Biovica International

Significant events during the third quarter

• Biovica signs commercial agreement for the DiviTum TKa assay in the Nordics
• Biovica receives final pricing decision on DiviTum TKa from Medicare effective 1 January 2024
• Resolution on change to the Articles of Association and rights issue at EGM
• Biovica obtained a license from the state of Maryland.
• Biovica publishes the results from the rights issue.
• DiviTum TKa featured in three posters at the world’s largest breast cancer symposium.
• Biovica signs commercial agreement with Palex Group in Spain and Portugal

Significant events after the end of the period

• Biovica signs master service agreement for TKa testing with leading pharma company (1st contract order value: 1,7 MSEK)
• Biovica signs yet another master service agreement (1st contract order value: 1,2 MSEK)
• Interventional DiviTum TKa trial launched at Washington University

Webcast:
When: 14/3 2024 kl. 15.00 CET
Where: register via lyyti: https://www.lyyti.in/Biovica_Q3_Earnings_call_2024__Live_Event_6440
Broadcast language: in English

CEO’s comments

We made progress during the quarter in all three of our priority areas, which are the USA, Europe and collaboration with pharmaceutical companies. Our focus remains on commercial activities aimed at being cash flow positive in 2025.

Sales of the assay have been increasing each week in the USA and we are thus confident in our forecast that the revenue will start making a significant contribution in our fourth quarter of the financial year. In Europe, we signed additional attractive partnership agreements in several important markets and are thus making progress on collaborations with several new customers and projects.

A very important milestone was achieved when Center for Medicare & Medicaid Services (CMS) decided that the crosswalk process would be used to link a price to DiviTum TKa. As of 1 January 2024, the established price will thus be USD 322 per test.

With this decision and the fact that agreements in the private sector are at a significantly higher price, the prerequisites are good for achieving an average price that is on a par with, or slightly above, USD 400 per test, which is what we have previously communicated as our goal for the US market.

We also obtained a license from the state Maryland during the quarter, which enables us to analyze and report patient samples from all states in the USA except New York and Washington D.C. The license gives us coverage of 94% of the US population, which is equivalent to 311 million people. Although high coverage is certainly a priority for us, so is reimbursement from payers, since that gives patients access to, and benefits from, the test.

Thus far, we have signed three agreements with major hospital chains covering around 50 hospitals. As previously communicated, our goal is to have signed agreements with 10 major hospital chains by the end of the financial year. We are happy to see the continued interest and enthusiasm from oncologists in the USA. They are placing regular orders with ever-increasing frequency. We are also receiving regular reports that DiviTum TKa significantly improves clinical routines by helping patients obtain alternative, better treatments or dosages that are more tailored to their needs.

In Europe, our goal for quite some time has been to sign partnership agreements in the most populous countries, as well as in the Nordics. We already have an agreement signed for Italy and we made great progress during the quarter on agreements for Spain, Portugal and the Nordics. Our partnership agreements in Europe give us access not only to a sales force, but also laboratories that perform analyses.

In Spain and Portugal, we signed agreements with Palex Group, which is a leading supplier of hospital equipment. It also has an excellent track record in commercialization of oncology tests and surgical instruments in southern Europe. This collaboration will make the test available to the more than 8,000 patients who are diagnosed with metastatic breast cancer each year in Spain and Portugal. Palex will be leading the introduction and sales of DiviTum TKa, with a focus on creating high awareness and knowledge among breast cancer doctors and other relevant decision makers, as well as incorporating the test into clinical guidelines.

For the Nordics, we signed a commercial partnership agreement with Axlab, which is one of the leading companies for cancer screening and diagnostics in these countries. Axlab has an excellent network in the field of oncology, as well as extensive experience in

oncology healthcare processes. They currently have 22 individuals in their oncology sales force but will be recruiting two more in conjunction with signing the agreement with Biovica, which makes us very enthusiastic about the collaboration.

The clinical use of the test is being bolstered by positive studies. Two important studies that are investigating the clinical utility of DiviTum TKa are TK IMPACT (currently underway at Washington University) and a prospective clinical trial at Yale Cancer Center, which is investigating the correlation between DiviTum TKa levels and the effects of medication dose reductions in the care of metastatic breast cancer patients. The study at Yale is aligned with the FDA initiative, Project Optimus, aimed at reforming and improving dose optimization, which means moving from maximum tolerated dose (MTD) to minimum effective dose (MED). This is fueling an even greater need for good biomarker assays that can be used to evaluate treatment effect.

Abstracts based on these studies were presented as posters at San Antonio Breast Cancer Symposium (SABCS) in December. It is the world’s largest and most important breast cancer symposium. In a third poster, we also presented data from a study showing that DiviTum TKa was a stronger indicator for progression-free survival (PFS) than the presence of certain gene mutations. This is the eighth year in a row that data on DiviTum TKa was accepted for presentation at SABCS. All three abstracts are very interesting but seeing DiviTum TKa performing as well or better than other standard monitoring tools in several patient case studies from the TK IMPACT trial of course makes me extra happy and proud. If the study continues in this direction and there is a successful outcome, it will significantly strengthen Biovica’s argument for inclusion of the assay in guidelines and payment systems.

We have been very successful during the period with our collaborations and sales to pharmaceutical companies that are developing new cancer drugs. At the end of the second quarter, our order book was SEK 8.1 million for projects in this area. At the end of the third quarter, it had grown to SEK 8.5 million and was SEK 11.4 million at the time when this report was published. One of these orders was from one of the world's largest pharmaceutical companies. They have also signed a master service agreement with us, which is expected to result in many new projects and orders.

It is evidence that we have established ourselves as an important partner to pharmaceutical companies that are developing new, targeted treatments for cancer. This is an outstanding achievement by our team. We anticipate that revenue will continue to rise during the current financial year and our goal of signing our first agreement for a Companion Diagnostic (CDx) development project is within reach.

A rights issue was carried out during the quarter, generating approximately SEK 100 million in capital for the company, prior to issue costs. I would like to thank all of our new and existing shareholders for their confidence in us.
 
After an analysis of the effects of replacing the cash bonus with an extra share-based incentive program in line with the communication in the prospectus, we have concluded that it is better from a shareholder perspective to keep the cash bonus as this fits within the current budget. The cash flow impact of this is estimated to be SEK -0.4M during Q4 23/24 and -4,3MSEK Q1 24/25 for the company.
 
The capital raised from the rights issue enables us to continue building on the successful launch of DiviTum TKa in the USA and Europe, along with further developing our collaborations in the pharmaceutical industry. We are striving to make the company cash flow positive, which will not only benefit patients with metastatic breast cancer, but also our shareholders.

Anders Rylander, CEO