Flerie AB (publ)

Good morning, welcome everyone to FLIRi's Q3 2025 report presentation. I hope everybody has had a good morning and have got your coffee. We are in for a good ride to talk about several of our companies today. First, a disclaimer, of course, please act accordingly. A little reminder, of course, I think FLIR is well known now. We have 27 portfolio companies, 71% in private companies. You can see the division, six in preclinical stage, six in early clinical, nine in clinical stage and six in commercial. So actually, quite a significant over half of our number of companies are in late clinical or commercial stage. So quite a mature portfolio and certainly diversified portfolio. we operate as an evergreen investor as you know we're long term and we have a very specialized team and we always invest with others around the globe today of course we're talking about the q3 and it's all about reaching milestones and gaining traction for our portfolio companies that's what we're driven by and we know as well as any investor should, but not all do, that financing and R&D progress really go hand in hand. It's not enough to just have fantastic development in your companies. You've got to be out there networking, meeting others, and also ensuring that your companies get financed. So let's talk a little bit about examples of that. But first, our current net asset value is just shy of 4 billion crowns. That's 50.58 SEC per share. And we have cash and cash equivalents, about 13% of that novel 511 million. The significant events and the value changes during the quarter are listed here. I'll go through it briefly. SimCell and XSpray are really something to highlight. They're both closed deals. Of course, after the quarter, X-Pray has had a setback. We will talk about that as well. I'm happy to answer questions. But during the quarter, a fantastic development for X-Pray. Completed merger with Tolerantia as well. So that's us ourselves, Fleury Fused with Tolerantia, one of our companies that was publicly listed, is now Bonsai Biotherapeutics, a private company. And we've done what a lot of people talk about, but very few people do, and I think it's quite an innovative tech private maneuver that Cecilia can talk a little bit about and answer questions on. Carl Merkel also secured 20 million dollars, this is one of several capital raises successfully closed, and we've also had our first implementation of share redemption scheme, that's our inlösenprogram in Swedish. After the quarter, Nanologic secured entry into China's insulin market. Quite excited about that commercial development in Nanologic in a space that is actually growing quite a lot with all the peptide drugs around obesity that are coming to market. X-spray pharma's FDA approval was delayed. Those were observations of its contract manufacturer. I was on the Doggins Industry TV this morning, and I explained a little bit about that. So if you haven't seen that, ask a question in the Q&A, and I'm happy to answer. Lipem has also decreased in value and CAR has decreased a little in value because we did a fundraise at a slight down round, but we did strengthen our position in CAR Medical. And CAR, how did it secure 20 million? Well, we got strong support from our co-investors Peregrine, Amoon and Cancer Focus Fund, as well as others like Auriella. But we also welcome a new investor into our strong syndicate, and that's Spring Global Investments. They have offices in New York and Singapore. Welcome, Spring, to this very good and strong syndicate that will help CAR Medical get through their very focused colorectal cancer clinical study. And we're quite excited. I mean, the data was published earlier this year from the previous study. It's looking very promising indeed. In a very unmet medical need, it's actually growing tremendously colorectal cancer Unfortunately, even early onset colorectal cancer is growing. So younger and younger people are getting it. This is a problem, of course, that we're trying to solve with CAR Medical. And how do we do that? Well, it's a patented solution to treat colorectal cancer, the so-called multifunctional immunotherapeutic platform, or MIRP for short. It works for both solid and hematological malignancies. For those of you not familiar with that term, essentially solid tumors or blood-borne cancer, that's what hematological malignancies are. And in the depiction at the bottom, you can see that you have cancer cells. And of course, the body has its own immune cells that need to find those cancer cells, recognize them as being malignant or diseased cells, because these are our own cells. The immune cells have to recognize that and remove them. And what MIRP does is essentially connect those two and help the body's immune system to remove cancer cells. So quite exciting patented solution that has very good patent coverage for quite some time. A little bit more then, we're catalyzing significant investments, as we did in CAR, but also here you can see XSpray and Aldo Therapeutics during the quarter. Fleury put in 23 million when XSpray actually secured a total of 161, and in Aldo we put in a little less than half of what Aldo secured. Obviously a small amount in Aldo, but it's a very early stage company as well. So in total, our syndicating partners invested 205 million alongside our 65. I think that's proof of our continued ability to get what our companies need without having to pay for all of it ourselves. Steady R&D progress is the key. As I said, they go hand in hand financing in R&D. SimCell entered into a strategic R&D collaboration with Johnson & Johnson. That's a giant on a global scale. And of course, they are advancing this rapid serility testing that SimCell is able to transform. I'm very excited about it. They're measuring the heat of cells and they measure them so precisely that actually be able to turns sterility testing from days into sort of 24 to 48 hours turnaround so it could be revolutionary for how we manufacture for example cell and gene therapies then turning to the right cinteala presented positive 24 months data in knee osteoarthritis i've spoken about this before but now we finally have proof there's not only ameliorating pain but actually some of the data that cinteala has is showing that they're improving uh bone and joint bone and cartilage structure so if this turns out to really be proven in a larger study that they now need to do then you know you'll be able to have a game changer because you're changing the joint actually improving joint function rather than just ameliorating pain and bottom left genius therapeutics

Just taking a bit of water.

