Cereno Scientific

Summary of the year-end report, January - December 2023

Cereno Scientific Group

Full year (1 January - 31 December 2023)

• Net Sales were SEK 0 (0)
• Result after financial items was SEK -48 106 210 (-27,648,649)
• Earnings per share was SEK -0.21 (-0.20) before dilution and SEK -0.16 (-0.19) after dilution
• The equity/assets ratio was 75.9% (93.4%)
• Cash and bank balance was SEK 87,168,535 (67,045,679)

Fourth quarter (1 October - 31 December 2023)

• Net Sales were SEK 0 (0)
• Result after financial items was SEK -21,933,596 (-8,635,283)
• Earnings per share was SEK -0.09 (-0.06) before dilution and SEK -0.07 (-0.06) after dilution

Parent company

Full year (1 January - 31 December 2023)

• Net Sales were SEK 0 (0)
• Result after financial items was SEK -48,181,632 (-27,747,301)
• Earnings per share was SEK -0.12 (-0.20) before dilution and SEK -0.16 (-0.19) after dilution
• The equity/assets ratio was 75.9% (93.5%)
• Cash and bank balance was SEK 87,102,526 (67,012,503)

Fourth quarter (1 October - 31 December 2023)

• Net sales were SEK 0 (0)
• Result after financial items was SEK -21,936,821 (-8,536,630)
• Earnings per share was SEK -0.09 (-0.06) before dilution and SEK -0.07 (-0.06) after dilution

