Flerie AB (publ)

Good morning, everyone, and welcome to Clary's Q4 2024 report presentation. For those of you who potentially can see these rather annoying captions being run at the bottom, please just ignore them as we're actually running this in English. We are here with several different people in the audience, and that's why we're running this in English. So apologies for the combination Swedish-English captions. We're, of course, talking about FLIRI, our investment company, located here in Stockholm and active all over the world. We've just come back from the JP Morgan Healthcare Conference, excited for 2025, but now reporting our last quarter of 2024. The usual disclaimer, I hope you've all read this in detail. And let me just remind for the new shareholders and new people in the audience of who we are. We are a biotech and pharma investment company. We invest long term and that therefore we're also often called an evergreen investor. We're investing off our own balance sheet into 29 portfolio companies. And we have mostly private companies, 73%, in fact, out of our net asset value of almost 4.2 billion SEG. We were founded in 2011 and we got listed on the NASDAQ Stockholm main market in June 2024. So just half a year listed. We have a very diversified portfolio and that's the reason we got listed and made it possible for other shareholders to invest in us. It's because we indeed provide this risk diversification across different stages. in the pharmaceutical and biotech development area. As you can see here, most of our company, 16 in fact, are in later clinical stages, or in fact, even in commercial stage. We're run by a specialised team. All of us have worked in biotech and pharma for a very long time, several decades, most of us. We're experts in life science and we're supported by specialist advisors all around the world, 100, 150 or so advisors that work with us in the core team. We have operational experience, meaning that we like to build companies, and we have built companies through to exit several of us. So we have a proven track record in both product development and commercialization. And last but not least, FLIRi prides itself in its network of syndicating investors. So, co-investors that invest with us into our portfolio companies. And this last quarter of 2024 is a perfect example where we really leveraged our network or actually saw the fruits of our labour of that leverage by having a lot of investment into our companies in addition to our own investment. And what really sets us apart as a company is our active board engagement, product roadmap and platform expansion work, our peer-to-peer network, and the collaborations and synergies that we pursue with partners all around the world. We are an active investor, as I said, and by being listed, we provide market access to these difficult to assess companies, based on very innovative sciences i like to say we provide liquidity to otherwise illiquid assets and i think that's quite unique there are very few investment companies especially evergreen investment companies like us that are available to public markets investors where they gain access to otherwise private companies mostly private that are just very difficult to access not only that difficult to assess because of the specialist knowledge required to understand their product development and even their early commercial launch activities So let's get into the Q4 report. There really has been progress in the portfolio. We've attracted new investors because of that progress. And to just put a number to it, around four times as much committed capital by co-investors into our portfolio compared to our commitments. So really a very strong leverage, or in Swedish, we like to say, vi har en riktig bra herbstdom. So our current net asset value on Firepower, 4.2 billion sec of net asset value, that's 53.77 sec per share. So we're trading just shy of 15% higher. So the net asset value is just shy of 15% higher than our share price at the moment. We do have very healthy cash and cash equivalents of 865 million. That equates to 20% of our NOV. And as mentioned before, and just reminding everyone, our ideal deployment rate is about 10% of NOV per annum. So, roughly about two years of run rate. uh the cash portion actually represents 11.08 sec per share out of the 53.77 that means that you know the slightly frustrating rebate that we still have uh share price versus nov is in fact even more rebated if you count the fact that our cash should really be valued at cash i really do hope and and i believe from talking to shareholders and potential investors uh that they believe in our active ownership and active investment way of working. And therefore, we are able to deploy that cash in a smart way. And again, this last quarter has been a good example of