Positive scientific ESAC opinion on GARD®skin paves the way for OECD validation and opens new commercial opportunities

EURL ECVAM, the EU Reference Laboratory for alternatives to animal testing, has announced that ESAC, their scientific advisory committee, has issued a positive opinion on the GARD®skin test method. Depending on the regulatory context, positive results obtained with GARD®skin can be used stand-alone to identify skin sensitizers and the method is recommended to be adopted as an OECD Test Guideline for skin sensitization. The announcement marks a major milestone in the regulatory approval process for GARD®, opening up new commercial opportunities for the company.

ESAC has now completed its scientific evaluation, which shows that the GARD®skin assay meets the EURL ECVAM requirements for reliability in testing in preparation for regulatory filing. This means that the test is science- and evidence-based, can be transferred to other laboratories, and delivers the same performance regardless of who conducts the test. In their report, ESAC states that GARD®skin can, depending on the regulatory context, be used as stand-alone for positive results when identifying skin sensitizers, which means that no additional testing is needed. A negative result must be considered together with additional evidence.

“This report is a key milestone for the company and I am very pleased that we have received a positive ESAC opinion for GARD®skin as the first genomic test for identifying skin sensitizers. I would like to thank EURL ECVAM and ESAC for their professionalism and a well-written report,” says Axel Sjöblad, CEO of SenzaGen. “According to the positive opinion, ESAC recommends that OECD include GARD®skin on their list of internationally agreed test methods. Furthermore, it means that our groundbreaking GARD®-technology, which is based on both genomics and machine learning, has now been validated by an objective group of international experts. With the final OECD approval in place, we will be able to offer the GARD®-tests to a significantly broader customer base in various industries, such as cosmetics and chemicals in the EU, the US and Asia. This paves the way for an accelerated market growth and from now on we will refer to ESAC’s positive opinion in all our external communications,” Axel Sjöblad continues.

“When an international regulatory authority approves such a technologically advanced test system as GARD®, it sends a strong message,” says Henrik Johansson, Chief Scientist at SenzaGen. “The positive news confirms that GARD® is a science-based, and a technically sound method for the prediction of skin sensitization. With this endorsement, a range of technical components such as high-dimensional predictive modeling and cloud-based analytic tools are also introduced as novelties in regulatory toxicology. This establishes SenzaGen as a strong player in the market, especially in the development of future tests based on our key competences,” he says.

Furthermore, ESAC considers that GARD®skin and GARD®potency are functional and valid test methods ready for use in industrial screening applications. SenzaGen is now building more data for GARD®potency regarding predictivity and reproducibility, so that GARD®potency can also be used in a regulatory context.

The ESAC opinion
ESAC’s opinion is available on the JRC Publications Repository webpage:
https://publications.jrc.ec.europa.eu/repository/handle/JRC125963

Webcast
SenzaGen invites media and investors to a webcast on July 29 at 15.00 CEST, when CEO Axel Sjöblad and Chief Scientist Henrik Johansson will comment on the ESAC opinion. The webcast will be held in English. It will start with a presentation which will be followed by a Q&A session.

To participate in the webcast, register well in advance using the following link: https://attendee.gotowebinar.com/register/8998421169786434061

After the live broadcast, a recording will be available on the company’s website.

The GARD regulatory process
The GARD regulatory process is underway for the GARD® test method. The evaluation has been conducted by the EU Reference Laboratory for alternatives to animal testing (EURL ECVAM) on behalf of the OECD. A key step in the process is evaluating whether the tests are scientifically evidence based, can be set up in other laboratories (transferability) and can deliver the same performance regardless of who conducts the tests (robustness). For this purpose, SenzaGen has conducted a large validation study and its results have been evaluated by EURL ECVAM’s Scientific Advisory Committee (ESAC). Following the scientific evaluation, ESAC has issued a recommendation to the OECD, which will be the foundation for issuing a Test Guideline. An issued OECD Test Guideline will allow customers to use GARD® test results in product registrations. SenzaGen has prepared a Test Guideline draft and is in regular contact with both the Swedish Chemicals Agency and OECD.

SenzaGen and RIFM begin part two of the GARD®skin Dose-Response program

SenzaGen is launching part two of a project together with the Research Institute for Fragrance Materials (RIFM) to determine the dose at which a fragrance ingredientcan be used without inducing skin allergy. With the support of a new grant of SEK 0.6 million from RIFM, SenzaGen will test additional substances with the unique GARD®skin Dose-Response assay.

The program on the safe use of fragrances began in the spring of 2021 when SenzaGen tested several substances for RIFM with satisfactory results. In the second round of tests, which runs until the end of 2021, RIFM wants to test more fragrance ingredients to get detailed information on skin sensitizers and the dosage at which they may induce sensitization.

