PCI Biotech Holding ASA

Welcome to PCI Biotech's Q3 presentation. Today in Norwegian, after a comment from our listeners. My name is Ronny Skugedal, I am the CEO. And with me today is Anders Haugset, CSO, and Morten Lur, BD Manager. At the end of the presentation, it will be possible to call in questions. You can find the details here. It is also possible to send written questions via the webcast console. Please note our disclaimer. So the agenda for today, first some highlights from my side, then Anders and Morten will take us through the operational review, then a little about finance and questions and answers at the end. So first some highlights. We reported in August that the company will not carry out a company-sponsored phase 2 study with our vaccine technology, Fimavac. This was due to the lack of funding for such a study in the recommended market. This decision also meant that we had to de-escalate our clinical team. This is now done and will have a full cost reduction effect from Q1 next year. Today's cash position is 67 million Norwegian kroner, and that will give us a financial runway into 2024. This period we now use to focus on mainly three fields for FIMA NAK, which are skin applications and bioprocess, production of biological drugs. and Fimavac with intratumoral immunotherapy. The company has been and is in a challenging situation with respect to restructuring and neuromagnetism. Despite this, we have held up momentum and progressed in our focus areas. This has materialized within our skin application. We have signed an external preclinical study where we will demonstrate the delivery of mRNA with the help of PCI technology in a cancer model. We expect the results of this study to be available in the first half of next year. Anders will give you more details about this later in the presentation. For the bioprocess project, we have now continued to work on our internal evaluation, and we are now focusing on the use of FIMA NAC for the production of gene therapy. Morten will give you more details on this. When it comes to Fimavac, this intratumoral immunotherapy project is an early phase project that will mainly be continued through a PhD program supported by the research department. But we continue to build on the data we have generated within our vaccine program earlier. Here we focus on a local application with a systemic effect, thereby increasing the effect of immunotherapy. PCI technology is very well suited for local application in this community. Our collaboration. We recently, in November, ended the collaboration with Mendes. This is based on the results of the project and an internal prioritization from both companies. Because of that, we agreed to end the collaboration recently. In August, we started a new collaboration with a company called MyMetix. Anders will come back with some comments about that later. So for FIMA-CAM release. Release was as known decided to be terminated in Q1, and the company has since worked towards an effective and cost-effective ending of the program. A lot has been done, and we expect that all essential closing actions will be completed before Christmas. We have already published the results, the so-called synopsis, in the European clinical database. And we expect that the same publication in the US is soon to arrive, but still not in place due to some formalities. The results we collected through this study were unfortunately not sufficient to draw conclusions about the effect. This is in line with what we have previously reported. The remaining cash effect of the study is expected to be up to NOK 3 million from 1 October. Then we will move on to the operational review, and I give the floor to Anders Haugset, CSO.

