Flerie AB (publ)

Welcome to the Q2 report from FLIRI. I welcome you from all your different locations around the world and Sweden from your holiday locations. Thank you for joining. And for those of you who are Swedish speakers, perhaps you have the chance to see the interview with Dagens Industri Television this morning as well. So let us get right into it. We of course have the usual disclaimer that I hope you will all follow. And today we're talking about not only the Q2 report, but the fact that it is in fact an anniversary of our IPO. We have done a lot. We have much to show. It is the 27th of June was our one year anniversary exactly going on to the main market after the reverse merger that we did on earlier that month in June 2024 and there has been a lot of portfolio progress and also some financial innovation I think that we would like to share with you something quite unique that some of you have asked us about and we're happy to answer questions on any details you are curious about. let's go straight into the current net asset value and firepower i think we have not only held but actually strengthened our position as a top tier european investment company with very significant assets totaling 4.1 billion crowns that's a 52.78 sec per share net asset value per share We have 737 million SEC in cash and cash equivalents. I think we have managed to cash very, very well since our IPO a year ago. We still have 9.44 SEC per share out of the 52.78, which is cash. So we will invest that and continue to invest that in our exciting portfolio. And over time, as you will see on the following slides, to keep that diverse portfolio, we will also make new investments. This is our portfolio at the moment. There's been significant progress in the portfolio. And as you can see, actually 93%, if you look at the lowest row there, 93% of our fair value lies in the clinical and commercial stages. So again, I want to highlight that we are a mature investor with a mature portfolio when it comes to venture and early commercial growth investments. But before I go into some of the clinical stage and commercial, I want to point out Strike Pharma on the left, which is a preclinical company, because recently there have been big M&A's announced, AstraZeneca and AbbVie. They bought Ezo Biotech and Capstan for two and one billion US dollars in an area that actually Strike Pharma is active in. So even though we pride ourselves in having a mature portfolio, it is important to start early with companies like Strike Pharma to identify the correct areas where there is interest from global pharma, and to develop those companies over time. That is how you get the best return of investment in our view. Let's go over into the clinical stage, phase one. I'd like to highlight microbiotic and procarium. These are actually our two UK investments. They both happen to be microbial therapies, and they're actually the only two true microbial therapies in the portfolio, an area that was actually hyped a long time ago, especially microbiome. We never followed that hype in the sense that we exploited or went in during the hype of, for example, the microbiome investments. We actually focus on those companies that have very, very good science, have done things systematically, and microbiotic and prokaryotes are certainly two cases of that. Microbiotica was originally spun out of the Wellcome Sanger Institute in the UK. That's a very reputable institute where they did a very systematic approach to looking at how microbes and microbial therapy can influence oncology, but also ulcerative colitis. So we continue to trend of working on ulcerative colitis for those of you who have invested in that space before. And Procarium has also progressed and now dosed four cohorts in their bladder cancer study. So both companies in the oncology space and microbiology are also in the ulcerative colitis space, two hot areas where there's a lot of global pharma interest. And we continue to work with them and all of our other portfolio companies to have interactions with pharma. Let's also move over into phase two, and I want to highlight Epiendo, that actually is an Icelandic company with some team members in the UK as well. They have managed very well with their cash to actually do a phase two study without needing to raise further funding. Very proud of all of our companies in that regard, having actually done a lot with very little, and I think that's one of our strengths as a European entity, and many of our companies are European, all but three actually. And I also want to highlight Empros Pharma. That's our Swedish metabolics company, one of two Swedish metabolic companies that we have. And Empros has started their phase three preparatory study and done something quite unique. They have been very tough in their sort of clinical development, meaning they have set themselves high bars to reach compared to some of their competitors. And I think that's important in a small company because you want to get to a clear answer quickly. And what EMPROS is now doing is they're actually taking back some of the patients from the previous study that had side effects. And I want to remind everyone that the great majority of patients did not see these side effects, but EMPROS again is doing a tough thing. They're actually bringing back those patients that had side effects, meaning the patients that had the worst time on the previous clinical trial. And that's a feat in itself to attract those, to convince those patients, please come back, do the same thing again. This time we're going to remove your side effects. And that is the data that we hope to get later in the autumn. So EMPROS is also in an exciting phase. We will talk a little about Expray later. We'll also talk about some of the other companies in the following slides. But the commercial growth, I want to point out that Nanologica has had several orders, mostly from Asian customers, but also customers from other areas. We'll talk a little bit about SimCell. in the slides to come. And last but not least, Frontier. That's