Spago Nanomedical : Annual Report2023

	Nanomedicine for
ANNUAL REPORT	treatment and
diagnostics of
	cancers and other
Spago Nanomedical AB (publ)	severe diseases

An introduction to

Spago Nanomedical AB

TECHNOLOGY

First of its kind of clinically validated functional nanoparticles optimized for physiologic accumulation in tumors. Potential for wide use as an anti-cancer drug and for imaging diagnostics.

TEAM

Flexible and cost-effective organization with many years of experience in life science and specialist competence in nanomedicine, drug development and commercialization.

MARKET

Patients in need of effective treatment or better precision in magnetic resonance imaging (MRI) diagnostics in cancer and endometriosis.

EVIDENCE

Clinical results confirm the physiological accumulation of Spago Nanomedical's functional nanoparticles in solid tumors and deep endometriosis in humans, a cornerstone of the platform technology.

DEVELOPMENT PROGRAMS IN

CLINICAL PHASE

Tumorad® - radionuclide therapy for treatment of advanced and metastatic cancer. SpagoPix - contrast agent for improved precision in MRI of endometrios and cancer.

BUSINESS MODEL

Optimized development of nanomedicine drugs for treatment and diagnostics, addressing clinical and commercial needs. Revenue based on license or partnership agreements.

Spago Nanomedical AB (Reg.no. 556574-5048) - Annual Report 2023

Contents

Significant events	04
CEO statement by Mats Hansen	05
Vision, objectives and strategy	06
Program - Tumorad	07
Program - SpagoPix	12
Organization	17
Share information for Spago Nanomedical AB	21
Administration report	23
Financial information in summary	26
Income statement	27
Balance sheet	28
Cash flow statement	29
Changes in equity	30
Notes	31
Signatures	38
Auditor's report	39
Glossary and financial definitions	42

Spago Nanomedical AB (publ)

Reg.no. 556574-5048

Scheelevägen 22

SE-223 63 Lund, Sweden

Tel: [phone]

www.spagonanomedical.se

This document is a translation of the original, published in Swedish. In cases of any discrepancies between the Swedish and English versions, or in any other context, the Swedish original shall have precedence.

Spago Nanomedical AB (publ) is a Swedish clinical phase company, developing products for treatment and imaging diagnostics of cancer and other severe diseases. Spago Nanomedical´s share is listed on Nasdaq First North Growth Market (ticker: SPAGO).

The company intends to develop pharmaceuticals and imaging diagnostic products for diseases with a high medical need under its own auspices until clinical proof-of-concept. Subsequent development and future commercialization are intended to take place through strategic license or partnership agreements with established pharmaceutical companies with the necessary capacity and global reach in each project area.

The company's operations are based on a patented material for the design of functional nanoparticles that accumulate physiologically in tumors, thus enabling higher precision in image diagnostics and treatment of cancer and other severe diseases. With the development programs Tumorad and SpagoPix, Spago Nanomedical aims to improve the conditions for effective healthcare for large groups of patients while meeting the need for stronger positioning and renewal of product portfolios of commercial pharmaceutical companies.

The Tumorad® development program aims to develop new pharmaceuticals for radionuclide therapy against aggressive cancer. Preclinical results show that the candidate drug in the program, 177Lu-SN201, accumulates in tumors, delays growth and prolongs survival at clinical useful doses. This opens up for wide use of 177Lu-SN201 for the treatment of various cancers where there are currently no opportunities for clinically effective treatment with radiopharmaceuticals, such as ovarian cancer and triple-negative breast cancer. A phase I/IIa clinical study in patients with advanced cancer is ongoing to evaluate safety, tolerability, biodistribution and initial efficacy of 177Lu-SN20. See further under "Program - Tumorad".

The SpagoPix development program aims to improve the precision of MRI scans for suspected endometriosis and cancer by launching a selective contrast agent for more precise visualization of tumors and other lesions. Initial clinical results show that the product candidate within the program, pefgosimer manganese (formerly SN132D), provides clinically relevant contrast in breast cancer tumors, in the liver and in the pancreas, while maintaining good safety. Selective contrast enhancement has also been observed in endometriosis lesions in a clinical phase IIa clinical study. See further under "Program - SpagoPix".