Significant events during the fourth quarter

• October 13, the company reported positive results from the data quality control review initiative in the Phase II study of CS1 in rare disease pulmonary arterial hypertension (PAH). Some of the key findings were:
  • The DQCR concluded no concerning issues with digital data transfer and patient/physician protocol adherence.
  • The DQCR shows several patients with a reduction in mPAP of similar or greater magnitude as the initial Patient Case as measured with CardioMEMS HF System over time (AUC mmHg days). This indicates a clinically meaningful efficacy potential with CS1 in reducing mPAP in patients with PAH on top of standard-of-care drug therapy.
  • The DQCR shows that more than 60% of patients on CS1, all doses included, have a sustained reduction in mPAP evaluated as the AUC.
• October 26, the company was informed that the Swedish Economic Crime Authority (ECA) had initiated a preliminary investigation related to a suspected insider trade on the Swedish stock market. No employee, member of the management team, or board member in the Company was notified about any criminal suspicion.
• On October 27, drug candidate CS1's second patent family has obtained a newly issued patent in Japan. This strengthens and broadens the intellectual property rights (IPR) for Cereno's Phase II drug candidate CS1, which is being developed for the treatment of rare disease pulmonary arterial hypertension (PAH).
• An extraordinary general meeting was held on November 7 where resolutions were made about the number of board members, remuneration to the board, election of the new board member Jeppe Øvlesen as well as about a directed issue of warrants to the new board member and adoption of a new incentive program.             
• Cereno's drug candidate CS585 was highlighted by top-tier medical journal Blood as a promising novel anti-thrombotic strategy without risk of bleeding, which was announced on November 8. The paper on CS585 was selected to feature in the journal's Blood Podcast as well as awarded a commentary titled "Targeting prostacyclin: all gain with no pain?" concluding that the discoveries reported by Stanger and colleagues mark a possible important milestone to improve anti-thrombotic strategies.
• On November 17, the company reported significant progress and a timeline adjustment in the Phase II study of CS1 in rare disease PAH. The timeline adjustment was due to a slower recruitment pace than estimated during the months before and a longer start-up phase for two new clinics had affected the study timeline.
• On November 17, the company reported entering a loan of 90 MSEK, extending the company's financial runway into 2025 and strengthens partnering opportunities.
• On November 17, the company announced the intention to submit a request for expanded access to investigational drug CS1 for use as a treatment outside of a clinical trial, sometimes called "compassionate use." The initiative was prompted by a request from an investigator in the ongoing Phase II study of CS1.
• On November 24, the company reported that Board Member Jeppe Øvlesen had acquired 1 000 000 warrants of series 2023/2026:3 within the framework of the company's incentive program; and that Kristina Runge, Head of Office and Administration, had acquired 250 000 warrants of series 2023/2026:4.
• On November 28, Cereno announced that drug candidate CS1's third patent family obtained a patent in India. This strengthened and broadened the intellectual property rights (IPR) for Cereno's Phase II drug candidate CS1, which is being developed for the treatment of rare disease pulmonary arterial hypertension (PAH).
• On November 29-30, CEO Sten Sörensen attended the Nordic Life Science Days in Copenhagen, as part of the company's intensified efforts into business development, partnering and M&A. Nordic Life Science Days is the largest Nordic partnering conference dedicated to the life science industry. NLS Days attracts global leading decision makers from biotech, pharma and medtech as well as finance, research, policy and regulatory authorities.
• On December 1, Cereno announced that the preclinical safety program for drug candidate CS014 had successfully been completed. The safety documentation is a key component needed to apply for permission from regulatory authorities to start a first-in-human Phase I study. The Phase I study will be conducted in Sweden in partnership with the contract research organization (CRO) Clinical Trial Consultants (CTC) and is planned to start during the first half of 2024.
• On December 6-7, CEO Sten R. Sörensen attended the 8th Annual Conference NAHC 2023 in New York City. The event took place over two days in New York City and is an invitation-only event. NAHC brings together leading Nordic biotechnology, co-tech and health technology companies and investors, partners, and business development managers, together with an outstanding network of private and public sector contributors - all committed to promoting cooperation between the US and the Nordic health service.
• On December 9-12, Cereno presented two abstracts on the preclinical drug candidates CS014 and CS585 at the 65th ASH Annual Meeting & Exposition organized by the American Society of Hematology, in San Diego, US. The abstract on CS014 concluded that CS014 has the potential to enrich the toolbox of antithrombotic therapies to prevent thrombosis without bleeding in patients with a high risk of thrombotic events. The abstract on CS585 concluded that CS585 provides a new option of activating the IP receptor to decrease platelet reactivity and could represent the first viable option for targeting the IP receptor on platelets for primary inhibition of thrombosis with a reduced risk of bleeding.
• In the 20th anniversary December issue of the prestigious Journal of Thrombosis and Haemostasis, a review article titled "Antiplatelet strategies: past, present, and future" highlighted the company's innovative drug candidate CS585 as a promising future strategy in reducing platelet activity.
• On December 19, Cereno announced a change of Certified Adviser from Mangold Fondkommission to Carnegie Investment Bank as per January 1, 2024.
• On December 21, the company announced that a new clinic had been activated in the ongoing Phase II study of CS1 in the rare disease pulmonary arterial hypertension (PAH).

