Ultimovacs Asa

Good morning and welcome to this webcast, where we will give a business update and present the results of Ultimovax for the fourth quarter of 2024. My name is Hans-Vasper Eid, and I'm the CFO and interim CEO of Ultimovax. With me today, I have Namir Hassan, CEO of Celuna Immunotherapy, who will become the CEO of the new Celuna Group. Our chief medical officer, Jens Børheim, will also be available during the Q&A session. You may post questions during the presentation through the web platform for this webcast.

Next slide, please. As a listed company, we would like to share our disclaimer.

Next slide, please.

Today, I will go through the key event the last quarter, which is the business combination with Celuna. I will also go through the key financials. Thereafter, Namir will give a more thorough presentation of the new Celuna group with a particular focus on the core TCR-NK technology. Next slide, please. And next. Thank you. On the 17th of December, we announced the business combination transaction between Ultimoax and Celuno Immunotherapy Group. which will create a listed company under the name Celuna ASA. The contemplated business combination will be structured as an acquisition of Celuna with an exchange ratio where the current Urtemark shareholders will get 19% of the shares in the new company and the Celuna shareholders will get 81% of the shares in the new company. There is full pre-acceptance from all the Celuna shareholders to the transaction. As part of this transaction, a private placement will be held, and there is a full commitment to raise 51.7 million NOK in this capital raise at a price of 2.60 per share. All the pre-commitments come from existing shareholders in Ultimoax and Celuna. This capital raise will provide an expected financial runway through the second quarter of 2026, which will ensure capturing of key IND catalysts related to the TCR-NK technology. There will also be a contemplated repair issue after closing at the discretion of the board. The main objectives of the combined company will be to advance the lead product, the world's first MAHA4 TCR-NK program, into the clinic. Further, we will seek to broaden the TCR-NK pipeline. We will also seek to unlock the multi-click technology potential. And last, we will wrap up the UV1 program. Next slide, please. Looking at the status of this transaction, an EGM extraordinary general meeting was held on the 9th of January this year, where the business combination and the private placement were approved. Further in the EGM, it was decided that the name of the company shall be Celuna AASA. A new board was elected that will be effective from the time of completion of the transaction. And the repair issue was also approved. So Ultimax is on track to complete the transactions within the first quarter of this year. Next slide, please. We are then moving on to the financial update. So by the end of the fourth quarter, 2024, Ultimax had a cash position of $109. 7 million dock, corresponding to roughly 9 million US dollars. During 2024, following the negative results from the EUV1 phase 2 trials, UTIMOAX has been through significant changes with an activity level prioritization and operational adjustments have been implemented. So this has led to a workforce reduction of approximately 50% during the year of 2024. And as I already mentioned, with a fully committed private placement, we expect a financial runway through the second quarter of 2026. Looking at the key financial results, we had an EBIT operating profit for Q4 or minus 121 million NOC and for the full financial year minus 224 million NOC. The profit before tax for the quarter was minus 119 million NOC and for the full financial year minus 213 million NOC. This includes an impairment or a write-down of goodwill and intangible assets in a total of 72 million NOC And this write-down is in alignment with the implicit company valuation put on UltimoAX in the business combination transaction. In the next quarterly report for Q1 2025, we will then share consolidated statements for the combined business, whereas still we are only reporting here for UltimoAX ASA alone.

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For looking at the main cost components, payroll expenses is influenced by the reduction in workforce during 2024. And in addition, the share option cost, which is a function of the share price development to a large extent, is also has also influenced the numbers here significantly. Due to the significant reduction in the share price, we see that there is a negative cost element, so a positive contribution to the results from the share option costs. Then the R&D costs... have gradually been reduced as we start completing projects and clinical trial activities, and also the CMC activities are being reduced. I'm not going into detail here, just trying to share the big picture. Next slide, please. On the write-down of assets, The total write-down, as mentioned, amounts to 72 million NOC, and that is split on 4 million related to patents for the UV1 program, and 68 million NOC related to licenses and goodwill related to the multi-click platform. On other operating expenses, there are no major changes in total costs, but we see that towards the end of 2024, other operational costs was significantly influenced by legal and consulting fees related to the business combination. Okay, so next slide, please. We are here showing the quarterly operating cash flow. And we see that the operating cash flow has come significantly down now over the last quarters and in particular for Q4. And this is reflecting, as already mentioned, reduction in the workforce and the completion of several key R&D projects and clinical trials. There is a significant difference, of course, between the operating profit or the EBIT and the operating cash flow. And that is mainly due to the write-down amounting to 72 million NOC. Okay, so next slide, please. We are here, as always, showing the detailed P&L broken down on a quarterly basis, more for information purposes and analytical purposes. So with that, we can move to the next slide, and I will then hand over the word to Namir, who will take us through a more thorough presentation on Celuna, and in particular, the TCR-NK technology. Thanks.