“We are pleased to be able to contribute to this important project and look forward to our continued collaboration with RIFM”, says Axel Sjöblad, CEO of SenzaGen. “Through the project, the fragrance industry will receive valuable information about skin sensitizing fragrance ingredients while actively supporting sustainable and ethical development in the test market. The fact that the independent Expert Panel for Fragrance Safety was impressed by the results in the first part of the project confirms the strength of the GARD® technology and that our unique method meets important needs in the industry.” (The Expert Panel for Fragrance Safety is an independent, international team of researchers and academics with no ties to the fragrance industry.)

“Together with the Expert Panel, we have decided to continue testing priority fragrances for which we want more data,” says Mihwa Na, PhD, Senior Scientist at RIFM. “Part one of the program returned impressive results. The information we obtained will be used to determine whether GARD®skin Dose-Response is appropriate for predicting the safe use levels of the fragrance materials.”

Since 2020, SenzaGen and RIFM have also collaborated on the continued development of an application that can assess whether fragrance materials could induce skin allergies when exposed to sunlight (photosensitization). The collaborators will present scientific data from this project at the World Congress on Alternatives and Animal Use at the Life Sciences Conference on August 23–September 2, 2021.

For more information, please contact:
Axel Sjöblad, CEO, SenzaGen AB
Email: axel.sjoblad@senzagen.com | Mobile: +46 705 35 93 51

Tina Dackemark Lawesson, VP Marketing & Communications
Email: tina.lawesson@senzagen.com | Mobile: +46 708-20 29 44

Mihwa Na, PhD, Senior Scientist, RIFM
Email: mna@rifm.org | Phone: +1.201.689.8089 ext. 108

About RIFM
Established in 1966, the Research Institute for Fragrance Materials (RIFM) generates, analyzes, evaluates, and distributes data to provide a scientific basis for the safe use of fragrances. RIFM has compiled the most comprehensive, worldwide source of toxicology data, literature, and general information on fragrance and flavor raw materials. RIFM’s Fragrance Ingredient Safety Assessment program draws from its comprehensive database of over 75,000 references and more than 135,000 human health and environmental studies.

RIFM assesses the safety of fragrance ingredients by the most current, internationally accepted guidelines—and has done so since its founding. The Expert Panel for Fragrance Safety, an independent, international team of researchers and academics with no ties to the fragrance industry, reviews all of RIFM’s work before RIFM submits it for peer-reviewed publication in a reputable scientific journal. RIFM makes all of its published, peer-reviewed work—current and historical—available for free at fragrancematerialsafetyresource.elsevier.com.

SenzaGen receives SEK 0.65 million order for GARD®skin Dose-Response from one of the world’s leading cosmetics companies

SenzaGen has been selected to test ingredients in cosmetics products from one of the world's largest cosmetics companies. Valued at SEK 0.65 million, the project includes SenzaGen’s unique GARD™skin Dose-Response assay. The tests will be performed in SenzaGen's GLP-certified laboratory in Lund.

SenzaGen now starts to collaborate with one of the world's leading companies in the beauty and cosmetics market. With GARDskin Dose-Response, the company wants to determine the dose at which a substance or a mixture in a cosmetic product cause allergy. This may apply, for example, to certain perfumes, preservatives, herbal ingredients, or hair dyes.

“We are very pleased that one of the largest cosmetics companies and top beauty brands chooses to test ingredients with our unique test method GARD™skin Dose-Response and see it as a great recognition of both SenzaGen and GARD™. The collaboration confirms the trust in that the GARD technology is able to identify the dosage at which a substance may induce sensitization, and further demonstrates SenzaGen’s strong position in this market segment. It is a verification that GARD™skin Dose-Response meets a need that companies and researchers in the cosmetics industry have expressed for a long time and that we are one of the first companies to fulfil. We look forward to providing data that ensures that the company’s products do not contain allergenic substances that may cause problems for consumers around the world”, says Axel Sjöblad, CEO of SenzaGen.

The GARDskin Dose-Response test provides information on the dose at which a substance causes allergy. The test enables companies in industries including cosmetics, pharmaceuticals, and chemicals to identify the highest possible quantity of a chemical that they can include in their products (“the Dose of Departure”). This serves as crucial information for prioritization and decision-making in research and development. The new test is an expanded application domain of GARDskin, and it is one of the first of its kind on the market.

SenzaGen expands services within in vitro skin toxicology

Due to market demand, and as a complement to the company’s innovative GARD® test platform for skin and respiratory allergies, SenzaGen is expanding its service offerings with in vitro tests for irritation and corrosion beginning July 1, 2021. SenzaGen will now provide customers with a wider range of tests in additional areas of non-animal skin toxicology, thus strengthening the company’s overall market position in in vitro skin toxicology testing.