Significant events after end of period

• On January 3, Cereno submitted a request to the FDA for Expanded Access, sometimes called "compassionate use", to use CS1 in an extension of the ongoing Phase II trial evaluating CS1 in PAH. The "compassionate use" Expanded Access Program will initially be limited to patients who have completed the Phase II study in PAH.
• On January 5, the company announced that a research article on the innovative study design of the ongoing Phase II study of drug candidate CS1 in pulmonary arterial hypertension (PAH) had been published in the renowned medical journal Pulmonary Circulation. The research article concludes that CS1 represents a potential novel disease-modifying treatment for PAH.
• On January 11, Cereno signed an agreement with CordenPharma, a Contract Development and Manufacturing Organization (CDMO). CordenPharma is contracted to manufacture drug candidate CS1 in larger quantities, so-called scale-up manufacturing, needed to ensure supply to conduct the next clinical trial and later when approved for market launch. A request for Extended Access (also called "compassionate use") for the use of CS1 was at the time under consideration by the FDA, which, if accepted, would require a supply of CS1 to PAH patients for whom there may be a request to continue treatment long-term with CS1 after the initial Phase II study. With this contract, we also secured long-term availability of CS1 supply for the Extended Access Program.
• On January 12, the company announced that Tatiane Abreu Dall'Agnol had joined the company as Medical Director. She will be part of the company's R&D team and report to Björn Dahlöf.
• On January 17, Cereno announced that drug candidate CS014, a novel HDAC inhibitor, has obtained an issued patent in the UK. This is the drug candidate's first patent that strengthens the positioning of CS014, which is currently in the preparatory stages of a Phase I study and being developed to effectively prevent thrombosis without increasing the risk of bleeding.
• On January 22, Cereno announced that equity research company Edison Investment Research has been engaged by Cereno to produce regular, in-depth research on the company. The intention is to raise the visibility of the company and enable investors and stakeholders to develop an improved understanding of the business.
• On January 31-February 3, CEO Sten R. Sörensen, Dr. Raymond Benza, System Director of Pulmonary Hypertension at Mount Sinai Icahn School of Medicine, New York City, Principal Investigator of the Phase II study of CS1, and member of Cereno's Scientific Advisory Board as well as CMO Björn Dahlöf, attended the PVRI 2024 Annual Congress organized by the Pulmonary Vascular Research Institute. The PVRI 2024 Annual Congress: "The next 50 years of pulmonary hypertension - a global view" is a top pulmonary vascular congress globally.
• On January 31, Cereno was granted approval by the FDA for Expanded Access, sometimes called "compassionate use", to investigational drug CS1 for use in an extension of the ongoing Phase II trial evaluating CS1 in pulmonary arterial hypertension (PAH). This is an important milestone on our path toward making a difference for patients with the deadly rare disease PAH.
• On February 1, Megha Ranjan joined the company as Project Director. She will be part of the company's business and operational team and report to Sten R. Sörensen, Chief Executive Officer (CEO).
• On February 2, Julia Fransson joined the company as Director of Business Development. Julia will be a great addition to our team in developing value leverage to our BD strategies as well as working across functions to coordinate our commercial business focus.
• On February 13, the company announced that Dr. Rahul Agrawal had been appointed as Chief Medical Officer and Head of R&D. The recruitment followed an intense period in the clinical-stage biotech's growth journey. With a background in leading and/or co-designing close to 30 clinical trials with over 200,000 patients, he will play a significant role in moving the development of CS1 into a pivotal clinical study phase, and starting up CS014 in Phase I.
• On February 13, Cereno announced that they have expanded the Executive Management Team with CEO Sten R. Sörensen, CSO Björn Dahlöf, Head of Preclinical Development Nicholas Oakes and Chief Financial Officer Eva Jagenheim, to include the newly appointed Chief Medical Officer & Head of Research & Development Rahul Agrawal and the Business Development Director Julia Fransson, to strengthen focus on the strategic priorities in development programs of lead candidate drug CS1 in PAH, and CS014 in thrombosis prevention and CS585 in thrombosis prevention in a CV indication not yet decided.
• On February 21, it came to our attention that equity research company Edison had initiated coverage of Cereno with a valuation of SEK 2.32bn and a price range of SEK 9.9/share.
• On February 21, Cereno announced an update on the progress of the Phase II study of CS1 in PAH, with substantial interest in the FDA-approved Expanded Access Program ("compassionate use") for patients who have completed the Phase II study, with investigators indicating that a majority of the patients at their sites who have completed the study would be interested in continued access to CS1 following study completion. The company reports significant progress in the study, however, a slower recruitment pace than estimated during the last months and a longer start-up phase for two new clinics have affected the study timeline and top-line results are expected in Q3 2024.

Letter from the CEO

The last quarter of the year brought several positive developments for Cereno Scientific and we entered 2024 with a positive outlook. During the fourth quarter we were happy to report progress in the CS1 study program with promising findings from the data quality control review (DQCR) of the Phase II PAH study and a subsequent submission to the FDA of an Expanded Access Program (EAP) ("compassionate use") enabling continued access to CS1 for patients who have completed the Phase II study. We are pleased to announce that the EAP was approved by the FDA during the start of 2024 and that we are seeing substantial interest in the program, with investigators indicating that close to two-thirds of the patients, having completed the study or are currently on therapy, have been judged to be interested in continued access to CS1 following study completion. CS014 is also taking strides toward the clinic and met an important milestone with a successfully completed safety program. Our commitment and ability to deliver on our strategy was further strengthened through a loan of 90 MSEK, extending the company's financial runway into 2025 to perform further studies and accelerate partnership activities.

