Announcement PDF Patrys Limited Appendix 4E Preliminary final report 1. Company details Name of entity: ABN: Reporting period: Previous period: Patrys Limited 97 123 055 363 For the year ended 30 June 2023 For the year ended 30 June 2022 2. Results for announcement to the market $ Loss from ordinary activities after tax attributable to the Owners of Patrys Limited up 4.1% to (7,061,624) Loss for the year attributable to the Owners of Patrys Limited 4.1% to (7,061,624) up Dividends There were no dividends paid, recommended or declared during the current financial period. Comments The loss for the Group after providing for income tax amounted to $7,061,624 (30 June 2022: $6,780,363). During the period, the Group had total other income of $2,851,908 (2022: $3,333,576), consisting of the R&D tax incentive of $2,775,033 (2022: $3,297,980) and interest income of $76,875 (2022: $8,096). The Group's research and development expenditure during the financial year was $7,524,812 (2022: $8,085,228). This includes direct research and development activities associated with pre-clinical and manufacturing work, as well as wages, salaries and other overheads associated with research and development. The Group had cash at bank at 30 June 2023 amounting to $3,045,516 (30 June 2022: $7,817,841) and a short-term deposit investment of $1,000,000. Excluding prepaid expenses, the working capital position at 30 June 2023 was $6,200,682 (30 June 2022: $12,690,342). 3. Net tangible assets Reporting period Cents Net tangible assets per ordinary security 4. Control gained over entities Not applicable. 5. Loss of control over entities Not applicable. 6. Dividends Current period There were no dividends paid, recommended or declared during the current financial period. 0.31 Previous period Cents 0.63 Patrys Limited Appendix 4E Preliminary final report Previous period There were no dividends paid, recommended or declared during the previous financial period. 7. Dividend reinvestment plans Not applicable. 8. Details of associates and joint venture entities Not applicable. 9. Foreign entities Details of origin of accounting standards used in compiling the report: Not applicable. 10. Audit qualification or review Details of audit/review dispute or qualification (if any): The financial statements have been audited and an unqualified opinion has been issued. 11. Attachments Details of attachments (if any): The Annual Report of Patrys Limited for the year ended 30 June 2023 is attached. 12. Signed Signed ___________________________ Date: 28 August 2023 ANNUAL REPORT FY2023 Developing novel antibodies, for life Contents From the Chair 4 Our People 6 Patrys Snapshot 8 ASX News, Media Headlines 10 Deoxymabs: Taking Aim at Hard-to-Treat Cancers 12 IP Update 14 Manufacturing Antibodies 16 Delivering With Deoxymabs 18 Directors’ Report 22 Auditor’s Independence Declaration 41 Statement of Profit or Loss and Other Comprehensive Income 42 Statement of Financial Position 43 Statement of Changes in Equity 44 Statement of Cash Flows 45 Notes to the Financial Statements 46 Directors’ Declaration 68 Independent Auditor’s Report to the Members of Patrys Limited 69 Shareholder Information 72 Corporate Directory 76 Corporate and Social Responsibility 77 3 From the Chairman It is with a sense of pride and privilege that I write this note – my first as Patrys’ Chairman – to reflect on the achievements of the past year, and look ahead, in anticipation, to the next stage of our journey as a clinical stage biotechnology company. In this, my first year as Chairman of Patrys, I have appreciated the opportunity to learn more detail about the Company’s exciting deoxymab technology, to work with the management and Board of Directors, and to meet a number of shareholders. As a lean team, our energy in the 2023 financial year has been focused on ticking off core activities behind the scenes, which are essential building blocks for our progress. Drug development is a meticulous process, but it is one we deeply understand and respect. Each milestone reached, each challenge surmounted, brings us closer to realising our vision of transforming cancer treatment. Preparations for our planned Phase 1 first-in-human study of PAT-DX1 are progressing well. As part of the vibrant Australian biotech community, Patrys is very fortunate to have access to some of the best clinical trial infrastructure in the world, and we are proud to be planning our clinical trial activities on home soil. We have completed the necessary preclinical toxicology studies to support the trial and are now completing our plans for our Phase 1 first-in-human study, planned for CY 2024. We believe that now we understand the issue that delayed our manufacturing run of PAT-DX1 in Q1 of CY 2023, with an audit conducted by the CDMO, as well as our own independent investigation. With this clarity we will work with our CDMO to schedule our new production run for PAT-DX1 in the coming months. The