IRLAB publishes interim report for the period January-March 2024

KEY HIGHLIGHTS DURING AND AFTER THE PERIOD

• Collaboration with MSRD/Otsuka, funding IRL757 through clinical Proof-of-Concept.
• Successful End-of-Phase 2-meeting with FDA for mesdopetam.
• New insights from the Phase IIb study with pirepemat.
• Regulatory approval to start Phase I with IRL757.

FINANCIAL OVERVIEW OF THE FIRST QUARTER

• Net sales: – (–)
• Operating profit: SEK –37.6m (SEK –59.5m)
• Earnings per share before and after dilution: SEK -0.75 (SEK -1.15)
• Cash and cash equivalents at the end of the period: SEK 73.1m (SEK 210.1m)
• Cash flow from operations: SEK –38.2m (SEK -41.5m)
• Share price at the end of period: SEK 15.60 (SEK 11.08)

Figures in brackets = same period 2023, unless otherwise stated.

PRESENTATION TO INVESTORS AND MEDIA
Wednesday, May 8, 2024, at kl. 10.00 CEST a presentation of the Q1 interim report will be held through a digital webcast. The presentation will be held in English, followed by a Q&A session.
Access via link: https://www.youtube.com/watch?v=xv4qL_nKV3s

COMMENTS FROM THE CEO
The new year has begun with an exceptionally positive development for the company and our projects. The collaboration agreement with the McQuade Center for Strategic Research and Development, MSRD, for IRL757 secures full funding of the project all the way through clinical Proof-of-Concept studies.

The deal with MSRD and the grant we received from MJFF gives us the conditions to run the business without further capital additions well past a potential license deal with mesdopetam and past the topline data in the Phase IIb study with pirepemat.

We have also conducted a successful End-of-Phase 2 meeting with the US FDA, which confirmed consensus regarding the design of the upcoming Phase III program for mesdopetam.

Furthermore, the ongoing Phase IIb trial of pirepemat (REACT-PD) has generated new insights into the severe Parkinson-related balance problems that often cause fall injuries, strengthening the possibilities of detecting treatment effects and providing more confident data-driven estimates of trial timelines.

Clear agreement with the FDA regarding the Phase III program for mesdopetam
On February 20, we held an end-of-Phase 2 meeting with the FDA prior to the initiation of the Phase III program for mesdopetam against levodopa-induced dyskinesias (LIDs) in Parkinson's. The discussions were very fruitful and there was a clear alignment between the FDA and us on the design of the program, which gives validation to the quality of IRLAB's research and development. An important basis for the discussion was the results from our previously completed Phase IIb study, which shows that mesdopetam has a dose-dependent anti-dyskinetic and anti-Parkinson effect, as well as a safety and tolerability profile on par with placebo. There is currently no other drug with this combination of effects available for people with Parkinson's disease, so mesdopetam could become the solution to a large and so far unmet medical need. The favorable safety profile makes it possible to include a broad patient population with levodopa-induced dyskinesias in the Phase III program, which may facilitate patient recruitment.

In the meeting with the FDA, we got clarity that there is consensus between us and the authority that the most appropriate primary efficacy measure to use in the program is UdysRS (part 1+3+4). In our Phase IIb study, a statistically significant and clinically significant effect of mesdopetam was observed on this particular measurement variable.

After the completed meeting with the FDA, our work on finding partners and financing for implementation of the Phase III program has intensified.

Full funding of IRL757 through clinical Proof of Concept secured
As we previously communicated, in December 2023 we received roughly SEK 20 million in a research grant from The Michael J. Fox Foundation for Parkinson's Research (MJFF)
to conduct the first clinical Phase I study with IRL757. The MJFF is the world's largest non-profit funder of research in Parkinson's disease and their support represents a very strong external validation of the potential of IRL757. We have just received the information that the pharmaceutical authorities have approved our application to conduct the study, so we estimate that the study will be able to start during the month of May.