Hi, and good morning. I'm going to talk a little bit about what we are planning to do, mainly within FIMA NAC and FIMA VAC, and also a little bit about some other things. As Ronja has been talking about, when it comes to FIMA NAC, we are now focusing on to use the technology within dermatology, or rather things that are on the surface of the skin. The goal is to develop a platform technology to use the PCI technology to deliver nucleic acid on the surface of the skin. There are several reasons why we are investing in this. Obviously, since we use light, it is very easy to shine on the surface of the skin. I will come back to this on the next slide. There are also many interesting diseases that are well suited for nucleic acid and PCI therapy on the surface of the skin. So the goal here is to develop what we call a topical formulation to deliver things to the skin. We have previously shown, as you can see on the left side of the slide, that we can use the PCI technology to deliver nucleic acids into the skin. If we look at these mice, we see that inside the red squares, we have used PCI to deliver an mRNA. Inside the black ones, there is a control where we have not used PCI. So we see that PCI has a very good strengthening effect on nucleic acid delivery in the skin. But what we have done here is to inject nucleic acid into the skin. If you are going to treat skin diseases, it is a much better approach to make, for example, a cream or a gel that you can just smear on the skin and light afterwards. And that is what we want to focus on now, to develop a formulation that can be used to deliver both Femaporphine and nucleic acids. We have done some preliminary tests here, as you can see on the right side, where we have taken Femaporphine in a simple formulation and rubbed it on the skin, and measured how much penetrates into the skin. These columns show how much has penetrated down to the layers we are interested in treating, and the red line shows the level we know is necessary to get nucleic acid delivery. So what you can see here is that this shows that we are fully capable of delivering enough Fimaporphine down to the deeper skin layers to achieve the effect we want. And what we want to do further within this project is to carry out experiments together with a company that is an expert on this type of experiments, where we want to show that we are able to use the PCI technology to improve the effects of mRNA delivery in a wound model. This model is simply that you get skin from healthy volunteers, typically people who have had fetal operations and such, and you can stretch out this skin on a surface and create an artificial wound, and then the skin is treated. They can keep this human skin alive for about 14 days afterwards, so this is a very relevant model for what happens in human skin. The goal here is to show that with a simple formulation, we are able to improve the effect of mRNA delivery. We want this to be a platform technology that can be used to deliver many types of nucleic acids to many types of lesions or diseases in the skin. We think we have a very good technological fit here, because... It is easy to shine on the skin, and creams and light are used today in extreme degree in skin treatment already, so this is technology that is well tested and commonly used. And as you can still see, patients can use it at home. You can apply a cream to the skin and shine yourself. One thing we want to focus on is the treatment of chronic wounds. For example, diabetes is an indication where there is a very large unmet medical need. Many of these conditions have a complex biology that is very well designed for nucleic acid therapy. What you need here is not usually a single drug that does one thing, but you need drugs that are capable of reprogramming what happens in the wound. change the environment in the wound so that you get healing instead of keeping it as an open chronic wound. Nucleic acid is very well used for this because it can be used to reprogram cells to do new things. We believe that both in diabetes and in many other skin applications, nucleic acid therapy will have a very big future. In the meantime, the delivery of such lesions has been a big problem. You can inject it, but it is limited to how large areas you can inject nucleic acids over, so developing a cream that can be used in larger areas and get an effective delivery of nucleic acids will be very attractive. for many companies. We are not trying to make PcBiotech develop its own nuclear power plants. What we want to create is a platform technology that we want to develop in collaboration with other companies. I give the floor to Morten, who will continue with the bioprocess.

Thank you. We have previously communicated that there are specifically three areas within the bioprocess where there are interesting opportunities for Fimanac. These are cell culture, cell and gene therapy, and virus production. We are talking about using Fimanac in the production of biological medicines. We have recently conducted internal studies, in addition to hearing about our interest in technology at conferences with external actors. We can also say that we will focus on the production of virus vectors in the future. Viral manufacturing in English. In this context, we would like to tell you a little more about how virus production works. The process starts with cell lines in culture, from a few hundred milliliters up to several thousand liters. The cells are manipulated to get certain characteristics, for example by gene modification, or by the addition of enzymes or growth factors in the media the cells are absorbed into. Cells produce virus vectors over several days, where the goal is to produce as many viruses as possible at the end of the process. It is important to note that today's production methods have a great need for improvements to be able to produce enough viruses to treat new diseases and reach larger patient groups. Finally, for the virus vectors to be able to be given to patients, extensive cleansing and characterization must be performed. The virus is used in several areas, including cancer treatment, general vaccination and gene therapy. We are particularly interested in the production of gene therapy. One example of a gene therapy is Solgensma from Novartis, which is used against spinal muscular atrophy to replace a defective gene. We are now working internally to develop one or more prototypes for use in the production of viruses. In the first round, the results are used to secure relevant patents. They also develop the basis for future early phase testing of prototypes for potential customers, so-called alpha testing, where the goal is to get feedback on how the prototypes work. It is important to emphasize that to get to that stage, more data must be generated. But the feedback we get from such a test is used to improve the prototypes, so that by late-phase testing, so-called beta testing, with potential customers, we are safe in that we are relatively close to a commercial product, without having to make expensive and time-consuming changes. And then I would like to give the floor back to Anders.

