INTERIM REPORT JANUARY 1st 2023 – MARCH 31st 2023

SELECTIMMUNE PHARMA IN BRIEF

• Antibiotic resistance is a global, rapidly growing health concern. The World Health Organization (WHO) has declared antibiotic resistance a major threat to global health.

• SelectImmune Pharma is an innovative biotech company that develops novel therapies against infection.

• These therapies are designed to inhibit excessive innate immune responses to infection, which are a major cause symptoms and pathology.

• Several of the company’s drug candidates have shown protective effects against bacterial infection in animal models, including acute cystitis, severe kidney infection and urosepsis. Immunomodulation is therefore a realistic option for treating these conditions as alternatives or complements to antibiotics.

• The Interleukin-1 receptor antagonist (IL1-RA), a registered drug, has successfully been used in the clinic to treat bladder pain syndrome and is currently being investigated in controlled Phase II trials. Furthermore, IL1-RA treatment is being investigated in a Phase II trial in patients with recurrent cystitis.

• SelectImmune Pharma is research-based and the company has an agreement with Lund University.

• The discoveries are protected by four patent families. Patents have been approved in the US, Europe and Australia. Group I include known immunomodulatory substances and pain inhibitors. Group II includes molecules from ’’good’’ bacteria that rebalance the immune system and Group III small RNA inhibitors that target excessive inflammation and reduce the risk of sepsis or kidney damage.

• The drug candidates address important medical needs in large patient groups. The markets for the treatment of infections are extensive, both nationally and internationally.

CLINICAL TRIALS AND DRUG DEVELOPMENT PROCEED ACCORDING TO PLAN

During the third quarter SelectImmune Pharma has continued development of the clinical trials and the project portfolio. The two clinical trials both involve the immunotherapeutic drug Kineret, which is an IL-1 receptor antagonist (IL-1RA). SelectImmune Pharma has shown that the proinflammatory cytokine IL-1, which is inhibited by Kineret, is activated during bladder infection and causes severe inflammation and symptoms. Pain is one such symptom and Kineret blocks the pain response to infection in animal models of acute cystitis, proving that the potential for helping these patients is significant. SelectImmune owns the patent rights to use Kineret for the treatment of cystitis and bladder pain and Kineret treatment has shown great promise for severely handicapped patients with bladder pain syndrome.

The company is also taking the drug candidate NlpD, through the drug development process. NlpD is a protein from ‘’nice’’ bacteria, with high advantageous properties. NlpD treatment is beneficial for the prevention exaggerated inflammatory responses to infection. The recombinant protein shows potent anti-infective and anti-inflammatory activity in animal models of cystitis and kidney infection. It is unusual for a molecule to both accelerate bacterial clearance and inhibit the inflammatory response that causes disease. In view of these properties, NlpD has the potential to add a new concept for the treatment of infection and potentially a wide range of inflammatory conditions, including GMP production and toxicology testing, and planning for clinical trials. In addition, structural studies of NlpD may open up for 2nd generation drug candidates or new production methods, in the future.

During the third quarter, the work has focused on planned merger of Hamlet Pharma and SelectImmune Pharma which is undertaken to create an innovative pharmaceutical company with a broader and stronger project portfolio for the treatment of cancer and infections. The plans to complete this transaction is expected to be realized, pending the decision of the extra general assembly on May 17th. The merged company (Hamlet Biopharma) secures a portfolio with a total of ten pharmaceutical projects, of which three projects are in phase II, whereof two so far with positive results in clinical studies. 

The combined patent portfolio includes a total of eleven patent families for cancer, infections and tuberculosis and more than 60 patents. Through the formation of Hamlet Biopharma SelectImmunes projects will benefit from a larger infrastructure, including a focused commercial organization with access to a technology platform with university-based scientist as well as an extensive network of international specialists for drug development and clinical studies. A larger listed company will become more cost-effective and attract talents to the company as well as to the network. Hamlet Biopharma has secured funding for at least twelve months. 

We thank our colleagues, consultants and partners for their contributions and our shareholders for their confidence and continued support. 

Catharina Svanborg

Chairman

Gabriela Godaly 

CEO (acting)

SIGNIFICANT EVENTS DURING THE THIRD QUARTER

 Q3

2023-01-23

SelectImmune Pharma AB publishes video from digital investor’s meeting

SelectImmune Pharma AB has published a video from the digital investor’s meeting held in conjunction with the company’s Annual General Meeting in November 2022. The video is now available on the company’s website. 

