Saniona : Interim Report Q1, 2021

INTERIM REPORT FOR SANIONA AB (PUBL) 556962-5345 January - March 2021

Published May 26, 2021

Saniona Starts Strong in 2021 with Orphan Drug Designation for PWS and Alignment on the Regulatory Path for Tesomet

Q1 2021 (Q1 2020)

Revenue was SEK 3.4 M (2.4 M)

Operating loss was SEK -94.1(-27.4 M)

Net profit/loss was SEK -83.4 M (43.2 M)

Earnings per share were SEK -1.34 (1.47)

Diluted earnings per share were SEK -1.34 (1.47)

Business highlights in Q1 2021

• The U.S. Food and Drug Administration ('FDA') granted orphan drug designation to Tesomet for the treatment of Prader-Willi syndrome (PWS). This designation qualifies Saniona for certain development benefits, including tax credits, elimination of certain FDA license application fees, and seven years of market exclusivity in the U.S. following approval.
• The U.S. FDA provided further clarity on a regulatory path for Tesomet in the treatment of hypothalamic obesity (HO). The FDA indicated overall agreement with Saniona's Risk Evaluation and Mitigation Strategy (REMS) proposal and cardiovascular monitoring proposal.
• Saniona continued to make progress in preparing for its Phase 2b Tesomet clinical trials, including selecting the clinical research organization (CRO) that will support the clinical trials, identifying clinical trial sites in the U.S. and globally, engaging the contract manufacturer to produce Tesomet for Phase 2b and Phase 3 clinical trials, and establishing partnerships with patient advocacy organizations relating to patient community education and insights.
• Saniona received an upfront payment of approximately USD 2.9 million (SEK 24.2 million) relating to Novartis AG's acquisition of Cadent Therapeutics Inc. ('Cadent Therapeutics'), in which Saniona held an ownership stake of approximately 3%. The acquisition may result in additional contingent consideration upon the achievement of future milestones.
• Saniona's Board of Directors and executive management team purchased shares of the company in the open market for a total value of approximately SEK 1.5 million.

Significant events after the reporting period

• Saniona announced the receipt of manufacturing feedback from the FDA that will delay the start of the Tesomet Phase 2b trials into the second half of 2021.
• Saniona announced a partnership with the Foundation for Prader-Willi Research (FPWR) to increase awareness about Saniona's upcoming Phase 2b clinical trial of Tesomet for the treatment of PWS.
• Saniona successfully monetized its position in the 2017 spin-out Scandion Oncology A/S ('Scandion Oncology'), completing the sale of its remaining shares on the open market.
• Saniona presented preclinical data on SAN903 in a model of idiopathic pulmonary fibrosis at the American Society of Pharmacology and Experimental Therapeutics (ASPET) Annual Meeting at Experimental Biology (EB) 2021.
• Saniona hosted a research and development (R&D) day featuring presentations highlighting its ion channel drug discovery engine, including its IONBASE™ database now consisting of more than 20,000 proprietary molecules targeting various ion channels, and data from ion channel modulators SAN711 and SAN903.

INTERIM REPORT FOR SANIONA AB (PUBL)

January - March 2021

• Saniona received a 33.3% ownership stake in Cephagenix, as per the terms of the previously announced February 2020 collaboration agreement through which the company was formed to explore ion channel modulators for the treatment of migraine.

Comments from the CEO

"In the first quarter of 2021, Saniona began to leverage the foundations we built in 2020 and execute on our strategies. Specifically, we received Orphan Drug Designation from the FDA for Tesomet in Prader-Willi syndrome, and we completed many of the necessary preparations to initiate our Phase 2b trials of Tesomet in both PWS and hypothalamic obesity, which we plan on starting in the second half of this year," said Rami Levin, President & Chief Executive Officer of Saniona. "Additionally, we have made progress with our ion channel drug discovery engine: we presented data on our ion channel programs at the ASPET conference and at our first R&D Day, and we look forward to advancing SAN711 into the clinic shortly."