Phase II Study with CS1 in Pulmonary Arterial Hypertension (PAH) - further signs of efficacy and high interest in approved Expanded Access Program

I would like to start with highlighting the positive findings from the data quality control review (DQCR) initiative of data obtained by the CardioMEMS HF System from the first 16 patients in the Phase II study of CS1 for PAH. The data quality of the CardioMEMS measurements was found satisfactory with adherence to study protocol and with timely data transfers from the patient's home to the clinic. We were also intrigued to see efficacy findings showing a clinically meaningful reduction of pulmonary pressure in several patients, included in the data quality control, already after 3 weeks of treatment with CS1, in line with the results from the previously communicated Patient Case. These findings, combined with the, previously announced, Patient Case data, provide valuable information for us to initiate planning of a pivotal clinical study for CS1 in PAH while the Phase II study will continue to run to completion according to plan. We are now confident that top-line data, once reported, will comprise optimal data quality for efficacy data on CS1, which strengthens both our scientific and business case moving forward.

In late January FDA gave us the green light for "compassionate use" of CS1 in the US under an Expanded Access Program. This means that patients who have completed the Phase II study, now have the option to continue CS1 therapy if judged beneficial by the investigator, and subject to approval by the ethics committee at the local hospital. Our EAP will allow for gathering of crucial long-term safety and efficacy data for CS1 in PAH patients under an official FDA-approved protocol. This initiative not only extends support to those suffering from PAH, but also provides valuable support for potential future FDA applications, including fast-track designation/breakthrough therapy and IND acceptance for a Phase IIb/III pivotal study with CS1. We have already seen a high level of interest in the EAP with close to two-thirds of the patients, having completed the study or are currently on therapy, have been judged to be interested in continued access to CS1 following study completion. CDMO CordenPharma has been contracted to manufacture drug candidate CS1 in larger quantities, so-called scale-up manufacturing, to ensure timely supply, and safeguarding long-term availability, of CS1 both for the EAP and as preparation for the next study.

During the quarter we also activated a new clinic in the ongoing Phase II study, which we believe will be a significant contributor to the recruitment of patients. While I can report considerable progress in the study, due to a longer start-up phase for the two new study sites than previously estimated, the study timeline has been negatively affected and top-line results are now expected in Q3 2024.

During Q4 2023, we also expanded our patent protection for CS1 in Japan and India. Japan is one of the largest global pharmaceutical markets and India is also a major pharmaceutical market and a valuable addition to our patent portfolio. This strengthens and broadens the intellectual property rights (IPR) for CS1. The expansion of CS1's patent portfolio plays an important role in shaping its forthcoming commercial strategy, which will be bolstered by robust clinical data.

CS014 soon to be a clinical candidate, ramping up to start Phase I study

At the end of 2023, we shared that the team had successfully completed the safety program for CS014, which is necessary for the submission of an application to start Phase I. The safety documentation is a key component needed to apply for permission from regulatory authorities to start a first-in-human Phase I study and is as such an important milestone for Cereno and the CS014 program. The Phase I study will be conducted in Sweden in partnership with the contract research organization (CRO) Clinical Trial Consultants (CTC) and is planned to start during the first half of 2024. We are excited to now have moved one step closer towards the next important inflection point for CS014, and to having two promising clinical candidates in our portfolio.

After our February 2023 announcement about CS014's progression towards clinical development for preventing thrombosis, we were glad to be able to present new positive preclinical data in December at the 65th ASH Annual Meeting & Exposition. What we have documented is that when combined with rivaroxaban, CS014 inhibits the formation of platelet and fibrin-rich thrombosis without adding to the bleeding risk. These data show that CS014 has the potential to enrich the toolbox of antithrombotic therapies to prevent thrombosis without bleeding in patients with a high risk of thrombotic events.

