Sareum Holdings plc (RYH0.F) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. Welcome to the Sareum Holdings [Technical Difficulty]. [Operator Instructions] I'd now like to hand over to Executive Chairman, Dr. Stephen Parker. Good morning.

Good morning, ladies and gentlemen. Welcome to the Annual General Meeting of Sareum Holdings plc. I'm Stephen Parker, Executive Chairman of the Board. A quorum being 2 members is present, and therefore, we may now proceed with the business of meeting. In common with recent annual general meetings, we have also opened a link through the Investor Meet company site in addition to the conventional meeting. I'm particularly grateful to those of you who have chosen to attend in-person. We will deal with the formal business of the meeting first, and there will be a presentation from Dr. John Reader, our Chief Scientific Officer, to provide an update on our research progress. We will then take questions from the floor in the usual matter of our Annual General Meeting. Following these questions, we will try to cover some or all of the questions posted via the IMC site in the time remaining for the meeting. As is our usual custom, answers to these questions posted on the IMC site will be published on the website following the meeting. We have a lot to get through today, and I'm grateful that you will follow the procedure and keep questions until the formal stages. I would now like to introduce the Board. All of whom will be happy to take questions from you on their areas of responsibility. So from my far left, Clive Birch, who Chairs the Audit and Risk Committee; John Reader, Chief Scientific Officer; Tim Mitchell, Chief Operating Officer; Michael Owen, who chairs the Remuneration Committee; and our Finance Manager, Chris Neal, who is on the side. I would now like to start the formal proceedings of this Annual General Meeting. The notice of Annual General Meeting was posted to shareholders on the 17th of November 2025. Accordingly, the requisite notice of the Annual General Meeting has been given. I propose, therefore, that with your consent, the notice of Annual General Meeting should be taken as read. Before proceeding with the formal business of this meeting, I will now read a statement, which was issued to the market this morning. The company has continued to advance its lead program, SDC-1801 following the successful completion of its Phase I clinical trial in 2024. Despite the temporary setback with the discontinuation of the toxicology study, the company has made significant operational progress, including the appointment of a leading global contract research organization and is now well positioned to restart these important studies to develop [indiscernible] SDC-1801, selective TYK2/JAK1 inhibitor remains positioned as a potential treatment for range of autoimmune diseases with an initial focus on psoriasis and autoimmune condition affecting the skin. As previously announced, SDC-1801 with a Phase I clinical development. A randomized placebo-controlled trial demonstrated that SDC-1801 achieved blood plasma levels significantly exceeding the predictive therapeutic exposure with a half-life of 17 to 20 hours, supporting once-daily dosing and with a smooth delivery of drug over the dosing period. Importantly, no deaths or serious adverse events due to SDC-1801 were reported and the frequency of adverse events or mild or moderate was similar in the active and placebo groups. Notably, SDC-1801 has not exhibited any of the potentially dose-limiting side effects that have been observed with leading dual TYK2/JAK1 inhibitors in clinical development, reinforcing the molecule's differentiated profile and best-in-class potential. Following successful completion of the clinical trial, 2 large-scale batches of SDC-1801 have been manufactured, one under GMP conditions for future planned clinical studies and a non-GMP batch for the Phase II enabling toxicology studies. Process chemistry improvements have enhanced the purity profile of SDC-1801 while maintaining good manufacturing yield. A program of work to optimize the capsule formulation of SDC-1801 is underway, aimed at enhancing drug release at higher doses and reducing the number of capsules required per dose in future clinical trials. Considerable progress has been made, and the company expects this project to conclude in Q1 2026. As announced on 10 of December -- sorry, the 10th of October 2025, the company discontinued its 16-week GLP preclinical toxicology study for SDC-1801 following unexpected safety findings observed by a third-party provider of the study. These findings occurred at a higher incidence in control group animals that received an inactive dosing solution compared to those dosed with SDC-1801. The company has now appointed a different lead global CRO with extensive experience in long-term toxicology studies