Yes, I will now talk about Fimavac, which is the use of PCI technology to improve immunotherapy. As many of you may know, immunotherapy has represented almost a revolution of cancer treatment, where a good number of patients can get a very good response to such therapy. In the meantime, it is the case that even if some patients respond very well, there are large numbers of patients who do not respond to this type of therapy, which typically today is so-called checkpoint inhibitors. Therefore, very intense research is underway to try to improve the response rate here, and most of these The research is to be able to use today's immunotherapy in combination with other drugs and therapies to use these combinations to increase the effect of checkpoint inhibitors. There are a lot of such clinical studies, and some of them have given good results, but it is a big problem for this type of therapy that it is quite limited what you can give of combinations as long as you are going to give this as systemic treatment. Because checkpoint inhibitors have a lot of side effects. The other therapies you combine them with also have side effects, and you reach a very high level where the total level of side effects is too high for you to be able to use this on patients So one way to solve this problem is that instead of giving the therapy systematically, you can give the therapy locally. That means that you can inject different substances into a tumor and start an immune reaction there. This has the big advantage that the doses you need to get a local reaction in a tumor is significantly less than what you would need if you inject this into the bloodstream, for example. so that the side effects in the patient are much less with this type of method. This also means that you can try out combination therapies that are not possible if you give them systematically. Now it may sound a bit It seems illogical to treat cancer that has spread with a local treatment, but since immune protection works, if you manage to start an immune response in one tumor, these immune cells, just like if you get a vaccine in your skin, will wander around in your body and will be able to attack cancer cells elsewhere. So this is what we call treat locally, act globally. You can give a local treatment in one tumor and get an effect in the whole body. As you know, PCI is a local treatment technology, so that injecting Fimaporphine together with other substances in a tumor and light is a very simple and cool way to use PCI. We have already shown in many animal studies that such treatment of tumors in mice can give a very good immune response, because we can also treat one tumor and have an effect on other tumors in the same animal. So we want to develop this principle further by studying how we can optimally use PCI technology in such a setting. That is, we will explore PCI used in combination with different types of immune-stimulating agents, based both on nucleic acids, small molecules and different types of molecules, and try to find out what happens in a tumor and how we can use this to get an optimal PCI-based treatment. The advantage of PCI in this setting is that we are a delivery technology that can improve the effects of many types of drugs, and you can use it to deliver many types of drugs at the same time, so that we with one technology here can strengthen the effects of many other types of therapies. As Ronny has said, the way we want to move forward here is that we have received a P&D approval from the Research Council, and this The main focus of the project will be to look at mechanisms and what happens in a tumour within this P&D programme. When we find something that is promising, we will take it further. for the first time in animal studies. But also here we would like to collaborate with other companies. There are many companies operating within this area that have many different principles, and in order to be able to identify what is good with PCI, it is natural to start collaborating with others here as well. Something about our collaboration projects. I will focus on a company called Mimetix, which is the newest collaboration we have started. Mimetix is a Dutch-Swiss company that works with something called virosome technology, which is a vaccine technology where you use making particles that look like viruses, but are not, and packing in everything you need in a vaccine. This is a very effective principle for vaccination, and what we want to do here is to see if we can get synergies with PCI together with this technology, in view of developing this for therapeutic cancer vaccines. Then there is a project that is on the side of the other things we do. It is a collaboration project we have with the Sea Research Institute, which is called Photolize, and which focuses on photochemical treatment of salmon light. This is a project that is fully financed by Public Grants, started one and a half years ago and ends in 2023. All the work here, the practical lab work, takes place at Havforskningsinstituttet, and the goal here is to see if photochemical treatment can be used to remove and kill salmon light on fish. The reason for using photochemical treatment is quite simple. Salmon lice are flat, transparent, they sit on the surface of the fish and are easy to light. If you induce a photochemical reaction in the lice, this can lead to the destruction of vital organs, which will lead to the death of the lice. So, there have been some experiments on this already. We have tested a number of different photosensitive connections, and shown that some of them can kill live salmon light when you shine on them. So what we are doing now is trying to improve this principle, see to what extent we are able to kill salmon light also on fish, and also try out other substances with perhaps even more optimal properties. Yes, there it is, Ronny again.

Thank you to Anders and Morten for a good and thorough overview. A few words about finance. As I said, we have 67 million kroner in the bank at the end of Q3. This is expected to give us a financial runway into 2024. You have just heard what we are trying to do. use the remaining time within the projects. With regard to the conclusion of the release, we have also said that it can cost up to 3 million kroner from the first of October this year. The down payment process will have a full cost reduction effect from Q1 next year. Due to the major operational changes from last year to this year, it is not sensible to compare the quarter to last year. But as indicated earlier, we now have in Q3 a result of about minus 10.5 million. This is included in the development costs in release. and depletion costs. In a normal quarter in the future, it will probably be lower than 10.5 million. Yes. Before we move on to questions and answers, just a little summary for FIMA NAC and our dermatology skin application. We are working primarily with this external preclinical study that Anders talked about, and we expect the results from this in the first half of next year. As for the bioprocess, we have continued to work on the project, and now we communicate that we are focusing on the production of gene therapy, which Morten took us through. As for collaboration, as I said, a collaboration has ended and a new one has come in. We also have this ongoing project with the Sea Research Institute, which has been running until the summer. I would also like to mention that the advantages of the bioprocess project are that there are shorter timelines and lower resource needs compared to the traditional product development for PCI Biotech. Here we are just going to enter as part of a production process. We have previously seen that Fimanac has the ability to deliver things to many different cell types. Now we will try to transfer this to use within the bioprocess. The difference between the two programs is that in dermatology we are doing an external study now, while the bioprocess is a full-time in-house project. Thank you. If you do wish to ask a question, please press five star on your keypad.

