Toleranzia

Three months, April 1 - June 30

• Operating profit/loss amounted to KSEK -1 788 (-2 490)
• Cash flow from operating activities amounted to KSEK -40 (-1 238)
• Investments in intangible assets amounted to KSEK 7 414 (19 659)
• Earnings per share amounted to SEK -0,01 (-0,02)

Six months, January 1 - June 30

• Operating profit/loss amounted to KSEK -3 429 (-4 477)
• Cash flow from operating activities amounted to KSEK -3 699 (-3 442)
• Investments in intangible assets amounted to KSEK 12 101 (29 792)
• Earnings per share amounted to SEK -0,01 (-0,04)

The "Company" or "Toleranzia" refers to Toleranzia AB with organization number 56877-2866.
 
Significant events in the second quarter of 2024

• Toleranzia received a loan commitment of SEK 20 million from Flerie Invest AB
• Toleranzia successfully completed a safety study of TOL2 in blood samples from patients with myasthenia gravis

Significant events after the reporting period

• Toleranzia appointed Ann-Sofie Taube as CFO of the company on an interim basis
• Toleranzia contracted a clinical CRO for the phase I/IIa study of TOL2

Key financial data

[1] 86,755,644 warrants converted into an equal number of shares, SEK 0.50 per share. Warrants issued September 2023, subscription period 7 - 21 October 2024.

COMMENTS FROM THE CEO

Big steps towards clinical trials
The intensive work to finalize the clinical trial application for our drug candidate TOL2 for patients with myasthenia gravis progressed during the second quarter of 2024. All preclinical studies are now completed and the data is being compiled for inclusion in the application, which is planned to be submitted to the regulatory authority in the third quarter. The study itself will be conducted as a placebo-controlled multicenter study with clinics in Sweden, Denmark and Germany. We look forward with great excitement and hope to soon be able to test the drug candidate in a patient group with great medical need.
 
In April, the Company strengthened the financial base for its operations through a loan commitment of SEK 20 million from our main owner, Flerie Invest AB. The agreement, which entered into force on May 1 with a term of 12 months, was signed on market terms and runs without collateral, with an interest rate amounting to a maximum of SEK nine hundred and ninety thousand.
 
At the end of May, Toleranzia conducted a unique and important preclinical study where, in blood samples from myasthenia gravis patients exposed to TOL2, we were able to clearly show that the drug candidate did not produce any signs of inflammatory immune activation or adverse effects on blood cells at the doses tested. The study results, together with the previously conducted GLP toxicology study, provide strong support for the safety of TOL2.
 
The scaling up of the formulation process to produce approximately 3,000 packs of sterile, freeze-dried, GMP quality TOL2 for the upcoming clinical trials is progressing according to plan. We are currently working on contracting a partner who will be responsible for all logistics, including storage, labeling and distribution of the drug product to the various clinics in connection with the treatment of recruited patients.
 
Shortly after the end of the period, the Company appointed Ann-Sofie Taube as CFO on an interim basis, as our current CFO was temporarily forced to take leave from her position for health reasons. Ann-Sofie Taube has more than 30 years of experience as CFO, business controller and financial advisor in various businesses and industries, and thus has solid experience in financial management and business development.
 
Furthermore, a key milestone was recently reached when, after an extensive review and evaluation of a large number of potential international companies, we engaged the Uppsala-based clinical CRO Clinical Trial Consultants (CTC) to be responsible for the conduct of the upcoming multicenter study of TOL2. CTC has extensive knowledge and significant experience of the type of study that Toleranzia plans to conduct, as well as its own clinical unit where the Swedish part of the study can be conducted.
 
At the beginning of the third quarter, Toleranzia's warrant program TO4 will be implemented. Upon full exercise of all warrants, the Company will receive approximately SEK 43.4 million. A good outcome of the program is essential to give us maximum strength in the implementation of future clinical programs, where we have the opportunity to achieve results that can mean a paradigm shift in the treatment of autoimmune diseases.
 
Charlotte Fribert
Executive Director
Gothenburg, August 23, 2024

ABOUT TOLERANZIA
 
General information about the business
Toleranzia AB (publ) (556877-2866) is a Swedish biotechnology company listed on Nasdaq First North. The company develops drugs that harness the power of the immune system to treat rare autoimmune diseases. The drugs, which target the cause of the disease, can alleviate or cure the disease and not, like current treatments, just reduce the symptoms. They have the potential to be the first long-acting or curative treatments that act specifically on the underlying cause of the rare autoimmune disease they are developed for. Toleranzia's main focus is the autoimmune nerve and muscle disease myasthenia gravis, for which the Company is developing the drug candidate TOL2. In addition, Toleranzia is working on the autoimmune blood vessel disease ANCA vasculitis, for which the Company is developing the drug candidate TOL3. Both diseases are so-called rare diseases where so-called orphan drugs can be developed and where there is a great medical need and a large market potential. For further information, please visit: www.toleranzia.se.
 
