The report is available on the company's website lipidor.se and in the attached pdf.

Summary of year-end report

During the period, the company conducted a Phase III study, from start to finish, of the company's AKP02 drug candidate for mild to moderate psoriasis. In October, it was announced that significant results can be seen compared to placebo but that non-inferiority with the reference product was not achieved. Since the results of the study showed potential patient benefits, the Board has decided to continue investigating the conditions for the project.

During the period, it was announced that the company is partly making cost savings, and together with the company's main owners has partly secured bridge financing. The purpose is to create financial space for forward-looking activities.

Lipidor in brief

Lipidor AB (publ), Org. Nr. 556779-7500 is a Swedish limited company based in Stockholm. The company address is: Lipidor AB, c/o Ekonomistubben, Box 55931, 102 16 Stockholm.

Lipidor is a drug development company with a pipeline of drug development projects in the preclinical and clinical phase. The company develops drugs for the treatment of skin diseases such as psoriasis, acne vulgaris, bacterial skin infections and atopic dermatitis by reformulation of proven pharmaceutical substances.

In 2019, the subsidiary Emollivet AB was formed, with a focus on animal skincare products based on Lipidor’s formulation platform AKVANO®.

Significant events during the fourth quarter (Oct-Dec)

• On 28th October, it was announced that the company's Phase III study showed that AKP02 had clearly better efficacy than placebo in the treatment of psoriasis. The study's primary goal of achieving equivalent therapeutic efficacy compared to the reference product was however not reached.
• In the middle of November, the company gave an update regarding the study outcome, with the assessment that AKP02 still has significant potential, and the goal is to continue to realize that value. Intensive work is underway to investigate the conditions for this, including strategy and financing.
• Lipidor secured bridge financing of at least SEK 5 million through loans and sale of subsidiary shares and took cost-cutting measures including staff redundancies.
• The Board of Lipidor decided to convene an Extraordinary General Meeting to approve the sale of subsidiary shares to major shareholders.

Significant events during the reporting period

• On 26th January 2022, it was announced that the first patients had been enrolled in a Phase III clinical trial with AKP02 cutaneous spray (calcipotriol + betamethasone dipropionate 0.005% / 0.05%) for mild to moderate psoriasis. The study was to be conducted during the first half of 2022.
• On 15th March 2022, it was announced that the subsidiary Emollivet AB was conducting a financing round. The new share issue, a rights issue to existing owners, amounted to SEK 5 million. Lipidor subscribed for its share of the issue volume, an investment of SEK 2.92 million.
• On 20th May, it was announced that half of the patients were enrolled in the Phase lll study with AKP02 skin spray for mild to moderate psoriasis.

Significant events after the reporting period

• On 17th January 2023, Lipidor held an Extraordinary General Meeting in Stockholm. At the meeting it was decided to approve the transfer of shares in the subsidiary Emollivet AB to two major shareholders in Lipidor.
  

Statement from Lipidor’s CEO

On October 28, it was announced that our Phase III clinical study for project AKP02 did not achieve the criterion of equivalent therapeutic effect ("non-inferiority") in the treatment of psoriasis compared to the market-leading reference product (Enstilar). We had high expectations for the study and therefore worked during 2022 to ensure that we had an organization ready to deliver and implement the commitments for Lipidor to uphold in the event of a successful study outcome. Investments and work to ensure GMP production at our manufacturing partner, Aurena, have been the priority areas.

Although the study did not give the result we hoped for, AKP02 showed a good effect, which means that we are having a discussion with our commercial partner Relife about the future of the project. Relife is positive about AKVANO® and AKP02 but assess to study the final study report that was completed in mid-February in order to make a decision. Relife will not be able to register AKP02 as a drug based on the completed study, so a new Phase III study will therefore be necessary, which will delay a possible market launch.

In recent months, we have carried out an extensive analysis of possible explanations for the results of the completed studies, and the conclusions will be able to be used in the design of new studies.

We have previously successfully completed a Phase III study with AKP01, which is also intended for the treatment of psoriasis, but based on calcipotriol alone. This means that we have high confidence in AKVANO® as a formulation. The agreement with Relife also covers AKP01. However, AKP01 has a significantly smaller market potential, which is why registration of AKP01 alone is not relevant at the current time.

Lipidor is a company with several promising projects, of which AKP01 and AKP02 are the two projects that we have taken furthest in the development chain. The other projects are in earlier stages and will require capital and partnerships to move forward. An example is AKP07, which is a project for atopic dermatitis where we are in a preclinical phase. Another is AKP08 which is based on a new combination of established substances for the treatment of acne. Both projects have significant market potential and are therapeutic areas that are growing globally. The priority application submitted in autumn 2022 to the EPO will, if approved, give us patent protection for both AKP08 and a number of other applications until 2043.

In order to secure working capital, Lipidor's board resolved to sell part of the shareholding in the subsidiary Emollivet, which develops and sells skin care spray products for animals. The sale was completed in February. After the sale, Lipidor owns approx. 25% of the shares in the company.

We have also carried out a major reorganization to minimize our fixed costs. It was a tough but necessary decision. Key competencies remain to ensure continued operation of the company and implementation of important projects.

Lipidor continues to work purposefully with the hope of providing positive updates shortly.

Stockholm, 22nd February 2023

Ola Holmlund

CEO

Financial Calendar

See the interim report

Year-end report 2022 (Swedish)

Publication

The information was provided for publication by Lipidor’s CEO on 22nd February 2023 at 8.30am (CET).