Annual Report • Feb 24, 2022
Annual Report
Open in ViewerOpens in native device viewer
Isofol issue all its reports in Swedish language. This report is a direct un-authorized translation of the issued Swedish year-end report 2021.
■ Jenny Sundqvist assumed her role as Chief Commercial Officer on January 1, 2022.
Isofol is developing the drug candidate arfolitixorin to improve the efficacy of standard 5-FU-based chemotherapy for advanced colorectal cancer (CRC). Arfolitixorin is currently being evaluated in the global pivotal Phase III AGENT study in patients with advanced CRC.
The Group consists of the Parent Company, Isofol Medical AB (publ), and the subsidiary, Isofol Medical Incentive AB. The business is conducted by the Parent Company, while the subsidiary only administers the Group's incentive programs. The descriptions of the business, results and financial position in this interim report apply to both the Group and the Parent Company, unless otherwise stated.
| KEY FIGURES TSEK |
2021 Oct–Dec |
2020 Oct–Dec |
2021 Jan-Dec |
2020 Jan-Dec |
|---|---|---|---|---|
| Net revenue | 4,704 | 18,680 | 22,407 | 37,119 |
| Result for the period | -61,170 | -54,659 | -200,251 | -188,992 |
| Earnings per share (SEK) |
-0.38 | -0.66 | -1.59 | -3.07 |
| Cash and cash equiv alents |
379,448 | 116,393 | 379,448 | 116,393 |
In the fourth quarter of 2021, efforts to establish the best possible conditions ahead of a future commercial launch continued. An important step in accomplishing this is to complete our ongoing study and enabling us to apply for market approval. Our Fast Track Designation will be valuable to us in this regard as we complete the final stage of our pivotal Phase III AGENT study. We have also continued commercial preparations.
In the second half of 2021, we have had two main priorities. The first was to carry out commercial preparations, and the second was to take the necessary measures to be able to present the results of the AGENT study in 2022. I want to stress that commercial preparations are being carried out to ensure a successful commercial launch and to ensure that the partners we engage in discussions evaluates our drug candidate in the right way. Interest from potential licensees and partners remains strong. We are in ongoing contact with several stakeholders, including partners, but are also fully aware that top-line data will be crucial for any continued dialogue and potential business. Pending top-line data, the updated market analysis has acted as an important framework for these discussions. Our efforts to prepare for the planned market launch include increasing knowledge of arfolitixorin in the US market, where we took a number of important steps during the quarter that are described in more detail later in this report.
As part of our efforts to achieve market approval, the FDA granted Fast Track Designation for our drug candidate arfolitixorin, which was a very positive step and serves as an important external validation of arfolitixorin's potential. I interpret this as a confirmation of the large unmet need of better cancer treatments, but also as an effort from the FDA to ensure that, assuming market authorization of the drug candidate arfolitixorin, we secure a supply shortage of folates for 5-FU treatment that puts patients in a difficult position. The drug candidate arfolitixorin is the first direct active folate for over 20 years.
Fast Track Designation enables more frequent dialog with the FDA, which will be significant moving forward. When we have completed our dialogue with the FDA, it will be possible to establish when the top-line results can be presented. However, we are convinced that the study will deliver high-quality results and hope that the AGENT study will have a positive outcome for patients, caregivers and our shareholders.
On October 21, an important step was taken with the listing in the Mid Cap segment of Nasdaq Stockholm's main market, allowing us to raise more awareness about Isofol. This has led to increased share liquidity, which is important for creating additional value for our shareholders.
2021 can be summed up with a number of positive events that signaled important external validations of arfolitixorin's potential to benefit CRC patients. The Independent Data and Safety Monitoring Board's (iDSMB) positive recommendation following its interim analysis enabled us to continue with the study as planned without expansion (including more patients). We held a digital poster presentation at AS-CO-GI that demonstrated that the active ingredient in arfolitixorin is not dependent on the individual's metabolism. The new share issue carried out in June secured the financial resources required to complete the AGENT study and later on submit a completed application for market registration to the FDA and initiate and accelerate global activities in the development of Medical Affairs, the commercial launch package and continued partnership activities.
Year 2022 will be the most exciting year in Isofol's history as we expect the results of the AGENT study. Our focus will thus be fully focused on implementing the activities and actions necessary to be able to present the results and complete the application for a market approval in the United States. In parallel, we will
The approval of Fast Track Designation was a very positive development.
Ulf Jungnelius, CEO, Isofol Medical AB (publ)
continue our efforts to prepare for commercial launch.
I want to express my thanks to the Isofol team for their hard work in moving the company closer to market launch. We are well prepared for 2022, both to handle the upcoming study results and the continued work for a possible market launch at the end of 2023. I would also like to express my thanks to our shareholders for their ongoing confidence. I look forward to continuing to lead Isofol to the market and thereby contribute to improving the quality of life for everyone suffering from metastasized colorectal cancer (mCRC).
Gothenburg, February 24, 2022
Ulf Jungnelius CEO, Isofol Medical AB (publ)
In the fourth quarter, Isofol maintained regular contact with the FDA to ensure the completion of the global pivotal AGENT study. Interactions are currently ongoing within the framework of our Fast Track Designation, which was granted for arfolitixorin in November. Activities in Medical Affairs – the function responsible for managing our relationships with the medical community – have also intensified with the recruitment of the first field-based medical employee (Medical Science Liaison) in the US. This individual will be tasked with spreading awareness of arfolitixorin by informing clinics in the US market about the drug candidate.
During the quarter we identified that more than expected patients were censored without a documented progression event for starting a new treatment. Thus, we are unable to unblind the study in accordance with the predetermined PFS events. Isofol has not yet had the opportunity to review the study data, and it is therefore not possible for Isofol to know whether the change is occurring in one or both treatment arms of the study, or the reason for patients proceeding to other treatments. However, the iDSMB has repeatedly reviewed the safety data of the study with no resulting changes, indicating that the reason is not due to a safety issue with the study.
