ExpreS2ion Biotech Holding AB (publ)

Welcome to today's event where we have the pleasure to present Expression Biotechnologies. To help us through today's event we are joined by CEO Ben Fransen, CFO Keith Alexander. Today, we will primarily go through the Q1 results, but I also guess we will address the rights issue, even if prospectus is coming. I think you mentioned the 5th of June. As always, you can ask questions in the box down below. Feel free to do it in English and Danish. If in Danish, I will try and translate to the best of my abilities. But I think for now, I will hand the call over to you, Ben.

Thank you very much, Michael. My name is Ben Fransen. I'm the CEO of Expression Biotech, and I'm joined by Keith Alexander, our CFO. And as Michael mentioned, we'll of course cover the Q1 report, which is the purpose of this webinar. We released it this morning, but we'll also take the opportunity to update you on our general business, the progression here, and not least also the rights issues that we announced shortly. First, the usual disclaimer. We'll let you read the details when we publish this on our web page later. So basically, so far in 2024, we've had some very good news. In fact, we have been rewarded with cash through our associated company at DATMAG. Back in February, ADAPBAC announced the phase three completion milestone payment from Bavaria Nordic for Bavaria Nordic's completion of the COVID-19 phase three study. And so this led into expression receiving 14.5 million DKK, approximately 22 million SEK, which we have just received there in the beginning of the second quarter. which is very nice for our runway. And also here in April, very importantly, we have completed the GLP safety study for the ES2P-C001, our breast cancer vaccine asset, a very important milestone for the company. And then lately, only shortly here in May, we have announced a rights issue to raise approximately 60 million SEK through a rights issue. If you look at our vaccine pipeline and the assets that we control, it's led by ES2B-C001, this very important asset. We have an outstanding preclinical package now, which documents both the efficacy and now also the safety We completed the safety package in non-human primates here very recently. And basically, we are in a clinical trial application enabling phase as we aim to progress into clinical phase one here within the next year. Furthermore, we have the CMV asset that we call ES2B-I002. This is in collaboration with Evaction Biotech. applying the AI platform and using expressionist expertise in making the appropriate antigens. And this is in a lead optimization phase. And then we have exploratory research on some exciting discovery projects that we are right now looking into the IP positioning and progressing on that as well. Common denominator for these assets is they're tapping into market sizes of multi-billion values. ESOB-C001 we are very excited about. It's a therapeutic breast cancer vaccine. It taps into an unmet medical need. And it's a HER2 positive breast cancer, the most common cancer. And unfortunately, a disease that takes more than 600,000 lives every year. The market size, in fact, the obtainable market, we conservatively estimate to 2.8 billion euro. So it's a blockbuster potential we're looking into with this asset. And a very nice thing about the technology platforms that we apply in this asset is that they have been clinically phase three validated most recently, as these are the same technologies that have been used in Bavaria Nordic's phase three stage COVID-19 vaccine. So that's a very good thing. And also, of course, we have a very strong team backing up this asset, those management board of directors level and importantly, also having a scientific advisory board with very strong oncology key opinion leadership. EF2B-C001 progresses across all the important stages of an asset like this. We have done the GLP safety study. We have the CMC manufacturing in place. We have done the drug substance manufacturing actually here in May, progressing with the drug product manufacturing. And then we have the clinical supply ready basically. We are in the middle of designing the clinical phase one trial right now. And in fact, pending selection of the trial manager, and the important investigators brochure and important document needed in this process. But we are on pass for making the clinical trial application here in the next quarter. Business development, we have initiated business development initiatives here. We have consultancy supporting us in opening doors to potential partners. So we are now actively marketing this product across the market. On the CMV side, ES2B I002, also a product on track together with Evaction, And we have done the antigen discovery, having identified potential targets, and we are in the middle of assessing preclinical work on this and continuing. The aim is to select a lead candidate by next year, where expression has the first right to select this and carry on the work under a license agreement. Our platform express has been validated now across many assets. I think it's important again to highlight the COVID-19 assets. It has been validated in clinical phase three. We have seen long-term efficacy. In fact, as far as we know, the only protein-based COVID-19 vaccine with more than 12 months protection from COVID-19. In terms of other clinical stage validation, the University of Oxford conducts several malaria clinical trials, all using the Express platform for the antigens. Earlier, we have, as I mentioned, the PR2 breast cancer, which we are now focusing on an expression to carry that on. And then we have the CMV project and other earlier stage projects, which are all grant sponsored, two within influenza and one within Nipah and filovirus vaccine. With respect to the malaria vaccine candidates, as I mentioned, these are actually all sponsored by University of Oxford. They have been super good in obtaining non-diluting grants to support their clinical development. This was lying still during the pandemic, where of course, even at University of Oxford, they were focusing on COVID-19 vaccine research. But I'm super pleased that since last year, they have really accelerated the work on the malaria vaccines. So in fact, these six different trials that I mentioned here cover four different malaria vaccine projects. all in or moving into clinical stage, and some even at the phase two level, which is important. And of course, we do everything to support University of Oxford in their endeavours to continue on these important works. That's a brief introduction to the business and where we are with our R&D. We have some upcoming events here in the short term where I will cover much more on this. Tune into the BioStock event on the 30th of May, as well as the H.E. Anderson Capital Life Science Seminar on the 4th of June, where Expression will present as well. I'll then hand over to Keith, who will go through our financial results and the rights issue.