Demand for contract research services for non-animal skin toxicological testing is growing in SenzaGen’s target markets. To meet customer requests and needs, the company is now expanding its testing services beyond skin sensitization to include irritation and corrosion as part of a broader risk assessment of customers’ substances. The testing and assessment of toxicity and potential risk of chemicals, drug candidates, and medical devices is a requirement for a variety product development benchmarks, including regulatory filings.

“We very much welcome that the market wants to perform more high-quality tests with the company,” says Axel Sjöblad, CEO of SenzaGen. “With an expanded range of tests, we further strengthen our position and meet our customers’ needs in a growing market. At the same time, we are increasing our competitiveness as one of the Nordic region’s few GLP-certified contract laboratories for cell-based toxicology tests. The expansion is part of our commercialization strategy and in line with our mission to offer best-in-class alternatives to animal testing across a variety of test areas. As early as the fall of 2021, we intend to again further expand the range of our testing services,” he says.

SenzaGen’s high-tech lab in Lund, Sweden serves as the company’s hub for customer studies, research, and product development. On behalf of customers, the lab currently performs in vitro toxicology testing using the GARD assay to evaluate the skin and respiratory sensitization potential and risk of various test items, with an expertise in substances traditionally considered difficult-to-test. This testing is critical for companies developing products in a variety of industries to provide safe, sustainable products and create better production environments for their employees, all while reducing the number of animals used in experimentation.

Skin sensitization, combined with irritation and corrosion, is one of ten subsegments of in vitro toxicology testing and accounts for approximately 5.5% of the current total market. This segment, in particular, is also growing the fastest with 9.5% growth annually and is expected to be valued at approximately SEK 5 billion by 2023, according to the 2018 report “In Vitro Toxicology” by Kalorama Information. SenzaGen’s service expansion looks to build upon this growth and meet the increasing needs of product developers and regulatory bodies alike.

Report from AGM of SenzaGen AB on 5 May 2021

SenzaGen’s Annual General Meeting (AGM) was held today on 5 May 2021 in Lund in a scaled-back format due to COVID-19. The AGM resolved to pass all proposals presented by the board and shareholders. CEO Axel Sjöblad’s address was replaced with a pre-recorded CEO address available on the Company's website, www.senzagen.com.

Adoption of income statement and balance sheet
The AGM adopted the income statement and balance sheet and the consolidated income statement and consolidated balance sheet for 2020.

Appropriation of earnings
The AGM resolved that no dividend be paid to shareholders and that the earnings at the disposal of the AGM be carried forward.

Discharge from liability
The AGM discharged the board directors and CEO from liability for the 2020 financial year.

Election of directors and auditors and their fees
The AGM resolved that the board shall consist of seven directors and no alternates. Carl Borrebaeck, Ian Kimber, Peter Nählstedt, Laura Chirica, Anki Malmborg Hager, Paula Zeilon and Paul Yianni were re-elected as directors. Carl Borrebaeck was also re-elected as board chairman. Authorized Public Accountant Mats-Åke Andersson was elected as auditor, with Authorized Public Accountant Martin Gustafsson as deputy auditor.

The AGM resolved to set directors’ fees at SEK 1,600,000 in total, with SEK 200,000 for each non-employee director and SEK 400,000 for the board chairman. Auditor’s fees shall be payable on the basis of approved invoices.

Authorization for the board to resolve to issue new shares
The AGM resolved to authorize the board, for the period until the next AGM, with the shareholders’ preemptive rights waived, on one or more occasions, to decide to issue new shares, stock options or convertibles. The total number of shares that may be issued or, if convertibles or stock options are issued, added following conversion or exercise of rights under the authorization shall be limited to 20 percent of the number of shares outstanding on the date of the notice of the AGM. As a result, the maximum number of shares that may be issued is 5,339,409, and the Company’s share capital may be increased by a maximum of SEK 266,970.45.

The purpose of the authorization is to enable the board to raise working capital for the Company, and/or bring in new owners of strategic significance to the Company, and/or acquire other companies or businesses.

Directed issue of a maximum of 587,500 stock options
The AGM resolved to issue a maximum of 587,500 stock options, as a result of which the Company’s share capital may increase by a maximum of SEK 29,375. With the shareholders’ preemptive rights waived, employees of the Company and the Group shall be entitled to subscribe for the stock options as follows:

  • Members of Group Management and key personnel comprising up to nine positions will each be offered to subscribe for a maximum of 50,000 options, altogether comprising a maximum of 450,000 options.
  • Other employees and consultants considered key personnel in the Group, comprising up to eleven individuals, will each be offered to subscribe for a maximum of 12,500 options, altogether comprising a maximum of 137,500 stock options.

The stock options will be offered for subscription free of charge. Given that the stock options are issued free of charge, the Company estimates that fringe benefits and social security expenses will be incurred for the participant and the Company as a result of the option program. The total expenses, including other expenses in the form of fees to external advisers and expenses for the administration of the program, are estimated at around SEK 100,000 over the program’s term and the cost of social security expenses is estimated at SEK 362,916.