Once we draw a question, please press 5 star again. We will have a brief pause while questions are being registered. The first question will be from the line of Svein Eirik Sjøvesen. Please go ahead. Your line will be unmuted.

Hello. Can you hear me? Hello, my name is Svein Eirik Sjøvesen. Good afternoon. You have some questions. I think I will first start by going back a little bit to 10 here. As many of you probably remember from PRC 10, he talked about the fact that Fimanak could become the new gold standard in terms of nuclear oxygen here. The results you had from the studies were, in my opinion, very good. And I think you had good results from some of the other partners you had here. Det som forundrer mig lite grann, er jo hvorfor ikke de her beskyddene, som veldig gode resultater som det hadde, har medført at det har klart fått noen partneravtaler innenfor dette området, og har oppstått en fase 1-studie. Som en legeman, så er det jo kanskje naturlig å tro at FIMA-natt, denne virksomheten, ikke så god som det har gitt uttrykk for her. Jeg lurer på om du har noen kommentarer til det her.

Anders will also be allowed to comment on that. First of all, we always work with partners within this area. The results we have produced before are, as you say, interesting and promising. But we have not succeeded in getting partners on this. There is no doubt about that. We will not speculate on the cause of this, but we will continue to work on this. Anders, if you have any comments on this, you can come up here.

previously focused on cancer treatment, and even though we may not agree with that, there are a good number of possible parties who think that using PCI in such a setting has been relatively complicated. You have to put on light and so on, which they are not used to. For skin treatment, which we are working with now, things are completely different. It is not complicated at all. Rather, it can be simpler than competitive technology, where, for example, you have to inject things into the skin. Spreading a cream on the skin and lighting a lamp is something you do in skin care already today, and it's not a complicated factor at all. We have now chosen to move on to areas where we believe that our technology has an advantage, and which are not as complicated as, for example, cancer treatment. And where there is also less competition in cancer treatment, there are many different principles that are tested by many actors within dermatology and cancer treatment. For example, there are much fewer actors, and we have a technology that we think fits very well, and which is also is in a way made for the future. Nucleic acid therapy within dermatology has a great potential. There are already things that are in clinical phase 3, and it has been shown that it can be used, for example, to treat certain types of cancerous skin diseases. And there are many possibilities here, and making a platform technology here that can be used by many partners, we think we are very attracted to. It is a very good way to use our technology.

Yes.

Thank you, Anders. Today, you talked about developing a cream for this area. Earlier, you talked about a device. I don't know if you're talking about a device today. How long do you think it takes to develop a cream and a device for the dermatology area?

You have to go up again, Anders. As Ronny said, we expect to have the first results when there is a cream for delivery of wounds in the first half of next year. Now, wounds are perhaps the easiest starting point, because it is easier to deliver things in wounds than in intact skin, but the results will be available in the first half of next year. These are the timelines we have, which we plan to keep here. When it comes to devices, this is not very complicated. We do not need a laser, we do not need any advanced equipment at all. You can use a regular lamp, In principle, you can use sunlight, although it is a bit difficult to dose, but no advanced device development is necessary here. You can just have a light at a suitable distance from what you are going to treat, and light for 10 minutes, for example. The first study is mostly a proof of concept, and it is probably not the case that what we have developed is the optimal product. is used to develop this further. I did not mention this in the slide I showed earlier, but there were four different soils, as far as I remember. One of them was in a very basal form. You can take it back. If you look here, the one to the left is a so-called basic formulation, which is a very simple basal formulation. We see that we get good delivery with it, but we also see that if you add what we call permeability enhancers, substances that increase permeability in the skin, we see that we get an improvement in the delivery. So even if we get it in the first attempt, there is certainly room to improve this further, especially when it comes to delivery to intact skin. But if we first show that it works, then we already have something we can go out and talk to partners about. And of course we have a very good incentive to work further with this.

