Lipum advances to phase II with capital raise, moves production to Sweden
On leap day, Lipum published the year-end report for 2023, where CEO Ola Sandborgh describes the progress as a “flying start to an exciting journey.” On the same day, Lipum announced a rights issue of SEK 187 million to advance SOL-116 into phase II. In addition, the company has decided to relocate its contract manufacturing of SOL-116 back to Sweden through an agreement with NorthX Biologics. Ola Sandborgh elaborates on the latest news in an interview.
Lipum is an Umeå-based biopharmaceutical company that develops a novel treatment for chronic inflammatory diseases. The company’s lead candidate SOL-116 is a humanised antibody designed to provide a safer and more effective therapy than today’s treatment options by blocking a new target protein – Bile Salt-Stimulated Lipase (BSSL).
The company is currently evaluating SOL-116 in a clinical phase I study, which has so far confirmed the candidate’s good safety profile and expected pharmacokinetics, and that it interacts with BSSL.
Rights issue to advance SOL-116 to phase II
Based on these advances, the company intends to continue the development of a phase II clinical trial to study the effect of SOL-116 on patients with rheumatoid arthritis (RA). To enable this, additional capital is required, and therefore the company has decided to carry out a rights issue with a subscription period running from April 9-23, 2024.
The capital injection of up to SEK 187 million will be used to complete the ongoing clinical phase I study, production of SOL-116, planning and implementation of clinical phase II studies, as well as preclinical studies on the mechanism of action and additional indications.
Lipum has also recently been granted funding from Vinnova to prepare an application to the Eurostars funding programme. This will potentially further strengthen the company’s cash position with so-called “soft money.”
Agreement with NorthX Biologics
Prior to the upcoming phase II study, a relatively costly production and formulation of the antibody SOL-116 is required. In preparation for this, Lipum has chosen to change contract manufacturer and move the production of SOL-116 to Sweden. The company has entered into a framework agreement and a related project agreement with Swedish NorthX Biologics for research, development and manufacturing of SOL-116 as an investigational drug product intended for use in the phase II study.
NorthX Biologics develops and manufactures advanced biologics and has over 30 years of GMP production experience. The company has facilities in both Matfors and Solna, which are significantly closer than the facilities of Lipum’s current manufacturing partner Abzena, based in San Diego. The collaboration with Abzena will continue until the phase I programme is completed, after which NorthX will take over.
Lipum believes that the collaboration with NorthX Biologics can lead to cost and time savings, while the company can ensure high quality and supply security by avoiding long transports, time differences and currency effects.
Next steps in the study: dosing of RA patients
In the near future, Lipum will primarily focus on the upcoming capital raise and the completion of the ongoing phase I study. The first part of the study has been successfully completed, in which 40 healthy subjects received a single dose of the drug candidate SOL-116 or placebo. The interim results from the first part show that the candidate is well tolerated with few side effects, none of which of serious nature. In addition, SOL-116 was found to reduce plasma BSSL to undetectable levels up to 90 days after the dose.
In the second part, all subjects have received all four doses of SOL-116, and follow-up and evaluation are now underway. At the same time, patient recruitment continues for the third and final phase, where eight RA patients will each receive a dose of SOL-116. Dosing is expected to begin shortly, and Lipum expects to be able to present additional interim results and the final study report during the year.
In parallel, a collaboration is underway with Karolinska Institutet, which is expected to result in more knowledge about the mechanism of action of SOL-116.
CEO comments on the latest news
BioStock reached out to Lipum’s CEO Ola Sandborgh to find out more about the company’s progress, the rights issue that will enable further development and the new agreement with NorthX Biologics.
In the year-end report, you describe that Lipum has had a flying start to an exciting journey. But what challenges may arise along the way, and how do you plan to address them?
– Challenges always exist, as do opportunities. The primary challenge in clinical drug development revolves around how studies are designed and the recruitment of patients. In our case, however, things have gone relatively well, and much of the reason for that is a well-designed study and an active CRO that is constantly one step ahead in finding healthy volunteers and patients. Another challenge for a company of our size and development phase is, of course, financing the operations. An important part of that is the support from existing and new shareholders, but we also continuously work on seeking soft funding from governmental agencies such as Vinnova, as well as EU funding such as EIC.
Why do you believe that the shareholders should continue to be a part of Lipum’s journey by participating in the upcoming rights issue?
– It is crucial to understand that Lipum is a long-term commitment. At the same time, we have made significant progress in our development, as we now find ourselves in the clinical phase. Along the way, we have obtained the answers needed to confidently propel the development forward. Currently, we stand at a pivotal juncture where we have decided to enter phase II. This decision is based on the fantastic research results we have obtained, guiding us in designing the next steps.
»Along the way, we have obtained the answers needed to confidently propel the development forward. Currently, we stand at a pivotal juncture where we have decided to enter phase II. This decision is based on the fantastic research results we have obtained, guiding us in designing the next steps.«
You have also announced that you have chosen to switch contract manufacturers to the Swedish company NorthX Biologics. What prompted the decision to move production to Sweden instead of the USA, and what factors ultimately led to the selection of NorthX Biologics?
– I have opted for a change in contract manufacturer and to bring production back to Sweden. The process involved a procurement process with offers from several potential manufacturers and subsequently conducting a selection process in which NorthX Biologics emerged as a clear winner. With them as the manufacturer of SOL-116, we anticipate cost savings and time efficiencies while maintaining high quality and delivery reliability. Choosing a domestic partner reduces the need for long-distance transportation, and we are not affected by time differences or currency effects.
Flerie Invest and other major shareholders have undertaken to subscribe for shares in the rights issue. In addition, Flerie Invest has passed the mandatory bid threshold by acquiring additional shares. What does this support mean to you?
– I would say that it “means everything” to us. Having a stable, knowledgeable, and supportive ownership base is extremely important, and we highly appreciate the support. Flerie Invest as a specialist investor in the life science field also means a lot to other stakeholders. If a major shareholder continues to believe and invest in the company, then it tends to influence others to do the same. And our shareholders are an important prerequisite for Lipum’s continued development.
Lipum’s CEO Ola Sandborgh has recently also participated in BioStock’s video podcast Health and Wealth – watch the video here.
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.