to restart the Phase II enabling toxicology program. Prior to commencing the full 16-week toxicology study, the company will conduct a separate pharmacokinetic study to evaluate 4 different formulations, 3 liquid formulations for gavage dosing and 1 capsule formulation. This 5-day study will provide valuable data on both tolerability and exposure levels, helping to optimize the formulation selection for the full toxicology study. The carrier formulation is specific to the animal toxicology studies only and will not form part of any human dosing regimen. The PK study is expected to commence imminently with the full toxicology study expected to restart as early as possible in Q1 2026. Both studies will be completed using the company's existing cash resources and the existing toxicology batch of SDC-1801. SDC-1802. Translational studies of SDC-1802 have been completed, providing a solid data package to support potential further development. The strongest cancer response was seen in hematological cancers with significant unmet medical need, including T-ALL and B-cell lymphoma. The company is reviewing how best to progress SDC-1802 into clinical development and notes that partnering may be the preferred route at this stage. SRA-737 is a clinical stage oral selective inhibitor of checkpoint kinase 1, Chk1 that targets cancer cell replication and DNA damage repair mechanisms. In March 2025, the former U.S. license arrangement for SRA737 was terminated and the asset reverted to the CRT Pioneer fund. Sareum successfully acquired the license for SRA737 following its termination, renegotiating significantly improved economic terms. The company now receives 63.3% of all future revenues compared with 27.5% under the former agreement at no cost to the company. The company continues to explore partnering opportunities for SRA737, building on positive Phase I/II data that demonstrated good tolerability as monotherapy and promising activity in combination with low-dose gemcitabine in anogenital cancers, an area of significant unmet medical need. Furthermore, Sareum has maintained an investigational new drug application, IND with the United States Food and Drug Administration opened by the previous license holder to conduct a Phase I trial in patients with acute myeloid leukemia and myelodysplastic syndromes. The company retained sufficient stock of SRA-737 capsules to conduct such a trial. The company remains confident in the potential of SRA737 and is assessing the most effective routes to progress and create value from this asset. Sareum has initiated a collaboration with Receptor AI to accelerate discovery of blood-brain barrier, BBB penetrant isoform selective TYK2/JAK1 inhibitors for potential use in neuroinflammatory indications such as multiple sclerosis and Parkinson's disease. This program builds on earlier preclinical work from the company's SKIL platform, which demonstrated blood-brain barrier permeability of selective TYK2/JAK1 molecules. The collaboration extends the relevance of Sareum's TYK2/JAK1 expertise into central nervous system diseases, areas of increasing scientific and commercial interest. A first batch of compounds have been designed and synthesized and are currently undergoing testing in biochemical assays to assess their potency against the JAK kinases and in early-stage absorption, distribution, metabolism and excretion assays to assess their potential to cross the blood-brain barrier and give sufficient exposure to the target site. As part of a broader value realization strategy, Sareum has engaged specialist U.S.-based business development consultants to actively broaden and accelerate ongoing partnering discussions for SDC-1801 and SRA-737. The Board continues to prioritize non-dilutive funding routes to advance the pipeline and protect shareholder value with current core activities funded from existing cash resources. Sareum continues to review the optimum level of staffing for the company, including Chief Medical Officer and Chief Executive Officer roles. Sareum has made substantial progress across its pipeline during 2025. The positive Phase I data for SDC-1801, together with the competitive profile versus other TYK2/JAK1 inhibitors in development continues to support SDC-1801's potential as a best-in-class once-daily oral therapy for autoimmune diseases. Despite the frustrating delay to the toxicology study, the company's confidence in the molecule remains strong and the coupled study is now on track to restart in Q1 2026. The significantly improved economic terms for SRA737, coupled with active partnering discussions for this asset and SDC-1802 position the company to create value across its portfolio. The new TYK2 neuroscience collaboration adds further long-term potential. The company has engaged specialist business development consultants to support partnering efforts across key