The AGENT study's primary endpoint, overall response rate (ORR), is not affected and the study is continuing to be conducted according to plan without any major Covid-related effects or delays for the patients remaining.
Since the secondary endpoint of 300 PFS events will not be reached, Isofol has requested from the FDA that the censoring rules be adjusted in accordance with the new ICH (International Council for Harmonization of Technical Requirements for Pharmaceuticals for Human Use) guidelines adopted by the FDA in May
Discussions with the FDA concerning a new cutoff point to begin the analysis of the Phase III data are ongoing and Isofol hopes to reach an agreement with the FDA regarding the new cutoff point in spring 2022. When the new cut-off point has passed, the read-out process can begin, including compilation, quality assurance and statistical analysis to enable top-line results to be presented.
The schedule for being able to present the study results (top-line results and final data) is dependent on the FDA decision regarding PFS cut-off point. The company believes that topline results will likely be able to be presented at the end of the second quarter of 2022.
Ongoing analysis of the final data will then form the basis for a New Drug Application (NDA) in the US, which is the highest priority market for Isofol. The submission of the application for market approval to the FDA is preliminarily expected to take place in the fourth quarter of 2022, with a potential launch in the US during the second half of 2023, provided that the AGENT study reaches its target.
The statistical goal of the AGENT study is to be able to improve tumor shrinkage, measured from the baseline, by at least 10 percentage points in patients treated with arfolitixorin in combination with 5-FU, oxaliplatin and bevacizumab compared with those treated with a leucovorin combination and to achieve a clinically relevant extension of PFS.
The AGENT study also has an exploratory endpoint in the form of gene expression, as Isofol's previous collaborations with academic research groups demonstrated a correlation between clinical benefit and gene expression in patients suffering from mCRC who were treated with 5-FU based chemotherapy. The results of the study have the potential to produce additional guidance about the use of 5-FU based chemotherapy in combination with arfolitixorin and a greater understanding of the role of gene expression in the mechanism of action of arfolitixorin.
Ahead of the submission of drug applications to the pharmaceutical authorities in the US, additional preparatory activities were carried out in the fourth quarter. The FDA granted approval of Fast Track Designation for arfolitixorin in the fourth quarter. The FDA's decision is based on the potential for arfolitixorin to address a large unmet medical need for new and more effective treatments of mCRC, the second deadliest and third most common form of cancer. Fast Track Designation is a process designed by the FDA to facilitate the development and expedite the review of new drugs to treat serious conditions, thereby meeting an unmet medical need. Fast Track Designation allows for a prioritized review process and can result in the expedited processing of an application, more frequent meetings with the FDA and ongoing evaluation, provided that relevant criteria are met. This means that a drug company can submit completed sections of its NDA for review by the FDA, rather than waiting until all parts of the application have been completed. The NDA review usually does not begin until the drug company has submitted the entire application to the FDA.
Despite a rising incidence of CRC, no new all-comer treatments for mCRC patients, regardless of genetic profile, have been approved for first-line treatment in almost 20 years. In a market with established treatment regimens, investments are required to raise awareness of new drug candidates by building relationships with the medical community and relevant external experts (Key Opinion Leaders) ahead of a potential launch. To accomplish this, the first of a number of field-based medical personnel has been recruited in the US. This has been accomplished through a collaboration between Isofol and Syneos Health. The duties of the fieldbased medical personnel include taking part in scientific exchanges with KOLs and other healthcare specialists concerning the efficacy and safety of arfolitixorin. These personnel will also be tasked with communicating and informing about related market trends, research, clinical practice and insights from relevant medical conferences.
In the AGENT study, we will analyze patient tumor material in relatationship to folate-associated genes. Isofol is convinced that biomarker analyses designed to demonstrate the capacity of cancer patients to respond to different folate-based cancer treatments will be applied to all patients treated with 5-FU treatment regimes in the future, provided that a gene-dependent effect can be confirmed in the AGENT study. However, further clinical studies are required to establish a better picture of the gene expressions that are relevant for 5-FU and thereby determine the exact genes that could lead to a difference in clinical efficacy.
An investigator-initiated clinical study (Modelle study) is currently being carried out in collaboration with researchers at Sahlgrenska University Hospital. It intends to investigate, more in detail, the effects that various folates (arfolitixorin/leucovorin) together with 5-FU have on mCRC patients with liver metastases. This is a groundbreaking study as it is the first time it will be possible to directly measure the effect that folates have on the enzyme targets that arfolitixorin is directed at (including the TS enzyme, which is an important target for cancer treatments insofar as it can contribute to inhibiting cell growth). As such, the analysis has the potential to contribute scientific data to Isofol's ongoing clinical work to trying to understand how gene expression determines the patients' capacity to respond to various folate-based cancer treatments.
Currently, about half of the expected patients have been recruited to the study, which will be conducted by Helena Taflin at Sahlgrenska University Hospital. During the fourth quarter, Norrland University Hospital in Umeå also participated in the study and their first patient was included within the framework of the study. The fact that the study now involves an additional hospital will hopefully speed up the pace of recruitment.
Isofol´s ambition is to obtain a market approval for arfolitixorin from the FDA in US, at the end of 2023, provided that the outcome of the ongoing pivotal Phase III AGENT study is positive. To create the most favorable prerequisites possible for the commercial launch, Isofol has initiated a number of preparatory activities.
Commercial preparations intensified in 2021 with the initiation of additional activities, such as detailed analyses of mCRC markets in the US and Europe including an analysis of how CRC patients are currently being treated in order to understand and optimize arfolitixorin's future positioning in the markets. Since January 1, 2022, commercial preparation activities have been led by Jenny Sundqvist, who was appointed Isofol's new Chief Commercial Officer.
Isofol has initiated a number of activities to prepare the company for a future commercial launch of arfolitixorin. During the year, an update of previously conducted market analyses commenced, as did the preparation of strategies for market access. The fourth quarter was dominated by compilations and analyses of the findings received in the last half of the year.