how we've, precisely because of that, been able to attract many new investors into companies. So let's talk a little bit about those new investors coming in. So we catalyzed significant investments in Anacardio, Chromophora, and we also attracted investment into Nanologica. These are just three out of many. So in total, if you read at the bottom of the slide, the syndicating co-investors committed 737 million alongside our 170 million. Not all of that was deployed during the last quarter. So the numbers are slightly different than from in the report. But if you counting the committed capital uh within the quarter and shortly after the quarter uh you know we're really talking about a ratio of more than four to one so going to a little bit of detail in anacardio which is our heart disease company so this is really about improving the pumping function or the more specifically the ejection fraction but to put it in simple terms the heart in many people fails. It's one of the biggest killers in the world. And the reason it fails is because, you know, in old age, it stops functioning as well. And people who have heart failure or before heart failure, they will maybe be pumping about four out of the usual five to six litres of blood around the body. And actually what Anacardi has shown is that with their drug, they're able to restore from four litres up to almost a full amount of five to six litres of blood being pumped So it is not only preventing the further degradation of the heart, which is what all the current drugs are doing, but it's actually improving the heart pumping function, which is truly tremendous achievement. And they have completed their phase one study now entering in their phase two study with the help of our new investors, Nova Holdings, Pureas BioVentures and Sound BioVentures, who were also followed by ourselves and some of our other co-investors. So we're really proud of Anacardia and looking forward to the future there with this company secondly chromophora our cleantech investment it's actually our only cleantech investment we're very proud of them having both achieved and developed further their pilot plants both in sweden and in belgium and because of their success in removing what's called PFAS is one of these forever chemicals from the environment. They have actually attracted 22.5 million euros of commitment from the European Investment Bank. And we're very excited now to be able to expand that further. Just one more thing about chromophora. So PFAS is actually an amazing chemical. It does the trick. It's been part of for example, fire extinguishers and used in many different industrial processes. And it is really doing its job well. The problem is that it is so well designed that it just does not degrade. So when it comes into the environment, it is difficult to remove. And when it accumulates in the food chain and so on, it really needs to be removed. And no one else in the world has been able to remove PFAS to the extent that chromophora is. And they're really in a league of their own, and they've now been recognized. Nanologica, which is our tools company in the purification space. So they have, for example, a technology that's used very widely in purifying insulin. It's actually, as the name suggests, a nanoporous silica that they've developed and can control the pore size of the silica very well. You can just see the innovative nature of our companies in just these three examples. And again, there we put in 46 million and attracted 99 million total into Nanologica during the quarter. Some other value changes during the quarter. So the result of Anacardio was a value change of positive 7.7 million. That's because Anacardio is, you know, we have 29 companies in the portfolio. We are well diversified, not any the company of ours is a very large part of the portfolio. That's the beauty about FLIRi. So even though it was a great achievement by Anacardio itself, the increase was 7.7 million so far in our portfolio. We do see that the great increase will come from Anacardio after their phase two efficacy results, and maybe even before when we get further partnerships in this company. That represents 2.2% of total love Anacardio. Tolerancia is one of our listed companies. They went up by 14.5 million. I think, again, that's because the market is understanding that Tolerancia for a long time has been undervalued, and I think, frankly, is still being undervalued. 