programs. With strengthened intellectual property, a clear operational road map, active business development initiatives and sufficient financial resources, the company enters the new period with confidence and a clear set of value-creating milestones ahead. We would like to thank our shareholders and other stakeholders for their continued support. Before we turn to the resolutions, I would like to say a few words about the procedure and remind you that only physical attendees or shareholders are able to vote today. I will propose each resolution in turn, having briefly summarized its content. I will then read the results of the votes received through the proxies. The directors will not answer questions relating to the individual rights of shareholders. Any shareholder who wishes to raise such a question should communicate with me or Mr. Birch by e-mail following the meeting. I shall move on to the formal business of the meeting and will now recite the resolutions. The full text of each of the resolutions is set out in the notice of Annual General Meeting, a copy of which was posted to shareholders or their nominee holders and is on the company's website. Resolutions 1 to 6 are proposed as ordinary resolutions, each requiring a simple majority of the votes cast to be in favor in order to be passed. Resolutions 7 and 8 were proposed as special resolutions, requiring a majority of 70% of the votes cast to be in favor in order to be passed. Each resolution received a total of between -- sorry, 11,838,576, which represents 8.6% and 11,456,534, which represents 8.3% of the votes of the total votes outstanding. Resolution 1. I propose Resolution 1 in the notice of Annual General Meeting as an ordinary resolution to receive the company's annual report and audited financial statements for the financial year ended 30th of June 2025, together with the directors' report and the auditor's report contained in the annual report. Proxy votes have been received as follows: in favor, 11,039,696; against 283,614; withheld, 472,289. I will now put the resolution to the meeting on a show of hands. For those in favor, please raise your hands. [Voting] Thank you. Those against, please raise your hands. [Voting] Thank you. That resolution is carried with the necessary majority. Resolution 2. I propose Resolution 2 in the notice of Annual General Meeting as an ordinary resolution to receive and adopt the directors' remuneration report for the year ended 30th of June 2025. Proxy votes have been received as follows: in favor, 10,021,984; against 1,544,196; withheld 229,419. I will now put the resolution to the meeting on a show of hands. Will all those in favor, please raise your hands. [Voting] Thank you. Those against, please raise your hands. [Voting] Thank you. It's carried by the necessary majority. Resolution 3 in the notice of Annual General Meeting is the reelection of Dr. John Reader, who retires by rotation under Section 93 of the Articles of Association and who, being eligible, offers himself for reelection as a director. Proxy votes have been received as follows: in favor, 10,329,982; against 1,000,383; withheld, 465,234. I will now put the resolution to the meeting on the show of hands. Will those in favor, please raise your hands. [Voting] Thank you. Will those against, please raise your hands. [Voting] Thank you. I declare the resolution carried by the necessary majority. Resolution 4 in the Notice of Annual General Meeting is to reappoint Moore Kinston Smith LLP as auditor of the company and to hold office from the conclusion of this Annual General Meeting until the conclusion of the next general meeting at which financial statements are laid before the company. Proxy votes have been received as follows: in favor, 11,342,993; against 325,897; withheld 126,709. I will now put the resolution to the meeting on a show of hands. Will those in favor, please raise your hands. [Voting] Thank you. Will those against, please raise your hands. [Voting] Thank you. I declare the meeting -- this resolution carried with the necessary majority. Resolution 5 in the notice of Annual General Meeting is to authorize the Audit Committee to determine the remuneration of the auditors of the company for the ensuing year. Proxy votes have been received as follows: in favor, 10,727,596; against 977,756; withheld 89,977. I will now put the resolution to the meeting on a show of hands. Will all those in favor, please raise your hands. [Voting] Thank you. Those against, please raise your hands. [Voting] Thank you. I declare this resolution carried by the necessary majority. Resolution 6. I propose Resolution 6, the notice of Annual General Meeting as an ordinary resolution to generally and unconditionally authorize the directors pursuant to and in accordance with Section 551 of the Companies Act 2006 to exercise all the powers of the company