On March 31, 2023 iBio, Inc. (NYSEA:IBIO) ("iBio" or the "Company"), an AI-driven innovator of precision antibody immunotherapies, reported the progression of its anti-CCR8 antibody immuno-oncology program into preclinical in vivo testing (Press release, iBioPharma, MAR 31, 2023, View Source [SID1234629660]). CCR8, a member of the G protein-coupled receptor ("GPCR") family, is expressed by T-regulatory cells ("Tregs") that play a crucial role in inducing immunosuppression across various cancer types.

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GPCRs are one of the most successful therapeutic target classes, with approximately one-third of all approved drugs targeting these proteins.1 Compared to small molecule-based GPCR drugs, antibody-based GPCR therapeutics potentially offer several potential advantages, including superior selectivity, extended mechanisms of action, and longer half-life. However, GPCRs are intricate, multi-membrane spanning receptors, making clinically relevant regions difficult to identify and target.

iBio employed its patented AI epitope steering platform in the discovery of anti-CCR8 molecules to overcome certain challenges associated with developing antibody-based GPCR-targeting therapeutics. iBio’s anti-CCR8 antibody is designed to selectively deplete Tregs, thereby allowing the immune system to effectively destroy cancer cells, without binding to CCR8’s closest neighbor, CCR4, significantly reducing the potential for adverse effects and safety issues associated with non-selective CCR8 antibodies.

Expressing his enthusiasm for the Company’s latest pipeline advancement, Martin Brenner, DVM, Ph.D., iBio’s Interim Chief Executive Officer and Chief Scientific Officer, commented, "Selective targeting of CCR8 shows our patented AI technology can successfully be applied to one of the most important drug target classes, and potentially allows us to pursue a range of other high-value GPCR targets in the future. We are pleased to be able to now move our anti-CCR8 molecules into in vivo testing."

Dillon Phan, PhD, iBio’s VP and Head of Early Research & Development, added, "We are thrilled to expand our Treg depletion franchise through our new anti-CCR8 program, which complements our existing IBIO-101 program. IBIO-101 is an anti-CD25 antibody designed to selectively bind and deplete Tregs in the tumor microenvironment without compromising immunostimulatory interleukin 2, or IL2, signaling to other T cells, thereby generating strong anti-tumor responses. We look forward to F. Hoffmann-La Roche’s anticipated presentation of clinical data for its IL2-sparing anti-CD25 antibody, RG6292, at the 2023 American Association for Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting in April, which we believe may validate IBIO-101 as a potential ‘fast-follower.’"

On March 31, 2023 I-Mab (the "Company") (Nasdaq: IMAB), a clinical-stage biopharmaceutical company committed to the discovery, development, and commercialization of novel biologics, reported its financial results for the 12 months ended December 31, 2022, and provided key business updates (Press release, I-Mab Biopharma, MAR 31, 2023, View Source [SID1234629659]).

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In 2022, the Company faced a series of risks, including macroeconomic and geopolitical headwinds, which prompted the Company to re-position its overall business in response to these challenges, while focusing on re-prioritizing the pipeline development to deliver on key clinical milestones. These measures resulted in a streamlined workforce and laser-focused R&D activity on five key clinical assets, significantly reducing the cash burn rate in 2022 and beyond. Today, the risks imposed by the Holding Foreign Companies Accountable Act (the "HFCAA") and the COVID-19 pandemic are largely mitigated. Collectively, the Company is now in a strong position to continue to deliver the expected key catalysts and value through pipeline progress and global partnerships with a more prudent expenditure strategy to support its key business operations for the next three years.

More specifically, the Company made significant progress in its pipeline development by focusing on five key clinical assets: eftansomatropin alfa, felzartamab, lemzoparlimab, uliledlimab, and givastomig. The major achievements in 2022 included (1) positive Phase 2 data readout for lemzoparlimab and regulatory approval to initiate a Phase 3 clinical trial in China; (2) positive Phase 2 data readout for uliledlimab – a very encouraging clinical dataset for CD73 and PD-1 combination therapy in advanced non-small cell lung cancer (NSCLC) to date, which is enabled by CD73 expression as a predictive biomarker. The clinical development plan is being finalized to initiate a biomarker-guided pivotal trial in 2H 2023 in advanced NSCLC. In addition, the Company expects that the recent Phase 2 data could contribute to the ongoing discussions for a potential global partnership; (3) encouraging Phase 1 data for givastomig (TJ-CD4B), which will potentially enable the initiation of a Phase 2 trial in 2H 2023, and a potential global partnership, and (4) significant progress on eftansomatropin alfa and felzartamab, leading to Phase 3 data readout expected in 2H 2023 and potential BLA submission in China by the end of 2023 or early 2024 for eftansomatropin alfa, and at a later time for felzartamab.

"In 2022, while facing unprecedented challenges, we strived to achieve two overarching business goals. One is the re-positioning of our core business and the optimization of our organization and resources to reduce our cash burn rate and extend our cash runway. The other is the achievement of thirteen key milestones, including positive data readouts for lemzoparlimab, uliledlimab, and givastomig and significant progress made for two pre-BLA assets, felzartamab and eftansomatropin alfa, towards BLA submission," said Dr. Andrew Zhu, Acting CEO of I-Mab.

"Going into 2023, we are now in a strong position to deliver on our innovative pipeline and corporate milestones, as well as to make expected progress in global partnerships and commercial partnerships given that business development remains a key strategic priority of the Company. We will stay laser-focused on creating value for our shareholders while extending the cash runway to support key business operations in the coming years," Dr. Zhu concluded.

Updated Pipeline Development Highlights and Upcoming Milestones

The five prioritized clinical assets include the Company’s three Phase 3 assets (eftansomatropin alfa, felzartamab, and lemzoparlimab), one End-of-Phase 2 (EOP2) asset (uliledlimab), and one Phase 1 asset (givastomig). As the studies progress, the Company expects to have two potential near-term BLA submissions in China (potentially by the end of 2023 or early 2024 for eftansomatropin alfa and at a later time for felzartamab), two key assets entering into Phase 3 or pivotal trials in China (lemzoparlimab for myelodysplastic syndromes (MDS) in Phase 3 and uliledlimab for NSCLC in a pivotal clinical trial) and one asset entering into Phase 2 (givastomig) in 2023.

(1) Progress on the five prioritized clinical assets:

Eftansomatropin alfa (Phase 3 data readout expected in 2H 2023 followed by BLA submission):

Phase 3 trial for pediatric growth hormone deficiency (PGHD): This Phase 3 registrational trial (TALLER) of eftansomatropin alfa as a weekly treatment for PGHD is ongoing in China. On May 31, 2022, the Company announced the completion of patient enrollment in the TALLER study for the treatment of PGHD. TALLER is a multi-center, randomized, open-label, active-controlled Phase 3 clinical study (NCT04633057) of 168 patients in China. The study aims to evaluate the efficacy, safety, and pharmacokinetics (PK) of eftansomatropin alfa in PGHD, as compared to Norditropin, a daily rhGH marketed in China. The study is on track, and the final dataset is anticipated in the second half of 2023, which is expected to be followed by a BLA submission by the end of 2023 or early 2024.

Commercialization plan for eftansomatropin alfa: In November 2021, the Company announced a strategic commercial partnership with Jumpcan, a leading domestic pharmaceutical company specializing in pediatric medicines, to accelerate the commercialization of eftansomatropin alfa. I-Mab will be the marketing authorization holder (MAH) of the product and supply the product at an agreed cost rate to Jumpcan. Jumpcan will be responsible for commercializing the product and developing new indications in collaboration with I-Mab in mainland China. Jumpcan has made an upfront payment of RMB224 million (US$32.5 million) to I-Mab. Moreover, upon the achievement of certain development, registration, and sales milestones, I-Mab will be eligible to receive milestone payments in aggregate of up to RMB 1.792 billion (US$259.8 million). In addition, I-Mab and Jumpcan will share profits generated from the commercialization of the product in mainland China on a 50/50 basis, pursuant to which I-Mab will be entitled to receive tiered low double-digit royalties on net sales. This partnership deal represents one of the largest in China’s biopharma market to date.

Jumpcan and I-Mab have been working together to prepare for the future product launch of eftansomatropin alfa in China.

Felzartamab (Phase 3 ongoing):

Third-line multiple myeloma (MM): The pivotal trial has been completed, and the topline data met the preset primary and secondary endpoints. The clinical data confirmed the clinical advantages of felzartamab in terms of lower infusion-related reaction rate and shorter infusion time, which has made it feasible and practical for its use in an outpatient clinic setting.

China phase 3 trial as a second-line treatment for MM: Patient enrollment for a randomized, open-label, parallel-controlled Phase 3 registrational trial of felzartamab in combination with lenalidomide and dexamethasone as a second-line treatment for MM was completed in September 2021. The study is on track.

BLA submission, local manufacturing and commercialization: The Company is focusing on a local manufacturing plan to support felzartamab’s BLA submission in positioning felzartamab as the first locally manufactured CD38 antibody for the Chinese market, which could lead to increased affordability and commercial competitiveness. In parallel, the Company is exploring a potential commercial partnership for felzartamab, with the goal of enabling the Company to quickly gain and scale up market share for felzartamab without investing significant resources in its own commercialization capabilities.

