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LIDDS AB (publ) Year-end Report 2023

October – December 2023

  • Net sales amounted to 0 (-0.1) MSEK
  • The operating result for the period was 19.2 (-8.9) MSEK
  • The net result was -18.7 (-9.1) MSEK corresponding to earnings per share of SEK -0.27 (-0.26)
  • Cash flow from operating activities amounted to -3.5 (-10.2) MSEK
  • Cash and cash equivalents amounted to 13.5 (5.3) MSEK

January – December 2023

  • Net sales amounted to 0 (1.9) MSEK
  • The operating result for the period was -40.7 (-36.6) MSEK
  • The net result was -40.2 (-36.9) MSEK corresponding to earnings per share of SEK -0.63 (-1.07)
  • Cash flow from operating activities amounted to -26.2 (-35.6) MSEK

Significant events 2023

  • The rights issue was approved at an EGM in January 2023 and was completed in February 2023. Approximately 72.7 percent of the rights issue, were subscribed for. The bottom guarantors were allocated approx 8.6 percent of the rights issue, and the top guarantors approx 14.4 percent of the rights issue. The company received approximately SEK 46.5 million before issue costs. Three of the guarantors chose compensation in the form of shares.
  • The company implements significant cost containment measures to maximize the possibility of reaching a license agreement without the need for further financing. The decision means that further investments in clinical development will be held back until licensing agreements can be secured. Staff reductions have been implemented and Anders Månsson left the CEO role in August 2023. The board appointed Matthew Lindon as acting CEO.
  • Max Mitteregger resigned from the Board of Directors
  • The collaboration agreement with Johnson & Johnson Enterprise Innovation Inc was closed.
  • Jenni Björnulfson was appointed CEO.
  • Daniel Lifveredson resigned from the Board of Directors.
  • The Board of Directors made its seats available.

Events after the reporting period

  • On the Extraordinary General Meeting of shareholders on the 9 January 2024 Daniel Lifveredson, Torbjörn Browall and Lars-Inge Sjöqvist were elected new members of the Board.
  • In January it was announced that an agreement to acquire Noviga Research AB had been signed.

CEO Statement

When we sum up 2023, we can conclude that it was a turbulent year for LIDDS. The year began with a rights issue that provided the company with SEK 46.5 million before issuing costs. This was a good outcome given the weak market conditions that prevailed, but unfortunately not enough to be able to finance the Phase I clinical trials for the company’s two projects as planned. The decision was therefore taken to carry out one of the trials with the funding we had secured. Nanodotax was chosen because it was the most advanced project and had the necessary approvals in place. In addition, the clinic was well prepared for the start of the clinical study. A number of circumstances pushed the start of the study, from a planned start in the second quarter to after summer.

In 2023, the main focus has been on finding a partner to out-license Liproca Depot and other projects. A successful out-licensing of Liproca Depot would give LIDDS the opportunity to finance further development of NanoZolid and other projects but would also serve as a clear validation of the technology and all the work that has been done within LIDDS over many years. We have been supported in this by Alira Health, which has played a key role in the work to find a partner for the company’s assets. Together with Alira, LIDDS has been in contact with over 200 companies in the process, ranging from big pharma to smaller specialist companies, with a particular focus to oncology and urology. There has been no lack of interest in Liproca Depot, which has undergone Phase IIb and reached Proof-of-Concept. Preparations for a Phase III clinical trial has also been made through an advisory meeting with the EMA. Liproca Depot makes it possible to treat prostate cancer patients with very limited side effects, which is attractive. However, most of the companies we have been in contact with have declined the opportunity to license Liproca Depot and other assets from LIDDS. We are still working to find potential solutions, but the clear validation, and more importantly, the funding we had hoped for from out-licensing of Liproca Depot has not yet been achieved.

The fact that both the start of the study and the out-licensing were delayed, and that J&J chose to not prioritize our joint project was a clear challenge for the company. It was therefore decided to halt all clinical development in order to significantly strengthen the company’s financial sustainability as additional funding was not considered possible to obtain in the weak market environment. As a result, the company’s organization was reduced and all further investment in projects was stopped. The measures taken has significantly reduced the company’s operating costs. The measures will have full effect from the beginning of 2024.

In recent months, LIDDS has evaluated a number of different options for the continued operation of the company. Discussions have been held with various potential stakeholders, but in such situations, both parties need to find a common solution in order for a transaction or collaboration to take place. The Board of Directors has now decided to propose to an Extraordinary General Meeting to resolve on a merger with Noviga Research, a privately held company with the drug candidate NOV202, which has shown good results in non-clinical studies in combination with PARPi drugs for the treatment of ovarian, pancreatic and prostate cancer. An additional toxicology study is required before NOV202 can be considered ready for Phase I clinical trials. The cost of such a toxicology study is estimated to amount to approximately SEK 5.5 million.

For LIDDS, we still have the option of conducting the DTX-002 clinical study with Nanodotax. As we have previously indicated, we had hoped to find an alternative solution for the study, which was never started due to the cost-cutting measures initiated in June. We have not yet given up on the possibility of achieving some form of implementation.

Finally, I would like to take this opportunity to thank the Board of Directors who resigned in connection with the Extraordinary General Meeting held in January 2024 and to welcome the new Board of Directors.

Jenni Björnulfson

The interim report is available on the company’s website