to allot shares or grant rights to subscribe for or to convert any security into shares of the company. A, up to an aggregate nominal amount of GBP 1,725,815; and b, comprising equity securities as defined in Section 561.1 of 2006 Act, up to a further aggregate nominal amount of GBP 1,725,815 in connection with an offer by way of a rights issue. Such authority is to apply in substitution for all previous authorities pursuant to Section 551 of the 2006 Act and to expire at the end of the next Annual General Meeting or if earlier, at the close of business 15 months after the passing of this resolution, but in each case, so that the company may make offers and enter into agreements during the relevant period, which would or might require shares to be allotted or rights to subscribe for or to convert any security into shares to be granted after the authority ends. For the purposes of this resolution, rights issue means an offer to ordinary shareholders in proportion, as nearly as may be practical, to their existing holdings and be holders of other equity securities if this is required by the rights of those securities or if the directors consider it necessary as permitted by the rights of the securities to subscribe for further securities by means of a renounceable letter or other negotiable document, which may be traded for a period before payment for the securities is due, but subject in both cases to exclusions or other arrangements as the directors may necessary or expedient in relation to treasury shares, fractional entitlements, record dates or legal, regulatory or practical problems in or under the laws of any territory. Proxy votes have been received as follows: in favor, 10,291,958; against 1,333,162; withheld 170,479. I now put the resolution to the meeting on a show of hands. Will all those in favor, please raise their hands. [Voting] Thank you. With all those against, please raise your hands. [Voting] Thank you. I declare the resolution carried by the necessary majority. Resolution 7. Given the passing of Resolution 6, I propose Resolution 7 in the notice of Annual General Meeting as a special resolution in substitution for any existing authority, but without prejudice to the exercise of any such authority prior to the date of passing this resolution, the Board of Directors be and they are generally empowered pursuant to Sections 570 and 573 of the 2006 Act to allot equity securities within the meaning of Section 560 of the Act. including the grant of rights to subscribe for or to convert any securities into ordinary shares of GBP 0.0125 each in the capital of the company for cash either pursuant to the authority conferred on it by Resolution 7 or by way of a sale of treasury shares within the meaning of Section 560.3 of the Act as if Section 561 of the Act did not apply to any such allotment or sale provided that this power should be limited to: (a), the allotment of equity securities or sale of treasury shares for cash in connection with the rights issue, open offer or other preemptive offer in favor of the holders of ordinary shares on the register of members on a date fixed by the Board where the equity securities respectively attributable to the interest of such holders of ordinary shares are proportionate as nearly as may be practical, to the respective numbers of ordinary shares held by them on that date, subject to such exclusions or other arrangements in connection with the rights issue, open offer or other preemptive offer as the Board deems necessary or expedient to deal with shares held in treasury, fractional entitlements to equity securities and to deal with any legal or practical problems or issues arising in any overseas territory or under the requirements of any regulatory body or stock exchange or to deal with any other matter whatsoever; and (b), the allotment of equity securities or sale of treasury shares otherwise pursuant to subparagraph (a) of this resolution up to an aggregate nominal amount of GBP 1,725,815 and provided that this power shall expire at the conclusion of the Annual General Meeting of the company to be held on or before the 13th of March 2027, say that the company may, before such expiry, make an offer to enter into an agreement which would or might require equity securities to be allotted or treasury shares to be sold after such expiry and the Board may allot equity securities and sell treasury shares in pursuance of such an offer or agreement as if the authority conferred hereby had not expired. Proxy votes have been received as follows: in favor, 10,165,335; against 1,312,944; withheld 317,330. I now put the resolution to the meeting on a show of hands. All those in favor, please raise your hands. [Voting] Thank you. All those against, please raise your hands. [Voting] Thank you. I now declare that the resolution carried by the appropriate majority.

