NUEsLETTER NO 1: LETTER FROM THE CEO

During my early years as industry medicinal chemist, I was fortunate enough to experience that hard work and bright minds by many, can overcome very difficult and important drug discovery challenges in the search for new medicines. I also realized that it required significant information generation in order to devise the optimal solutions, and that it came with high cost in terms of time, capital and human resource consumption. Worst however, many projects trying to address very important biological disease targets get stuck already in screening, because it seems impossible to find molecules that can do the job.

From Idea to Practice

When we commenced the work at Nuevolution back in 2001, some 14 years ago, we had ideas on paper for a prototype technology – a technology that would allow us to screen very large collections of drug-like molecules, and thereby potentially make the drug discovery process of finding new tablet based medicine more effective. Based on my past experiences, I brought with me a personal dream that we would create an efficient drug discovery engine that would allow us to continuously fuel a biotechnology pipeline of valuable programs. Through increased research efficiency, this would permit generation of a surplus of programs such that select programs could be out-licensed in exchange of revenues, supporting the realization of a self-sustainable biotechnology company, while other programs would be progressed in parallel internally for further shareholder value creation.

In its current state, our platform, which we have termed Chemetics® (from “chemistry” and “genetics”), enables Nuevolution on a day-to-day basis to screen 1,000+ times more drug-like small molecules (for oral use, i.e. tablets) than is possible by the largest pharmaceutical companies with all of their techniques, and we have not yet reached its limits. This alone, realizes a higher success rate and significantly more information at considerably lower cost, such that the further optimization process is better guided with a lower risk of failure. Furthermore, Nuevolution’s scientific staff converted the original idea for a screening technology into a concerted platform for also efficiently performing the further optimization process, such that fewer resources and less capital is needed during the phase of fine-tuning of drug properties.

It took hard work and bright minds of many to transform the original ideas for the prototype technology into the robust, reliable and time, cost and resource efficient platform for discovery of tablet based medicines, which Nuevolution operates today. Our platform, Chemetics®, has been carefully patented with more than 100 patents already granted, offering Nuevolution a dominant position in this technical field of drug discovery.

Scientific and Commercial Validation

Based on our scientific expertise for operating Nuevolution’s powerful platform, and leveraged by our strong patent position, we have transformed this into realization of 15 deals with blue chip pharmaceutical companies like Merck & Co. (MSD), GlaxoSmithKline, Novartis, Boehringer Ingelheim, Janssen (Johnson & Johnson) and Lexicon Pharmaceuticals, where we have e.g. entered into two deals with Merck & Co. and three deals with Novartis. In these partnerships, Nuevolution has produced successes against very challenging targets, where the pharma partner had already attempted multiple other approaches without success.

Strategic Business Decision and Execution

This strong commercial and scientific validation of the platform in multiple partnerships led to the decision in 2012, that Nuevolution should embark on the establishing of its own pipeline of programs within cancer and chronic inflammatory diseases, where a significant unmet need remains, and where substantial deal making is executed both in the discovery, the pre-clinical and the clinical phases.

Today, Nuevolution applies its platform by screening billions of small molecules (for tablet based medicine) against about 15 biological disease targets annually with the aim to identify novel, safe and efficacious treatment of cancer and chronic inflammatory diseases, and with the hope to be able to improve quality of life and life expectancy for patients.

Objectives

We have set our objectives to seek:

• Realization of efficacious, safer, orally available, and lower cost medicines, for treatment of severe chronic inflammatory diseases like e.g. multiple sclerosis (MS), rheumatoid arthritis (RA), psoriasis (PsO), inflamed fatty liver (NASH) and chronic inflamed colon or intestine (IBD) where significant unmet medical need remains.

• Realization of programs enabling future medicines in immuno-oncology, effectively reactivating the cancer patient’s own immune system, when this has been ‘silenced’ by tumour cells.

• Realization of programs enabling personalized medicine (medicine fitting the individual patient) for treatment of cancer through identification of drugs, which selectively and safely eliminate the biological pathways upon which the tumour cells (of the individual patient) are dependent for survival and growth.

World Class Key Opinion Leaders

At Nuevolution, we strive to conduct research optimally and to realize solid business successes. We are therefore most fortunate to be supported by serial entrepreneurs like Dr. Peter Hirth, who successfully created two block buster biotech companies (Sugen and Plexxikon), pre-clinical and clinical experts like MD Keith Nolop, cancer experts Dr. Gordon B. Mills (MD Anderson, TX, US) and Professor Paul Workman (Institute of Cancer Research, UK), inflammation experts Professor Sir Marc Feldman (pioneer and discoverer of anti-TNFalpha antibodies for treatment of rheumatoid arthritis) and Professor Dr. Marc Genovese (Stanford, CA, US), and Professor and Nobel Laureate Dr. Robert Lefkowitz (Duke University, NC, US) with whom Nuevolution is searching for novel ways of applying its platform in research of certain specific important biological targets.

Now and the Future

In less than three years, Nuevolution has already established a pipeline of promising opportunities with its frontrunner program potentially offering next generation tablet based treatment for chronic inflammatory diseases through blockade of the biological target RORγt – a key biological switch for the inflammation process of autoimmune conditions. Following the frontrunner program, Nuevolution is progressing programs for treatment of cancer e.g. through stimulation of the cancer patients own immune system to aid effective and safe elimination of the cancer, and furthermore through programs targeting essential proteins in the tumour cells responsible for driving tumour cell survival and cancer disease progression.

In support of our cancer disease research, Nuevolution has joined forces in a number of programs with Cancer Research Technology (CRT, UK) and Institute of Cancer Research (ICR, UK). CRT represents the commercial research unit for all cancer research at UK academic institutions. In these collaborations, Nuevolution, CRT and ICR research multiple novel mechanisms for treatment of cancer diseases.

We believe that much has been achieved during the past 14 years with strong support from leading Scandinavian investors in SEB Venture Capital, SEB Ütvecklingsstiftelsen, Sunstone Capital, Industrifonden and Novo Ventures.

Over the next years, we intend to further boost the application of our platform by progression of more internal programs, by the inclusion of risk sharing partnerships with biotechnology and pharmaceutical companies and by realization of several product out-licensing agreements.

We are determined to realize promising programs with breakthrough therapy potential. Our programs will be further progressed in partnerships in exchange of financial remuneration, and by Nuevolution to realize value creation for shareholders and hopes for patients with life threatening cancer diseases and chronic inflammatory diseases resulting in poor quality of life.

With this letter, I would like to invite you to follow-us on our website or seek collaboration with us in support and realization of our grand vision of building Scandinavia’s leading company within cancer and chronic inflammatory diseases with the potential and focus on realizing novel important medicines and creation of shareholder value.

Copenhagen, October 16, 2015
Alex H. Gouliaev
Chief Executive Officer
Nuevolution