
-
Competitive pressure from Chinese products like atezolizumab and cepurlimab in Europe, though current impact is limited.
Q & A Highlights
Here are the key highlights from the Pharma Mar SA ( PHMMF ) Q2 2026 earnings call, focusing on the most significant Q&A exchanges.
Q: Can you provide some color on how we should expect the ramp in Europe to be over the next year, including the timing of pricing negotiations and how the competitive landscape differs from the U.S.? A: (Luis Mora, Managing Director) We don't give guidance, but we have already addressed 80-90% of the European market. We expect rapid adoption by physicians, as seen in Germany and Austria. We anticipate having at least 95% of the European market approved within a year. For key markets like Spain, France, and Italy, we expect full reimbursement by spring next year. Regarding competition, the main competitors are two Chinese products (atezolizumab and cepurlimab), but they haven't had a major impact. Tarlatamab is not expected to be a factor in Europe until the second half of 2028.
Q: How large of a transaction would you be willing to do as you consider late-stage or in-market assets for Europe? A: (Pascal Desmond, Chief Strategic Officer) We are not looking for blockbusters; our niche is niche assets. Our current balance sheet would allow us to use an upfront payment of up to $100 million without any stress. For earlier-stage assets, the upfront would be much lower with more milestone payments. We are looking at drugs with peak sales of $300 million or less.
Q: How do you see the SALUDO trial and the leiomyosarcoma (LMS) opportunity in comparison to the first-line maintenance opportunity? A: (Luis Mora, Managing Director) The SALUDO trial combines lurbinectedin with doxorubicin in first-line LMS. If the results are similar to the Patricia-Proteus study with trabectedin, we could see a PFS jump from 6 months to nearly 12 months. This would mean 12-14 cycles of treatment, which is more than three times the cycles in second-line and double that of first-line maintenance. Even though the patient population is smaller (4,500 in Europe, 2,500 in the US), the high number of cycles makes this a very important future revenue opportunity.
Q: Could you comment on the potential trajectory of sales and marketing expenses? Do you expect them to step up further in the second half? A: (Luis Mora, Managing Director) No, we actually expect a little less in the second half than the first half. The first half included many meetings like ASCO and the cost of hiring the sales force and medical affairs teams across Europe. The European Congress is in Madrid, which is less expensive for us.
Q: What is the length of exclusivity for Zepzelca in Europe? A: (Luis Mora, Managing Director) In Europe, the exclusivity is 10 years due to the orphan drug status. If we achieve approval in first-line leiomyosarcoma, we can get an additional year of market exclusivity, extending it to 11 years.
Q: How do you estimate the change in France from second-line to first-line maintenance, and how will compassionate use revenues transition to formal sales? A: (Luis Mora, Managing Director) The increase in compassionate use sales in France was because French authorities opened the program for first-line treatment after EMA approval. By law, when the drug is approved in Europe, compassionate use closes and moves to a new figure called "AXSEPRECO," which is similar but a different legal mechanism. This will happen in France around September or October. The AXSEPRECO will remain in place until an official pricing and reimbursement agreement is finalized.
Q: What is the expected timing for the approval and reimbursement of Zepzelca in Spain? A: (Luis Mora, Managing Director) We are ready and have had several meetings with Spanish authorities. The process is ongoing, and if all goes well, we expect to launch the product with reimbursement in Spain in December. We believe the drug will be available in all Spanish hospitals by then.
Q: What is the impact of the German healthcare reform on the Zepzelca price, and have you taken this into account? A: (Luis Mora, Managing Director) The law is not yet approved, so we don't know the final details. The draft includes an increase in the manufacturing discount from 7% to 15% and a reduction in the sales threshold for orphan drugs to submit a pharmacoeconomic dossier from 50 million to 30 million. However, the law is not final.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
