Nanologica AB (publ)

Hi, Andreas Bagan is my name. I am the CEO and one of the largest owners of Inonologica. I thought I would give a presentation today on why we are releasing our report for the third quarter. I will try to connect the report with our vision, Better and Cheaper Medicine through Porosilica. That is, we believe that we must have essentially better, and not just a little better, treatment for those who do not have treatment, and that we simultaneously or complementarily need to reduce the costs of the healthcare system. A little bit about the highlights for Q3. First of all, I would say large-scale production, full focus on that to get products out of our chromatography products. But within innovation, you can say, there we have two new employees. We have Gary Pitcairn, who is the CSO, Chief Scientific Officer, and Ulf Eriksson, who is responsible for commercial VP, Drug Development. Together with them, we have looked at our strategy and focused it on generating a lot of data. I will tell you a little bit about the clearance studies we have done and the results around them. A little bit about the figures first. Approximately 2 million in sales in line with the previous year, somewhat better. The same period of the previous year, but significantly lower than what we had in the previous quarter. And this is due to the fact that we now have several healthcare projects that we phase out and begin to generate our own data internally, that is, we focus on our own development now, while we have not yet started large-scale sales and chromatography. Minus 12 million to minus 6 million in the previous year, a significantly higher loss, which is due to the fact that we both have a higher development pace in product development and that we now produce at full speed in large facilities. And it's a little higher, but in line with the previous quarter. Almost 29 million in the cash. A little bit about our product. When you hold our product in your hand, it is like a fine white powder, like sandstone. When you look in the microscope, you can see that the sandstones are as big. And when you look at other microscopes, you see that holes are made through them, or pores, as we say. And to be able to control both the size of the particles, the distribution of it, surface properties and even porosity, that's what makes it possible to create completely unique products, so that we can give better and cheaper treatment to patients who have no treatment. A little bit about chromatography. It is a cleaning technique that is mainly used for diabetes drugs. Even other drugs use this type of cleaning technique. But it is mainly insulin and insulin analogues that are the big products here. And if you look at that market, then you can say that you see that we have a decline in India and China here. And that is no coincidence, because that is where the large number of diabetics will grow. And unfortunately, one might say, then that development is very stable over time. Both if you look back at the time and the forecasts that exist. It is not really a doubling of the number of diabetics, but a very large number of diabetics that will increase and they will need insulin. And if you look at our segment, there are three companies that we all know, which is to the left or west. It's Lille in the USA, Sanofi in Germany, Frankrike and Novo Nordisk in Denmark. And they stand for 95% of the world's diabetes production today. But if you look at where the growth is, then especially where the growth in the number of doses is. So Biocon is very, very large, they deliver to the United States, and CARTorrent is medium-sized, but all of these were much smaller just five years ago. While Granelig, especially, and Dongbao have become large in recent years in China. So I think that you will see, in the number of doses, we will see a very strong shift eastward. So they will get a much higher output and that is what drives our market. A little bit about production. I had it on my highlights list. What happened then? This is a picture of our large production facility. We started the project in 2019 and we are very proud that it is now coming to a point where we can start producing. Vi har redan producerat sex batcher som är validerade och klara. Vi har testat det hos kunder. Det ser väldigt bra ut. Nu väntar vi på storskalig produktion. Vi håller på med de två sista stegen för att få ut material. Vi håller på att producera. Det är en ganska lång produktionsprocess, men vi håller på att producera de två sista stegen just nu. Så vi har en produkt att sälja i slutet av det här året, i början nästan. När vi nu har en storskalig produktion, hur ska vi få kunder på det? a pretty clear value proposition. Why should customers buy our products? Yes, it's because they last longer and they clean better. And that can have a big impact on their production costs. Then we have an application team is very, very important because when customers have problems, then it is necessary to be able to help them, either with us or with them. And an example of that, we had a American customer here now, one of our application designers was with us. And they had problems both in our step, i.e. the cleaning step, but they also had problems in the step before. And our application technicians could help them with that because they have been doing it for a very long time. But just being able to help them in another step, it creates a kind of loyalty, and that's where we want to be, which may make it harder for competitors to break. Then, in addition to being technically skilled and having a good product, we want to have a sales organization that is very good and that can cover the four major markets. In China, we have a very good partner. We also have a Chinese show that is with us that covers the market. I cover India together with a good partner. We have a very good person in the USA. But then we need someone to keep this together, and we also need someone in Europe. So we will fill in the sales organization, one after the other, so that we can get a real organization. But I would say that perhaps the most important thing is that we have already worked with these customers. We have brought forward a number of customers who already exist and who are waiting for our products. And now we end up in a situation where it is a matter of timing, that we get materials and then we want them to buy them at once. But I would say that the underlying driving force, the indication to get from the market, is very, very good when it comes to getting out