Nanexa AB (publ)

Welcome to this report interview and closing interview with the drug delivery company Nanexa. It's the fourth quarter. With us from the company we have CEO Göran Ando and CEO David Westberg. Today we will start with a presentation of Göran Ando's upcoming GLP-1 overview before we let in David to comment on the quarter. They are both here in the studio. You who are watching can ask questions via the live chat. Ladies and gentlemen, welcome. Thank you very much. It's nice to have you here again. How happy are you? I

am very happy with the conclusion of last year when we got the results from our Nexu 2 project. Very happy. Great.

Göran, you will give us an overview of the wonderful world of GLP-1.

I will try to give a brief glimpse of what has happened in the last few months. This is an area that moves very fast, as you know. Not everyone follows it very closely. What I am saying is my opinion and my interpretation of the whole thing. In that way I have to talk about it. There are only two companies that have approved the preparation. It's Nomenordisk and Eli Lilly. They have both prepared the preparation. They finished the year in 2024 with sales of between 20 and 30 billion dollars. This is a very similar class. They are very much in the market right now in the US. They have the freshest data. The rest of the world is bigger than Nomenordisk. But the big economic incentive right now is in the US. What has happened? Nomenordisk presented the first three results just before Christmas. They have prepared a combination preparation with a new product called Cagri Litinid. The product is called Cagri Sema. They have prepared a weight loss of 23%. Since the analysts had suggested 25% as the appropriate, Nomenordisk lost about 2000 billion dollars. The study showed that when the patients felt that they had reached a weight loss they wanted, they had to stop. The study shows that the majority of patients don't need more than 20% weight loss. The average of the patients is about 100 kg. They have lost about 20 kg. The average of the patients is about 100 kg. The average of the patients is about 100 kg. The average of the patients is about 100 kg. The average of the patients is about 100 kg. The average of the patients is about 100 kg. The average of the patients is about 100 kg. The study showed that the patients stopped voluntarily at about 20%. The study showed that the patients stopped voluntarily at about 20%. The study showed that the patients stopped voluntarily at about 20%. The study showed that the patients stopped voluntarily at about 20%. The study showed that the patients stopped voluntarily at about 20%. The study showed that the patients stopped voluntarily at about 20%. The study showed that the patients stopped voluntarily at about 20%. The study showed that the patients stopped voluntarily at about 20%. The study showed that the patients stopped voluntarily at about 20%. The study showed that the patients stopped voluntarily at about 20%. The study showed that the patients stopped voluntarily at about 20%. The study showed that the patients stopped voluntarily at about 20%. The area is very well monitored. It is an area where there will be sensitivity. I think it is obvious that it does not matter to me what the size of the area will be. It is obvious that it is a very effective product class that will take over all the weight reduction side. We also often forget that this is a standard treatment for old people with type 2 diabetes. It is not a small part of the sales. What happens besides this? NovoNorisk was approved in the US an indication that the risk of heart disease is reduced. It is not to be underestimated. It is a very important indication. A couple of very large studies have been shown, both for diabetics and for e-diabetics, that by lowering the weight in the way that these products do, you reduce the risk. It is mainly stroke and heart attack, but also other heart complications. It is a significant reduction. I think it will lead to an increase in the use of non-diabetic patients who need to lower their weight, but above all they have risk factors in the heart side. It is a new group of patients that will emerge. You have probably seen interesting studies, relatively small studies, which show that treatment with Osempic or VEGOVI not only reduces appetite, but also the addiction to alcohol for alcoholics and drugs for drug addicts. The mechanism is difficult to be completely clear about, at least for me, but the results from several studies show exactly the same thing. It is likely that this has a way forward. Both Lille and Nommonodisk developed this as a new indication. There you have additional growth. It is not a very large group, but it is interesting in many ways. Can it help with the existing problem? It would be fantastic. Then, of course, there will be competition on this. Lille and Nommonodisk have been sailing alone on this for a good time. There will be a large number of small companies that will come in and develop their drugs, which will always be an exception where the majority will probably never come to the market. Some will come to the market. There are also some large companies that work with this. Pfizer has had some setbacks, so I will count them off right now, but they will probably come back. Amgen is what is moving right now for me. They have a product called Maritide that shows good results, not fantastic results, but good results, solid results and clearly a viable competitor in that way. One of the competition factors that I think is important, and that we see here, is the attention to this product, is that it is dosed once a month. That is an interesting game for me, because it is something that we work with a lot. Therefore, I think that the environment that exists here on the development side will help us to focus on what we do. I can just reflect on what David said at the beginning. We from the board are also happy with how we have progressed during the fourth quarter. We had hoped that this would happen, and it does not always happen as we hoped in our industry. Therefore, we are all happy right now. David, any comments?

