Publication of rights issue material

PharmaLundensis rights issue is available 13 -27 february.

Message from the CEO
Memorandum Feb 2025 (in Swedish)
Teckning utan företräde Interaktiv (in Swedish)

PharmaLundensis press release ENG
At the board meeting of PharmaLundensis AB (publ) (“PharmaLundensis” or the “Company”), with the support of the authorization from the annual general meeting on May 27, 2024, the Board of Directors decided today, Tuesday, February 4, 2025, to increase the Company’s share capital by a maximum of SEK 721,982.70 through a new issue of up to 14,439,654 shares and on the following terms: SEK 1 shall be paid for each new share, subscription of shares with preferential rights shall be made by exercise of subscription rights (the “Rights Issue”). One (1) existing share entitles to one (1) subscription right and seven (7) subscription rights entitle to subscription of two (2) new shares. The record date for participation in the issue shall be on February 11, 2025. The Company’s CEO Staffan Skogvall has announced an intention to subscribe for at least SEK 200,000 via companies. Upon full subscription, PharmaLundensis will receive approximately MSEK 14.44 before issue costs, which are expected to amount to approximately MSEK 200,000.

Reasons for the Rights Issue
PharmaLundensis develops new, effective and gentle drugs to bind and excrete heavy metals such as mercury, lead and cadmium from the body. We believe that several of our most common disorders are caused by these metals, such as the lung diseases COPD and chronic bronchitis, and also severe depression. Additionally, under the subsidiary CleanTech Lund, we market our proprietary Minievaporator for the purification of liquid hazardous waste from various companies.
Preparations are underway for the first clinical study with our test substance Phal-501. Recently, we received very encouraging results from a pilot toxicology study where a group of mice receiving high doses of Phal-501 for three days exhibited no adverse effects whatsoever. Histological analyses of the mice’s mucosa from both the small and large intestines showed completely normal results, with no signs of inflammation or irritation. The mucosa of the gastrointestinal tract is the only tissue that comes into contact with Phal-501 as the substance never enters the bloodstream. These animal tests strongly suggest that Phal-501 will have very few, if any, side effects. We continue preparations for the first clinical study.
Another positive news about Phal-501 is the announcement from the European Patent Office (EPO) that our application contains structures that meet all their requirements for obtaining a patent. This PCT application can form the basis for patents in most countries of the world.

The Minievaporator is also making good progress. We are currently conducting intensive sales of the Minievaporator within Cleantech Lund following two tracks: 1. Direct sales of machinery to companies producing chemical waste, and 2. Sale of the entire Minievaporator project to a large company.

We are currently in discussions with major companies about selling the entire Minievaporator project. We feel that their interest is considerable. In parallel, discussions are underway with several smaller companies regarding selling individual machines. We estimate that there could be hundreds of thousands of companies in Europe running a business that could benefit from our machine. Through larger production series, we can set a reasonable price that still gives PharmaLundensis a good profit.

The Company is now conducting a Rights Issue to finance continued preparations for planned clinical studies with Phal-501, as well as marketing and production of the Minievaporator.

Terms of the Rights Issue in brief
Issue amount (maximum): Upon full subscription, the Company will receive SEK 14,439,654.
Number of shares issued (maximum): 14,439,654 shares.
Preferential rights: One existing share entitles to one subscription right and seven subscription rights entitle to subscription of two new shares.
Record date: February 11, 2025.
Subscription price: SEK 1 per share.
Brokerage: No brokerage fee is charged.
Subscription period with preferential rights: Subscription of shares with warrants shall be made by cash payment during the period from February 13, 2025, up to and including February 27, 2025.
Subscription without preferential rights: From February 13, 2025, until February 27, 2025. Subscription of shares without subscription rights shall be made in lots of 4,000 shares or whole multiples thereof. The application shall be made on an application form entitled “Subscription without subscription rights”. Payment for shares subscribed for without subscription rights shall be made no later than the tenth banking day after the notification of allotment has been sent to the subscriber through a settlement note.
Number of shares in the Company: 50,538,792 today, 64,978,446 if the Rights Issue is fully subscribed.
Share capital: SEK 2,526,939.60 today, SEK 3,248,922.30 if the Rights Issue is fully subscribed.
Dilution effect: A maximum of approximately 22% if the Rights Issue is fully subscribed.
BTAs: After payment, investors will receive BTAs (paid subscribed shares) in their designated custody accounts. These BTAs will be converted into shares around 5 to 7 days after registration of the issue with the Swedish Companies Registration Office.
Trading in SRs (subscription rights): From February 13, 2025, until February 24, 2025.
Trading in BTAs (paid subscribed shares): From February 13, 2025, until the Swedish Companies Registration Office has registered the issue, the preliminary last day of trading in BTAs is estimated to be March 17, 2025.

