Stian Kildal, CEO of OncoZenge, comments:

"We are very pleased to welcome Yangtian Pharma as a new strategic shareholder in OncoZenge. Together, we share the vision of bringing BupiZenge to a global market, and the millions of patients who deserve better pain relief during their cancer therapy. With their investment, we have secured the necessary funds for our registrational Phase 3 trial, which is currently in final scoping reviews with our intended European partner and licensee, Molteni Farmaceutici. These agreements, which together deliver on our partner strategy, position us to unlock the significant value creation potential we see in BupiZenge."

Introduction to Yangtian and statement from its chairman:

Yangtian Pharma Co, headquartered in Chengdu, Sichuan, is a Chinese pharmaceutical company, founded in 1993 now with more than 30 years of experience, which develops, manufactures, and distributes drugs, based on both modern medicine and traditional Chinese medicine. It operates through a couple of units including Yangtian Bio-Pharma Co, and Yangtian Wanying Pharma Co.

For more information: https://www.yangtian.com.

Mr Zhang Zuo, Chaiman of Yangtian:

"Our investment in Oncozenge is part of Yangtian's strategy of international cooperation with interesting pharmaceutical companies. We are therefore excited to support Oncozenge when taking Bupivacain to international markets. We are also looking forward to exploring further pharmaceutical market opportunities such as in the United States and Asia. For the latter, and certainly in China, Yangtian have extensive expertise."

Background and motive

On 13 January 2024, OncoZenge announced that the Company has entered into a non-binding agreement with the intention to partner with Molteni Farmaceutici for commercialization of BupiZenge™ in Europe, with the goal to sign the definitive licensing agreement no later than 30 April 2025. The Company is preparing for the upcoming Phase 3 studies as a step toward market launch in Europe. A plan has been developed for the proposed Phase 3 study to secure European regulatory approval of BupiZenge™. However, the Company's existing working capital is, in the Board's assessment, insufficient to conduct the study and meet OncoZenge's ongoing capital needs. Therefore, the Board has evaluated the possibility of raising capital through a significant investment from a new strategic, financially strong and professional investor. Consequently, the Company initiated negotiations with the Investor, with the dual aim to obtain the necessary capital to fund the Phase III project for BupiZenge™ and of securing a new major strategic shareholder with the capacity to support the Company's continued growth journey.

Following arm's length negotiations, the Company and the Investor have agreed and entered into an Investment Agreement totaling approximately SEK 30.2 million. The investment proceeds from the Investment will primarily be allocated as follows:

Approximately 67 percent of the Investment for conducting a multi-country Phase III clinical trial(s):

• Appointment and execution of CDMO and manufacture for the trial;
• Appointment of CRO and execution of clinical trial during 2025;
• Clinical site fees, pass through costs and Regulatory fees; and
• Market Authorization Application (MAA) preparation.

Approximately 33 percent of the Investment for general corporate purposes and operational activities in 2025-2026. Including but not limited to:

• Business development for licensing in Rest of the World markets;
• Joint business development and collaboration with the Investor to determine best way to maximize commercial potential in China.
• Development and filing of intellectual property (IP) in support of global licensing;
• Required resourcing of sponsor oversight roles needed for the clinical trial (Regulatory, CMO, program management etc);
• Management, legal, finance, Nasdaq listing fees and other regulatory OPEX; and
• Development of strategy for launch of USA market plan.

The Investment

Pursuant to the Investment Agreement, the Investor has committed to subscribe for a total of maximum 4,669,647 new shares in the Company at a subscription price of SEK 6.47 per share. The shares will be issued in four separate tranches, corresponding to 10, 10, 30, and 50 percent of the total number of issued shares through the Directed Share Issues. The subscription price has been negotiated on arm's length between the Company and the Investor and represents a premium of approximately 40 percent compared to the volume-weighted average price of the Company's shares on Nasdaq First North Growth Market during a period of 20 trading days ending on 24 January 2025. Existing shareholders will be compensated for dilution of ownership through the pricing of the Directed Share Issues at a premium relative to the average volume-weighted share price and the Board assesses the subscription price to be market-based.

Upon execution of the four Directed Share Issues, the Investor will hold a total ownership stake in the Company of approximately 28.5 percent and the Investment is intended to be executed as follows:

1. Subject to the EGM authorizing the Board to resolve on the Directed Share Issues, the Board will resolve on the first Directed Share Issue by virtue of the Authorization and the Investor will subscribe for 466,965 new shares in the Company at a subscription price of SEK 6,47 per share, corresponding to a total consideration payable to the Company by the Investor of approximately SEK 3 million.

1. Subject to the Company having completed the phase III clinical trial plan for the Bupivacaine Orodisintegrating Tablets (Bupizenge™), which is estimated to be completed during the first quarter of 2025, the Board will resolve on the second Directed Share Issue by virtue of the Authorization and the Investor will subscribe for 466,965 new shares at a subscription price of SEK 6,47 per share, corresponding to a total consideration payable to the Company by the Investor of approximately SEK 3 million.

1. Subject to the Company having submitted the complete phase III Clinical Trial Application (CTA) in Europe for Bupizenge™, which is estimated to be submitted during the second quarter of 2025, the Board will resolve on the third Directed Share Issue by virtue of the Authorization and the Investor will subscribe for 1,400,894 new shares at a subscription price of SEK 6,47 per share, corresponding to a total consideration payable to the Company by the Investor of approximately SEK 9.1 million.

