Xintela Half-year Report 2021-01-01 - 2021-06-30

Summary of the half-year report

The "Company" or "Xintela" refers to Xintela AB (publ), corporate registration number 556780-3480.

Second quarter 1 April - 30 June 2021

· Income amounted to TSEK 0 (0).

· Loss before tax totalled TSEK 11,797 (loss: 9,087).

· Loss per share* was SEK 0.13 (loss: 0.22).

· At 30 June 2021, the equity/assets ratio** was 76% (8).

First half year 1 January - 30 June 2021

· Income amounted to TSEK 0 (0).

· Loss before tax totalled TSEK 20,842 (loss: 16,606).

· Loss per share* was SEK 0.24 (loss: 0.41).

* Earnings/loss per share: Profit/loss for the period divided by 87,851,970 shares, which was the number of registered shares at 30 June 2021. In the year-earlier period, the Company had 40,788,744 registered shares.

** Equity/assets ratio: Equity divided by total capital.

Amounts in parentheses: Comparative period of the preceding year.

Significant events in the second quarter of 2021

· On April 6, Xintela reports positive results from preclinical ARDS (Acute Respiratory Distress Syndrome) study and new grant of 2.3 MSEK.

· On May 4, Xintela announces that Per Norlén has been recruited as CEO of Xintela's wholly owned oncology subsidiary Targinta. He will start on 1 September 2021. Per Norlén will also have the role of Xintela's Chief Medical Officer (CMO) from 1 July 2021.

· Xintela announces on May 18 that the Company's stem cell product XSTEM® regenerates cartilage in a preclinical animal model.

· Xintela announces on May 20 that the Company will develop its stem cell product XSTEM® for the treatment of difficult-to-heal (chronic) wounds. In collaboration with The Burn Center at Linköping University Hospital, Xintela has found that XSTEM® has excellent wound healing capability in a preclinical model and is now planning for a clinical trial on patients with difficult-to-heal wounds.

· On 21 May, Xintela announces that the Company has received permission from the Medical Products Agency to produce cell therapy products, so-called advanced therapy drugs (ATMPs), in its own GMP facility.

· On June 17, Xintela announces that Xintela has completed a directed new share issue raising proceeds of approximately SEK 28 million.

Significant events after the end of the period

· On July 1, it is announced that Xintela has formed a wholly owned subsidiary, Xindu Pty Ltd, in Australia, which will administer the Company's upcoming clinical study on osteoarthritis patients.

· On July 16, Xintela announces that the Company has signed a contract with GreenLight Clinical, an Australian Contract Research Organisation (CRO) to conduct Xintela's First-in-Human study using the stem cell product XSTEM®.

Statement from the CEO:

Production of XSTEM® for clinical studies has started

We are now closing in on our next major milestone: initiating clinical studies with the stem cell product XSTEM®, produced in our own GMP-facility. In the beginning of April, the Medical Products Agency carried out its inspection of Xintela's GMP facility and of the process for the production of stem cells, and by May the manufacturing permit for ATMPs (Advanced Therapy Medicinal Products) was in place. Our work is now fully focused on the production of XSTEM® for our first clinical study in patients with knee osteoarthritis in Australia. In July, we initiated a collaboration and signed contracts with GreenLight Clinical, our clinical partner in Australia, to conduct the clinical trial. We also incorporated an Australian subsidiary, Xindu, which will manage the formalities related to the study.

In the clinical study on osteoarthritis patients, the main goal is to demonstrate the safety of our stem cell product. We also hope to obtain preliminary results showing that XSTEM® has the properties of a disease-modifying osteoarthritis drug (DMOAD), meaning it can prevent the further breakdown of cartilage in osteoarthritis patients and promote the regeneration of the damaged cartilage, thereby improving joint function. In May we reported on a collaboration with Copenhagen University and a preclinical study showing that our stem cell product XSTEM®, when injected into a joint with cartilage damage, homes to the damage and differentiates into cartilage-like cells that produce new cartilage tissue. This indicates that XSTEM® has regenerative properties and thus has great potential to function as a DMOAD in the treatment of osteoarthritis. At present, there are no DMOADs on the market, and the market potential is therefore significant.

