Medincell Publishes Its Consolidated Annual Financial Results

(April 1^st, 2023 - March 31^st, 2024)

MONTPELLIER, France--(BUSINESS WIRE)--Regulatory News:

Medincell (Paris:MEDCL):

Highlights

Commercial launch by Teva Pharmaceuticals (“Teva”) of UZEDY^® (risperidone) in the U.S., the first product using Medincell BEPO^® technology

• Successful commercial launch and market access negotiations with U.S. private and public health insurance systems
• Receipt of a €3.6 million milestone payment for U.S. FDA approval and €1.7 million in royalties received on first net sales
• Sales ramp-up in line with forecasts: $80 million in revenue anticipated by Teva in 2024

Acceleration of phase 3 clinical trial of mdc-TJK (olanzapine, schizophrenia), second antipsychotic developed with Teva

• End of recruitment in January 2024, 9 months earlier than originally planned

Post-closing

• Announcement of positive phase 3 efficacy results in May 2024
• No post-injection delirium/sedation syndrome (PDSS) observed after administration of approximately 80% of the number of injections required by the FDA, as of May 8, 2024

End of phase 3 clinical trial of mdc-CWM (intraarticular celecoxib, post-op pain, developed in partnership with AIC)

• Recruitment of 151 patients completed in August 2023

Post-closing

• Encouraging phase 3 results paving the way for future developments announced in May 2024

Financing

• €23.2 million net received following the capital increase in May 2023
• €10.0 million corresponding to the final tranche of the European Investment Bank loan received in August 2023

Christophe Douat, CEO of Medincell: "2023 has been a transformative year, marked by the FDA approval and successful commercial launch of UZEDY in the United States by our partner Teva. The anticipated rise in UZEDY royalties and the expected revenue from the olanzapine LAI will generate net profit to fuel Medincell’s sustainable growth. We have entered a new era, demonstrating our ability to innovate and develop the enabling technologies to design innovative therapeutic solutions. We are now excited to welcome new partners, such as AbbVie, with whom we have recently signed a significant strategic agreement."

Consolidated financial statements for the year 2023-24

Operating result: €(21.0) million, a 13% improvement vs previous year

• Revenues and other income: €11.9 million
• Operating expenses: €(32.9) million

Net result: €(25.0) million, a 22% improvement vs previous year

Cash consumption from operating activities: €11.9 million, a 43% decrease vs previous year

Closing cash position: €19.5 million (of which €5.2 million in the form of non-risky financial assets)

Main post-closing cash-in: €32.5 million (AbbVie initial payment)

Audit procedures on the Company’s 2024 consolidated accounts were completed. The statutory auditors report on the 2024 consolidated financial statements will be issued after the completion of the procedures required for the filing of the Universal Registration Document with the French Financial Markets Authority (Autorité des Marchés Financiers or AMF).

Strategic co-development and licensing agreement with AbbVie (April 2024, post-closing)

On April 16, 2024, Medincell announced a collaboration with AbbVie to co-develop and commercialize up to six therapeutic products across multiple therapeutic areas and indications. Medincell will use its commercial-stage long-acting injectable technology platform to formulate innovative therapies. Medincell will conduct formulation activities and preclinical studies, including supportive CMC work to advance candidates into clinical trials. AbbVie will finance and conduct the clinical development for each program and will be responsible for regulatory approval, manufacturing, and commercialization.

The first LAI program candidate has been selected and formulation activities are underway.

Under the terms of the co-development and licensing agreement covering up to 6 programs, Medincell has received a $35 million upfront payment and is eligible to receive up to $1.9 billion in development and commercial milestones ($315 million for each program). Medincell is also eligible to receive mid-single to low-double-digit royalties on net sales.