I think that Amgen is interesting. As I have said several times after this conference I was at in Boston, the pod conference, where both Lille and Novo were talking about less frequent dosing, how important it is, how many people point it as a way forward. Convenience and adherence to treatment are factors that are at least as important as the big studies when they show 20-23%. In real life, adherence to treatment is extremely important to achieve these results.

Thank you very much, my dear guests. It was a very interesting exposure to the GLP1 area. David, we will start with the financial side before we move on with your studies. You are reducing the turnover, but you are improving the movement result. Could you tell us why the numbers look like they do for the quarter?

Absolutely. We have had a focus on cost reduction during the last half year last year. That has had an effect on both personal costs and direct costs. We have reduced that. It will be a full year's effect on that over the next year. As for the income, we have focused on our NEX 22 project and the Novo Nordisk Uthvaldering in 2024. We have selected a number of highly prioritized cooperation projects. That has led to a slightly lower income, but we consider it so important to do this focus. We are reaching the results we achieved with NEX 22 in the end of last year. We will continue to achieve these results this year. I will not go into that until you ask those questions. But the economy is in accordance with the plan and I am very happy with it.

We will now let in the analyst Johan Widmark. I have one question from the viewer. The periodization of the income from Novo Nordisk shows a lower turnover. Has the exclusivity been extended? Has NEX 22 received any compensation for that? Is the periodization of the income in the periodization?

There is no difference. The agreement is as it should be. We made a slightly different assessment earlier on when we would be done. But we will be done with this evaluation or Novo will be done with this evaluation during the time that has been agreed. So we just made a small adjustment. The question is whether a potential license agreement is within the agreement. So it does not do that. Thank

you. We will now let in Johan Widmark from Emergers who will ask some questions. Here you go Johan.

Hi David and Göran. My first question is that you have taken up phase 1 with the dosage escalation. Can you tell us about the background to this and how it affects the timeline that you indicated earlier for 2025?

At the beginning of the timeline it did not affect the timeline at all. We continue in parallel with the formulation optimization that we have said we should do. We do that and then we prepare to start the next study during this year, sometime towards the end of the year. So there is no impact on the timeline. That we started this or that we took and added a dosage group with higher dosage had to do with that we actually ... When we looked at the results from these dosage groups that we ran the first three, we saw that it was such a good result and no side effects at all. We were a little careful when we did this first study because it could have been much better if we got a lot of side effects. But since we see that we do not have that, we chose to go up one more dose. And that is what we have the opportunity to do here now for practical reasons. I believe that it will add security to the project and more data that can be valuable. But it does not affect whether timeline or discussions with partners. On the contrary, discussions with partners will support these data.

I understand. Thank you. I wondered, earlier you said that the main scenario for financing was to find a regional license partner in China, Asia, something like that. Now you have secured some financing here with the unit emission. But can you tell us how the licensing work continues? Is there an unremarkable force against Asia or have you changed the plan? Or what do you think?

That's a great question. Thank you for asking that question. Absolutely. Our initial focus was to think that, okay, let's make a local deal in Asia, China or Japan or India, perhaps. What we see now when we got these results and look forward to is that ... We look at it, but we focus more on a global deal, but with a code development deal where a company has the opportunity to buy in for a signing fee, cost phase next study and then have an option to license for a phase three study. That is our thoughts now. This will show when we continue to discuss with these companies that we are in contact with and perhaps other companies that we are in contact with. But the licensing effort is the same or maybe increased. I don't know if you have an answer to your question.

Absolutely. I interpret it as a reduced focus on a regional deal. Yes, absolutely.

I think one of the reasons is that we are doubtful that we can get enough early capital on such a deal. Is there someone who suddenly appears in China or something like that who is insanely interested and has a big point of interest? So it is clear that we do not say no to them and throw them out. But right now, in the form of trying to find, because now we have to have a partner, we believe that a global focus on development gives us a better opportunity.

Yes, but we look at it broadly. I understand.

I had two questions about the market. As you described, this is a big pie and many want to be part of it. I first think of the licensing agreement as the Ascendis-knot with Novo, which is a fairly close competitor. Have you received any new indications of how it has continued and their thoughts and reflections on the relationship with Ascendis and ER?