For more information, please contact

Trista Morrison, Chief Communications Officer, Saniona. Office: + 1 [phone]. Email: [e-mail]

INTERIM REPORT FOR SANIONA AB (PUBL)

January - March 2021

Letter from the CEO

2020 was a year of transformation for Saniona. We transformed our business strategy from one focused on out-licensing to a strategy of retaining our innovation and developing it ourselves, which we believe will create the highest value. We also transformed from a discovery focused company to one focused on discovery, development and delivery - bringing medicines all the way to patients. In order to move from discovery into development, we transformed from a company that historically had raised very small amounts of capital to a company with sufficient funding to conduct the larger clinical trials required and to hire the talent and expertise needed.

Our transformation will continue in 2021, and the first quarter of 2021 already brought several important accomplishments in the execution of our strategies:

• Tesomet in the treatment of hypothalamic obesity (HO) and Prader-Willi syndrome (PWS): In the first quarter of 2021, the hard work of our clinical and regulatory teams paid off in the receipt of orphan drug designation from the FDA for Tesomet in the treatment of PWS. This designation qualifies Saniona for certain development benefits, including tax credits, elimination of certain FDA license application fees, and seven years of market exclusivity in the U.S. following approval. Our clinical and regulatory team also worked closely with FDA in the first quarter to advance our HO program, gaining further clarity on a regulatory path for Tesomet in HO. Subsequent to the end of the quarter, we did receive manufacturing feedback from the FDA that will delay the start of the Tesomet Phase 2b trials into the second half of 2021, but importantly, we feel that we now have good alignment with the agency on our work to transition Tesomet from tablets to capsules, which we believe will provide multiple benefits as we move into later-stagetrials and eventual commercialization.
• Ion channel pipeline and drug discovery engine: One of the most exciting opportunities for Saniona during the first quarter of 2021 and subsequent months was the opportunity to highlight that, in addition to Tesomet, we have multiple prospects to create value through our ion channel drug discovery engine. In April, we presented preclinical data on SAN903 in a model of idiopathic pulmonary fibrosis at the American Society of Pharmacology and Experimental Therapeutics (ASPET) Annual Meeting, and in May, we hosted our first R&D Day, in which we presented information and data on our ion channel drug discovery engine, our IONBASE™ database now consisting of more than 20,000 proprietary molecules targeting various ion channels, and our ion channel modulators SAN711 and SAN903.
• Partnerships and spinouts: Although Saniona's current strategy is to retain and develop our innovative molecules, we continue to see value from our past partnerships and spinouts. During the first quarter, we received an upfront payment of approximately USD 2.9 million (SEK 24.2 million) relating to Novartis's acquisition of Cadent Therapeutics, in which Saniona held an ownership stake due to a previous spin-out. After the close of the quarter, we also successfully completed the monetization of our position in the 2017 spin-out Scandion Oncology. We continue to eagerly await a regulatory decision from the Mexican authorities on our partner Medix's application for approval of tesofensine in general obesity; Medix has communicated that they expect this milestone around mid-year.

Overall, 2021 is off to an exciting start for Saniona. During the first quarter, our board of directors and executive management team showed their commitment to Saniona's future by purchasing shares of the company in the open market for a total value of approximately SEK 1.5 million. As always, we appreciate the support of our shareholders as we continue on our journey to transform Saniona into a fully-integrated biopharmaceutical company with the ability to discover, develop and ultimately commercialize our own innovative treatments for rare disease patients around the world.

