Hansa Medical Year-End Report 2014 Significant events

Significant events Fourth quarter 2014 · Net sales in the Group amounted to TSEK 841 for the fourth quarter 2014, compared with TSEK 762 for the fourth quarter 2013 and TSEK 392 for the fourth quarter 2012. · Consolidated net profit for the the Group for the fourth quarter 2014 amounted to TSEK -12,771, compared with TSEK -4,206 for the fourth quarter 2013 and TSEK -3,574 for the fourth quarter 2012. · Operating profit in the Group for the fourth quarter 2014 amounted to a total of TSEK -8,558, compared with TSEK -4,282 for the fourth quarter 2013 and TSEK -3,913 for the fourth quarter 2012. · Earnings per share before and after dilation for the fourth quarter 2014 amounted to SEK -0.51, compared with SEK -0.18 for the fourth quarter 2013 and SEK -0.15 for the fourth quarter 2012. · On 1 October 2014, Birgit Stattin Norinder was appointed Chairwoman of Hansa Medical after Bo Håkansson’s death on 29 September 2014. · On 25 November 2014, Fredrik Lindgren was appointed new Chief Executive Officer. January - December 2014 · Net sales in the Group amounted to TSEK 4,716 for the financial year 2014, compared with TSEK 1,727 for the financial year 2013 and TSEK 2,619 for the financial year 2012. · Consolidated net profit for the Group for the financial year 2014 amounted to TSEK -29,042, compared with TSEK -17,562 for the financial year 2013 and TSEK -16,468 for the financial year 2012. · Operating profit in the Group for the financial year 2014 amounted to a total of TSEK -24,709, compared with TSEK -17,629 for the financial year 2013 and TSEK -16,798 for the financial year 2012. · Earnings per share before and after dilation for the financial year 2014 amounted to SEK -1.16, compared with SEK -0.75 for the financial year 2013 and SEK -0.75 for the financial year 2012. · On 27 January 2014, the Company reported on successful completion of the Phase I IdeS study. The study showed that IdeS degraded antibodies safely, quickly and effectively. · On 3 March 2014, the Company applied for and on 6 May 2014, the Company received approval from the Swedish Medical Products Agency to initiate a Phase II IdeS study. · In March-April 2014, the Company carried out a preferential rights issue which contributed MSEK 35.6 to the Company, after share issue expenses. · On 9 July 2014, the Company announced that it commenced a clinical Phase II IdeS study in highly-sensitized patients on the waiting list for a kidney transplant. · The Company announced on 18 August 2014, that the second patient included in the clinical Phase II study was successfully transplanted. · Bo Håkansson, Hansa Medical’s Chairman and founder, passed away on 29 September 2014, after a motorcycle accident. Significant events after the end of the financial year 2014 · On 7 January 2015, the Company reported that the final patient had been included and dosed in the clinical Phase II IdeS study in highly-sensitized patients on the waiting list for a kidney transplant. · On 20 January 2015, the Company reported preliminary results from the clinical Phase II study showing that IdeS quickly and effectively reduces the levels of HLA antibodies. · Göran Arvidson was appointed as CFO on 27 January 2015. · On 29 January 2015, the Company announced the formation of a medical advisory committee for IdeS in anti-GBM (Goodpasture syndrome). · Hansa Medical raised on 2 February 2015, a loan of MSEK 20 from the majority shareholder, Nexttobe AB. The purpose of the loan was to strengthen the Company’s financial sustainability. The loan incurs a market interest rate and the lender has the right to demand repayment at the end of 2015. · The Company announced on 5 February 2015, that Dr Stanley Jordan has been appointed as medical advisor in the USA and that approval has been granted by the American FDA to clinically test IdeS in sensitized transplantation patients in the USA. · The Company announced on 12 February 2015, that it is developing and submitting a patent application regarding a second generation IdeS molecule aiming to enable repeated dosage and potentially provide IdeS with a role within chronic autoimmune disease. · The Company announced on 12 February 2015, that a preliminary application has been submitted regarding admission to trade on Nasdaq Stockholm. · The Board of Directors proposed that no dividend is to be distributed for the financial year 2014. Message from the CEO Dear shareholders and other stakeholders of Hansa Medical, On 28 September 2014, Hansa Medical’s Chairman and founder, Bo Håkansson, died in a motorcycle accident. Bo is sorely missed, not only by his family and friends, but also by many business acquaintances on whom he made a lasting impression during his many years in the Swedish business sphere, and by Hansa Medical’s employees and Directors. I, myself, had the privilege of working for, and with, Bo Håkansson for nearly 20 years. That is how, as early as the mid -1990s, I came into contact with the researchers, headed by Lars Björck, and research behind Hansa Medical, which at that time was being conducted as a project in Active Biotech. Since then, I have followed the project through its establishment as an independent company in 2001 and was CEO of Biolin Scientific in 2007, when it spun off its subsidiary Hansa Medical to its shareholders. For a number of years now, I have been back at Hansa Medical, first as a Board member and, since 25 November 2014, as CEO. Taking over Hansa Medical, I have the ultimate responsibility for a pharmaceutical candidate, IdeS, which has significant medical and commercial potential. I will