MEDIVIR AB – YEAR-END REPORT JANUARY – DECEMBER 2020

Promising clinical results, successful business development and secured financing

October – December
Financial summary for the quarter

• Net turnover amounted to SEK 1.5 (1.4) million.
• The profit before interest, tax, depreciation and amortization (EBITDA) amounted to SEK -10.6
  (-30.3) million. Basic and diluted earnings per share amounted to SEK -0.46 (-1.32) and SEK -0.46 (-1.32) respectively.
• Cash flow from operating activities amounted to SEK -1.0 (-23.6) million.
• Liquid assets and short-term investments at the end of the period amounted to SEK 70.0 (134.5) million.

Significant events during the quarter

• In October Dr. Tom Morris was appointed interim Chief Medical Officer. Dr. Morris is a member of Medivir’s management team and reports to CEO Yilmaz Mahshid.
• In December, Medivir’s Board of Directors decided to propose a rights issue of class B shares with preferential rights for existing shareholders of approximately SEK 170 million before transaction costs.
• Medivir renegotiated in December the agreement with TetraLogic Pharmaceuticals Corporation regarding compensation model and levels for birinapant in order to create better conditions for business development.

January - December
Financial summary   

• Net turnover amounted to SEK 13.9 (8.7) million.
• The loss before interest, tax, depreciation and amortization (EBITDA) amounted to SEK -38.5 (-118.9) million. Basic and diluted earnings per share amounted to SEK -1.75 (-5.08) and SEK -1.75 (-5.08) respectively.
• Cash flow from operating activities amounted to SEK -58.1 (-148.3) million.
• Liquid assets and short-term investments at the end of the period amounted to SEK 70.0 (134.5) million.

Significant events after the end of the period  

• In January the company signed an exclusive license agreement with IGM Biosciences, Inc. for birinapant. Medivir received a payment of USD 1 million after signing, which is to be followed by an additional USD 1.5 million when IGM includes birinapant in phase I clinical trials. In addition, the agreement entitles Medivir to milestone payments and royalties.
• A rights issue of class B shares with preferential rights for existing shareholders was completed in early February. Through the rights issue, which was oversubscribed to 93.5 percent, Medivir received approximately SEK 170 million before transaction costs.
• The Board of Directors decided to exercise the over-allotment option of SEK 25 million, directed to the specialist investor HealthInvest.
• An Extraordinary General Meeting has been announced on March 11, 2021, to decide on a directed new share issue of approximately SEK 28 million to Linc AB.
• In February 2021 a licensing agreement with Ubiquigent was signed for the preclinical research program USP7.

Conference call for investors, analysts and the media
The Year-End Report January - December 2020 will be presented by Medivir’s President & CEO, Yilmaz Mahshid.
 
Time: Friday, February 26, 2021, at 14.00 (CET).

Phone numbers for participants from:
Sweden + 46 8 505 583 50
Europe + 44 33 3300 9273
US + 1 844 625 1570

The conference call will also be streamed via a link on the website: www.medivir.com
The presentation will be available on Medivir’s website after completion of the conference.

CEO’s message
In the spring of 2020, Medivir was able to present promising data from the phase Ia study and shortly thereafter begin the phase Ib study with MIV-818, our proprietary and wholly owned candidate drug for liver cancer. We now look forward to within short determine the starting dose to be able to initiate part two of the phase Ib study, where MIV-818 will be included as part of a combination treatment. In December, we succeeded in renegotiating the old agreement with TetraLogic for birinapant, which enabled us to sign a license agreement for birinapant with IGM Biosciences in mid-January 2021. In addition, at the beginning of 2021, we were able to carry out a much-needed financing of the company with strong support from both existing and new investors. This provides Medivir an ownership base with specialist investors and institutions in the lead.

Medivir is one of the oldest listed companies in the Swedish pharmaceutical sector. It is a company in constant development that in recent years has been transformed into a specialist company in the field of oncology. Unlike many other cancer companies, Medivir does not have a number of projects in the early clinical phase, but focuses on one clinical project, MIV-818, with a clear therapeutic goal, where the unmet medical needs are large.

I took over as CEO of Medivir in September 2020 and when I was recruited, it was precisely this clear focus that attracted me the most. But the company also stands for much more that is interesting. Experience and competence, not only from clinical development but also from business development and the ability to take drugs to market approval. A robust portfolio of projects for outlicensing or partner agreements. A strong and experienced board of directors. And a very high scientific standard.