advancement of our second deoxymab, PAT-DX3, remains a priority for Patrys. The last 12 months have demonstrated the growing potential of our full-sized antibody in a variety of applications. Earlier this year, the results of a preclinical study validated the potential to use PAT-DX3, to treat cancers which have pre-existing mutations that compromise their DDR systems, including BRCA2 negative breast cancer. Additionally, new evidence supporting the potential to use PAT-DX3 to deliver small molecule therapeutics across the blood-brain barrier to brain tissue, opens up opportunities to explore various neurological targets and conditions. I would like to thank the Patrys team, led by our CEO and MD, Dr James Campbell, and the rest of the Board of Directors for their advice and expertise as we move steadily toward the clinic. I also want to express my sincere gratitude to our esteemed shareholders for your ongoing support. Your belief in our mission and your trust in our capabilities propel us forward. 4 Our ambitions are great. We are committed to advancing our science, exploring new frontiers, and pushing the boundaries of what is possible in cancer therapy. Together, we are shaping a future where hard-to-treat cancers are no longer insurmountable challenges. Thank you for being part of our journey. Sincerely, Charmaine Gittleson Dr Charmaine Gittleson Patrys Chairman “ Our unwavering focus on developing novel treatments for some of the most challenging and elusive cancers is what sets Patrys apart. - Patrys Chairman, Charmaine Gittleson 5 Our People Patrys’ team comprises specialists in research, development, and innovation who are working together to progress our deoxymab technology and develop new approaches for hard-to-treat cancers. Board of Directors Charmaine Gittleson Chairman of the Board of Directors, BSc.MBBCh, GAICD Dr. Gittleson is the former Chief Medical Officer of CSL Limited with more than 20 years of experience in pharmaceutical development. Her expertise spans many aspects of the pharmaceutical industry, from drug development and clinical research through to strategic planning and executive management. She has successfully worked with regulators in key markets such as the US, EU, Asia Pacific, Japan and South America to register new products to address unmet medical needs. Dr. Gittleson is the Chair of Antisense Therapeutics Limited (ASX:ANP) and a board member of George Medicines Pty Ltd. James Campbell Managing Director & Chief Executive Officer, BSc (Hons), PhD, MBA, GAICD Dr. Campbell has more than 20 years of international biotechnology research, management and leadership experience and has been involved in the creation and/or transformation of multiple successful Australian and international biotechnology companies. Dr Campbell sits on the board of Australia’s peak industry body for biotechnology, AusBiotech. Michael Stork Non-Executive Director, BBA Mr. Stork is the Managing Director of Stork Holdings Ltd, an Investment Holding company active in the Canadian technology startup sector. Mr. Stork is the Chairman of the Waterloo Accelerator Centre, a technology company incubator affiliated with the University of Waterloo. He is active on the boards of a number of leading Canadian technology startup companies. Suzy Jones Non-Executive Director Ms. Jones is Founder and Managing Partner of DNA Ink LLC, a life sciences advisory firm in San Francisco with clients in the United States and Europe. Ms. Jones has extensive networks within the pharmaceutical and biotech companies and VC community in North America. Pamela M. Klein Non-Executive Director, BSc, MD Dr. Pamela M. Klein completed her medical training at Stritch School of Medicine, Loyola University in Chicago, followed by internal medicine training at Cedars-Sinai, Los Angeles, prior to spending seven years working at the U.S. National Cancer Institute. Dr. Klein currently serves as an advisor to a range of different biotech and investment companies, with roles on scientific advisory boards and corporate boards, as well as broader advisory roles. 6 Management Our expanding Management Team brings a cross-section of experience and expertise in clinical and commercial development. Stefan Ross Company Secretary, BBus (Accounting) Stefan Ross has over 10 years of experience in accounting and secretarial services for ASX listed companies. His extensive experience includes ASX compliance, corporate governance control and implementation, statutory financial reporting, shareholder meeting requirements, capital raising management, and board and secretarial support. Stefan has a Bachelor of Business, majoring in Accounting. Deanne Greenwood Vice President Business Development & Intellectual Property, BSc (Hons), PhD, MBA, GAICD Dr. Greenwood’s efforts are focused on commercialisation of the Company’s assets and management of the extensive intellectual property portfolio. Dr. Greenwood has worked in the health and life