The findings confirm the need for new treatments for CRC. In the updated surveys, approximately 350 physicians expressed their views on the roll of arfolitixorin in future treatment regimes. Provided that the AGENT study reaches its set targets, physicians conclude that arfolitixorin constitutes an improvement compared with current treatments. In addition, payers who have been interviewed in the US, the
Source: 1.) GLOBOCAN 2018, Cancer Incidence and Mortality Worldwide. 2.) GlobalData 2017. 3.) GlobalData Colorectal Cancer: Competitive landscape to 2026. 4.) Deallus Market research and forecast modell 2018.
EU4 and the UK, confirmed that arfolitixorin has an acceptable product profile provided that the study reaches its set targets. The findings will now constitute an important component in discussions with potential partners and serve as a framework for the planning of commercialization efforts.
Arfolitixorin is patent protected until 2038 in the US and Japan and until 2034 in the rest of the world (for example, Europe and China), which means that there is potential for the treatment of additional forms of cancer under the patent protection. In addition to CRC, other solid tumors are treated with the drug combination of 5-FU and folates, including tumors in the pancreas and stomach. Arfolitixorin's mechanism of action is the same for these forms of cancer as for CRC and the potential advantages of using arfolitixorin may be the same. These indications will require further clinical studies in order to secure regulatory approval, something which Isofol is evaluating.
I look forward to shouldering the role of CCO and it is an honor to assume responand strengthened our collaborations with
Jenny Sundqvist, CCO, Isofol Medical AB (publ)
CRC, also known as intestinal or rectal cancer, is a form of cancer that arises from mutations in the mucus membranes of the intestine and is the third most common form of cancer after lung and breast cancer and the second deadliest.
CRC affects both men and women with an equal distribution between the genders. However, there are differences in its localization, as more men are affected by rectal cancer and more women by colon cancer. CRC mainly affects older people, with the majority becoming ill after the age of 70. The global incidence (the number of new patients who are diagnosed with this form of cancer annually) is approximately 1.9 million patients a year.
Despite improvements in the prognosis for patients with CRC over the past decade, the prognosis for survival is worse compared to patients with breast or prostate cancer, and CRC is the second most common cause of global cancer-related death after lung cancer. The prognosis for survival is better with an early diagnosis. Patients in later stages, when the cancer has spread to other organs (known as metastases/ mCRC), have a worse prognosis and significantly higher mortality. Only 10 percent of patients with mCRC are still alive five years after diagnosis.
The total drug market for the eight largest markets for the treatment of CRC amounted to USD 7.6 billion in 2018 and is expected to grow to about USD 10.6 billion by 2028. The reason for this relatively modest market growth is that few new drugs have been launched or will be launched in the coming years. In addition, sales of drugs that have been launched recently or
will be launched (not counting arfolitixorin) are expected to be relatively low since these drugs can primarily help only a smaller subgroup of CRC patients.
In the seven largest markets (the US, the EU4, the UK and Japan), about 370,000 patients are diagnosed with mCRC each year. About 170,000 of these patients annually comprise Isofol's primary market – first-line treatment.
Given that Isofol's primary market consists of the first-line treatment of mCRC patients, the company estimates that its annual sales of arfolitixorin in the seven largest markets could amount to USD 1 billion given market approval.
In 2020, the UK market-analysis company GlobalData published a forecast for the CRC market between 2020 and 2028 for the eight largest markets: the US, the EU4, the UK, Japan and China. The report describes arfolitixorin as one of the most promising drug candidates for CRC together with Array BioPharma's/Pfizer's BRAF inhibitor encorafenib (Braftovi).
Amounts stated without parentheses refer to October-December 2021, and amounts stated in parentheses refer to October-December 2020.
Net revenue amounted to TSEK 4,704 (18,680) for the quarter. Revenue for the quarter was attributable to reimbursements for the AGENT study in Japan. Other revenue amounted to TSEK 0 (18).
Other external costs amounted to TSEK -58,168 (-59,866), corresponding to a decrease of TSEK 1,698. Costs for the ongoing AGENT study were lower compared with the year-earlier period, mainly due to the study having been fully recruited since the fourth quarter of 2020 and at the same time, pre-commercialization costs have increased and the fourth quarter also included costs for the listing change.
Personnel costs in the Group amounted to TSEK -8,990 (-8,376), corresponding to an increase of TSEK 614. There were 15 (12) employees at the end of December 2021.
Depreciation, amortization and impairment of tangible and intangible fixed assets during the period amounted to TSEK -397 (-438).
Net financial items amounted to TSEK 1,689 (-4,932), of which TSEK 1,705 (-4,898) was attributable to exchange rate fluctuations in cash and cash equivalents and derivative instruments and TSEK -16 (-34) to interest.
The operating result amounted to TSEK -62,858 (-49,727), corresponding to an increased loss of TSEK 13,131. The result after financial items was TSEK -61,170 (-54,659), corresponding to an increased loss of TSEK 6,511. The Group has no tax costs since there was no profit in the comparative period.
Cash and cash equivalents at December 31, 2021 amounted to TSEK 379,448 (116,393). No loans had been raised at December 31, 2021 and no loans have been raised since then. Of the Group's cash and cash equivalents, TSEK 42,124 (40,898) was pledged as collateral for currency futures that will fall due for payment in the first half of 2022.
Cash flow from operating activities during the period amounted to TSEK -42,022 (-35,103), corresponding to a change of TSEK -6,919. The negative cash flow for the period was attributable to the company's clinical and pre-commercial activities and lower revenues compared to the same period last year.
Cash flow from investing activities during the period amounted to TSEK 0 (0).
Cash flow from financing activities during the period amounted to TSEK -368 (-325). The negative cash flow was attributable to the repayment of the company's lease liability.
Cash flow for the period amounted to TSEK -42,390 (-35,427), corresponding to a change of TSEK -6,963. The negative cash flow for the period was attributable to the company's clinical and pre-commercial activities.
