CEO letter

April 29, 2021 (Annual Report 2020)

It has just been a year since I joined Oasmia as CEO and initiated my plan to transform our company. After undertaking an in-depth strategic review validated by our Board, 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 our technology platforms
  3. Clinical development of Docetaxel micellar
  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 significant 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 developed focused biotechnology company. In addition, we are set to move Oasmia’s headquarters to a new, more costefficient building in Stockholm, while we will keep our R&D laboratory facility in Uppsala. We are now realizing annualized cost savings of more than SEK 100 million and have reduced the cash burn rate to around SEK 12 million per month. These cost savings will enable us to invest in areas which can deliver the greatest return, including pipeline development that 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 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 progress, 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 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), by Elevar. These two new studies of Apealea will 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 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.

A key part of our growth strategy is to advance and build our pipeline. Post-period, in March, we announced that we had acquired the global development and commercialization rights for Cantrixil, a clinical stage, ovarian cancer program from Kazia Therapeutics. The agreement is the first in a planned series of “string of pearls” acquisitions & in-licensing deals to build critical mass in our oncology pipeline. Cantrixil is a potent and selective third generation benzopyran SMETI inhibitor, encapsulated in a cyclodextrin. In late 2020, Kazia released the top-line results of a Phase I open-label study conducted at sites in the USA and Australia. The Phase I study met its primary endpoints, establishing clinical proof of concept, subject to further clinical evaluation and confirmation. In addition to its promise as stand-alone therapy, Cantrixil has the potential to complement Oasmia’s lead product for ovarian cancer, Apealea, through treatment protocols to be developed. It may also offer synergies with Oasmia’s XR-17 technology platform, which could enhance solubility in various routes of administration. A Phase II study with Cantrixil is expected to be initiated in 2022.

Also in March 2021, we entered into a collaboration with Sweden’s most renowned medical research facility, the Karolinska Institutet, to help delve deeper into the biological properties of XR-17 and its interactions with oncology drugs to help generate new ideas and formulations. We 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 the joint encapsulation of two active pharmaceutical ingredients in one micelle.

Docetaxel micellar is being prepared to progress into a investigator initiated 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, potentially offering similar benefits to advanced prostate cancer patients in terms of side effect profile while removing the need to take additional drugs.

Securing Oasmia’s long-term success depends on building a senior team and network of trusted advisors with the expertise and capabilities to deliver on our strategic growth plans. I am pleased to report that over the last year we appointed several experienced individuals with significant pharma and biotech background. 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 several 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 the rest of 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, high-growth pharmaceutical business.

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