science sector for the last 15 years. She has extensive experience related to R&D drug development, relationship management, contracts, grants and industry partnerships. Valentina Dubljevic Vice President, Research & Development, MBB, BSc, GAICD Ms. Dubljevic is responsible for the pre‑clinical and clinical development of Patrys’ products. Ms. Dubljevic brings more than 20 years of scientific and commercial experience in the areas of anti‑cancer therapies, vaccine development and diagnostics. Rebecca Tunstall Vice President, Corporate Development, BApp Sc (Hons), PhD Dr. Tunstall has an impressive track record in clinical development and stakeholder engagement in oncology clinical research and development spanning more than 15 years. She has strong relationships with industry, government, regulators and research partners, both in Australia, and internationally. Scientific Advisory Board Our scientific advisors are globally sought-after specialists in their fields. Peter Ordentlich, BSc, PhD Dr. Peter Ordentlich completed a PhD in Immunology at the University of Pennsylvania and a Post‑Doc at the Salk Institute for Biological Studies. He worked at X‑Ceptor Therapeutics, which was acquired by Exelixis in 2004, then in 2005 co‑founded Syndax Pharmaceuticals, a NASDAQ‑listed, clinical stage biopharmaceutical company developing an innovative pipeline of cancer therapies with three clinical stage assets. Allen Ebens, BSc, PhD Dr. Allen Ebens completed a PhD at UCLA and Post‑doctoral training at UCSF. Over 25 years his distinguished career has seen significant contributions to the scientific literature as well as advancement of multiple discovery projects to clinical development at companies including Exelixis, Genentech and Juno Therapeutics. 7 Patrys Snapshot Deoxymabs: A new type of therapeutic antibody Antibodies have been used to treat cancer for over two decades. These drugs work by binding to specific cancer markers on the cell surface, which causes the cells to die. This has transformed cancer therapy, as antibody drugs are more specific and have fewer side effects than traditional chemotherapy drugs. However, there are two major hurdles to a broader application of antibodies to treat cancer. First, many cancers do not have suitable cell surface markers, so they are not amenable to traditional antibody approaches. Second, no therapeutic antibodies have been able to cross the blood-brain barrier, which means that antibodies have not been widely used for the treatment of brain cancers. Patrys has developed a new type of antibody - deoxymabs - that can bind to cancer cells that do not have traditional cell surface markers. Instead, they bind to strands of DNA. DNA is released from cells when they die, and the rate of cell death is much higher in cancer cells than in healthy cells. This means that deoxymabs can be used to target cancer cells regardless of their location or type. In animal experiments, Patrys has successfully demonstrated that deoxymabs are able to seek out and kill cancer cells in a variety of tissues anywhere in the body, including crossing the blood brain barrier. This suggests that deoxymabs have the potential to be a more effective and versatile treatment for cancers, including brain cancers, than other traditional therapeutic antibodies. Patrys is currently planning clinical trials to evaluate the safety and efficacy of deoxymabs in humans. If these trials are successful, deoxymabs could offer a new and promising treatment option for cancer patients. Unique qualities of Patrys’ deoxymabs Patrys’ deoxymab antibodies exhibit several distinctive properties ideal for human therapeutic applications: • They target all cancers: Deoxymabs are naturally drawn to DNA released into the bloodstream by all types of cancers, regardless of their location. This unique property allows deoxymabs to selectively target both primary tumors and metastases throughout the body. • They cross the blood-brain barrier: The blood-brain barrier (BBB) presents a significant challenge in treating primary and secondary brain cancers as it limits the passage of drugs and antibodies into the brain. Deoxymabs possess the ability to cross the BBB and reach neural tissues, opening new avenues for treating brain cancers. • They can penetrate the cell membrane: Deoxymabs have the exceptional ability to penetrate the cell membrane and enter cells intact. This unique capability is facilitated by the ENT2 transporter protein found in most human adult cells. Patrys intends to leverage this property to potentially deliver therapeutic payloads directly into the cell. • They inhibit DNA damage repair: Once inside the cell nucleus, deoxymabs bind to damaged DNA, preventing its repair by the cell’s DNA damage repair (DDR) systems. Cells with unrepaired DNA become incapable of dividing and typically undergo self-destruction. This inhibitory action on DDR makes deoxymabs valuable in developing new cancer treatments. Patrys’ commitment to advancing these innovative antibody-based approaches brings hope for more effective and targeted therapies, potentially transforming the landscape of cancer treatment. 