Hansa Medical Year-End Report 2017

IdeS consistently demonstrates strong efficacy and safety in highly sensitized patients awaiting lifesaving kidney transplant

October–December 2017 in brief
› Hansa Medical successfully raised SEK 545 million (USD 65 million), gross, through a directed share issue to a number of US, UK and Swedish specialist healthcare investors. The proceeds will enable the timely completion of ongoing clinical studies with IdeS evaluating the efficacy of this drug candidate to enable kidney transplantation in highly sensitized patients. The proceeds are also being used to expand the company’s commercial and medical affairs’ capabilities. Hansa Medical will also carry out several clinical studies in related transplant indications and in selected acute autoimmune diseases, including anti-GBM disease and Guillain-Barré syndrome (GBS).

› Ulf Wiinberg, the company’s Non-Executive Chairman, was appointed Acting CEO, following the tragic and unexpected death of the company’s CEO, Göran Arvidson. Board member Birgit Stattin Norinder was appointed chairman. Recruitment of a new CEO is underway.

› Continued patient enrollment in the investigator-initiated Phase II study with IdeS in anti-GBM, a rare and acute autoimmune kidney disease. The study began in June 2017, and as of December 31, five patients have been recruited and treated with IdeS. Limited follow-up data is currently available from three of these ve pa- tients who have all responded favorably and IdeS appears to be well tolerated. Patients enrolled in the study will be monitored for six months.
 

Significant events after the end of the reporting period
› Completed enrollment in Hansa Medical’s international multi-center Phase II study Highdes. The primary objective of the study – to turn a positive cross-match test into a negative and thereby enable kidney transplantation - has been accomplished in all 18 treated patients. All patients will be monitored for six months.

› Finalized enrollment in US investigator-initiated Phase II study with IdeS in highly sensitized patients. IdeS effectively reduced the level of DSAs in all 17 treated patients and turned the cross-match tests from positive to negative, thereby enabling transplantation for all patients. All patients will be followed for six months to monitor safety, kidney function and DSA levels.
 

January–September 2017 in brief
› Combined data from three independent clinical Phase II studies with Hansa Medical’s lead candidate IdeS was published in The New England Journal of Medicine 2017;377:442-53, August 3, 2017 issue. The published results demonstrate that treatment with IdeS is effective in reducing donor-speci c antibodies (DSAs) to levels allowing lifesaving kidney transplantation of highly sensitized patients.

› The European Medicines Agency (EMA) granted access to its Priority Medicines (PRIME) scheme for IdeS in enabling kidney transplantation for highly sensitized patients. Access to PRIME may allow Hansa Medical to accelerate the development of IdeS.

› Lead candidate IdeS was discussed in a two-day workshop titled Antibody Mediated Rejection in Kidney Transplantation, organized by the U.S. Food and Drug Administration (FDA). Transcripts from the workshop have been released and are available on the FDA website. The presenters and the audience at the well-attended workshop were generally very optimistic about the potential of IdeS in kidney transplantation.

› New published preclinical data demonstrated that treatment with IdeS could be a novel therapeutic strategy for the treatment of Guillain-Barré syndrome (GBS).

› Published preclinical results utilizing IdeS confirmed the potential in cancer immunotherapy. The findings demonstrate how pre-treatment with IdeS in tumor models may increase the efficacy of currently available antibody-based cancer therapies.
 

Significant events after the end of the reporting period
› Completed enrollment in Hansa Medical’s international multi-center Phase II study Highdes. The primary objective of the study – to turn a positive cross-match test into a negative and thereby enable kidney transplantation - has been accomplished in all 18 treated patients. All patients will be monitored for six months.

› Finalized enrollment in US investigator-initiated Phase II study with IdeS in highly sensitized patients. IdeS effectively reduced the level of DSAs in all 17 treated patients and turned the cross-match tests from positive to negative, thereby enabling transplantation for all patients. All patients will be followed for six months to monitor safety, kidney function and DSA levels.

