Interim Report 1 January to 31 March 2022

Financial Summary for the group

• Cyxone stepped up activities and collaborates with global CRO on the RA study.
• Cyxone engaged contract development and manufacturing organization for production of T20K.
• Cyxone announced the outcome of the rights issue. In total, the rights issue was subscribed to approximately 91 percent.
• Cyxone announced that the company's CMO is resigning at his own request due to personal reasons.

• Cyxone announced updated strategy for the year.

Cyxone was pleased to start the quarter with a rights issue which provided the company with funding to support preparation and initiation of the Phase 2b trial of our lead asset Rabeximod in Rheumatoid Arthritis (RA).

During the quarter Cyxone made good progress in preparations for Rabeximod in RA phase 2b trial: The instability in Europe required adjustment to our plans, and we managed to quickly make changes to ensure we have secured sites to enable the study to run smoothly.

Within this new climate, the management team and board have worked closely together to revise and agree a new forward-looking strategy. The strategy prioritizes and focuses resources on our lead asset Rabeximod and the upcoming trial in RA and will guide us through the coming year to ensure implementation of the Rabeximod trial.

Our second asset T20K has also been advanced in the first quarter with CMC activities initiated in collaboration with one of Europe’s leading peptide manufacturers. Furthermore, the academic collaboration with Medical University of Vienna has continued to deliver promising results demonstrating the enhanced therapeutic benefit of combining T20K and kappa opioid receptor agonist (KORa) therapy for the treatment of more advanced cases of multiple sclerosis. While we are prioritizing Rabeximod phase 2b trial, the ongoing activities for T20K will continue to completion and allow us to move this program forward.

It has become clearer than ever that Rabeximod meets a major unmet need among rheumatologists for real alternatives to current therapies. Over 40% of patients do not respond to the first line oral treatment methotrexate while 25% of diagnosed patients do not tolerate it. Second-line biologics such as TNF alpha inhibitors can provide great efficacy, but only 30% of patients respond well. Finally, the safety of oral JAK-inhibitors, a drug class that raised expectations within the specialist community when being launched about a decade ago have caused concern among both American and European authorities.  The US Food and Drug Administration (FDA) had already voiced concerns, while the European Medicines Agency’s (EMA) safety committee, PRAC, started a safety review of these drug therapies in February.

We have therefore been positioning Rabeximod with its favorable safety and tolerability profile as a second line oral therapeutic following methotrexate failure to delay the need for patients to move to more invasive and complex biologics and other injectables. Patients would be able to keep disease in remission with an effective, oral, easy to take and tolerate once a day tablet for many years. Feedback to date confirms there is a large market interest from rheumatologists, patients and strategic partners for such an approach.

During the first quarter of 2022, we took the opportunity to optimize the trial design, increase trial efficiency and robustness, while reducing the overall cost. We are preparing for regulatory submissions in the upcoming quarter as the next important step toward patient enrolment.

The T20K program has delivered exceptional preclinical efficacy results in 2021-2022 and remains a key interest for the company despite a lower focus for the upcoming period. We have been testing a new subcutaneous administration form and strong synergistic effects have been shown by the T20K/KORa combination. Thus, preclinical studies have shown that T20K is effective as both an oral and subcutaneous administered drug expanding possibilities for therapy. The preclinical studies also support our new T20K/KORa combination therapy patent application and have thus expanded the potential therapeutic use of T20K to a wider MS patient population. And very importantly we have progressed the program to the non-clinical CMC phase of development with initiation of a manufacturing feasibility study for T20K. Therefore, we have further expanded our pipeline and put in place key drivers for accelerating the program when the situation allows.

Cyxone embarked upon the Covid-19 trial during the height of the pandemic in 2020 due to the extreme unmet need and our desire to make a difference. There is a potential for Rabeximod to address the cytokine storm leading to death in Covid-19 patients. After careful consideration the company has decided not to work further on Covid-19 for the following reasons:

• The focus on the RA indication which offers at least a 10-fold greater commercial opportunity.
• The market and business attractiveness are less urgent with more options available for Covid-19 patients today.

Cyxone’s goal to uplist the company´s shares to Nasdaq main market, Stockholm remains a strategic focus, which was preliminary announced for the first quarter of this year. The uplisting is an important goal for Cyxone, however we will wait for a time when it will most benefit the company and our shareholders. We have already made extensive preparations and will be able to move swiftly when the opportunity arises.

Our conviction in the need for a therapeutic like Rabeximod in the RA market for the large segment of nonresponding patients remains strong having received additional feedback from independent Key Opinion Leaders (KOL) during the quarter, which has shaped our streamlined trial design. We were also fortunate to secure additional funding early in the year to support this goal.

In conclusion, I am positive and excited for the upcoming year and the current strategy which will allow us to push our lead program forward. Implementing the optimized strategy that the company settled on, will help us deliver a successful clinical study. With a strong and focused development team, efficient organization, and additional financial resources secured in January 2022, we are well positioned to execute our drug development strategy to deliver on important upcoming clinical milestones.

Follow our news and information about our presence at investment events via Nasdaq First North Growth Market and the company's website: www.cyxone.com.

Tara Heitner

CEO, Cyxone

16 May 2022                                  Annual General Meeting

24 August 2022                            Interim report Q2, 2022

27 October 2022                         Interim reportQ3, 2022

17 February 2023                        Year-end report 2022

The report is enclosed in full here, and all reports will be available from these dates at www.cyxone.com

Malmö
May 12, 2022

The Board of Directors
Cyxone AB

This is a translation of the original Swedish version of the interim report. In case of any discrepancy between this translation and the Swedish original, the latter shall prevail.

Tara Heitner, CEO
Tel: +46 (0)70 781 88 08
Email: tara.heitner@cyxone.com

The information was submitted for publication, through the agency of the contact person set out above, at 08.30 a.m. CEST on 12th of May 2022.

This press release contains forward-looking statements that constitute subjective estimates and forecasts about the future. Assessments about the future are only valid on the date they are made and are, by their nature, similar to research and development work in the biotech field, associated with risk and uncertainty. In light of this, actual outcomes may differ substantially from what is described in this press release.

Cyxone AB (publ) (Nasdaq First North Growth Market: CYXO) develops disease modifying therapies for diseases such as rheumatoid arthritis and multiple sclerosis. Rabeximod is a Phase 2 candidate drug being evaluated for the management of rheumatoid arthritis. T20K is a Phase 1 candidate drug for treatment of multiple sclerosis. Certified Adviser is FNCA Sweden AB, +46(0)8-528 00 399, info@fnca.se. For more information, please visit www.cyxone.com