Genius Therapeutics, their patients have aggressive brain and liver cancers and they've been treated for several years now. And because we've followed these individuals for five years, we can now say that there has been no recurrence of the tumour during five years. That's an amazing achievement. These are patients that normally would only live a few months. And Procarium finished dosing all of the cohorts in a non-muscle invasive bladder cancer. Bladder cancer comes in several different forms. First, it's not invading the muscle, then it invades the muscle, and eventually patients have to remove the bladder entirely. The standard of care is something called BCG, and we've actually shown improvement in a lot of valid models that were actually much better than BCG. Procarium has the potential to be a real game changer for bladder cancer, which is actually the seventh largest cancer in men. Now let's turn over to the numbers. Cecilia, tell us a bit more about the quarter.

Yes. Thank you, Ted. Right, so now I can go without an echo, hopefully. No. Sorry about that.

You try. So I will go through the financial development in the quarter. And this is a quarter, Ted already outlined a couple of comments on that. We had our first redemption related to the redemption scheme. And we also carried out a share issue in connection with the merger with Tolerancia. It was a quarter where we saw positive share price development for a few listed companies, but also decreased valuations for both listed and unlisted shares from financing rounds, and a couple of write-downs as well. Next slide, please. Before we look at the actual numbers, a few words on our valuation methodology. The listed companies, as we know, are valued at the latest share price. The private companies are valued in accordance with the latest funding round. There are cases, though, where we feel the need to adjust the value for a private company and deviate from the valuation in the latest round. These cases can be where we see a negative result from a clinical trial for a PD company, or where a CG company doesn't meet its sales targets, for instance, or report continued losses. And in Q3, we could see such cases, and therefore we have written down the values for Seneca and Cixera and Bose Biotech, which all in all decreased our NAV by 104 million. But we can go to the next slide and look at the numbers and the development in the quarter. So the net asset value, the NAV, was a little bit over 3.9 billion end of Q3 and 4.1 billion end of Q2. So it's a decrease by 203 million in the quarter. And the changes, the changes explained by firstly in Q3, we had the redemption of shares, the redemption scheme that reduced the NAV by 195 million. And also, as Ted mentioned earlier, We had the merger between Tolerancia and Fleury that closed. And as merger consideration to Tolerancia's shareholders, we issued new shares at a value of 131 million. And to that, we had a change in fair value of the portfolio of minus 124 in the quarter. 124 million, I should say. So I will come back and explain further details later. NAV per share was 50.58 as compared to 52.78 end of last quarter. So it's decreased by 2.2 sec per share. And as you can see in relation to portfolio fair value in the chart to the far right, we had a portfolio value end of Q3 that was almost equivalent to that of Q2. only a small decrease by 8 million. And this is the reason for the changes. We had a negative change in fair value, as I mentioned earlier, of 124 million. We made divestments primarily related to Tolerancia shares prior to the merger. But in total, the divestments decreased the portfolio fair value by 91 million. And we made investments in the quarter of an additional 206 million. And this also includes the 131 million of newly issued shares from the merger of Tolerancia and Fleury. If we go to the next slide, please, we can dig into the segments more in detail. So we have here the key financials or key numbers for the three segments, product development, commercial growth and limited partnerships. The PD segment had a total portfolio value at the end of Q3 of 2.450 billion, as compared to 2.453 at the beginning of the quarter, so it's a decrease by only 3 million. The change in fair value in the quarter was negative, 107 million. And the changes, again, were explained by the write-downs of the value of the private companies, Sinerkheim, 59 million. And this was due to difficulties to secure the additional financing for upcoming clinical studies. And also Siksera, minus 29, due to unfavorable results from a clinical study. We also saw low valuations in connection with the funding grants for Car Medical and Alder. Together, 51 million negative. However, offset by a positive share price development for X-Pray that increased 91 million. In the quarter, we invested 195 million in the segment. And again, this includes the 131 million of issued shares from the merger of Tolerancia and Clarisse. No cash investment for that. And we divested shares at a value of 91 million. And of that, the tolerancia shares was around 82 million of that. Continuing to the commercial growth or CG segment, had a total value at the end of Q3 of 530 million to be compared to 545 beginning of the quarters. It's a decrease by 15 million. And the reason for the decrease is a fair value change related to the write-down of the value of the Boas Biotech shares following delays in sales growth and profitability. Limited partnerships had a fair value end of the quarter of 106 million, and we made investments in the quarter of 11 million into that segment.