More detailed information on the Rights Issue
The Board of Directors of PharmaLundensis AB, with the support of the authorization from the annual general meeting on May 27, 2024, decided today, Tuesday, February 4, 2025, that the Company shall carry out a Rights Issue with the issuance of up to 14,439,654 shares at a subscription price of SEK 1 per share. The record date for participation in the issue is February 11, 2025. PharmaLundensis’ existing shareholders will receive subscription rights for subscription of shares in proportion to the number of shares they own on the record date February 11, 2025. Each existing share entitles to one subscription right and seven subscription rights entitle to subscription of two new shares. Subscription of shares with warrants shall be made by cash payment during the period from February 13, 2025, up to and including February 27, 2025.

Subscription of shares without subscription rights shall be made on a separate subscription list during the same period as subscription with subscription rights. Subscription of shares without subscription rights shall be made in lots of 4,000 shares or whole multiples thereof. Payment for shares subscribed for without subscription rights shall be made in accordance with special instructions on the settlement note sent to those who receive allotment.

If not all shares are subscribed for with subscription rights, allotment of the remaining shares within the maximum amount of the issue shall be made to others who have subscribed for shares in the issue (both those who have also subscribed for shares with subscription rights and those who have subscribed for shares without subscription rights). If it is not possible to fully allocate the remaining shares, allotment shall be made so that each subscriber shall first receive an allotment of one lot of 4,000 shares. After that, the remaining shares shall be distributed to the subscribers, with one lot of 4,000 shares being allocated at a time until all shares have been allocated. However, no subscriber shall receive more shares than the amount they have subscribed for. The shares that cannot be allocated in the specified manner shall be allocated equally among the subscribers. If certain shares cannot be allocated accordingly, the allocation shall be made by drawing lots executed by the Company’s Board of Directors. However, no subscriber shall be allocated more shares than the subscriber has subscribed for.

The Board of Directors shall be entitled to extend the subscription and payment period.

Schedule
February 7, 2025: Last day of trading in shares with the right to receive subscription rights (SRs).
February 10, 2025: First day of trading in shares without the right to receive subscription rights (SRs).
February 11, 2025: Record date for receipt of subscription rights (SRs).
Around February 12, 2025: Publication of memorandum.
February 13, 2025: The subscription period and trading in subscription rights (SRs) and paid subscribed shares (BTAs) starts.
From February 13, 2025: Trading in paid subscribed shares (BTAs) continues until the Rights Issue has been registered with the Swedish Companies Registration Office. The last day of trading in BTAs is expected to be March 17, 2025.
February 24, 2025: Trading in subscription rights (SRs) is closed.
February 27, 2025: Subscription period ends.
Around February 28, 2025: Announcement of the outcome.

For additional information, please contact:
Dr. Staffan Skogvall
CEO
Phone: +46 (0)46-13 27 80
E-mail: info@pharmalundensis.se

This information constitutes information that PharmaLundensis AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person above, on February 4, 2025.

IMPORTANT INFORMATION
Publication or distribution of this press release in certain jurisdictions may be subject to restrictions according to law and the people in jurisdictions where this press release has been made public or distributed should inform themselves and follow such legal restrictions. This press release does not contain and does not constitute or form part of an invitation to acquire or subscribe or a solicitation of any offer to buy or subscribe for shares or other securities in PharmaLundensis AB.

This press release may not be published or distributed, directly or indirectly, in or into the US, Australia, Belarus, Hong Kong, Japan, Canada, New Zealand, Russia, South Africa, Singapore or in any other country where such action is wholly or partly subject to legal restrictions. The information contained in this press release may not be redistributed, reproduced or displayed in ways that conflict with such restrictions. Failure to comply with this instruction may constitute a violation of the United States Securities Act of 1933 or applicable laws of other jurisdictions.

Forward-looking statements
This press release contains certain forward-looking statements that reflect the Company’s current views and expectations about future events and financial and operational performance, including statements regarding the Rights Issue and statements regarding guidance, planning, prospects and strategies. Forward-looking information includes words like “intend”, “estimate”, “expect”, “plan”, “project” or “may”, and other expressions that are indicative of or predictive of future developments or trends and are not based on historical facts. Although the Company believes that these statements are based on reasonable assumptions and expectations, it can give no assurances that they will materialize. Because these forward-looking statements involve known and unknown risks and uncertainties, the actual outcome may differ materially from that expressed in the forward-looking information. Forward-looking statements in the press release speak only as of the date of the press release and are subject to change without notice. The Company does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable law or stock market regulation.

The pilot animal toxicology study with Phal-501 in mice has now been completed. The study was conducted according to the following plan:
Number of animals: 6 mice received treatment and 3 mice were in the control group.
Dose: The animals received a dose about 10 times higher than the highest dose planned in humans.
Dosage: The test animals received two doses of Phal-501 orally (by mouth) daily for three days, totaling 6 doses.
Parameters:
Body weight during the study.
Assessment of animal behavior for 30 min after each dose to identify any adverse reactions.
Stool consistency and appearance at the study’s end.
Microscopic assessment of histological preparations stained with Hematoxylin and Eosin from the small and large intestines to identify possible irritant/inflammatory effects of Phal-501.
Results:
No change in body weight of any animal in the study.
No indication of adverse reaction in any animal in the study during 30 min after dose.
Normal stool consistency/appearance for all animals at the study’s end.
Histological assessment showed normal epithelium (mucosa) in all animals. No sign of infiltration of inflammatory cells in the tissue of any animal to indicate an inflammatory reaction.