3.3% of total NAV. Scintilla is, unfortunately, the one who's mostly contributed to the decline of our net asset value during the quarter. As you've read from our report, minus 2.5% result for us in the quarter overall. um and that is about 66 million uh cecilia our cfo will talk more about that in detail in the coming slides but centella is really responsible for 61.7 million negative development out of that again centella is a listed company and i think this is a an example again of when there is not a lot happening in the company in the sense of they're in a clinical trial and they're waiting for the results to come out um some of course investors who are not used to this long-term thinking that you need to have in the space um get a little bit tired of of not seeing new results i would like to encourage anyone investing in the space to invest in someone like fliri where there's a lot going on in different companies so we're actually having a good news flow all the time any individual biotech company will always have times of maybe six to 12 months where there's very little news flow, especially if they're in a long-term clinical study like scintilla in leg ulcers and also osteoarthritis. So these studies do take time. So a little bit more detail on Anacardio. It was also accepted into the EIC Scaling Club. This is a community for the 120 most promising deep tech scale-ups in Europe. So it's a very prestigious club to be included in. And it shows the recognition that Anacardio is getting not only in Sweden, but across Europe and in the world. They've actually completed the first part of their Phase 1b2a study in HEFREF, which is a We'll not go into all of those details right now. They closed, as I said, at 205 million with Nova Holdings, Pureers, BioVentures, and Sound BioVentures, followed by us and others. And I've already talked about their lead program. I just want to say that because we have 17% ownership in this company, even though it's a small change in this quarter, when Anacardio has its real development later on with a partnership, then this could be a real game changer for us and for Anacardio. We've only been invested in Anacardio since 2022, so it's relatively early days still in the long-term cycle of investment in Anacardio. Tolerancia, we also invested just a little before Anacardio 2021. They filed their CTA, their clinical trial application, as it's called, for their main programme called Toll 2. This is actually, all of their focus is on this main programme, and it's for Myasthenia gravis, which is an orphan indication. They had successful warrants that brought in 37 million SEC into the company, so they're financed through for the next preparations for the upcoming clinical trial. and they're also doing large-scale manufacturing, and working partly with Northex Biologics, our other company in the CDMO space. Charlotte Freebet has done this kind of thing before, she sold the company before, she's well able to deliver on this with a very lean team, so we're proud to see that actually Tolerantia is already now, even before we've done any partnership in this company, is actually valued at 127 million, Sorry, where we've invested 127 million and it's still valued at 103 million. We own 66% of Tolerantia. scintilla is the company that unfortunately has lost in value during the quarter but they do they are financed through their to3 warrants that brought in 29 million into the company they've reported that their patients from all three dose levels of xm and osteoarthritis have now completed their 18 months follow-up and they're preparing for the interim analyses so as i said we're looking forward to those analyses coming out It's an allogeneic stem cell therapy. They're based out of Lund. They have their own small manufacturing facility for that. So it's a very high tech area of development. Some further key developments in the private portfolio. I mentioned chromophora with a 22.5 million financing, where PFAS is being removed from the environment. The proceeds of these 22.5 million will be used to support the development and commercialization of this technology. They have several pilot plants working already, and more of them will be expanded. microbiotica which i haven't spoken about yet is a live bacterial therapeutic for both ulcerative colitis and also melanoma patients so they have two studies and they enter the clinic for both of them recently during the last quarter so it's very exciting times for microbiotica They're a spin-out out of the Welcome Sanger Institute in the UK, where they've done a very systematic approach to microbiome studies. So they really are standing out in this space where there's unfortunately a lot of people who think they can solve the microbiome problem with just a single one or two bugs. Microbiotic has done a very systematic analysis and have a consortium of seven specifically chosen bugs who they can now manufacture at a very controlled way for these two studies. So excited actually for Microbiotica to eventually get their clinical data from these two studies. One of which by the way is run with Cancer Research UK, a very prestigious organization in the UK. So let's over to Cecilia Schiele.