Lemzoparlimab (Phase 3, potential first-in-class in China):

Lemzoparlimab in combination with azacitidine (AZA) for MDS: In September 2022, the Company announced encouraging data from its Phase 2 trial (NCT04202003) of Lemzoparlimab in combination with AZA in patients with newly diagnosed higher-risk myelodysplastic syndrome (HR-MDS), presented in a selected oral presentation at the 2022 European Society for Medical Oncology (ESMO) (Free ESMO Whitepaper). Topline data of 53 patients enrolled as of March 31, 2022, showed that for patients who began treatments six months or longer prior to the analysis, the overall response rate (ORR) and complete response rate (CRR) were 86.7% and 40.0%, respectively. It should be noted that this study enrolled more patients with worse baseline conditions than the comparable clinical trials conducted in western countries due to the underlying disease that is heavily influenced by clinical practice in China. In this group, 74% of patients had grade ≥3 anemia, and 51% of patients had grade ≥3 thrombocytopenia at baseline. The overall results showed that lemzoparlimab combined with AZA was well-tolerated, and the safety profile was comparable with that of AZA monotherapy. Updated results from the most recent data analysis of 62 patients on the study have demonstrated consistent clinical efficacy including ORR and CRR with no new safety signals identified. The Company plans to present the updated data at a major scientific meeting in 2H 2023.

Phase 3 clinical trial of lemzoparlimab in combination with AZA as a 1L treatment for HR-MDS: In September 2022, the Company obtained approval from the Center for Drug Evaluation (CDE) to initiate a Phase 3 registrational trial evaluating lemzoparlimab in combination with AZA as a first-line treatment for patients with newly diagnosed HR-MDS. This is the first approved Phase 3 trial for anti-CD47 therapies in China. With this, the Company aims to develop lemzoparlimab as a potential first-in-class product in China.

Other ongoing clinical trials: the Company continues to evaluate lemzoparlimab in combination with rituximab for non-Hodgkin’s lymphoma and lemzoparlimab in combination with PD-1 therapy for selected advanced solid tumors.

Update on AbbVie partnership: In August 2022, I-Mab and AbbVie entered into an amendment to the original license and collaboration agreement dated September 3, 2020 (as amended, the "Agreement"). The parties are collaborating on the global development of anti-CD47 antibody therapy under the Agreement. According to the Agreement, the Company will be eligible to receive certain milestone payments and tiered royalties upon the accomplishments of the conditions set forth therein (Form 6-K filed on August 16, 20221). The Company has the exclusive right to develop and commercialize all licensed products under the Agreement in Greater China. AbbVie discontinued the global Phase 1b study of lemzoparlimab combination therapy with AZA and venetoclax in patients with MDS and acute myeloid leukemia (AML), and a Phase 1b study of lemzoparlimab in patients with relapsed/refractory multiple myeloma. This discontinuation was not related to any specific or unexpected safety concerns.

Details of the financial implication of this amendment are discussed below in the section titled "Full-Year 2022 Financial Results".

Uliledlimab (Currently end of Phase 2, a biomarker-guided pivotal study planned in 2H 2023):

Phase 2 study of uliledlimab in combination with toripalimab (PD-1 inhibitor) in Stage 4 NSCLC: The Company presented the preliminary results of a Phase 2 study of uliledlimab in combination with toripalimab (TUOYI) in patients with Stage 4 NSCLC who were previously ineligible for standard-of-care treatment at the 2022 American Society of Clinical Oncology (ASCO) (Free ASCO Whitepaper) Annual Meeting. The results were largely consistent with those observed in the Phase 1 clinical trial with regard to the favorable safety, pharmacokinetics (PK), and pharmacodynamic (PD) profile of uliledlimab. Uliledlimab can be safely administered and well-tolerated up to the highest doses tested at 30 mg/kg Q3W as a monotherapy and as a combination therapy with toripalimab with no dose-limiting toxicity (DLT). In addition, uliledlimab exhibited a linear PK profile at doses ≥ 5mg/kg and a dose-dependent receptor occupancy with no "hook effect" whereby the antibody loses its effectiveness at high concentrations.

As of December 2022, 70 patients had been enrolled in the same Phase 2 study of uliledlimab and PD-1 combination therapy in Stage 4 NSCLC patients. In summary, at the time of the first data cutoff in March 2022, ORR was 26%, and the DCR was 74% for the 19 evaluable patients. Approximately 80% of the patients showed low PD-L1 expression in baseline tumor samples (tumor proportion score [TPS] 1-49% or TPS<1%) who were considered less responsive to anti-PD-1 monotherapy as demonstrated in KEYNOTE-042 (ORR=16.9% for patients with PD-L1 TPS 1-49%). Remarkably, in patients with high CD73 expression (≥35% expression level in tumor cells or immune cells), a much higher ORR was observed with 57% ORR and 100% DCR. Similar efficacy data in relation to CD73 expression were obtained in August 2022 with 32 evaluable patients and December 2022 with 45 evaluable patients, showing a consistent trend of efficacy signals with an overall ORR >30% in all patients and an ORR ~50% in CD73 high expression patients. The efficacy data continue to mature for ORR and more importantly for PFS as the study approaches a closure in 2023. The results have demonstrated that the higher clinical response of uliledlimab and PD-1 combination therapy correlates with high tumor CD73 expression in patients with advanced NSCLC.

The current status of the Phase 2 clinical trial and clinical development plans: (1) The enrollment of 70 patients with advanced NSCLC was completed in December 2022. Data readout for ORR is expected in 1H 2023 and for PFS in 2H 2023. The Company plans to present the data at a major scientific venue in 2023. (2) With the new data, the Company has been discussing with potential global partners and aims to accelerate the ongoing business discussion for a potential global partnership in sync with the planned global study. (3) Further clinical development plan is being finalized to include (a) a biomarker-guided pivotal trial of uliledlimab in combination with a PD-1 therapy in Stage IV NSCLC in 2H 2023 in China, and (b) a global study of uliledlimab in combination with a PD-1 therapy and chemo regimen in advanced NSCLC. (4) A companion diagnostic kit is being developed with Wuxi Diagnostics and is on track for the planned studies.

Givastomig (Phase 1, FDA Orphan Drug Designation for the treatment of gastric cancer):

Givastomig is a novel bi-specific antibody, with one arm targeting Claudin18.2 (CLDN18.2) and the other targeting 4-1BB through conditional or local activation. The key differentiation of givastomig is two-fold. Firstly, it binds to tumors with a wide range of CLDN18.2 expression levels, including lower expression, as demonstrated in pre-clinical models. This feature makes givastomig unique among the CLDN18.2-targeted agents, including ADC and zolbetuximab (a CLDN18.2 monoclonal antibody), whose anti-tumor activity is rather limited by higher CLDN18.2 expression in the tumor. Secondly, the 4-1BB arm of givastomig is designed to function upon local tumor engagement as a mechanism of conditional activation. This feature makes givastomig a unique T cell activator only localized at the tumor site without systemic toxicities, e.g. liver toxicity and systemic cytokine release, that are typically associated with 4-1BB. In addition, givastomig exhibits less gastrointestinal (GI) toxicity than what is commonly observed for other CLDN18.2 targeted therapeutics. As such, givastomig is clinically positioned to target (1) gastric and pancreatic cancers that have lower CLDN18.2 expression and are considered not eligible for treatment by zolbetuximab or CLDN18.2 ADC and (2) gastric and pancreatic cancers with high CLDN18.2 expression with more favorable safety profile over other CLDN18.2 therapeutic modalities. The preliminary clinical data described below are consistent with the differentiation of givastomig.

Phase 1 trial of givastomig in patients with advanced or metastatic solid tumors: The dose escalation part of the study reached 15 mg/kg without encountering DLT. By the end of 2022, 8 dose cohorts had been studied, with 38 subjects dosed. Givastomig was well tolerated and most of the TRAEs were grade 1 or 2. No severe hepatic and gastrointestinal toxicities or signs of systemic cytokine release. No DLTs were reported. There is a dose-dependent increase of drug exposure and soluble 4-1BB in serum, indicating a favorable PK/PD profile and potentially a longer dosing interval given its ability to induce durable T cell activation. Partial response (PR) and stable disease (SD) signals of givastomig monotherapy were observed across different dose levels in gastric cancer patients who failed multiple lines of prior therapies, including PD-1 therapy. Of note, efficacy signals were also observed in patients with low CLDN18.2 expression, suggestive of its potential to treat CLDN18.2 low-expressing tumors where other CLDN18.2 targeted agents have a limited treatment effect. The complete Phase 1 data is expected to be presented at a medical conference in 2H 2023.

Clinical development plans: (1) The clinical development plan (including the next Phase 2 study) is being finalized to initiate in 2H 2023. (2) The Company is developing a CLDN18.2 IHC assay for patient selection to be used in future clinical studies. (3) The Company continues to explore potential global partnership opportunities for this asset.

