Lipigon's third project aims to cure dyslipidemia, general disorders related to blood fat. While sharing the treatment objective of P1 Lipisense®—lowering high triglyceride levels in the blood—the project addresses broader indications. It aims to assist patients whose blood fat metabolism remains imbalanced despite using standard fat-lowering treatments, like statins. These patients comprise approximately 70% of those affected. Statins, with Lipitor being a prime example, have been the cornerstone of dyslipidemia treatment for about three decades. In fact, Lipitor once stood as the world's top-selling drug, with sales peaking at nearly USD 13 billion in 2006. Given this backdrop, Lipigon believes this drug possesses blockbuster potential, anticipating annual sales of at least 1 billion USD.

Lipigon's strategy revolves around the development of a medication primarily aimed at treating high triglyceride levels. In this context, demonstrating a reduction in triglyceride levels alone is sufficient for market approval. This approach allows for smaller clinical trials and a shorter time to reach the market.

Once accomplished, the drug's application could expand to mitigating cardiovascular disease risks. Comprehensive studies for such indications might involve tens of thousands of patients and substantially more resources. However, genetic patient stratification has the potential to substantially reduce study size.

Lipigon has previously, over a period of two years, collaborated with AstraZeneca to develop a test system. This system effectively weeds out undesirable compounds during the search for substances that activate LPL (lipoprotein lipase). LPL plays a pivotal role in blood fat regulation as it breaks down triglycerides. This achievement paved the way for collaboration discussions and initiated a DEL screening with the esteemed screening company, HitGen, in May 2020.

HitGen is a world-leading company in DEL technology (DNA-encoded chemical libraries). DEL is used to identify small molecules that bind to target proteins where it was previously very difficult to find drug candidates. The DEL technology allows the screening of thousands of times more compounds (up to hundreds of billions of compounds) compared to traditional screening technologies.

HitGen has collaborations with several of the world's leading pharmaceutical companies, including Merck, Pfizer, Johnson & Johnson and Sanofi. The collaboration agreement means that the companies work together to identify and develop drug candidates up to preclinical safety studies. Lipigon is responsible for the preclinical and clinical development work, as well as for outlicensing drug candidates, whereby HitGen receives a portion of Lipigon's future revenues.

Together, Lipigon and HitGen have identified small molecules that activate LPL, an enzyme that plays a central role in the breakdown of fats in the blood. These small molecules can become starting points for new drug candidates against blood lipid disorders and cardiovascular diseases.

A small molecule means that the treatment can be given in tablet form. For indications where several million patients are to be treated lifelong to reduce the risk of cardiovascular disease, tablets are the

preferred way of administration. According to the company's assessment, based on similar drugs, there is blockbuster potential, i.e. the annual sales should be able to amount to at least 1 billion USD.

To assess the sales potential for the treatment of patients with high triglyceride levels, the following calculation example can be used: if a 5% market share is achieved among an estimated 5 million patients with high triglyceride levels, at an annual treatment cost of USD 6,000 per patient, it translates to approximately USD 1.5 billion in revenue.

For the prevention of cardiovascular disease, employing similar calculations, a 2% market share among an estimated 135 million patients with elevated triglyceride levels, at an annual treatment cost of USD 2,000 per patient, would amount to a turnover of roughly USD 5.4 billion.

Our patent strategy

Existing Treatments on the Market

The LPL enzyme is a well-studied protein. Often, disturbances in the LPL system lead to the most severe forms of hypertriglyceridemia. Current scientific and clinical evidence strongly suggests that increased LPL activity reduces coronary artery disease risk. Genetic studies indicate that LPL and the target protein in Project 1 (ANGPTL4) are superior target proteins compared to other established ones. Yet, no drug directly influences LPL at present. The demand for such a blood fat-lowering agent is evident when observing Big Pharma's mergers and acquisitions in this domain over recent years.

Relevant Structural Deals

Drug projects targeting well-established drug markers, like LPL and its regulators, grounded in robust clinical, genetic, and basic research, often present attractive early partnership opportunities. This appeal is amplified by the significant medical necessity and commercial potential within this therapeutic domain.

For instance, AstraZeneca recently acquired a license for a small molecule, PCSK9 inhibitor, intended for oral dyslipidemia treatment, even though the project is still in the preclinical stage. Typically, deals in this field include an upfront payment ranging from USD 10-50 million during the preclinical phase, with the potential for billions in milestone payments and royalties reaching double-digit sales percentages.

• In 2018, Staten Bio and Novo Nordisk collaborated on a preclinical dyslipidemia project, with an agreement potentially worth up to USD 486 million for Staten Bio.

• In November 2019, Novartis invested USD 9.7 billion to acquire the Medicines Company. Their primary asset was inclisiran, a PCSK9 inhibitor aimed at reducing LDL cholesterol, which was in Phase III during the acquisition.