That wraps up the financial section, and I hand over back to you, Ted.

okay thank you very much i hope everyone can hear me and let's move on to some conclusions obviously you can see from the slide uh what a diverse portfolio we have and we've shown it before we have a lot of companies and we've had the feedback from some of you shareholders and others that it's sometimes difficult to get an overview of everything that we're doing it's very exciting but we've got a lot of companies and today you've obviously seen um you've seen you know just a handful of companies or two handfuls of companies that we've talked about. And I just want to leave you with a few, basically five messages. If there's five things that you should remember from what we've talked about today, it is that Procarium finished dosing all cohorts of patients within non-muscular invasive bladder cancer. That may sound like, okay, that's business as usual, but it's actually quite difficult to run these clinical studies. And we have teams that are working really, really hard to do that. and some companies fail, and that's when we write them down. But Procarium is actually doing extremely well, has delivered on time, and has the potential to replace standard of care BCG in the future. Genius Therapeutics, with these aggressive brain and liver cancers that have been treated with personalized immunotherapy, so where the tumor is actually analyzed for any surface antigens and then personalized immunotherapy given back to that patient within a few weeks. And then the patient stays on that for several years and never has the tumor recur. That's an amazing achievement. Sintiola presenting their 24-months data for the stem cell product in knee osteoarthritis. Again, this is a stem cell company. This is truly innovative work that very few people in the world can do. And Sweden is actually in place. Sintiola is based down in Lund. Sweden's a place that has been a pioneer in stem cell development for many, many decades. So remember that we're doing really fantastic, innovative stuff. And SimCell on the commercial side, we have a team here at FLIRI that's helping them. But of course, SimCell's team itself has done all the hard work for years, talking to various partners and keeping those interactions alive. And now there's proof that, for example, a big player like Johnson & Johnson wants to collaborate with SimCell. So this is really a test for the commercial capability of SimCell. And last but not least, In difficult financing times, our companies are able to gain financing, and Car Medical managed to raise $20 million, secure $20 million. I think that wraps it up for today, and we're very happy to answer any questions on any of the other companies, any of these, or indeed all of our portfolio.

Thank you very much, and look forward to Q&A.

Yes, hello and welcome to today's Q&A session. My name is Paula and I will be your moderator. If you have any questions, then please click on the raise your hand icon on the toolbar. I will then activate your microphone when it's your turn to speak. Thank you very much. And let's see, we have our first question from Elinus Sigurdsson.

Okay, thank you. Perfect. Apologies if these questions have been addressed. I had some issues connecting to the call earlier, but I'm looking, for example, at how indices have moved in this quarter. It seems the overall market is coming back to life in biotech. Is this something you're feeling incrementally in your discussions around potential fundraisers in your portfolio?

Thank you.

Yeah, it's almost a question I'd like to turn around to you. But of course, my opinion is that, yes, we are feeling a change. The winds are changing, certainly in the public markets. I would say that in the private markets, a lot of the VC companies that we have co-invested with have indeed struggled to raise their funds in the past, especially the smaller ones. I mean, generally, we analyze a lot of trends during the summer and as a team, the main conclusion we can make is that there's actually been more money spent in the sector, but into fewer companies. So, basically, there are very large rounds being done, rather than a lot of smaller rounds. And the effect that that has is that you've got to work even harder to syndicate, to get larger rounds done, and we're good at that. So, I think we're feeling that there is indeed light at the end of the tunnel when it comes to what you've just said.

Okay, that's helpful. Would you say that that implies that you could see your own portfolio becoming slightly more concentrated over, say, the coming one to two years?

Yeah, so I think that's always part of the model, actually. I think hopefully I've been clear about that in the past, that biotech is hard. Not all companies will succeed. So naturally, what any investor should do is to have a diverse portfolio, invest in a lot of different innovative companies, all of which you believe in when you make the investment. But then, of course, as time passes, some companies will have successful clinical trials. others will not and they fall away so naturally you will go through these cycles of concentrating the portfolio more and then expanding the portfolio again when you have an exit so i think that's just naturally what we do um we we really do um see that our portfolio has decreased already from 30 to 27 companies and and may decrease further and then it will expand again uh when we have an exit

Thanks, that makes a lot of sense. And then my final question, if you could just give some color on the write-downs that you carried out in the quarter, what were the main considerations going into those discussions?

