Toleranzia AB: Interim report third quarter 2024

Three months, July 1 - September 30

• Operating profit/loss amounted to KSEK -2 809 (-1 099).
• Cash flow from operating activities amounted to KSEK 1 931 (133)
• Investments in intangible assets amounted to KSEK 10 684 (9 792)
• Earnings per average share amounted to SEK -0,01 (-0,01)

Six months, January 1 - September 30

• Operating profit/loss amounted to KSEK -5 213 (-5 549).
• Cash flow from operating activities amounted to KSEK -1 768 (-3 310)
• Investments in intangible assets amounted to KSEK 22 996 (39 583)
• Earnings per average share amounted to SEK -0,03 (-0,05)

The "Company" or "Toleranzia" refers to Toleranzia AB with organization number 56877-2866.
 
Significant events in the third quarter of 2024

• Toleranzia contracted a clinical CRO for the phase I/IIa study of TOL2
• Toleranzia appointed Ann-Sofie Taube as CFO on an interim basis
• Subscription commitments were received for the exercise of warrants of series TO4 corresponding to approximately 71.14 percent

Significant events after the reporting period

• Toleranzia submitted a clinical trial application for TOL2
• The exercise period began for warrants of series TO4

Key financial data

COMMENTS FROM THE CEO
 
Application for clinical trial with TOL2 submitted
In the third quarter of 2024, we completed the extensive clinical trial application for the use of our drug candidate TOL2 in patients with myasthenia gravis and shortly after the end of the period, on October 2, we were pleased to submit the application online via the European Medicines Agency's (EMA's) CTIS portal. In the coming quarter, the Agency will review the application before an approval decision.
 
The planned clinical trial, which is a placebo-controlled multicenter study with participating clinics in Sweden, Denmark and Germany, is divided into two parts. In the first part, patients with myasthenia gravis will each receive a single dose of TOL2 in gradually increasing doses. In the second part, patients will receive repeated treatment with TOL2 for just under two weeks at gradually increasing doses. The study is designed to evaluate safety and tolerability and to obtain preliminary efficacy data.
 
In order to strengthen Toleranzia's financial base before the start of the study, we are implementing the TO4 warrant program in October, which, if fully subscribed, can provide the Company with just over SEK 43 million before issue costs. At the end of August, we were very pleased to announce that the Company received subscription commitments from Flerie Invest AB and Zonda Partners AB as well as the Company's CEO and board members for a total value of approximately SEK 30.9 million, corresponding to 71.14 percent of the total issue proceeds. With the strong support provided by the subscription commitments, we hope, despite a tough market climate, to achieve a very good result in TO4.
 
During the summer, the Company appointed Ann-Sofie Taube as CFO on an interim basis, during our regular CFO's leave of absence. Ann-Sofie has more than 30 years of experience as a CFO, business controller and financial advisor in various businesses and industries with solid experience in financial management and business development.
 
In terms of operations, the work of scaling up the formulation process continues for the manufacture of the approximately 3000 packages of sterile, freeze-dried TOL2 of GMP quality needed for the clinical study. During the period we have successfully produced a large-scale test batch of about 700 finished freeze-dried packages that will be used, among other things, to determine the shelf life of the drug product. Further, during the period, Toleranzia has also built up the chain of resources necessary for the implementation of the multicenter study as well as for labeling, storage and distribution of the lyophilized drug product.
 
All in all, Toleranzia has during the quarter completed several important steps to be able to start the first study in myasthenia gravis patients with the company's potentially groundbreaking treatment, and during the last quarter of the year we look forward with excitement to the response from the EMA, regarding our clinical trial application.
 
Charlotte Fribert
Executive Director
Gothenburg, October 21, 2024

ABOUT TOLERANZIA
 
General information about the business
Toleranzia AB (publ) (556877-2866) is a Swedish biotechnology company listed on Nasdaq First North. The company develops drugs that harness the power of the immune system to treat rare autoimmune diseases. The drugs, which target the cause of the disease, can alleviate or cure the disease and not, like current treatments, just reduce the symptoms. They have the potential to be the first long-acting or curative treatments that act specifically on the underlying cause of the rare autoimmune disease they are developed for. Toleranzia's main focus is the autoimmune nerve and muscle disease myasthenia gravis, for which the Company is developing the drug candidate TOL2. In addition, Toleranzia is working on the autoimmune blood vessel disease ANCA vasculitis, for which the Company is developing the drug candidate TOL3. Both diseases are so-called rare diseases where so-called orphan drugs can be developed and where there is a great medical need and a large market potential. For further information, please visit: www.toleranzia.se.
 