CEO Staffan Skogvall: These animal toxicology tests clearly show that Phal-501 does not exhibit any adverse effects in the gastrointestinal tract of a mammal (mouse). There is, therefore, every reason to believe that Phal-501 will also be very well tolerated in humans in future clinical studies! We could not have wished for a better outcome from this animal study!

The European Patent Office (EPO) has now published PharmaLundensis’ patent application that protects Phal-501 and similar heavy metal binding compounds. As can be seen from the application text, the application is broad, covering a large number of possible substances, which provides flexibility for PharmaLundensis while making it difficult for potential competitors.

Phal-501 consists of a mercury binding ring with five sulfur atoms and a linker that attaches the ring to a small plastic bead (approx. 0.1 mm in diameter). We have attached thousands of sulfur-containing rings on each plastic bead, which provide a very effective and strong binding of the mercury. The plastic beads are so large that they just pass straight through the gut without being absorbed into the bloodstream.

On the Phal-501, the sulfur ring is attached to a plastic bead made of Hypogel, which is a plastic that is highly hydrophilic (water soluble). Our tests have shown that hydrophilic carriers are more effective at binding water-soluble mercury compounds than hydrophobic (water-repellent) carriers. The most common organic mercury compounds are hydrophobic in their natural state. However, this changes when the liver tries to excrete them via the bile. The liver then adds a glutathione group, which makes the complex much more water-soluble. In this situation, a hydrophilic carrier (plastic bead) is therefore appropriate to effectively capture the mercury excreted from the liver into the bile.

In certain situations, binding organic mercury variants that do not have glutathione may also be desirable. Some organic Hg likely passes from the blood through the intestinal wall directly into the intestinal fluid without going through the liver. That certain heavy metals can pass straight through human tissue is clearly shown by an example where a chemist got a few drops of dimethylmercury on her glove, whereby the mercury passed right through both the glove and the skin, leading to her death. The example also shows the extreme toxicity of dimethylmercury! Our patent also protects a combination of hydrophilic and hydrophobic carriers.

In summary, we are delighted that the EPO intends to approve our patent, as we are confident that they will enable the treatment of a range of diseases, and generate considerable revenue!

PharmaLundensis is now performing pilot in-vivo toxicological tests on mice with Phal-501. The study examines  6 mice and 2 control animals who are administered high amounts of Phal-501 orally. Histological examinations on tissue from the animals stomach, duodenum and colon will be performed, to clarify if Phal-501 cause any local effects such as inflammation.

No other tissue will be examined, since Phal-501 never enters the blood stream and therefor never get in contact with other organs except from the gastro-intestinal tract.

Recent tests have shown that Phal-501 also binds cadmium. The binding is strong and dose-dependent. The results suggest that Phal-501 may be an effective antidote to elevated blood cadmium levels. This could open a new, large market for PharmaLundensis’ heavy metal binder Phal-501.

Prevalence
Cadmium is naturally present in arable land. It also enters arable land mainly through air pollutants and through the use of commercial fertilizers, farmyard manure and sewage sludge. Cadmium is taken up by the root system of plants and is present in most food we eat. Most of the cadmium intake for both children and adults comes from cereal products and potatoes. These foods contain relatively low levels of cadmium, but since we eat a lot of them, the total amount of cadmium is large. Some foods may contain higher amounts of cadmium This is the case for internal organs such as the liver and kidney, the brown crab meat, and snowball and king mushrooms. Furthermore, larger amounts of cadmium can be ingested from tobacco smoke and many industrial processes.

Symptoms
Cadmium negatively affects the bone mineralization of the body. Swedish studies have shown a relationship between increased cadmium exposure and reduced bone density, as well as increased risk of fractures. In Japan, cadmium has also been found to cause bone damage. High levels of cadmium have been found to cause a large number of spontaneous fractures, known as itai-itai disease. Studies have also shown that cadmium is carcinogenic and can cause cancer of the lungs, endometrium, bladder and breast. Furthermore, cadmium causes a range of neurotoxic effects in the central nervous system. For example, high blood cadmium levels have been shown to be associated with depression. Also, the kidneys and cardiovascular system can be damaged by cadmium.
In conclusion, high levels of cadmium are very harmful to health. A new, effective and harmless substance that can eliminate this heavy metal from the body would be highly valuable.

PharmaLundensis has now received a review report from the PCT authority regarding the company’s mercury-binding substance Phal-501. The report is positive and states that the PCT application meets all the requirements for patenting (novelty, inventive step and industrial applicability). The PCT application can now form the basis for patents in a large number of countries in the world that are part of the PCT cooperation, which are most major industrial nations.

CEO Staffan Skogvall: “The PCT review confirms that our substances are novel and patentable, which opens up the possibility of large revenues. When clinical studies confirm a good effect on COPD/chronic bronchitis and some other diseases, Phal-501 will have a very high value.”