Sure, I'll start with giving you the high-level view, and then Cecilia can jump in on any figures, but essentially, Synecine is a Dutch company that we've invested in the chronic pain space. We think it's a very necessary area to be in, but the truth is in this funding environment that has been, people do not generally want to invest in something that's not easily translatable from preclinical to clinical. So the nature of pain is that, you know, the way a mouse feels pain or the way even a monkey feels pain is very different from the way humans feel pain. So essentially, almost anything you do preclinically doesn't necessarily de-risk what happens clinically. And so a lot of partners are quite skeptical of moving ahead. And we just found that we couldn't on the whole of it move ahead anymore with Sinekind. And that was not just us, that was the syndicate of investors in that company. So that's why we had to write it down, we're conservative. It's not impossible that something could happen in Sinekind, but we've written it down as early as we made that decision. And that's actually a promise to our shareholders, that we will always follow this conservative valuation methodology. And on Sixera, it was, as Cecilia mentioned already, actually a clinical, failure i would say it was a confusing output from that clinical trial again we agreed with all of our investors um that that it was not not worth to uh to carry on um uh with the original plan so we've actually brought it down to zero but we are looking at opportunities uh to somehow make something out of that company nonetheless so it's not a complete write-off And in Buhus, it's definitely not a write-off. It's simply that it has not performed as well as we had hoped. So, it was already quite a low valuation. So, Cecilia, how much did we... What was the valuation?

Sorry about that.

So for Synerkind, the write-down in the quarter was 59 million, and for Six Sierra, it was 29, and then for Boris, it was an additional 17 million. And by that, we wrote down all the values to zero for these companies.

Okay, thank you very much.

and i think you have yes thank you for taking my question um i have two questions one related to your private company one to a listed company uh would you please give us some guidance on emperor's pharma and what is your next step given the very tough competitive competitive environment in the obesity space yeah uh certainly

Let's talk about Empros and then I think you had a second company you mentioned as well. I guess I'll answer Empros first. So we've been in Empros since 2014. We invested in that company before the obesity space became really hot. And that's why we've been able to make essentially get a phase three ready company. So in terms of competition, were quite far along there is indeed there are indeed a lot of other solutions out there but they're early stage um so obviously you've got the big ones you've got novo and lily who are selling because they're they've basically changed the diabetes drug into an obesity drug and it's an absolute blockbuster We see that as positive actually, so we don't see that part as competition, because precisely Amprose is in a space where it can essentially be a weight maintenance drug eventually. So we've positioned it as that. The company will actually have a readout relatively soon. I will not be able to make any statement about what that readout is at this point for obvious reasons, but we certainly think it's positioned itself well You're right, it is a difficult area to compete in, but if you have something that is different and fulfills a niche, there's certainly an opportunity and maybe even a great opportunity. I hope that answers your question.

Yes, and the side effects, do you think these are limited, although you don't have a readout now about it? compared to what you see in the competition, which I understand are quite some side effects. The people I know are at least using this, etc.

Yeah, so side effects with Osempic are obviously, you know, they're quite nasty to some people, a large proportion of people. So you're right, there are a lot of people who can't take it. Therefore, they could take EMPROS EMP16 drug because it's a very different mechanism of action. It's also combinable with the GLP-1 drugs. But if your question is around the side effects of EMP16 itself, again, I cannot make a statement about that right now, beyond saying that the study that they're currently conducting and will read out is precisely done to address those. So obviously, we're in for an interesting readout when the company actually publishes that.

The second question I have is related to Liipum. I know that you are trying to raise funding for the next study here. How do you look upon your position given that you're quite a dominant owner in Liipum? How do you foresee your future position given this significant round of capital raising?

Yeah, so I myself am not on the board, and nobody in the FLIR decision structure is on the board. We have a senior advisor, Collie Wansbach, who's on the board of Lepum. So everything I tell you is based on public information that we know ourselves from the public database, so to speak. Yeah, it's clear from their reports that they will run out of money at the end of the year. We are 56, almost 57 percent shareholder in Liipum. We didn't actually want to become such a large shareholder, but we believe so much in this company and what they're doing, and they've done it right well, that we've actually picked up the tab. uh on a few occasions when we felt that others should join i think as you'll see again this is public information obviously i i would never comment on our own share price but i can comment on leaping share price having come down by almost 30 percent so again we believe in this company we think it's actually a good opportunity to invest and we would encourage people to invest alongside us in the future of leapum because they have you know, really the next trial is something where they will be able to carry. They've already, you know, dosed eight actual rheumatoid arthritis patients and shown that the safety is good, that they can inhibit the BSSL mechanism, which is the target of their drug. So the next trial will actually be a really significant trial, and it will be a great pity if they cannot raise the money to achieve that. We will, of course, try to support that in every way we can.

Okay, thank you for taking my questions. Thank you, Eric. And hand over to Kat.

Thank you everyone. Appreciate you joining and look forward to the next one. Have a wonderful