(2) Other active clinical assets

TJ-L14B (Phase 1):

TJ-L14B, also known as ABL503, is another 4-1BB-based bi-specific antibody targeting both PD-L1 and 4-1BB and is being developed in collaboration with ABL Bio. Similar to givastomig, TJ-L14B is designed to induce conditional activation of 4-1BB when it binds to its target PD-L1 expressed on tumor cells, leading to the localized T cell activation at the tumor site and minimized systemic side effects such as liver toxicity and cytokine release. Additionally, with the advantage of maximizing T cell activation by simultaneously turning off the PD-1/PD-L1 co-inhibitory pathway and turning on the 4-1BB co-stimulatory pathway, TJ-L14B has the potential to overcome resistance to PD-(L)1 therapy as demonstrated in pre-clinical models, which may bring additional clinical benefits to patients who are resistant or refractory to standard PD-(L)1 therapy.

Phase 1 dose-escalation and dose-expansion trial: The trial is ongoing in cancer patients with progressive locally advanced or metastatic solid tumors who are relapsed or refractory following prior lines of treatment with no available treatment options. The dose escalation has reached an efficacious dose level. TJ-L14B was well tolerated, and MTD was not reached. Clinical PK data indicated a linear dose profile. Early clinical efficacy signals were observed. The dose expansion part of TJ-L14B will be initiated in 2H 2023, both in the U.S. and South Korea.

Efineptakin alfa (Phase 2):

Phase 2 Clinical Trial of efineptakin alfa (also known as TJ107) in combination with pembrolizumab (Keytruda) in patients with advanced solid tumors. The study follows a "basket" trial design to include selected tumor types, including triple-negative breast cancer (TNBC) and squamous cell cancer of the head and neck (SCCHN).

Clinical data published by Genexine/NeoImmuneTech: (1) Data from phase 1b/2 Keynote-899 study, presented at ASCO (Free ASCO Whitepaper) 2022, showed that the combination of efineptakin alfa with pembrolizumab (Keytruda) induced an ORR of 15.7% (8/51) in phase 1b and 21.2% (7/33) in phase 2 study in patients with metastatic TNBC. Notably, ORR in patients with PD-L1 CPS ≥ 10 was 60% (6/10) compared to 0% (0/15) in patients with PD-L1 CPS < 10, which warrants a further investigation of a combination regimen for patients with PD-L1 CPS ≥ 10. (2) Recent data from an ongoing phase 1b study presented at 2022 American Society of Hematology (ASH) (Free ASH Whitepaper) Annual Meeting (ASH) (Free ASH Whitepaper) evaluating the safety, preliminary anti-tumor activity, and T cell reconstitution with efineptakin alfa administered following Tisagenlecleucel (Kymriah), a CD19-directed CAR-T therapy in subjects with relapsed/refractory large B-cell lymphoma showed that efineptakin alfa treatment following tisagenlecleucel was safe and well-tolerated with no induction of cytokine release syndrome (CRS) and immune effector cell-associated neurotoxicity syndrome (ICANS). In addition, a single dose of efineptakin alfa was shown to increase the absolute numbers of lymphocytes and CD19 CAR-T cells in the peripheral blood of treated patients.

(3) Preclinical programs

Several discovery and pre-clinical programs of bi-specific antibodies are under early development, including a Claudin6 x 4-1BB bi-specific antibody and a PD-L1 x interferon-alpha bi-specific antibody. (1) TJ-C64B is specifically designed to simultaneously target Claudin6 (CLDN6), uniquely expressed in specific cancer types, and 4-1BB expressed by T cells to mediate the T cell killing of CLDN6+ tumor cells. CLDN6 is hardly detectable in normal adult tissues offering treatment specificity for solid tumors, including ovarian cancer and NSCLC. TJ-C64B activates T cells through 4-1BB stimulation only upon CLDN6 engagement, providing a localized immune activation in tumors with expected efficacy and reduced systemic toxicity. (2) TJ-L1IF is engineered as a novel PD-L1/IFN-α antibody-cytokine fusion protein and is specifically designed for the treatment of PD-1/PD-L1 resistant tumors that can potentially convert "cold" tumors to "hot" tumors to achieve superior responses to PD-(L)1 antibody monotherapy. Novel drug molecules with such a design address the current clinical challenges of a majority of cancer patients who do not respond or respond poorly to PD-1/PDL-1 therapies. TJ-L1IF is an antibody prodrug in that the IFN-α2b moiety is masked by a PEG group through a protease-cleavable linker rendering the drug inactive in the systemic circulation, thus strongly reducing systemic toxicity. Once the drug accumulates at the tumor site through PD-L1 antibody targeting, the linker is cleaved by proteases that are uniquely expressed in the tumor environment to achieve localized activation. Other discovery and clinical programs are ongoing at an early development stage.

The Company’s Responses to Recent Challenges and Risks

Reduction of Costs and Cash Burn Rate: In 2022, the Company faced volatile market conditions and macroeconomic headwinds globally, including China, prompting the Company to re-position its overall business and preserve cash. The Company took a series of coordinated measures to respond to the challenges through (a) pipeline prioritization to focus only on five key clinical assets; (b) streamlining of the workforce and corporate structure; and (c) reduction in operating costs, capital expenditures and other expenses. As a result, the Company significantly reduced its headcount as compared to that as of December 2021 and reduced its yearly gross cash burn rate by 20% (constant rate) at the end of 2022. The Company now maintains a lean and efficient global R&D organization with an extended cash runway for at least three years.

Mitigating Potential Challenges from the Holding Foreign Companies Accountable Act (HFCAA): I-Mab was listed as a "Commission-Identified Issuer" by the SEC in May 2022 under the HFCAA following the filing of the Company’s annual report on Form 20-F for the fiscal year 2021. On December 15, 2022, the U.S. Public Company Accounting Oversight Board (PCAOB) issued a report that vacated its previous determination and secured complete access to inspect or investigate registered public accounting firms headquartered in mainland China and Hong Kong. For this reason, the Company does not expect to be identified as a Commission-Identified Issuer under the HFCAA after it files its annual report on Form 20-F for the fiscal year 2022. Each year, the PCAOB will determine whether it can fully inspect and investigate auditing firms in mainland China and Hong Kong, among other jurisdictions. Nevertheless, the Company has put in place a contingency plan for an expedient change of its auditor to a U.S.-based public accounting firm as the Company sees fit.

I-Mab’s Strong Commitment to Environmental, Social, and Governance (ESG)

As an integral part of the Company’s business and as a core value, I-Mab strives to make a positive impact around the world through the transformational medicines that it develops, manufactures, and delivers. I-Mab is committed to reflecting ethical, social, and environmental responsibilities in its business decisions, ensuring that the Company’s products improve people’s lives and maintaining the sustainability of its business.

In August 2021, I-Mab established an ESG committee to supervise its ESG strategies, policies, long-term sustainability objectives, and risks of the Company. In February 2023, I-Mab was granted an "A" rating by MSCI (Morgan Stanley Capital International) ESG following MSCI ESG’s most recent annual review. I-Mab’s commitment to ESG can be summarized into three "P"s: patients, philanthropy, and people.

Patients: Since its inception, I-Mab has been focusing on delivering immuno-oncology biologics with best-in-class and first-in-class potential, with the mission to bring transformative medicines to patients through innovation. I-Mab has built an innovative and advanced pipeline of over ten highly differentiated, novel biologics with the potential to address the significant unmet medical needs in cancer.

According to GLOBOCAN 2020, there were approximately 19.29 million new cancer cases worldwide in 2020, in which China had the highest number of new cases (4.57 million), exceeding all other countries. In fact, one out of every three patients who die from cancer in the world is from China. I-Mab is committed to addressing this significant global disease burden and addressing the unmet needs of patients through innovative treatment paradigms.

As soon as COVID-19 broke out in 2020, I-Mab set up an emergency response plan by coordinating with local warehouses, logistics vendors, and CROs and designing a direct-to-patient plan to ensure that our medicines were delivered to patients on time amid lockdowns. In order to allow patients to continue to receive medication without interruption, the clinical operation team actively communicated with pharmacies, cold chain logistics companies, and local research centers in Shanghai and took precautions with its rich operation experience and assessment of clinical drug inventory. At the same time, the Company coordinated and arranged 14 emergency shipments. In addition, on the premise of fully protecting patients’ privacy, the Company also developed an emergency process to send drugs directly to patients from the pharmacies to ensure smooth delivery.

Philanthropy: At the peak of the COVID-19 outbreak, the Company donated personal protective equipment and funds worth a total of RMB800 thousand to support medical personnel and hospitals in Wuhan. I-Mab also donated US$50 thousand to BayHelix, a non-profit organization focused on global life sciences and the healthcare community, to support the relief of COVID-19 in the United States.

In July 2021, I-Mab donated RMB1 million to Henan Charity General Federation for the rescue and reconstruction of flood-hit regions in Henan Province in China. The Company is committed to philanthropic giving, which can help build stronger communities.

People: People are the most valuable asset of I-Mab, and I-Mab is committed to creating a healthy, engaging, diversified, and inclusive environment for all staff. I-Mab is at the forefront of promoting diversity and inclusiveness in the workplace. Women account for about 71% of our employees; 59% of them hold a master’s degree or above. In 2020, I-Mab launched the Women’s Leadership Council ("WLC") globally to support the Company’s future female leaders to accelerate their career and personal development. In 2021 and 2022, I-Mab was selected for inclusion in the Asia Pacific Diversity, Equity, and Inclusivity Best Practice Guide for two consecutive years. In 2022, in response to the COVID-19 pandemic, I-Mab set up an emergency task force to deliver food supplies to employees in areas experiencing prolonged home quarantine. These packages included daily necessities and anti-pandemic gift packs to support employees and their families affected by the pandemic in Shanghai. I-Mab also organized a series of virtual town halls, virtual birthday parties, and mental well-being lectures to connect employees and help relieve their stress during the lockdown.