Each stock option entitles the holder to subscribe for one new share in the Company in exchange for cash payment, provided that the barrier conditions have been met, during the period from 1 June 2024 to 30 September 2024.

The stock options are subject to barrier conditions and cannot be exercised to subscribe for shares until the barrier level has been reached. The barriers are calculated as 158% and 300% of the average of the listed volume-weighted price paid for each trading day as per the Nasdaq First North Growth Market’s official price list for shares in the Company during the period from 21 April 2021 to 4 May 2021. Stock options subject to barriers cannot be exercised until the volume-weighted price paid measured per trading day as per the Nasdaq First North Growth Market’s official price list for shares in the Company during the share subscription period is higher than the barrier level.

Payment for shares subscribed for by exercising stock options shall be made in cash at an exercise price of SEK 14.30.

The maximum dilutive effect of the incentive program is estimated to be a maximum of approximately 2.6% of the total number of shares and votes in the Company (calculated based on the number of existing shares in the Company and taking into account other outstanding stock options), provided that all offered stock options are subscribed for and exercised.

For detailed rules regarding the resolution passed at the AGM, please see the AGM notice available at the Company’s website, www.senzagen.com.

NOTICE OF ANNUAL GENERAL MEETING OF SENZAGEN AB (Publ)

The shareholders of SenzaGen AB (Publ.), company registration number 556821–9207, (“the Company”) are hereby given notice of the annual general meeting (“AGM”) on Wednesday, 5 May 2021 at 4 PM in The Spark Sharience, Medicon Village, Scheeletorget 1, Lund, Sweden. The meeting will be held in Swedish.

Eligibility to attend the AGM and notice of attendance
Shareholders wishing to attend the AGM must be registered in the share register kept by Euroclear Sweden AB on the record date, Tuesday 27 April 2021.

Shareholders must also give notice of their attendance and that of any proxies (max two) by Thursday, 29 April 2021 by mail to SenzaGen AB, Medicon Village, 223 81 Lund, Sweden, or by email to anmalan@senzagen.com. The notice of attendance should include the full name, personal or company registration number, shareholding, address, phone number and, if applicable, information about proxies or other representatives. If applicable, the notice of attendance should be followed by a proxy document, a certificate of registration and other documentation.

Nominee shares
Shareholders who have their shares held in custody with a bank or some other nominee must have their nominee temporarily register the shares in their own name to be eligible to attend the AGM. Such registration, which normally takes a couple days, must be complete by Tuesday, 27 April 2021. Therefore, shareholders must request this registration from their nominee well in advance of this date. Registration of voting rights that has been requested by shareholders at such a time that the registration has been made by the relevant nominee no later than Thursday, April 29, 2021 will be taken into account in the production of the share register.

Proxies
Shareholders represented by proxy must grant a written and dated proxy document to the designated proxy. If the proxy was granted by a legal entity, a certified true copy of the entity's certificate of registration, or equivalent documentation proving that those who signed the proxy are authorized signatories for the legal entity, must be enclosed with the proxy. If the proxy specifically states a term of validity, this term is not permitted to exceed five years. If no term of validity is stated, the proxy will be valid for no more than one year. A copy of the proxy and, if applicable, the certificate of registration should be sent to the Company's address above well in advance of the AGM. The original proxy and the certificate of registration must also be presented at the AGM. A proxy form will be available on the Company’s website, www.senzagen.com.

Important information with regard to COVID-19 (the coronavirus)
As a precautionary measure to reduce the risk of spreading COVID-19, the Company has decided to keep the AGM as short as possible. As a result, the CEO’s address will be skipped and the general question and answer period will be limited in duration. The CEO's address will be recorded and posted to the website after the AGM. The Company’s management, board of directors and other employees who are not shareholders will attend the AGM to a limited extent. In light of government guidelines, the Company wishes to encourage all shareholders to carefully consider exercising the aforementioned option to vote by proxy instead of attending the AGM in person. This applies in particular to those who feel sick, are in a risk group, have been in an area with active community transmission or have recently been in contact with someone infected with COVID-19. No refreshments will be offered at the AGM.

The Company is carefully monitoring developments around COVID-19 and will update the measures listed above if necessary. Information about any changes will be published on the Company's website. For up-to-date information and recommendations regarding COVID-19, please refer to the Public Health Agency of Sweden, www.folkhalsomyndigheten.se.

