Hello, and welcome to the Scandion Oncology EGM Information Call 2021. For the first part of this call, all participants will be in listen-only mode, and afterwards, there will be a question and answer session. Today, I am pleased to present the Chairman of the Board, Peter Høngaard Andersen. Please begin your meeting. Thank you. Welcome to this information call. I have with me here in the room, Bo Rode Hansen, the CEO of the company. I have Johnny Stilou, the CFO, and I have Maj Hedtjärn, the COO, and I have board member Christian Vinding Thomsen, to help me answer questions which I may not be able to answer myself. If we move on to the first slide, please, which is the usual disclaimer, which our legal advisor always tell us it's important to show. We'll quickly move on to the next slide, which is slide number three, and the agenda for today's call. I will start by giving a very brief update on Scandion Oncology. It will be more or less a repetition of what was said at the recent Capital Markets Day. I will go into details on the single point we have on the agenda for the EGM next week. If we move on to slide four, which is Scandion Oncology at a glance. Our vision is basically to bring new medicines to patients suffering from cancer. As you can see, we have currently two clinical programs running. We have two compounds in our pipeline. We are focused on two cancer indications right now, colorectal and pancreatic cancer. We have hired about 10 people in the last year, which have the experience needed to drive all of these compounds to the market and thus harvest the value of these assets. To the right, you can see our cash position, market cap today. If we move on to the next slide, which is slide five, it's just a big picture of our journey. I want to start to the very left, where we were about a year ago. A year ago, Nils Brünner and his team had developed SCO-101 to the level where it was just starting the clinical trials. I may recap that the whole foundation of the company was more than 20 years of basic research conducted by Professor Brünner and his team. We had a long series of discussions between Nils and the board of directors and agreed that we needed to accelerate the company into a clear and well-defined development path to get SCO-101 to the market as quickly as possible. That led to a number of events which brought us to where we are today, where we, a few months ago, first of all, presented the first CORIST data, which, by the way, were very positive. Being an old grumpy guy, it's really hard to continue to be pessimistic with those kinds of data. We have built the organization and successfully hired in people with a known and well-defined track record in developing medicines. We have internationalized the company, and we have a good cash position. Where do we want to go near-term? Well, already by 2023, we plan to be a phase III company, which I guess is quite remarkable with this time horizon. We want to obviously build on the good CORIST data which we got in. We also want to harvest the value which we got out of the very positive immuno-oncology data we have seen. Obviously, the goal eventually is to bring significant value to the patient which suffer from cancer. If you shift to the next slide six, I have just listed in a short form the key achievements we have done in the past year. We have hired a new CEO, Bo Rode Hansen, which started out early October last year. We hired a COO, Maj Hedtjärn, which started in March this year. We hired in a chief business development officer in order to continue keeping the pressure on all the potential collaborators and acquisitions of the company down the road. We hired a CFO in July, Johnny, sitting here next to me. Finally, we have built our clinical advisory board with four highly renowned specialists in oncology. I just want to put a few words on this. The clinical advisory board is very important for two things. First of all, to identify the right patients and design the trials the right way, but also to understand the market out there. How is the gold standard for treating cancer today, and how do we, by knowing that, optimize our trial design and thereby value of our assets so we get to the market and potentially get a high price for our product? The clinical advisory board has been very helpful in this process. Finance, as already mentioned, we have a fairly good cash position and have changed the listing to Nasdaq First North in Stockholm. The pipeline, I already mentioned, but the big news here is actually that we entered our clinical trial sites also to include a couple of German sites. If we change to the next slide, which again was a slide, which was slide seven now, which was a slide shown at the Capital Markets Day earlier this month, where you can see the path laid out to get to the market with the indication colorectal cancer. This means that we plan to start, hopefully, the pivotal phase III study already in 2023, with a market approval hopefully in 2026. In order to move up from third line to second line, we want to have the positioning studies going, which will include the monoclonal antibody used in the second-line treatment of colorectal cancers. Furthermore, the CORIST part one study showed us that there was a different response to SCO-101, whether you had RAS wild-type or RAS mutated. We want obviously to explore this to expand our market, and potentially this will allow us down the road to get also this indication approved. Finally, I want to mention that the active ingredient in FOLFIRI, which is irinotecan, actually with a number of new formulations, is expanding into additional indications. We do see this as yet another possibility for expanding the market approval. Final thing I want to mention on colorectal cancer is immuno-oncology, where you already saw the very positive data we showed, and we see this as a potential partnering opportunity down the road. We have PANTAX Ib running at the moment, with data readout here closing up by the end of the year sometime, and where we went to phase II shortly thereafter. That will be a randomized phase II, which eventually could lead into a phase III pivotal study. With this brief introduction to where we are today in Scandion, I will move into the subject of today's or the future EGM next week, which will be the warrants. If you take the next slide eight, where I've asked the question, why warrants? First of all, just to be clear, a warrant is a right to purchase a single share to a predefined strike price. What we are up against as a biotech company is that we have lower