The Group's investments during the period amounted to TSEK 0 (0). Most of the Group's costs are related to research and development. These costs are expensed on an ongoing basis and are thus not classified as investments. Besides its planned studies, the Group has no material ongoing or planned investments.
Amounts stated without parentheses refer to January-December 2021, and amounts stated in parentheses refer to January-December 2020.
Net revenue amounted to TSEK 22,407 (37,119) for the period. Revenue was attributable to reimbursements for the AGENT study in Japan. Other revenue amounted to TSEK 0 (18).
Other external costs amounted to TSEK -196,712 (-199,535), corresponding to a decrease of TSEK 2,823. Costs for the ongoing AGENT study, which has been fully recruited since the fourth quarter of 2020, have declined over the year. and at the same time, costs for pre-commercialization activities have increased and the fourth quarter included costs for the listing change.
Personnel costs in the Group amounted to TSEK -27,721 (-22,740), corresponding to an increase of TSEK 4,981. There were 15 (12) employees at the end of December 2021.
Depreciation, amortization and impairment of tangible and intangible fixed assets during the period amounted to TSEK -1,596 (-1,770).
Net financial items amounted to TSEK 4,215 (-2,497), of which TSEK 4,378 (-2,350) was attributable to exchange rate fluctuations in cash and cash equivalents and derivative instruments and TSEK -163 (-147) to interest.
The operating result amounted to TSEK -204,465 (-186,494), corresponding to an increased loss of TSEK 17,971. The result after financial items was TSEK -200,251 (-188,991), corresponding to an increased loss of TSEK 11,260. The Group has no tax costs since there was no profit in the comparative period.
Cash and cash equivalents at December 31, 2021 amounted to TSEK 379,448 (116,393). No loans had been raised at December 31, 2021 and no loans have been raised since then. Of the Group's cash and cash equivalents, TSEK 42,124 (40,898) was pledged as collateral for currency futures that will fall due for payment in the first half of 2022.
Cash flow from operating activities during the period amounted to TSEK -188,429 (-160,270), corresponding to a change of TSEK -28,159. The negative cash flow for the period was attributable to the company's clinical activities and the company's pre-commercialization activities and lower revenues compared to the same period last year.
Cash flow from investing activities during the period amounted to TSEK 0 (0).
Cash flow from financing activities during the period amounted to TSEK 450,477 (150,013). The positive cash flow for the period was attributable to the new share issue completed during the second quarter.
Cash flow for the period amounted to TSEK 262,048 (-10,257). The positive cash flow for the period was attributable to the new share issue completed during the second quarter. Excluding the share issue, cash flow for the period amounted to TSEK -189,869 (-161,515).
The Group's investments during the period amounted to TSEK 0 (0). Most of the Group's costs are related to research and development. These costs are expensed on an ongoing basis and are thus not classified as investments. Besides its planned studies, the Group has no material ongoing or planned investments.
There were 15 full-time employees at the end of the reporting period, six of whom were men and nine of whom were women, and all of whom were employed at the company's head office in Gothenburg, Sweden. The company also has approximately ten consultants, most of whom are considered to work full time or almost full time for Isofol.
Remuneration to the Group's senior executives was paid according to applicable policies during the period. No other related-party transactions took place during the period.
Isofol works continuously to identify, evaluate and manage risks in various systems and processes. Risk analyses are conducted on an ongoing basis for the business, but also for activities that lie outside Isofol's normal quality system.
The market risks considered to be of special significance in regard to Isofol's future development are linked to the availability of the financial and clinical resources to conduct the company's studies. The most significant strategic and operational risks that affect the Group and the Parent Company are described in the Annual Report for 2020, and are unchanged since then.
The company is mainly affected by currency risks due to the fact that the pivotal study is essentially paid in USD and EUR. In accordance with the company's financial risk policy, the company exchanges USD and EUR to manage and reduce currency exposure.
The number of shares at the end of the period was 161,515,440 (83,365,966), with a nominal value of SEK 0.0306 (0.0306). The average number of shares in the fourth quarter was 161,515,440 (83,365,966). From October 21, 2021, the share is listed on Nasdaq Stockholm's main list, under the commercial name "ISOFOL". The share was previously listed on First North Premier Growth Market.
No significant events other than those stated on page 1 have occurred since the end of the reporting period.
Isofol's main business is the research and development of one drug, arfolitixorin. This business is capital-intensive and associated with risks that could have a significant adverse impact on the Group's operations, financial position and result. A more detailed description of Isofol's main risks and the uncertainty factors faced by the Group and the Parent Company is presented in the Annual Report for 2020.
| Shareholder | Number of shares | Share capital/votes |
|---|---|---|
| Futur Pension (formerly Danica) | 13,486,795 | 8.4% |
| Avanza Pension | 8,750,907 | 5.4% |
| Handelsbanken Fonder | 7,290,946 | 4.5% |
| Swedbank Försäkring | 5,511,276 | 3.4% |
| Hans Enocson | 4,555,236 | 2.8% |
| AP4 | 4,521,257 | 2.8% |
| Swedbank Robur Fonder | 4,175,839 | 2.6% |
| Bengt Gustafsson* | 3,749,459 | 2.3% |
| Nordnet Pensionsförsäkring | 2,826,930 | 1.8% |
| Alfred Berg Fonder | 2,348,268 | 1.5% |
| Ten largest shareholders | 49,925,967 | 35.5% |
| Other shareholders | 111,589,473 | 64.5% |
| TOTAL | 161,515,440 | 100% |
*Own or related natural or legal person holding shares (direct and indirect) and other financial instruments in the company.
ISOFOL'S LARGEST SHAREHOLDERS BASED ON INFORMATION FROM EUROCLEAR SWEDEN AB AND MONITOR AT DECEMBER 31, 2021.
