Interim Report 2015-01-01 – 2015-09-30
The board and CEO of Oncology Venture Sweden AB hereby announces its report for the third quarter of 2015.
Summary of Interim Report
Operations of the group’s controlling company, Oncology Venture Sweden AB, started on June 4:th 2015.
Hence, the group relationship was established on this date, and comparable periods are not yet available.
Approximately four months (2015-06-04 – 2015-09-30)
• Net sales: 446.000 SEK.
• Profit after financial items: -4.521.000 SEK.
• Cash and Bank 23.692.000 SEK.
• Earnings per share: -0,63 SEK.
• Solidity: 94,6 %.
Third quarter (2015-07-01 – 2015-09-30)
• Net sales: 446.000 SEK.
• Profit after financial items: -3.629.000 SEK.
• Earnings per share: -0,50 SEK.
Group earnings per share: the period’s result divided by 7 233 186 stocks (on 2015-09-30).
Solidity: equity divided by assets.
“Oncology Venture Sweden AB” refers to Oncology Venture Sweden AB, organization number 559016-3290.
“The Company”, “Oncology Venture” or “OV” refers to the group, i.e. Oncology Venture Sweden AB and its fully owned subsidiary company, Oncology Venture ApS.
Significant events during the third quarter of 2015
- On July 17:th, AktieTorget announced the first trading day for Oncology Venture Sweden AB to be July 22:nd.
- At an Extraordinary General Meeting on June 28:th, decision was made to introduce three stock option programs for employees and board members. The option programs include a total of 325 000 warrants.
- On September 30:th, Oncology Venture announced the incorporation of APO010 Drug Response Predictor (APO010 DRP™) from Medical Prognosis Institute A/S in its clinical development program. Based on DRP, APO010 will be developed for use in treatment of Multiple Myeloma (blood cancer) a market with a turnover of seven billion USD. The DRP™ will consistently be used in screening Myeloma patients in a phase 1b/2-programme. Screening is scheduled to begin during the last quarter of 2015 in hematological clinics at several medical centres in Denmark.
Events after the end of this period
- On November 6th, 2015 – Oncology Venture announced that it has in collaboration with Department of Molecular Disease Biology, University of Copenhagen, Denmark; Laboratory of Molecular Pharmacology, National Cancer Institute, USA; Linus Oncology, USA; Medical Prognosis Institute A/S (MPI), Denmark and Department of Medical Chemistry and Molecular Pharmacology, Purdue University and the Purdue University Center for Cancer Research, USA published a poster at the AACR-NCI-EORTC International Conference on Molecular Targets and Cancer Therapeutics in Boston under the title: “Targeting the topoisomerase 1 enzyme in cancer cells with acquired resistance to SN-38”. Data from this scientific collaboration shows that LMP400 has topoisomerase 1 inhibitory activity, and that colon cancer and breast cancer could be target for clinical trials.
- On November 8th, 2015 Oncology Venture announced that the Company in collaboration with Medical Prognosis Institute A/S, Denmark; Lantern Pharma Inc., USA; and Faculty of Health and Medical Sciences, University of Copenhagen, Denmark, have published a poster under the title: “A two stage prospective clinical trial with irofulven treatment targeting a selected subgroup of castration- and docetaxel resistant prostate cancer patients”, at the AACR-NCI-EORTC International Conference on Molecular Targets and Cancer Therapeutics in Boston announcing the use of the DRP™ technology for a planned prospective trial with Irofulven treatment targeting a selected subgroup of castration and docetaxel resistant prostate cancer patients.
- On November 9th, 2015 – Oncology Venture Sweden announced an up-date on the Company. For more information, please see the press release published at AktieTorgets webpage (www.aktietorget.se).
- The rights issue of Oncology Venture Sweden AB was completed, and the revenue of 19.188 TSEK was made disposable to The Company on July 15:th, 2015 (The total IPO amount was 18.565 TSEK after calculating off all cost from the IPO after Q2 2015).
- Oncology Venture has received a so called ”Orange Book Strategy Comfort Letter” from American IP lawyers Hyman, Phelps & McNamara. This document confirms the IP strategy OV is using in its drug development.
- The license regarding APO010 with TopoTarget (Onxeo ) covers 2015-16, and as of 2016 this license will be automatically prolonged one year at a time, given the circumstance a yearly minimum of 3 million DKK is invested in product development.