Proposed agenda

  1. Opening of the meeting and election of AGM chairman
  2. Preparation and approval of the voting register
  3. Election of one or more people to verify the minutes
  4. Check that the AGM has been duly convened
  5. Approval of agenda
  6. Presentation of the annual report and auditor's report and of the consolidated financial statements and the auditor's report on the consolidated financial statements
  7. Resolutions to:
    1. Adopt the income statement and balance sheet and the consolidated income statement and consolidated balance sheet
    2. Appropriate the Company's profit or loss as per the adopted consolidated balance sheet
    3. Discharge the board of directors and CEO from liability
  8. Setting of the number of directors, alternates and auditors
  9. Setting of directors’ fees and auditor’s fees
  10. Election of directors, alternates and auditors
  11. Resolution to authorize the board to issue shares, stock options and/or convertibles
  12. Resolution on directed share issue of a maximum of 587,500 stock options
  13. Closing of the meeting

Proposed resolutions

Item 1: Election of AGM chairman
The Nomination Committee proposes that Board Chairman Carl Borrebaeck be elected AGM chairman.

Item 7.b Resolution to appropriate the Company's profit or loss as per the adopted balance sheet
The board proposes that all earnings at the disposal of the AGM be carried forward.

Items 8–10: Setting of the number of directors, alternates och auditors; setting of directors’ fees and auditor’s fees; election of directors, alternates and auditors
The Nomination Committee’s proposals are as follows:

Item 8
The board shall consist of seven directors and no alternates. The number of auditors and the number of deputy auditors shall each be one.

Item 9
Directors’ fees shall be SEK 200,000 (SEK 100,000) for each director elected by the AGM who is not employed by the Company and SEK 400,000 (SEK 200,000) for the board chairman, for a total amount of SEK 1,600,000 (SEK 800,000). The amounts in parentheses are the fees for 2020.

Auditor’s fees shall be payable on the basis of approved invoices.

Item 10
Re-election of Carl Borrebaeck, Ian Kimber, Peter Nählstedt, Laura Chirica, Anki Malmborg Hager, Paula Zeilon and Paul Yianni as directors.

Re-election of Carl Borrebaeck as board chairman.

Information about the proposed directors can be found at www.senzagen.com.

Re-election of Authorized Public Accountant Mats-Åke Andersson as the Company’s auditor, with Authorized Public Accountant Martin Gustafsson as deputy auditor.

Item 11: Resolution to authorize the board to issue shares, stock options and/or convertibles
To enable the board to raise working capital for the Company, and/or bring in new owners of strategic significance to the Company, and/or acquire other companies or businesses, the board proposes that the AGM resolve to authorize the board, for the period until the next AGM, with the shareholders’ preemptive rights waived, on one or more occasions, to decide to issue new shares, stock options or convertibles. The total number of shares that may be issued or, if convertibles or stock options are issued, added following conversion or exercise of rights under the authorization shall be limited to 20 percent of the number of shares outstanding on the date of this notice. The board shall also be entitled to resolve on whether new shares are payable in the form of cash, non-cash, offsetting, or in another manner consistent with the provisions of Chapter 2 Section 5 Paragraph 2 items 1-3 and 5 of the Swedish Companies Act.

To prevent the Company’s current shareholders from being disadvantaged in relation to external investors who could subscribe for shares in the Company, the board plans, by virtue of this authorization, to set the issue price on market terms (meaning that an issue discount on market terms may be provided) for issues with the shareholders’ preemptive rights waived.

As a result, the maximum number of shares that may be issued is 5,339,409, and the Company’s share capital may be increased by a maximum of SEK 266,970.45.

The board, or those designated by the board, are proposed to be granted authorization to make adjustments as may be necessary in conjunction with registering the resolution with the Swedish Companies Registration Office (Bolagsverket).

Item 12: Resolution on directed share issue of a maximum of 587,500 stock options
The Company’s board proposes that an extraordinary general meeting resolve to issue a maximum of 587,500 stock options, as a result of which the Company’s share capital may increase by a maximum of SEK 29,375, with an exception for possible increases caused by recalculation in the event of share issues. The stock options will entitle the holder to subscribe for new shares in the Company.

The following rules shall apply to the directed share issue:

With the shareholders’ preemptive rights waived, employees of the Company and the Group shall be entitled to subscribe for the stock options as follows:

  • Members of Group Management and key personnel comprising up to nine positions will each be offered to subscribe for a maximum of 50,000 options, altogether comprising a maximum of 450,000 options.
  • Other employees and consultants considered key personnel in the Group, comprising up to eleven individuals, will each be offered to subscribe for a maximum of 12,500 options, altogether comprising a maximum of 137,500 stock options.

Oversubscription cannot take place.

The stock options must be subscribed for by 26 May 2021 on a separate subscription list. The board shall be entitled to extend the subscription period but no later than until 1 November 2021.

The subscriber is entitled to subscribe for stock options free of charge. The market value of the option shall be calculated using the Black-Scholes pricing model, adjusted for barrier conditions to calculate the Company’s social security expenses. The valuation of the options shall be performed by an independent valuation institute or auditing firm. A preliminary calculation based on an exercise price and barrier conditions at the time of exercising the stock options of SEK 15.94 per share results in an option value of SEK 1.97.