Novo does not discuss Ascendis with us, but they discuss our project with us. We had a meeting with them about a week ago, the last meeting. I only comment on our project and it is the full focus forward in the evaluation they do with us. I do not know if you want to comment, but we reason in terms of making parallel evaluations.

For me it is not crystal clear that you only choose one technology. As I said, the turnover today is 25 billion dollars, increasing by 30% roughly per year, you can count for yourself. Semaglutide is the patent of 32 in the first countries. Before that, you would like to do a few things to protect your franchise, which will then be 75 billion dollars. Who knows, it will be very large in any case. So that you only go with one new technology is unlikely for me, but it is those who do not decide.

I understand. And then a little on the same topic, but I know that Novo Ventures has invested in another similar company that deals with NASA administration of GLP1. Or you can assume for GLP1. What do you think about the possibility of administering GLP1 NASA?

I do not believe in that, but that is my own opinion. This is a chronic administration. This will not be around for a while. And to find out when the slime is in the process of being removed is not a good idea. It works, there is no doubt that it will be removed that way. But the absorption will be dependent on the slime being well, that it is not irritated, that it is not chilled. And that you do not have anything else in the nose that surrounds it. So you have an built-in insecurity on that side. For the record, it may not be very much if it suddenly swells up for a while. Because diabetes is life-threatening. It does not work.

I understand. Thank you very much.

Thank you Johan Vidmark, Emergers. I will raise another question here. To Göran, how do you see the administration on the fact that it has not yet managed to reach an increased development slash license agreement, despite the fact that it has been an ambition for several years. What is missing to reach the goal?

That is a good question. And for a stubborn jerk like me, I stand with balls in my ass, including the administration I am in. I have a question about the meeting we had yesterday. Where we look at, can we optimize in some way? There is no doubt that we have so much data now, and we have got it in the last three or four months. So we are in a completely different position to attract potential co-workers. But if you ask if it is a disappointment, yes, of course it is a disappointment that we have not reached that goal. It is absolutely the first thing to admit. We will put more resources in our very limited budget, instead of going to Tokyo on the cost side. On the whole business development side now, with David focusing more and more on his time. We will also take in external resources to help us on this side during this year. That is what we are completely ready for.

Thank you, Göran. Another question, how do you judge that Pharma Shell is from a production cost perspective, compared to for example Transcon or other well-known technologies? What are the production advantages you see with Pharma Shell from a commercial point of view?

That is a good question too. One of the advantages of Pharma Shell is the production technology. If you compare it with many other technologies for drug delivery systems, it is about that it is a solution, it is liquids, it is polymers and it is other things that are unstable. We build the whole production on a gas phase technology in a dry environment. We do not have cleaning steps that are usually cost-effective. We have no other, but there are two unit operations, one is to build the scale and the other is to deagglomerate particles, so we keep them as primary particles. Even though Pharma Shell is not well known in the drug industry, it is well known in other industries, so there is a scale-up technology. I think that this will be a very advantageous cost of goods for this production. There are

a few other things, but one thing that is important in this industry is that this is a finished product that can be injected with very thin needles. When you are doing this, you are a diabetic, you know that it is important. If you give yourself one injection, it does not make much, but a thick needle makes a lot more pain than a thin needle. If you are going to do that with a regular average of a few years, then it is very important. I think that we have a clear advantage. Yes,

we have a clear advantage. If you look at the cost, what we are looking at is an opportunity to produce this with so-called terminal sterilization and intra-septic. This can be very much saved in production costs. When we also see that we have indications that this can have a storage room temperature and transport room temperature instead of refrigeration, then it takes away x number of percent in logistics costs. So yes, we see great advantages and I think that Novo and other companies do too.

Another question, do you think that you can get more paid for a evaluation today after this positive phase 1 result for Nexio 2 than earlier? Absolutely, that is the question. A rumbling job.

Yes, and a lot more. I think we have to do that and focus on that. If that makes that some small potential collaborations do not happen, then it must be like that. We have to focus on larger collaborations that give us the income we need.

Yes, and I can say that is exactly how we have put it. When we talk about that we are putting focus on business development, so that is one of the things we have done. Thank

you. You write in the report that the focus is now on a license deal, parallel to the next phase with a higher dose, where you count on reaching a full clinical dose, which makes it possible to distribute this simplified registration fee to the FDA in the US. How is that formulated to open that path?

