Interim Report Q2 2022 – August 5, 2022

Continued progress in the development of AP1189

Boosted by the successful rights issue that was completed in the second quarter, SynAct continued to drive progress in its clinical development pipeline for AP1189 and deliver on the commitments on corporate activities.

Shareholders continued to show support for the company, helping us raise SEK 150 million that allows us to plan for and finance the continued clinical program with AP1189 in rheumatoid arthritis (RA), development of AP1189 for kidney disease, explore new research into new molecules and cover general administration costs. This financing was critical for us to reach our full potential. We remain confident and are grateful for the trust given us.

SynAct submitted its clinical trial application (CTA) to enable the start of the Phase 2b study EXPAND with drug AP1189 in patients with newly diagnosed RA in the very near future.

The purpose of the EXPAND study is to confirm the encouraging effects of AP1189 demonstrated in the previous BEGIN study showing very good safety and a clinically meaningful effect on both primary and secondary efficacy readouts already after four weeks treatment. A major aim is to identify the full treatment potential of the compound, i.e. how large a proportion of patients that respond to the compound and to generate safety data during prolonged treatment of 12 weeks. This truly could be a gamechanger for the management of RA, and we expect the study to be completed in the second half of 2023.

Before the end of the quarter, we announced that the Company was granted and received written response from the FDA on the request for a Type B pre-IND meeting on the planned development of AP1189 oral tablets for treatment of rheumatoid arthritis in patients with an inadequate response to methotrexate (DMARDIR). The FDA’s guidance is critical as it will help us align with the agency’s expectations but is also valuable for discussions with potential partners. The response enables us to continue our preparations for the clinical Phase 2a/b study (RESOLVE) which we, subject to approval of the investigational new drug (IND) application, expect to initiate in the second half of 2022, according to plan.

The development program in RA for AP1189 is our top priority, but we are confident that AP1189 has a potential as a safe and effective treatment in kidney diseases associated with proteinuria and NS. During the quarter we therefore re-assessed and re-designed our clinical Phase 2a study in idiopathic membranous nephropathy (iMN) patients, (SynAct-CS003). Through the new design, when duly approved, we believe that recruitment to the study can be accelerated and hope to obtain proof-of-concept in a third disease for AP1189 during 2023.

The company hit another major milestone during the quarter when Nasdaq Stockholm approved SynAct for listing on the Main Market, and subsequently trading started on July 12. Moving to Nasdaq Stockholm’s main list will help us take the company to the next level, giving us greater access to the Swedish and international capital markets as well as additional international and institutional investors. We listed on Spotlight Stock Market in 2016 and have had a fantastic journey for which I want to extend my sincere thanks and appreciation to our shareholders and to the Spotlight Group.

In the second quarter, our operating expenses were SEK 26.4 million, an increase by 69% from the same period last year. R&D investments were at SEK 14.3 million or +10% compared with the second quarter 2021. We expect slightly higher costs for our R&D activities starting from the third quarter driven by the two new studies in RA.

Driven mainly by the Nasdaq uplift, our G&A expenses grew by SEK 9.4 million to SEK 12.1 million in the quarter. I expect significantly lower costs as we are now on Nasdaq.

With the proceeds from the rights issue, our cash-on-hand improved significantly, and we ended the quarter with approximately SEK 96 million which gives us a runway of approximately 18 months, to the end of 2023.

It was an incredibly busy period for us, and we are happy to see the company is progressing as planned. The programs are on time and our business development activities continue on an ongoing basis. SynAct is in a strong financial position with a strong pipeline, and we are all grateful for the support and look forward to the second half of the year.

Jeppe Øvlesen, CEO