Message from the CEO

Dear shareholders, Dear Reader

It has been a year with progress across a broad front of objectives. The results are in line with of our general ambition of realizing a valuable portfolio of multiple clinical as well as pre-clinical programs. Some programs will be kept internally for Nuevolution’s own further development and additional value creation, whereas other programs will be partnered for realization of revenue.

With three attractive programs at the Drug Candidate stage, Nuevolution is now set for the crossing from being a pure pre-clinical company to also have clinical development programs.

On the corporate side and realization of a key objective, we obtained approval for the up-listing to the Nasdaq Stockholm’s Main Market in June 2018 according to the projected time plan and 110 MSEK in gross proceeds was secured through a capital raise in May 2018, enabling the company to continue its investments and high activity level.

The year started out well, with Janssen/Johnson & Johnson taking license to one of our successful collaborative programs. In Q1/18, Nuevolution completed its research contribution to the Almirall collaboration, and during the year, Almirall cautiously and successfully completed a comprehensive set of further studies confirming a truly best-in-class program. The joint work and successful review by internal and external boards, was completed supporting the program’s continued progression towards clinical development. A contractual milestone payment of 10.5 MSEK (1 MEUR) to Nuevolution was triggered in recognition of the program having documented best-in-class attributes based on program data, which underscores the quality of the program, developed by a very experienced, combined research and development team. Altogether, this is a strong testament to the uniqueness and potential of the Nuevolution-Almirall program.

Also the collaboration with Amgen went very well in 2018. Our partner exercised a contractual Opt-In right twice. This means that two programs are moving forward with complete funding by Amgen, while Nuevolution retains ownership until potential licensing by Amgen. The joint programs in the partnership progress at full speed with significant participation by both companies in a very well-functioning partnership.

Overall, we could not have hoped for a better outcome of the year from our existing partnerships.

Additionally, our research organization completed its work to nominate the development candidate in the bromodomain BET BD1 selective inhibitor program (Inflammation).

Throughout the year, the team has solidified the documentation for the mechanism of action explaining and supporting the potential use in treatment of atopic dermatitis, fibrotic diseases and potentially immunotherapy.

The internal RORγt inhibitor program showed good efficacy data in an important animal model of Inflammatory Bowel Disease (IBD), and attractive candidate compounds for development have been identified.

Nuevolution’s IL-17A small molecule inhibitor program is a truly unique program with a clear first-in-class potential. Current medical treatment based on IL-17A inhibition e.g. for treatment of psoriasis requires injection of expensive antibodies, which causes potential side effects as a result. For patients suffering from mild-to-moderate psoriasis, it would be more attractive and convenient to use a topical treatment, which is devoid of such risk and inconveniences. Nuevolution’s topical IL-17A small molecule inhibitor program is being developed to offer exactly this. The program is moving fast forward with biological characterization and final optimization towards the future candidate nomination.

Finally, but not the least, behind these frontrunner programs, Nuevolution is progressing a number of additional programs in the built of the next wave of future opportunities for the company.

Based on the success in partnerships and with our own pipeline, we have a strong incentive to enter into further partnerships, and we remain focused on realizing this.

We have our focus on additional partnerships that provide, i.) unique skills and expertise to our programs enabling optimal development; ii.) revenues that may support our financing ability to expand and progress our other pipeline programs; or iii.) de-risking and cost-reduction of progressing programs. Our overall goal is to realize a broad portfolio of valuable programs with an aim to maximize shareholder value through a combination of keeping certain rights, increasing ownership and/or realization of revenues. We remain confident that we will obtain one or more new partnerships based on positive progress with development of our assets and development in our business discussions.

Our listed 2018 achievements and core assets:

  • A successful Nasdaq Stockholm Main Market listing and capital raise
  • Three candidate stage programs moving towards future clinical studies:
    • Almirall: RORγt program (Inflammation) with potential for treatment of skin diseases and psoriatic arthritis
    • Nuevolution: Separately, owned Nuevolution RORγt program (Inflammation) for potential treatment of ankylosing spondylitis and/or inflammatory bowel disease
    • Nuevolution: Selective bromodomain BET BD1 program (Inflammation) for potential treatment of atopic dermatitis, fibrotic diseases and potentially immunotherapy
  • Three well-functioning successful partnerships:
    • Almirall: Reached success criteria for best-in-class potential
      • Potentially up to 442 MEUR in development, registration and sales milestones plus royalties on netsales
    • Amgen: Contractual Opt-In’s in the first two programs
      • Multitarget collaboration
      • Amgen covering all costs for the further development of the first two Opt-In programs, which remains owned by Nuevolution
      • Amgen option to license on a program-by-program basis at 10+ MUSD upfront payment plus up to 400 MUSD in development, registration and sales milestones plus royalties on net sales
    • Janssen: Research collaboration
      • In January 2018, Janssen licensed an anti-infectives program, and is now covering all costs for the further progression of the program in optimization towards potential future candidate nomination
      • Nuevolution is eligible to research, development and commercialization milestones and royalties (undisclosed terms)
  • A powerful drug discovery platform that continues to realize additional successful program for the internal pipeline as well as for partnered programs

We have very clear objectives for the further value creation in our partnered and own pre-clinical and clinical programs:

  • Support partnered programs to realize further successful research and development milestones,
  • Progress own and partnered programs towards clinical studies, and
  • Close additional partnerships in line with strategy

Overall, we look back at 2018, and conclude that we have taken several important steps forward in the direction of realizing our major strategic goals for value creation.

On behalf of the Board of Directors and Management, we would like to thank our shareholders for your continued and strong support which is of key importance for the successful development of Nuevolution.

Finally, we would like to thank all employees of Nuevolution for their dedicated efforts and constant focus on goals that allowed us to deliver the important successes during the year.

Stockholm, April 4, 2019

Stig Løkke Pedersen, Chairman Nuevolution AB (publ)

Alex Haahr Gouliaev, CEO Nuevolution AB (publ)