MIV-818 is proprietary developed and wholly owned by Medivir. It has received orphan drug designation both in the USA and in Europe, which entails a number of advantages in the development towards market registration. The value of MIV-818 is illustrated by its clear potential. It may become the first liver-directed, orally administered drug that can help patients with various cancers of the liver. Liver cancer is the third most common cause of cancer-related deaths in the world and hepatocellular carcinoma (HCC) is the most common form of cancer that occurs in the liver. Although existing treatments for HCC can prolong patients' lives, the treatment benefits are often limited and mortality remains at a high level.

The data from the phase Ia study presented last year showed that patients had been exposed to acceptable levels of the drug substance, outside of the liver, which provides support for the liver-directed effect of MIV-818. Based on an independent analysis of the growth of liver tumors, five of the nine patients were judged to have stable liver cancer disease after treatment.

The first part of the phase Ib study with MIV-818 in patients with advanced liver cancer who have undergone previous treatments is a classic dose escalation study with groups of three patients, that aims to further investigate the safety and tolerability profile and to determine the starting dose for part two of the phase Ib study.

In parallel, we are preparing part two of the phase Ib study, where MIV-818 will be included as part of a combination treatment. This part of the study is planned to begin in the second half of 2021. At time of writing, this looks feasible, despite the covid-19 pandemic.

We are also working on our business development, where we are looking to find possible partners for outlicensing our projects for partnerships, MIV-711 and remetinostat.

Birinapant is a project acquired in 2016 from TetraLogic Pharmaceuticals Corporation, subsequently developed by Medivir. At the end of 2020, we succeeded in renegotiating the birinapant agreement with TetraLogic so that the conditions for achieving an out-licensing were significantly improved. At the beginning of 2021, we could announce that we had signed an exclusive license agreement with US based IGM Biosciences for birinapant. The agreement gives IGM the global and exclusive rights to develop birinapant. IGM intends to initiate clinical trials with birinapant in the second half of 2021 in combination with its proprietary antibody IGM-8444, a combination which has shown enhanced antitumor activity preclinically.

The agreement with IGM provided Medivir with a payment of USD 1 million after signing, which is to be followed by an additional USD 1.5 million when IGM includes birinapant in phase I clinical trials. The terms of the agreement also entitle Medivir to milestone payments up to a total of approximately USD 350 million, given that birinapant is successfully developed and approved, as well as tiered royalties up to mid-teens on net sales. A portion of all revenue goes to Tetralogic, but the main part goes to Medivir.

Another licensing agreement was signed in February 2021, for Medivir's preclinical research program USP7. The agreement grants UK based Ubiquigent Limited an exclusive global license to develop and commercialize all of the program's related substances in all therapeutic indications in exchange for agreed revenue sharing with Medivir upon successful development or commercialization.

In the financing we were able to carry out successfully at the beginning of 2021, the rights issue was oversubscribed to 93.5 percent. As a result, the over-allotment option was exercised, directed to the specialist investor HealthInvest, which thus becomes a new shareholder in Medivir. In addition, it is proposed that an Extraordinary General Meeting on March 11 decides on a directed new share issue of approximately SEK 28 million to Linc AB. In total, Medivir will receive approximately SEK 223 million before transaction costs through the issues, a financing that is central for us to be able to develop our cutting-edge project MIV-818 into the next phase. That this financing has strong support from existing owners such as Linc AB and Nordea as well as from new institutional specialist investors such as HealthInvest feels very gratifying. Medivir now has an owner base with three strong institutions in the lead. I would like to thank all, both old and new shareholders, for the clear trust you have shown in Medivir.

The results we have presented so far regarding MIV-818 have generated strong interest. 2021 will be an exciting year and we will work forward with a clear focus and a strong commitment.         

I am convinced that Medivir has a very strong potential to create value for healthcare and patients as well as for our shareholders.

Yilmaz Mahshid
President & CEO

For further information, please contact
Yilmaz Mahshid, CEO, +46 (0) 8 5468 3100
E-mail: yilmaz.mahshid@medivir.com

Magnus Christensen, CFO, +46 (0)8 5468 3100
E-mail: magnus.christensen@medivir.com

This report has not been subject to auditors' review.

The information was submitted for publication at 08.30 CET on 26 February 2021

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