CEO comments interim report Q4 2021

I am very pleased with the company’s development in 2021. During a period when the Covid-19 pandemic and the financial markets created major challenges for the biotech sector, we took major steps ahead, both in our clinical development projects and in the growth of the company.

Without a doubt, the most central event was the competi- tive negotiation that resulted in the mesdopetam license agreement with Ipsen, which gave us an initial milestone pay- ment of USD 28 million, the potential payment of an additional USD 335 million and royalty on any sales.

During the year, we have leveraged our stronger position to accelerate the development in our preclinical projects and, in parallel, we have expanded our organization with new talent.

The Ipsen transaction leads to greater opportunities for additional partnerships

IRLAB is engaged in long-term and purposeful conversations with a large group of pharmaceutical companies. In January 2021, IRLAB presented new and highly exciting preclinical data indicating that mesdopetam is capable of both treating and pre- venting the development of levodopa-induced dyskinesia (LID) in Parkinson’s. Combined with the convincing clinical and preclini- cal results, this started off the process in the first quarter 2021 that led to the commercial license agreement with Ipsen.

In addition to placing mesdopetam at the heart of the hope for a new and better treatment for people with Parkinson’s, the

deal has given IRLAB a strong financial basis, which has allowed us to vigorously develop the company towards the vision that is governing our work – to be a world-leading developer of innova- tive drugs for the treatment of Parkinson’s and other disorders of the brain.

The transaction, which was one of the largest deals ever made in Swedish biotech, strengthened our conviction that we are developing IRLAB in the right direction. We are now acting in the international arena, with increased visibility and capacity. The transaction has brought us valuable attention and opportunities for additional partnerships. The license negotiation and the new collaboration also subjected us to thorough scrutiny as a research company, and we are proud to confirm that we have effective internal processes, controlled risk management and high operational quality. Our deal with Ipsen has also allowed us to accelerate the research and development in the P001 and P003 preclinical programs.

The fact that we reported a profit and positive cash flows in 2021 is an important milestone for IRLAB and an important conse- quence of our successful business development. Not only does this give us the conditions required to take the business to a higher level; it is also a highly important signal that our business model works, and that the organization delivers in line with our goals.

Scalability

Our research and business model is scalable, and we are now expanding our organization with cutting-edge talent in key areas

to leverage the scalability of our research. We are currently focusing on important roles in strategy, research, artificial intelli- gence and communication.

In parallel with the scaling up of the business and the pro- gression of our preclinical projects to clinical Phase I studies, our top priorities include conducting the Phase IIb/III study with mesdopetam, ensuring that we have the best possible condi- tions for the Phase IIb study with pirepemat, and increasing our visibility to investors and industry peers.

Our ISP platform gives us a clear competitive advantage

ISP is an important element of IRLAB’s competitiveness, as the research platform and the company’s extensive and profound knowledge of brain disorders can generate new projects and drug candidates efficiently and quickly. Our research method gives us a major competitive advantage compared with our industry peers and sets the stage for major collaborations in product development and preclinical projects. Based on our technology development and experience, we can now state that our research and business development engine has been prop- erly tuned.

We enter 2022 with confidence

Covid-19 had a major impact on the pharmaceutical sector last year. For IRLAB, our research organization was able to do its work, and we were able to adapt quickly to the new conditions imposed on us by increasing the digitalization of our work pro- cesses.

From a global perspective, biotech companies had to delay the start of studies or interrupt studies prematurely in 2021, and delays in patient recruitment were not unusual. All companies

also experienced longer response times from regulatory author- ities. We are therefore very happy that the mesdopetam study was able to progress, even though people with Parkinson’s belong to the elderly at-risk group who were advised to isolate and avoid unnecessary medical appointments. In connection with the rapid spread of the omicron variant at end of the year, a slow-down in recruiting to clinical studies became clear.

Hospitals, where clinical studies are conducted, found it diffi- cult to participate in starting up new studies, as they prioritised Covid-19 and its effects. These factors also affected IRLAB and we experienced delays when entering into agreements with hospitals.

In light of the situation in 2021, we were therefore very pleased to receive regulatory approval for our Phase IIb study with pirepemat in the fourth quarter. Now that lifting of restrictions seem to begin in Europe, we have an opportunity to get patient recruitment for this study off to a good start, and we hope that conditions will return to normal during 2022. The aim of the pirepemat study is to improve balance, thus reducing injuries from falls, in people with Parkinson’s.

Last year, we received a great deal of positive feedback and external validation from our ongoing collaborations with British laboratories and Swedish research teams that are helping us evaluate our clinical drug candidates and the exciting com- pounds in the P001 and P003 projects. We enter 2022 with curiosity about new collaborations and a sense of confidence.

Nicholas Waters, CEO, IRLAB