Infant Bacterial Therapeutics AB (publ), Interim report January 1-September 30, 2023

Message from the CEO
The third quarter has been very eventful for IBT.

In July IBT received a capital injection of 101 MSEK from our shareholders. The funds will be used for preparations leading up to the launch of our most advanced product, IBP-9414, which is currently in the final stages of Phase III. In addition, the funds will also be used to initiate the development work of our other development projects which are in the earliest phase of pharmaceutical development. We have initiated these activities and enhanced our US team with two individuals, one within the framework of commercial readiness with a focus on our well-established KOL-network. The other person is focused on the early development projects. One of the early projects we have advanced during Q3 is our ROP (IBP-1118) which aims to prevent ROP, an eye condition affecting prematurely born infants, often leading to blindness. We have completed an expert meeting in Rome which resulted in an IBT development plan for the IBP-1118 project. We will next establish a preclinical plan as well as understand the commercial aspects. Once completed the full development plan will be discussed with the authorities and then will it be time to move from words to action. IBT aims to have a full development plan covering all steps through approval prior to initiating tangible development work such as clinical studies. Our development project IBP-1222, which is conducted in collaboration with the Medical College of Wisconsin, aims to develop a medication to treat antibiotic-resistant bacteria. We anticipate that the patent protection for the IBP-1122 project will be strengthened when the European patent is soon set to take effect. Once the European patent is granted, the plan is to allocate additional resources to the project.   

Regarding IBP-9414, our development program that is approaching the end of the Phase III study, we currently have 1950 patients recruited out of the planned 2158. We thus have approximately 10% left of our development program. On September 29, 2023, the FDA sent out a warning letter to hospitals in the US who treat prematurely born infants with probiotics. It has been found that probiotic products can seriously harm the health of prematurely born infants. One child developed sepsis and subsequently passed away due to the administration of probiotics, writes the FDA in its warning letter. The FDA has also issued warning letters to two American companies, Abbott and Infinant Health, both of which have marketed probiotic products with unauthorized advertising according to the FDA. In the USA and in most countries, a medicine must first be approved by a regulatory agency or equivalent before it can be placed on the market. According to the FDA's warning letter, this did not occur when Abbott and Infinant Health chose to market their products. On October 26, the FDA chose to send another warning letter to the hospitals in the USA. In the warning, it states that the FDA advises against administering probiotic products to prematurely born infants in a hospital setting, as these products have not received FDA approval. This likely means that the use of probiotic supplements will not be used for prematurely born infants in a hospital setting. This is very good news for IBT since we initiated already in 2012 the pharmaceutical development of IBP-9414 as a New Biological Entity, which is the correct way to develop a product according to the FDA. IBT has from the beginning consulted with the FDA in the USA and the EMA in the EU pertaining to our development work. The design and implementation of IBP-9414 follow the laws and regulations applied in pharmaceutical development, for instance, all studies have been conducted under an IND (Investigational New Drug) or equivalent regulatory authorization. IBT’s market position should thus have been strengthened by the fact that physicians are no longer recommended to use unapproved products moving forward. In the near term, recent developments have affected IBT’s ability to recruit for our Phase III study. We noted during the first two weeks of October a significant reduction in the recruitment rate. It has since improved and is now at approximately 40-50 infants per month. Since we need to recruit an excess of 200 additional infants to reach 2158 infants, the latest development means that IBT may need to recruit during the first quarter of 2024. We are making great efforts to accelerate recruitment and continue to look forward to receiving the results in the near future and continue to aim to apply for drug approval in 2024. Our hope remains to have our important medicine on the market in 2025.  

I would like to also express my appreciation to those who work for IBT. For 10 years we have carried out our work together, with a conviction that the most sensitive people on earth do best from having access to medical products where the manufacturing is of the highest quality and that both the safety and efficacy of drug candidates are well documented. At the same time, since the start, IBT has followed the literature that shows the importance of a healthy intestinal flora/microbiome and how probiotics have shown positive health effects. Now the FDA has thus proved us right, by giving the directive that for our target group a medicine should be developed instead of a dietary supplement, which of course feels satisfying. Now only a fraction of the work remains to reach the long-awaited clinical results and we are perhaps more motivated than ever. IBT is on the run towards the finish line.

Stockholm, September 9th, 2023

Staffan Strömberg, CEO

Financial overview for the period

Third quarter (Jul-Sep) 2023

• Net sales KSEK 0 (0)
• Operating income KSEK -33,718* (-7,746)
• Earnings per share before and after dilution SEK -2.31 (0.69)

Reporting period (Jan-Sep) 2023

• Net sales KSEK 0 (0)
• Operating income KSEK -88,965* (-25,051)
• Earnings per share before and after dilution SEK -6.86 (-2.26)

* Operational income includes exchange rate effects on foreign currency deposits to secure future outflows during the third quarter amounting to KSEK -448 (17,220) and during the reporting period amounting to KSEK 7,313 (43,451)

Significant events during the third quarter (Apr-Sep)

• On July 3rd, 2023, IBT announced that the product IBP-1016 for gastroschisis has been granted Orphan Drug Designation.
• On July 4, 2023, IBT announced the outcome of the rights issue. The issue provided IBT with approximately SEK 101 million before deduction of transaction costs. After the rights issue, the number of shares and votes in the company changed. The new number of shares now amounts to 13,471,420, of which 453,283 A-shares and 13,018,137 B-shares.

Significant events during the reporting period (Jan-Sep)

• On January 12, 2023, it was announced that IBT acquired a pharmaceutical platform that can prevent antibiotic-resistant hospital infections.
• In January 2023, IBT published new results in the British Journal of Gastroenterology validating “Sustained Feeding Tolerance” (SFT) as a relevant primary endpoint in “The Connection Study”.
• In March 2023, IBT announced the opening of the final cohort for recruitment, with 1400 patients enrolled in the study. This third cohort will include infants with birth weight between 1001 grams and 1500 grams.
• On May 16, 2023, IBT decided on a rights issue and called for an Extraordinary General Meeting of shareholders.
• On June 9, 2023, the Extraordinary General Meeting resolved to approve the Board's decision to increase the share capital by issuing new shares with pre-emptive rights for the company's shareholders.
• On June 15, 2023 IBT announced that the European Patent Office has approved its patent application for Lactobacillus reuteri. The patent covers the drug candidate IBP-9414
• On June 21, 2023, it was announced that the Data Monitoring Committee (DMC) conducted a planned safety analysis, without objections. At the same time, a planned futility analysis was also conducted and was positive, which means that IBT is continuing the study as planned.

Selected financial data