Rami Levin

President & CEO

INTERIM REPORT FOR SANIONA AB (PUBL)

January - March 2021

About Saniona

Saniona is a biopharmaceutical company focused on discovering, developing, and delivering innovative treatments for rare disease patients around the world. The company's lead product candidate, Tesomet, is in mid-stage clinical trials for hypothalamic obesity and Prader-Willi syndrome, severe rare disorders characterized by uncontrollable hunger

and intractable weight gain. Saniona's robust drug discovery engine has generated a library now consisting of more than 20,000 proprietary modulators of ion channels, a significantly untapped drug class that is scientifically validated. Lead candidate SAN711 is entering Phase 1 for rare neuropathic disorders, with SAN903 for rare inflammatory and fibrotic disorders advancing through preclinical development. Led by an experienced scientific and operational team, Saniona has an established research organization in Copenhagen, Denmark and is building its corporate office in the Boston, Massachusetts area, U.S. The company's shares are listed on Nasdaq Stockholm Small Cap (OMX: SANION). Read more at www.saniona.com.

Our vision

Improve the lives of rare disease patients around the world through scientific innovation.

Our mission

We leverage our ion channel targeting expertise to discover, develop and deliver innovative rare disease treatments.

Our values

• Put People First
  Treat all people with kindness, respect and equity. Support people on their journey and enable a sense of belonging.
• Innovation With Impact
  Push boundaries with courage. Embrace empowerment. And deliver excellence.
• Integrity, Always
  Maintain the highest ethical standards in all that we do as we deliver with urgency for patients in need.

Our Strategy

Saniona's focus is on the discovery, development and delivery of proprietary product candidates for the treatment of rare diseases with high unmet medical need. We believe our research, clinical development, and commercial expertise, and our ability to leverage our ion channel research engine, will enable us to advance Tesomet and generate a robust pipeline of clinical candidates with preferred pharmacological properties that we believe will make a meaningful difference in the lives of patients.

Investment rationale:

INTERIM REPORT FOR SANIONA AB (PUBL)

January - March 2021

Strategic priorities:

• Advance our clinical development programs: Saniona's most advanced internal program is Tesomet. We intend to initiate Phase 2b trials of Tesomet in HO and PWS in the second half of 2021. Additionally, Saniona plans to initiate a first-in-human study of SAN711 for rare neuropathic disorders in the first half of 2021.
• Identify novel preclinical programs to build our pipeline: We will continue to progress SAN903 to Phase 1 studies, currently planned for H1 2022. Additionally, we will leverage our proprietary, ion channel drug discovery engine to seek to qualify new programs and preclinical candidates.
• Build technical operations capabilities: As Tesomet advances into mid-stage clinical trials, we have begun to build our technical operations capabilities to support this advancement. We will continue to develop these capabilities to ensure timely product supply, in line with clinical development activities and timelines and potential commercialization
• Build commercial operations: As we advance towards launch, Saniona will build an experienced commercial team, including, marketing, sales and market access, to prepare the market and the company for the launch of Tesomet.
• Evaluate strategic external innovation opportunities: We will assess potential business development opportunities, including mergers and acquisitions (M&A) and licensing opportunities, that complement our areas of expertise and allow us to expand our portfolio in rare diseases.
• Explore life cycle management: We will explore and develop our treatments in new rare disease indications beyond the leading indications.
• Integrate stakeholder insights: Saniona will build relationships with and collaborate respectfully and compliantly with key stakeholders across the healthcare ecosystem, including patients, caregivers, physicians and payors. We will seek to ensure that their voices and insights inform our strategies and decisions, optimizing outcomes for all.

Our Pipeline

Saniona's wholly-owned pipeline consists of four programs in clinical and preclinical development and a portfolio of programs in discovery and lead optimization, each of which has well-established biology.

Tesomet

Our most advanced proprietary clinical program is Tesomet for the treatment of hypothalamic obesity (HO) and Prader- Willi syndrome (PWS), severe rare disorders characterized by near total loss of appetite control, also called hyperphagia, intractable weight gain, and disturbances of metabolic functions. Tesomet is an investigational first-in-class,once-daily oral fixed-dose combination therapy of tesofensine (a triple monoamine reuptake inhibitor) and metoprolol (a beta-1 selective blocker). Saniona has completed Phase 2 studies in HO and PWS and is planning to initiate Phase 2b trials in both indications in the second half of 2021.