Corporate Development

The Company and its senior management demonstrated full confidence in the Company’s fundamentals by implementing share purchase plans:

The Company announced on August 23, 2022, that it plans to implement share repurchases pursuant to the share repurchase program previously authorized by its board of directors. On the same day, the Company was informed by Dr. Jingwu Zang, Founder and Chairman of the Company, and other members of senior management of their intention to use personal funds to purchase the Company’s American Depositary Shares (the "ADSs") on the open market. Under the share purchase plans, the Company and the senior management may purchase up to US$40 million of ADSs in aggregate. As of December 31, 2022, the Company had purchased 718,496 of our ADSs in an aggregate amount of approximately US$3 million under the authorized share purchase program.

· The Company invested in I-Mab Hangzhou in 2020 as a part of the Company’s overall and long-term strategic plan for the current and future manufacturing demand at both clinical trial material and commercial production scales. In July 2022, I-Mab Hangzhou entered into a definitive financing agreement with a group of domestic investors in China to raise approximately US$46 million in RMB equivalent. Upon the occurrence of certain triggering events, as specified in the shareholders’ agreement among I-Mab Hangzhou, I-Mab (through its wholly-owned subsidiary), and other domestic investors, including but not limited to I-Mab Hangzhou’s failure to accomplish certain public offering conditions, I-Mab may be obligated to repurchase the equity held by other domestic investors in cash or in I-Mab’s stocks within a certain time period.

· As previously disclosed, the Company is involved in an arbitration proceeding with Tracon Pharmaceuticals. The Company currently expects that the outcome of the arbitration may be available in 2Q 2023.

Full-Year 2022 Financial Results

Cash Position

As of December 31, 2022, the Company had cash, cash equivalents, restricted cash, and short-term investments of RMB3.5 billion (US$514.2 million), compared with RMB4.3 billion as of December 31, 2021. I-Mab’s strong cash balance is estimated to provide the Company with adequate funding to support its key business operations for over three years.

Net Revenues

Total net revenue for the full year of 2022 were RMB-221.6 million (US$-32.1 million), compared with RMB88.0 million for the full year of 2021. The decrease in 2022 net revenue was primarily due to a one-off non-cash accounting treatment of US$-48.0 million (equivalent to RMB-314.2 million) recorded in 2H 2022 following the amendment to the original license and collaboration agreement with AbbVie in August 2022. This amendment led to a lowered probability of achieving a key milestone that was included in the consideration of revenue recognition in prior years. As of December 31, 2020 and 2021, the Company noted that the achievement of the key milestone was probable based on the clinical progress. The decrease was partially offset by revenue of RMB92.6 million from license and collaboration arrangements and the supply of investigational products.

Research & Development Expenses

Research and development expenses for the full year of 2022 were RMB904.9 million (US$131.2 million), compared with RMB1,213.0 million for the full year of 2021. The decrease was primarily due to the reduced demand for investigational products as the Company procured sufficient stock in 2021 and lower share-based compensation expenses. Share-based compensation expense was RMB117.9 million (US$17.1 million) for the full year of 2022, compared with RMB201.9 million for the full year of 2021.

Administrative Expenses

Administrative expenses for the full year of 2022 were RMB720.3 million (US$104.4 million), compared with RMB899.9 million for the full year of 2021. The decrease was primarily due to lower share-based compensation expenses in relation to the management personnel and optimized control of operating and administrative expenses. Share-based compensation expense was RMB239.3 million (US$34.7 million) for the full year of 2022, compared with RMB406.7 million for the full year of 2021.

Other Income (Expenses), Net

Net other expenses for the full year of 2022 were RMB126.6 million (US$18.4 million), compared with net other income of RMB83.2 million for the full year of 2021. The change was primarily caused by unrealized exchange losses due to the significant fluctuation in the exchange rate of the Renminbi against the U.S. dollars in 2022.

Equity in Loss of Affiliates

Equity in loss of affiliates for the full year of 2022 was RMB437.5 million (US$63.4 million), compared with RMB367.9 million for the full year of 2021. The change was primarily due to the increased expenditure of the Company’s investee, I-Mab Hangzhou.

Net Loss

Net loss for the full year of 2022 was RMB2,411.8 million (US$349.7 million), compared with RMB2,331.5 million for the year 2021. Net loss per share attributable to ordinary shareholders for the full year of 2022 was RMB12.71 (US$1.84), compared with RMB13.35 for the full year of 2021. Net loss per ADS attributable to ordinary shareholders for the full year of 2022 was RMB29.23 (US$4.24), compared with RMB30.71 for the full year of 2021.

Non-GAAP Net Loss

Non-GAAP adjusted net loss, which excludes share-based compensation expenses, for the full year of 2022, was RMB2,040.8 million (US$295.9 million), compared with RMB1,709.7 million for the full year of 2021. Non-GAAP adjusted net loss per share attributable to ordinary shareholders for the full year of 2022 was RMB10.75 (US$1.56), compared with RMB9.79 for the full year of 2021. Non-GAAP adjusted net loss per ADS attributable to ordinary shareholders for the full year of 2022 was RMB24.73 (US$3.58), compared with RMB22.52 for the full year of 2021.

On March 31, 2023 Hutchison China Meditech presented its corporate presentation (Presentation, Hutchison China MediTech, MAR 31, 2023, View Source [SID1234629658]).

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On March 31, 2023 HUTCHMED (China) Limited ("HUTCHMED") (Nasdaq/AIM:​HCM, HKEX:​13) reported that it completed the rolling submission of a New Drug Application ("NDA") to the U.S. Food and Drug Administration ("FDA") for fruquintinib, its highly selective and potent oral inhibitor of VEGFR-1, -2 and -3, for the treatment of refractory metastatic colorectal cancer ("CRC") (Press release, Hutchison China MediTech, MAR 31, 2023, View Source [SID1234629657]).

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"This FDA submission is a significant milestone for patients in the U.S. with metastatic CRC, one of the most common and deadly cancers in the U.S. and worldwide. Fruquintinib is an important treatment option for patients with metastatic CRC in China, where it has been available to patients since 2018. We look forward to working with our partner Takeda to commercialize fruquintinib outside China, and we remain on track to submit regulatory filings in Europe and Japan later this year," said Dr. Michael Shi, Head of R&D and Chief Medical Officer of HUTCHMED.

The NDA is supported by the global Phase III multi-regional clinical trial ("MRCT") FRESCO-2 study conducted in the U.S., Europe, Japan and Australia that investigated fruquintinib plus best supportive care ("BSC") vs placebo plus BSC in patients with refractory metastatic CRC, along with data from the FRESCO study conducted in China. Filing of a Marketing Authorization Application (MAA) to the European Medicines Agency (EMA) and an NDA to the Japan Pharmaceuticals and Medical Devices Agency (PMDA) are planned in 2023.

In March 2023, HUTCHMED and Takeda Pharmaceutical Company Limited (TSE:4502, NYSE:TAK) closed an exclusive license agreement to further the global development, commercialization and manufacture of fruquintinib outside China. In China, fruquintinib is approved under the brand name ELUNATE and is included in the China National Reimbursement Drug List ("NRDL"). HUTCHMED markets fruquintinib in China in partnership with Eli Lilly and Company.

About CRC

CRC is a cancer that starts in either the colon or rectum. According to the International Agency for Research on Cancer, CRC is the third most prevalent cancer worldwide, associated with more than 935,000 deaths in 2020.1 In the U.S., an estimated 153,000 patients were diagnosed with CRC and there were 53,000 deaths from the disease in 2023.2 In Europe, CRC was the second most common cancer in 2020, with approximately 520,000 new cases and 245,000 deaths. In Japan, CRC is the most common cancer, with an estimated 148,000 new cases and 60,000 deaths in 2020.1 Although early stage CRC can be surgically resected, metastatic CRC remains an area of high unmet need with poor outcomes and limited treatment options.

About Fruquintinib

Fruquintinib is a highly selective and potent oral inhibitor of VEGFR-1, -2 and -3. VEGFR inhibitors play a pivotal role in blocking tumor angiogenesis. Fruquintinib was designed to improve kinase selectivity with the intention of minimizing off-target toxicities, improving tolerability and providing more consistent target coverage. Fruquintinib has been generally well tolerated in patients to date, and is being investigated in combinations with other anti-cancer therapies.

About Fruquintinib Approval in CRC in China

Fruquintinib was approved for marketing by the China National Medical Products Administration (NMPA) in September 2018 and commercially launched in China in November 2018 under the brand name ELUNATE. It has been included in the NRDL since January 2020. ELUNATE is indicated for the treatment of patients with metastatic CRC who have been previously treated with fluoropyrimidine, oxaliplatin and irinotecan, including those who have previously received anti-VEGF therapy and/or anti-epidermal growth factor receptor (EGFR) therapy (RAS wild type). Results of the FRESCO study3, a Phase III pivotal registration trial of fruquintinib in 416 patients with metastatic CRC in China, were published in The Journal of the American Medical Association, JAMA, in June 2018 (NCT02314819). The primary endpoint of the study, overall survival ("OS"), was achieved with a hazard ratio ("HR") of 0.65 (95% confidence interval ["CI"] 0.51–0.83; p<0.001)

The safety and efficacy of fruquintinib for the following investigational uses have not been established and there is no guarantee that it will receive health authority approval or become commercially available in any country for the uses being investigated.

