NEOVACS: 2023 annual results – 04/30/2024 at 11:00 p.m.

• New advances in scientific programs in France with a view to entering clinical trials of a new generation vaccine in the field of allergies;

• Confirmed support for Pharnext pending the latest results of Phase III clinical trials;

• Stability of operating income despite the acceleration of scientific programs;

• Net income impacted by accounting operations with no effect on cash flow;

• Gross cash flow and financing lines covering estimated needs over the next 12 months.

Suresnes, April 30, 2024 – 11 p.m. CET – Néovacs (Euronext Growth Paris: ALNEV), a biopharmaceutical company at a preclinical stage developing new therapies for inflammatory and autoimmune diseases, presents its 2023 annual results. The annual financial report is updated available to the public today and can be viewed on the company’s website.

Hugo Brugière, CEO of Néovacs, declares: “

We are completing a busy 2023 financial year during which we simultaneously carried out our scientific activity, with good prospects for 2024, and our support for Pharnext to enable the Company to realize its value creation potential. The coming months will be decisive on these two themes and will guide our strategy for the future. »

New advances in scientific programs in France with a view to entering clinical trials of a new generation vaccine in the field of allergies

During the 2023 financial year, NEOVACS achieved several major advances in its preclinical developments in the field of allergies, illustrated in particular by:

• The publication by NEOVACS, in collaboration with its academic partners (Inserm and Institut Pasteur), in the journal Allergy of work demonstrating in humanized mice the effectiveness of their human Kinoid vaccine candidate developed in allergic asthma;

• Development, by the CMC department (
  
  Chemistry, Manufacturing, and Controls
  
  ) of NEOVACS, manufacturing processes for the Kinoid conjugate vaccine and securing sources of supply of raw materials;

• The results of preclinical work on the Kinoid IgE vaccine candidate demonstrating that it induces a strong polyclonal response against IgE secreted during severe allergic reactions (anaphylaxis) in humanized mice;

• Validation of the proof of concept of the IL4/IL13 vaccine using the mRNA version approach, capable of generating a strong production of neutralizing antibodies against these two circulating cytokines in the model of allergic asthma in humanized mice.

These results were considered satisfactory for comparing the two IL4/IL13 vaccine candidates in the protein version (Kinoid) and in the mRNA version as part of a study in primates which started in December 2023.

This study consisted of 3 injections over a period of 3 months until April 2024. The results of immune response and tolerance are expected in the second quarter of 2024, knowing that no adverse effects have been observed to date.

This major milestone for NEOVACS will make it possible to select the type of vaccine that could enter clinical development in allergy, with a possible Phase I/IIa trial in humans.

Favorable opinion in China for the launch of a clinical trial in the field of lupus

The year 2023 was also marked by the achievement of a new decisive step in the search for a treatment for lupus.

The Biosense Global LLC group, Chinese partner of NEOVACS, received favorable feedback from the NMPA (

National Medical Products Administration

), the Chinese health authority, to submit a clinical trial authorization (IND) application with a view to launching a new Phase IIb trial.

Biosense Global has therefore entered a new phase with the preparation of the IND and has initiated a search for partners in order to financially support the next stages of its development. In this context, NEOVACS was open to discussing the establishment of a licensing agreement broader than China for the benefit of Biosense Global. Discussions were initiated in this context.

Confirmed support for Pharnext pending final results of Phase III clinical trials

At the same time, NEOVACS continued in 2023 its activity of supporting BioTech and MedTech companies, corresponding to net financial assets estimated at €48.2 million at the end of 2023, mainly with the company Pharnext which today represents nearly 52 % of this heritage.

During the 2023 financial year, NEOVACS invested a total of €5.8 million in Pharnext, in particular to enable the Company to finalize its Phase III clinical trial, the first results of which were published on December 11, bringing the Total exposure at €24.9 million at the end of 2023 (€25.2 million to date).