Company structure and shareholding
Toleranzia does not have any subsidiaries. Flerie Invest AB owns more than 50% of the shares, which means that Toleranzia is a subsidiary of Flerie Invest AB. The company owns no shares.
 
Financial development and position
 
Period July – September
Other operating income amounted to SEK 771 thousand (213) during the quarter and consists of foreign exchange gains and project support part of development projects.
 
Operating expenses amounted to SEK 14 067 thousand (11 296) during the quarter, of which SEK 1 544 thousand (1 214) relates to personnel costs.
 
The costs are in line with the Company's plan and expectations linked to the long-term strategy.
 
Of the total cost, SEK 10 684 thousand (9 792) relates to the development of the Company's project portfolio in myasthenia gravis and ANCA vasculitis, where the costs incurred are continuously capitalized as work for own account.
 
The operating result amounted to SEK -2 613 thousand (-1 292) during the quarter.
 
Period January - September
Other operating income amounted to SEK 1 298 thousand (261) during the period and consists of foreign exchange gains and project support part of development projects.
 
Operating expenses amounted to SEK 30 125 thousand (45 615) during the period, of which SEK 4 900 thousand (4 072) relates to personnel costs.
 
The costs are in line with the Company's plan and expectations linked to the long-term strategy.
 
Of the total cost, SEK 22 785 thousand (39 583) relates to the development of the Company's project portfolio in myasthenia gravis and ANCA vasculitis, where the costs incurred are continuously capitalized as work for own account.
 
The operating result amounted to SEK –6 042 thousand (-5 770) during the period.
 
Cash flow and liquidity
Cash flow from operating activities amounted to SEK -1 931 thousand (133) during the quarter. Cash flow from operating activities amounted to SEK -1 768 thousand (-3 310) during the nine months.
 
As of September 30, the Company's cash and bank balances amounted to SEK 1 042 thousand (32 511).
 
Investments
Total investments in intangible assets amounted to SEK 10 684 thousand (9 792) during the quarter. The corresponding investment for the period Januari-September amounted to SEK 22 785 thousand (39 583)
 
The investments relate to the development of the Company's portfolio of projects in myasthenia gravis and ANCA vasculitis and the costs are capitalized on an ongoing basis as work for own account.
 
Human resources
Toleranzia is a development company where committed employees with solid experience and cutting-edge expertise are a prerequisite for commercial success and for achieving the Company's vision. The Company had 11 full-time equivalent employees or contracted consultants as of September 30, 2024.
 
Funding and financing
During the second quarter of 2024, Toleranzia signed a loan agreement of SEK 20 million with the Company's main owner Flerie Invest AB. The loan commitment, which entered into force on May 1, 2024, and has a duration of 12 months, is expected to ensure that the Company will be adequately financed at least twelve months after the balance sheet date. The loan was utilized to 7.5 MSEK as of 30 September.
 
In the fall of 2023, Toleranzia carried out a new share issue, which provided the Company with capital and cash of approximately SEK 43.4 million, before issue costs. Together with the shares, warrants (TO4) were simultaneously issued with exercise during the period October 7 - 21, 2024. At full subscription, the Company will receive an additional SEK 43.4 million.
 
The Board of Directors and management have a continuous focus on cash flow and work continuously to ensure long-term and sustainable financing of ongoing and planned development projects and assess that there are several possible options to secure the financing of the Company.
 
Shares
Toleranzia's shares are traded on Nasdaq First North Growth Market since October 15, 2020. The number of shares in Toleranzia amounted to 197 070 875 as of June 30, 2024. The share is traded with the short name TOL and with ISIN code SE0007438577. As of 30 September, 2024, the share capital amounted to SEK 24 633 859. The Company has one class of shares, of which each share has a quota value of SEK 0.125 (SEK 0.125) and carries equal rights to participate in the Company's assets, earnings and votes.
 
In addition to the share capital, 86 755 644 warrants have been issued that give the holder the right to subscribe to the same number of shares through exercise during the period October 7 - 21, 2024, at a price of SEK 0.50 per share.
 
Toleranzia’s website contains a list of the largest owners, which is continuously updated.
 
Mangold Fondkommission AB is the Company's Certified Adviser and can be reached at: ca@mangold.se.
 
Review by auditor
This interim report has not been reviewed by the Company's auditors.
 
Financial calendar

Quarterly reports and annual reports are published on the Company's website www.toleranzia.com.
 
The Board of Directors and the CEO hereby certify that the interim report gives a true and fair view of the Company's operations and financial position.
 
Gothenburg, October 21, 2024
Toleranzia AB
The Board of Directors and CEO