Recently, in January 2024, CS014 obtained an issued patent in the UK. This is the drug candidate's first patent, a significant milestone for our CS014 project that further strengthens the commercial positioning of CS014.

CS585 is gaining international attention as promising anti-thrombotic treatment strategy

Our drug candidate CS585 is making an impression on the medical world. The prestigious medical journal Blood featured CS585 as a promising novel anti-thrombotic strategy with no bleeding risks. Not only did the article catch the eye of the journal's podcast initiative where only a few articles end up, but also earned a commentary titled "Targeting prostacyclin: all gain with no pain?", concluding that the discoveries made by Stanger and colleagues is a possible important milestone to improve anti-thrombotic strategies. It is a proud moment for all of us to have our work gaining this recognition and stand out in the medical and scientific community.

In December, we presented further preclinical data that strengthen the case for CS585. The study, which was a head-to-head comparison of CS585, a novel IP receptor agonist, and FDA-approved IP receptor agonists selexipag and iloprost, concluded that CS585 provides a new option of activating the IP receptor to decrease platelet reactivity,and could represent the first viable option for targeting the IP receptor on platelets for primary inhibition of thrombosis with a reduced risk of bleeding. It is very exciting to see CS585 compared to two FDA-approved drugs and demonstrate more selective and sustained efficacy than currently available IP receptor agonists.

Expanded Operational capacity and expertise pave the way for the next step of Cereno's growth journey

Cereno has made great advances towards its vision to provide valuable, more effective, and safer drug therapies to patients in need with rare and common cardiovascular diseases over the last year in a challenging investment and market climate. Thanks to the passionate, creative, and competent work of the whole Cereno team, we indeed made great progress with all our portfolio assets. One consequence of success is growth, which is why we have made several high-quality additions to the team lately. 

We are happy to have welcomed the newly elected board member, Jeppe Øvlesen, our new Medical Director Tatiane Abreu Dall'Agnol, Project Director Megha Ranjan, Director of Business Development Julia Fransson and new CMO and Head of R&D Rahul Agrawal. Julia Fransson and Rahul Agrawal have also joined our Executive Management Team. With Rahul Agrawals arrival, Björn Dahlöf will be focusing on his role as CSO providing more time for focused scientific leadership to identify and drive value of our portfolio and its vast potential. The Executive Management Team now consists of CEO Sten R. Sörensen, CSO Dr. Björn Dahlöf, CMO & Head Research & Development Dr. Rahul Agrawal, Head of Preclinical Development Nicholas Oakes, CFO Eva Jagenheim and Director of Business Development Julia Fransson. These additions to our, already competent, Cereno team strengthens our management foundation, enhances our capabilities to advance as a company with three programs and, soon to be, two in clinical development, and bolsters our business development efforts.

Expanding awareness of Cereno at Medical and Investor Events

During Q4, I have represented the company at several medical congresses and investor events. Two of these took place during November, when Cereno attended the Nordic Life Science Days, (NLSDays), in Copenhagen, and the invitation-only Nordic-American Healthcare Conference 2023 (NAHC) in NYC. On January 31-February 3, I, together with Dr. Raymond Benza, System Director of Pulmonary Hypertension at Mount Sinai Icahn School of Medicine, New York City, Principal Investigator of the Phase II study of CS1, and member of Cereno's Scientific Advisory Board as well as CSO Björn Dahlöf, attended the PVRI 2024 Annual Congress organized by the Pulmonary Vascular Research Institute. This year's theme focused on the global future of pulmonary hypertension, aligns greatly with our mission to transform the treatment of PAH.

It's evident from these meetings that the interest in both our company and our pipeline is increasing and we have several investor and scientific engagements scheduled throughout the coming year to continue to build our network and awareness of Cereno.

