There are many who show great interest for Cyxone and our drug candidates. We are pleased about the discussions happening around the effects of T20K and Rabeximod and what it can lead to in the future. Since there seems to be a lot that should be commented and explained, we would like to provide both a supplementary description and a general update.

As I previously presented, the development of T20K is in the end of the preclinical phase, which, if the fundamental studies are done in a good way, should not lead to any new, unexpected effects. Cyxone and its collaboration partners have, since the summer of 2016, tested T20K for its anti-inflammatory effects, inhibition of mouse MS symptoms, uptake and distribution in the body, as well as a number of studies in cells and animals to better understand how T20K works. Nevertheless, these studies are very important to execute to ensure the effects of T20K, especially from a safety perspective ahead of upcoming studies in human. We are currently executing the slightly longer studies with T20K in two animal species that the medicines agency requires to approve the initiation of phase 1 studies in humans. If I compare with the drug development projects I have previously worked with and have knowledge about, T20K is unusually positive and without the problems that otherwise are more or less the rule in developing new drugs.

In other words, we do the studies we have planned for a long time and within the time frame we already stated at the start of Cyxone as a company. I look confidently at phase 1 studies in MS later in 2018.

With regard to Cyxone’s decision to conduct a pilot study in colitis model (IBD), it was based on a tip from researchers at a major pharmaceutical company. They thought that cyclotides of T20K type could be effective for inflammation in the colon, called colitis and belong to the disease IBD. In the colitis studies, we see an inhibition of lymphocyte activation measured as size of lymph nodes, an effect that we had not investigated in, for example, the EAE studies in MS. This simple measurable effect is also supported by a trend of decreasing number of “aggressive” T-cells as well as a decrease of a protein that, among other things, can transport large molecules into cells. It is good that the results we obtained from the pilot study, i.e. indication that T20K seems to have an anti-inflammatory effect, since it would be beneficial for its effect as a MS drug. This is because the early phase of MS development is considered driven by inflammatory processes in the central nervous system, i.e. the brain and spinal cord, which control most of the body, from breathing to memory.

In the case of autoimmune diseases such as MS and IBD, one has to remember that there are no animal models that are the same as what happens in humans. The only animal model for MS, the so-called EAE model, reflects, for example, the entire disease progression in about two weeks while the corresponding MS progression in humans (RRMS to SPMS) may take 20-30 years.

Cyxone’s decision to let the IBD track rest is, therefore, made for practical and economic reasons. I just got a call from a shareholder and doctor who wanted to remind me that our colitis study did not include effect measurements in the small intestine, and is, therefore, relevant to the IBD type ulcerative colitis. In the second main type of IBD, the difficult type, Crohn’s disease, just the small intestine may be even more important for successful patient treatment. In Sweden, approximately 50,000 people are estimated to suffer from ulcerative colitis and approximately 32,000 is living with Crohn’s disease.

Thus, we have just ”scratched the surface” of which diseases a substance like T20K could work on and, in future, perhaps the other type of IBD is something to continue research on. But, as said, we cannot do all the studies we would like to do to test T20K in other diseases, but we are currently focusing on MS and the studies that must be done to take our candidate through the development process.

Overview of the company’s projects

Below you can see an illustration of how we look at the company and our portfolio right now, which I hope can help to clarify the picture of our two main programs and the side track with the IBD pilot study we just completed.

Next milestone for T20K in MS

In the MS indication, our focus is now to complete the mandatory preparation for the application to initiate a clinical study in human mentioned earlier. Our nearest milestone expected this fall is to get the results from the T20K toxicology study, which will show that the substance is not dangerous for a human to intake. This is an important step in further strengthening the quality of our substance before it is given to human as planned later this year.

Update of Rabeximod

When we expanded our portfolio with Rabeximod, we were impressed by the results already measured in RA. As you may remember, the already completed clinical phase 2 study by OxyPharma, was too short for Rabeximod’s effects to show. That study did not achieve the desired results during the 12-week study, but when the results were measured informally, outside the study frame after 16 weeks, a significant treatment effect was observed, but it is not possible to change the design of a study afterwards. However, it is a longer study that includes 24 weeks of oral Rabeximod treatment that is the first bigger goal, which Cyxone will conduct after the necessary toxicity studies have been completed when the funding is in place.

You know that we are working towards a financing solution to initiate a clinical phase 2 with Rabeximod and I hope that we can share more information soon. This while the funding earmarked for T20K’s clinical program until the end of phase 1 already exists.

Cyxone steps into ’bigger shoes’

Progress and development are taking place not only for our drug candidates, but also as a company, since we are now entering into a new phase as a clinical development company. As the attentive already has seen, we have updated our website as well as made an upgrade in the graphic profile. This in order to better communicate our target image – to develop novel drugs to improve quality of life for patients suffering from autoimmune diseases.

You can now find more information about the diseases, candidates and the market, as well as other information relevant to the company at www.cyxone.com.

As always, keep contacting me. I respond as much as I am allowed, given market rules, either as a direct response or to a broader audience, such as with this newsletter.

I hope, too, that you, our shareholders, are enjoying the great summer we have, and I hope to be able to share more news with you soon!

Kjell G. Stenberg

CEO, Cyxone