8 The deoxymab family: PAT-DX1 and PAT-DX3 Patrys’ two deoxymabs - PAT-DX1 and PAT-DX3 - are both based on the same original deoxymab (a mouse antibody called 3E10). While both deoxymabs have similar properties, these two different formats also have distinctive differences, which allows Patrys to apply these unique properties across different therapeutic applications. PAT-DX1 PAT-DX1 is a dimer of a small antibody fragment derived from a humanised version of the binding domain from the original mouse deoxymab antibody 3E10. Patrys is currently scaling up the production of clinical grade PAT-DX1 with a view to initiating first-in-human studies in 2024. PATDX1 is likely to have clinical utility for treating primary and secondary brain cancers due to its ability to cross the blood brain barrier. It also may have utility for treating cancers with existing DDR deficiencies, or in combination with other DNA damaging agents such as radiation and many chemotherapy drugs. Initial draft reports from GLP toxicology studies of PAT-DX1 indicate a favourable safety and tolerability profile, which supports Patrys’ ability to initiate a Phase I first-in-human study. PAT-DX3 PAT-DX3 is a humanised, full-sized antibody, that has been further optimised to improve its therapeutic potential. PAT-DX3 has the DNA-binding and DDR blocking properties of PAT-DX1, but is expected to have different pharmaceutic properties (tissue distribution, pharmacokinetic profile etc) due to its larger size. Patrys believes these will open up further opportunities to leverage its deoxymab platform and to develop additional therapeutic products. Preclinical data supports synthetic lethality mechanism of PAT-DX3 In March 2023, Patrys announced results from a pre-clinical study which demonstrated the potential to use its full size IgG deoxymab, PAT-DX3, for synthetic lethality strategies to treat relevant cancers. Patrys’ deoxymabs have a number of novel properties that are not typically found in antibodies and that offer the potential to develop new antibody-based therapeutic strategies for treating cancer. One of these is the ability to enter the cell and cell nucleus and block the DDR systems. In tumours with pre-existing mutations that compromise their DDR systems, such as cancers with a mutation in the BRCA2 gene, the additional inhibition from adding a deoxymab may result in the accumulation of DNA damage that can ultimately kill the tumour cells. This approach is known as ‘synthetic lethality’ and has been successfully used in certain tumours with several new small molecule cancer drugs. This study confirms the potential to use deoxymabs as a single agent to treat cancers which have pre-existing mutations that compromise their DDR systems, including BRCA2 negative breast cancer and other cancers. In addition, Patrys is looking at using deoxymabs in combination with DNA damaging therapies, such as radiation and chemotherapies, and as a delivery agent for small molecules and nucleic acids. R&D Pipeline Compound Discovery Preclinical Clinical PAT-DX1 PAT-DX3 PAT-DX1-NP 9 ASX News, Media Headlines Milestones: FY23 During FY23, Patrys announced several significant clinical, commercial and corporate milestones. 10 PAT-DX1 Engineering Run Successfully Completed July 2022 PAT-DX1/Radiation Combination Improves Brain Cancer Survival August 2022 New Research Grant for Deoxymabs in Metastatic Breast Cancer August 2022 PAT-DX1 From Engineering Run Meets All Specification Tests August 2022 PAT DX3 Crosses Blood Brain Barrier in Healthy Animals October 2022 Patrys Appoints Dr Charmaine Gittleson as Chairman November 2022 Patrys Receives R&D Tax Incentive Refund January 2023 New PAT-DX3 Data Demonstrates Synthetic Lethality March 2023 Two New Deoxymab Patents Granted in the USA April 2023 Master Cell Bank and Integration Run for PAT-DX3 Completed April 2023 PAT-DX1 GLP Toxicology Reports Received May 2023 are deeply committed to translating “We our research discoveries into life-saving therapies. - Patrys CEO & MD, Dr James Campbell 11 Deoxymabs: Taking Aim at Hard-to-Treat Cancers Cancer is a complex and often devastating disease. Some cancers, such as glioblastoma (GBM) and triple negative breast cancer (TNBC), are particularly difficult to treat, leaving patients with limited options and poor prognoses. Patrys’ deoxymabs offer a unique mechanism of action to treat cancers by exploiting weaknesses in the body’s DDR systems. This strategy targets the inherent vulnerabilities of hard-to-treat cancers with impaired DNA repair mechanisms, offering a potential solution to the challenges in treating these types of cancers. Understanding the challenge When it comes to treatment, some cancers present a particularly difficult challenge. GBM and TNBC, are often