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Okay. My apologies. You'll be pleased to know we're at the end of the road. I propose Resolution 8 in the Notice of Annual General Meeting as a special resolution that a general meeting other than an Annual General Meeting may be called on not less than 14 clear days notice. Proxy votes have been received as follows: in favor, 10,941,745; against 391,565; withheld 462,289. I now put the resolution to the meeting on a show of hands. All those in favor, please raise your hands. [Voting] Thank you. All those against, please raise your hands. [Voting] Thank you. I declare the resolution carried by the necessary majority. Ladies and gentlemen, that concludes all of today's formal business. On behalf of the Board, I'd like to thank you all for your attendance, and I declare the formal business of the Annual General Meeting is closed. In closing, may I thank you for all your ongoing support during this year, which has continued to present challenges to the sector generally despite your company's significant achievement of completing the Phase I study for SDC-1801. I will now ask Dr. John Reader to present an update on the SDC-1801 and CNS projects as well as other projects in the portfolio. Following that, we'll be happy to try and answer questions from attendees and if time permits from the IMC platform.

Okay. Thank you, Stephen. I'd be happy to give you an overview of the pipeline as it currently stands. As the usual disclaimer slide, please familiarize yourselves with this. This will be online after the meeting. I'm not proposing to read through all of this. Okay. So company overview. Sareum is a clinical stage drug development company. We deal with small molecule drugs. We're developing next-generation kinase inhibitors for autoimmune diseases and cancer. The strategy is to take programs for the late preclinical or early clinical stages and then look to license or partner. We have deep expertise in kinase inhibition, including the JAK signaling family, which is an area of growing commercial focus with good scientific validation. Our lead program is a dual TYK2/JAK1 inhibitor for autoimmune diseases and has successfully completed a Phase I clinical trial. And as mentioned, we recently regained control of the oncology asset, SRA737 with improved economic interest. And we're based in Cambridge in the U.K. Here's an overview of our pipeline then in a picture. So you'll see that SDC-1801, the dual TYK2/JAK1 inhibitor has completed a Phase I in healthy volunteers. Behind that, we have 1802 and the recently announced neuroscience project. And then in the field of JAK1, former license holders, Sierra Oncology completed 2 Phase I/II trials, one as a monotherapy and one in combination with low-dose gemcitabine, chemotherapeutic. And then there is a lot of preclinical work that has been done around this molecule and other checkpoint inhibitors to find other potential combinations, which would have utility in the clinic. To give you a summary of the SDC-1801 program then, we believe it's well positioned for further development as potentially a best-in-class TYK2/JAK1 inhibitor in multiple high-value indications. There's a validated mechanism of action and a strong rationale. So dual inhibition of TYK2 and JAK1 can deliver superior efficacy across a large number of autoimmune diseases. We think it's better than single inhibition of each target, but avoids the liabilities tied to JAK2 and JAK3 inhibition. The high selectivity for TYK2 and JAK1 supports a stronger safety profile and positions the molecule to be potentially best-in-class. I'll show you some data, but we've seen a very favorable pharmacokinetic profile for JAK inhibition, driven by the extended human half-life of the drug. 1801 showed no effect on neutrophils or reticulocytes at doses equivalent to 100 mg of brepocitinib. Brepocitinib is the leading asset in the clinic, a molecule developed by Pfizer, and I'll show you some data comparing 1801 to brepocitinib, we believe, very favorably. Brepocitinib shows some side effects, which we avoid principally the COX2-mediated kidney liability and the effect on neutrophils and reticulocytes -- these are components of blood. Our molecule has a greater human half-life, so about 17 to 20 hours versus brepocitinib 6 to 8 hours. We believe that dual TYK2/JAK1 inhibition has the potential to target multiple autoimmune disorders. So there's a broad therapeutic reach within a single molecule and strong evidence to support efficacy in diseases such as psoriasis, lupus, inflammatory bowel