Yesterday we announced that we signed an agreement to start a development collaboration for IRL757 with the McQuade Center for Strategic Research and Development, MSRD, a company within the Otsuka group. Within the framework of the agreement, we will together develop the substance to a completed clinical Proof of Concept, i.e. clinical patient studies that aim to provide evidence of a beneficial effect on apathy in neurological disease. The patient studies will include people with both Parkinson's and Alzheimer's disease. Through the collaboration agreement, IRLAB receives USD 3 million upon signing and additional activity-based milestones of USD 5.5 million. According to the agreement, IRLAB will carry out all development work and in addition to the milestone payments, MSRD will cover these costs. After the Proof-of-Concept studies, the collaboration may be extended based on new negotiations between the parties. If the agreement is not extended MSRD is entitled to low single digit royalties on future sales. It is important to point out that the development collaboration does not give MSRD the right to commercialize a potential future drug – for this it is required that the parties enter into a customary license agreement at a later stage. Such an agreement could generate significant milestone and royalty income for IRLAB. We are very excited about both the full funding of IRL757 and the collaboration with MSRD which provides a solid validation of the quality of our research and development and clearly demonstrates the potential of IRL757.

REACT-PD generates new important insights
We have also taken important steps forward in our clinical program for pirepemat, a drug candidate that has the potential to be the world's first treatment to counteract the severe balance problems and resulting falls and fall injuries that affect people with Parkinson's disease. In our ongoing Phase IIb study, React-PD, we have already generated very important knowledge about this patient group that frequently loses balance and falls. For example, our measurements before the start of the study (baseline measurements) show that the participants in the study fall 2-3 times more often than expected and that the fall rate is stable during the baseline measurements, which last for a whole month. The higher fall frequency, combined with the fact that more patients than expected have chosen to stay in the study for its duration, gives us a stronger statistical opportunity to detect treatment effects. In consultation with regulatory authorities, we have now made the assessment that we can re-evaluate the size of the study and reduce the planned number of patients in the study while maintaining the potential to detect a treatment effect in the form of reduced fall frequency. We expect to have reached a sufficient number of patients in the study during the third quarter of this year and then be able to finish patient recruitment.

New publication describes antipsychotic effect of mesdopetam
A scientific article in the journal Neurotherapeutics published in mid-March describes the results of a study of mesdopetam in a preclinical model of psychosis in Parkinson's disease (PD-P). The study was carried out using a new and impressive technology that makes it possible to follow and study the mechanisms in the brain that are behind psychosis. In the study, mesdopetam exhibited important properties associated with antipsychotic efficacy. The technology provides an excellent tool for evaluating potential new therapies, and the study results provide strong support for mesdopetam's potential as a new treatment for psychosis associated with Parkinson's disease.

Great interest in IRLAB's projects
During the quarter, we have presented IRLAB and our unique project portfolio at, among others, the Life Science Day in Gothenburg, Bayes@Lund, and at the international conference AD/PD™ 2024 in Lisbon. As we present clinical and preclinical data around our projects in various contexts, it becomes increasingly clear that our project portfolio in Parkinson's is unparalleled in the global pharmaceutical industry. This is attracting increasing attention from the medical profession, industrial players and investors.

Forward looking
After an exceptionally positive start to the year, we look forward to further positive events during the rest of 2024. We follow our strategy to discover and develop new drug candidates with the aim of creating the greatest possible value for those affected by Parkinson's and other progressive and incurable diseases in the brain, for their relatives, health care staff and of course also for the company's shareholders. In that work, our most important near term priorities are:
• Mesdopetam – secure funding for the start of Phase III through partnership/out-licensing
• Pirepemat – complete ongoing Phase IIb study
• IRL757 – start the first Phase I of the study and plan the implementation of the activities that fall within the MSRD collaboration
• IRL942 and IRL1117 – continued preclinical development activities towards Phase I ready status
• Continue to evaluate ways to continue financing the company's future activities
 
All in all, our assessment is that the deal with MSRD provides the conditions to run the business without additional capital injection, well past a potential licensing deal with mesdopetam and past the topline data in the Phase IIb study with pirepemat. In our work within Business Development, our focus is now to find a partner for a license deal for mesdopetam. For pirepemat, the focus is to complete the ongoing study and analyze the results. In parallel, discussions take place with players in the financial markets. We continue to be vigilant about our financial stability and continuously evaluate our opportunities.

I look forward to continuing to develop both the company and all the pioneering projects in our research portfolio. Finally, I would like to express my thanks to all shareholders for the trust you place in us.