About the FRESCO-2 Phase III Trial in CRC Outside China

The FRESCO-2 study is a MRCT conducted in the U.S., Europe, Japan and Australia that investigated fruquintinib plus BSC vs placebo plus BSC in patients with refractory metastatic CRC (NCT04322539). The results were presented at European Society for Medical Oncology (ESMO) (Free ESMO Whitepaper) congress in September 2022.4 The MRCT FRESCO-2 study demonstrated that treatment with fruquintinib resulted in a statistically significant and clinically meaningful increase in the primary OS endpoint and key secondary progression free survival ("PFS") endpoint compared to treatment with placebo.

Specifically, the median OS was 7.4 months for the 461 patients treated with fruquintinib compared to 4.8 months for the 230 patients in the placebo group (HR 0.66; 95% CI 0.55–0.80; p<0.001). The median PFS was 3.7 months for patients treated with fruquintinib compared to 1.8 months for patients in the placebo group (HR 0.32; 95% CI 0.27–0.39; p<0.001). The disease control rate ("DCR") was 55.5% in the fruquintinib group compared to 16.1% for patients in the placebo group. Median duration of follow-up was approximately 11 months for patients in both groups.

The safety profile of fruquintinib in FRESCO-2 was consistent with previously reported fruquintinib studies. Grade 3 or above adverse events occurred in 62.7% of patients who received fruquintinib, compared to 50.4% of patients who received placebo. Grade 3 or above adverse events that occurred in more than 5% of patients who received fruquintinib were hypertension (13.6% vs 0.9% in the placebo group), asthenia (7.7% vs 3.9% in the placebo group) and hand-foot syndrome (6.4% vs 0% in the placebo group). Treatment related adverse events leading to discontinuation occurred in 20.4% of patients who received fruquintinib, compared to 21.1% of patients who received placebo.

About Other Fruquintinib Developments

Gastric Cancer in China: The FRUTIGA study is a randomized, double-blind, Phase III study in China to evaluate fruquintinib combined with paclitaxel compared with paclitaxel monotherapy, for second-line treatment of advanced gastric cancer or gastroesophageal junction adenocarcinoma (NCT03223376). Topline results were announced in November 2022. The trial met one of the primary endpoints of statistically significant improvement in PFS, which is clinically meaningful. The other primary endpoint of OS was not statistically significant per the pre-specified statistical plan, although there was a numerical improvement in median OS. Fruquintinib also demonstrated a statistically significant improvement in secondary endpoints including objective response rate (ORR), DCR, and improved duration of response (DoR). The safety profile of fruquintinib in FRUTIGA was consistent with previously reported studies. Results are expected to be disclosed at an upcoming scientific meeting.

HUTCHMED is also developing fruquintinib for the treatment of multiple solid tumor cancers in combination with PD-1 monoclonal antibodies for the treatment of endometrial and other solid tumors.

On March 31, 2023 Hamlet Pharma AB and SelectImmune Pharma AB, listed on the Spotlight Stock Market, reported to merge and create a powerful pharmaceutical company for drug development for the treatment of cancer and infectious diseases (Press release, HAMLET Pharma, MAR 31, 2023, View Source;utm_medium=rss&utm_campaign=hamlet-pharma-and-selectimmune-pharma-merge-to-create-an-innovative-pharmaceutical-company-with-a-broad-and-strong-portfolio-of-projects-for-the-treatment-of-cancer-and-infections [SID1234629656]). The merged company (Hamlet Biopharma) gets a portfolio with a total of ten pharmaceutical projects, of which three projects are in phase II, where two of the projects already have positive results in clinical studies. The portfolio includes a total of eleven patent families for cancer, infections and tuberculosis with more than 60 patents. Hamlet Biopharma is now building a focused commercial organization with access to a technology platform and university-based scientist as well as an extensive network of international specialists for drug development and clinical studies. A larger listed company will become more cost-effective and attract talents to the company as well as to the network. Hamlet Biopharma has secured funding for at least twelve months.

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The board of directors of Hamlet Pharma AB (publ) ("Hamlet Pharma") and SelectImmune Pharma AB (publ) ("SelectImmune") (together the "Companies") have today adopted a merger plan (the "Merger plan") to carry out a merger of Hamlet Pharma and SelectImmune Pharma ("Hamlet BioPharma") through a corporate merger (the "Merger"). The Merger is subject to, inter alia, approvals by the extraordinary general meetings of the two Companies. As merger consideration, shareholders in SelectImmune will receive 0.8 shares in Hamlet Pharma for each share in SelectImmune, for each class of shares.

Furthermore, Hamlet Biopharma has entered into an agreement with Linnane Pharma AB ("Linnane Pharma") regarding the acquisition of the company that owns rights to a project for the treatment of tuberculosis (the "Project").

Background and reason

The long-term goal of the company group consisting of Hamlet Pharma, SelectImmune Pharma and Linnane Pharma is to commercialize a broad portfolio of innovative pharmaceutical projects and to create an agile organization where the commercial leadership in Hamlet Biopharma, which is a merger of Hamlet Pharma and SelectImmune, focuses on establishing partnerships, licensing or selling rights, running clinical studies and protecting patents and IP rights. The board of directors of Hamlet Pharma and SelectImmune (collectively the "Board of Directors") now see positive clinical results in Hamlet Pharma and SelectImmune, and therefore believe that the time is right to take this step. The main shareholder of the companies looks positively on the merger to create a powerful company to effectively run the pharmaceutical projects in the long term. Hamlet Biopharma has secured funding for at least twelve months.

The Board of Directors have investigated the consequences of a merger between the Companies and see a convincing strategic and operational advantage of the merger. The purpose of the Merger is to create a broader portfolio of pharmaceutical projects in two major clinical areas, cancer and infections. The need for new, more selective cancer drugs is great, as is the need for alternatives to antibiotics, which increasingly lose their effects due to antibiotic resistance and leave the patient without treatment options. Furthermore, the Companies project portfolio is supplemented by the acquisition of drug projects and patents for the treatment of tuberculosis with the company Linnane Projects AB (the "Acquisition"), which holds rights to the Project.

Merger of two supplementary businesses

Through the Acquisition and the Merger, a combined powerful company is created with a broad portfolio of pharmaceutical projects for the treatment and prevention of cancer and infectious diseases.
The Acquisition entails that Hamlet Biopharma obtains the rights to patents and access to developed know-how to commercialize the tuberculosis project.
Overall, the Board of Directors consider that there are clear logical and rational reasons for the Merger and the Acquisition as the businesses complement each other well. The Board of Directors thus assess that the Merger and Acquisition are beneficial for Hamlet Pharma’s and SelectImmune’s shareholders.
The Merger creates a larger company that takes care of the promising projects in Hamlet Pharma and SelectImmune. Through the Merger and Acquisition of Linnane Projects AB ("Linnane Projects"), the various sub-projects are established in an organization that can effectively drive them further towards market approval within important clinical indications. This includes the most advanced pharmaceutical projects within the respective companies: Alpha1H for the treatment of bladder cancer, which is in clinical phase II, and KineretR for the treatment of acute cystitis and bladder pain syndrome which is in phase II. Furthermore, the Companies see a great potential for synergies in the form of strengthened know-how.

Portfolio pharmaceutical projects and patents

Project/company For treatment Phase
Alpha 1HHamlet Pharma Bladder cancer Phase II clinical trials
Alpha 1HHamlet Pharma Brain tumor Positive data in animal model, development of technology
Hamlet Hamlet Pharma Colon and rectal cancer Preclinical evaluation
Hamlet Hamlet Pharma Oral cavity cancer Preclinical evaluation
IL1-beta receptor antagonistSelectImmune Pharma Infection and inflammation Preclinical evaluation Phase II – clinical trialsa) Bladder pain syndromeb) Recurrent acute cystitis
NK1R receptor antagonistSelectimmune Pharma Inhibitor of pain and nerve activation Positive data in animal model, development of technology.Development of substance for clinical studies
RNA Pol II inhibitorsSelectImmune Pharma Preventive inflammation inhibitor Positive data in animal model, development of technology Development of substance for clinical studies
RNA Pol II bacteriotherapySelectImmune Pharma Prevention of inflammation and treatment of infection Positive data in animal model, development of technology
IRF7 inhibitor, siRNASelectImmune Pharma Inhibits severe bacterial infections Positive data in animal model, development of technologyData to support the development of drugs for clinical studies
Project tuberculosis Plectasin Lung tuberculosis Positive data in animal model, development of technology for drug production
The pharmaceutical projects are based on a total of eleven patent families and applications for a further four patent families, a total of more than 60 patents and patent applications, see the table below.

