Interim Report Q4 2022 – February 17, 2023

Strengthened pipeline from acquisition and progress on AP1189

With a busy 2022 behind us, it is important to take a moment and reflect on the accomplishments made and give thanks to our investors who trusted us and our ability to execute on the company strategy.

SynAct kept a fast pace during the year, working hard through the end of the fourth quarter. We advanced our pipeline with the lead compound AP1189, dramatically expanded our portfolio with the acquisition of TXP Pharma and bolstered the finances and shareholder base with a successful rights issue of SEK 150 million and the directed share issue of SEK 80 million. With our studies progressing and this broader portfolio, SynAct is in a fantastic position to drive shareholder value.

The company’s acquisition of TXP Pharma and SEK 80 million investment from Thomas von Koch and Christian Kinch were momentous, and their knowledge within the industry and extensive network will be important for the company, lifting our attractiveness towards potential business partners. Our leading position within therapies for resolution treatment through melanocortin biology is boosted by combining the pipeline and scientific capabilities of SynAct and TXP. We can now take on the full range of inflammatory and autoimmune diseases with two complementary platforms, highlighting SynAct’s strength in developing pharmaceuticals to treat these severe and debilitating diseases where there is a great unmet medical need. The development program in rheumatoid arthritis continues to be our main focus.

SynAct also advanced its efforts withing Rheumatoid Arthritis (RA) with the company’s lead compound AP1189. The company received clearance from the US Food and Drug Administration (FDA) of its Investigational New Drug (IND) application for a Phase 2a/b study in RA with AP1189. It marks the start of regulatory and clinical processes in the US and allows us to work together with well renowned key opinion leaders in the further development of AP1189 in the US and in the conduct of the RESOLVE study.

At the end of the fourth quarter, the first patient with inadequate response to disease-modifying antirheumatic drugs (DMARD-IR) was dosed in part A of the clinical Phase 2a/b study RESOLVE. This was a big step for SynAct, and we expect results in the second half of 2023 if the recruitment goes as planned. Including clinics in the US in the development program is key for our discussions with potential business partners.

It also opens up the US market, the world’s biggest and most important pharma market, where rheumatoid arthritis (RA) in itself has an estimated market value of approximately USD 20 billion annually.

In September, we enrolled our first patient in the Phase 2b EXPAND study in RA using our candidate drug AP1189. This first patient in Moldova was a nice milestone for the EXPAND study, and we will continue to enroll additional patients there and in Bulgaria.

The EXPAND study follows the successful results from the BEGIN study that showed AP1189 to be safe, well tolerated and induce a statistically significant reduction in disease. To bolster the position of AP1189 as a novel compound with a unique mode of action in resolution of inflammation, several exploratory endpoints are included in EXPAND, such as MRI-scanning of affected joints. Topline data is expected to be ready during the second half of 2023, assuming recruitment goes smoothly. EXPAND results will be pivotal in the ongoing interactions with potential partners and for the further development of AP1189.

SynAct also bolstered its board and management team during the year. Kerstin Hasselgren joined the board and adds a wealth of experience from the pharmaceutical industry. Patrik Renblad joined as CFO at the start of 2022 and was instrumental in our move to NASDAQ Stockholm and our capital raisings.

In the fourth quarter, our operating expenses were SEK 31 million, an increase of 16% over the same period last year. R&D investments were SEK 22 million or 7% higher than Q4 2021. Due to the acquisition of TXP Pharma, we incurred higher General and Administration costs than predicted, or SEK 9 million in the quarter, up 52% from the same period last year.

This year will also be crucial for the company. We will work hard to incorporate TXP and drive our portfolio. We are planning for a Capital Markets Day during the spring and will revert with a date in due course. SynAct is in a strong position with its broader pipeline and new shareholder base. The team at SynAct is grateful for all the support we receive from investors and other stakeholders.

Jeppe Øvlesen, CEO