Successful commercial launch of UZEDY^® (1-month and 2-month risperidone, schizophrenia)

UZEDY^® is the first product based on Medincell long-acting injectable technology to reach the commercial stage:

• U.S. market authorization obtained from the U.S. FDA on April 28, 2023
• Commercial launch under the brand name UZEDY^® by Teva in the United States in May 2023
• Teva's comments on the commercial launch:

• Based on the agreements already reached and ongoing negotiations with US government, private and public health insurance systems, Teva expects market access to continue to improve in 2024;
• Feedback from healthcare professionals and patients has been well-received related to the product's attributes, such as its subcutaneous injection and pre-filled, ready-to-use syringe;
• Teva forecasts sales of $80 million in 2024, in line with sales acceleration forecasts.

• Over the past fiscal year, Medincell received €3.6 million in milestone payments following FDA approval of UZEDY^®, as well as the first royalties of €1.7 million, calculated on Teva net sales in the U.S.

mdc-TJK (olanzapine, schizophrenia): recruitment finalized 9 months earlier than planned

If approved by the FDA, mdc-TJK would be the first long-acting injectable olanzapine product with a favorable safety profile, potentially elevating this product to first-in-class status. mdc-TJK aims at offering an additional treatment solution for UZEDY for patients with more severe forms of schizophrenia.

• On November 13, 2023, Teva announced that it had entered into a financing agreement with Royalty Pharma to accelerate the program's development.
• Recruitment of the 640 study participants was completed in January 2024, 9 months earlier than initially planned.
• On May 8, 2024, Medincell and Teva announced positive efficacy results for the SOLARIS phase 3 trial: meeting its primary endpoint across all three dosing groups, with mean difference in change in the Positive and Negative Syndrome Scale (PANSS)¹ total score from baseline to week 8 of -9.71 points, -11.27 points, and -9.71 points versus placebo for the high, medium, and low dose groups, respectively. These differences from placebo were clinically meaningful and statistically significant with adjusted p-values of <0.001 for each comparison. Key secondary endpoints of CGI-S (Clinical Global Impressions – schizophrenia) and PSP (Personal and Social Performance Scale) total score were also statistically significant after adjusting for multiplicity. No cases of post-injection delirium/sedation syndrome (PDSS) have been reported to date, after administration of approximately 80% of the target injection number requested by FDA.

^1The PANSS is composed of 3 subscales: Positive Scale, Negative Scale, and General Psychopathology Scale. Each subscale is rated with 1 to 7 points ranging from absent to extreme. Each of the 30 items is accompanied by a specific definition as well as detailed anchoring criteria for all seven rating points. These seven points represent increasing levels of psychopathology, as follows: 1- absent 2- minimal 3- mild 4- moderate 5- moderate severe 6- severe 7- extreme; the PANSS overall total score ranges from 30 to 210, with a higher score indicating greater symptom severity. The primary efficacy endpoint was measured by change from baseline to week 8 against the PANSS total score.

• The complete safety database should be available in the second half of 2024.

mdc-CWM (intra-articular celecoxib, post-operative pain): end of phase 3 clinical trial and encouraging results paving the way for future developments

• Recruitment of the 151 participants in the study conducted by Arthritis Innovation Corporation (AIC) was completed in August 2023.

• The results of the study conducted by AIC were released on May 14, 2024. The study did not meet its primary endpoint of time-weighted AUC¹ of pain intensity over 14 days when comparing treatment with multimodal analgesia (MMA) alone to MMA concurrent with a single dose of F14 administered in the knee at the time of Total Knee Replacement (TKR). The MMA control analgesia that every patient received was defined by the protocol as standard of care periarticular infiltration with bupivacaine, oral acetaminophen and opioid rescue medication.

A numerical improvement favoring F14 was observed for the primary endpoint. Secondary endpoints of time-weighted AUC of pain over 3 and 7 days also demonstrated numerical improvement favoring F14. The safety profile for F14 was consistent with the prior Phase 2 study, and no new safety signals were identified, and no SAEs² were reported as related to F14 treatment.