CEO Peter Buhl Jensen comments
The third quarter of 2015 has passed, and we have made significant organizational progress. I want to thank the shareholders for their interest in our share and for making it possible for us to focus on providing better cancer treatments to patients. Oncology Ventures business model is to bring oncology drugs that have failed to demonstrate sufficient effect - from Zero to Hero. To better the odds compared to traditional drug development the most rewarding indication will be identified and patients will be screened in order to find the most optimal population for the drug. Oncology Venture will use the DRP™ to design adaptive focused phase 2 trials. Instead of all patients with a certain type of cancer being treated, patients are screened, and only those with the highest likelihood of response to the drug candidate will partake in the study. With a well-defined group of patients, risks and costs can be reduced. Time and resources can be saved, and drug development made more efficient.
Oncology Venture (OV) has two licensed drug candidates. The latest agreement was signed during the spring of 2015 with Lantern Pharma LLC for Irofulven. OV previously signed a license agreement for the drug candidate APO010 with TopoTarget (Onxeo).
In developing Irofulven against prostate cancer, the in-licensed tool DRPTMwill be used. For OV and for Lantern Pharma, development cost for Irofulven will partly be covered through allocations of a maximum 0.8 million USD (approximately 7 million SEK) from Boston, Massachusetts Life Science Center, and Medicon Valley Region Hovedstaden.
The drug candidate Irofulven has been tested on more than 1000 patients, and has shown very good effect in some cases. However, it has not reached a high enough success rate to be approved. We have a great method, which we anticipate will render a product approval. Irofulven works differently compared to other drugs in also having effect for cases with drug resistance. Hence, the drug candidate fulfills Oncology Venture’s requests.
At the end of September, we announced incorporating the APO010 Drug Response Predictor (APO010 DRP™) from Medical Prognosis Institute A/S in our clinical development program. Based on DRPTM, we will develop APO010 to be used in the treatment of Multiple Myeloma (MM) and Chronic Lymphatic Leukemia (CLL), two types of blood cancer which according to the DRP™ are very sensitive to APO010. DRPTMwill be consistently used in screening Myeloma and CLL patients in a phase 1b/2 program. This is scheduled to begin during the last quarter of 2015 in Hematology Clinics at several Medical Centres around Denmark. In this study, we aim to choose those patients most likely to respond to treatment with APO010. Likelihood is based on the patient’s personal, genetic signature. At the same time, our goal is to verify APO010 as an effective treatment alternative against MM and CLL where other drugs have not provided the desired effect. There are great medical needs regarding MM and CLL, and the yearly market value potential is over 7 and 3 billion USD respectively.
In November 2015 an update on the products in our pipeline was announced. In brief one thing to mention regarding Irofulven is that first patient is expected to be included in the screening phase of the study during Q4 2015. Furthermore, it was announced that the production of Irofulven has begun and it is expected that the first patient could be treated with the study drug during late Q2 - Q3 2016. Regarding APO010 there is a possibility that the current stock of the study drug can be used in the planned study of MM and CLL which could potentially give large savings on the production costs. After the end of the period Oncology Venture has sold 5mg of APO010 from current stock to a non-disclosed non-competing company for 176.000 USD. Finally, I want to emphasize that Oncology Venture has acquired 2 more DRP™ licenses from MPI A/S for two non-disclosed, promising anticancer drug candidates. Work and discussions is ongoing with the drug owners to further evaluate the marked potential of the drug candidates.
Our objective is to in-license a total of five drug candidates. Agreements will be different with each product owner, but Oncology Venture expect as a starting point to own a risk adjusted 40% in each project. By this we mean that ownership share could be higher or lower depending on the upfront financial commitment taken on by OV. Furthermore, our goal within a time frame of three years is to perform five DRP™ focused, phase 2 clinical studies on these drug candidates, and to generate at least two drug candidates to be out-licensed or sold. We dedicate ourselves to reach these goals, and look with great optimism to the future.
Peter Buhl Jensen
CEO, Oncology Venture Sweden AB
About Oncology Venture
Many cancer drugs are only beneficial for a small group of patients, and at present there is no way of identifying which patient will respond to which treatment. This forces oncologists to treat many patients blindly. If the number of patients positively affected by a certain drug is too low, the drug candidate will probably not be used even if it could be suitable and effective for some patients.