Thank you. The new investment role for you is bioprocessing. In the first half of 2023, there will be redoubts from an external company. If the results are good, how long will it take to find out if this is something to focus on? There will be a lot of work after the redoubts. So how long will it take in the next half of the year? Can you say if this can be useful? Can you say how much interest you have in this?

I now understand that you are talking about bioprocess. Bioprocess is currently only an internal project, and it is very early on. at that stage, so now it remains to produce data in-house before we can go out and show this data, both to secure IP and to share data with potential collaboration partners. We don't have anything concrete today that we can go out and show that we have to produce data in-house. But we have, as Morten said, received feedback that as long as we have good data, there will be interest in our technology within this area.

Okay, so how far will this go?

No, we also mean that we communicate that within this area there are shorter timelines and shorter resource needs for PCI-Biotech. We will be part of a production process, so we will not be involved in the entire product development. So here is the shorter timeline for PCI-Biotech. I don't know, Morten, if there is anything else you can add?

Nei, men jeg kan kanskje tilføre at vi ser for oss å få nøkkelresultater i 2023 som in-house, som er viktige døråpner for denne her eksterne testingen med potensielle kunder.

Ja, takk. Anders?

Yes, it is not so easy to say. The current project is going forward, and that is because we have a two-year development on it. Hvis vi får resultater som vi anser for å være lovende nok i den resterende delen av prosjektet, så er vi interessert i å følge opp dette med kanskje nye prosjekter, kanskje ny offentlig finansiering osv. Eller en videreutvikling av det vi holder på med. Men det er fortidlig å si noe om Forleby. Først må vi fullføre det prosjektet vi allerede har, og så får vi se hvordan vi tar dette videre.

Sorry Sven-Erik, but we have also received some written questions related to this Laksalus project. I think it is important to say that this is also an early phase project, so when we are finished with the project in June next year, it will not be a project that is ready to be put into commercialization. It would be, as Anders mentioned, a need for a step two in this project. Absolutely.

Thank you very much. One last question. One last question, maybe something more important. You have 62 million kroner again after the start of Q3. That gives, as you say, a runway into 2024. But they need money. It's a good time for that. Based on what has been presented and answered today, it seems to me that not many new shareholders can expect what will happen in the summer, autumn, next year. Is that an important understanding? Or can there be results from some of the partners If we take the collaborations first, we have also received questions via the internet.

The collaborations that are in an active data generating phase are MD Immune and Mimetix, which has just started. IMV and OLIX are in a kind of idle or dormant phase, as we say in English. There is no research happening within these two projects today. MD Immune and Mimetix are early stages in the projects, so it is too early to say anything about where this can take us. Other than that, from the other projects, we said that there will be a reading on salmon light by the summer. Dermatology, we will get external data on our wound model in the first half year. And within Bioprosess, we work hard to generate in-house data that we will have available in the first six months and be able to discuss with external potential partners. We don't have more rabbits out of the hat than we are trying to present here.

Okay.

As there are no more questions, I'll now hand it back to the speakers for any written questions.

Thank you. Through this session, we got a good deal of the written questions that came in as well. There is a question here in addition, if we have experienced any external interest in this with wound treatment. And as Anders said earlier, this is a field under development, a very early phase. There is no mRNA on the market today for this, but it is an early phase. And it can also be an advantage for our delivery technology that we can come in early together with other mRNA developers who are looking at this. before they have concluded on which delivery method they want to use. And that can make it easier for us to get in.

I don't know if you have anything else? Yes, you are right, Ronny. But it's not just mRNA we are looking at here. There are also many other types of nucleic acids that are also attractive here. So there is actually a lot of decline, companies in early stages and academic groups that develop different things within this area. But as Ronny said, it is an early stage. It is one nucleic acid product that is in phase 3 actually for diabetic wounds today. Apart from that, most of it is very early and we see it in many ways to be an advantage. Our experience over the years has been that It's more difficult to get involved with companies that already have clinical studies, where they have their own program that they want to follow, than to come in at an early stage and be involved in developing something together.

Thank you, Anders. And with that, we say thank you for your interest and for listening. We wish you a good day. Goodbye.