To date, Covid-19 has had a relatively limited impact on Isofol and its operations. The extent to which Covid-19 will impact Isofol's operations and specifically its clinical study during 2022 will largely depend on the pace at which global vaccination programs are rolled out and how quickly hospitals can return to normal operations and as well as the restrictions that apply in each country. Isofol is carefully monitoring the development of Covid-19 and assessing the extent to which the operations may be impacted in the short and long term. Isofol has adapted its operations and taken continuous precautionary measures to ensure that its employees, consultants and study participants stay safe and healthy and to ensure that the study is based on high-quality data. The AGENT study was fully recruited in December 2020 and the risk of delays due to patient recruitment has therefore been reduced. However, there remains a risk that hospitals could close or that the collection of data could become more difficult due to future waves of Covid-19, which could delay the compilation of data ahead of the study's top-line results.
The Nomination Committee for the 2022 Annual General Meeting consists of Chairman Malin Björkmo, Lars Lind, Ulrik Grönvall, Mats-Ola Palm and Pär-Ola Mannefred. Shareholders who wish to submit proposals to Isofol's Nomination Committee for 2022 can contact Isofol Medical AB (publ), Attn: The Nomination Committee, Arvid Wallgrens Backe 20, 413 46 Gothenburg, Sweden or by email to [email protected].
The Annual General Meeting of Isofol Medical AB (publ) will be held in Gothenburg on May 19, 2022.
Given the considerable uncertainty regarding developments with the prevailing pandemic, decisions will be taken at a later stage to enable implementation of the necessary precautions to ensure that the Annual General Meeting can be conducted with minimal risk to shareholders, employees and other participants.
Shareholders who wish to have matters addressed at the Meeting may submit a written request to the Board of Directors. Such requests are to be submitted by post to Isofol Medical AB (publ), Attn: Chairman of the Board, Arvid Wallgrens Backe 20, 413 46 Gothenburg, Sweden or by email to [email protected] and must be received by the Board of Directors no later than five weeks prior to the Meeting, or in ample time to allow the matter to be added to the agenda for the Meeting, if required.
Isofol's Annual Report for 2021 is expected to be available for download on Isofol's website during the week of May 25, 2022.
The following reports are scheduled for publication:
Annual Report 2021 April 2022 Interim report January-March 2022 May 12, 2022 Six-month report April-June 2022 August 23, 2022 Interim report July-September 2022 November 10, 2022 Year-end report 2022 February 23, 2023
Interim reports are published on the company's website www.isofolmedical.com
2022 Annual General Meeting May 19, 2022
This report has not been reviewed by the Group's auditors.
Ulf Jungnelius, CEO Telephone: +46 709 16 89 55 Email: [email protected]
Telephone: +46 709 16 83 02 Email: [email protected]
www.isofolmedical.com | [email protected] Corporate identity number: 556759-8064 | Registered office: Gothenburg
This report has been prepared in a Swedish original and has been translated into English. In the event of differences between the two, the Swedish version shall apply.
The information was submitted for publication, through the agency of the contact people above, at 8:00 a.m. (CET) on February 24, 2022.
| TSEK* | Note | 2021 Oct-Dec |
2020 Oct-Dec |
2021 Jan-Dec |
2020 Jan-Dec |
|---|---|---|---|---|---|
| OPERATING REVENUE | |||||
| Net revenue | 2 | 4,704 | 18,680 | 22,407 | 37,119 |
| Other revenue | – | 18 | – | 18 | |
| Total operating revenue | 4,704 | 18,698 | 22,407 | 37,137 | |
| OPERATING COSTS Other external costs |
-58,168 | -59,866 | -196,712 | -199,535 | |
| Personnel costs | -8,990 | -8,376 | -27,721 | -22,740 | |
| Depreciation and amortization of tangible and intangible fixed assets |
-397 | -438 | -1,596 | -1,770 | |
| Other operating revenue and operating costs** | -7 | 255 | -843 | 413 | |
| Total operating costs | -67,563 | -68,425 | -226,872 | -223,631 | |
| Operating result | -62,858 | -49,727 | -204,465 | -186,494 | |
| FINANCIAL ITEMS | |||||
| Net financial items | 1,689 | -4,932 | 4,215 | -2,497 | |
| Total financial items | 1,689 | -4,932 | 4,215 | -2,497 | |
| Result after financial items | -61,170 | -54,659 | -200,251 | -188,991 | |
| Tax charged to result for the year | – | – | – | -1 | |
| Result | -61,170 | -54,659 | -200,251 | -188,992 | |
| Of which attributable to Parent Company shareholders | -61,170 | -54,659 | -200,251 | -188,992 | |
| Earnings per share before and after dilution, SEK | -0.38 | -0.66 | -1.59 | -3.07 |
* Certain figures may not tally due to rounding.
** Includes currency effects associated with the business.
There are no amounts to be recognized as other comprehensive income, which is why the result for the period/year corresponds to comprehensive income for the period/year.
