Thank you and hi everyone and welcome to Synclus Pharma second quarter 2026 earnings call. I'm Christy Rahlberg and I'm CEO of Synclus Pharma and with me here today I have also our CFO Magnus Christensen. We will walk you through the key developments from the second quarter after which we will be happy to answer any questions you may have our lead asset lina plus anglerate is the next generation p-cab and we offer and and that substance offers sustained around the clock acid control that distinguishes from from from the current standard of care with the protein pumps inhibitors the ppis and also all other pcaps available in the market and also in the development in the market and it's also for severe erosive gird this patient populations we are addressing is large and underserved roughly 10 million people across the us and europe live with severe erosive girt and a substantial share of them are not adequately healed or treated by today's standard of care. This makes this a specialty driven commercial opportunity rather than a primary care one. Better healing and better symptom control translate directly into clinical and commercial differentiation and that's our goal. our phase three program healing one began in september 2025 and i'm very pleased to to report that it it has completed enrollment total now in early july we announced that we had exceeded protocol specified target number of patients so that was a very good news for us healing one top line results are expected in the fourth quarter already communicated before of this year which which of course could give us a potential major value inflection point for the company. Our program is DRISC at this stage. We have a robust clinical data package, alignment both from the US FDA and the European EMA, our regulatory strategy, and we have a well-defined CMC plan which we already have communicated before. Lina Prasanglerite has in 2026 been launched in China as planned through our Senorda licensing agreement and also through their partner Huadong which is the 10 seconds biggest pharma company in China we are although restricted to give any details on that about the launch at this stage but of course it looks very promising and good and and we are progressing very well during the launch in in china and we are of course excited that we have seen the first commercial launch of lena lena person glurate globally and it's of course a very important validation of the drug we see that the first generation pcaps is are rapidly gaining traction PCAVs are now available in more than 30 countries globally, and local treatment guidelines increasingly adopting recommendations. And that's of course very good for us. There is no doubt that the PCAVs are about to take over the market from the current standard treatment with protein pumps inhibitors like LowSec and Nexium and other products in that group. So if you look into the enrollment complete of the phase three study, we are very pleased that with this, with the execution of the first phase three study, Healing One, that has developed according to our plans since the start last fall. We announced in early July that our enrollment in the study was completed and that time we had randomized 521 patients exceeding our protocol specified target of 501 patients. The total number of patients in the study now is actually 523 patients and the study is being conducted across eight European countries. The primary endpoint is superiority to lanceprazole. That's a unique primary endpoint and we're going to deliver it in healing of the severe erosive GERD patients, the LA grade C and D. And we're going to deliver that after four weeks of treatment. Key secondary endpoints cover healing of course and symptom relief through through four weeks, but also through eight weeks for both C and D patients, but also of course, all patients. So all grades as well, A, B, C and D. The study will be followed by our second and final phase three study, Healing 2, that will also evaluate maintenance therapy and will be done at clinical sites in both Europe and in US as well. Healing 2 is planned to initiate following Healing 1 top-line results. This slide highlights our Healing 1 progress. We screen the last patient in June and reach enrollment target randomized last patient in July. The remaining milestones prior to the top-line results are last patient treated that we expect within a few weeks. and also the last patient last visit expected to be in September October this fall which will end the clinical phase thereafter the remaining steps will be data cleaning and database lock and finally read out that we expect during the fourth quarter of the of the year we have good visibility over the remaining timeline of the study. This slide you have seen before but it's very important. It shows how well a drug controls gastric acid over 24 hours a day predicts how well it heals the erosive GERD patients. The relationship is linear as you can see whether you look at PPI's or PCABS. That is the central scientific argument for the linaplosone at this stage. Acid control is the biomarker that drives healing in this disease. And the more of the day, the 24 hours, you can keep gastric pH above 4, the better it is for the patients. And that is precisely the variable on the which linaplosangularate is differentiated but also what we have done what we have had as an aim and objective when we have developed the product from the beginning this slide illustrates the number of hours ph in the stomach is below ph4 which different treatment giving the treatment alternatives available in the market over the over the over the decades and the history of