job security than a pharma company. A biotech company is always low in cash and cannot compete with the compensation packages you see in pharma. We need somehow to compensate our employees by other means, and this is really where the warrants come in. It's an instrument which allow employees to harness the potential upside if we're successful, the potential upside of the value they have built and created as employees in the company, and thus it's a very strong incentive tool. The other part of this is that warrants obviously align the interest of shareholders, management, employees, and Board of Directors, and which is a very important thing in my mind. Since we need to be competitive in attracting the best people, I do see warrants as a very essential tool in this battle. I want to add here that the job market here in Denmark in the pharma biotech area is actually best at the moment. It's very hard to hire in people this current point in time. If we move over to the next slide, which is slide nine, and which briefly describe the 2021 program, which was approved at the EGM in October 2020. At this EGM, it was approved to give out 1.5 million warrants corresponding to 4.46% fully diluted. The warrant agreement document is a document which we got from Deloitte Denmark and which is a fairly standard Danish program which is adapted to the blunt, weird Danish tax system. Strike price on this was defined as an average share price over 10 days following the EGM approval, and that share price was DKK 49.996. The warrants were divided into retention warrants and event warrants, and employees received two-thirds of their warrants as retention warrants and one-third as event warrants. Whereas Board only received retention warrants. The retention warrants vest one-third a year over three years and not pro rata. This means that you need to be employed a full year to get your vested warrants out. The event warrants vests upon a major business event. It could be trade sale of the company or a major pharma collaboration deal. In the agreement document from Deloitte, there is a clause allowing a repricing of the warrants. This repricing is based on the original Black-Scholes value, which was calculated the day the program started, thus meaning after the 10 days average share price. That was very easy in this case because the Black-Scholes value was virtually zero. Nevertheless, the retention warrants were repriced to 37.946. The event warrants was not repriced because the runtime of these warrants is somewhat longer than the retention warrants. Go to slide number 10. It's the details. Shift to slide number 10, please. It depicts how these warrants were actually given out. As you can see, about 1.3 million warrants were given to employees, 214,000 were given to the board of directors, you can see how they were distributed. I assume that the numbers here speak for themselves. The take home, and this is really what I want to emphasize today, is that the 2020 warrants are way under water, and thus are not fulfilling its purpose of aligning incentives between shareholders, management, and employees. We now shift gear and go to the 2021 warrants, which is next slide 11. This is what the EGM is all about. We want to get a new warrant program going to ensure that we have incentivized the employees in a proper manner and align their incentives and focus completely with the shareholders. We plan to continue using the Deloitte template adapted to the Danish tax system. I would also like to say here that according to Deloitte, this template is fairly common and used also in Sweden, including the repricing paragraph, which was new to me, but apparently it's widely used in Sweden as well. In between the 2020 warrants and 2021 warrant program here, we have conducted a benchmark survey in Denmark, internationally in EU and U.S., and in Sweden on both the level of warrants and the conditions to ensure that we are aligned with the market and do offer competitive compensation packages for current and future employees. Based on the benchmark, we identified levels of employee ownership. This is the table you can see in the call for the EGM. This does not mean that we from day one want to comply with this, not at all. This is what we can see other companies have done which are similar size and situation as Scandion Oncology. What we also learned from this benchmark is that we should try to keep the warrant program as simple as possible. Basically, this means that we have decided not to do event warrants, but just to do the retention warrants. Obviously, the purpose here is to ensure that we have incentives to newly and future employees primarily, but also to have the option to ensure incentives for people who are already employed in the company and the board members. If we change to the next slide 12. How do we see these distributed? Again, I want to emphasize that this will happen if we get it voted through to the discretion of the board. Again, I want to emphasize that the overarching purpose is really to ensure this alignment between shareholders, management, employees, and the board. We asked for 2.3 million warrants, which is 2.3% fully diluted. The proposed distribution, I want to emphasize here that this distribution has not been fully discussed in the board, that will come down the road. There you can see that the proposal at the moment is to distribute only part of this warrant pool. The reason for this is that before we start hiring additional people, we want to see the data for the new trials going on at the moment. If they are positive, we will need to hire in additional people to support the clinical programs. This is why almost 900,000 of these warrants is reserved for future employees. We have a pool which are reserved for major accomplishment bonus. This is almost 1.3 million of the 2.3 million, which is reserved for this. The rest, you can read the distribution between yourself. What I want to emphasize is that the Board, and I've been contacted by several shareholders, was very concerned that the CEO actually had a program which was so deeply underwater that they encouraged us to allocate additional pool of warrants to the CEO to ensure his incentivized properly. This is the proposal, which will be discussed further in the Board, assuming that it is approved at our coming EGM. This was what I wanted to present on the warrants, which is up for the EGM next week. In addition, I want to mention, we move on to the next slide 13, that we have received a lot of input from various shareholders. Of particular interest in this