Year-end Report

The Board and CEO of Oncology Venture Sweden AB hereby announces the Report for The Financial Year of 2015.

Summary of Year-end Report

Operations of the group’s parent company, Oncology Venture Sweden AB, started on June 4:th 2015. Hence, a group relationship was established on this date and comparable periods are not yet available.

Approximately Seven Months (2015-06-04 – 2015-12-31)

• Net sales amounted to 1.784.000 SEK.
• Profit after financial items: -7.083.000 SEK.
• Earnings per share: -0,98 SEK.
• Solvency ratio: 93,1 %

Fourth Quarter (2015-10-01 – 2015-12-31)

• Net sales amounted to: 1.338.000 SEK.
• Profit after financial items: -3.368.000 SEK.
• Earnings per share: -0,47 SEK

Group earnings per share: Period result divided by a number of 7 233 186 stocks (on 2015-12-31).
Solvency ratio: 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 2015

Second Quarter

-          On June 5, Oncology Venture was approved for listing at the Swedish stock share exchange AktieTorget.

-          On June 5, the subscription period for the rights issue of Oncology Venture AB opened.

-          Subscription period for the rights issue closed on June 24:th. The rights issue was subscribed by approximately 77.8 million, including the subscription commitment. This equals a subscription rate of about 370%. The rights issue consisted of 2 840 000 shares, and Oncology Venture raised approximately 19,7 MSEK through 1340 new shareholders.

Third Quarter

-          On July 17, AktieTorget announced the first trading day for Oncology Venture Sweden AB to be July 22, 2015.

-          In July, it was announced that at an Extraordinary General Meeting held on June 28, decision was made to introduce three stock option programs for employees and board members. The stock option programs include a total of 325 000 warrants.

-          On September 30, 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). DRP™ will consistently be used in screening Myeloma patients in a phase 1b/2 program. Screening process has begun during the last quarter of 2015. Patients will be included from hematological clinics at several medical centers in Denmark.

Fourth Quarter

-          On November 6, Oncology Venture announced the publishing of a poster at the AACR-NCI-EORTC International Conference on Molecular Targets and Cancer Therapeutics in Boston, USA. The title of the poster is “Targeting the Topoisomerase 1 Enzyme in Cancer Cells with Acquired Resistance to SN-38”, and was made 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, Department of Medical Chemistry and Molecular Pharmacology and Purdue University and the Purdue University Center for Cancer Research, USA. Data from this research collaboration is showing LMP400 to have topoisomerase 1 inhibitory activity, and that Colon Cancer and Breast Cancer may be suitable target groups for clinical trials.

-          On November 8, Oncology Venture announced that, in collaboration with Medical Prognosis Institute A/S (MPI), Denmark, Lantern Pharma Inc, USA and Faculty of Health and Medical Sciences, University of Copenhagen, Denmark, the Company published a poster at the AACR-NCI-EORTC International Conference on Molecular Targets and Cancer Therapeutics in Boston, USA. The poster’s title is “A Two-stage Prospective Clinical Trial of Irofulven Treatment for Selected Patients with Castration- and Docetaxel Resistant Prostate Cancer”, and announces the use of DRP™ technology in a planned, prospective study where castration- and docetaxel resistant patients will be treated will Irofulven.

-          On November 9, Oncology Venture shared an update on operations to the market. Further information can be obtained through a press release published at AktieTorget’s website (www.aktietorget.se).

-          Oncology Venture stated on December 18 that the Company submitted a screening protocol for APO010 in Multiple Myeloma (MM) to the Ethics Committee. OV will screen approximately 150 patients to identify 15 patients with the highest likelihood to benefit from APO010 in a focused phase 2 study.

Events After End of This Period

-          Oncology Venture announced January 28, 2016 that the Australian Patent Office has approved patent for the Company's licensed technology DRPTM.

-          Oncology Venture announced on the 19th February 2016 that it has in-licensed LiPlaCis™ from LiPlasome Pharma ApS, Denmark. LiPlaCis is the third drug in OV’s pipeline and will be the first prospective trial using the Drug Response Predictor - DRP™.

Other events 

-          Oncology Venture participated at the Biotech Showcase 11 – 13 January 2016 which takes place in relation to the JPMorgan Healthcare Conference and every year attracts decision makers from Big Pharma, Biotech and Investors as well as other important players in the field to meet and kick off the new year in the pharma society.

-          Analysis on Oncology Venture Sweden AB published on smallcap.se 9th February 2016.

“Oncology Venture has performed well in 2015 and was poised to continue these trends in 2016 working with our partners to unlock value in oncology pharmaceutical assets. This is an exciting time for the company and its shareholders as we develop a new more cost effective approach to drug development in the field of cancer treatments.”

