2017 Q2 report, January-June for Panion Animal Health AB

Period April-June

• Net sales: kSEK 0 (0)
• Operating profit: kSEK -1 269 (0)
• Earnings per share: SEK -0,10 (-).
• Liquidity at the end of the period: kSEK 796 (582).

Period January-June

• Net sales: kSEK 0 (0). 
• Operating profit: kSEK -2 536 (-). 
• Earnings per share: SEK -0,21 (-). 
• Liquidity at the end of the period: kSEK 796 (582).

Significant events after the end of the period:

• Panion’s business and structure was approved by AktieTorget on the 3.rd of July, and the shares could then be listed on the MTF under the name “Panion”. First trading day was 6.th of July 2017.
• The license agreement with CombiGene was clarified and resigned on the 3.rd of July, specifically regarding the compensation that Panion will receive in case CombiGene would need to withdraw the license.
• The Letter of Intent with GeneQuine Biotherapeutics GmbH was extended to 31/12 2017 to facilitate a robust review.

About Panion’s epilepsy project
Epilepsy is a serious disease with recurrent seizure attacks and it affects about 1% of all dogs. Millions of family dogs across the world suffer from epileptic seizures and approximately 30% of these are not well controlled with the current medicines. This reduces the quality of life for both the dog and the owner, and such dogs may eventually be euthanized. By combining progress in neurological research with modern gene therapy techniques we want to create a unique new treatment opportunity for dogs. Panion’s exclusive license agreement with CombiGene covers important markets in the USA, Europe and Switzerland.

Milestones April-June 2017

• A shares emission was successfully finalized in May and raised 7½ MSEK before issuing expenses for he upcoming clinical trials.
• The business scrutiny for the listing process for AktieTorget was carried through to enable the listing of Panion’s shares on the MTF.
• A representation office was opened in New York, USA, with our US-representative and director of business development Carlos N. Velez and two highly qualified consultants connected.
• A MUMS and fee waiver application was submitted to the FDA.
• A Letter of Intent was signed with GeneQuine Biotherapeutics GmbH and the dialogue is ongoing for the inlicensing opportunity.
• Our team was expanded with Anni Acs, who is our well-qualified CFO.
• The Annual Meeting was held on the 27/4 – the minutes and decisions are published on Panion’s website.
• The full Company Description in both Swedish and English was finalized and published on Panion’s website.

Milestones January – June 2017

• The Service and Supply agreements with CombiGene for the epilepsy project have been finalized.
• A bridge funding of MSEK 6 was completed on February 2017. Out of this 6 MSEK 1 MSEK was used, 5 MSEK was reverted.
• A small directed emission of 1 MSEK was finalized.
• SME-status was applied for and granted by the European Medicines Agency, which gives access to regulatory assistance and potential financial incentives.
• The Board, in cooperation with the financial adviser Regin Corporate Finance, has worked with preparing the company for a listing of the shares on AktieTorget (first trading day was 6/7 2017).
• Panion’s website has been revised and updated.

About Panion
Panion Animal Health AB‘s aim is to develop and commercialize the canine application of CombiGene AB’s technology for gene therapeutic treatment of drug refractory epilepsy. In addition, Panion aims at inlicensing or acquiring other, similar assets, i.e., animal health applications of human health development projects where relevant animal experiments can be lifted back into the veterinary field.
Panion is a public Swedish company that started as a subsidia-ry company of CombiGene.
Panion’s shares are listed on AktieTorget under the name “Panion”.

CEO statement
In the second quarter of 2017, Panion made real progress with the listing of the company on AktieTorget, and this finally came true on the 3. rd of July with first trading day on the 6.th of July. Admitted, it took longer time and more effort than we had first estimated. The review process prior to acceptance is a thorough investigation of the documents, procedures, persons, and business of a company, and we had to adapt some of our documents along the way. However, being accepted by AktieTorget’s lawyers and professionals is a genuine qualitystamp for Panion and it shows that we have a robust and healthy company structure. Our team was expanded with Anni Acs as the Chief Financial Officer (CFO) in the spring and is now also fully operational for the coming steps in Panion’s development.

Looking ahead, the next big task is to run the planned clinical trial for our epilepsy project, for which we raised capital by a shares issue in May. The development plan is progressing, qualified consultants are connected, we have started the exchange process with FDA for a feewaiver, and we are in dialogue with the preferred dog-epilepsy center. To facilitate this, Panion’s board decided to open a representation office in New York, on Lexington avenue, which will be managed by our US-based director of business development Carlos N. Velez.

I encourage interested investors to read more details in the full company description of Panion, which can be found on our website in both Swedish and English. It will be very interesting times that we are heading into, and I am fully confident that we will create true value with our product development. Epilepsy in dogs is serious disease that affects millions of family dogs across the world and for which medicine is not effective in approximately 30% of cases. We want to develop an effective gene therapy treatment that can alleviate or eliminate the scary and unpleasant seizure attacks and improve the quality of life for these dogs and their owners. The prospect of treating epilepsy – and other chronic diseases - with gene therapy is very promising and all members of Panion’s team are ready to fight the challenges on our way.
Anja Holm,
CEO, Panion Animal Health AB

Financial information
Income and profit/loss April-June
The company had no sales during the period April-June. Operating profit/loss for the period April-June amounts to kSEK – 1 269 (-). The principle costs refer to compensation to the CEO and consultants.

Income and profit/loss Jan-June
The company had no sales during the period January-June. Operating profit/loss for the period January-June amounts to kSEK – 2 536 (-). The principle costs refer to compensation to the CEO and consultants.

Cash flow and financial position
Cash flow for the period January-June amounts to
kSEK 490 (497). Liquidity at the close of the period amount to kSEK 796 (582).

The share
The number of shares at the end of the period amount to
13 084 110, with a quota value of SEK 0,05. All shares are of the same class and have the same voting right.

Personnel
The average number of employees during the period was 0 (0) of which 0 (0) none are women. The present CEO works in the company on a consultancy basis.

Risks and uncertainty factors
A pharmaceutical development company such as Panion is exposed to significant operational and financial risk, and many factors can have a negative impact on the probability of commercial success. The risks to which the company is exposed in its current phase and which must be given careful consideration are the risk that Panion’s method is not safe or effective and the risk that the necessary financing cannot be secured. During the second quarter no significant changes with respect to these risks or uncertainty factors have occurred.

Principles for the preparation of the interim report
Panion prepares its financial reports in accordance with the Swedish Annual Accounts Act and BFNAR 2012:1 (K3) Annual Accounts and Consolidated Accounts. Before 2016 the company applied the Swedish Accounting Standards Board’s General Recommendations BFNAR 2018:1 (K2).
The change in accounting principles has not affected the comparative periods. Review by auditors This report has not been subject to review by the company’s auditors.

Future reporting dates
Interim Report for Q3 2017, 21 November
Interim Report for Q4 2017, 22 February 2018

Anja E. H. Holm, SEO
+ 45-22 94 66 00
anja.holm@panion-animalhealth.com

Bolaget ska utveckla och kommersialisera genterapi för behandling av epilepsiliknande tillstånd hos hundar och andra djur, samt utveckla och kommersialisera andra veterinärmedicinska produkter och nya behandlingsformer som kan ge sjuka djur bättre livskvalitet.
Panion will develop and commercialize a gene therapy treatment for dogs with drug refractory epilepsy, and other new animal health products and treatments that improve the quality of life for animals suffering from chronic diseases.