the development of these kinds of drugs. With the old H2 blockers you can see to the left, such as SunTac, they were launched during the the 70s. pH was below 4 during 16 hours per day, but still it was a dramatic improvement compared to have nothing. And this drug became the most old drug in the world and actually built Glaxo to to the to the big big pharma company as it is today looking into the development into the next step for them for the protein pumps inhibitor that came to the market in the end of 80s in the beginning of 90s here you can see a reduction between 7 to 14 hours with ppis below ph4 and that as you have known these drugs low sec prilosec nexium became the most sold drug in the world at the same time and that actually built astra and astrazeneca toward to what it is today so these drugs are important for companies and when they are developing the company and also when we see now the next step in this evolution you see that the first generation of pcaps were launched in 2015 and now in 2024 in the US, where you can see that you have another dramatic step downwards in hours of pH below 4. And actually, what they managed to do in Japan, where it was launched first was to became the most sold drug in japan and uh with a with a close to one billion us dollar in sales only there so of course acid acid control improvement matter to actually build the market and to build companies uh launching this this these kind of products and what you now can see then is there is uh our studies show that lina person blue rate have a uniqueness to deliver ph below for only one hour per day this is a major improvement to all existing treatment alternatives on the market and in the development highly highlighting a significant market potential as you understand that this is really uh the the the end of the of the treatment ladder you can say i mean now you have reached the goal that also can help the severe ill patients And also, if you remember the slide I showed you before with the biomarker relating the linear coloration between assay control and healing of these patients. we also wanted to to control this and double check if it works also for pcaps and and the last study that has been performed the phase three trials been performed in u.s and europe with with vonoprasan tegoprasan and they have used the same comparator of the ppi lansoprazole and if you start from the beginning here with the with with the acid control of each of these drugs uh lanzoprazole it's actually interesting to see when you plot in these these results into the curve that we showed you before the biomarker curve it's spot on it's it's perfectly spot on related also to this curve so if you have to look at the acid control of lanzoprazole it's 63 percent after eight weeks and in the results of their clinic of the clinical studies of of the phase three clinical studies of tegopressan and vonopressan in u.s europe they came to conclusion of 68 to 72 percent and that's perfectly on the line which uh of the biomarker line here showing showed you before going further then into to the tegopressan they have an acid control of 75 And actually, their clinical data showed 83% in the phase three trial after eight weeks of the C&D patient. And if you just compare 75% into this curve, you see it's perfectly on the line of 80 plus percent in healing. And also looking into the Vonoplasone, they have a little bit higher acid control, up to 85%. and if you look at their clinical data from the phase three they have 91.7 percent of the cnd patient healing after eight weeks and it's also perfectly spot on the curve as well so you can really predict outcomes with this with this data with this curve and therefore it's very interesting to see that we have 96 percent and it will be very interesting to follow our healing rates after eight weeks for the CND patients coming to the end of the year, then we know absolutely in our phase three trial. But of course, our ambition is to have in absolute figures also the best healing rates for the CND patients, but not only the best healing rates. We also will look into, thanks to our unique acid control, we also want to have the biggest the effect difference compared to the ppis the biggest delta as we as we call it where we in our phase two trial delivered um 55 delta in in absolute percentage figures 93 versus to 38% of the PPIs. That's 55% units in difference. If you look into the other PCABs, they have delivered something between 15 to 20% delta compared to versus the same compared to Lansoprasol after two and eight weeks. And of course, we want to have the best healing rates, but we also want to deliver the best delta, the effect difference between ourselves and the PPI that we're comparing with. And that's the same as Ivana Plassan and Tegovarsan has done. So we will have a uniqueness in reaching the best-in-class positioning here. On top of that, we also want to deliver superiority in symptom relief versus the PPI, which are both in daytime symptoms but also in nighttime symptoms and if we can do that which we have good chances to do this could definitely be a game changer and a unique position best-in-class position that no one has delivered before and that is of course something that we have tried and that is of course done thanks to the uniqueness of of our acid control and that was the aim from the beginning when we developed this product from the from the very beginning that we should have total assay control which also could have a chance to help the the most severe patients okay i think i stopped there and then we let's go into some financials and i hand over them to you Thank you, Krister.