| TSEK* | Note | Dec 31, 2021 | Dec 31, 2020 |
|---|---|---|---|
| ASSETS | |||
| FIXED ASSETS | |||
| Intangible fixed assets | |||
| Patents | – | – | |
| Total intangible fixed assets | – | – | |
| Tangible fixed assets | |||
| Equipment, tools, fixtures and fittings | 1,745 | 3,258 | |
| Total tangible fixed assets | 1,745 | 3,258 | |
| Financial fixed assets | |||
| Other long-term receivables | 5,009 | 5,031 | |
| Total financial fixed assets | 5,009 | 5,031 | |
| Total fixed assets | 6,755 | 8,289 | |
| CURRENT ASSETS | |||
| Current receivables | 3 | 15,160 | 23,448 |
| Cash and cash equivalents | 3, 4, 5 | 379,448 | 116,393 |
| Total current assets | 394,609 | 139,841 | |
| Total assets | 401,363 | 148,130 |
| TSEK* | Note | Dec 31, 2021 | Dec 31, 2020 |
|---|---|---|---|
| EQUITY AND LIABILITIES | |||
| EQUITY | |||
| Equity | 6 | 318,233 | 66,567 |
| Total equity | 318,233 | 66,567 | |
| LIABILITIES | |||
| Long-term liabilities | |||
| Long-term lease liability | 110 | 1,439 | |
| Total long-term liabilities | 110 | 1,439 | |
| Current liabilities | |||
| Current lease liability | 1,542 | 1,677 | |
| Other current liabilities | 3 | 81,478 | 78,447 |
| Total current liabilities | 83,020 | 80,124 | |
| Total liabilities | 83,130 | 81,563 | |
| Total equity and liabilities | 401,363 | 148,130 |
| TSEK* | Note | Share capital |
Other contributed capital |
Retained earnings |
Total |
|---|---|---|---|---|---|
| Opening equity, Jan 1, 2020 | 981 | 619,003 | -515,076 | 104,908 | |
| Subscription warrants, repurchases | 6 | – | -57 | – | -57 |
| New share issue, issued subscription warrants | 6 | – | 60 | – | 60 |
| Rights issue | 1,309 | 148,280 | – | 149,589 | |
| Over-allotment option | 262 | 29,738 | – | 30,000 | |
| Issue costs | – | -28,941 | – | -28,941 | |
| Result for the period | – | – | -188,992 | -188,992 | |
| Equity, Dec 31, 2020 | 2,552 | 768,083 | -704,068 | 66,567 |
| TSEK | Note | Share capital |
Other contributed capital |
Retained earnings |
Total |
|---|---|---|---|---|---|
| Opening equity, Jan 1, 2021 | 2,552 | 768,083 | -704,068 | 66,567 | |
| Rights issue | 1,914 | 398,242 | – | 400,157 | |
| Over-allotment option | 478 | 99,522 | – | 100,000 | |
| Issue costs | – | -48,240 | – | -48,240 | |
| Result for the period | – | – | -200,251 | -200,251 | |
| Equity, Dec 31, 2021 | 4,945 | 1,217,607 | -904,319 | 318,233 |
| TSEK* | Note | 2021 Oct-Dec |
2020 Oct-Dec |
2021 Jan-Dec |
2020 Jan-Dec |
|---|---|---|---|---|---|
| OPERATING ACTIVITIES | |||||
| Result after financial items | -61,170 | -54,659 | -200,251 | -188,991 | |
| Adjustments for non-cash items | -1,308 | 5,417 | -2,946 | 3,958 | |
| Income tax paid** | – | – | – | -1 | |
| Cash flow from operating activities before changes in working capital |
-62,478 | -49,242 | -203,196 | -185,033 | |
| CASH FLOW FROM CHANGES IN WORKING CAPITAL |
|||||
| Increase (-)/decrease (+) in operating receivables | 11,448 | 325 | 9,860 | -14,050 | |
| Increase (+)/decrease (-) in operating liabilities |
9,007 | 13,815 | 4,907 | 38,813 | |
| Change in working capital | 20,456 | 14,139 | 14,766 | 24,763 | |
| Cash flow from operating activities | -42,022 | -35,103 | -188,429 | -160,270 | |
| INVESTING ACTIVITIES | |||||
| Acquisition of tangible fixed assets | – | – | – | – | |
| Cash flow from investing activities | – | – | – | – | |
| FINANCING ACTIVITIES | |||||
| Repayment of lease liability | -393 | -394 | -1,548 | -1,553 | |
| Subscription warrants, proceeds received | 6 | 25 | 70 | 108 | 308 |
| New share issue | – | – | 451,917 | 151,258 | |
| Cash flow from financing activities | -368 | -325 | 450,477 | 150,013 | |
| Cash flow for the period | -42,390 | -35,427 | 262,048 | -10,257 | |
| Cash and cash equivalents at the beginning of the period | 420,861 | 153,612 | 116,393 | 126,983 | |
| Exchange rate difference in cash and cash equivalents | 977 | -1,791 | 1,007 | -334 | |
| Cash and cash equivalents at the end of the period | 5 | 379,448 | 116,393 | 379,448 | 116,393 |
* Certain figures may not tally due to rounding.
** Includes currency effects associated with the business..
| TSEK* | Note | 2021 Oct-Dec |
2020 Oct-Dec |
2021 Jan-Dec |
2020 Jan-Dec |
|---|---|---|---|---|---|
| OPERATING REVENUE | |||||
| Net revenue | 2 | 4,704 | 18,680 | 22,407 | 37,119 |
| Other revenue | – | – | – | – | |
| Total operating revenue | 4,704 | 18,680 | 22,407 | 37,119 | |
| OPERATING COSTS | |||||
| Other external costs | -58,577 | -60,292 | -198,349 | -201,231 | |
| Personnel costs | -8,990 | -8,376 | -27,721 | -22,740 | |
| Depreciation and amortization | -18 | -40 | -77 | -197 | |
| Other operating revenue and operating costs** | -7 | 255 | -843 | 413 | |
| Total operating costs | -67,593 | -68,453 | -226,990 | -223,754 | |
| Operating result | -62,888 | -49,772 | -204,583 | -186,635 | |
| FINANCIAL ITEMS | |||||
| Net financial items | 1,706 | -4,900 | 4,304 | -2,354 | |
| Total financial items | 1,706 | -4,900 | 4,304 | -2,354 | |
| Result after financial items | -61,183 | -54,673 | -200,280 | -188,989 | |
| Result before tax | -61,183 | -54,673 | -200,280 | -188,989 | |
| Group contributions paid | – | -293 | – | -293 | |
| Tax | – | – | – | – | |
| Result | -61,183 | -54,965 | -200,280 | -189,282 |
* Certain figures may not tally due to rounding.
