The Board of Directors of Lipum AB (publ) has, based on the so far successful phase 1 study, resolved to advance SOL-116 into phase 2 and has therefore resolved on a rights issue of up to 27,944,055 shares at a subscription price of SEK 6.70 per share (the "Rights Issue"). Through the Rights Issue, the Company will raise proceeds of up to approximately SEK 187 million before deduction of transaction costs. Lipum assesses that the Company?s financing needs until the start of the phase 2a study, which according to the current plan is expected to occur at the end of 2025, amount to approximately SEK 100 million.

Lipum further assesses that the Company?s financing needs to be able to complete the phase 2a study and start the phase 2b study, which according to the current plan is expected to occur at the end of 2026, amount to an additional approximately SEK 80 million (i.e. approximately SEK 180 million in total). Of the proceeds from the Rights Issue, approximately SEK 11 million will be used for the completion of the ongoing phase 1 clinical study of the lead candidate SOL-116, and approximately SEK 52 million will be used for the new production of SOL-116 for clinical phase 2 studies through advance payment to NorthX Biologics AB (?NorthX?) [1]under the framework agreement (and a related project agreement) that has been entered into between Lipum and NorthX today. Of the remaining proceeds from the Rights Issue, approximately SEK 54 million is intended to be used for the planning and implementation of clinical phase 2 studies, approximately SEK 22 million is intended to be used for preclinical studies on the mechanism of action and treatment of more diseases with SOL-116, and approximately SEK 48 million is intended to be used to finance Lipum?s other operating costs until the end of 2026.

The Rights Issue is supported by the Company's larger shareholders and is covered by subscription undertakings in a total amount of approximately SEK 67 million, corresponding to approximately 36% of the Rights Issue. The Board of Directors' resolution on the Rights Issue and the framework agreement (and the related project agreement) with NorthX is subject to approval by an extraordinary general meeting planned to be held on 2 April 2024. The Company?s lead candidate SOL-116 is being evaluated in an ongoing clinical phase 1 study.

The interim results from the first part of the study, presented in January 2024, showed that SOL-116 is well tolerated with few, and no serious, side effects. In addition, SOL-116 reduced the amount of the target protein BSSL (bile salt-stimulated lipase) in plasma to undetectable levels from day 3 after administration, which was maintained until day 90 after the dose. The results suggest that SOL-116 is a potent BSSL-binding antibody that can effectively eliminate freely circulating BSSL in humans after a single dose of SOL-116.

Based on these progressions, the Company intends to continue the development as planned and to study the effect of the lead candidate SOL-116 in patients with rheumatoid arthritis (RA) in a clinical phase 2 study. To enable this, a relatively costly new production and formulation of additional quantities of the SOL-116 antibody is required. Therefore, Lipum?s Board of Directors has resolved, subject to approval by the EGM, on the Rights Issue.

If the Rights Issue is fully subscribed, the Company will raise proceeds of approximately SEK 187 million before deduction of transaction costs. Lipum assesses that the Company?s financing needs until the start of the phase 2a study, which according to the current plan is expected to occur at the end of 2025, amount to approximately SEK 100 million. Lipum further assesses that the Company?s financing needs to be able to complete the phase 2a study and start the phase 2b study, which according to the current plan is expected to occur at the end of 2026, amount to an additional approximately SEK 80 million (i.e. approximately SEK 180 million in total).

Of the proceeds from the Rights Issue, approximately SEK 11 million will be used for the completion of the ongoing phase 1 clinical study of the lead candidate SOL-116, and approximately SEK 52 million will be used for the new production of SOL-116 for clinical phase 2 studies through advance payment to NorthX under the framework agreement (and a related project agreement) that has been entered into between Lipum and NorthX today. Of the remaining proceeds from the Rights Issue, approximately SEK 54 million is intended to be used for the planning and implementation of clinical phase 2 studies, approximately SEK 22 million is intended to be used for preclinical studies on the mechanism of action and treatment of more diseases with SOL-116, and approximately SEK 48 million is intended to be used to finance Lipum?s other operating costs until the end of 2026. Lipum has entered into a framework agreement and a related project agreement with NorthX for, among other things, research, development and manufacturing of SOL-116 as an investigational drug product intended for use in Lipum?s phase 2 clinical studies, including production of SOL-116, analysis, filling and several stability tests.

The first project agreement under the framework agreement currently comprises 9 work packages and includes all currently foreseen activities, from the start of development activities to manufacturing and release of the investigational drug products for phase 2 clinical studies with SOL-116, including subsequent storage and stability testing with the investigational drug product. The total cost of the 9 work packages under the first project agreement amounts to approximately SEK 52 million. The framework agreement (and the related project agreement) with NorthX constitutes a material related party transaction and thus requires approval by Lipum?s EGM.