disease, rheumatoid arthritis, other autoimmune diseases. Our Phase I data was very favorable. We have a great safety profile, excellent pharmacokinetic characteristics, and we believe they provide meaningful advantages over competing agents. And currently, we're aiming to get SDC-1801 ready for Phase II by the end of Q2 2026. Why do we believe dual inhibition is better than single inhibition? Well, I'm not going to go through this slide in great detail, but what it's showing is for a number of diseases, autoimmune diseases, the key pathogenic cytokines. These are signaling molecules that drive the development and the duration of the disease. And what we're showing on this slide is that inhibiting TYK2 and JAK1 really gives you much broader coverage than the single agents. The main difference, I would say, between our molecule and a selective TYK2 inhibitor is the effect on interferon gamma. And you'll see interferon gamma is in a key pathogenic cytokine for all of these molecules. The selective TYK2 agents do not touch that cytokine. Dual inhibition of TYK2 and JAK1 does. And I would say that's the single most important thing. I'd be happy afterwards to go through this slide in more detail with anyone who's interested. What I'm showing you here is some data from the MAD phase of our Phase I clinical trial. So this is multiple ascending dose, 10 days dosing of SDC-1801 in healthy volunteers. And I'm showing you the levels of drug in the blood of the volunteers. And again, so we're looking at 4 cohorts here. I'll just draw your attention to the top 2 cohorts really, cohort C and D, and we're comparing the levels in the blood to the IC50 or the EC50. This is 50% inhibition of these target cytokines. And you can see that Cohort D, we exceed the human whole blood interferon alpha and IL-12 IC50s throughout the entire dosing period. Cohort C, we're very nearly there, exceeding interferon alpha throughout the period and IL-12 for a significant period of time. Our plasma exposure is equivalent to brepocitinib at 100 mg, okay? Brepocitinib cannot be used in the clinic at 100 mg. There's too many toxic side effects. We saw no hematology or serum creatinine changes with our molecule during 10 days dosing. Brepo at 100 mg causes increased serum creatine -- serum creatinine, sorry, and reductions in reticulocytes and neutrophils after 10 days dosing in the MAD study. This is showing Cohort D in more detail. Now it may not be obvious, but what we're seeing here is we're doing twice daily dosing for Cohort D, okay? And this was to do with maximizing the levels of compound that we got. So we couldn't achieve those high levels with a single dose, even though the half-life is set up ideally for single dose. And this is really why we're working to improve the formulation of the molecule so that we can give a higher dose of SDC-1801 with a smaller number of capsules. But what we're seeing is in the table below, cohort D, we're greater than the IC50s. We're greater than the IC80s. So 80% knockdown of these cytokines for the entire period of time that we're dosing. In contrast, brepocitinib at 30 mg -- so that's the dose that brepocitinib is typically used in the clinic. They have gone as high as 45 mg. They can't use 100 mg, okay? You'll see at 30 mg, they're getting 5 and 8 hours excess of the EC80, 14 and 12 hours in excess of EC50. So we believe 1801 has potential for best-in-class efficacy. What we're looking at here is the number of agents on the market or close to the market for psoriasis. And talking about this PASI 90. So that's a psoriasis area and severity index. It's the score that dermatologists use to say how severe psoriasis symptoms are to the patient. PASI 90 has become the gold standard for psoriasis patients, and that's really been driven by advances in the biologics and antibodies such as Skyrizi, an inhibitor of IL-23. And then recently announced oral IL-23 inhibitors such as icotrokinr achieved significant PASI 90s after 4 to 16 to 24 weeks. Now brepocitinib was taken into a short 4-week study at 100 mg, and they achieved PASI 90 after 4 weeks. That is much better than any of these other agents. Now just a reminder, brepocitinib cannot be used at 100 mg in the clinic fit. Side effects are too great. But we believe we can -- without Cohort D, we can achieve a similar exposure to brepocitinib without the side effects. So we would expect that we can achieve similar PASI scores to brepocitinib. What we're doing at the moment then is preparing for Phase II readiness. We've resynthesized the drug substance. That's the molecule, the