resistant to treatments due to their heterogeneous presentations; lack of specific molecular targets; and complex tumour microenvironments. Brain cancers also present a unique challenge in that the blood-brain barrier is a highly effective barrier to the delivery of drugs to the tumour. Patrys is exploring ways to improve outcomes for patients with these hard-to-treat cancers with its unique antibody platform. Patrys’ deoxymabs exploit weaknesses in the body’s DDR systems, which play a crucial role in preventing, detecting, and repairing DNA damage. By entering cancer cells and binding to damaged DNA, deoxymabs block the repair process, leading to the self-destruction of cancer cells upon division. This approach exploits the fact that cancer cells often harbour numerous mutations that require DNA repair. By inhibiting this repair mechanism, deoxymabs push cancer cells toward their ultimate death. Building on previous successes Targeting DDR systems in cancer treatment has successfully been demonstrated in a class of drugs called PARP inhibitors (PARPi’s). PARP inhibitors, such as niraparib and olaparib, have shown efficacy in certain cancers where the DNA damage response system is compromised, such as breast cancers with BRCA mutations. The addition of PARPi can tip these cancer cells over the edge, resulting in the accumulation of DNA damage and subsequent cell death. This approach, known as ‘synthetic lethality’, has garnered significant interest and paved the way for precision medicine in cancer treatment. Another successful breakthrough is the development of trastuzumab deruxtecan (Enhertu), which was approved by the FDA in 2022 for the treatment of HER2-low breast cancers that cannot be surgically removed or have metastasised. This approval has reshaped the treatment landscape for HER2-negative breast cancer and has opened avenues for novel platform technologies, such as deoxymabs, to offer new hope in the battle against TNBC. The commercial success of targeted therapies in the field of cancer treatment is compelling. Lynparza (olaparib), an antineoplastic agent targeting PARP, saw global sales surpass $2.4 billion in 2021, with projections expecting a rise to approximately $6.4 billion by 2028. These figures illustrate the growing demand for innovative therapies that can provide improved outcomes for patients battling hard-to-treat cancers. The GBM market reached $2.4B in 2022 and is project to grow to $4.5B by 2030. This market growth reflects the urgent need for improved treatment options and highlights the potential market opportunities for innovative approaches like deoxymabs. By harnessing the body’s own defense mechanisms and inducing cancer cell death, deoxymabs offer a promising avenue for tackling glioblastoma and other challenging cancers. 12 Glioblastoma • More than 14,500 Americans are expected to receive a GBM diagnosis in 2023. • GBM accounts for 50 percent of all primary malignant brain tumors. • The five-year survival rate for glioblastoma patients is only 7 percent, and the average length of survival for glioblastoma patients is estimated to be only 8 months. • Only four drugs and one device have been approved by the FDA specifically for the treatment of glioblastoma. (Source: National Brain Tumour Society, braintumor.org) New hope Patrys is dedicated to advancing new treatments using its antibodies PAT-DX1 and PAT-DX3. Preclinical studies have demonstrated their potential in addressing some of the challenges of hard-to-treat cancers; and while the specific indication for initial trials is still being determined, the Company is making significant progress in planning the first in-human trial of PAT-DX1 in 2024. What is clear is that the unique qualities of these antibodies make them particularly compelling for treating a variety of hard-to-reach and treat cancers, irrespective of their location, and with ongoing research and clinical trials, Patrys is hopeful for improved outcomes and increased survival rates among patients facing these challenging diseases. Triple Negative Breast Cancer • TNBC accounts for about 15% of all breast cancers. • There are approximately 2500 new cases of TNBC in Australia each year. • Occurs more often in patients who are pre-menopausal or under 50 years of age • TNBC has a greater chance of advancing to the metastatic stage. • Survival rates are lower than for other breast cancer types. (Sources: Breast cancer network Australia, bcna.org.au; Breast Cancer trials, breastcancertrials.org.au) 13 IP Update Intellectual Property Portfolio Patrys has an extensive global intellectual property (IP) portfolio with protection potentially extending through to at least 2042 in all major markets. This IP position is expected to provide the Company with substantial commercial advantages as it develops its product candidates for major markets including the United States, Europe, Japan and China. Deoxymab technology and product candidates The