The stock options allotted will be offered for subscription free of charge. Such an offer to allot stock options must be provided within 10 banking days of the date a resolution to allot options has been passed.

Each stock option entitles the holder to subscribe for one new share in the Company in exchange for cash payment, provided that the barrier conditions have been met, during the period from 1 June 2024 to 30 September 2024 or the earlier date set out in the option rules. However, the stock options shall be exercisable at an earlier point in time in the event of a merger, compulsory redemption, liquidation, or similar circumstances.

Payment for shares subscribed for by exercising stock options shall be made in cash at an exercise price of 100% of the average of the listed volume-weighted price paid for each trading day as per Nasdaq First North Growth Market’s official price list for shares in the Company during the period from 21 April 2021 to 4 May 2021. The exercise price established in this manner shall be rounded to the nearest whole tenth in SEK öre, with SEK 5 öre rounded down.

The stock options are subject to barrier conditions and cannot be exercised to subscribe for shares until the barrier level has been reached. The barriers are calculated as 158% and 300% of the average of the listed volume-weighted price paid for each trading day as per the Nasdaq First North Growth Market’s official price list for shares in the Company during the period from 21 April 2021 to 4 May 2021. Stock options subject to barriers cannot be exercised until the volume-weighted price paid measured per trading day as per the Nasdaq First North Growth Market’s official price list for shares in the Company during the share subscription period is higher than the barrier level. The barriers shall be recalculated in the same way as for the redemption price in the option rules.

New shares subscribed for by exercising stock options entitle the holder to dividends for the first time on the dividend record date most immediately following the date the new share issue was registered with the Swedish Companies Registration Office and Euroclear Sweden AB.

The purpose of the share issue and the reason for waiving shareholders’ preemptive rights is to implement an option program suited for allotment to key personnel in the Company so that they can be offered the opportunity to participate in the growth in value of the Company’s stock. This is expected to lead to stronger interest in the Company’s growth – as well as the Company’s share price performance – and stimulate continued company loyalty over the coming years.

In conjunction with the transfer of the stock options to the participants in the program, the Company reserves the right to buy back all stock options if the participant’s employment is terminated or if the participant wishes to transfer the stock options to another party during the period until 31 May 2024.

The complete rules for the stock options will be kept available on the Company’s premises and on the Company’s website no later than two (2) weeks prior to the AGM. These rules include that the exercise price and the number of shares to which a stock option entitles the holder to subscribe for may be recalculated in certain cases.

It is proposed that the board or those designated by the board be authorized to make minor adjustments to this resolution as may be necessary in conjunction with registration with the Swedish Companies Registration Office and, if applicable, with Euroclear Sweden AB.

Deliberation on the board’s proposed 2021/2024 L series incentive program, the costs of the program, other outstanding stock-based incentive programs, dilution
The proposed agenda item 12 has been deliberated on by the board in consultation with external advisers.

Valuation
The stock options shall be subscribed free of charge, which means that social security expenses for the Group may be incurred in conjunction with subscriptions for stock options. According to a preliminary valuation based on a market value of the underlying stock of SEK 15.94 , the market value of the stock option is SEK 1.97 per option with a redemption price of 15.94 per share in the 2021/2024 L series program. The Black-Scholes pricing model has been used for this valuation on the assumption of a risk-free -0.238% interest rate and 41.7% volatility and taking into account that no dividend or other transfers of value to shareholders are expected to occur during the program’s term.

Expenses and impact on financial ratios

Given that the stock options are issued free of charge, the Company estimates that fringe benefits and social security expenses will be incurred for the participant and the Company as a result of the option program. The total expenses, including other expenses in the form of fees to external advisers and expenses for the administration of the program, are estimated at around SEK 100,000 over the program’s term and the cost of social security expenses is estimated at SEK 362,916.

The program is expected to have a marginal impact on the Company’s financial ratios.

Dilution
The total number of registered shares and votes at the time of this is proposal is 21,357,636. The maximum dilutive effect of the 2021/2024 L series incentive program is estimated to be a maximum of approximately 2.7% of the total number of shares and votes in the Company (calculated based on the number of existing shares in the Company and taking into account other outstanding stock options), provided that all offered stock options are subscribed for and exercised.

There are earlier programs in which share subscription will not take place until June 2021, November 2022 and November 2023, totaling a maximum of 525,000 options with an exercise price of SEK 69.87, SEK 19.84 and SEK 39.68, respectively. If all previously issued warrants and warrants issued in incentive program 2021/2024, series L are exercised, the dilution may amount to a maximum of approximately 4.90 percent of the total number of shares and votes in the Company (calculated on the basis of the number of existing shares in the Company and taking into account other outstanding warrants).

