Spago Nanomedical

JANUARY – JUNE IN BRIEF

• Net sales for the quarter amounted to KSEK 114 (KSEK 304)
• The loss for the quarter amounted to KSEK –7,866 (KSEK -9,565)
• Operating expenses for the quarter amounted to KSEK -10,982 (KSEK -11,084)
• Earnings per share, before and after dilution, for the quarter amounted to SEK -0.09 (SEK -0.23)
• Cash and cash equivalents at the end of the quarter amounted to KSEK 31,392 (KSEK 29,414)

JANUARY – JUNE IN BRIEF

• Net sales for the half-year period amounted to KSEK 201 (KSEK 515)
• The loss for the half-year period amounted to KSEK -22,274 (KSEK -19,445)
• Operating expenses for the half-year period amounted to KSEK -28,150 (KSEK -22,184)
• Earnings per share, before and after dilution, for the half-year period amounted to SEK -0.24 (SEK -0.47)

SIGNIFICANT EVENTS DURING THE QUARTER

• The application for the start of the clinical phase I/IIa study of the radionuclide therapy program Tumorad with the candidate drug 177Lu-SN201 in cancer patients, Tumorad-01, was submitted to an Australian ethics committee.
• Principal investigator Dr Ligita Jokubkiene presented observations from the ongoing phase IIa clinical trial SPAGOPIX-02 in endometriosis at the 15th World Congress on Endometriosis scientific conference.
• Hans Arwidsson was elected as new chairman of the board and Alan Raffensperger as new board member by the annual general meeting to increase the commercial focus. Kari Grønås and Nicklas Westerholm were re-elected.
• A Scientific Advisory Board (SAB) of scientific and clinical leaders in oncology and nuclear medicine was established to provide support and guidance in the clinical development of the Tumorad radiopharmaceutical program. At the outset the SAB consists of three prominent members; Professor Sten Nilsson, Professor Kristian Pietras and Dr. Austin Smith.
• A preliminary analysis of data from the phase IIa clinical study SPAGOPIX-02 shows that SN132D has a good safety profile in patients with endometriosis. Further evaluation of the MRI contrast enhancing properties, particularly in lesions indicative of deep endometriosis, is ongoing.

CEO STATEMENT

The intensive work with the start of our first clinical study Tumorad-01, a phase I/IIa study, with the radionuclide therapy Tumorad® in cancer patients has continued during the second quarter. We expect to include patients as soon as we receive approval to commence the study. We expect initial results showing the accumulation of Tumorad in tumors of cancer patients later this year. In addition, we also expect to make calculations on the biodistribution during the phase I part of the study, i.e. determining the amount of radiation that will be able to reach the tumor and thus the conditions for an effective and safe drug.

Within the SpagoPix project, the MRI contrast agent SN132D has continued to demonstrate a favorable safety profile in a preliminary analysis of the phase IIa study SPAGOPIX-02, while the work to produce the final report for the completed SPAGOPIX-01 study continues.

With a clearly commercially oriented board, a newly established scientific advisory board and all preparations ready to enter the clinic with Tumorad, we look forward to a busy autumn as we take Spago Nanomedical into the next phase.

In May, the final preparation steps for the clinical study with the candidate drug Tumorad (177Lu-SN201) were taken, and our assessment is to start the clinical phase I/IIa study Tumorad-01 after the summer. The application to start the study has been submitted to an Australian ethics review committee, which is then followed by a Clinical Trial Notification, to the Australian Medicines Agency (TGA). We anticipate approval from the Australian authorities by the end of the summer, or shortly thereafter, and to be able to enroll patients immediately thereafter.

While awaiting the completion of the formal approval process, we are working on preparing the participating clinics. Earlier in the spring, large-scale GMP-classified manufacturing of test material for the study was completed, resulting in a significant reduction of risk in the project. We have established an agreement with an Australian contract manufacturer who will provide the isotope and ensure the delivery of radioactive medicine to the hospitals. Furthermore, the clinical study protocol has been finalized previously, and we have selected CROs for conducting the study.

The Phase I part of Tumorad-01 is a dose-escalation, first-in-human study, planned to include up to 30 patients with advanced cancer, with a primary objective of evaluating safety, tolerability and dosimetry of 177Lu-SN201. Initially, the study will be conducted at a number of clinics in Australia. The decision to start the clinical development of 177Lu-SN201 in Australia is based on the country offering an excellent structure for our study with several regulatory and financial advantages that will facilitate bringing Tumorad to patients in a fast and cost-effective way. In addition to competent clinics, the possibility of significant reimbursement of R&D costs is a great advantage, as well as experience with regulatory authorities and hospitals with radionuclide therapies and access to local manufacturing and distribution of the radioisotope lutetium-177. As the study progress, clinics in other countries may also be included.

In recent years, radionuclide therapy has become increasingly common and an effective treatment option for cancer. The fact that we are now taking the step into this segment is incredibly exciting. We see several clinical advantages with our technology compared to other radionuclide therapies. Its unique action profile, provides the potential to create a drug that can be used against several types of cancer. We see an increased interest in radionuclide therapy from both major pharmaceutical companies and specialist investors.

In parallel with taking Tumorad into the clinic, the development continues with the MRI contrast agent SN132D, which in phase I showed clear contrast in MRI images of solid tumors in the breast, as well as in the pancreas and liver. At the beginning of May, Dr. Ligita Jokubkiene, principal investigator of the phase IIa clinical trial SPAGOPIX-02, participated in the 15th World Congress on Endometriosis scientific conference, where she presented the design and observations of the study evaluating SN132D in endometriosis. At the end of June, we announced that a preliminary analysis of SPAGOPIX-02 showed that the contrast agent is well tolerated in patients with endometriosis. The number of patients included so far is deemed sufficient to carry out a meaningful analysis, hence the recruitment of patients to the study is paused for the time being. We look forward to the conclusions of this analysis.

The start of the clinical development program with Tumorad marks a very important milestone for Spago Nanomedical and takes the company into a new important phase. In order to ensure the best way forward, we have during the quarter established a new scientific advisory board consisting top experts in oncology and nuclear medicine who will provide support and guidance in the continued clinical development. Furthermore, we have implemented changes in the company's board composition for increased commercial focus.

We note that the first half of the year offered a series of investments and deals with companies that develop radionuclide therapies, which we interpret as continued high interest in the field. The ability to use radioactivity to stop tumor growth is well known and clinically well used in many forms of cancer. With modern targeted drugs, radioisotopes can be taken to certain types of tumors inside the body and thus can treat more patients, including patients with cancer that has spread or with tumors that cannot be treated with external radiation. Tumorad can further open up the field through the possibility of treating several different forms of cancer, even those where we currently lack targeted treatments. We are also very interested in exploring Tumorad in combination with other treatments, as it is well known that radioactivity can make tumors more susceptible to different therapeutic approaches.

We continue to operate the business in a cost-effective manner, maintaining a lean organization optimized for the task. With a strengthened board in place, suited to address company operations, business development and financing, as well as access to deep collective expertise in the development of new radionucleotide therapies for cancer, we are well prepared to take the next step in the company's history. I am now looking forward to an even more exciting second half of the year.

Thank you for your continued support.

Mats Hansen, CEO Spago Nanomedical AB

The interim report is available at the Company’s website; https://spagonanomedical.se/investor-relations/#financial-reports