Thank you, Hans. Good morning, everyone. It's a pleasure to take you through the Zaluna TCRNK technology. And just to start with saying Zaluna is developing what we believe is the next era of cell therapies. And the question is why cell therapies? Well, when we look across all treatment modalities, that have been designed to treat late stage cancer patients. Cell therapies are the modality where we have actually used the C word, cure. And they've been able to treat and cure cancer patients. And perhaps one of the most notable stories is the six-year-old child, Emily Dickinson, back in 2012, who was treated with the first engineered cell therapy and remains cancer free. There was a seminal paper also in 2020 that summarized hundreds of patients treated with engineered cell therapies and demonstrated remission after five years effectively cured of their late stage cancer. So cell therapies have had this capacity to cure cancer patients and Zuluna aimed to develop the next generation of cell therapies. We've seen nine approvals in this space, mainly in liquid cancer. Though despite the successes, there remain two key challenges. The first is that solid cancers remain tough to treat, and there is a struggle to deliver long-term responses in solid tumors. And the second is scaling global access to treatment has been a challenge. And so Zaluna has built a platform over the last years to take the curative potential of cell therapies to solid tumors at a global scale. So how are we doing this? Well, in four main ways. The first is the game-changing platform. It's a world-leading cell therapy platform. We're virtually the only company that are developing this, which importantly leverages on the clinical successes of the last decades. It combines and brings together components that have been proven in the clinic into a unique platform. and we believe can provide transformative treatments to solid cancer patients. So it's a game-changing platform. The second and very importantly, that in the intellectual property that we have developed over the last years, we have a fairly, I would say, unprecedented position where the entire therapeutic space, the so-called TCRNK platform, and be grabbed in its entirety as a consequence of a concept patent that's been granted, which I can go into more detail a bit later. The third is that we are at a stage at the company now, a very exciting stage, where the lead program is on the verge of the clinic. We have a pathway that's been validated through pre-IND meeting with the FDA, so regulatory discussions that have validated our plans to get to the IND, and that provides a near-term value inflection, catalyzing significant value creation from the novel platform. And finally, And this is a very important point related to the cell therapy field. What we have seen in this space is that approvals can be fast. And in some cases from data from only 100 patients or less, really catalyzing high value from early clinical phases. Let me give you a couple of examples. Here are two examples of cell therapies which have been approved. and they have been approved on the basis of a data set that constitutes less than a hundred patients. The top one here, Brianzi, has been approved for refractory mantle cell lymphoma with a data set of 68 patients in a single arm study. And as you can see, the cost of this one-time treatment is around $490,000. The second there from Novartis Kimraya, Again, treated across patients in a single-arm study, 63 patients, to gain the approval in a B-cell precursor acute lymphoblastic leukemia with a cost of treatment of around $475,000. So there is precedence to approve these types of therapies with less than 100 patients, and that is principally because we see high degrees of efficacy with cell therapies. So if we take a moment to reflect on the total cancer burden and where we have seen the greatest activity and successes in cell therapy. So in this schematic, what you'll see is a depiction of the total cancer burden. Clearly what we immediately see from this is that the largest cancer burden worldwide is in solid cancer. Approximately 90% of cancer cases are in solid cancer with approximately 10% in liquid cancer. Now, as I alluded to earlier, where we have seen the major successes in cell therapies has been with liquid cancers. And these have been with cell therapies that have been engineered to be guided by what's called a CAR. So they're CAR-based cell therapies. And we've seen seven approvals to date with these types of therapies, and they have shown efficacy in liquid cancers. But the challenges have been that they have failed to expand this degree of efficacy into solid tumors. The cost of goods of these types of treatments is high, and as a consequence, And also due to the autologous nature of these therapies, meaning that a single batch from a patient is manufactured and reintroduced into that patient, there is a challenge in scaling to meet the demand. Now, if we look across to the solid cancer space, which is the largest burden of cancer globally, we have seen two approvals in this space. And very importantly, these approvals have been based on what are called TCR-based therapies. These are cell therapies that are guided by a T cell receptor, a TCR. That's where we have seen the successes. So we've seen solid cancer responses, though virtually all patients relapse. So the durability has been a challenge. The cost of goods, again, are high because these types of therapies have been autologous therapies where it's one batch, one patient. And again, the scaling has been a challenge to meet the demand. Now, This presents an incredible and enormous opportunity. If one can take the curative potential of cell therapies and apply that to solid cancer, it presents an immense opportunity for patients and for value creation. In fact, the estimated solid tumor treatment market by 2028 is expected to be around $380 billion. So why is it such an issue to drive responses in solid tumors? I would say we can perhaps summarize this in one word, diversity. Tumors are incredibly diverse within a patient. They have multiple faces. You can see in this illustration, which is trying to demonstrate that tumors in this particular illustration can have multiple faces shown by the different colors here. And so they are a mix of cells with different faces exposed. And so the challenge has been that when you have an agent that targets one particular face, as you can see here, for example, the red cells, you may get elimination of those cells, but the other cells with different faces that are not recognized by that particular therapy will remain and sustain and thrive. And what happens is that patients, although they may get an initial response, and we have seen that with the TCR-based cell therapies where we have seen initial responses, which have been incredibly encouraging. What we also see is that the cancers remain and are able to thrive due to the diversity and due to components of the cancer not being recognized by that targeted therapy. And so the diversity of cancers has been an issue. And this is where the Zuluna platform comes in. Zuluna have built a novel cell therapy platform that takes the clinically validated components, the T-cell receptor, the TCR, which we know can target solid tumors and has been proven to target exquisitely solid tumors, with the most potent cellular killer that we know, the natural killer cells, and brought those two together. And you can see that in this illustration. So as I mentioned, the T cell receptor, this is nature's guiding system. It's nature's way of detecting diseased cells. And we have seen with engineered T cell receptor products that they can target solid tumors. And we have two TCR-based therapies approved for solid cancer. So it's a clinically validated targeting system. And we bring that together with nature's most efficient cell killers, natural killer cells. And natural killer cells, importantly, have the ability to detect cancers broadly. You can see in the illustration in the bottom left that that natural killer cells has multiple sticks coming out. Each of them have different colors. That's designed to illustrate that they are able to detect different faces on cancers. And so they have this broad detection ability which can then overcome cancer diversity. We know that natural killer cells are clinically safe and they have also shown efficacy in some liquid cancers. And so we bring these together in the TCRNK platform with the idea to exquisitely target cancers through the T cell receptor and have the ability to broadly detect cancers through the ability of natural killer cells to do that innately and naturally. And so the solution here is to have a targeted therapy that can target solid cancers with a broad cancer detection capacity to overcome this diversity problem. And so the three areas that the Zaluna platform addresses is number one, to target solid tumors using a clinically validated scaffold, the T-cell receptor. Number two, to be able to broadly detect cancers. As I explained, cancers are diverse, even within a patient. And so natural killer cells are able to broadly detect cancers. So detect the multiple faces, as I used in the analogy. And thirdly, We can also use this platform in what's called an off-the-shelf fashion, meaning that a batch can be produced up front and used to treat multiple patients with multiple doses, bringing the cost of goods down and allowing cost-efficient scaling and redosing potential.