PROJECT & INDICATION

DISCOVERY

PRECLINICAL

PHASE I

PHASE II

PHASE III

MARKET

Tumorad - Solid tumors

SpagoPix - Breast cancer

SpagoPix - Endometriosis

New Projects*

Treatment

Imaging diagnostics

*Undisclosed indications

Spago Nanomedical AB (Reg.no. 556574-5048) - Annual Report 2023

CONTENTS

Significant events

Scientific paper with positive preclinical data with Tumorad® The paper, titled "Characterization and Efficacy of a Nanomedical Radiopharmaceutical for Cancer Treatment", was published in the peer reviewed scientific journal ASC Omega. The results show that the candidate drug 177Lu-SN201in the Tumorad program accumulates in tumors to the same extent as comparable market-approvedbenchmark and is well suited for the systematic treatment of cancer. Furthermore, 177Lu-SN201delays tumor growth and prolongs survival in a preclinical model of colon cancer.

First patient dosed in Tumorad-01

First cancer patient successfully dosed in the Phase I/IIa clinical trial Tumorad-01 with the candidate drug in the radionuclide therapy program Tumorad, 177Lu-SN201. The study is being conducted in cancer patients with advanced solid tumors.

Application for extended patent protection for Tumorad

Four new patent applications were filed with the European Patent Office (EPO) to extend and prolong the patent protection for Tumorad. If granted, Tumorad will receive protection in all strategically important markets including the EU, US and Japan, until at least 2042.

Positive topline data from SPAGOPIX-02

The analysis of data from the Phase IIa clinical study SPAGOPIX-02 with contrast agent pegfosimer manganese confirms that the primary endpoint of measuring the MRI enhancing effect in endometriotic lesions was met, with an acceptable overall safety profile.

Rights issue

The company raised approximately SEK 26 million after issue costs in the rights issue, in which the subscription period ended on 23 November. The net proceeds are intended to be used for the continued development of Tumorad, including inclusions of patients and obtaining initial results in the first clinical study with Tumorad in cancer patients. Full allotment and registration with the Swedish Companies Registration Office took place in January 2024 after required approvals were obtained from the Swedish Inspectorate for Strategic Products ("ISP").

During 2023

Q1

Q2

Q3

Q4

During 2024

Q1

Q2

Presentation of SPAGOPIX-02 in endometriosis at the 15th World Congress of Endometriosis

Principal investigator Dr Ligita Jokubkiene presented observations from the Phase IIa clinical trial SPAGOPIX-02 in endometriosis at the 15th World Congress on Endometriosis.

Changes in the Board of Directors for increased commercial focus

At the Annual General Meeting, Hans Arwidsson was elected as new Chairman of the Board and Alan Raffensperger was elected as new Board member

for increased commercial focus. Board members Kari Grønås and Nicklas Westerholm were re-elected.

Scientific Council

A Scientific Advisory Board consisting of scientific and clinical leaders in oncology and nuclear medicine was formed to provide support and guidance in the clinical development of the Tumorad radiopharmaceutical program.

Strengthens management with Head of CMC & Supply

Spago Nanomedical strengthens management by the appointment of Birgitta Rembratt Svensson as Head of CMC & Supply. Birgitta, an experienced CMC project manager with several leading positions at development and commercial stage pharmaceutical companies, will join Spago Nanomedical on June 1 and serve as a member of the management team.

Favourable data in breast cancer model with Tumorad

177Lu-SN201 demonstrates significant anti-tumor effect in a non-clinical triple- negative breast cancer model compared to several cancer drugs1 with a low and acceptable level of radiotoxicity observed.