Substantial improvement was observed for F14-treated patients for the key secondary endpoint of knee range of motion (ROM) at 6 weeks, as well as at 3 months (p<0.005 and p<0.0005 respectively; unadjusted for multiplicity). Treated-knee effusion (i.e., swelling) showed highly improved outcomes for the F14-treated patients compared to MMA at 6 weeks and 3 months (p<0.005 and p<0.05 respectively, unadjusted for multiplicity). The widely used clinical-performance based measure of lower extremity function, the Timed-Up-and-Go (TUG) test was also improved for the F14 group at 6 weeks. Notably, far greater improvements were observed for the endpoints of time-weighted AUC of pain, ROM, effusion, and TUG in a sub-group of patients representing over 70% of the trial population (108/151) who had not previously undergone TKR in their contralateral (non-study) knee. This subset analysis was pre-specified in the protocol, but not alpha-controlled for formal statistical testing. AIC intends to discuss the results from this trial with regulators and explore alternative approval pathways for F14 in this sub-group of patients.

^1Time-weighted Area Under the Curve (AUC) of pain is a statistical measure used in clinical trials and pain management studies to quantify the overall experience of pain over a specified period. It integrates both the intensity of pain and the duration for which that pain is experienced.

^2SAE: Severe adverse event

Progressing the preclinical pipeline

• Progress in preclinical activities for two programs to prepare initial of clinical trials: mdc-WWM (contraception) with support from the Bill & Melinda Gates Foundation and mdc-STM (malaria) with support from Unitaid (the international health agency has granted Medincell an additional envelope of $6 million to advance the mdc-STM program into clinical phase in April 2024, post-closing)
• Launch of feasibility studies and formulation activities for several in-house or partnered programs
• Discontinuation of two preclinical programs for strategic reasons: mdc-ANG (antipsychotic, developed with Teva) and mdc-GRT (transplantation, in-house program).

Other Research and Development activities

In parallel with the advancement of the R&D pipeline, Medincell teams have continued to strengthen the Company's technological portfolio, to increase its capacity to formulate innovative treatments with different types of molecules and different therapeutic objectives.

Selected financial information for fiscal year 2023-2024

Key consolidated figures - IFRS (in thousands of €)
INCOME STATEMENT	March 31, 2024 12 months	March 31,2023 12 months
Revenues	9 032	9 889
Other income	2 913	3 766
Current operating result	(20 940)	(24 025)
Operating result	(20 977)	(24 046)
Financial result	(3 973)	(7 964)
Net result	(25 038)	(32 010)
CASHFLOW	March 31, 2024	March 31,2023
Net cashflow from operating activities	(11 922)	(21 005)
Net cashflow from investing activities	(613)	1 298
Net cashflow from financing activities	25 528	1 556
BALANCE SHEET	March 31, 2024	March 31,2023
Equity of the consolidated group	(40 824)	(42 294)
Total non-current liabilities	61 304	14 608
Total current liabilities	16 466	57 025
Total non-current assets	9 690	9 772
Of which financial assets and other non-current assets	1 792	1 460
Total current assets	27 258	19 568
Of which cash and cash equivalents	19 460	6 467
FINANCIAL DEBT	March 31, 2024	March 31,2023
Financial debt, non-current portion	50 541	11 708
Financial debt, current portion	5 518	39 757
Non-current derivative liabilities	5 745	-
Current derivative liabilities	-	3 055
GROSS FINANCIAL DEBT	61 804	54 520
Cash and cash equivalents	19 460	6 467
NET FINANCIAL DEBT	42 344	48 053

Consolidated cash flow statements

(In thousands of euros)		March 31, 2024 12 months	March 31,2023 12 months
A	Net cashflow from operating activities	(11 922)	(21 005)
B	Net cashflow from investing activities	(613)	1 298
C	Net cashflow from financing activities	25 528	1 556
	Impact of non-monetary items and foreign exchange rate changes	-	-
	Change in net cash position	12 993	(18 150)
	Cash and cash equivalents - opening balance	6 467	24 617
	Cash and cash equivalents - closing balance	19 460	6 467

A- Net cashflow from operating activities

Cash expenses from operations decreased compared to previous year, in particular due to lower current operating expenses and the receipt of the first royalties from UZEDY^® net sales.