materials that we can sell. And the focus for us now is to bring out large-scale production in the green window here, or the green blob. And that we then build up with a customer portfolio and that we have a sales organization that can start delivering on this. Medicinal development, it's about working with difficult lung diseases and that our technology can do something that current technology cannot. As you know, or as many of us know, these are our particles. It is a sphere that is micrometer-sized. And then, as I showed in the pictures before, you fill it with medication, you fill the holes with medication, the pores with medication, and then it is released into place. And then we have worked with a number of tablet medicines, for example, where we are essentially better, but we are also much more expensive. But in inhalation, there are quite big problems, there are many holes there, there is a lot you can't do that we can solve, and there we seem to be unique. And it feels fantastic that you should be able to help there. And one such example is that we cannot control the particle size, and it is very difficult for other inhalation techniques to do this, for a few different reasons. But it's like this, if you have a 5-micrometer particle, it reaches the central part of the lungs, and a 2-micrometer particle, it comes more peripheral to the lungs. But when we make 5 micrometer particles, they are all the same size. They are somewhere between 4.5 and 5.5, while the competitors have a much, much larger spread, which also means that the drug is spread in a completely different way. And it is perhaps even more important when it is smaller particles. If you have a 2 micrometer particle, then you have between 1.7 and 2.3. And then a much larger number of drugs end up in the right place in the lungs than with conventional technology, you might say. How is medication delivered today? Yes, if you look at an American movie that we made here last night, it was an asthmatic, he had this on the left, a small gas container with medication that you press on, the medication is aerosolized, it becomes a spray, and at the same time you breathe in. There is no development today, it is an old technique, but where all development occurs is on the dry powder inhalators. A slightly different principle, the medication is not a solution, but it is dry powder. It is through its own pull that you release the medication and then you get a powder in you and it goes down in the lungs. This one has quite a few problems, and the right one here, which is an apparatus, a nebulizer, you don't really want to use it, because it's much more complicated, there will be big problems with it, and the principle is that you sit and breathe like this. For maybe five minutes. They are not particularly effective, but the reason they exist is because they cannot be formulated in any other way. And we see that in the next picture, and there we also see why there is such a great interest for our platform, nLab Spiral. This is just a schematic picture of what the different techniques can and cannot do. And if we look to the left, we see that we are very good at these small molecules as well, but if you look at asthma and COOL, where there are several really sufficiently good drugs, And then we would be a little better and much more expensive, so we will not be there. It is also an incremental improvement that would happen there. But when it comes to inhaled biomolecules, it is almost impossible today. And we have previously shown that we can both load and release biomolecules. And now we want to show it in an inhalation setting. And as you can see, there are quite a few possibilities there, that is, not much that works. There are a few products in nebulization. Difficult drugs, which is a huge problem with a drug, cannot be formulated for the lungs, but if you need to give a drug that is difficult, then you can give it intravenously or as a tablet. The problem with lung diseases is often that you want to have a drug for the lungs, but if you give it as a tablet, you get the same concentration in the lungs as you get in the large intestine, as you get in the liver. It often causes side effects that you do not want to have, and then when the side effects become too severe, there is no alternative. Sometimes there is an alternative with nebulization, but not on severe drugs. When it comes to getting the right place in the lungs, the most advanced nebulizers can do that, but most nebulizers cannot. While we have a very large control over our particles and that means that we can get to the right place in the universe. So even if it is early, there is a great interest in our products. I started by saying that we are very focused on generating our own data now. And that becomes more and more important as we now also want to be able to produce our own products. And I talked about this with the Clearance study, and I think it's a pretty good example, where we started with a small study, and it was, when Gary came in, it was also that we wanted to do a method validation, that is, silica, we want to measure how long it takes before the silica disappears from the lungs. What happens is that you can say that it melts and then it becomes a chisel acid, and in the body we have a lot of chisel acid, and then you pee out of it. But we want to know how long it is left in the lungs. And then it is important that you can measure it. And that was the purpose of the two Clearance studies we did. How do we get a robust model to measure? And it was just as expected and that it was not really as easy as we had first thought. But with a little method development, we have now solved it. So it means that we can move on with a little larger studies, both commercially and for regulatory use. But I think now it is a strong focus on generating your own data. And we will also see that when I start publishing data, even if it's not there yet. To summarize, the highlights for Q3. Large-scale production, we are almost there. We are waiting to get out material at the end of the year, beginning of next year, and then we can start selling. Very, very exciting time, I have to say. Then, during the inhalation, we have now got two new employees. We are working together on a strategy, or a focused strategy, I should say, and we have carried out a clearing study with emphasis on method development and that we will now generate quite a lot of data in the future that we will also publish within this area. So, thank you very much for listening and we'll see you again soon.