2023-03-31

SelectImmune Pharma AB (publ): Hamlet Pharma and SelectImmune Pharma merge to create an innovative pharmaceutical company with a broad and strong portfolio of projects for the treatment of cancer and infections

The two pharmaceutical companies Hamlet Pharma AB and SelectImmune Pharma AB, listed on the Spotlight Stock Market, intend to merge and create a powerful pharmaceutical company for drug development for the treatment of cancer and infectious diseases. The merged company (Hamlet Biopharma) gets a portfolio with a total of ten pharmaceutical projects, of which three projects are in phase II, where two of the projects already have positive results in clinical studies. The portfolio includes a total of eleven patent families for cancer, infections and tuberculosis with more than 60 patents. Hamlet Biopharma is now building a focused commercial organization with access to a technology platform and university-based scientist as well as an extensive network of international specialists for drug development and clinical studies. A larger listed company will become more cost-effective and attract talents to the company as well as to the network. Hamlet Biopharma has secured funding for at least twelve months.

The Merger is subject to, inter alia, approvals by the extraordinary general meetings of the two companies. As merger consideration, shareholders in SelectImmune will receive 0.8 shares in Hamlet Pharma for each share in SelectImmune, for each class of shares. Furthermore, Hamlet Biopharma has entered into an agreement with Linnane Pharma AB regarding the acquisition of the company that owns rights to a project for the treatment of tuberculosis. 

• Through the Acquisition and the Merger, a combined powerful company is created with a broad portfolio of pharmaceutical projects for the treatment and prevention of cancer and infectious diseases.

• The Acquisition entails that Hamlet Biopharma obtains the rights to patents and access to developed know-how to commercialize the tuberculosis project.

• Overall, the Board of Directors consider that there are clear logical and rational reasons for the Merger and the Acquisition as the businesses complement each other well. The Board of Directors thus assess that the Merger and Acquisition are beneficial for Hamlet Pharma’s and SelectImmune’s shareholders. 

Through the Merger and Acquisition of Linnane Projects AB (“Linnane Projects”), the various sub-projects are established in an organization that can effectively drive them further towards market approval within important clinical indications. This includes the most advanced pharmaceutical projects within the respective companies: Alpha1H for the treatment of bladder cancer, which is in clinical phase II, and KineretR for the treatment of acute cystitis and bladder pain syndrome which is also in clinical phase II. Furthermore, the Companies see a great potential for synergies in the form of strengthened know-how.

2023-03-31

SelectImmune Pharma AB (publ): SelectImmune Pharma and Hamlet Pharma invites to a digital investor meeting on April 3 and 4 at 12

SelectImmune Pharma and Hamlet Pharma invited to digital investor meetings via Zoom on Monday and Tuesday, April 3 and 4 at 12:00 p.m., to discuss the merger. We welcomed existing shareholders, other investors and stakeholders to participate. The meeting participants have the opportunity to inform themselves about the company’s operations and to ask questions. 

2023-03-31

SelectImmune Pharma AB (publ): Statement from the board of SelectImmune Pharma AB on the occasion of the merger with Hamlet Pharma AB

The board of SelectImmune Pharma AB unanimously recommends the shareholders of SelectImmune Pharma AB to vote for the Merger.

The boards of SelectImmune Pharma AB (publ) (“SelectImmune”) and Hamlet Pharma AB (publ) (“Hamlet Pharma”) (together the “Companies”) jointly announced today that the board of SelectImmune and the board of Hamlet Pharma have reached an agreement on the merger between SelectImmune and Hamlet Pharma through a legal merger in accordance with the Companies Act (2005:551) (the “Merger”). The purpose of the merger is to create a powerful pharmaceutical company for the development of drugs for the treatment of cancer and infectious diseases. The merged company (“Hamlet Biopharma”) receives a portfolio with a total of ten pharmaceutical projects, three of which are projects in phase II where two of the projects already have positive results in clinical studies. The merger will be implemented by the absorption of SelectImmune by Hamlet Pharma. Furthermore, Hamlet Pharma has entered into an agreement with Linnane Pharma regarding the acquisition of Linnane Projects AB, which owns rights to a project for the treatment of tuberculosis (the “Acquisition”). The merger requires, among other things, approvals at extraordinary general meetings of the Companies.