1. anti PD-1 and anti-CTLA-4 (immune checkpoint inhibitors), Niraparib (PARP-inhibitor), Paclitaxel (taxanes), and Carboplatin (platinumbased chemotherapy)

Spago Nanomedical AB (Reg.no. 556574-5048) - Annual Report 2023

CONTENTS

CEO statement by Mats Hansen

2023 was a successful year for Spago Nanomedical, where we achieved several important milestones in both our programs. After extensive preparatory work, we received the go-ahead to start our first clinical study within the Tumorad program in Australia at the end of the year. Just before year-end, we were able to announce that we had successfully dosed the first cancer patient. Progress was also made in our second clinical program, SpagoPix. At the end of the year, we announced positive topline data from the phase IIa clinical trial SPAGOPIX-02 with the contrast agent pegfosimer manganese in patients with endometriosis.

Spago Nanomedical's main focus in 2023 was to prepare for the start of the first clinical study in the radionuclide therapy program Tumorad. This involved intensive work including, among other things, submission of the application to the relevant ethics review committee and a Clinical Trial Notification to the Australian Medicines Agency, in addition to the completion of large-scaleGMP-classified manufacturing of study material. The work resulted in us receiving a final approval in mid-October to start the phase I/IIa study Tumorad-01 in patients with advanced cancer. Patient recruitment began immediately and at the beginning of December the first cancer patient was treated.

Tumorad-01 is a first-in-human study with the primary aim of evaluating the safety, tolerability, dosimetry and initial effect of 177Lu-SN201 in cancer patients. The phase I part of the study aims to, based on safety and biodistribution, identify a possible therapeutic dose for further testing in selected patient groups in the phase IIa part. Based on preclinical results, we assess that there are good conditions for a favorable benefit-risk profile in humans. Using different methods to measure radioactivity in the

body, even at low doses, we expect to be able to get an early idea of the possibilities for therapeutic usefulness in cancer patients.

In parallel with the clinical study, an extensive non-clinical program is underway to explore Tumorad as monotherapy and combination therapy in a triple-negative breast cancer model. This is a very aggressive and difficult-to-treat form of cancer in which the tumor cells often have resistance to chemotherapy even before the chemotherapy treatment has begun; triple negative tumors make up approximately 15 percent of all breast cancer cases. It was therefore very gratifying that in the spring we were able to report favorable data from the initial non-clinical study with 177Lu-SN201 as monotherapy showing a significant tumor-inhibiting effect with no unwanted radiotoxicity observed. The findings we have seen in this model are promising and support continued non- clinical development alongside the ongoing clinical trial, with an evaluation of combination therapy as the next step.

The need for new, more effective methods to treat spread and aggressive cancer is still huge, and is evident in the steadily increasing interest in the radiopharma field among major pharmaceutical companies and specialist investors. The area has received significantly increased attention in recent years in line with clinical and commercial progress as well as several major completed transactions by global pharmaceutical companies. Last March 2024, AstraZeneca strengthened its radiopharma portfolio with the acquisition of the US based Fusion Pharmaceuticals, a transaction worth up to USD 2.4 billion. Another current example is Bristol Myers Squibb which at the end of 2023, acquired RayzeBio and its radiopharma platform for around USD 4.1 billion.

We are now experiencing greater interest from other pharmaceutical companies and specialist investors as we advance our pipeline. This also applies to our second development program, SpagoPix, where we saw significantly increased interest following our end-of-year reporting of positive topline data from our phase IIa clinical study SPAGOPIX-02 with the contrast agent pegfosimer manganese, formerly SN132D, in patients with

endometriosis. This aligns with a welcome and growing interest in women's health in general and endometriosis specifically. Women who suffer from endometriosis are a severely underdiagnosed and undertreated patient group, and the need for both more effective treatment and diagnostic methods is both recognized and huge.

SPAGOPIX-02 was an open-labelproof-of-concept study with the primary objective of evaluating pegfosim manganese as contrast enhancement in patients with endometriosis. In May 2023, principal investigator Dr. Ligita Jokubkiene participated at the scientific conference 15th World Congress on Endometriosis where she presented the design and observations from

the study, and in June we announced a preliminary analysis showing that the contrast agent is well tolerated in patients with endometriosis. Topline data reported in December showed that contrast enhancement could be observed in the majority of lesions confirmed by ultrasound, thus meeting the study's primary efficacy objective. The results are very promising as they show the potential of pegfosim manganese in medical imaging of endometriosis lesions.