If we are turning to our second quarter results, we ended quarter two with a cash balance of 388 million seq, which is included in the structure financing agreement drawn under the clarity facility in quarter one this year. the cash flow in the quarter amounts to minus 88 million sec which reflects the continued focus and on this investment on healing one execution and its upcoming milestones the R&D expenses remain the clear driver of our cost base at 89 percent of operating expenses in quarter two compared with the average of 87 percent over the prior four quarters and if you're looking at the year-over-year comparison for q2 net say almost 2 million sec and the revenue consistent primarily on the licensed income from the sentiva partnership for conversation of linear percent great in europe the revenue from sentiva deal which included an upfront payment of 13 million euro in q2 2025 is being periodized across the phase three studies. Operating expenses were 96 million SEK driven by the ongoing phase 3 study activity. EBIT was minus 95 million SEK reflecting the higher R&D expenses associated with a full phase 3 execution. And if you look at the financial net line and we recorded 16.3 million SEK and that's consisting mainly the revaluation of the structure financing of the Claret facility as well as interest bank and the interest payments to Claret facility mainly. Net loss for a quarter was almost 79 million and is driven by the higher R&D expenses from the ongoing phase 3 study. and if we look at the balance sheet we have the non-current asset has increased and that's primarily reflecting the leasing liabilities for the new office premises other current assets decreased mainly due to prepayments to the cro in and that's in line with the contract that we have cash decreased cash decreased by 200 million uh with the 86 million structure financing drawdown partially offsetting the increased R&D expenses as the phase 3 activity ramped full execution. Non-current liabilities decreased by almost $50 million, mainly representing the contract liability from the Centiva deal, which is periodized beyond one year. And the current liabilities increased by 100 and are primarily driven by the structured financing in-depth convertibles and warrants plus a short-term contract liability from the Centiva deal. And with this, I hand back over to Krister.
Okay, thank you, Magnus. Thank you for these figures. And that brings us to the end of our formal remarks. Before we open the line for questions, a few important dates ahead. The Q3 results will be reported on November 11th this year. And the Q4 results will be reported on February 17th, next year, 27th. And of course, we look forward to keeping you updated on the remaining steps of the Healing One study and results of the fourth quarter of this year, the defining clinical milestones ahead for the company. And with that, I would like to open the line for questions.
Operator
Operator, please go ahead. if you wish to ask a question please dial pound key 5 on your telephone keypad to enter the queue if you wish to withdraw your question please dial pound key 6 on your telephone keypad the next question comes from clements tier from stifle please go ahead hi thanks for the presentation and thanks for taking my question i have one on healing one so you ended up randomizing 523 patients versus 501.
Speaker 1
Was it simply because there was patient being still in screening when you reached the target or was that a deliberate decision and does it have any meaningful impact on that stat signal in the end?
It's a very easy question. We had patients still in screening when we reached it and of course you want to you want to give i mean from an ethical point of view you want to give all patients the possibility to to be enrolled so nothing but that makes sense and maybe just a second on healing too so you've started preparing for the trial how much of the work can be done before the healing one readout and i guess the question being how quickly after the result could you start the trial and enrolling patients well i mean of course what we could do and what we do now is that we i mean we are prepared i mean of course we are preparing the the the protocol this uh for the studies we are we are we are working uh with the the i mean the picking the right zero so we are we are having the requests out there and then of course we have also a dialogue with the authorities so we make sure that we have everything in place as fast as possible so you can do it as seamless as possible so I mean that is what we are working on now and the more we can do now the faster it will go thereafter after the results of the healing one and also one advantage is that we have now of course is as you have seen i mean we have executed this healing one study i mean very fast recruitment time of of nine months i would say more than 500 patients so we have a very good collaboration with both the zero in this case then but also we have picked the right sites so we know the high high delivery sites here and the high performers and that of course good for the feasibility of selecting the the sites also in in next study which may make it maybe hopefully and that's our ambition is to have a more flying start with higher recruitment early stage in the study but otherwise normally it takes some kind of long time before you're up and running with the sites and recruitment so the most and that's also the question the answer on the on your first question that when you are up and running and having many sites very actively they recruit a lot of patients in the end of the studies so we want to have this recruitment pace as early as possible also for the healing too okay thank you very much and that's all for me the next question comes from arvid nikater from dnb carnegie please go ahead um good morning and thanks for taking my questions so the first question is on healing one now that enrollment is complete how much
visibility do you have on the available patient population including discontinuations protocol deviations and disease severity splits on central review and i guess in summary has all of this been broadly in line with your assumptions when you power the study and then my second question is on Healing 2. How much of the protocol is now effectively done? And aside from selecting a single dose and enrolling patients both in the States and in Europe, are there any significant changes in the study design versus Healing 1? Those are my questions. Thanks.