Future outlook

After having secured financing through a loan of 90 MSEK, we have significantly extended the company's financial runway, ensuring stability until 2025 and strengthened our partnership opportunities. Currently, we are in the process of preparing for subscription of series 3 (TO3) warrants set to be invoked in March 2024. I hope that we will see a high subscription rate for the warrants supporting our vision to continue developing innovative treatments for common and rare cardiovascular disease, while also building shareholder value. With the combination of the loan and TO3 warrants, we believe we've secured a robust position for discussions and potential negotiations with partners. 

Furthermore, the enhanced cash position supports our capabilities to deliver increasing shareholder value. We anticipate leveraging this strengthened financial standing to strategically advance all three of our programs, steering them towards future milestones adding considerable value to each of them.

The engagement of Cereno's shareholders is deeply appreciated by us and we very much look forward to being able to deliver on their expectations, creating value for them as shareholders as well as for patients and society as a whole. To help our present and potential future shareholders make well-informed decisions, we have recently engaged the equity research company Edison, to produce regular, in-depth research on Cereno. The intention is to raise the visibility of the company and enable investors and stakeholders to develop an improved understanding of our business.

Looking ahead into 2024 we look forward to achieving several impactful milestones for Cereno, with topline results of the Phase II study of CS1 in PAH and initiating First-time-in-human studies for CS014.  Once again, thank you for being on this journey with us!

February 2024

Sten R. Sörensen

Chief Executive Officer

Cereno Scientific

Financial calendar

Annual report will be published week 16 2024

Interim report Q1 2024  23 May 2024

Annual general meeting  28 May 2024

Interim report, Q2 2024  29 August 2024

Interim report, Q3 2024  21 November 2024

Interim report Q4 2024  25 February 2025

For further information, please contact:

Henrik Westdahl, Director IR & Communications

Email: henrik.westdahl@cerenoscientific.com

Phone: +46 70-817 59 96

Sten R. Sörensen, CEO

Email: sten.sorensen@cerenoscientific.com

Phone: +46 73-374 03 74

About Cereno Scientific AB

Cereno Scientific develops innovative treatments for common and rare cardiovascular disease. The lead drug candidate, CS1, is a HDAC (histone deacetylase) inhibitor that acts as an epigenetic modulator with pressure-reducing, reverse-remodeling, anti-inflammatory, anti-fibrotic and anti-thrombotic properties. A Phase II study is ongoing to evaluate CS1's safety, tolerability, and efficacy in patients with the rare disease pulmonary arterial hypertension (PAH). A collaboration agreement with global healthcare company Abbott allows Cereno to use their cutting-edge technology CardioMEMS HF System in the study. Two initiatives performed during the ongoing Phase II study have shown positive findings suggesting the potential clinical benefit of CS1 in PAH patients. These initial findings are, however, not a guarantee of the final study results that are expected in Q3 2024. Since January 2024, CS1 has been available under FDA's Expanded Access Program ("compassionate use") for continued CS1 treatment in patients who have completed the Phase II study. Cereno also has two promising preclinical drug candidates in development through research collaborations with the University of Michigan. Investigational drug CS014 is a HDAC inhibitor in development as a treatment for arterial and venous thrombosis prevention. The innovative drug candidate represents a groundbreaking approach to antithrombotic treatment potentially without the associated increased risk of bleeding in humans. CS014 is a new chemical entity with a multi-fold mechanism of action as an epigenetic modulator - regulating platelet activity, fibrinolysis, and clot stability for the prevention of thrombosis without increased risk of bleeding as documented in preclinical studies. Drug candidate CS585 is a prostacyclin receptor agonist that has been documented in several preclinical studies to target the IP receptor for prevention of thrombosis without increased risk of bleeding, which also has been recognized in the medical community. CS585 was in-licensed from the University of Michigan in 2023. The company is headquartered in Gothenburg, Sweden, and has a US subsidiary Cereno Scientific Inc. based in Kendall Square in Boston, Massachusetts, US. Cereno is listed on the Nasdaq First North (CRNO B). More information on www.cerenoscientific.com.