have the privilege of entering the Company at a stage when much of the arduous and time-consuming preparatory work in the form of preclinical development and early clinical studies has been completed, and when the project, now, enters its most exciting stage: developing the finished product through pivotal clinical studies. IdeS is a pharmaceutical candidate that is remarkable in many respects. IdeS cleaves all IgG type antibodies quickly and effectively, without having any other known activity in the human body. The cleaving process is the same each time and the residual product is two antibody fragments. This is a spectacular and dramatic effect. As IdeS is a natural enzyme from streptococcus bacteria, it has had thousands of years to evolve and create its role, which is the explanation for this specificity and efficacy. We have had the opportunity to study IdeS activity in many different models, in test tubes and in animal and human subjects. It is therefore well-documented that IdeS has its specific effect in all humans, regardless of the presence of disease or other clinical condition. When IdeS was discovered in 2001, there were serious doubts about whether the molecule could be turned into a drug. It seemed reasonable that a bacterial enzyme with such a powerful effect would also have powerful, potentially negative side effects. For that reason, IdeS was initially commercialised for laboratory use, and is today used by the pharmaceutical industry to create antibody fragments. It would take until 2007 before we dared embark on pharmaceutical development of IdeS. Since that time we have studied IdeS’ safety profile in a number of preclinical models, in two toxicological studies, in a Phase I study in healthy volunteers and now, most recently, in a Phase II study with eight severely ill transplantation patients. Having completed these studies, we are ever more convinced that IdeS will prove both safe and tolerable in the great majority of relevant patient groups and indications. And IdeS truly has many potential medical applications. These include relatively rare and serious, or even life-threatening, acute autoimmune diseases such as anti-GBM (Goodpasture syndrome) and Guillain-Barré syndrome. IdeS may also be used to degrade IgG in order to enable other forms of treatment, such as kidney transplantation or treatment with blood factors which have lost their effect due to antibody formation. In 2014, when we published the results of our Phase I study – in which we showed that IdeS is both safe and tolerable in effective doses – we attracted substantial from external parties. Medical teams and clinical researchers around the world see a potential for using IdeS in a large number of diseases and clinical conditions. Some pharmaceutical companies see opportunities in using IdeS in combination with their own drugs. Other pharmaceutical companies see an opportunity to help develop IdeS in return for future commercial rights. Having had the opportunity to personally meet a large number of stakeholders of various kinds and in different parts of the world, I cannot characterise the interest shown in IdeS as anything other enormous. What we would now like to do is to complete the development of IdeS through a number of pivotal development activities, before moving on to the commercialisation phase. We would like to conduct several clinical studies in a number of different diseases and clinical conditions. We also need to scale up and quality-assure production of IdeS in preparation for a market launch. To ensure an effective process for developing the finished product, we aim to build support for our development plans through consultative and formal contacts with regulators. If our current plans come to fruition, IdeS could obtain marketing authorisation and be launched in as little as a few years. If IdeS were to be approved only for those relatively rare diseases for which we would initially like to develop it, the commercial potential is still several hundred million US dollars in annual sales. If IdeS can reach out to many indications, or even just a slightly broader palette, the sales potential can run into the billions. To achieve all of this, we need, in addition to time, expertise and capital. Regarding expertise, I believe our organisation already has both ambition and knowledge. We should of course continue to build our organisation. We have succeeded in establishing ties with a very strong network of clinicians and researchers. With regard to capital, we have engaged financial advisors to determine the best options for funding our development plans, and we have applied for listing on Nasdaq Stockholm. And as Bo Håkansson would have said, “for good investments there is always plenty of capital”. Thank you for your interest, Fredrik Lindgren, CEO For further information, please contact: Hansa Medical AB Fredrik Lindgren, President and CEO Mobile: 46 705 61 61 77 E-mail: fredrik.lindgren@hansamedical.com www.hansamedical.com About Hansa Medical AB Hansa Medical is a biopharmaceutical company focused on novel immunomodulatory enzymes. Lead project IdeS is an antibody-degrading enzyme in clinical development, with potential use in transplantation and rare autoimmune diseases. Other projects include HBP (a market introduced diagnostic marker for severe sepsis) and EndoS (an antibody-modulating bacterial enzyme in pre-clinical development). The company is based in Lund, Sweden. Hansa Medical's share (HMED) is listed on NASDAQ First North in Stockholm with Remium Nordic AB as Certified Adviser. Major shareholders are Farstorps Gård AB and Nexttobe AB.