B- Net cashflow from investing activities

Net cashflow from investing activities was down €1.9m on the previous year. The latter included the termination of a capitalization contract in the first quarter of 2023 for 2.6 M€, which was not repeated in the year ended March 31, 2024. In the year ended March 31, 2024, net cashflow from investing activities included the acquisition of laboratory equipment and instruments, and improvements to the Jacou site for €0.3 million, and the acquisition of intangible assets relating to intellectual property for €0.9 million, partially offset by the receipt of €0.5 million in income from cash interests on investments.

C- Net cashflow from financing activities

The €24 million increase over the previous year relates to proceeds of €23.2 million from capital raise in May 2023, net of issuance costs, and the receipt of the last 10 M€ tranche of the EIB loan in July 2023. The Company continued to repay its outstanding loans during the fiscal year.

Consolidated income statement

(In thousands of euros)	March 31, 2024 12 months	March 31,2023 12 months	Value Variance	Variance %
Revenues	9 032	9 889	(857)	-9%
Other income	2 913	3 766	(853)	-23%
REVENUES AND OTHER INCOME	11 945	13 655	(1 710)	-13%
Research and Development Expenses	(21 076)	(27 925)	6 849	-25%
Sales and Marketing Expenses	(2 639)	(2 588)	(51)	2%
General and Administrative Expenses	(9 170)	(7 167)	(2 003)	28%
TOTAL OPERATING EXPENSES	(32 885)	(37 680)	4 795	-13%
CURRENT OPERATING RESULT	(20 940)	(24 025)	3 085	13%
Other non-current operating income and expenses	(37)	(21)	(16)	76%
OPERATING INCOME	(20 977)	(24 046)	3 069	13%
Financial interest income	553	41	512	1249%
Cost of gross financial debt	(4 617)	(3 932)	(685)	17%
Change in fair value of financial liabilities	(53)	(5 206)	5 153	-99%
Other financial expenses	(1)	(57)	56	-98%
Other financial income	145	1 190	(1 045)	-88%
FINANCIAL RESULT	(3 973)	(7 964)	3 991	50%
PROFIT BEFORE TAX	(24 950)	(32 010)	7 060	22%
Income tax (expense)/income	(88)	-	88	N/A
NET RESULT	(25 038)	(32 010)	6 972	22%
- Attributable to Medincell shareholders	(25 038)	(32 010)	6 972	22%
- Attributable to non-controlling interests	-	-	-	-

Revenue and other revenue: 11.9 M€

For the year ended March 31, 2024, Company revenues include the following items:

• Medincell has received a milestone payment of €3.6 million from Teva following FDA approval of UZEDY^®.
• Royalties on net sales from UZEDY^® were invoiced to Teva for €1.7 million, and royalties on intellectual property to the CMB joint-venture for €0.6 million.
• As part of the collaboration with the Bill & Melinda Gates Foundation to develop a contraceptive long-acting injectable and an HIV preventive product, Company revenues amount to €1.8 million for the 2023-2024 financial year.
• The collaboration with Unitaid to develop a long-acting injectable product to fight malaria in LMICS (low- and middle-income countries) generated revenue of €0.6 million.
• Sales from services, including feasibility studies, represented €0.7 million.

Other income consists mainly of the Research Tax Credit for €2.8 million.

Current operating expenses: €32.9 million

Current operating expenses decreased by €4.8 million (13%) compared to the previous year.

R&D expenses decreased from €27.9 million in the previous year to €21.1 million, to represent 64% of the total operating expenses. Subcontracting expenses relating to CDMOs and CROs decreased following the end of phase 2 trial of the mdc-TTG program and because of reduced polymer purchases.

General and administrative expenses increased by €2.0 million (or 28%) compared to the previous year, due to various fees (consulting concerning the Research Tax Credit, lawyers, audit, investors relations in the United States), as well as higher personnel expenses (notably bonus, profit-sharing and free shares related expenses).