NEOVACS is currently awaiting the upcoming results (before summer 2024) of the Phase III trial currently being conducted in China by the company TASLY as part of the licensing agreement on the rights to PXT3003 granted by Pharnext in 2017:

• If the results of the study conducted in China are negative, PHARNEXT and NEOVACS will analyze these results and draw the necessary conclusions;

• If the results of the study conducted in China are positive, confirming the benefit of PXT3003 in a statistically significant manner, PHARNEXT will continue its dialogue with the FDA and the EMA to agree on a registration process for PXT3003 in CMT1A, with significant value creation potential for NEOVACS through the expressions of interest already received by Pharnext for the signing of exclusivity agreements on the rights to PXT3003.

Stability of operating income and decline in net income

Thanks to strict management of its expenses, Néovacs has stabilized its operating result at -€6.9 million in 2023 compared to -€6.4 million in 2022, while expenses for research and development activities are increased from €2.5 million in 2022 to €5.2 million in 2023. This control was made possible by a reduction in administrative and general expenses from €3.9 million in 2022 to €2.3 million in 2023.

At the same time, the annual financial result stood at -€2.1 million. Financial income generated by investment activity (+€4.0 million) was offset by depreciation recorded on the book value of certain investments (€6.1 million mainly linked to the depreciation of the participations in BDK9 and SIGNIA THERAPEUTICS). Please note that, in the context of the 2023 closing, the Company’s management has not identified any sufficiently significant indication of loss of value to justify other depreciation in the accounts.

After taking into account the exceptional result, without impact on cash flow, of -€0.5 million (penalties for converting bonds below par), and a tax credit of €0.9 million, the result net 2023 is -€8.7 million compared to -€3.5 million in 2022.

Gross cash flow and financing lines covering estimated needs over the next 12 months

Thanks to the success of its June 2023 bond issue open to all (€1.8 million) and the measured use of the equity financing line (€4.5 million vs. €9 million in 2022) during the 2023 financial year , Néovacs covered its cash flow needs while maintaining a healthy financial structure.

Thus, at the end of 2023, Néovacs had €48.8 million in total equity (including €1.3 million in respect of ORAs currently being

equitization

), gross financial debt of €0.7 million, entirely composed of bonds to be converted into shares, and gross cash of €0.9 million. This amount does not include the CIR debt (€1.7 million).

The company considers, taking into account its monetizable assets and the residual financing capacity on the equity financing line (€24.5 million), to be able to cover its current needs over 12 months.

ABOUT NEOVACS

Néovacs is a French biotechnology company which conducts a dual activity of R&D and investment. Its own products are vaccine candidates developed from its kinoid® technology platform in lupus and allergies. The innovative approach uses the patient’s immune system to regulate the harmful overproduction of cytokines (active immunotherapy) such as IL-4/IL-13/IgE. At the same time, the Company leverages its internal expertise to invest in innovative Biotech and Medtech companies with high potential.

For more information :

www.neovacs.fr

Warning :

The company Néovacs has set up (i) financing in the form of OCEANE-BSA with the company European High Growth Opportunities Securitization Fund, which, after receiving the shares resulting from the conversion or exercise of these instruments, n is not intended to remain a shareholder of the company, and (ii) financing in ORA which have all been transferred to a trust, which is now responsible for their equitization.

The shares resulting from the conversion or exercise of the above-mentioned securities are generally sold in the market at very short notice, which can create strong downward pressure on the share price. In the specific case of the trust, the shares are sold on the market according to the terms set out in the trust agreement.

Shareholders may suffer a loss of their invested capital due to a significant decrease in the value of the company’s stock, as well as significant dilution due to the number of securities issued to the company European High Growth Opportunities Securitization Fund and/or trust.

Investors are advised to be very vigilant before making the decision to invest (or remain invested) in the securities of the company admitted to trading which carries out such dilutive financing transactions, particularly when they are carried out successively. The company recalls that this dilutive financing operation is not the first that it has implemented.

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