I look forward to continuing to deliver progress in our development programs. Thank you for your continued support.

Mats Hansen

CEO Spago Nanomedical AB

Spago Nanomedical AB (Reg.no. 556574-5048) - Annual Report 2023

CONTENTS

Spago Nanomedical's vision is to engage in competitive and successful development of products that increase patient survival and quality of life and thereby create long-termprofitability for the company and its owners.

Spago Nanomedical's objective is to become a leading company within the development of therapeutics and diagnostics based on nanomedicine through the development of products that benefit patients benefit and provide good health economics.

Spago Nanomedical's overall strategy is to conduct development of medical programs based on the company's proprietary and patented nanomaterials. The business strategy is based on the commercialization of the company's development projects through collaborations and out-licensingto industrial partners with the resources to brign the product to market and clinical use. This reduces capital need and the time to revenue, and increases the potential for successful market penetration.

06	Spago Nanomedical AB (Reg.no. 556574-5048) - Annual Report 2023

CONTENTS

Program - Tumorad

Radiation therapy has long been used effectively in the fight against cancer. Along with surgery and chemotherapy, radiotherapy forms a cornerstone in the treatment of several cancer. The development and approvals of new generations of radioactive drugs for internal radiotherapy, known as radionuclide therapy, has led to a renaissance in the field. Radionuclide therapy has received increased attention in recent years in line with clinical and commercial advances and a number of major deals completed in the field. In Tumorad, nanoparticles for physiological accumulation in tumors are loaded with clinically effective radioactive isotopes, which can open for effective internal radiation therapy of aggressive and spread cancer with high precision. Tumorad can thus provide the opportunity to treat cancer diseases that cannot be treated with other types of radioactive drugs.

MARKET OVERVIEW AND COMPETITIVE SITUATION

Surgery, chemotherapy and radiotherapy have been used for a long time and form the basis of treatment for most cancers. However, despite important advances and new therapies, long- term survival in many cases remains unsatisfactory, especially in the treatment of spread (metastatic) cancer. Treatment resistance is a significant challenge in cancer care, and there is therefore

a clear clinical need for new treatment alternatives. Treatment with radiation is effective against cancer and has long been an established cornerstone in the treatment of many cancers.

Usually, an external radiation source is used to target a certain tumor, but it is also possible to utilize molecules or particles that accumulate in tumors after distribution in the blood, known as radionuclide therapy. The latter has been used successfully in certain specific cancers for a long time, and may be a valuable alternative or complement to other types of treatment, especially in metastatic or aggressive cancer. One representative example is the treatment of thyroid cancer with radioactive iodine, which has been used successfully since 1942 and where a cure can be achieved despite extensive spread.

More recently, several targeted radionuclide therapies have been developed. Common to these is that a radioactive isotope bound to a carrier molecule is given intravenously and reaches tumors via the blood, so-called systemic distribution. Through different types of carriers that accumulate in tumors, controlled doses of radioactivity can target the cancer and thus treat both aggressive and spread cancer.

Tumorad's potential benefits

Tumor selectivity, physiological	Nanoparticles with radioisotopes	Complementary treatment enables	Simple preparation facilitates
accumulation in tumors offers	provide the possibility for radiation	combination with other types of	logistics and may reduce costs
potential for use in the treatment of	treatment of metastasized, aggressive,	therapies	compared to other radionuclide
several different cancers	and difficult-to-access cancer		therapies

Spago Nanomedical AB (Reg.no. 556574-5048) - Annual Report 2023

Program - Tumorad

Physiological targeting of tumors gives potential to treat several different cancers

1

2

3

1	The isotope lutetium-177 (177Lu) is clinically effective and allows tumor imaging
2	The nanoparticle is optimized for physiological and selective accumulation in
tumors

3	Simple preparation facilitates logistics and can reduce costs compared to other
radionuclide therapies
	Physiological accumulation of functional nanoparticles in aggressive tumors and
	metastases
	Delivery of an adapted radiation dose with sufficient force to treat the tumors
	while minimizing the impact on surrounding tissue