Significant events after the period

 2023-04-06

SelectImmune Pharma AB (publ): Notice to an extraordinary general meeting of SelectImmune Pharma AB (publ)

The shareholders of SelectImmune Pharma AB (publ) (“SelectImmune Pharma” or the “Company”), 559104-6874, are hereby invited to an extraordinary general meeting on Wednesday, May 17, 2023 at 11:00 in the High Court Malmö at Malmöhusvägen 1, 211 18 Malmö. Registration for the meeting begins at 10:30.

2023-05-17

SelectImmune Pharma AB (publ): Communiqué From the Extraordinary General Assembly of SelectImmune Pharma AB

An extraordinary general assembly was held by SelectImmune Pharma AB (corporate no. 559104-6874) on May 17, 2023. The decisions are summarized below. For more detailed information, please refer to the documents and information available on the Company’s website www.selectimmune.com. 

Decision to approve the proposed merger of SelectImmune Pharma and Hamlet Pharma 

The general assembly decided to approve the merger jointly proposed by the boards of Hamlet Pharma AB and SelectImmune Pharma AB on March 31, 2023. The planned merger was registered with the Swedish Companies Registration Office on April 4, 2023 and announced in Post- och Inrikes Tidningar on April 6, 2023. 

According to the merger plan, the merger shall be by absorption with Hamlet Pharma as the acquiring company and SelectImmune as the transferring company. The proposed exchange ratio for the merger has been determined such that one A share in SelectImmune entitles the holder to 0.8 A shares in Hamlet Pharma and one B share in SelectImmune entitles the holder to 0.8 B shares in Hamlet Pharma. 

The merger is expected to be registered with the Swedish Companies Registration Office in the third quarter of 2023, and will result in the dissolution of SelectImmune, whereby all of SelectImmune’s assets and liabilities will pass to Hamlet BioPharma. Accounting for the Merger Fee will be the Swedish Companies Registration Office.

Group I 

• Based on the initial successful off-label study of IL1-RA treatment of patients with bladder pain syndrome, we have initiated the placebo-controlled clinical trial. 

• The IL1-RA Phase II clinical trial in recurrent, acute cystitis is being performed in Giessen, Germany, and the patient enrollment continues as foreseen.

• SelectImmune Pharma has been seeking patent protection for modulators of the IL-1 pathway for treatment of chronic inflammatory conditions in the lower urinary tract and chronic pelvic/bladder pain syndrome. The company has recently extended the geographical scope by filing for patent protection in Europe, the US, Australia, China, and Japan. 

• While the IL1-RA compound is effective against pain, the company is also pursuing the pain inhibitor NK1-RA, neurokinin receptor antagonist, which is efficient in animal models. 

• Dialogues for potential project partnering are pursued internationally.

Group II

• The polymerase inhibitor NlpD is a potent drug candidate. The protective properties of this molecule have been confirmed and extended in cellular assays and animal models.

• Technology transfer and small-scale production of the NlpD protein have been successfully completed at the pharmaceutical manufacturing partner Lonza corporation’s UK site. SelectImmune Pharma is testing small-scale quantities for further development work.

• SelectImmune Pharma has filed patent applications for further indications of this interesting and active protein.

Group III

• Continued studies in animal models are performed for the IRF7 inhibitor to support and develop the obtained results. Additional molecules are being explored for this indication.

THE PERIOD IN SUMMARY

Amounts in parentheses indicate the corresponding value in the preceding year.

THIRD QUARTER 2023-01-01–2023-03-31

– Net sales totaled kSEK 0 (0)

– Loss before tax amounted to kSEK -2 932 (-3 488)

– Loss after tax amounted to kSEK -2 932 (-3 488)

– Loss per share* was SEK -0,1679 (-0,1998)

FIRST NINE MONTHS 2022-07-01–2023-03-31

– Net sales totaled kSEK 0 (0)

– Loss before tax amounted to kSEK -5 682 (-11 118)

– Loss after tax amounted to kSEK -5 682 (-11 118)

– Loss per share* was SEK -0,3255 (-0,6368)

– On March 31, 2023, the equity/assets ratio** was 86 (88)%

* Profit/loss after tax for the period divided by 17,459,225 (17,459,225) shares, where 17,459,225 is the number of shares outstanding on March 31, 2023. 

The comparative figure in parentheses was the number of shares on March 31, 2022.

** Equity divided by total capital.

SelectImmune Pharma AB

SelectImmune Pharma AB is a company that performs drug development. The company’s development aims to offer effective alternatives to antibiotics. Instead of killing the bacteria directly, the body’s immune system is strengthened and balanced to kill the bacteria itself. The company is developing new drug candidates for the treatment of bacterial infections.

