Xintela develops the stem cell product XSTEM for the treatment of osteoarthritis and difficult-to-heal wounds in humans, as well as EQSTEM for the treatment of joint disease in horses. Both products are based on the discovery of the cell surface marker integrin α10β1 which is used to select and quality assure mesenchymal stem cells.
Positive 18-month data
Since 2022, Xintela has been conducting a clinical phase I/II study with XSTEM in knee osteoarthritis patients. In March this year presented Xintela has an 18-month analysis showing that all dose levels of XSTEM are safe and well tolerated, meaning that the primary objective has been achieved.
No serious side effects related to the treatment have been reported. The results also showed significant and clinically relevant improvement in knee pain and function, an improvement in bone structure and a trend towards halting cartilage breakdown, meaning that the secondary objective has also been achieved.
To gain further knowledge about XSTEM's effect, the company has chosen to continue evaluating the highest dose level for an additional 6 months, i.e. up to 24 months after treatment.
License agreement for veterinary stem cell product
Another important milestone during the year is the collaboration and licensing agreement with EQGen Biomedical regarding the stem cell product EQSTEM, which is intended for the treatment of osteoarthritis and other musculoskeletal diseases in horses. EQGen is a US-based company with an experienced team in drug development for both humans and animals. The company was founded after Xintela and EQGen signed a term sheet in May 2024.
Under the agreement, EQGen Biomedical will receive the global rights to EQSTEM. In exchange, Xintela will receive an initial license fee of USD 1 million and shares in EQGen worth USD 3 million, in addition to future royalty income. Furthermore, Xintela will receive additional license fees if EQGen chooses to exercise its option to develop products for other indications.
The GMP facility generates revenue
To enable a rapid start of clinical studies in horses, Xintela has begun the development of a GMP-compliant production process for EQSTEM. This process is based on the same foundation as the company's human product XSTEM, but will be optimized to suit equine stem cells.
The service assignment that Xintela has now been awarded within the framework of the collaboration and license agreement with EQGen is a strategic step in the company's ambition to make the GMP operation self-financed and create a positive cash flow.
Xintela already has an ongoing assignment from Region Östergötland for the development of a GMP process for the isolation and quality assurance of keratinocytes (skin cells) from skin biopsies with the aim of treating burns.
Last opportunity to exercise the warrants
Together, these service assignments contribute to covering a significant portion of the costs of the company's GMP operations. Additional capital is required to finance the remaining operations. The company is therefore actively working to identify and evaluate various financing alternatives such as capital raising, grants and loans, both for Xintela and the subsidiary. Targinta, which develops antibody-based treatments for aggressive cancers.
Xintela will also receive capital through the ongoing exercise period of the TO3 series warrants. The warrants were issued in connection with the rights issue in July 2023 and gave the right to subscribe for new shares on four occasions over a two-year period, at a price of SEK 0,30 per share. The fourth and final subscription period began on May 26, 2025 and runs until June 5, 2025.
Options equivalent to SEK 36 million have already been exercised on the three previous occasions. At the current subscription time, remaining options could bring up to approximately SEK 11,7 million to Xintela. Xintela's main owner Flerie has previously subscribed for all of its options.
CEO tells more
BioStock contacted Xintela's CEO Evy Lundgren-Åkerlund to learn more about the latest milestones and the ongoing capital raising.
What does the agreement with EQGen Biomedical mean for Xintela's long-term strategy?
– Xintela's strategy is to focus on the development of therapies based on XSTEM, our human stem cell product, and that the clinical development and commercialization of stem cell products in veterinary medicine will take place together with a partner. The agreement with EQGen is therefore fully in line with our long-term strategy.
What makes EQGen a suitable partner for EQSTEM?
– EQGen consists of a highly competent team with extensive experience in drug development, both for humans and animals, and who have also worked in the field of regenerative medicine. The team's experience in leading and financing companies in veterinary medicine is also a big plus.
How does the collaboration with EQGen affect your own funding strategy, given that some compensation is linked to receiving external funding?
– An important part of the agreement is that EQGen purchases services from Xintela for the development of a GMP-compliant production process and for the production of EQSTEM for clinical studies. It may also be relevant to process develop and produce stem cells for the treatment of other animals, including dogs, which provides additional revenue to Xintela. This helps to finance Xintela's GMP operations, which are central to our own clinical development of XSTEM. We are of course looking forward to EQGen landing external financing, which will be a good addition to our coffers through a license payment.
You have invested in building a GMP facility that is now starting to generate revenue through service assignments. How close are you to achieving the goal of making this business self-financing?
– With revenue from EQGen and Region Östergötland, we are on the right track and with additional assignments in the future, it could happen within a year or two.
The exercise period for TO 3 is now underway. Why is this a favorable opportunity to redeem your warrants?
– The price of SEK 0,30 per share is an attractive discount compared to the current share price. In addition, we have an upcoming value-enhancing milestone with the final report from the osteoarthritis study. We expect this to have a positive effect on the share price given the positive results we have already reported from our interim analysis of 18-month data. I think everyone can see that things are going well for Xintela and that many important pieces of the puzzle are falling into place. Our stem cell products XSTEM and EQSTEM are making great progress, we have landed our first collaboration and licensing agreement and we are generating revenue.
What upcoming milestones are you looking forward to achieving in 2025?
– In addition to the final report from the osteoarthritis study, which is planned for the end of September, a lot of business development activities are underway with the goal of finding partners/licensees for our development projects in Xintela and in the subsidiary Targinta. In collaboration with the Brännskadecentrum in Linköping, we are investigating opportunities for the next step with XSTEM in wound healing. We are also aiming for additional revenue-generating assignments for our GMP operations. I think it will be an exciting continuation of 2025.