We are also planning other clinical studies with XSTEM® where our strategy is to focus on diseases that currently lack effective treatments. One example is ARDS (Acute Respiratory Distress Syndrome), a life-threatening lung complication that can affect seriously ill covid-19 patients. In April, we announced positive results from a preclinical ARDS study that showed therapeutic effect of our stem cell product XSTEM®. This was based on measurements of clinical parameters and histological analyses that showed less damage to the lung tissue after treatment with XSTEM®.

Another area with significant medical need is chronic wounds that are difficult to heal. In May we reported results from a collaboration with Professor Folke Sjöberg and his team at the Burn Centre at Linköping University Hospital, showing that XSTEM® has a significant wound-healing effect in a preclinical model. The wound healing field is of extra interest since the clinical trials run for a relatively short time and we can quickly get to market with a wound-healing product.

The oncology projects have also reached several important milestones and we believe that the time is now right to spin-out our subsidiary Targinta, which we expect can take place in 2021. This is based on, among other things, positive preclinical results that we have obtained with our targeting, therapeutic antibodies that significantly reduce tumour growth of both glioblastoma and triple-negative breast cancer in animal models. These results suggest that antibodies, targeting integrin α10β1, have great potential for development into a new and effective treatment strategy for aggressive cancers and provide a firm foundation for Targinta to build on.

In April we announced that Per Norlén has been recruited as CEO of Targinta from September 1. With his previous experience from developing antibody-based drugs for the treatment of cancer, Per is the right person to lead and develop Targinta's projects toward clinical trials and commercialisation. Per is also the Chief Medical Officer in Xintela since July 1.

In June, we carried out a directed new share issue that provided Xintela with approximately SEK 28 million before issue costs. The investors were a number of Swedish and international professional investors, including Maarten de Chateau, a new board member of Xintela.

We are continually working to secure various forms of long-term financing for both Xintela and Targinta for the continued financing of the companies' operations.

Sincerely,

Evy Lundgren-Åkerlund

CEO, Xintela AB (publ)

Xintela AB

Xintela develops medical products in the fields of stem cell therapy and targeted cancer therapy based on the Company's marker technology platform, XINMARK.

For stem cell-based therapy, Xintela has developed and patented the stem cell product XSTEM®, consisting of allogeneic (donated) mesenchymal stem cells (MSCs) which are selected and quality assured using the cell surface marker integrin α10β1. The initial therapeutic focus for XSTEM is treatment of the joint disease osteoarthritis (OA). Preclinical studies, including studies on horses, have shown that XSTEM is safe and has a protective and therapeutic effect on the articular cartilage and underlying bone following cartilage damage. Xintela is currently preparing a clinical study (Phase I/IIa) for treatment of patients with knee OA and produces XSTEM in its own GMP approved manufacturing facility.

The stem cell product XSTEM is also being evalutated for treatment of other diseases with large medical need and Xintela has reported therapeutic effects in preclinical models for chronic, difficult-to-heal wounds as well as the lung disease ARDS (Acute Respiratory Distress Syndrome). Xintela also develops stem cell products for treatment of animals with OA and other diseases.

In targeted cancer therapy, Xintela has discovered that integrin α10β1 is a First-in-Class target on certain aggressive cancers and has developed and patented therapeutic antibodies targeting integrin α10β1 on cancer cells. Preclinical studies in animal models have demonstrated that Xintela's antibodies significantly inhibit growth of the brain tumour glioblastoma and triple-negative breast cancer and is a promising new treatment strategy for aggressive cancers. Xintela is also evaluating the antibodies for treatment of other aggressive cancer forms.

The oncology business is run in Targinta AB, a wholly owned subsidiary.

Xintela conducts its business at Medicon Village in Lund and is listed on Nasdaq First North Stockholm.

Xintela's financial reports are available at www.xintela.se/en/investors#reports

Xintela AB (publ)

Evy Lundgren-Åkerlund, CEO

Tel: +46 46 275 65 00

Email: [email protected]

Medicon Village

223 81 Lund, Sweden

www.xintela.se

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