In the study that we will start towards the end of this year, which we call phase 1b, there will be a direct comparison with Victosa, and then you measure pharmacogenetics. Then you have primarily one parameter that will be important there, and that is area under curve, AUC, which is usually shortened. Then we will compare our formulation in the right clinical dose with Victosa, 28 injections of Victosa. What we need is a so-called similarity. It must not be a ratio higher or a ratio lower, but it should be about the same. That study in itself is a summary study back to Victosa's original NDA, their documentation. What we need to do beyond that, to fulfill the requirements from the FDA, is to do one limited phase 3 study with maybe 300-400 patients, and then the whole clinical program is over. But if you go back to the question of the next study, that is exactly the comparison we will do there.

Thank you. How will you be able to communicate about phase 1b study, and when will the first patient be dose?

We calculate in the plan we have put that the first patient will be dose in the year. We have to be a little careful, but it depends on a little different activities, but that is our absolute focus to get it going this year. Then we really start to trigger time to market, or it is already now, so we will put a lot of resources on that.

You have now proven a month's deposit, and also clinical positive results for a three month deposit. What does this mean in the form of opportunities for you?

It's a bit funny actually. If you think about it, take Noah or Lille, or any of the companies as an example, and then think about line extension and lifecycle management. What you want to do is to create a product that differs from the other products on the market, and that is better for the patient. Then one step is to go to a one month product, and we will judge that it is a very strong product, an incredibly strong product. But when the market has moved there, having a quarterly dosing can in many cases, and maybe especially for the obesity market, be incredibly powerful. That's how we see it. Absolutely.

For me, these long-term preparations are also attractive, and not only that it is comfortable for the patient and easy, and it reduces costs. Instead of 28 injections, or whatever it is now, for how many injections, you give one or two. It should also give less side effects and possibly better effect, because you have a complete what is called zero order genetics, so that it is completely stable in the body. The side effects often come when you get pikes like this, and especially on these products, it is very related to the tops in the blood. Effect, not fully so, but it should be, at least not worse, and with a little luck you can also show better effects. So there are quite attractive potentials here to look at.

There are some shareholders who are expressing that their patience is starting to run out. How do you handle your patience? We work on it.

I think both Göran and I have expressed that. We are a little frustrated that we do not have a contract, which is of a dignity that we want. We really think that we are in that position now, and I must say, especially after the phase 1 data on NEXO 2, because there we have shown something that is completely unique. We have a handful of companies that have heard of it after that, and we have some discussions with the companies we have worked with in previous years, who also see these data. We are frustrated about that, but it happens after phase 1. The more we work, the more we will get a contract, or two or three. I dare to promise.

You can confirm for me what you have already confirmed when we have more listeners, that you will communicate when this contract is in place, not before. Yes,

and we must have respect for that. It is very difficult to comment when you are in the middle of a negotiation. It just doesn't work.

Last question. You will visit BIO Asia in India in a few weeks. What do you hope to get out of that?

Considering the small shift we described earlier about the local deal, we have actually switched over so that we will instead be at BIO Europe. It was well-planned. We can ask

again, what is the purpose of

BIO Europe? The main purpose of BIO Europe is ENEX 22. We will launch it, we are just about to set up all meetings here and now. There will be continued meetings with a number of companies that we already have discussions with. I also hope that we will get a handful on the ground where we can initiate real discussions. We will also talk about Pharma Shell as such. There is a lot of use of Pharma Shell outside the GLP1 market. We have monoclonal antibodies, we have oligonucleotides, we have other peptides that are very interesting. I look forward to a few full-blown days in BIO Europe.

I think it is important that our shareholders understand that last year we had a fairly sensitive balance with saving money to extend the cash we had as far as it went. We did not have enough money to do our work and to drive our projects forward. We did exactly as David said, we very strongly limited what we did. That included not being present at a number of conferences. We did not do certain studies, especially preclinical studies, that were good to do, but we decided that it was more important to save money. It has made it possible to blame ourselves for not being as far ahead as we wanted. But we chose that balance. Now we are pulling up the business development side and the focus is very strong. We think we have enough exciting data now. Data is not only about the X-U2, but it is very easy to translate to other products.

Thank you, that was a positive ending to this broadcast. Thank you very much for coming and sharing with us. Thank you. Thank you to all of you who have watched and welcome back in about three months when we talk about the first quarter of 2024.