IRLAB Therapeutics : Interim report Q2 (Jan-Jun) 2021

Q2

IRLAB THERAPEUTICS AB (PUBL)

Interim report April-June

"Cases of Parkinson's disease are increasing as more and more people are getting older, world- wide. We want to offer a better future with a high quality of life for everyone affected by Parkinson's"

2021

10Calendar

Interim report July - September 2021:

November 10, 2021

Year-end report 2021: 23 February 23, 2022

Contents

IRLAB IN BRIEF	5
SECOND QUARTER IN BRIEF	6
CEO's COMMENT	9
PROJECT PORTFOLIO	13
Clinical drug candidate mesdopetam	15
THE GROUP'S PERFORMANCE JANUARY- JUNE 2021	19
Share capital development	20
Share and owners	21
The group's income statement in summary	22
The group's report on comprehensive income in summary	23
The group's report on financial position in summary	24
The group's report on the changes in equity in summary	26
The group's report on cash flows in summary	27
The parent company's income statement in summary	28
The parent company's report on comprehensive income in summary	29
The parent company's balance sheet in summary	30
The parent company's report on cash flows in summary	32
Key financial ratios for the group	33
Notes	34

IRLAB THERAPEUTICS INTERIM REPORT APRIL 1 - JUNE 30, 2021

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IRLAB in brief

IRLAB is a Swedish research and development company that develops novel drugs for the treatment of Parkinson's disease with the aim of transforming the lives of those affected and their families.

IRLAB's two drug candidates, which have concluded Phase IIa studies: Mesdopetam for the prevention and treatment of dyskinesias (involuntary movements) in Parkinson's caused by long-termtreatment with levodopa. Pirepemat to treat impaired balance and reduce falls in Parkinson's.

Mesdopetam Pirepemat

"As a researcher specializing in Parkinson's disease, IRLAB, with its history and unique systems biology research platform, is a very exciting workplace. I look forward to contributing to the development IRLAB's preclinical programs for studies in patients."

DANIEL ANDERSSON, PRINCIPAL SCIENTIST

9 million	IRLAB A
	At present, nearly nine million people have Parkin-	Listed on Nasdaq Stockholm's Main Market
	son's, by 2040 this is expected to have doubled.	under the ticker IRLAB A.
	It is not known exactly what causes Parkinson's.
	There is currently no way to prevent the onset or
	slow down the development of the disease.
Integrative		candidates using
			IRLAB generates drug
Screening		the company's unique
	and machine learning
			systems biology
Process		research platform
ISP Process, ISP.
			Integrative Screening

IRLAB THERAPEUTICS INTERIM REPORT APRIL 1 - JUNE 30, 2021

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Second quarter in brief

Significant events during second quarter (April 1-June 30, 2021)

• On May 6, the company's annual general meeting was conducted solely through postal voting due to the covid-19 pandemic.
• In May, a scientific paper reporting the clinical phase I study results for drug candidate mesdopetam was published in the journal Pharmacology Research & Perspectives (PR&P). The published paper strengthens the growing scientific evidence of the drug candidate mesdopetam's significant potential in Parkinson's.
• In June, it was announced that equity research company Edison initiates coverage of the company.
• In mid-June, a scientific publication reporting the results from the clinical first-in-human study with pirepemat was published in the journal Clinical Pharmacology in Drug Development (CPDD). Publication of results from preclinical and clinical studies are an important part of drug development and is at the center of the company's strategy to establish IRLAB's science and pipeline broadly academically as well as in the industry.

Significant events after end of period

• In July, it was announced that the global biopharmaceutical company Ipsen and IRLAB entered a licensing agreement, providing Ipsen exclusive worldwide development and com- mercial rights to mesdopetam, a novel investigational drug candidate for the treatment of dyskinesia and psychosis in Parkinson. IRLAB will continue to be responsible for the ongoing Phase IIb trial that started in autumn 2020. Ipsen will take over and drive the preparatory activi- ties for the upcoming Phase III trial and will be responsible for all remaining clinical develop- ment and worldwide commercialization. IRLAB is eligible to receive up to $363m, including a

$28m upfront payment, corresponding to approximately SEK 240m which has been paid out after the end of the reporting period, and up to $335m in potential development, regulatory and sales-based milestones, plus tiered low double-digit royalties on worldwide net sales.