our collaboration with KKR. I'm sure many of you have heard of KKR. That's one of the biggest private equity houses in the world. And we're looking at several interesting opportunities where our partner, Mark Quick, and our chairman, Thomas Eldred, are involved in looking at interesting opportunities to invest. But let's first talk about Tolerantia. That's actually a financial innovation that I'm very proud of. The team has done a good job doing this in a very methodical way, but also a very innovative way. In May, Fleury and Tolerantia shareholders approved a merger plan between the two companies. and innovation in itself so if you look at the right hand side this is a share for share merger tolerancia shareholders receive one newly issued share for every 88 tolerancia shares and there are zero transaction fees here normally when you do an m a you will have to pay some cash you will have to pay banks and so on we've actually been able to do an innovative very effective way of taking tolerancia from the public market, so delisting Tolerancia in what I call a take private maneuver. And that take private maneuver is something that many people speak about, but few people actually do, because there are companies that really shouldn't be on the public markets because they're too small. They don't get onto the radar of the big public market investors. And that was the issue with Tolerancia. to be able to raise funding for their clinical trial. That's what they now will hopefully be able to do. We think they have a much better chance of doing so. So again, to the left-hand side, we value the company at 136 million. That was 50 cent premium on the pre-announcement trading price. We will have it all done by the 19th of august so that's when the shareholders of tolerancia will become fleary shareholders and then tolerancia will be a wholly owned fleary subsidiary and be able to raise money in a private manner and we know that there are investors who are interested in tolerancia but who did not were not able to invest in tolerancia as a public or uh yeah public entity it's very exciting also to announce and this is written in our quarterly report released this morning, of course, is that current and new investors were able to essentially invest in Fleary and will become Fleary investors on the 19th of August. And we were able to sell both during the quarter and shortly after the quarter, a total of over 65 million Swedish crowns of our holdings in Tolerancia. So this has been a very effective, cost-effective way of raising money And we actually raised 65 million when our deployment into the portfolio was 58, or our deployment in total during the quarter was around 65. So overall, a neutral cash position for the quarter. Again, a testament to our ability to manage our cash in an innovative way. So let's look at the core of what we do. The significant R&D events during the quarter were Atrogi, Carr and Liepen, but there are many more. So just choosing three here to highlight. Atrogi's research was published in Cell. Cell and Nature are basically the two top ranking scientific journals in the world. Usually these are reserved and well, not reserved, but usually it's the top tier academics that that are able to publish in those journals. And here you have a company, a relatively small company in Sweden, that has something so innovative that they were able to publish in that journal. And that is, of course, their muscle targeted therapy platform for treating metabolic diseases. So it's an exciting time for Atrogi. It's a new mechanism of action, and that's why it's gaining so much attention. So keep your eyes peeled for Atrogi. CAR is our company in the Middle East and in Israel to be particular. And they have announced positive phase two results for DSP107. That's the name for their colorectal cancer therapy. And they presented at the prestigious ASCO conference. Again, a conference where you rarely get presentation abilities unless you are really cutting edge. And last but not least on the slide, Lepum completed a phase one trial. This is a Swedish company, a listed Swedish company in rheumatoid arthritis. They're actually also continuing their mechanism action studies with the Karolinska Institute. For those of you who are dialing in internationally, I'm sure you've heard of the Karolinska Institute. So, Lipum is a not so well-known publicly listed company in Sweden doing very exciting research and now standing in front of basically a phase two development program.

Now let's go into financing events, two that I want to highlight.

SimCell raised 80 million crowns. We invested 18 out of those 80. This is an example of how our syndication, our networking abilities actually really pay off. So I remind everyone that we have managed well to support our companies, not only with our own cash, but also by us working within our network to attract both money from internals in the case of SimCell, but also in many companies, we have attracted new investors. And that was the case with Northix Biologics. In fact, there we attracted the New York-based Signet Healthcare Partners. They're active within Pharma Services. And not only did we not invest more cash or new cash ourselves, but actually this was an up round in a very tough fundraising climate, as you know. So a testament to the team at NorthX Biologics and to the board members who are working from Fleury's side on NorthX. So staying with NorthX, it's one of the three that has had the most change in value. So NorthX in an ascending order here, 13 million, mendes 19 million and x-pray a whopping 134 million up during the quarter uh back to north x this is now a fair value of 202 million that's 6.5 percent of our fair value or portfolio value and mendes is 92 million fair value three percent of our of our fair value in total and x-pray is now one of us it's actually the second largest company in our portfolio now with 326 and a share of fair value of 10.5 percent so now i'll leave it to cecilia to go into some more details on the numbers please cecilia yes thank you ted