LETTER FROM THE CEO
Dear shareholder, Dear reader,
It has been a very successful and productive year for the company with major achievements on multiple fronts including execution of major agreements and realization of significant revenues, pipeline program progress and technology achievements. The results of the year support our long-term ambition to realize a valuable portfolio of multiple clinical as well as pre-clinical programs, where 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 revenues.
The next major value-creating goals that we will strive to realize with focused efforts are:
- Progression of at least one program to become Clinical Development ready
- Strengthening of the shareholder base with international and/or institutional investors
- During fiscal year 2017/18, move Nuevolution from Nasdaq First North Premier to Nasdaq Stockholm’s Main Market
Together forming the further foundation for bringing Nuevolution to new horizons in terms of value proposition, business opportunities and growth potential.
We will be seeking to complete these developments without deviating from our general multiple-shots-at-goal and risk mitigation strategy. In the light of the successful execution of our strategies in the past and a very productive year on multiple fronts, I feel that we have good reasons to be optimistic also for the time to come.
Nuevolution is a biotech company that has significant focus on risk mitigation and continuous revenue generation, while at the same time having a major focus on shareholder value creation. The next step on this journey will include clinical development of own and partnered programs.
Nuevolution’s Chemetics® technology platform not only offers a higher chance of success for each individual program, but also enables the company to cost-effectively run multiple programs in parallel. This multiple-shots-at-goal research strategy allows Nuevolution to reduce the company’s overall research risk, while at the same time offering more options for doing deals and for identifying which programs Nuevolution should progress into the clinic.
Nuevolution continue to apply its Chemetics® drug discovery platform in the search for highly effective new medicines within the fields of oncology, immuno-oncology and inflammatory diseases.
Chemetics® Drug Discovery Platform
During fiscal year 2016/17, we made significant breakthroughs in two important technology areas:
In February, we reported the successful completion and validation screening of our biggest collection of molecules to date. This new screening library consists of 40 trillion, i.e. a 4 with 13 zeroes of molecules – a size of screening library that we only dreamt about 16 years ago when Nuevolution was founded. We believe this represents the largest synthetic drug discovery library in the world, with a size corresponding to about 20 million times the size of a typical Big Pharma screening collection. Our new library is now being employed in several projects, with the expectation that it will further increase the probability of success for tough disease targets. Despite the size of this library, it can be handled by one person, literally with one hand, as all the molecules are present in just one test tube.
Second, and almost simultaneously, we reported a publication in collaboration with Nobel Laureate Professor Robert Lefkowitz presenting a breakthrough in the application of Nuevolution’s technology against the important class of targets named GPCRs, which are involved in signaling across cell membranes.
A number of important goals were realized during the year. In connection with Nuevolution’s IPO in December 2015, we had announced that we would seek to establish two deals within 18 months. After ten and twelve months, respectively, we signed two major agreements of significant strategic importance.
In December 2016, we announced a strategic collaboration with Almirall (worth up to SEK 4.4 billion plus royalties) for the development and commercialization of Nuevolution’s novel RORγt inhibitor program for the treatment of inflammatory skin diseases and disorders, as well as for the treatment of psoriatic arthritis. By transferring the further development process for this drug candidate within the dermatology and psoriatic arthritis fields to Almirall, we have secured a very experienced and dedicated partner for the program.
In October, we announced our major research collaboration with Amgen, a multi target research collaboration in which Amgen has an exclusive option to obtain all rights to successfully developed programs (with a potential value of up to SEK 3.5 billion plus royalties for per program licensed by Amgen). By securing our potential program licensee upfront, this agreement represents a key element in Nuevolution’s strategy to reduce the business risk of the investments that the company undertakes in its research and development of new medicines, while at the same time offering a significant upside for successful programs. In addition to the business aspects of this agreement, this collaboration combines the synergies of Nuevolution’s powerful platform and strong experience in the field of small molecules (tablet-based medicines) with the significant biology and disease expertise of Amgen as well as its development experience and capacity.