Financial overview

(TSEK)	2021	2020	2021	2020	2020
	Apr-Jun	Apr-Jun	Jan-Jun	Jan-Jun	Jan-Dec
Operating result	-26 521	-26 103	-46 487	-45 164	-91 458
Result for the period	-26 629	-26 154	-46 670	-45 272	-91 653
Earnings per share before and after dilution
attributable to the parent company's shareholders -0.51	-0.54	-0.90	-0.97	-1.92
Number of shares at the end of the period,
incl. subscribed but not yet registered shares	51 748 406	48 498 406	51 748 406	48 498 406	51 748 406
Cash and cash equivalents	229 383	201 784	229 383	201 784	277 009
Equity per share	5.82	5.61	5.82	5.61	6.72
Average no. employees	21	19	20	19	18
of which are in R&D	19	17	18	17	17

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"The licensing agreement with Ipsen is one of the largest deals struck within Swedish biotech, which is a merit both for IRLAB and for those who have supported the mesdopetam project to this milestone. It also shows that IRLAB has succeeded to deliver on the business strategy of developing drug candidates until proof-of-concept to then seek partnership."

NICHOLAS WATERS, CHIEF EXECUTIVE OFFICER (CEO)

CEO:s comment

During the first half of the year, the business delivered several successes that culminated in the exclusive global licensing agreement for mesdopetam with the pharmaceutical company Ipsen, which was signed in mid-July. This is a very impressive milestone in the company's history. According to the agreement, IRLAB is eligible to receive up to $363 million, across an up-front of $28 million and up to $335 million in potential milestone payments. IRLAB is, in addition, entitled to royalties that increase in line with the global net sales. The deal is one of the largest made within Swedish biotech and provides us a completely new position to further increase the activities of the research platform ISP, focus on the pirepemat project and take our pre- clinical projects to clinical development and studies.

Ipsen - an optimal partner for IRLAB

Ipsen shares IRLAB's broad vision for mesdopetam and its commitment for people with neurological diseases. Ipsen has a global presence with products in neurology, an experienced development and marketing organization and a strategy focusing on neurological diseases. This provides very good conditions for Ipsen to successfully bring mes- dopetam to the market and achieve high sales. We are therefore very happy to be able to complete the final steps toward a market launch in a fully-funded partnership with just Ipsen. The agreement is also a clear external validation of our research platform, ISP, our drug development oper- ations, and our business strategy.

The licensing agreement with Ipsen is one of the largest deals struck within Swedish biotech, which is a merit both for IRLAB and for those who have supported the mes- dopetam project

to this milestone. It also shows that IRLAB has succeeded to deliver on the business strategy of developing drug candidates until proof-of-concept.

Another important outcome of the mesdopetam deal is that we can now allocate more resources to our other development projects; the upfront payment provides an immediate and significant reinforcement of our cash position and, in addition, Ipsen takes over the cost responsibility for the preparatory activities ahead of Phase III studies.

Ongoing Phase IIb/III study with mesdopetam

IRLAB will continue to be both financially and operationally responsible for completing the ongoing Phase IIb study with mesdopetam that is now ongoing in the US and Europe. In parallel, Ipsen will take over the work with the preparatory activities for Phase III studies. The transition time between Phase II and Phase III is thus minimized.

Phase IIb study with pirepemat

Pirepemat, the second drug candidate in our clinical pipe- line, is the first in a completely new class of drugs discovered using our ISP technology. Pirepemat is being developed for the treatment of balance impairment and falls in Parkinson's. The aim is to give people with Parkinson's improved balance and prevent falls and fall injuries, which are commonly occurring, thus providing the opportunity for improved quality of life.

IRLAB is now intensifying the work on the upcoming Phase llb study. The drug candidate will be administered during 12-weeks to evaluate the effect on fall frequency compared with placebo.

Continued spotlight of IRLAB's projects through scientific publications

During the quarter, two new publications have been published in renowned scientific publications, which contrib-

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