Financial summary for the Group (KSEK)

KSEK, unless otherwise stated Q4 2017 Q4 2016 Year 2017 Year 2016
Net revenue 1,013 543 3,442 2,579
Operating profit/loss -48,921 -33,562 -176,083 -111,135
Net profit/loss -48,988 -33,556 -176,660 -111,129
Earnings per share before and after dilution (SEK) -1.36 -0.99 -4.97 -3.37
Shareholders’ equity 630,661 283,693 630,661 283,693
Cash flow from operating activities -29,142 -27,185 -150,105 -94,563
Cash and cash equivalents including short term investments 616,061 253,578 616,061 253,578

CEO statement
2017 was a successful year for Hansa Medical, during which we reached several important milestones in our clinical studies and broadened our long-term investor base to include specialist international healthcare funds. We also gained increased attention from the medical research community following the publication of IdeS clinical data in The New England Journal of Medicine.

A lot of the progress achieved during the year should be attributed to the groundwork of our late CEO Göran Arvidson, who unexpectedly passed away in November. Through his inspirational leadership and dedication, he evolved Hansa Medical into a strong, emerging biopharmaceutical company with a clear, ambitious strategy and a dedicated organization capable of executing and delivering on milestone targets. We are firmly dedicated to continuing the development in the direction outlined by Göran and the board of directors. We are currently recruiting a new CEO for Hansa Medical.

During the year, we received further evidence of the potential of our lead compound IdeS as a new and innovative treatment to enable life-saving kidney transplantation. Our two ongoing clinical Phase
II studies in Europe and the US completed enrollment in January 2018, and a total of 35 patients were treated with IdeS prior to kidney transplantation. IdeS effectively reduced the level of donor-specific antibodies (DSAs) in all patients and turned the cross-match tests from positive to negative, thereby enabling transplantation for all patients. Safety, kidney function and DSA levels will be monitored for all patients during a six-month follow-up period in 2018.

We received further validation of the increasing medical need for IdeS as a new treatment option to enable kidney transplantation in highly sensitized patients, when the European Medicines Agency (EMA) granted our IdeS development program access to its Priority Medicines (PRIME) scheme. This allows us to continue to accelerate the development of IdeS. Access to the PRIME scheme was granted on the basis of data from both our finalized and ongoing Phase II studies in sensitized patients.

In line with the clinical progress, we also gained increased attention from the medical research community. In August, data from three of our clinical Phase II studies with IdeS was published in one of the leading medical journals, The New England Journal of Medicine. The article, titled IgG Endopeptidase in Highly Sensitized Patients Undergoing Transplantation, concluded that treatment with IdeS effectively reduces DSA and thus enables lifesaving transplantation for highly sensitized kidney transplant patients. The publication is an important peer review of our novel treatment concept and now also forms the basis for interactions with global key opinion leaders, both in transplantation and within several autoimmune indications.

In parallel with our work in organ transplantation, we have taken the first important clinical steps to broaden the use of IdeS for both transplant-related indications and acute autoimmune diseases. A phase II study is ongoing in anti-GBM antibody disease, a rare and acute autoimmune kidney disease, where approximately 2/3 of the patients lose their kidney function, resulting in the need of chronic dialysis. We are also planning a Phase II study in Guillain-Barré syndrome (GBS), a rare acute autoimmune neurological disease.

In the third quarter, we announced that five patients had been included in the investigator-initiated Phase II study in severe anti-GBM. Limited follow-up data is currently available from three of these five patients who have all responded favorably. IdeS appears to be well tolerated. The study aims to enroll approximately 15 patients at clinics/centers across Europe. Also, prior to site initiation of this study, three additional patients were treated on a so called named patient basis in Sweden.

GBS is another promising indication in which IdeS’ mode of action has the potential to make significant treatment improvements. Early in 2017, preclinical in vivo data with IdeS was published in the scientific journal Experimental Neurology, demonstrating that treatment with IdeS could be a promising new therapeutic strategy for GBS. A clinical Phase II study in GBS is currently under design.