08

CONTENTS

4

5

Spago Nanomedical AB (Reg.no. 556574-5048) - Annual Report 2023

Program - Tumorad	CONTENTS

Radioactive drugs are currently used clinically against a limited number of tumor types, while the rate of development in the field is accelerating with several new products under development. Based on public sales figures from global players with market- approved radionuclide therapies, the market for these products is currently estimated to be worth at least USD 1 billion. Examples of systemic radionuclide drugs include Xofigo, which was approved in 2013 for the treatment of prostate cancer metastases in bone tissue. In early 2018, Lutathera was approved for the treatment of certain neuro-endocrine tumors and in 2022, Pluvicto was approved for the treatment of advanced prostate cancer. These new radioactive drugs may be used both as a single treatment option and in combination with surgery, chemotherapy, and immunotherapies.

The interest in the field is huge and is shown not least by the acquisitions in recent years. In 2018, Novartis acquired both Advanced Accelerator Applications (with Lutathera) and Endocyte (with Pluvicto) for a total value of approximately USD 6 billion, according to the company's press release. In 2014, Bayer completed the acquisition of Norway's Algeta for US$2.4 billion to obtain the rights to Xofigo. In 2021, Bayer continued to complement its portfolio in radionuclide treatments against prostate cancer with the acquisitions of Noria and PSMA Therapeutics. In 2023, Eli Lilly acquired the adiopharma company Point Biopharma Global, with its radionuclide program for the treatment of prostate cancer, for $1.4 billion. In February of this year, Bristol Myers Squibb (BMS) acquired radiotherapy company RayzeBio Inc, with product candidate RYZ101 for the treatment of neuroendocrine tumors, for $4.1 billion. The latest in a string of major deals is Astra Zeneca's acquisition of Canadian Fusion Pharmaceuticals for $2.4 billion. Like many other companies in the field, Fusion Pharmaceuticals, with the Phase 2 program FPI- 2265, is primarily focused on prostate cancer.

The market for radionuclide therapies can be expected to increase significantly in the coming years. Investments to develop new radioactive drugs have increased significantly in recent

years and the focus continues to be primarily on the treatment of prostate cancer and neuroendocrine tumors. The challenge going forward in the field will be to broaden the use of effective radionuclide therapy, both to earlier in the disease stage and also as a treatment for several cancers. This can be done e.g. through the use of new isotopes or through new ways of targeted accumulation of drugs in tumors. Bayer Healthcare, Novartis, Astra Zeneca, Eli Lilly, BMS, Spectrum Pharmaceuticals, Jazz Pharmaceuticals, GE Pharmaceuticals, Immunomedics, Antisoma and Progenics Pharmaceuticals are examples of companies that market or develop radioactive drugs. These can be seen

as competitors but also as potential future partners of Spago Nanomedical.

Compared to the targeted therapies available on the market today, Spago Nanomedical's drug candidate 177Lu-SN201 (Tumorad) has the advantage of providing the opportunity to treat various types of solid tumors, and thus potentially a significantly higher market value. Based on mortality data1 from a number of major cancer indications (colorectal, gastric, breast, pancreatic, and ovarian cancer) which based on clinical science can be expected to be candidates for treatment with 177Lu-SN201 (indications with documented EPR effect2), as well as prices of comparable existing pharmaceuticals, the company's assessment is that the annual addressable market for Tumorad amounts to several billions.

STRENGTHS AND COMPETITIVE ADVANTAGES

Spago Nanomedical's candidate drug SN201 is loaded with a radioactive isotope, 177Lu (the same one successfully used in Novartis products Lutathera and Pluvicto), and thus enable internal radiation therapy, radionuclide therapy. The advantag of radionuclide therapy compared to external beam radiation is the ability to selectively deliver radioactivity to tumors and thereby irradiate multiple soft tissue tumors and metastases simultaneously. The technology also irradiates tumors that would be unreachable with external radiation, such as deeper tumors or tumors adjacent to vital organs.