** Includes currency effects associated with the business.
There are no amounts to be recognized as other comprehensive income, which is why the result for the period/year corresponds to comprehensive income for the period/year.
| TSEK* | Note | Dec 31, 2021 | Dec 31, 2020 |
|---|---|---|---|
| ASSETS | |||
| FIXED ASSETS | |||
| Intangible fixed assets | |||
| Patents | – | – | |
| Total intangible fixed assets | – | – | |
| Tangible fixed assets | |||
| Equipment, tools, fixtures and fittings | 158 | 235 | |
| Total tangible fixed assets | 158 | 235 | |
| Financial fixed assets | |||
| Participations in Group companies | 50 | 50 | |
| Other long-term receivables | 5,009 | 6,631 | |
| Total financial fixed assets | 5,059 | 6,681 | |
| Total fixed assets | 5,217 | 6,916 | |
| CURRENT ASSETS | |||
| Current receivables | 3 | 15,389 | 23,672 |
| Cash and bank balances | 3, 4, 5 | 379,398 | 114,862 |
| Total current assets | 394,787 | 138,534 | |
| Total assets | 400,004 | 145,450 | |
| TSEK* | Note | Dec 31, 2021 | Dec 31, 2020 |
| EQUITY AND LIABILITIES | |||
|---|---|---|---|
| Equity | 318,297 | 66,660 | |
| Total equity | 318,297 | 66,660 | |
| Current liabilities | 3 | 81,707 | 78,790 |
| Total liabilities | 81,707 | 78,790 | |
| Total equity and liabilities | 400,004 | 145,450 | |
This interim report has been prepared in accordance with the Swedish Annual Accounts Act and IAS 34 Interim Financial Reporting for the Group and in accordance with the Swedish Annual Accounts Act and the Swedish Financial Reporting Board's recommendation RFR 2 Accounting for Legal Entities for the Parent Company. Unless otherwise stated below, the accounting principles applied for the Group and the Parent Company are consistent with the accounting principles used for the preparation of the Annual Report for 2020.
New and amended standards adopted from 2021 are not expected to have any significant impact on the Group's financial position.
The Parent Company does not apply IFRS 16 in accordance with the exception in RFR 2.
The Group's operations comprise the development of the drug candidate arfolitixorin and are organized as a cohesive business within the framework of the ongoing Phase lll AGENT study. Accordingly, all of the Group's operations comprise one operating segment. The operating segment is followed up in a manner corresponding with the internal reporting submitted to the chief operating decision maker, namely the CEO. Only one segment is used in the internal reporting to the CEO.
Isofol's net revenue is attributable to revenue from licensing agreements for the licensing rights to Isofol's intellectual property. Revenue from licensing agreements may comprise one-off payments, licensing fees, royalties and milestone payments for the use of Isofol's intellectual property. Isofol may also be entitled under its licensing agreements to receive reimbursements for costs incurred for the execution of service assignments.
| Group | ||||
|---|---|---|---|---|
| TSEK | 2021 Oct-Dec |
2020 Oct-Dec |
2021 Jan-Dec |
2020 Jan-Dec |
| North America | – | 11,089 | – | 11,089 |
| Asia | 4,704 | 7,591 | 22,407 | 26,030 |
| Total | 4,704 | 18,680 | 22,407 | 37,119 |
| Parent Company | |||||
|---|---|---|---|---|---|
| TSEK | 2021 Oct-Dec |
2020 Oct-Dec |
2021 Jan-Dec |
2020 Jan-Dec |
|
| North America | – | 11,089 | – | 11,089 | |
| Asia | 4,704 | 7,591 | 22,407 | 26,030 | |
| Total | 4,704 | 18,680 | 22,407 | 37,119 |
| Group | ||||
|---|---|---|---|---|
| TSEK | 2021 Oct-Dec |
2020 Oct-Dec |
2021 Jan-Dec |
2020 Jan-Dec |
| Licensing | – | 11,089 | – | 27,431 |
| Execution of service assignments | 4,704 | 7,591 | 22,407 | 9,688 |
| Total | 4,704 | 18,680 | 22,407 | 37,119 |
| Parent Company | ||||
|---|---|---|---|---|
| TSEK | 2021 Oct-Dec |
2020 Oct-Dec |
2021 Jan-Dec |
2020 Jan-Dec |
| Licensing | – | 11,089 | – | 27,431 |
| Execution of service assignments | 4,704 | 7,591 | 22,407 | 9,688 |
| Total | 4,704 | 18,680 | 22,407 | 37,119 |
| Group | |||
|---|---|---|---|
| TSEK | Dec 31, 2021 | Dec 31, 2020 | |
| Accrued income | 1,631 | 11,065 | |
| Contract liabilities | – | – | |
| Total | 1,631 | 11,065 |
| Parent Company | ||
|---|---|---|
| TSEK | Dec 31, 2021 | Dec 31, 2020 |
| Accrued income | 1,631 | 11,065 |
| Contract liabilities | – | – |
| Total | 1,631 | 11,065 |
100 percent of the Group's assets are in Sweden.
As of December 31, 2021, the Group had financial instruments, which were measured at fair value, in the form of currency derivatives of TSEK 1,663 (-1,872). Other financial assets and liabilities are measured at amortized cost. There are no significant differences between fair value and carrying amount in respect of financial assets and liabilities. As of the balance sheet date, the carrying amount of the Group's financial assets amounted to TSEK 381,135 (118,849) and the carrying amount of the Group's financial liabilities to TSEK 72,556 (71,549).