1. Subject to the Company having received European approval for phase III Clinical Trial Application (CTA), which is estimated to be received during the second or third quarter of 2025 pending on regulatory lead time, the Board shall resolve on the fourth Directed Share Issue by virtue of the Authorization and the Investor shall subscribe for 2,334,823 new shares at a subscription price of SEK 6,47 per share, corresponding to a total consideration payable to the Company by the Investor of approximately SEK 15.1 million.

Deviation from shareholders pre-emptive rights

The Directed Share Issues deviates from the shareholders' pre-emptive rights and is strictly limited to the new shares issued to the Investor, or at the request of the Investor directed to a wholly owned subsidiary of the Investor, which currently holds no shares in the Company. The Board has conducted a comprehensive assessment and carefully considered the option of raising capital through a rights issue with pre-emptive rights for the Company's existing shareholders. The Board has concluded that the reasons for deviating from the shareholders' pre-emptive rights are that (i) a rights issue would entail a higher risk of a negative impact on the share price, particularly in light of the current volatile and challenging market conditions, (ii) executing the Directed Share Issues can be done at a lower cost, as a rights issue would likely require significant expenses, including guarantee commitments, (iii) the predictability of the Investment enables the Company to initiate and execute the Phase III project for the Company's product candidate, BupiZenge™ and (iv) to further diversifying and strengthening the Company's shareholder base with a new strategic, financially strong, and professional investor, which is expected to enhance the liquidity of the Company's shares and contribute to the Company's long-term financial stability.

The Board's overall assessment is that the reasons for carrying out the Directed Share Issues with deviation from the shareholders' pre-emptive rights outweigh the reasons that justify the general rule that new share issues shall be carried out with pre-emptive rights for the shareholders and assesses that the Directed Share Issues is in the best interest of the Company and the Company's shareholders.

Outbound Direct Investment

The Investment qualifies as an Outbound Direct Investment under Chinese regulations and is conditional of mandatory filing with NDRC, Bureau of Commerce and Foreign Exchange Authority in China at the provincial level. The estimated timeframe for approval is 45 days or less, with the approval process expected to be completed by 14 March 2025. If such approval is not obtained within 90 days from signing the Investment Agreement, either Party has a right to terminate the Investment Agreement.

EGM

The Investment is conditional upon that the Authorization is granted by the EGM and that the EGM resolves to change the limits for the number of shares and share capital in the Company's articles of association. An EGM is intended to be held on 3 March 2025 and notice to the EGM will be issued in a separate press release. For the avoidance of doubt, the Authorization shall apply in addition to the general authorization for share issues granted by the annual general meeting 2024. Also, a renewed authorization from a subsequent general meeting of the Company might be needed to facilitate all four Directed Share Issues. A renewed authorization, if applicable, will be proposed for the Annual General Meeting 2025 (the "AGM").

Voting undertakings

Written voting undertakings have been procured from shareholders collectively representing approximately 34 percent of the shares and votes in the Company. Niclas Holmgren (who holds 1,463,590 shares and votes in the Company), Linc AB (who holds 1,170,607 shares and votes in the Company), Andreas Ozbek (who holds 1,074,000 percent of the shares and votes in the Company, directly and indirectly through a controlling company), Christoph Nowak (who holds 27,000 shares and votes in the Company) and Stian Kildal (who holds 243,342 shares and votes in the Company) have each of them separately entered into binding voting undertakings, to vote in favor of the Authorization and the amendments to the articles of association at the upcoming EGM, as well as a potential renewal of the authorization at the AGM.

As part of the voting undertakings, the shareholders have entered into lock-up undertakings, entailing they are prevented from divesting any of their shareholding in the Company before the EGM or the AGM. Furthermore, the shareholders have also committed to vote in favor of a board candidate nominated by the Investor, conditional of the Investor reaching an ownership stake in the Company of not less than twenty (20) percent of the share capital and votes and at the request of the Investor.

Advisors

Eurosin has acted as financial advisor and Fredersen Advokatbyrå AB has acted as legal advisor to the Company in relation to the Investment.

For additional information, please contact:

Stian Kildal, CEO, mobile: +46 76 115 3797, e-mail: stian.kildal@oncozenge.se
Michael Owens, CFO, mobile: +46 73 324 4988, e-mail: michael.owens@oncozenge.se

Certified Adviser

OncoZenge's Certified Adviser is Redeye AB.

OncoZenge AB

Gustavslundsvägen 34, 167 51 Stockholm, Sweden

About OncoZenge

OncoZenge is dedicated to developing an innovative, effective, and well-tolerated treatment for oral pain in conditions where current options fall short, often due to insufficient pain relief or significant side effects. BupiZenge™ is a novel oral lozenge formulation of bupivacaine, a local anesthetic with decades of clinical experience. The lead indication for BupiZenge™ is oral pain caused by oral mucositis, an inflammatory condition affecting millions of cancer patients. Oral mucositis leads to severe physical and psychological distress, representing a significant unmet medical need for an effective, opioid-sparing treatment. In Phase 2 trials, BupiZenge™ demonstrated substantially better pain relief compared to the standard of care. OncoZenge is headquartered in Stockholm, Sweden, and is publicly traded on Nasdaq First North Growth Market under the ticker ONCOZ.

This information is such that OncoZenge AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation (MAR). The information was submitted for publication, through the agency of the contact persons set out below, at 19:00 CEST on 27 January 2025.