Year-end report 2023 – February 23, 2024

Dear Shareholders,

Leaving a disappointing year behind, we move forward with continued determination to deliver on the promise of resomelagon and resolution therapy. Despite all the therapies available to treat rheumatoid arthritis, many patients still have ongoing disease activity and require additional efficacy. A once daily oral and well tolerated therapy like resomelagon that works by a non-immunosuppressive mode of action – inflammation resolution – could positively impact the lives of many patients dealing with the challenges of rheumatoid arthritis and other inflammatory diseases.

While the EXPAND and RESOLVE outcomes did not meet our expectations, we now know how to identify patients more likely to respond to resomelagon and better understand how to design trials to give resomelagon every chance to demonstrate maximal patient benefit. In EXPAND, while there was no benefit seen at 3 months in the overall patient population, we saw a 71% ACR20 response rate with resomelagon treatment versus 54% for placebo in patients who had elevated levels of an inflammation marker called C-reactive protein (CRP). When further analyzed, we saw that the response further improved in patients who entered the study within 6 months after receiving their diagnosis of RA where we saw an 82% ACR20 rate versus 52% in placebo. Another important lesson from both EXPAND and RESOLVE is the need to treat for at least 3 months, a painful but important learning.

And while our belief in the potential of resomelagon remains undeterred, so does our belief in our develop to partner strategy. While momentum to partnering has obviously waned given the disappointing results, we need to stay focused on their feedback on their desire to see resomelagon activity in a commercially relevant population. With limited resources this is why we have decided to put our focus on conducting a trial in patients who are experiencing moderate to severe disease activity after up to 6 months of initial treatment with methotrexate, which is a commercially relevant and attractive patient segment with significant unmet needs.

In parallel we seek to diversify our clinical risk with resomelagon by doing a study in virus-induced respiratory insufficiency caused by influenza similar to the COVID induced study conducted under the RESOVIR collaboration. While we will remain focused on resomelagon we will look to prepare TXP-11 to enter the clinic in 2025 and look for collaborative ways to advance additional peptides.

The R&D expenses in Q4 were much less than in the previous quarter as the final dosing in clinical studies was completed in Q3. Other expenses included a goodwill write-off of SEK 74.5m related to the TXP acquisition from January 2023. The goodwill was largely related to the increase in SynAct’s share price from signing to closing. You can say the remaining intangible asset of SEK 152.2m is more balanced as it better reflects the value at signing.

We have worked hard as a management team and board along with our expanded clinical key opinion leader advisors to fashion a capitally efficient plan to address partner data requests, diversify resomelagon risk and to advance the melanocortin peptides. We look forward to a more prosperous 2024 as we strive to deliver on the promise of resolution therapy. We are excited that Kirsten Harting who brings a broad wealth of clinical development experience has joined the team as our new CMO and will be instrumental in designing, executing, and managing our trials and development programs going forward.

Our belief in resomelagon and resolution therapy remains steadfast, but we need to be capitally efficient and maximize our resources to drive resomelagon partnering and build shareholder value. We will need further financing to be to follow our strategy and achieve our objectives and goals. The current situation is of course challenging, but we are greatly encouraged by the opinions and support from our key opinion leader advisors. This taken together with our belief in resomelagon is already being leveraged to help investors see the same potential we do.

We sincerely appreciate the investment and continued support of our shareholder who we know are committed with us to unlock the potential of resolution therapy. We have excellent opportunities before us, and we remain focused on delivering patient, company and shareholder value. Lastly, I would like to thank our Board of Directors. The board of Synact Pharma comprises expert knowledge and valuable experience in drug development and capital markets, as well as the building and governance of biotech and pharma companies. With perspectives from the US to the Nordics and with a diverse composition, I believe we have a superior platform to drive the company in the right direction going forward.

Torbjørn Bjerke | CEO