context is what we received last week from a group of shareholders. Three things was suggested from the shareholder group. First of all, a share buyback program. The idea behind this was that we will use some of our outstanding cash. Obviously, this would cut back on the runway we have. Another thing was the conditions for the next financing round. The final thing was option rights for existing shareholders, both shareholders from before the last emission in the Q4 last year, and for shareholders coming in after that emission in December last year. The board is currently evaluating this program together with our legal counsel, and when we come back to ask for permission to go out and do the next emission round, a number of the details in these proposals will obviously be brought in what we propose. If we turn on to the next slide, I just want to share with you how our current thinking are in the upcoming financing round. First, I want to emphasize that the current funds with an unchanged plan will be able to finance the company until early 2023. As I mentioned earlier in the brief overview of status of the company and as was presented at the Capital Markets Day earlier this month, it's very clear that our plans actually potentially have shifted a bit to be more aggressive to bring SCO-101 to the market and thereby harvest the value upside of this asset. This means that maybe I should add that it's very hard to raise funds if you don't have money in the bank. We do need to go out and have an additional funding round sometime in 2022. How can we do this funding? Well, we can either do a rights issue or a directed issue or a combination. We can partner our assets and get some funds in that way. We can actually loan money, but with the kind of risk we typically have in a biotech company, I can tell you that the interest rate is normally not very interesting. Right now, my favorite here is to do a rights issue because that's typically where you have to give less discounts than you do in a directed issue, because in a directed issue, you typically have lower discount than you have in a rights issue. To combine the directed issue with a rights issue, allowing the current investors and shareholders to actually prevent the dilution which will come in case of an emission. We will come back with that when we have calculated in detail the funding needed for this more aggressive program, allowing potentially a market entry already in 2026. With these words, I want to go into the Q&A session. Operator. Thank you. If you would like to ask a question, please press 01 on your telephone keypad. If you wish to withdraw your question, you may do so by pressing 02 to cancel. There will now be a brief pause while questions are being registered. Just a reminder to press 01 on your telephone keypad if you have any questions. We have no questions, I will pass back to the speakers. Yes. Thank you. We have received a few questions in relation to the EGM. One of the questions is, why should we accept Chapter Five, which protects you from dilution? This puts you in direct contradiction from shareholder interest, incentivizing you to value that. As I mentioned, this paragraph is actually standard in Danish warrant agreements, and it doesn't prevent you fully from dilution because it's based on the Black-Scholes value of the warrants when they're actually given out, and then take into consideration two things, the share price and the volatility of the share. As I mentioned in the 2020 warrants, since the Black-Scholes values are virtually 0 at the beginning, it's still zero and the warrant is deeply underwater. Let me also add that according to the information I got from Deloitte, this paragraph is also fairly standard in a number of Swedish warrant programs. I don't see it as such a special thing. Thank you. Another question is why should we give the BOD new warrants? They already have got warrants, and it's their fault that they are underwater. Where is the incentive if we just give new warrants every time the share is down? First of all, again, and let me emphasize that once again, I don't want to spend more cash than necessary. In order to save cash and still be able to reward people which are doing a lot of work for the company, we actually offer warrants as a compensation. Here, we are talking about compensation, now you mentioned the board, which is on the low side compared to benchmark. To compensate for that, we actually bring in warrants. That is the case also for several of the levels in the employees. I'm not sure you can blame the board of directors for the current share price. I guess you shareholders could just buy a few more shares, and then it will change. Thank you. Yes. Thank you. Another question, I think it is maybe mainly on some of the things we have talked about, but the reason why existing employees who already have warrants, why they should need new warrants? As I mentioned, the new warrants is primarily for new employees hired in 2021, and which will be hired from now and until the next AGM. The reason why we also give a selected number of warrants to older employees is simply because we find it so important that especially the CEO is incentivized and aligned with shareholders in everything he does. That's the reason. As you can see from the numbers I showed, and the slides here will be available on the homepage, you can see it's primarily directed towards new employees. Thank you. Let me see if anything. I think the questions are all on the same topics that have already been addressed in relation to the EGM. Okay. Maybe let me just add a comment here because it should be no secret that when we did the benchmark, it became very clear that Sweden was probably the most heterogeneous market compared to the warrant programs used and the level of warrants allocated to employees and board members. However, it's important to understand that we actually operate in the Danish market in Copenhagen, where we are located. We need to compete with the market here, and that's important that we need to comply with the Danish system and employee market. That's the way you need to see it. I know that you can find Swedish companies which they give a complete different incentive packages, but it's a different market. Thank you for participating, and thank you for having invested in Scandion Oncology. We look forward to seeing you again at the upcoming EGM next week on October sixth. Which by the way, three days after my birthday, but that's a different story. Thank you. Thank you for attending. You may now disconnect your lines.