Indication Patent Group Description Countries
Cancer ALL-ALA This case relates to αLactalbumin complexes that have been engineered to optimize production DE, DK, FI, FR, UK, NL, SE, AU, CA, IN, JPUSA
Cancer Alpha1 and Alpha2 fragment complexes This case relates to the αLA fragment complexes – comprising the human Alpha1 or Alpha2 sequences. CH, DE, DK, ES, FI, FR, UK, HU, IE, IT, NL, NO, PL, SEUSAUSA divisional
Cancer PAPILLOMA This case relates to αLA complexes (including HAMLET and BAMLET) for treatment of skin papillomas. USAUSA divisional
Cancer PROPHYLACTIC THERAPY This case relates to αLA complexes for prophylactic treatment of cancer. CH, DE, DK, ES, FI, FR, UK, HU, IE, IT, NL, NO, PL, SE,USA divisional
Cancer NUTRACEUTICAL This case relates to milk-based nutraceuticals that contain αLA-complexes. CH, DE, DK, ES, FI, FR, UK, IE, IT, NL, NO, SE, HKUSA
Cancer 39-MER COMPLEX This case relates to the Alpha1H 39mer complex. CH, DE, DK, ES, FI, FR, UK, IE, IT, NL, NO, PL, SE, HK, AU, CA, CN, IN, JP, KP, SG, USA
Cancer MIXING METHOD This case relates to a simplified production method. Europe divisionalHong KongUSA continuation
Cancer SYNERGISTIC COMBINATION CANCER THERAPY This case relates to anticancer protein-fatty acid complexes plus other chemotherapeutic agents as a combination for use in anticancer therapy. EuropeUSAJapan
Infection/Immunotherapy IL-1 RECEPTOR ANTAGONISTS IL-1 receptor antagonists for the treatment of cystitis. AustraliaEurope (CH, DE, DK, FI, FR, NL, SE, GB)USA
Infection/Immunotherapy MMP7 INHIBITORS MMP-7 inhibitors for the treatment of cystitis. AustraliaEurope (CH, DE, DK, FI, FR, NL, SE, GB)
Infection/Immunotherapy ASC / NLRP-3 ASC or NLRP-3 proteins for the treatment of cystitis. EuropeUSA
Infection/Immunotherapy IRF7 INHIBITORS IRF-7 inhibitors for the treatment of Enterobacteriaceae infections. AustraliaEurope (CH, DE, DK, FI, FR, NL, SE, GB)USA
Infection/Immunotherapy NK1 ANTAGONISTS NK1 antagonists for treating bacterial infection or management of pain caused by bacterial infections. EuropeHong KongUSA
Infection/Immunotherapy POL II INHIBITORS Inhibitors of polymerase II, which can be used for immunosuppression, anti-inflammation, and/or anti-infection. AustraliaEurope (CH, DE, DK, FI, FR, NL, SE, GB)Hong KongIndiaSingaporeUSA
Infection/Immunotherapy BLADDER PAIN IL-1 receptor antagonists for the treatment of bladder pain. EuropeUSAAustraliaChinaJapan
Infection/Immunotherapy PYELONEPHRITIS Treatment or prevention of acute pyelonephritis and/or urosepsis. Great Britain, initial filing
Tuberculosis TUBERCULOSIS TREATMENT Bactericidal peptide Plectasin for the treatment of M. tuberculosis. CH, DE, DK, FI, FR, NL, SE, UK, AU, CA, HK, IN, US
The Merger and Acquisition also creates strategic advantages for the shareholders. By broadening the business, the shareholders’ risk is reduced and the possibility of future income increases. This increases the likelihood of attracting stronger ownership groups. The Board of Directors expect that the shareholders will benefit from more robust trading of shares in Hamlet Biopharma than in the trading of shares in the Companies individually. In addition, Hamlet Biopharma will have a greater ability to raise capital than SelectImmune on its own.

Hamlet Pharma and SelectImmune have developed their projects with the support of Linnane Pharma. As part of the Acquisition and Hamlet Biopharma, the current agreements between Linnane Pharma and Hamlet Pharma and SelectImmune, respectively, will be replaced by a new collaboration agreement, which includes HAMLET, Alpha1H, the tuberculosis project and all projects operated by SelectImmune (the "Collaboration Agreement"). Hamlet Pharma is currently conducting a technical evaluation of BAMLET. BAMLET is therefore not covered by the collaboration agreement with Linnane Pharma.

Cancer and infections are among the greatest challenges for humanity, with high mortality and limited efficacy of the drugs and traditional treatments currently used. The vision for Hamlet Biopharma is to develop new drug concepts with great potential to improve people’s health, increase the quality of life and reduce the suffering of those who become ill and need new treatments.

Summary of the Merger

The merger will be carried out by Hamlet Pharma absorbing SelectImmune which will then be dissolved.
As merger consideration, new shares in Hamlet Pharma will be issued to SelectImmunes shareholders in proportion to their existing shareholdings in SelectImmune. One (1) class A share in SelectImmune entitles the holder to receive 0.8 class A shares in Hamlet Pharma and one (1) class B share in SelectImmune entitles the holder to receive 0.8 class B shares in Hamlet Pharma (the "Merger consideration").
The Merger consideration is based, among other things, on the volume-weighted average price paid for SelectImmune’s B share and Hamlet Pharma’s B share 30 trading days before the day of the announcement and on the Companies’ prospects after the implementation of planned measures.
Based on the volume-weighted average price paid over the last thirty trading days of Hamlet Pharma’s B share, the offer values ​​SelectImmune at SEK 3.06 per share, which means a premium of approximately 63.25 percent compared to the volume-weighted average price paid of SelectImmune’s B share over the past thirty trading days and a premium of approximately 36.07 percent compared to the closing price of SelectImmune’s B share on March 30, 2023.
The merger requires, among other things, approvals at extraordinary general meetings in both Companies.
The Merger is conditional on approval of the Acquisition and the Collaboration Agreement at an extraordinary general meeting of Hamlet Pharma.
A merger document is expected to be published on or around May 3, 2023.
The acquisition, etc.

Through the Acquisition, Hamlet Pharma acquires all shares in Linnane Projects. The company is newly started and holds ownership rights to patents and access to know-how for commercialization of the Project. The purchase price amounts to a total of SEK 10 million, of which SEK 5 million is paid upon closing and the remainder is paid in two equal installments during 2024 and 2025. In addition, Linnane Pharma, as the seller, is entitled to an ongoing cash compensation corresponding to three percent of future net revenues attributable to the Project.

A total of 1.5 million deaths from tuberculosis occurred ("TB") in 2018 (including a quarter of a million with HIV). Worldwide, TB is one of the top ten causes of death and the most common cause from a single infectious agent. Current treatment protocols require a cocktail of antibiotics given by skilled medical staff over six months but there is a growing problem of drug resistance, which reduces the options for this patient group.

The acquired Project (patent and right to know-how) offers a new therapeutic concept to fight TB through treatment with bactericidal peptide drug candidates that show efficacy in animal models. In terms of research and development, the project fits very well into Hamlet Biopharma’s operations and the already established collaboration with the researchers.

Hamlet Pharma and SelectImmune have a multi-year collaboration with Linnane Pharma, which ensures Hamlet’s and SelectImmune’s access to advanced science and cutting-edge technology for drug development. The collaboration means that Linnane Pharma’s technology platform and other resources are available to Hamlet Pharma and SelectImmune respectively.

Hamlet Biopharma has a great need for continued collaboration with Linnane Pharma. Hamlet Biopharma will therefore replace the previous collaboration agreements with the Collaboration Agreement with Linnane Pharma, which in the cancer area includes HAMLET and Alpha1H and in the infection area includes all projects run by SelectImmune regarding immunotherapy with inhibitors of inflammation and pain such as IL1-RA (KineretR) NKR1 inhibitors against pain, RNA POL II inhibitors against inflammation and infection and IRF7 inhibitors against kidney infection and sepsis. Furthermore, the tuberculosis project acquired from Linnane Pharma is added.

Linnane Pharma has unique competence that is of direct benefit to the projects run in Hamlet Biopharma. In addition, Hamlet Biopharma will not have to develop its own resources as they are provided by Linnane Pharma in a more efficient, less expensive and flexible way. Hamlet Biopharma will pay an annual fixed fee for these services.

Linnane Pharma is Hamlet Pharma’s largest shareholder with a holding of approximately 49,33 percent of the shares and 83,52 percent of the vote. Both the Acquisition and the Collaboration Agreement are related party transactions that require approval at a general meeting in Hamlet Pharma. Linnane Pharma does not have the right to vote for its shares in the general meeting’s decision on approval.

Hamlet Pharma’s board of directors believes that the Acquisition is beneficial for Hamlet Pharma and its shareholders. The board believes that the purchase price paid in the Acquisition is reasonable from a financial point of view for Hamlet Pharma’s shareholders and this opinion is supported by a valuation from an independent third party, Xplico ApS, that Hamlet Pharma’s board has obtained based on and subject to the assumptions and limitations stated therein.

The preliminary timetable for the Acquisition, etc. is in accordance with below.

19 May 2023 Extraordinary general meeting of Hamlet Pharma for the approval of:Implementation of the AcquisitionEntering into the Collaboration Agreement with Linnane Pharma
23 Maj 2023 Closing date of the Acquisition
Hamlet Biopharma

After Completion of the Merger, Catharina Svanborg, Carl-Johan Wachtmeister, Helena Lomberg, Bill Hansson, Ulla Trägårdh and Magnus Nylén are expected to be members of the board and Martin Erixon to be the CEO of Hamlet Biopharma.

