To read the digital Report click here: https://reports-en.ziccum.com/delarsrapport-q3-2021/start/

Q3 2021

• The result for the quarter amounted to -5 043 kSEK (-5 346 kSEK)
• Cash flow for the quarter amounted to -6 414 kSEK (-165 kSEK)
• Cash and cash equivalents at the end of the quarter amounted to 19 564 kSEK (39 561 kSEK)

Significant events during Q3 (July-Sept’)

On the 1st of September Anna Lönn was appointed as Development director

Significant events during Q1-Q2 (Jan’-June)

Ziccum published its goals for 2021 on January 12. The major goals are to enter into the first licensing agreement for one or more dry-formulated vaccines, and to present a detailed plan for establishing a modular Fill and Finish production facility for filling and final packaging of dry, thermostable powder vaccines, including the necessary partnerships and financing plans. Ziccum’s medium-term goal (2–3 years) is to establish the first Fill and Finish facility for dry-formulated vaccines in Sweden.

On January 25 Ziccum announced the extension of the evaluation agreement with Janssen Vaccine & Prevention B.V. (one of the Janssen Pharmaceutical Companies of Johnson & Johnson) that was entered into on October 3, 2019. The purpose is to finalize the analysis of Ziccum’s air-drying capabilities on one of Janssen’s vaccine platform technologies.

On March 17 Ziccum announced that the company has been accepted as a member of NIIMBL, the US National Institute for Innovation in Manufacturing Biopharmaceuticals. NIIMBL drives innovation and uptake of new technologies within biopharmaceutical manufacturing in the US. NIIMBL is among others funded by the US National Institute of Standards and Technology (NIST) and the U.S. Department of Commerce and is able to distribute federal grants.

At the General Meeting it was decided to adopt two long-term incentive programs: one for the Board of Directors, consisting of warrants (LTI 2021/2024), and another one for the employees consisting of employee stock options (LTI 2021:1).

The warrant program LTI 2018/2021 has also closed, and all warrants were exercised. The warrant program was assigned to the Board of Directors and consisted of 200 000 warrants, with a vesting period during 26 April – 26 May 2021. To finance the share subscription, the warrant holders have sold 120 000 warrants to a long-term investor, who has also exercised the warrants. The exercise price was 11 SEK per share, hence 2.2 mSEK was added to Ziccum through the share subscriptions. The exercised warrants increased the number of shares and votes with 200 000 and the total amount of shares is hereby 9 806 200.

Significant events after the reporting period

Nothing significant to report

CEO statement
Vaccinations are and have long been one of the best ways to prevent pandemics and epidemics. Right now the need has never been greater. New travellin habits, population growth, climate change and overcrowding all potentially increase the risk of epidemics and pandemics, and children are the most vulnerable; one child in five still does not receive adequate vaccination protection. Approximately 1.5 million children die each year from diseases for which vaccines are already available. With the Covid-19 pandemic, many countries have come to realize the importance of taking responsibility for vaccine production, not least many countries on the African continent. Our solution, described in a White Paper on our website, of a Fill & Finish production facility, may therefore be very suitable.
 
Ziccum has a unique and patented technology – LaminarPace ™ – which enables us to produce vaccines in dry powder form, which is not practically or economically possible with conventional technologies. The benefits are many. It increases the stability and so the lifespan of the vaccine, it facilitates the entire transport chain from factory to patient and it enables the distribution of vaccines to new places where, for example, cold- and freezer storage is a major challenge. The result is greater vaccination coverage at a lower cost.
 
Ziccum's key strategic priorities focus on three major areas: Developing thermostable formulations of vaccines, preparing for production on a commercial scale and building external collaborations with industrial actors who develop vaccines and, importantly for the industry, Non-Governmental Organizations (NGOs) and International Governmental Organizations (IGO). Several IGOs, including the WHO, are very clear that vaccine production must be increased in developing countries in so-called regional hubs, so that an equitable vaccine supply can achieved. We are currently in discussions at a senior level with one of these regional hubs.

Driven by the ongoing pandemic, our work on developing thermostable formulations of vaccines is focused increasingly on Covid-19 vaccines. For example, we taken on work evaluating whether LaminarPace can dry vaccines built on mRNA technology. Good results in this would broaden our offer to the vaccine industry significantly. It should also be mentioned that Covid-19 vaccines are mainly based on 4-5 different technology platforms - we feel comfortable that our technology can be used effectively on a number of these.

In parallel, we are continuing our work developing a system for large-scale industrial production of dry thermostable vaccines. This is a top priority that will speed up our discussions with external collaborators and make our offering more attractive to partners. During the quarter, we have achieved important successes in this, and we now have an updated system onsite in our laboratory which we are evaluating. The updated system is a big step forward and is being prepared for GMP (Good Manufacturing Practice) requirements and scaling up.

Our collaboration with Janssen continues as planned. We have also initiated a new collaboration with a prominent academic partner and we have several discussions ongoing with new partners, both industrial and academic, about new collaborations.

It should also be mentioned that we were invited to participate in a Vinnova grant focusing on gene therapy, this grant was granted, to GeneNova, and is 5 years old. The aim is for more efficient production of gene therapy for individualized treatment. KTH is the coordinator for this innovative project and AstraZeneca, AlfaLaval and CombiGene among others are included as important partners. The grant money is distributed only to the academic partners. Gene therapy uses viruses, and in this area too, transport, often at -80 ° C, is considered a major challenge to be solved in order for gene therapy to break through as a treatment, hence our interest.

We have two main goals for 2021, to partly develop concrete plans to build and establish a demonstration Fill and Finish facility for filling and final packaging of vaccines based on LaminarPace, and to continue our work of licensing our technology. A license agreement would validate LaminarPace and be a clear acknowledgment of the commercial value of Ziccum's offering. This work is continuing.

We are gratified to see the large number of new initiatives being taken worldwide to greatly increase the regional production capacity of vaccines. This means that the traditional customer base for our technology, ie large global vaccine companies, is being expanded with several new players, especially in developing countries. Our solution for thermostable vaccines provides a very strong competitive advantages, as many Covid-19 vaccines still have to be transported and stored at temperatures all the way down to -80 ° C. Yet storing and transporting vaccines at -80 ° C in large parts of the world with undeveloped infrastructure and insecure access to stable electricity networks is an enormous challenge.

In summary, we are well positioned for a very exciting future in an industry that will remain a key priority area globally for a long time to come.

Lund, October 28, 2021 Göran Conradson
VD