Duncan Moore, Chairman of the board

CEO Peter Buhl Jensen Comments

2015 has come to an end, and we can look back at an eventful year for Oncology Venture (OV). OV works with a model that is expected to considerably improving the odds compared to conventional drug development. During this past year, we’ve listed at the Swedish AktieTorget. The aim was raising capital for developing Irofulven, and for in-licensing one more cancer drug candidate. The listing contributed over 19,7 MSEK before issuing costs (to The Company’s operations). We thereby also have the pleasure of greeting 1340 new shareholders a warm welcome, thanking them for their confidence in us. With the listing we’ve taken the leap into a new phase in the development of Oncology Venture. Summarizing the time from our stock listing until now, I can state that we’ve taken several important steps towards realizing our goal: utilizing DRP™ to increase the response rate for promising cancer drugs that have previously been unable to reach sufficient results to be approved by the authorities.

We have published a poster regarding use of Irofulven for Prostate Cancer at the conference AACR-NCI-EORTC International Conference on Molecular Targets and Cancer Therapeutics in Boston, USA. This was done in collaboration with Medical Prognosis Institute A/S (MPI), Denmark, Lantern Pharma Inc., USA and Faculty of Health and Medical Sciences, University of Copenhagen, Denmark. The poster announces the use of DRP™ technology in a planned, prospective study where castration- and docetaxel resistant Prostate Cancer patients will be treated will Irofulven. The drug has shown promising potential as a single agent for several indications, such as Hormone Refractory Prostate Cancer (HRPC), Ovarian Cancer, Liver Cancer and Pancreatic Cancer, and also as a combination treatment for HRPC, Colon Cancer and Thyroid Cancer. OV will perform the first clinical study with Irofulven in Prostate Cancer where the drug has shown good efficacy with response in 10% of the patients. OV expects - with the use of the DRP™ - to screen 300 patients and select the 10% with the highest likelihood to respond to Irofulven. In theory we should then find all top 10% with possible 100% effect. However, it is not likely that the DRP-system will identify all 100% - but this is also not a necessity. If we can increase the effect 2 times – meaning that more than 20% of patients will benefit – we expect that the product can be approved by authorities. The aim is to raise the response rate to a clinically relevant and approvable level. We look forward to performing this prospective clinical study, where our DRP™ technology can prove its strength and potential in contributing to effective treatment for cancer patients. The first patients should be able to receive treatment with the drug during the later part of quarter two, or during quarter three, 2016.

Regarding APO010 for Multiple Myeloma and Triple Negative Breast Cancer, our immuno-oncology product, we prolonged the license agreement with Onxeo in October 2015. The agreement gives us global rights, royalties etc. in line with what has previously been communicated. We have APO010 product manufactured in 2007, which is still active and stable. Presently, an expert group is investigating whether this product could be used in clinical trials. If so, this would render us great economical savings, and enable us to initiate the study sooner than if a new batch of the product needs to be produced. Provided we can use existing stocks of the drug, a start of the study during the third quarter of 2016 should be feasible. We are excited to begin the screening for the Phase-2 Study of APO010. Tipple Negative Breast Cancer is a hard to treat breast cancer where immunotherapy could potentially change the survival significantly. This is also the case with Multiple Myeloma (a Hematological Cancer, with malignant plasma cells in the bone marrow. Normal plasma cells are an important part of the immune system). Hence, there is great need for new treatment methods.

APO010 is a first-in-class product that imitates our immune system when killing the cancer. APO010 behaves like a Killer T Cell and we expect that APO010 will contribute to the current immunotherapy to increase efficacy in those cancer indications where immunotherapy currently has a hard time breaking through. We believe that APO010 can become an effective treatment for Breast Cancer and Myeloma a.o. Multiple Myeloma are expected to respond well to APO010 treatment, and over 50 patients will be screened in order to select 20-25 participants for the study. In Breast Cancer high likely responders are to be selected amongst the 900 patients who are already screened in collaboration with LiPlasome Pharma. In November 2015, we sold 5mg of our existing stock of APO010 for 176 000 USD to a non-competitive project where APO0101 is utilized for external use.

We are working diligently on securing new products for our pipeline. We have acquired DRP™ licenses for two new, promising anti-cancer drugs and we now have a total of seven DRP™ licenses for use if we like what we see - when we dig deeper - and we can agree on terms with the drug owner. To support our American teams in Boston and Arizona in finding the best products, and in negotiating advantageous agreements, we have built an expert team of oncologists and hematologists researching on promising drug candidates to incorporate in the future.

To summarize the year that just passed, we have performed a successful right’s issue and listing at AktieTorget, and taken several important steps on our path towards optimizing the use of anti-cancer drugs. The combination of an efficient tool for drug response prediction and an extremely experienced team give us great prospects for success. We enter this year strengthened by the achievements we’ve made, and look forward to a prosperous 2016.