Okay, yeah, the first question is, of course, a little bit harder to say yet now. I mean, of course, still it's blinders. We have no insight on results or anything like that, as you know. so that is totally blind and then we will not know anything about that before we have the results in Q4 but also I mean but when it comes to other things it looks everything so far we should say that we have not closed the database yet it's I mean the study is still ongoing so we don't have all all data yet when it comes to the groups and this continuation and things like that we will have the last treated patient as i mentioned in in a couple of weeks here but nevertheless it looks like it's everything goes according to plan as what we can see now and what i can see now so that is the first uh question next question is um you asked are we regarding the differences between healing one and healing two um and more or less i would say and i think is important for everyone to understand the outcome of this study is definitely the value inflection point this is the the outcome of this study is what we foresee improve also will happen in in the healing two study because the the protocol will look very similar to each other of course it might be that we fine-tune anything based on the results that we get but overall we we do not expect to have any other outcome in the healing two versus the healing one. So from an analyst point of view, I would say the healing one study is the most, most important value inflection point. I also, of course, I mean, what we will do hopefully, I mean, in the healing one, we have two doses of healing of Lina Fesson-Greik. patients in the healing to our ambition is to go with only one though so that might be the the biggest difference otherwise the end points will look similar and and what we are measuring so definitely uh we do not expect to see any differences here was that answer did that answer your question okay but let's go to other questions are there other questions from the audience as a reminder if you wish to ask a question please dial pound key five on your telephone keypad okay i think we have also some written questions which i can which i can cover uh there is a question regarding the cost of healing one if all the cost has been taken now so the rest cash can be used for the preparation of healing two yes well no it's not everything is not taken yet i mean we have ordered the communicator that we we have cash into Q3 next year and then including that is of course all costs for Healing 1 but also some of the preparation for the Healing 2 so that is already communicated and everything goes according to plan and also thoughts regarding Nasdaq listing I assume that means in US and we We have not, we have, I mean, of course, this is something that you always have in mind. I mean, especially depending on if you're going to have a commercial, commercialize yourself in U.S., and of course that could be a solution, but there are no decisions or anything on that yet. So that's much too early for us to say anything about now. We have another question regarding if the results of Healing 1 will have an impact on the design of the scope of Healing 2. It's actually the same question as every man just had raised. And I would say, of course, it could be fine-tuned, but overall it's more or less the same design. with the exception that we would like to reduce one dose of the Linnaprasan. Great. Reduce one of the dosing arms, so only one dosing arm. And then we had another question regarding Vonoprasan, if they cannot just deliver twice daily or three times daily to overcome the 24 hours gap of acid control. um well it's not that easy i have to say um if that firstly what we could say is that we have a better asset control once daily compared to what one person has so we have the best asset control overall what we also see though if if they try to split their dose into twice two times per day they don't gain anything what we have seen in their own in their own studies meaning that there is no reason to split the dose for them and and this 24 day once daily dose is what they have used in in the clinical trials and what they have used in in in the registration as we have now and what they are approved for we see that uh when we split the dose those uh though uh our if we have 100 milligrams once once once daily if we split that into 50 times do we actually even though once daily is is we are we are outperforming the other pcaps uh with with acid control and if we split the dose we also gain quite a lot during the acute phase what we do again is of course that we have a smoother acid control over the over the 24 hours but we also reduce that we also make sure that we push all the patients about ph4 24 hours not only the easy to treat patients we also push up the difficult to treat patients and most severe patients that really suffer from this disease we actually can have a chance to to to help them as well and that's unique that is uh we have not seen anyone that can actually help these patients doing that uh with with the product and actually the severe patients is also the patient group that definitely have the medic unmet medical need and this is not only a patient that suffer and complaining about some mild heart burns once in a while after after a bar bar uh round in in in the day before this is patient that they really suffer from this they they they cannot they have day-to-day business they cannot the quality of life is very very low they cannot sleep during night time they they get um and it's and also they have a risk of progressing into cancer if they don't heal these patients so this is a patient that really suffer from from that the acid the content in the stopper going up in the esophagus and really frying up the mucosa there and this is not nothing to be compared with with with some mild mild heartburn that some some actually might think that this disease is about This is a really tough disease, have a huge impact on quality of life and actually risking the patient's long-term health and actually progressing into a risk of progressing into cancer. So that this patient population is the patients that we want to help with this drug. And we have a chance actually once for all to help this patient that no one has done before. Okay. Any other questions after today's meeting? Otherwise, I will stop there and thank you for your time and I'm really looking forward to coming back to you during Q4 with the results of our phase three trial. So let's stay in touch. Thank you very much for today's meeting.
