CombiGene is preparing for clinical studies together with partner Spark Therapeutics. BioStock contacted the company’s Chairman of the Board, Bert Junno, to learn more about the company and to find out what will be discussed at the upcoming Annual General Meeting on May 19. Among other things, we get to know more about the details of the proposed incentive programme.
CombiGene’s drug candidate CG01 is being developed for the treatment of drug-resistant focal epilepsy, the most common form of epilepsy in adult patients. Today, these patients are referred to therapies that only treat the symptoms. CombiGene’s ambitions, however, extend beyond symptom-relieving effects, to potentially being able to cure the disease.
On October 12, 2021, CombiGene signed a collaboration and licensing agreement with gene therapy company Spark Therapeutics worth up to 328.5 million USD, excluding royalties. CombiGene is now conducting preclinical studies to prepare the project for clinical studies, all with full support from Spark Therapeutics.
Therefore, CombiGene can now, among other things, focus more on CGT2, a gene therapy candidate that is being developed for the treatment of the very rare disease partial lipodystrophy, which today has no treatment options.
The Chairman of the Board comments
With CombiGene’s Annual General Meeting coming up on May 19, BioStock contacted the company’s Chairman of the Board, Bert Junno.
Bert, for starters, what is your view of the financial year 2021?
– The start of the collaboration with Spark Therapeutics really defined 2021. For me, having followed the process that led up to the agreement, I praise our internal organisation with CEO Jan Nilsson at the helm, who managed to secure this fantastic agreement. The partnership with Spark, which yielded a direct payment of 8.5 million USD, verified the value of our technology. This means that the company now has opportunities to find other promising drug candidates for in-licensing and development. The company’s technologies have great potential to contribute to the development of new valuable clinical therapies. The agreement with Spark comprises a total of more than 328.5 million USD plus royalties, with potential capital injections of 50 million USD, at a number of pre-defined preclinical and clinical milestones.
– In 2021, the company received a final payment from Horizon 2020, which means that we have received a total of 3.6 MEUR in soft money toward our project. This is proof that the development of CG01 is of the highest international class.
– The company also signed a new agreement with the University of Michigan to evaluate the leading gene therapy candidate in the lipodystrophy project CGT2.
On May 19, you will hold your Annual General Meeting. What will be discussed at this meeting?
– The Board of Directors will ask the Meeting for an authorisation to issue new shares, warrants or convertibles. However, this is only a matter of securing a mandate to be able to decide on a share issue, if necessary. It is therefore not a sign of or a stated plan to carry out a share issue or that a financial deficit currently exists. Such an authorisation occurs in most listed companies, and we have had it every year before, so it is nothing new.
– In addition, the Board of Directors proposes a performance-based incentive programme linked to the company’s share price.
– The background is that we want to motivate, retain, and reward qualified staff and signal that they are important to drive the company forward. Provided that the company has reached certain pre-defined performance levels and the person in question has been employed for at least three years (vesting period), key employees will be allotted warrants in the company. If the employee remains in the company for the entire vesting period, he/she will then be offered to buy shares at a predetermined share price.
– The proposed programme, LTI 2022, is currently aimed at eight company employees, but may, in the long term, include more new employees and possibly important consultants. For maximum outcome in the programme, three requirements must be met:
(i) the company’s market capitalisation must exceed 600 million SEK.
(ii) the company must have built up a new project that shall correspond to at least 20 per cent of the company’s value.
(iii) the beneficiary shall have been employed by the company throughout the vesting period.
– It is important to emphasise that the programme will not affect the company’s liquidity, since a share of the programme’s options are reserved so that the company can use these to finance tax costs (employer’s contributions, etc.). The programme would result in a dilution of about 3 per cent and an additional 1.4 per cent to fund overheads, taxes and employer contributions. Please read more about the detailed terms and conditions on our website.
What are the plans for 2022 and 2023?
– Together with Spark, we will run the preclinical programme for CG01 and then move on to clinical studies.
– We look forward to advancing in the lipodystrophy field with CGT2. In January, we signed an agreement with Professor Ormond MacDougald, University of Michigan Medical School, which includes a pilot study and a main study in which CombiGene’s most promising gene therapy candidate in the lipodystrophy project CGT2 is currently being evaluated.
– The company will identify projects that could be of interest to CombiGene to inlicense and develop with now validated technologies and the collaboration network that the company has established in recent years.
– CombiGene is hot right now.The content of BioStock’s news and analyses is independent but the work of BioStock is to a certain degree financed by life science companies. The above article concerns a company from which BioStock has received financing.