The same problem arouses in clinical studies of drug candidates. Lack of effect has become the most common reason for clinical failures in drug development. Many of these failures cannot be accounted to the drug as such, but are instead the consequence of difficulties performing clinical studies in the right way, i.e. with an adequately defined patient group.
Our subsidiary Oncology Venture ApS holds a license from Medical Prognosis Institute A/S (MPI) to use the technology Drug Response Prediction (DRPTM). MPI is listed at NASDAQ First North in Copenhagen. With the help of DRPTM, we can identify which patients are likely to respond to a drug candidate. This increases the chances of the candidate succeeding in clinical trials.
Oncology Venture is based on the idea of ”rescuing” cancer drug candidates that have been stopped in clinical development due to insufficient response rate or difficulties in raising enough capital to move on. The company works with a model that betters the odds compared to traditional drug development. Instead of treating all patients suffering from a certain type of cancer, patients are first screened, and only those with the highest likelihood to respond to treatment will be treated. With a well-defined target group, risks and costs are reduced and development made more efficient.
Oncology Venture’s current drug candidates
In May 2015, The Company signed an in-license agreement with Lantern Pharma LLC regarding the drug candidate Irofulven. The agreement is valid for three years, with a possible extension of another three years.
Since 2012, Oncology Venture has exclusive global rights for the drug candidate APO010. Oncology Venture holds all rights to the candidate, rights transferred to The Company from TopoTarget A/S (later Onxeo) during 2012. After an initial payment to TopoTarget A/S (later Onxeo) for the license, royalties are being payed. Initially, the license was valid for three years. After an agreement with Onxeo, this has been extended and now runs throughout 2016 without further payments. The agreement will be automatically extended one more year at a time, provided it is demonstrated that a minimum of three million DKK yearly is invested in the development of APO010 by Oncology Venture. As mentioned above, an agreement in accordance with customary market terms has also been made regarding royalties to Onxeo on future revenue from APO010.
Business model summary
Oncology Venture will in-license or buy drug candidates that have been stopped in clinical development.
New clinical studies will test the candidates, making use of extended knowledge on which patients are likely to respond to the drug. The ambition is to in-license effective drug candidates that have shown too low response rate to be competitive. With these candidates, we will perform phase 2 studies on a well defined population as defined by the DRP™. After clinical trials showing a high response rate, Oncology Venture will out-license or sell these drug candidates. A typical transaction will include revenue at the time of out-licensing, plus milestone and royalty incomes.
Company structure and shareholdings
Oncology Venture Sweden AB has a fully owned subsidiary, Oncology Venture ApS. All operations take place in the subsidiary, and the only operative activity of Oncology Venture Sweden AB is owning the subsidiary. Other than this, The Company holds no shares in any other company.
Risks and uncertainties related to the operations
The risks and uncertainties that Oncology Venture is exposed to in its operations are essentially related to drug development, competition, technology development, patents, authority demands, capital needs, currencies and interest rates. During the current period, no significant changes regarding risks or uncertainty factors have occurred. For a more detailed accounting of risks and uncertainties, we refer to a previously published memorandum, announced in June 2015.
Development in numbers during the third quarter of 2015
The mother company of the group, Oncology Venture Sweden AB, began its operations on June 4:th 2015.
Hence, the group relationship was established on this date, and no comparable numbers for the group can yet be shown.
The net turnover during the third quarter of 2015 amounted to 446.000 SEK. This was mainly derived from sales of lower quantities of APO010 to external non-competitors with an interest in the product.
The Company’s result after taxes for quarter three, 2015 amounted to -3.629.000 SEK.
Bank accounts and cash
Per September 30:th 2015, the bank accounts and cash of Oncology Ventures amounted to 23.692.000 SEK.
The stock share
The shares of Oncology Venture Sweden AB were introduced at AktieTorget on July 22:nd 2015. The short name is OV and ISIN number SE0007157409. AktieTorget is a subsidiary company of ATS Finans AB, a private equity company subject to oversight by The Swedish Financial Supervisory Commission. AktieTorget runs a trading platform (Multilateral Trading Facility), which is a non-regulated market. Per September 30:th 2015, the number of stock shares of Oncology Venture Sweden AB was 7 233 186.
The Company has one class of shares. Each share carries the same right to participate in the assets and result of OV.