We made significant investments in the IdeS manufacturing process during 2017. The processes have been transferred to manufacturers in Europe suitable for commercialization. The IdeS product intended for launch is lyophilized for convenient and effective world-wide distribution.

We are in a strong and unique position in the development of our novel immunomodulatory enzymes. Our vision is to become a world-leading IgG-modulating company and bring our products to patients across a range of conditions where IgG plays a key role in disease progression or forms a barrier for patients to receive appropriate treatment.

With this vision in mind, in November, the Board resolved the company to undertake a directed share issue that raised SEK 545 million. The proceeds from this offering are being used to fund the continued development of our existing product portfolio and to expand our medical affairs and commercial capabilities, ahead of a potential US and European approval and subsequent launch of IdeS. We received strong interest from several reputable US, UK and Swedish institutional investors and the share issue was fully completed by December 29, 2017.

During 2017, we continued to build a strong and experienced team expanding our capabilities in R&D, medical affairs and marketing, and we now have a dedicated team of approximately 40 co-workers. We will continue to add more expertise to the organization, particularly within regulatory affairs, medical affairs and commercial competencies.

Looking ahead, we will continue to build on the progress we have made in recent years. The successful financing event enables us to continue implementing our strategy. Our focus will be on completing the development of IdeS in highly sensitized patients and the ongoing Phase II study in anti-GBM as well as initiating additional Phase II studies in closely related transplant indications and in Guillain-Barré syndrome. In addition, we will continue the development of our novel IgG-eliminating enzymes, as well as explore development of potential applications in oncology of these enzymes.

We still have a number of milestones to reach before IdeS is potentially available on the market. During 2018 we plan to continue discussions regarding the regulatory path to approval for IdeS in transplantation with both the FDA and EMA. In addition to the convincing data demonstrating the efficacy and safety of IdeS in enabling kidney transplantation, important items for these discussions will be six-month follow-up data, further improvements of the manufacturing process, and the significant medical need for these highly sensitized patients who today have very limited chances, if any, to be transplanted.

We have made progress in our strategy, the foundations are now in place and we are on track to achieve our vision of becoming a world-leading IgG-modulating company delivering important, life-saving products to patients across a range of conditions where IgG plays a key role in disease progression or forms a barrier for patients to receive appropriate treatment. I look forward to updating you on our continued progress.

Ulf Wiinberg
Acting CEO of Hansa Medical

For further information, please contact:
Emanuel Björne, Vice President Business Development and Investor Relations, Hansa Medical AB (publ)
Mobile: +46707175477
E-mail: emanuel.bjorne@hansamedical.com

About Hansa Medical AB
Hansa Medical is a biopharmaceutical company developing novel immunomodulatory enzymes for transplantation and acute autoimmune diseases. The lead product, IdeS, is a proprietary antibody-degrading enzyme currently in late-stage clinical development for kidney transplant patients, with significant potential for further development in other solid organ transplants and in acute autoimmune indications. The company also has a strong pipeline of preclinical projects that may provide a second wave of potential drugs. Under the project name NiceR, novel immunoglobulin cleaving enzymes are developed for repeat dosing with the objective of treating relapsing autoimmune diseases and cancer. Hansa Medical is based in Lund, Sweden, and its shares are listed on Nasdaq Stockholm (ticker: HMED).

About Us

Hansa Medical is a biopharmaceutical company focused on novel immunomodulatory enzymes. Lead project IdeS is an antibody-degrading enzyme in clinical development, with potential use in transplantation and rare autoimmune diseases. Other projects include HBP (a market introduced diagnostic marker for severe sepsis) and EndoS (an antibody-modulating bacterial enzyme in pre-clinical development). The company is based in Lund, Sweden. Hansa Medical's share (HMED) is listed on Nasdaq First North in Stockholm with Remium Nordic AB as Certified Adviser.