The drug candidate 177Lu-SN201, like the product candidate pegfosimer manganese in the SpagoPix program, is designed for physiological and selective accumulation in tumors and other lesions, via the well-documented Enhanced Permeability and Retention (EPR) effect. Growing malignant, and even some benign lesions are surrounded by a disorganized capillary network with porous vessel walls with cavities that allow particles to pass through to the growing lesion. In addition, tumor tissue has a poorly functioning lymphatic system, which means that particles that end up in the lesion stay there longer than they would have done in healthy tissue. The company's nanoparticles are designed and carefully optimized to exploit the EPR effect. The local accumulation of 177Lu-SN201 allows for the delivery of an adapted radiation dose with sufficient power to treat the tumors while minimizing unwanted effects on the surrounding tissue. The mechanism of physiological accumulation also uses 177Lu-SN201 for the treatment of several tumor types. This is where 177Lu- SN201 differs from most other targeted radionuclide therapies based on, for example, antibodies, which have been developed to reach only a certain tumor type.

1.	Bray et al, 2018.
Spago Nanomedical AB (Reg.no. 556574-5048) - Annual Report 2023
2.	Natfji et al.,2017

Program - Tumorad	CONTENTS

PROGRAM STATUS

As the core of the Tumorad particles is based on the same platform as the nanoparticles used for the SpagoPix program, there are significant synergies between the programs with regards to the material's structure and production. SpagoPix has shown in the clinical studies SPAGOPIX-01 and SPAGOPIX-02 that the material is safe to give to patients and that the mechanism for selective accumulation of the nanoparticles in tumors via the EPR effect works. Furthermore, the radioactive isotope 177Lu is already used clinically today and has been shown to have an effect in the treatment of cancer.

Extensive non-clinical development and optimization work has previously resulted in a drug candidate, 177Lu-SN201, with the desired exposure of radioactivity in tumors, while minimizing the impact on other organs.

In April 2024, the company reported favorable results from a study with 177Lu-SN201 as monotherapy in a model for triple- negative breast cancer, a very aggressive and difficult-to-treat

form of cancer in which the tumor cells often have resistance to chemotherapy even before chemotherapy treatment begins and which represents approximately 15 percent of all breast cancer cases. The results show a better tumor-inhibiting effect compared to drugs used in standard treatment, in parallel with a low level of radiotoxicity. The findings support continued non-clinical development to explore 177Lu-SN201 as monotherapy and in combination therapy in triple-negative breast cancer,

The company has also show that 177Lu-SN201 reduces tumor growth and prolongs survival by 37 percent in a preclinical model for colorectal cancer3. The material has shown a good safety profile in regulatory preclinical toxicology studies, as well as a favorable distribution in the body (biodistribution) in preclinical studies. Manufacturing of SN201 on a larger scale for clinical studies is completed and during the fourth quarter of 2023 the first patient was successfully dosed in a clinical phase I/IIa, dose escallation and dose expansion, first-in-human study on patients with advanced cancer. The primary objective of the study is to evaluate the safety, biodistribution, tolerability and initial efficacy

of 177Lu-SN201. The phase I part of the study is ongoing and will include up to 30 patients. Based on biodistribution analysis (by measuring radioactivity) in the first patients in the study, an early indication of the possibility of reaching a safe and effective dose can be expected. The study is initially conducted at a number of clinics in Australia and as the study progresses, clinics in other countries may also be included.

PATENT

Spago Nanomedical has extensive own experience in patent work and works actively together with a well-reputed Swedish patent office to continuously strengthen the commercial protection for its products.

The company has product protection for SN201 in the most strategically important markets for radionuclide therapy, including the US, the EU and Japan, and is valid until at least 2035. Additional patent applications for product and process protection have been filed, which may both strengthen and extend the protection until at least 2042. Tumorad is a protected trademark.

Pipeline - Tumorad

PROJECT & INDICATION

DISCOVERY

PRECLINICAL

PHASE I

PHASE II

PHASE III

MARKET

Tumorad - Solid tumors

SpagoPix - Breast cancer

SpagoPix - Endometriosis

New Projects - Undisclosed indications

Treatment

Imaging diagnostics

3. Mattisson et al., 2023

Spago Nanomedical AB (Reg.no. 556574-5048) - Annual Report 2023