patents that Patrys has obtained, and continues to apply for, cover deoxymab antibodies PAT-DX1 and PAT-DX3 composition of matter, combination approaches, method of treatment and product candidates derived from these technologies. Among the indication-specific issued or pending patents covering product candidates derived from our deoxymab portfolio we have patents covering the use of deoxymabs in gliomas, metastases, breast, pancreatic, ovarian and prostate cancers and melanomas. In April 2023, Patrys announced the granting of two additional patents in its portfolio by the US Patent and Trademark Office. There are now six granted patents covering the unconjugated form of deoxymab 3E10 (and derivatives thereof) in Europe, Japan, China, and three granted in the US. In addition, there are five patents covering nanoparticle conjugation that have been granted in Australia, Canada, China, India and the US. In total, Patrys and/or Yale have filed numerous patent applications across 13 different patent families in major jurisdictions which provides the Company with a significant patent estate covering the use of its unique deoxymab platform for the treatment of cancer. This provides the Company with a significant and material patent estate covering the use of its deoxymab antibodies. Patrys continues to focus on maintaining patent protection in major jurisdictions where future regulatory approvals and product sales are targeted. In addition, in many major jurisdictions we may be able to extend commercial exclusivity period for our product candidates, which include, but are not limited to the exclusive right to reference our data, orphan drug exclusivity and patent term extensions. Active intellectual property strategy in place to protect key assets Deoxymab patent portfolio 13Deoxymab patent portfolio 1113 2611 26 Active patent families Granted patents Patent families Patent applications pending Granted patents Active patent applications IPIP protection protectiongranted granted 14 “ We are proud of the robust patent portfolio we have developed which gives flexibility for cross-licensing capabilities for deoxymabs in the future. - Patrys CEO and MD, Dr James Campbell 15 Manufacturing Antibodies Manufacturing antibodies is a complex process, which requires the coordination and integration of many separate processes. As Patrys prepares to move PAT-DX1 into the clinic in 2024, the team has been working diligently behind the scenes to meet our manufacturing milestones, ensuring that we have sufficient clinical-grade material to conduct in-human studies. What is involved in manufacturing monoclonal antibodies? The rise of monoclonal antibodies (mAbs), means that they are used to treat a wide range of conditions, including cancer, autoimmune diseases, and infectious diseases. In recognition of growing interest in mAbs, new methodologies have helped to advance production processes and supported efforts to scale-up manufacturing. The manufacturing process of monoclonal antibodies involves several crucial steps to ensure the production of high-quality and potent therapeutic agents. • Clone Selection In general, commercial production of monoclonal antibodies begins with the identification and optimisation of the coding DNA sequence and the construction and identification of a stable high-producing clone. Once a clone is available, an antibody production platform such as a mammalian cell line can be used to make large quantities of antibodies. Patrys has developed a stable cell clone for its lead asset PAT-DX1. The choice of production system is important to ensure the clone produces correctly folded proteins that maintain the molecule’s biological activity; stability; and increase the half-life, while reducing immunogenicity. Mammalian cells, like the CHO cell line, have become the predominant method for industrial biopharmaceutical production, largely because of their ability to produce consistent and reproducible quantities of antibodies. • Upstream Development After generating a stable cell clone, the next step involves upstream development processes, to multiply the cells. These include cell culture process, scale up and production. Disposable bioreactors are often used for small scale production due to easy adaptation to process validation and flexibility. The process parameters including feeding strategies, as well as the ongoing improvement of environmental parameters, are optimised to ensure reproducible results. Close monitoring is necessary to ensure high productivity and yields to make the monoclonal antibody production more economical. • Downstream Process Development Once the cells have produced the antibodies, they need to be extracted and purified from the culture medium. A series of different purification techniques, such as chromatography and filtration, may be employed to obtain highly purified and potent antibodies. • Formulation development Patient safety is paramount in drug developm