Year-end report 2021 – February 11, 2022

A strong 2021 and prospects for an even stronger 2022

In this reflection of 2021, I would like to start where I usually end; by thanking you, my fellow shareholders and investors, for your continued long-term support of SynAct Pharma. Together we made incredible progress during 2021, setting the stage for what could be a transformative 2022.

I want to begin with the major development milestone we reached during the fourth quarter with our leading candidate drug AP1189 as a novel potentially new treatment for patients suffering from Rheumatoid Arthritis (RA). We were pleased to report on November 30th that the Phase 2a trial (BEGIN) met its primary endpoint of decreasing disease activity. This is the second positive Phase 2a assessment, along with the study in COVID-induced respiratory distress (patients needing supplemental oxygen) study we read-out in 2021. While we are encouraged by the good response seen in the trial particularly in the higher dose group, we are pleased that the safety and tolerability of AP1189 appears to remain high. The emerging profile of AP1189 as a safe and efficacious once-daily oral medication is very exciting.

While the completion of the BEGIN study was the most important moment during 2021, there are other key events that will also be vital for the future development of AP1189.
We made significant progress in the development of an oral tablet that remains on track to be used in the next clinical trials replacing the current suspension formulation. The first dosing of the new AP1189 tablets occurred in a pharmacokinetics (PK) study in healthy volunteers and data showed that the PK profile of the new tablet is very comparable to that of the oral suspension. This implies that the new tablets can be used in future clinical trials increasing patient convenience.
SynAct also completed further toxicological assessment of AP1189 which supports 3-months dosing in humans. Using the newly developed tablet formulation allows us to design future studies with longer treatment periods, which is in line with current guidelines.

Earlier in the year as previously mentioned, we also had positive results from the COVID-19 study conducted with AP1189 in Brazil, the RESOVIR study. The results were the first positive proof of concept that AP1189 may be able to help patients recover respiratory function and be discharged from the hospital faster.
In November, we announced that the COVID-19 pandemic had impacted recruitment in Phase 2a development program using AP1189 in the Nephrotic Syndrome (NS). Given the progress made with the new oral tablet and the 3-month dosing duration that the new toxicology studies support, we announced that we decided to take the opportunity to strategically re-design that program to potentially incorporate these advancements.

On the business side, SynAct made large strides during the year. The company significantly strengthened the patent protection of and around AP1189. In June, the company filed patents related to the API and our new tablet formulation, and in August, the European Patent Office (EPO) granted a patent covering AP1189 for the treatment of kidney diseases. Furthermore, EPO issued an intention to grant our patent for AP1189 in arthritis diseases in November.

We also recruited very competent and strong leaders and colleagues, making SynAct today a much stronger and more capable organization than it was a year ago. We recently appointed Patrik Renblad to Chief Financial Officer. Patrik joined in August and has shown during these few months that he has the experience, leadership ability and dedication that will help drive SynAct to the next level.

In February, we completed a directed share issue which brought proceeds of 80 MSEK to the company. The conversion to International Financial Reporting Standards (IFRS) for our financial reporting occurred in January for the Annual Results of 2020. During the year, the Board of Directors has been expanded and strengthened with the appointment of Marina Bozilenko.
With that I would like to share SynAct’s priorities and objectives for 2022.

Strategic priorities for 2022.

The exciting data from the BEGIN study strongly supports further development of AP1189 as a candidate for the treatment of RA and other autoimmune and inflammatory diseases. Therefore, our number one strategic priority for 2022 is to plan for and initiate the Phase 2b program in RA with AP1189. We have prepared protocols for both first line treatment as well as treatment in patients that achieve inadequate response to traditional DMARD1 therapies (DMARD-IR) and will discuss the study designs, including dimension, dose selection and endpoints with regulatory authorities prior to filing for an IND in the US and parallel Clinical Trial Applications in Europe. We expect to have this process, including scientific advice meeting with FDA finalized during the first half of this year.

Since announcing the revision of our Nephrology study, we have communicated with our team of clinical investigators and together with them plan to make a major revision of the study, aimed not only to take advantage of the possibility to use our new tablet, dose for longer treatment periods, but broaden the patient population outside idiopathic membranous nephropathy (iMN) for which the study was originally designed. Proteinuria is major unsolved clinical problem, not only associated to iMN and other primary kidney diseases associated with Nephrology, but also found in systemic inflammatory disease as Lupus and secondary to large lifestyle diseases such as diabetes and hypertension. We therefore expect that the strategic redesign will give us the possibility to demonstrate effectiveness.

COVID-19 still is a pandemic that impacts the world and humanity. SynAct believes that AP1189 could potentially benefit patients suffering from respiratory insufficiency caused by this horrible virus. During the autumn of 2021, we therefore planned to setup a follow up study to our RESOVIR study dimensioned to show statistically significant treatment effects in a larger study in Phase 2b. The study was planned to be conducted in Europe, South Africa and Brazil and we discussed the study design as well as the potential possibility to reach early market assess on a scientific call with the Brazilian health Authorities. However, it has become clear to us that the patient population as we targeted in the RESOVIR-1 study where the average time for recovery in the placebo treated patients were more than 9 days for is not an average COVID patient referred to hospital today. The omicron variant has been as game changes in that respect, still larger fraction of hospitalized patients is discarded within a few days and a still smaller proportion of patients suffers from virus induced pneumonia with need for avid supplementary oxygen support. Consequently, to set up a study in the current patient population would require large samples sizes and a logistic setup that would be to challenging for SynAct Pharma in the current stage.

However, virus induced hyper-inflammation with pulmonary affection as present in COVID- 19 as well as in Influenza will be a continued focus area moving forward. We have initiated pharmacological studies in influenza to further build the understanding of and support for the role of melanocortin receptor agonists in treatment of this disease. These results are expected in 2H 2022 and we will incorporate these findings into our planning for our viral-induced respiratory insufficiency program which we will update on later this year.
Parallel to the development of AP1189 in and by SynAct Pharma, business development activities are continuing with a high level of activity and will remain an important part for us moving forward. Following the positive data from BEGIN, we have had good interactions with several potential partners during and after the virtual JP Morgan conference in January. These discussions will continue and SynAct is now in a favorable position thanks to the strong BEGIN data.

SynAct’s listing on Nasdaq Main Market is still very important for the company’s ability to attract investors and it remains a priority. The preparations for an application to list the share at Nasdaq Main Market, as announced in February 2021, has been ongoing for the entire year. We plan to submit the formal application to the Nasdaq in Q1 and obtain listing before the end of the first half of this year.

All of us at SynAct want to thank you again for your interest and support. I am not going to promise that the share price is going to triple in 2022, but together with the entire management team, I promise that we will do our utmost to deliver continued shareholder and future patient value.

Jeppe Øvlesen, CEO

1 Disease-modifying antirheumatic drugs, e.g., methotrexate.