I'm going to speak to you about our financial development in the quarter. And being an investment company, the financial development, of course, is very much triggered our portfolio valuations. So before we head into the numbers, I would like to revisit our valuation methodology and speak a bit about how and when we adjust the valuations of the companies. So as Ted already mentioned, we do have investments both in public companies and private companies. At the year end, the public companies constituted 27% of the portfolio, and we had 73% of the portfolio were private companies. The listed companies are valued at the latest share price. Normally, you would expect the valuation to fluctuate from day to day or month to month. The private companies are valued based on the latest financing round. Between financing rounds, you would expect their valuation to stay still. The only event that would trigger an appreciation that is a higher valuation would be a financing round to a higher valuation that is up round. And on the opposite, a down round or a financing round to a lower valuation would, of course, force us to reduce the valuation. But there are also cases that when we adjust the valuation between the financing rounds, and that could, for instance, be due to the companies are experiencing delays have trial setbacks, then we need to reduce the valuations as we do that. And since we have, from our active ownership model, we have board seats in every company except one, we do have good and momentary information on the company's progress and issues, so we can adjust the valuation down very, very soon. And when the companies eventually managed to turn the development and are back on track, we reversed the previously made rise down, but never beyond the value of the latest financing. So, we do reverses, but we never increase the valuation. So, with the basis of valuation as a backdrop, let's look at the numbers and the development in the quarter. Thank you. So as Ted mentioned already, our NAV net asset value at the end of the year was 4.198 billion as compared to 4.262 at the end of September. That's an increase or it's decreased by 68 million or equivalent to one and a half percent. Our NAV per share was 53.77 compared to 54.59 end of September. And I will come back shortly to describe the bits and pieces that are behind that decrease. If we look at the fair value of the portfolio, it was 3.072 at the end of the quarter. Beginning of the quarter, it was 2.993. So that's an increase by 78 million. And as you can see from the chart on the right-hand side of this slide, the increase is mainly related to the new investments or follow-on investments that we've made into our portfolio. 159 million. We had a negative fair value change in the quarter, 74 million negative, 75, if I rounded it up correctly. And we've also divested part of our holdings in a listed company, Getis, that brought us 7 million in cash in the quarter. Again, this is the only portfolio company where we do not have a board seat, and our share of the company is 1.5% at the end of the year. If we go to the next slide, we can look at the segments more in detail. So we structure our portfolio into three segments. We have product development, commercial growth and limited partnerships. The product development segment is the largest one. End of the year, it constituted 76% of our total portfolio value. The segment had a fair value end of the quarter of 2.394. That's an increase by 40 million in the quarter. The change in fair value in the segments, however, was negative 65 million. And as we already touched upon, the larger changes came from the listed companies in TLN X-ray that decreased by 62 and 52 million respectively, while we had a positive share price development for Tolerancia that increased 14 million. Also, also talked already quite a bit about Anacardio, but they closed around, they announced it now in January, and got three main investors in, the round was 205 million. And it was to an increased valuation. And since we signed the investment agreement in December, we applied the higher valuation already in Q4, leading to a fair value increase of 80 million for Anacardium. Investments in shares in the segment were 110 in the quarter. Commercial growth is our second largest segment. At the end of the quarter, it constituted 21% of the total portfolio. The fair value increased to 587 million. That's an increase by 40 million. It is due to investments. We have invested 46 million in the company, NanoLogica, in the quarter, and also 5 million in SIMSA. The fair value development was negative 10 million. It was also related to Nanologica, the listed company that had a share price development of negative 15 million. While we on the other hand had an increase in the value for A3P Biomedical that reflected the share price in external transactions during the quarter. Then we have limited partnerships. It's the smaller segment. It constitutes 3% of the total fair value. And it's characterised by long-term commitments. So I'm not going to say so much about that. But if you have questions, I'm happy to take those later. So that was that about the financial performance. If we go to the next slide, we can look and just remind everyone a bit about our redemption scheme. So, Fleri provides a redemption program or axiom program that allows up to 5% of all shares to be redeemed annually at a value of now per share. The first conversion period will be this year in connection with the Q2 report. And in the years that follow after, we will have the conversion period in connection with the Q1 report instead. Some shareholders have agreed not to utilize this right. The majority shareholder will not utilize it for several years. And also the investors that participated in the undirected share issue in July or June last year are exempt from participating this first year. So you will be able to redeem your shares at NAV per share, which is a really good opportunity as it looks now. Again, NAV per share was 53.77 at the end of the year. And on the same day, the share price was 46.95. So the NAV per share increased or exceeded the share price by almost 15% that day. There are two main reasons that why we put this programme in place. The first one is liquidity. The scheme or the redemption scheme provides a good liquidity option. It might happen that investors, even though they have invested with a long-term perspective, might need to realise liquidity from time to time. So the redemption scheme provides an annual and recurring liquidity option. The second reason is to align the share price to the reported NAV per share. Fleury, as we have talked a bit about or a lot about, is an active investor. So we'll have to build the portfolio companies using our expertise and network. and support the market in understanding the extra value, the added value that Fleri brings, in addition to just the invested capital. The redemption scheme should help to align the NAFPA share and the share price. If you want to read more and to know more of the details and how the process for redemption would go about, you can do that on our website. We have a special site for this on fliri.com. So with that, I hand over to Tim.