Company structure and shareholding
Toleranzia does not have any subsidiaries. Flerie Invest AB owns more than 50% of the shares, which means that Toleranzia is a subsidiary of Flerie Invest AB. The company owns no shares.
 
Financial development and position
 
Period April - June
Other operating income amounted to SEK 298 thousand (2) during the quarter and consists of foreign exchange gains and project support part of development projects.
 
Operating expenses amounted to 9 499 KSEK (22 151) during the quarter, of which 1 789 KSEK (1 506) relates to personnel costs.
 
The costs are in line with the Company's plan and expectations linked to the long-term strategy.
 
Of the total cost, SEK 7 414 thousand (19 659) relates to the development of the Company's project portfolio in myasthenia gravis and ANCA vasculitis, where the costs incurred are continuously capitalized as work for own account.
 
The operating result amounted to SEK -1 788 thousand (-2 490) during the quarter.
 
Period January - June
Other operating income amounted to SEK  528 thousand (49) during the quarter and consists of foreign exchange gains and project support part of development projects.
 
Operating expenses amounted to 16 058 KSEK (34 318) during the quarter, of which 3 356 KSEK (2 858) relates to personnel costs.
 
The costs are in line with the Company's plan and expectations linked to the long-term strategy.
 
Of the total cost, SEK 12 101 thousand (29 792) relates to the development of the Company's project portfolio in myasthenia gravis and ANCA vasculitis, where the costs incurred are continuously capitalized as work for own account.
 
The operating result amounted to SEK – 2 429 thousand (-4 477) during the half year.
 
Cash flow and liquidity
Cash flow from operating activities amounted to SEK -40 thousand (-1 238) during the quarter. Cash flow from operating activities amounted to SEK -3 699 thousand (-3 442) during the six months.
 
 As of June 30, the Company's cash and bank balances amounted to SEK 2 293 thousand (703).
 
Investments
Total investments in intangible assets amounted to SEK 7 417 thousand (19 659) during the quarter. The corresponding investment for the period January-June amounted to SEK 12 101 thousand (29 792)
 
The investments relate to the development of the Company's portfolio of projects in myasthenia gravis and ANCA vasculitis and the costs are capitalized on an ongoing basis as work for own account.
 
Human resources
Toleranzia is a development company where committed employees with solid experience and cutting-edge expertise are a prerequisite for commercial success and for achieving the Company's vision. The Company had 10 full-time equivalent employees or contracted consultants as of June 30, 2024.
 
Funding and financing
During the period January – June, negotiations were concluded regarding conditional loans from 2013/2014 that related to completed projects. The project support in the form of loans from VGR/Tillväxtverket was finalized through repayment remission and simultaneous payment of accrued interest. The interest was paid during the first quarter and since then the Company has no interest-bearing liabilities.
 
In the fall of 2023, Toleranzia carried out a new share issue, which provided the Company with capital and cash of approximately SEK 43.4 million, before issue costs. Together with the shares, warrants (TO4) were simultaneously issued with exercise during the period October 7 - 21, 2024. At full subscription, the Company will receive an additional SEK 43.4 million.
 
During the second quarter of 2024, Toleranzia signed a loan agreement of SEK 20 million with the Company's main owner Flerie Invest AB. The loan commitment, which entered into force on May 1, 2024, and has a duration of 12 months, is expected to ensure that the Company will be adequately financed at least twelve months after the balance sheet date. The loan was not utilized as at June 30.
 
The Board of Directors and management have a continuous focus on cash flow and work continuously to ensure long-term and sustainable financing of ongoing and planned development projects and assess that there are several possible options to secure the financing of the Company.
 
Shares
Toleranzia's shares are traded on Nasdaq First North Growth Market since October 15, 2020. The number of shares in Toleranzia amounted to 197 070 875 as of June 30, 2024. The share is traded with the short name TOL and with ISIN code SE0007438577. As of June 0, 2024, the share capital amounted to SEK 24 633 859. The Company has one class of shares, of which each share has a quota value of SEK 0.125 (SEK 0.125) and carries equal rights to participate in the Company's assets, earnings and votes.
 
In addition to the share capital, 86 755 644 warrants have been issued that give the holder the right to subscribe to the same number of shares through exercise during the period October 7 - 21, 2024, at a price of SEK 0.50 per share.
 
Toleranzia’s website contains a list of the largest owners, which is continuously updated.
 
Mangold Fondkommission AB is the Company's Certified Adviser and can be reached at: ca@mangold.se.
 
Review by auditor
This interim report has not been reviewed by the Company's auditors.
 
Financial calendar
Quarterly report 3, 2024                        2024-10-24
Bokslutskommuniké 2024                        2025-02-21
 
Quarterly reports and annual reports are published on the Company's website www.toleranzia.se.  
 
The Board of Directors and the CEO hereby certify that the interim report gives a true and fair view of the Company's operations and financial position.
 
Gothenburg, August 23, 2024
Toleranzia AB
The Board of Directors and CEO