In addition, there are currently no decisions regarding significant changes to Hamlet Pharma’s or SelectImmune’s employees or to the current organization and operations, including the terms of employment and the locations where the Companies conduct their business.

Below is a pro forma statement that has been adjusted to reflect the effect of the Merger and Acquisition on Hamlet Pharma’s balance sheet as of December 31, 2022, as if the Merger and Acquisition had been completed at the beginning of the interim period and to reflect the effect of the Merger and Acquisition for the six-month period ended on 31 December 2022, as if the Merger and Acquisition had been completed at the beginning of the interim period. The pro forma statement is presented for information purposes only and reflects estimates and assumptions made by Hamlet Pharma’s management as it deems reasonable, and other so-called forward-looking statements. It does not imply to represent what Hamlet Pharma’s actual results or financial position would have been if the Merger and acquisition of Linnane Projects had occurred on the date indicated and is not necessarily indicative of future results or financial position. For complete information regarding the pro forma accounts, including notes, please refer to the merger document to be published on or around May 3, 2023.

Consolidated pro forma income statement in summary for the six-month period ended December 31, 2022

SEK thousand
Hamlet Pharma Select-Immune Linnane Projects Pro forma adjustments Consolidated income statement pro forma
Net sales 0 0 0 0 0
Other operating income 0 0 0 0 0
Operating expenses -11,929 -2,750 0 1,600 -13,079
Operating results -11,929 -2,750 0 0 -13,079
Financial posts 98 0 0 0 98
Profit before tax -11,831 -2,750 0 0 -12,981
Tax on the period’s results 0 0 0 0 0
Profit after tax -11,831 -2,750 0 0 -12,981
Earnings per share, SEK -0.1070 -0.1575 0 0 -0.1014

Group pro forma balance sheet in summary as of 31 December 2022

SEK thousand
Hamlet Pharma Select-Immune Linnane Projects Pro forma adjustments Consolidated balance sheet pro forma
Assets
Total fixed assets 0 922 0 0 922
Total current assets 29,766 9,306 25 0 39,097
Total assets 29,766 10,228 25 0 40,019
Equity & Liabilities
Total tied up equity 1,125 873 25 0 2,023
Total unrestricted equity 25,057 8,162 0 0 33,219
Total equity 26,183 9,035 25 0 35,243
Total short-term liabilities 3,583 1,193 0 0 4,776
Total equity and liabilities 29,766 10,228 25 0 40,019


Number of shares 110,529,666 17,459,225 25,000 0 128,013,891
The table below illustrates the ownership in Hamlet Biopharma if the Merger had been completed based on the shareholder information from Euroclear Sweden AB as of December 30, 2022.

Shareholder Class A shares Class B shares Percentage of capital Percentage of votes
Catharina Svanborg, privately and through Linnane Pharma 37,946,152 22,976,104 49.93% 82.95%
Avanza Pension 40,576 5,623,009 4.55% 1.24%
Nordnet Pensionsförsäkring 0 5,663,178 4.55% 1.17%
EFG BANK/Geneva, W8IMY 273,538 268,500 0.44% 0.62%
Rolf Karlsson (FV Group) 0 2,903,707 2.33% 0.60%
Hans Nygren 0 2,067,553 1.66% 0.43%
Hazina Ljungman, privately and through companies 74,846 227,126 0.24% 0.20%
Försäkringsaktiebolaget Skandia 3,342 891,042 0.72% 0.19%
Olle Jonsson 0 711,998 0.57% 0.15%
Fredrik Herslow, privately and through companies 0 497,965 0.40% 0.10%
Others 1,732,712 42,595,698 35.61% 12.35%
Total 40,071,166 84,425,880 100% 100%
Merger consideration

The Merger consideration has been determined after negotiations between the parties, whereby representatives of the respective companies have discussed various options to determine the exact distribution of the Merger consideration. The parties have, among other things, considered the volume-weighted average prices paid of the respective Companies during the last 30 trading days as well as Hamlet Pharma’s and SelectImmune’s prospects after the implementation of planned measures. In connection with the signing of the Merger plan, each company has assessed that it can accept an agreement that results in a distribution of the Merger consideration as set out below.

The Merger consideration will consist of newly issued shares in Hamlet Pharma, provided that shareholders in the Companies resolve to approve the Merger at the extraordinary general meetings that will resolve on the Merger plan. One (1) class A share in SelectImmune entitles the holder to 0.8 class A shares in Hamlet Pharma and one (1) class B share in SelectImmune entitles the holder to 0.8 class B shares in Hamlet Pharma.

Based on the volume-weighted average price paid of Hamlet Pharma’s class B share during the last thirty trading days, the Merger consideration represents a premium of approximately 63.25 percent compared to volume-weighted average price paid of SEK 1.88 for SelectImmune’s class B share during the last thirty trading days (prior to the announcement of the Merger) and approximately 36.07 percent compared to the closing price of SEK 2.25 for SelectImmune’s class B share (the day before the announcement of the Merger).

Entitled to receive the Merger consideration will be the shareholders who are recorded in SelectImmune’s share register on the date of registration of the Merger by the Swedish Companies Registration Office. However, the board is entitled to postpone this date if required for practical reasons. Such postponement will be communicated as soon as possible after such decision is made.

The shareholders of SelectImmune will collectively own approximately 11.22 percent of the shares and approximately 5.85 percent of the votes in Hamlet Biopharma (based on a total of 17,459,225 outstanding shares in SelectImmune, of which 2,000,000 class A shares and 15,459,225 class B shares, as of the date of this announcement).

Fractions

Only whole shares of Hamlet Pharma will be paid to shareholders of SelectImmune as Merger consideration. Hamlet Pharma and SelectImmune will therefore assign Aqurat Fondkommission AB ("Aqurat") to combine all fractions of class B shares in Hamlet Pharma ("Fractions") that do not entitle to a whole new class B share in Hamlet Pharma as Merger consideration and the total number of class B shares in Hamlet Pharma corresponding to such Fractions will thereafter be sold by Aqurat on Spotlight Stock Market. The sale shall take place as soon as possible after the registration of the Merger with the Swedish Companies Registration Office (the "Completion"). The proceeds of the sale of Fractions shall be accounted for by Aqurat and thereafter paid to those entitled thereto in proportion to the value of the Fractions held immediately prior to the sale. Such payment shall be made as soon as practicable after such sale of the Fractions. All class A shares in SelectImmune are held by Linnane Pharma and thus no fractions will arise.

Accounting for Merger consideration

To the extent not otherwise stated below, the Merger consideration will be recognized after the Swedish Companies Registration Office has registered the Merger by Euroclear Sweden AB registering the number of Hamlet Pharma shares to which the shareholder is entitled on each beneficiary’s securities account. At the same time, the shareholder’s shareholding in SelectImmune shall be deregistered from the same account. The Merger consideration will thus be distributed automatically, and no action will be required by SelectImmune’s shareholders in this regard. The new shares in Hamlet Pharma issued as Merger consideration entitle the holder to the rights of shareholders from and including the date of registration of the shares with the Swedish Companies Registration Office. The accounting of the sale proceeds for the sale of Fractions shall, as stated above, be done through the agency of Aqurat. The accounting shall take place as soon as practicable after the sale of the Fractions. If the shares in SelectImmune are pledged at the time of accounting of the Merger consideration, accounting shall, as a result, be made to the pledgee. If the shares in SelectImmune are registered in the name of a nominee, the resulting accounting shall be made to the nominee.

Issuance of consideration shares

The issue of shares in Hamlet Pharma for payment of the Merger consideration must be approved by Hamlet Pharma’s shareholders at the extraordinary general meeting that will resolve on the Merger plan. The shares issued in Hamlet Pharma as Merger consideration to the shareholders in SelectImmune shall carry the right to a dividend for the first time on the record date for the dividend that falls closest to the Completion.

The total number of shares that will be issued to SelectImmune’s shareholders as Merger consideration will be based on the number of SelectImmune shares outstanding at the time of the Completion of the Merger. Assuming that the number of outstanding shares at the time of this press release is unchanged upon the Completion, 1,600,000 class A shares and 12,367,380 class B shares are to be issued by Hamlet Pharma to make up the total of 13,967,380 shares in Hamlet Pharma of which the Merger consideration consists of. At the time of Completion of the Merger, there will be a total of 40,071,166 outstanding class A shares and 84,425,880 class B shares in Hamlet Biopharma based on the number of shares in Hamlet Pharma at the time of this press release.

Commitments prior to the Merger

The Companies undertake, during the period from the approval of the Merger plan by the respective general meetings until the Completion, to take all necessary measures to carry out the Merger on the terms stated herein and to continue to conduct their respective businesses in the usual manner. The Companies shall not take any of the following actions without the prior written consent from the other company:

a) resolve on or pay dividends or make any other value transfer to shareholders, with the exception that the Companies may pay such dividends as follows from Chapter 18 Section 11 of the Swedish Companies Act;

b) issue shares or other securities;

c) enter or amend material contracts or other agreements or raise new material loans, beyond what falls within the company’s normal business operations; or

d) take any other action likely to unreasonably affect the relative value of the Merger consideration in relation to the value of the shares in SelectImmune.