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 who benefits from a certain drug is too low, the drug candidate will most likely not be used even if it could de facto be well suited 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 accurately, 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 (DRP™). MPI is listed at NASDAQ First North in Copenhagen, Denmark. With the help of DRP™, we can identify which patients are likely to respond to a drug candidate. This increases the chances of the candidate successfully passing clinical trials.

Oncology Venture is based on the idea of optimizing the use of anti-cancer drugs that have shown effect but been stopped in clinical development, due to insufficient response rate or difficulties in raising enough capital to continue. 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 better defined target group the use of the drug is optimized, risks and costs are reduced, and development becomes 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 (now Onxeo) during 2012. After an initial payment to TopoTarget A/S (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 automatically be extended one more year at a time, provided that Oncology Venture makes a minimum yearly investment of three million DKK in the development of APO010. 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, utilizing 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 of a response rate to be competitive. With these candidates, we will perform focused phase 2 studies on a well-defined population as defined by the DRP™. After clinical trials with 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, 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 more detailed accounting of risks and uncertainties, we kindly refer to a previously published memorandum, announced in June 2015.

Development In Numbers During The Third Quarter of 2015

The parent 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.

Turnover

The net turnover during the fourth quarter of 2015 amounted to 1.338.000 SEK. This was mainly derived from sales of lower quantities of APO010 to external non-competitors with an interest in the product.

Result

The Company’s result after taxes for the fourth quarter of 2015 amounted to -3.368.000 SEK.

Bank accounts and cash

Per December 31 2015, the bank accounts and cash of Oncology Venture amounted to 16.786.000 SEK.

The Stock Share
The shares of Oncology Venture Sweden AB were introduced at AktieTorget on July 22, 2015. Its short name is OV and its 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 December 31, 2015, the number of shares in 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.

List of shareholders owning over 5% per 2015-12-31

Warrants
At an Extraordinary General Meeting on June 28 2015, decision was made to introduce three stock option programs for The Company’s employees and board members. The option programs include a total of 325 000 warrants.

Warrant Program 1

This program consists of 170 000 warrants, and is directed to key employees who worked with the stock share introduction of Oncology Venture Sweden AB. The warrants were received free of charge, and can be subscribed to during a period that expires on August 22:nd, 2018. Each warrant entitles subscription to one new share in Oncology Venture Sweden AB at a rate of 7.40 SEK per share. The warrants have a lock-up period of one year, which is transferred to stock shares if the warrants are used during the first year. Holders of these warrants will not be able to partake in any other warrant program.

Warrant Program 2

Consists of 125 000 warrants received free of charge, and is directed to employees of The Company, among these board member Ulla Hald Buhl, Chief Science Officer Nils Brünner and board member Steen Knudsen, who received 10 000 warrants each. One third of the warrants can be subscribed to at a rate of 8,14 SEK per share August 1:st-22:nd, 2018. Another third can be subscribed to at a rate of 8,954 SEK per share between August 1:st, 2017 and August 22:nd, 2018. The remaining third of the warrants can be subscribed to at a rate of 9,849 SEK per share August 1:st-22:nd, 2018. Each warrant entitles subscribing to one new share in The Company. Should a warrant holder leave his or her employment before the end of the first subscription period, all warrants will return to The Company. If an employee leaves after the end of the first subscription period, two thirds of his/her warrants will return to The Company. If leaving after the second subscription period, one third of the employee’s warrants will return to The Company.

Warrant Program 3

Consists of 30 000 warrants and is directed to Duncan Moore and Sanjeevi Carani, board members of OV. Each warrant entitles subscription to one new share in Oncology Venture Sweden AB at a rate of 15,00 SEK per share. The warrants can be subscribed to August 1:st-22:nd, 2018. Moore and Carani are offered buying warrants at a price of 1,15 SEK per warrant.

Proposal for Allocation of Oncology Venture’s Financial Result
The board and the CEO proposes no dividend for the financial year of 2015-01-01 – 2015-12-31.

Annual General Meeting and access to Annual Accounts
Annual general meeting will be held on 26thof April 2016. The annual report will be accessible to download from The Company’s website no later than in connection with the publication of the notice of the Annual General Meeting.

Auditor’s review
In accordance with AktieTorget’s regulations, the Interim Report has not been reviewed by The Company’s auditor.

Principles for The Year-end Report
The year-end report has been made in accordance with Swedish jurisdiction for Annual Accounts, and following General Advice of the Swedish National Board of Accounting 2012:01 (Bokföringsnämndens Allmänna Råd 2012:01), Annual Accounts and Consolidated Accounts (”K3”). For further information on accounting principles, we refer to the Annual Accounts of Oncology Venture, 2014.

Future Financial Reports

The Board and CEO hereby certify that the Year-end Report gives an accurate overview of The Company’s operations.
Hoersholm, February 19, 2016
Oncology Venture Sweden AB
The Board and CEO