CEO letter

February 19, 2021

Since I joined Oasmia in March last year, after undertaking an in-depth strategic review I implemented a growth plan based on four key pillars and focused on ensuring that the company is able to deliver it successfully:

  1. Execute on Apealea® global partnership with Elevar Therapeutics
  2. Enhancement & Partnering of technology platforms
  3. Clinical development of Docetaxel micellar & new API
  4. In & out-licensing, partnering & M&A in oncology

I am pleased to report that we have made good progress on all of these during the year, initiating the transformation of Oasmia, and laying down a strong foundation on which to support our future growth.

As part of the strategic review, we undertook a comprehensive cost control program designed to focus our resources, including a reduction of headcount bringing the total number of staff at Oasmia to under 30 employees at the end of the year, making Oasmia a truly lean, research and development focused biotechnology company. In addition, we have served notice for our current offices in Uppsala and we will move Oasmia’s head quarter to a new more cost-efficient building in Stockholm over coming months, while we will keep our R&D laboratory facility in Uppsala. We are now realizing annualized costs saving of more than SEK 100 million and have reduced cash burn rate to around SEK 12 million per month. These cost savings have enabled us to invest in areas which can deliver the greatest return, including pipeline development which is critical for our success and future growth.

The most significant event in 2020 was the signing of a global strategic partnership with Elevar Therapeutics, Inc. (‘Elevar’) for our lead program Apealea® (paclitaxel micellar) for advanced ovarian cancer. This agreement delivered an immediate upfront payment of USD 20 million, with the potential of milestone payments of up to USD 678 million and double-digit royalties in the future.

Our partnership with Elevar continues to go from strength to strength, with several positive developments during the year that underscore the commercial potential of new therapeutic options for ovarian cancer patients. These include Elevar signing a licensing agreement with Inceptua Group for the commercialization of Apealea® in Europe, and with Taiba Middle East FZ LLC in the Middle East and North Africa region. In addition, Elevar announced the signing and subsequent launch of a global named patient program with Tanner Pharma, enabling access to Apealea® outside the US for eligible patients at the request of a treating physician.

In December, following a series of interactions with the US Food and Drug Administration (FDA), we shared an update from Elevar providing clarity on the US commercialization pathway for Apealea®. This includes two additional studies which will be initiated in 2021, before filing a new drug application (NDA) according to Elevar. These two new studies of Apealea may help to secure a successful registration in the U.S. and may provide new data to support a strong product label – critical for commercial success.

As part of our four pillar strategy, we have continued to progress in a number of areas of strategic focus, including exploring additional opportunities to apply our proprietary XR-17™ solubility-enhancing technology in oncology and other therapeutic areas, and out-licensing non-core applications. Specialized investment firms are now helping us to identify appropriate partners for our Animal Health division as well as the XR-17™ platform. We are also actively exploring a number of potential M&A and in-licensing opportunities that we believe will fit with our strategic goals. We aim to update you shortly as we make progress.

We have also initiated further research into XR-18, a next-generation solubility-enhancing technology platform which we expect to have even greater versatility and potential than XR-17™. With combination therapies becoming ever more prominent in modern medicine, we are also in the process of establishing proof of-concept to demonstrate the feasibility of XR-19, a dual encapsulation solubilization platform, which could have the potential to enable combination therapies to be delivered in a single intravenous administration.

Another key part of our growth strategy is to advance and build our pipeline. Following on from Apealea®, two other promising development candidates are already in or poised for clinical development. Docetaxel micellar is being prepared to progress into a Phase Ib clinical study for advanced prostate cancer with the Swiss Group for Clinical Cancer Research (SAKK). Like Apealea®, Docetaxel micellar uses our proprietary XR-17™ platform to enable intravenous administration of docetaxel without solubility enhancers and therefore has the potential to offer similar benefits to advanced prostate cancer patients in terms of side effect profile and removing the need to take additional drugs. Prostate cancer will affect one in every seven men in their lifetime, so if successful Docetaxel micellar could benefit many patients.

We are also aiming to add a new product candidate in pre-clinical development, using our XR-17™ technology in partnership with a leading academic research institute in Sweden to evaluate potential candidates for progression. I hope to be able to disclose further details soon.

Securing Oasmia’s long-term success depends on building a senior team and network of trusted advisors with the expertise and capabilities to deliver our strategic growth plans. I am pleased to report that over the last year we have appointed a few high caliber individuals with significant pharma and biotech experience. These include Fredrik Järrsten joining as Chief Financial Officer, Dr. Heidi Ramstad joining as Chief Medical Officer, and Peter Selin joining as Chief Business Officer. We have also appointed two senior scientists to our technical operations team. Investing in this crucial area of the business will enable us to further develop and upgrade our proprietary technology platforms.

With our growing pipeline and a new and experienced leadership team in place, I look forward to 2021 and beyond with renewed confidence, and to updating you on our progress. Thank you for continuing to support the ongoing transformation of Oasmia as we strive to build a sustainable, profitable, high growth pharmaceutical business.

Dr. Francois Martelet, M.D., CEO of Oasmia