Other outstanding stock-based incentive programs
For disclosures on the Company’s other stock-based incentive programs, please see the Company’s 2020 annual report. Apart from the programs disclosed there, the Company does not have any other stock-based incentive programs.

Majority requirement
Shareholders representing at least two thirds of both the votes cast and the shares represented at the AGM must vote for the resolution under item 11 for it to be deemed duly passed.

Shareholders representing at least nine tenths of both the votes cast and the shares represented at the AGM must vote for the resolution under item 12 for it to be deemed duly passed.

General information

Number of shares and votes
The total number of shares in the Company at the date of this notice is 21,357,636 with the same number of votes. The Company does not hold any treasury shares.

Documents
Copies of the financial statements, auditor’s report and proxy form will be kept available at the Company’s premises at Medicon Village, Scheelevägen 2, Building 401, Lund, Sweden, and on the Company’s website, www.senzagen.com no later than three (3) weeks prior to the AGM. Complete proposals and other documentation that must be made available under the Swedish Companies Act will be kept available in the locations above no later than two (2) weeks prior to the AGM. All of the aforementioned documents will sent to those shareholders who so request and provide their email address or mailing address.

Shareholders are reminded of their right, at the AGM, to request disclosures from the board and CEO under Chapter 7 Section 32 of the Swedish Companies Act.

Personal data processing
For information on how your personal data is processed, please see the privacy policy available on the Company’s website: https://senzagen.com/wp-content/uploads/2018/05/Policy-for-processing-personal-data.pdf.

* * * * *
Lund, March 2021, 
the Board of Directors of SenzaGen AB

The English translation is for convenience only and in case of any discrepancy, the Swedish text shall control.

SenzaGen’s Annual Report 2020 published

SenzaGen has today published its Annual Report 2020. A digital copy can be downloaded at www.senzagen.com or read via the link below.

The printed version of the annual report will be available in April. To request a printed copy, please email name and address to IR@senzagen.com.

2020 in short
In 2020, SenzaGen’s efforts to create a commercial enterprise proved effective. Because of the organizational changes we made and the sales focus we established, we tripled our sales from the previous year.

Strong belief in the future
SenzaGen’s plans for 2021 are based on continuing to strengthen our market presence and develop our organization in line with our six strategic initiatives updated for the year. We will work toward our profitability target by approaching customers and industries that stand to benefit from the GARD® test’s high predictivity without requiring OECD validation and are interested in the additional skin toxicology services that we will be able to offer through our GLP-certified lab.

SenzaGen and RIFM expand collaboration on the safe use of fragrances with GARD™skin Dose-Response

SenzaGen and the Research Institute for Fragrance Materials (RIFM) have expanded their collaboration on the safe use of fragrance materials to evaluate the dosage at which a fragrance may induce an allergic response. Under the collaboration agreement, SenzaGen will receive an initial grant from RIFM of SEK 0.6 million to test several substances from RIFM with GARD™skin Dose-Response, a novel test for this application. The agreement runs through 2021.

RIFM is an international scientific non-profit organization based in the United States supporting the safe use of fragrance ingredients in consumer products. RIFM’s Fragrance Ingredient Safety Assessments provide the International Fragrance Association (IFRA) with the scientific basis for developing standards for the safe use of aromatic components by the perfume industry.

“We are very proud of RIFM’s continued trust in us and that our most recently launched test GARDskin Dose-Response may contribute to progress in terms of sustainability and ethics in the testing market. With its strong position and broad scientific expertise, RIFM helps promote new technology and knowledge in the cosmetics and consumer product industry. RIFM’s cooperation with us confirms GARD technology’s strength and that it meets critical needs in these and our other prioritized industries. Access to more detailed information on skin sensitizing substances is important for companies developing products,” says Axel Sjöblad, CEO of SenzaGen.

“We look forward to our continued collaboration with SenzaGen to evaluate GARDskin Dose-Response as we refine our understanding of several fragrance ingredients. Identifying the dosage at which a fragrance may induce sensitization is a need that fragrance industry stakeholders have expressed for a long time. This project demonstrates our commitment to non-animal testing methods and supports our mission to provide the fragrance industry with data that meets internationally-recognized scientific standards,” says Mihwa Na, PhD, Senior Scientist at RIFM.

Since 2020, SenzaGen and RIFM have been collaborating on the continued development of an application that can assess whether fragrance materials could induce skin allergies when exposed to sunlight (photosensitization).