Terms of the Merger

The Completion is conditional on:

that Hamlet Pharma’s shareholders, at a general meeting in Hamlet Pharma, approve the Merger plan and approve the issue of the shares that make up the Merger consideration;
that SelectImmune’s shareholders, at a general meeting in SelectImmune, approve the Merger plan;
that Spotlight Stock Market has decided to admit the class B shares that constitute the Merger consideration to trading on Spotlight Stock Market;
that the Merger is not wholly or partially made impossible or substantially more difficult due to laws, court decisions, authority decisions or the like;
that neither Hamlet Pharma nor SelectImmune has breached the commitments set out under the heading "Commitments prior to the Merger" before the date on which the Merger is registered with the Swedish Companies Registration Office in such a way that would lead to a material adverse effect on the Merger or Hamlet Biopharma;
that no change, circumstance or event or consequence of changes, circumstances or events has occurred which had or could reasonably be expected to have a material adverse effect on the financial position or operations, including SelectImmune’s, Hamlet Pharma’s or Hamlet Biopharma’s turnover, results, liquidity, solvency, equity or assets, and as a result the other party cannot reasonably be expected to complete the Merger;
completion of the Acquisition, including approval of the transaction at a general meeting in Hamlet Pharma; and
approval of the Cooperation Agreement at a general meeting in Hamlet Pharma.
If the conditions stated in this section have not been met and the Completion has not taken place by October 1, 2023, the Merger will not be implemented and the Merger plan will cease to apply, provided that the Merger shall be terminated and the Merger plan will cease to apply only, to the extent permitted by applicable law, if the non-compliance is of material importance to the Merger or to Hamlet Biopharma. The Board of Directors reserve the right to waive, in whole or in part, one, several or all the above conditions by a joint decision.

The boards have, to the extent permitted by applicable law, the right to decide by joint resolution to postpone the latest date for fulfillment of the conditions from October 1, 2023, to a later date.

Recommendation from SelectImmune’s board and valuation statement (so-called fairness opinion)

SelectImmune’s board of directors believes that the Merger is beneficial for SelectImmune and its shareholders. The board of directors considers that the Merger consideration is fair from a financial point of view for SelectImmune’s shareholders and this opinion is supported by a so-called fairness opinion from Hjalmarsson & Partners Corporate Finance AB which SelectImmune obtained in accordance with Section IV.3 of the Swedish Corporate Governance Board’s takeover rules for certain trading platforms (the "Takeover Rules") and which states that, based on and subject to the assumptions and limitations set forth therein, as of March 30, 2023, the Merger consideration to be received in the Merger by SelectImmune’s shareholders is reasonable from a financial standpoint of such shareholders.

SelectImmune’s board of directors has issued a statement pursuant to Section II.19 of the Takeover Rules, according to which SelectImmune’s shareholders are advised to vote in favor of the Merger.

Recommendation from Hamlet Pharma’s board

Hamlet Pharma’s board of directors believes that the Merger is beneficial for Hamlet Pharma and its shareholders. The board of directors considers that the Merger consideration is fair from a financial point of view for Hamlet Pharma. Accordingly, Hamlet Pharma’s board of directors recommends that its shareholders approve the Merger plan and the issuance of the Merger consideration to SelectImmune’s shareholders at the extraordinary general meeting in Hamlet Pharma. As a basis for this view, the board of directors of Hamlet Pharma has considered several factors, including, but not limited to, the volume-weighted average price paid for SelectImmune’s class B share and Hamlet Pharma’s class B share respectively thirty trading days prior to the date of this announcement, as well as the Companies prospects after the implementation of planned actions.

Form of merger and dissolution of SelectImmune

The board of directors consider that the combination of Hamlet Pharma and SelectImmune shall be carried out as a corporate merger of the Companies, whereby the shareholders of both Companies are given the opportunity to approve the Merger at an extraordinary general meeting in each company. All shares in SelectImmune are covered by the Merger.

Provided that the extraordinary general meeting of each company votes in favor of the Merger plan, SelectImmune will be dissolved, and all its assets and liabilities will be transferred to Hamlet Pharma when the Swedish Companies Registration Office registers the Merger. This is expected to take place no earlier than the third quarter of 2023. The Companies will later announce the date on which the Swedish Companies Registration Office is expected to register the Merger.

The last day for trading in SelectImmune’s shares is expected to be the trading day that falls two (2) trading days before the date of the Swedish Companies Registration Office’s registration of the Merger and the first day for trading in the newly issued shares in Hamlet Pharma is expected to fall two (2) trading days after the date of registration of the Merger.

Share ownership between Hamlet Pharma and SelectImmune

Hamlet Pharma does not own or control any shares in SelectImmune, or other financial instruments, which give Hamlet Pharma a financial exposure equivalent to a holding in SelectImmune. SelectImmune does not own or control any shares or other financial instruments in Hamlet Pharma. However, the Companies are associated companies vis-à-vis each other through Linnane Pharma, which is the majority shareholder as well as the parent company of both Companies.

The Merger requires, among other things, approvals at extraordinary general meetings in both Companies. Linnane Pharma is SelectImmune’s largest shareholder with a holding of approximately 34.37 percent of the shares and 67.69 percent of the votes in SelectImmune. Since Linnane Pharma is also the parent company of Hamlet Pharma and thus is part of the same group as Hamlet Pharma, Linnane Pharma does not have the right to vote at SelectImmune’s general meeting. Linnane Pharma has a holding of 49.33 percent of the shares and 83.52 percent of the votes in Hamlet Pharma and has the right to vote at Hamlet Pharma’s general meeting regarding the Merger.

Holders of securities with special rights

There are no outstanding shares, warrants, convertibles or other securities that entitle the holder to special rights in SelectImmune.

There are also no incentive programs for board members, senior executives or other employees who will be affected by the Merger.

Certain related party matters, etc.

Catharina Svanborg and Helena Lomberg are chairpersons in the boards and board members respectively in both Hamlet Pharma and SelectImmune. Furthermore, Catharina Svanborg is, through Linnane Pharma, SelectImmune’s and Hamlet Pharma’s largest shareholder. For this reason, neither Catharina Svanborg nor Helena Lomberg participated in the handling of and decisions regarding the Merger in SelectImmune.

These circumstances also mean that Section IV of the Takeover Rules is applicable to the Merger. This means that, according to Section IV.3 of the Takeover Rules, SelectImmune’s board is obliged to obtain and publish a valuation statement, a so-called fairness opinion, regarding the shares in SelectImmune from independent expertise.

Financing

The execution of the Merger is not dependent on any financing as the Merger consideration consists exclusively of new shares in Hamlet Pharma.

Due Diligence

In connection with the preparations for the Merger, the Companies have conducted customary limited due diligence investigations of a confirmatory nature of certain business-related and legal information regarding Hamlet Pharma and SelectImmune respectively. During the due diligence investigations, no other information that has not previously been made public and that could constitute insider information in relation to Hamlet Pharma and SelectImmune has been disclosed.

Fees due to the Merger etc.

No special fees or benefits, within the meaning of the Swedish Companies Act, will be paid to any of Hamlet Pharma’s or SelectImmune’s board members or CEO in connection with the Merger. Apart from what is stated below, no such fees or benefits will be paid to the Companies’ auditor.

The fees to the auditor of Hamlet Pharma and SelectImmune shall be paid according to approved invoice for, among other things, its opinion on the Merger plan, its review of the Merger plan and other work performed by the auditor in connection with the Merger.

Indicative timetable for the Merger

The preliminary timetable for the Merger is as per below.

31 March 2023 The Merger plan is published and made available to the Company’s shareholders
3 May 2023 Disclosure of the merger document
17 May 2023 Extraordinary general meeting in SelectImmune
19 May 2023 Extraordinary general meeting in Hamlet Pharma
Beginning of August 2023 The Swedish Companies Registration Office grants permission for the Merger. Press release on preliminary timetable for the last day of trading in SelectImmune’s class B share, payment of the Merger consideration, etc.
Beginning of August 2023 The Swedish Companies Registration Office registers the Merger.
The indicative timetable is preliminary and may be subject to change. An exact timetable is not possible to indicate; the timetable is partially dependent on factors within the framework of the regulatory process that are beyond the Companies’ immediate control.

Applicable law and disputes

The Merger shall be governed by and construed in accordance with Swedish law. Through the commitments that follow from the Companies’ listing on Spotlight Stock Market, the Merger and the Companies are subject to the Takeover Rules, the Swedish Securities Council’s statements and advice on the interpretation and application of the Takeover Rules (and, where applicable, the Swedish Securities Council’s previous statements and advice on the interpretation and application of the rules for public offers of the Swedish Industry and Commerce Stock Exchange Committee that were previously applied), as well as the sanctions that Spotlight Stock Market may decide on in case of violation of the Takeover Rules. Disputes relating to, or arising in connection with, the Merger shall be settled by a Swedish court exclusively, with the Stockholm district court as first instance.

Advisor

Hamlet Pharma has engaged Advokatfirman Delphi as legal advisor. SelectImmune has engaged Falkenborn Advokatbyrå as legal advisor.

Please note, this is a translation of the Swedish original. In case of deviations, the Swedish version of the press release available on the company’s website shall prevail.

This is information that Hamlet Pharma AB (publ) and SelectImmune Pharma AB (publ) are obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out below, on March 31, 2023, at 08:00.