Pledged assets refers to collateral in the form of cash and cash equivalents for derivative instruments, specifically currency futures. The company has pledged TSEK 42,124 (40,898) of its cash and cash equivalents as collateral.
| Group TSEK |
Dec 31, 2021 |
Dec 31, 2020 |
|---|---|---|
| The following sub-items are included in cash and cash equivalents: |
||
| Short-term investments | – | – |
| Cash and cash equivalents | 379,448 | 116,393 |
| Total | 379,448 | 116,393 |
| Parent Company TSEK |
Dec 31, 2021 |
Dec 31, 2020 |
| The following sub-items are included in cash and cash equivalents: |
||
| Short-term investments | – | – |
| Cash and bank balances | 379,398 | 114,862 |
| Total | 379,398 | 114,862 |
The Annual General Meeting on June 24, 2020 resolved to establish a long-term incentive program ("Warrant Program 2020") aimed at the CEO of the company. Warrant Program 2020 should be seen as a supplementary program aimed exclusively at the company's CEO, who did not participate in Warrant Program 2018. The program, which includes a maximum of 250,000 subscription warrants, will result in a smaller dilution for the company's shareholders since the company canceled approximately 408,000 subscription warrants from Warrant Program 2018 in conjunction with the 2020 Annual General Meeting. The maximum of 250,000 subscription warrants entitles the holder to subscribe for a maximum of 370,000 shares (after the completion of the rights issue in June 2020). The subscription period will extend from May 15, 2023 to July 15, 2023. The subscription price for shares subscribed for with the support of the subscription warrants was set at SEK 30.3 per share. In August, the CEO subscribed for all 250,000 subscription warrants at a price corresponding to SEK 0.24 per subscription warrant, generating SEK 60,000 in warrant premiums. The subscription warrants were transferred at market value.
At the end of each program, each subscription warrant entitles the holder to subscribe for one new share in Isofol at a fixed exercise price. The exercise price for series 18/22 is SEK 28.3 per share (subscription period from May 15 to July 15, 2022), and the exercise price for series 18/23 is SEK 42.5 per share (redemption period from May 15 to July 15, 2023).
In early February 2020 and in May 2020, 207,287 subscription warrants were repurchased by Isofol. These subscription warrants were attributable to individuals who had terminated their employment with Isofol. The repurchase took place at market value, calculated according to the Black & Scholes model. The market valuation was performed by an external valuation consultant. The repurchase pertained to Warrant Programs 2018/2022 and 2018/2023 issued in January 2019.
Of the total number of warrants, approximately 408,000 subscription warrants remained that had not been transferred or repurchased by participants whose employment with the company had ended. In conjunction with the 2020 Annual General Meeting, all of the remaining 408,000 warrants regarding the Warrant Program 2018 were canceled.
The company's management and employees paid the warrant proceeds in 2019, pertaining to Warrant Program 2018, through a cash payment and a loan from the company. The loan will be paid off over three years.
| Group and Parent Company TSEK |
2021 | 2020 |
|---|---|---|
| Subscription warrants, proceeds | – | – |
| Loan to management and employees | – | – |
| Repayment from management and employees |
82 | 305 |
| Repurchase of subscription warrants | 0 | -57 |
| Issued subscription warrants, CEO | – | 60 |
| Total | 82 | 308 |
In November 2020, subscription warrants were repurchased from a senior executive who had terminated his employment with Isofol Medical AB (publ). The repurchase was based on a market valuation in accordance with a Black & Scholes calculation performed by Grant Thornton Sweden AB. The repurchase comprised a total of 117,534 warrants at a total cost of SEK 73,460 and pertained to Warrant Program 2018. In conjunction with the repurchase, all repurchased subscription warrants were transferred at market value to the newly appointed Chief Commercial Officer (CCO), Tony Gustavsson.
In December 2021, subscription warrants were repurchased from a senior executive who had terminated his employment with Isofol Medical AB (publ). The repurchase was based on a market valuation in accordance with a Black & Scholes calculation performed by Grant Thornton Sweden AB. The repurchase comprised a total of 117,534 warrants at a total cost of SEK 1,011 and pertained to Warrant Program 2018. In conjunction with the repurchase, 49,134 of the repurchased subscription warrants were transferred at market value to the newly appointed Chief Commercial Officer (CCO), Jenny Sundqvist, and the remaining 68,400 subscription warrants to members of the clinical team.
Upon full exercise of all warrant programs issued for the subscription of shares, a total of 2,359,980 shares will be issued, corresponding to a dilution of approximately 1.5%.
This report includes key figures that are not defined in IFRS, but are included in the report because management believes that this information allows investors to analyze the Group's earnings trend and financial position. Investors should consider these key figures as a supplement to the IFRS financial information.
| TSEK | Dec 31, 2021 | Dec 31, 2020 |
|---|---|---|
| Equity | 318,233 | 66,567 |
| Total assets | 401,363 | 148,130 |
| Solvency | 79.3% | 44.9 % |
| Cash and cash equivalents | 379,448 | 116,393 |
| Working capital | 311,589 | 59,717 |
Solvency is calculated by comparing equity in relation to total assets and is thus a measure of the proportion of assets that are financed with equity.
Equity consists of share capital, other contributed capital and retained earnings, including the Group's result for the year.
Cash and cash equivalents comprise cash and bank balances, immediately available bank balances and other money market instruments with original maturities of less than three months.
Working capital consists of the Group's current assets less current liabilities.
The result for the period divided by the weighted average number of shares during the period, before and after dilution.
To calculate earnings per share after dilution, the weighted average number of outstanding ordinary shares is adjusted for the dilution effect of all potential ordinary shares. These potential ordinary shares are attributable to the warrants included in Warrant Program 2018 (series 2018/2022 and series 2018/2023) and Warrant Program 2020. If the result for the period is negative, the warrants are not considered dilutive.
The Board of Directors and the CEO hereby affirm that the interim report provides a fair overview of the operations, financial position and result of the Group and the Parent Company and describes the material risks and uncertainties facing the Parent Company and the companies included in the Group.
Gothenburg, February 24, 2022
Pär-Ola Mannefred Chairman
Paula Boultbee Board member
Anna Belfrage Board member
Aram Mangasarian Board member
Magnus Björsne Board member
Alain Herrera Board member
Robert Marchesani Board member
Lennart Jeansson Board member
Ulf Jungnelius CEO
A DRUG CANDIDATE FOR THE TREATMENT OF COLORECTAL CANCER
ISOFOL MEDICAL AB (publ) | Biotech Center | Arvid Wallgrens Backe 20 | 413 46 Gothenburg | www.isofolmedical.com
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.