For more information, please contact:
Axel Sjöblad, CEO, SenzaGen AB
Email: axel.sjoblad@senzagen.com | Mobile: +46 705 35 93 51

Mihwa Na, Senior Scientist, RIFM
Email: mna@rifm.org | Phone: +1.201.689.8089 ext. 108

About RIFM
Established in 1966, the Research Institute for Fragrance Materials (RIFM) generates, analyzes, evaluates, and distributes data to provide a scientific basis for the safe use of fragrances. RIFM has compiled the most comprehensive, worldwide source of toxicology data, literature, and general information on fragrance and flavor raw materials. RIFM’s fragrance ingredient safety assessment program draws from its comprehensive database of over 70,000 references and more than 135,000 human health and environmental studies.

RIFM assesses the safety of fragrance ingredients by the most current, internationally accepted guidelines—and has done so since its founding. The Expert Panel for Fragrance Safety, an independent, international team of researchers and academics with no ties to the fragrance industry, reviews all of RIFM’s work before RIFM submits it for peer-reviewed publication in a reputable scientific journal. RIFM makes all of its published, peer-reviewed work—current and historical—available for free at fragrancematerialsafetyresource.elsevier.com.

SenzaGen secures SEK 0.6 m order from a new European customer in the chemical industry

SenzaGen has received an order with a value of approximately SEK 0.6 million from a new global customer in the chemical industry. The order includes SenzaGen's tests to assess whether chemical substances in products can cause allergic reactions to skin (GARD™skin) or in the respiratory tract (GARD™air). The tests will be carried out in SenzaGen's GLP certified laboratory in Lund.

The customer has its headquarters in Europe and is a leading supplier of specialty chemicals and sustainable technologies. With the combination of GARD tests, the customer can identify substances with various allergy-causing effects during both product development and manufacturing for the first time, which contributes to cost savings for the company and safer products to society. At the same time, the customer minimizes the risk during chemical manufacturing by offering a safer work environment.

“The chemical industry has a great need for chemical sensitization testing and is one of our prioritized target markets. With this order we continue to deliver in line with our strategic initiatives. The fact that the customer tests difficult-to-test samples for both skin and respiratory allergies makes this an important reference order”, says Axel Sjöblad, CEO of SenzaGen.

SenzaGen’s test platform GARD targets companies looking to optimize their in vitro testing strategy; increasing the accuracy of their test results while avoiding animal testing. Through its high accuracy, GARD improves the quality of customers’ decision-making and contributes to increased product safety in people’s everyday lives while reducing the number of animal experiments. SenzaGen is the only company that can offer a non-animal, so called in vitro test, for chemical respiratory allergens.

SenzaGen 2020 Year-end report: Tripled sales for the full year

CEO comment
”Looking back on 2020, I am pleased to report that SenzaGen’s progress on commercialization has had a positive impact and we are in a much better position today than we were a year ago. Despite the challenges posed by the ongoing pandemic, we succeeded in establishing our GARD® technology with new, international customers and tripling our sales from the previous year. In 2021, we will continue working toward our profitability target by approaching customers and industries that stand to benefit from the GARD® test’s high predictivity and are interested in the additional skin toxicology services that we will be able to offer through our own now GLP-certified lab.”

Axel Sjöblad, CEO

Full year 1 January–31 December

  • Net sales totaled SEK 7,958 (2,724) thousand.
  • The operating loss was SEK -27,098 (-37,927) thousand.
  • Earnings per share were SEK -1.27 (-3.11).
  • Cash and cash equivalents at 31 December amounted to SEK 89,343 (120,467) thousand.
  • The board proposes that no dividend be paid to the Company’s shareholders.

Second half year 1 July–31 December

  • Net sales totaled SEK 4,128 (1,072) thousand.
  • The operating loss was SEK -14,169 (-22,730) thousand.
  • Earnings per share were SEK -0.67 (-2.10).

Significant events during the second half year

  • Pharmaceuticals company H. Lundbeck A/S ordered GARD®skin and GARD®air tests for SEK 0.4 million.
  • The global medical device company Sonova placed an SEK 0.6 m order after evaluation.
  • A major US chemicals company ordered GARD®skin and GARD®potency tests for SEK 0.4 million.
  • SenzaGen signed a distribution agreement with Danske Teknologisk Institut (DTI) in Denmark.
  • The ESAC’s scientific evaluation of GARD® was underway during the year. Their opinion was delayed until 2021 as a result of the COVID-19 pandemic.

Significant events after the end of the year

  • The Company’s global collaboration agreement with Charles River Laboratories was renewed and expanded.

Conference call
SenzaGen is pleased to invite press and investors to a conference call on Thursday February 18 at 9.30 CET where CEO Axel Sjöblad comments SenzaGen’s 2020 full year results. The conference call, which will be held in English, will begin with a presentation of the report followed by a Q&A session.

Phone number for the conference
To participate in the conference call, use the dial-in numbers below.

FR: +33170750721
DE: +4969222239167
SE: +46850558368
CH: +41225675632
NL: +31107129162
UK: +443333009267

Weblink
https://tv.streamfabriken.com/senzagen-q4-2020