We call this an off-the-shelf approach.

So let me show you an example of how it works and specifically on this point of addressing cancer diversity. So what I'll do in a minute is play a couple of videos shown here. Now in these videos, these are experiments where we have mixed cancer cells, red and green. And with these cancer cells, the red cancer cells present a cancer cell with a particular face that can be detected by the T-cell receptor scaffold, the TCR. The green cancer cells have a different face. They do not present the target for the T-cell receptor. And so what I'll do is when I play the videos on the left-hand side, what you will see is we have a T cell, an engineered T cell receptor T cell, which is a clinical benchmark that we have been using. In fact, this is the furthest advanced T cell receptor T cell, which has been approved for a solid tumor, and we use that as a benchmark. And what you should be able to notice when I play that video is that the T cell receptor T cell can detect and eliminate those cancer cells that express the target for that therapy, which would be the red cancer cells, but has trouble and will not eliminate the green cells. And over the course of the video, you may see the green cells, in fact, enrich. And this is exactly what we see in patients. parts of the tumor enriching that are not detected by that therapy. On the other hand, with the Zaluna lead asset TCRNK on the right hand side, what you should be able to see is the ability of this therapy to broadly kill across this population, both red and green cells through the T cell receptor targeting mechanism or through the broad detection ability of natural killer cells. So I'll go on to play these videos simultaneously so that you can see the effect in both conditions. As you can see, as the videos play, one of the first things that