Furthermore, in December we announced that Nuevolution, in collaboration with Professor Kristian Helin, Biotech Research and Innovation Center (BRIC) at the University of Copenhagen, will pursue the discovery and development of therapeutics directed towards specific cancer types for which there is currently no effective treatment. By collaborating with Professor Helin, Nuevolution will obtain access to frontier research relevant for these specific cancer disease targets.
Finally, during the financial year, we also announced a further expansion of our collaboration with Janssen Biotech and payments related to this collaboration.
Drug Discovery & Development Pipeline
During fiscal year 2016/17, we made significant progress in our drug discovery programs, for example with our anti-inflammatory program targeting the RORγt nuclear hormone receptor being partnered with Almirall for uses within dermatology and psoriatic arthritis. Since the initiation of the collaboration, Almirall’s and Nuevolution’s teams have enjoyed a successful scientific partnership in progressing the program. Likewise, in the collaboration with Amgen, we reached cell-based proof-of-concept for the two first programs, and the research collaboration is continuing to progress programs according to plan.
We believe we are well under way with execution of our strategy and, after two major deals during the financial year, we are now also focusing on bringing our own programs forward into clinical development and on progressing multiple internal programs in the realization of this objective.
In the search for secondary indications for our anti-inflammatory RORγt inhibitor program outside of the Almirall collaboration, we have now obtained positive data in two animal models of Inflammatory Bowel Disease (IBD) and we will continue to explore opportunities within the inflammatory Th17-related diseases area before selecting the next indication for our RORγt inhibitor program. It is the plan to reach this conclusion during 2017.
The bromodomain BET BD1 selective inhibitor program (inflammation), successfully completed a number of significant biological studies. We have solidified the on-target mechanism of action in animals, obtained efficacy at the disease biomarker level in an animal fibrosis model, and demonstrated efficacy in two animal models of the severe auto-immune disease Lupus, and we have shown a benign toxicity profile both in vitro and in vivo. Chemistry optimization towards final candidate compound is ongoing, and we expect to reach a conclusion for the best first indication for the program during 2017 following further biological studies.
Several other programs also progressed very well during the year as reported later in this annual report by our Chief Scientific Officer Thomas Franch.
Internally, 43 full-time employees from 11 nations are working ‘hard and smart’ with focused efforts in our teams and in collaboration with a large number of external contract research organizations (CROs) to deliver the next successful results for Nuevolution. Externally, we are supported by a number of key specialists in the areas of importance to Nuevolution, including in the sciences as well as in corporate matters. In support of the three important goals of the Grand Plan outlined above, we have engaged Swedish law firm Vinge and Carnegie Investment Bank to assist the company in realization its goals.
In addition to the recent engagements of Vinge and Carnegie Investment Bank to support the company in realizing its goals, Nuevolution also took several steps during 2016/17 to prepare for its intended move of the company stock to Nasdaq Stockholm’s Main Market. Nuevolution has established fully operational Nomination, Audit and Remuneration Committees and, in addition, the company’s report for the third quarter 2016/17 was reviewed by its auditors in accordance with the Swedish Corporate Governance Code. Also, a pre-audit of the company’s Main Market listing readiness reviewing corporate governance, the control framework, the company’s tax position, and its legal and investor relations, among others, is ongoing.
It is our goal to move our listing from Nasdaq First North Premier to Nasdaq Stockholm Main Market during the fiscal year 2017/18.
Overall, I believe that we can look back at 2016/17 and conclude that it was a very productive and successful year. I am looking forward to continuing on a positive trajectory for the further development of Nuevolution in the realization of our major strategic goals and for reaching new horizons in terms of value proposition, business opportunities and growth potential.
Finally, I would like to thank our shareholders for their support and continued interest during the year. We very much hope to meet you and discuss with you at many of the events where we will be present during the coming year. Also, but not the least, I would like to thank all of my colleagues, the employees of Nuevolution for their continued and dedicated efforts and with a constant focus on realizing our key objectives.
Stockholm, 18 September 2017
Alex Haahr Gouliaev
Chief Executive Officer