Well, thank you very much. I realize we're short on time. So I think what we will do is we'll just go right into the Q&A to give a chance to anyone to ask questions. So while you're thinking about your question, I'll just leave it on this slide and tell you that, of course, we do have a very broad portfolio. The reason we like to speak for maybe a little bit too long in these presentations is because we have so much going on in our portfolio, and it's difficult to sort of condense that into just one report presentation. But happy to answer any questions. Please raise your hand, and my colleague Paula, who's an operations and IR manager, will unmute your microphone and allow you to ask a question.

First question here from U1 from Glenberry.

I will activate your microphone. Please, U1.

And you also have to unmute yourself.

Okay, here we go. Thank you so much. I missed the first part of the introduction, so sorry for asking a stupid question. But again, we saw some negative reactions in X-ray pharma, and I noticed that you're strong in your position there. Can you elaborate a bit on how you see the long-term value in X-ray and what do you expect going forward?

Thank you, and definitely there are no stupid questions. There are only stupid AIs, apparently, that cannot tell whether we're speaking English or Swedish. So, you're in safe hands. No, let's talk about X-Ray. So, X-Ray actually had that second delay, which is very unfortunate, of course, and I think that's why the market has reacted the way they did in X-Ray. For us, it does not change our view of the company. We still believe that they will get their approval this year to take Dacetanib to the market in the US to get their approval from the FDA. They've actually recently also had positive news about their second program, Nilotinib, which is not that far behind. So we're actually excited about this company. And even though there is a delay of a few months, it doesn't change the overall picture. That's why we purchased another 5 million SEC worth of shares over the market and strengthened our ownership in the company. Does that answer your question?

Yeah, thank you. Thank you.

Thank you. The question comes from Arvid Nikander. I will activate your microphone. Now you can unmute yourself.

Yes, thank you. Thanks for taking my question and congratulations on all the progress made during the quarter. So I had a question on Sixera Pharma, which I guess is a company I haven't spoken much about. There's not too much information available, but judging by the somewhat outdated protocol summary on clinical trials, It seems like this company should be approaching a readout in a not too distant future. So I just wanted to get some extra color on this. What are your expectations ahead of this readout? It seems like it could provide a proof of concept of sorts. If you could just talk a little bit about this, that would be helpful. Thanks.

Thank you, Arvid, and congratulations back. I know you're on paternity leave there, so I hope everything is going well on the home front. Thanks. Sixera is indeed not spoken much about. It usually flies under the radar for most people, so extra happy to answer questions. For those who have no idea about what Cixiera is doing, it's actually an ultra-rare disease company working on Netherton's syndrome, which obviously it's an ultra-rare disease, a skin disease, where actually the patients, their skin essentially sloughs off. They have to have sort of baths in oil and stuff multiple times per day. It's a very difficult disease. And I think, as you point out, Arvid, Once they have the end of their phase one, which they're in right now, they have had to extend that a little bit because it's taken a little bit longer to recruit patients. It is a rare disease, an ultra-rare even, so it is tricky to get these patients. They have to travel quite far to the clinic, and as you can appreciate, they're having quite a difficult lifestyle as it is. But I think Martin de Chateau, who's the CEO there and the real driver behind this, has done a fantastic job at hopefully bringing that study to a close uh within the next short little while so once that does read out uh you're right it will show um basically a proof of concept for this type of technology that could indeed be applied to different skin disease areas and and we are talking to And I don't want to go into these details at this point, but we are talking to other parties who are very interested in expanding Succera's technology into other disease areas. So not only will we get proof of concept and hopefully a value reflection for Netherton syndrome, but actually Succera will be able to be more widely applied as well.

Thank you very much, Ted. That's very helpful. I'll jump back in the queue. Thanks.

Thank you, Arvid. And I am afraid we are running out of time, but you are more than welcome to contact us after the webcast. And just some final words from Ted.

yep so just i just want to flag up that we we now have uh voices from our expert network available on our web page uh we're still doing some tweaks to to to also bring you more in the future uh hopefully we'll bring bringing these fleary insights expert interviews uh you know every few months we'll bring you a new one uh we're starting with these four experts very happy to actually have um interviewed tim oppler quite recently from c4 financial corporate also large learned who is working in the space that Anacardio is in. So if you were excited about our news about Anacardio, maybe listen to at least Lars Lund's video on our webpage and stay tuned for more. Thank you very much for attending and please send any other questions to us on our IR email, for example.