The technology agreement between SelectImmune Pharma and Linnane Pharma from 2021 ensures the company’s access to advanced science and technology. The agreement runs for two years and the technology platform is available to SelectImmune Pharma on a subscription basis. This is an effective way to gain access to cutting-edge expertise and new technology at low cost. The agreement does not contain any further financial commitments to Linnane Pharma.

Revenue and earnings

As SelectImmune Pharma is a life science development company, future income will primarily consist of various forms of royalty income such as advance payments, milestone-based payments, and ongoing royalties. The longer the company runs its projects under its own auspices, the better bargaining power the company will have in business negotiations with potential future partners. The company has assessed that continued development under its own auspices will increase value and has therefore chosen not to enter into any cooperation agreements yet.

Net sales during the nine months amounted to kSEK 0 (0), and the loss after tax amounted to kSEK -5,682 (-11,118). Net sales during the third quarter amounted to of kSEK 0 (0), and the loss after tax amounted to kSEK -2,932 (-3,488). The lower negative result is explained by an uneven distribution of costs between the quarters and specifically lower costs for the clinical trials during this quarter. 

Financial position

At the end of the quarter, the equity/assets ratio was 86 (88) %, and the company’s cash and cash equivalents were kSEK 5,838 (15,334). The equity at the same time amounted to kSEK 6,103 (14,749). 

Cash flow and investments

During the period July 1 2022 to March 31 2023, cash flow amounted to kSEK -5,353 (-11,234). No intangible assets were capitalized during the period, since the company is in an R&D stage. R&D costs are therefore recognized as operating expenses in the income statement. No new investments in tangible assets were capitalized during the quarter.

Depreciation

During the quarter, depreciation of equipment amounted to kSEK 100 (100), and during the nine months, depreciation of equipment amounted to kSEK 300 (299).

Employees

The company had the corresponding of 2 (2) full-time employees during the quarter.

The share

The number of registered shares as of March 31, 2023 amounted 17,459,225 (17,459,225), of which 2,000,000 (2,000,000) Series A shares and 15,459,225 (15,459,225) Series B shares. Each Series A share entitles to ten votes and Series B shares to one vote.

SelectImmune Pharma’s Series B shares have been admitted to trading on Spotlight Stock Market since June 26, 2019. Spotlight Stock Market is the secondary name of ATS Finans AB, a securities company under supervision by the Swedish Financial Supervisory Authority (Finansinspektionen).

Transactions with related parties 

During the nine months, there were costs to Linnane Pharma AB of kSEK 1125 (1125) for the technology platform and kSEK 360 (360) for license costs for. The corresponding amounts for the quarter are kSEK 375 (375) for the technology platform and kSEK 120 (120) for license costs. Furthermore, salaries and remuneration to the Board and management were paid during the period. Transactions with related parties are on market terms.

In addition to the collaboration with Lund University, SelectImmune Pharma needs access to current and innovative cutting-edge expertise. Linnane Pharma offers a collaboration to solve these needs. A technology platform provides access to a unique combination of cutting-edge expertise, large-scale analysis methods such as proteomics, RNA and DNA sequencing, methods for analysis of clinical materials and animal models for the design of clinical studies for drug development, etc.

The technology agreement between SelectImmune Pharma and Linnane Pharma ensures the company’s access to advanced science and technology. The agreement runs for two years and the technology platform is available to SelectImmune Pharma on a subscription basis. This is an effective way to gain access to cutting-edge expertise and new technology at low cost. The agreement does not contain any further financial commitments to Linnane Pharma. 

Significant risks and uncertainties

The Board’s assessment of significant risks and uncertainties is unchanged compared with the most recent financial year and is described in the most recently published annual report (2022-06-30).

Basis of preparation for the interim report 

The company prepares its accounts in accordance with the Swedish Annual Accounts Act and the K3 framework (BFNAR 2012:1) of the Swedish Accounting Standards Board (Bokföringsnämnden).

The company’s accounting principles are unchanged compared with the most recent financial year and are described in the most recent published annual report (2022-06-30).

Review 

This interim report has not been audited.

Financial calendar

Interim report for Q4, 2022/2023 2023-08-29 

Year end report 2022/2023 2023-11-01 

Interim report for Q1, 2023/2024 2023-11-16 

Annual General Meeting 2022/2023 2023-11-22