Thank you, Bent. As you mentioned, my name is Keith Alexander and I'm the CFO of Expression Biotech. In the first quarter of 2024, Expression generated operating income of 1.6 million Swedish krona, a decrease of 40% compared to the prior year quarter. Our net loss in the quarter amounted to 12.9 million, which was 51% lower than in the first quarter of 2023, and drove a loss of 0.25 SEC per share, or 0.23 SEC on a fully diluted basis. At the end of March, Expression had 60 million SEC in cash, I'll dive into these figures and others in more detail in the coming slides. Starting with operating income, we experienced a 40% decrease year over year in the first quarter to approximately 1.6 million Swedish krona due to the progression of client projects. In the middle chart, we focus on net sales, which reflects revenue from projects, licenses and our webshop. They were well below the long term average in the quarter, reflecting the transition to a pipeline strategy strategy. In the chart on the right, we show other operating income, that is, grant-related income, which remained at elevated levels compared to history but was lower than last quarter. Moving to the cost side, which is much more significant than the income side, operating costs in Q1 amounted to approximately $16 million, a decrease of 52% compared with the first quarter of 2023. The decrease is primarily driven by external R&D costs, which I'll dive into in more detail on the next slide. Here we have illustrated the two largest components of operating costs. Starting on the left with external R&D costs, these peaked in the fourth quarter of 2022 due to preclinical development costs for the breast cancer vaccine and have followed a downward trajectory since then. This item is large, volatile, and very much driven by our pipeline activities. Moving to the chart on the right, we have removed the cost of share-based compensation from personnel costs to calculate an underlying personnel cost. This underlying figure is approximately the cash cost of personnel. It peaked in Q1 of 2023 and has since decreased by 37%. The decrease partially reflects the cost reduction program enacted last August. Note that personnel cost is sensitive to inflation and wages, wages are set by the market for talent and fx since we report in sec and pay wages in dkk moving to the net loss for the period after financial expenses and taxes we had a net loss of approximately 13 million sec in the first quarter a decrease of 51 we show the full year comparison for 2023 on the right Last year, the loss decreased 19% as compared to the 2022 result to 96 million SEC. Our next slide shows how our cash balance developed in the first quarter of 2024. At the start of the year, the company had a cash balance of 58 million SEC. Net cash flow from financing activities was negligible, as was cash flow from operations and investment activities. However, this does not reflect the underlying dynamics in which we received a large upfront payment related to a grant, which offset our operating loss. Note that the grant payment factors into cash, but only the realized portion is part of the operating income. As we complete the funded activities, we will realize the income in our income statement. Finally, we realize a 2 million krona gain from currency changes. Putting this all together, at the end of the quarter, the company had a cash balance of 60 million Swedish crowns, an increase of 2 million SEK in the quarter. The next slide we show our trend in the cash balance, which ended the quarter at 60 million. We received a dividend of approximately 22 million SEK from Adafact after the end of the quarter. This balance should carry us into 2025 under the current budget assumptions. However, additional capital is required to initiate a phase one trial of the breast cancer vaccine asset. This leads us to the rights issue launched on May 2nd, which I'll cover on the next two slides. The company's lead asset, the breast cancer vaccine, will soon be ready for clinical trials. As we've stated in many recent presentations, the phase one trial will require additional capital. We're exploring various sources as well as partnership opportunities, preferring not to dilute investors. Those other sources take time, as does establishing partnerships, and both are uncertain until terms are signed. While they may bear fruit in the future, the board decided to launch a rights issue now to prevent delay to the initiation of the phase one trial. The rights issue targets a capital raise of 60 million sec. As shown on this slide, approximately 65% of the targeted proceeds will fund clinical development of the breast cancer vaccine. 10% will fund continued development of the CMV vaccine, 5% will fund grant-sponsored projects, and 20% will fund working capital, including discovery and platform development. We have secured subscription intentions and guarantee commitments from insiders and investors amounting to approximately 50% of the targeted amount, or 30 million SEC. The rights issue includes two warrant series with subscription periods in Q4 2024 and Q3 2025, which we hope will result in additional funding. So how does the rights issue work? Investors who hold expression shares as of June 10th will receive seven unit rights for each existing share. Every six unit rights will entitle subscription in one unit in the rights issue for one SEC per unit. Each unit consists of one share and one warrant in each of the two warrant series. Looking at the timeline below, the key dates are the start of the subscription period, June 12th, and the end, June 24th. Participating investors must subscribe their unit rights during that period and ideally near the beginning as some banks cut off period for subscription may be shorter. This is unfortunately outside our control. After the subscription period, the outcome will be announced on July 1st, and the conversion to shares and warrants will occur around July 22nd. With that, I'll pass back to Michael for Q&A.