Net financial result: €(4.0) million

Net financial loss reduced by €4.0 million year-on-year. This variance is explained by the renegotiation of the EIB loan on November 22, 2022, which led to an increase in the average debt after the issue of tranches B and C of the loan, and to a reduction in the effective interest rate from 16.3% to 13.0% on tranche A, by the re-evaluation of the variable remuneration due to EIB and by the change in fair value of the warrants put options attributed to EIB as of March 31, 2024.

Net financial charge is mainly composed of interest payable on the EIB loan of €(4.4) million as of March 31, 2024, compared with €(3.5) million as of March 31, 2023. The change in fair value of the EIB loan amounted to €(0.1) million and comprises the following items:

• The change in the estimate of variable remuneration had a positive impact of €1.5 million on financial income,
• The fair value of the put options on the warrant components of the EIB loan had a negative €1.5 million impact on financial charges.

About Medincell

Medincell is a clinical- and commercial-stage biopharmaceutical licensing company developing long-acting injectable drugs in many therapeutic areas. Our innovative treatments aim to guarantee compliance with medical prescriptions, to improve the effectiveness and accessibility of medicines, and to reduce their environmental footprint. They combine active pharmaceutical ingredients with our proprietary BEPO^® technology which controls the delivery of a drug at a therapeutic level for several days, weeks or months from the subcutaneous or local injection of a simple deposit of a few millimeters, entirely bioresorbable. The first treatment based on BEPO^® technology, intended for the treatment of schizophrenia, was approved by the FDA in April 2023, and is now distributed in the United States by Teva under the name UZEDY^® (BEPO^® technology is licensed to Teva under the name SteadyTeq™). We collaborate with leading pharmaceutical companies and foundations to improve global health through new treatment options. Based in Montpellier, Medincell currently employs more than 140 people representing more than 25 different nationalities.

UZEDY^® and SteadyTeq™ are registered trademarks of Teva Pharmaceuticals.

www.medincell.com

This press release may contain forward-looking statements, particularly concerning the progress of the Company's clinical trials. Although the Company considers that its forecasts are based on reasonable assumptions, any statements other than statements of historical fact that may be contained in this press release relating to future events are subject to change without notice, to factors beyond the Company's control and to the Company's financial capabilities.

These statements may include, but are not limited to, any statements beginning with, followed by or including words or expressions such as "objective", "believe", "expect", "aim", "intend", "may", "anticipate", "estimate", "plan", "project", "will", "may", "probably", "should", "could" and other words or expressions of similar meaning or used in the negative. Forward-looking statements are subject to inherent risks and uncertainties beyond the Company's control which may cause actual results, performance or achievements of the Company to differ materially from those anticipated or implied by such statements.

A list and description of such risks, hazards and uncertainties can be found in the documents filed by the Company with the Autorité des Marchés Financiers (AMF) pursuant to its regulatory obligations, including in the Company's document de base, registered with the AMF on September 4, 2018 under number I. 18-062, as well as in documents and reports to be published subsequently by the Company. Furthermore, these forward-looking statements only apply as of the date of this press release. Readers are cautioned not to place undue reliance on these forward-looking statements. Except as required by law, the Company undertakes no obligation to publicly update these forward-looking statements, nor to update the reasons why actual results may differ materially from those anticipated in the forward-looking statements, even if new information becomes available. The Company's updating of one or more forward-looking statements does not imply that it will or will not update these or any other forward-looking statements.

This press release is published for information purposes only. The information contained herein does not constitute an offer to sell or a solicitation of an offer to buy or subscribe for securities of the Company in any jurisdiction whatsoever, particularly in France. Similarly, this press release does not constitute investment advice and should not be treated as such. It is not intended to address the investment objectives, financial situation or specific needs of any particular recipient. It should not be relied upon as a substitute for the exercise of your own judgement. All opinions expressed in this document are subject to change without notice. The distribution of this press release may be restricted by law in certain jurisdictions. Persons into whose possession this press release comes are required to inform themselves about and to observe any such restrictions.