powder that goes into the capsules. That's complete 2 batches for tox and for a future clinical study. We've improved process chemistry around that. We're working on improving formulation. We're expecting to complete that next quarter with the objective of improving absorption, particularly for higher dosage capsules. And then we'll prepare the capsule sizes consistent with the predicted Phase II doses. And then 16-week toxicology, which will restart early in the new year, and we're expecting to complete by the end of Q2. Let's just talk a little bit about what happened in the toxicology studies as far as I'm able. So 1801 has been very well tolerated in our previous preclinical and short-term toxicology studies. The data from those and the human data from a clinical trial supports a longer duration, high exposure studies to really define the safety margin. Because we're trying to get a higher exposure of the drug in the preclinical species than we do in humans, we use specialist formulations, usually unsuitable for human use, frequently used in the industry to enable the sustained high exposure that you want to get in the toxicology study. So we used formulation A in our previous -- all of our previous tox studies, but including the 4-week study, and there were no adverse effects reported. Unfortunately, in the recent 16-week study, we used the same formulation and at around the 4-week time period, we had to discontinue the study on animal welfare ground. The effects were observed with greater frequency in the control groups receiving formulation only. So we are very, very confident that these effects are not due to SDC-1801, they're vehicle related. So as Stephen mentioned in the report that came out this morning, we have a 5-day PK study, which starts today actually, which will look at 4 additional formulations. The 3 of them have a track record of use in long-duration studies. The fourth is a capsule formulation, which we have developed ourselves. And the objective is to evaluate the tolerability of these formulations to look at the exposure and obviously, to select the best one to take forward into the 16-week studies. That study has been commissioned at an alternative CRO and will commence as soon as possible in Q1 after we have the data from the PK study. Just briefly on 1802, the translational studies are finished. The chemistry is closely related to 1801. So we'll be able to use our learnings from the development of 1801 to transfer on to 1802. We have a strong patent position covering several disease targets, both in oncology and autoimmune disease. Again, 1802 is a dual TYK2/JAK1 inhibitor. It's well validated in hematological cancers, such as T-ALL, B-cell lymphomas, and we're reviewing our options for further development of 1802 to get it into the clinic. Partnering is likely to be preferred. Just talk about the new CNS project. So there's been a lot of evidence recently in the literature concerning TYK2 inhibition in neuroinflammatory diseases and linking the 2 closely together in diseases such as multiple sclerosis, Parkinson's and Alzheimer's disease, all areas of high unmet medical need. TYK2 has been demonstrated to be a key neuroimmune modulator in most settings. So we have a collection of TYK2/JAK1 inhibitors, and we thought we ought to look at the potential for brain penetrant amongst those molecules. We selected 6 compounds and got them screened, and we were able to demonstrate that 3 of them showed meaningful blood-brain barrier penetration and one in particular had high levels of free drug in the brain. And importantly, it's not on this slide, but we were able to use an in vitro assay that would give us a really high level of confidence that correlated very nicely with blood-brain barrier penetration. So we can use that going forward. The big market opportunities in neuroinflammation, millions of people affected with limited treatment options. So we partnered with Receptor AI, announced this collaboration in August '25, an initial 4-month partnership to optimize brain penetrant TYK2/JAK1 inhibitors. We own 100% of the IP. Receptor AI do their virtual screening and PK predictive models. We've done the compound synthesis and testing and we'll take any molecules that show merit into disease models downstream. So progress to date, Receptor AI developed their model of blood-brain barrier permeation. They've done docking. So this is modeling how our molecules sit in the active site of TYK2 and the other JAKs to look at selectivity. Our first RAMBA compound design and synthesis is complete. We've got our in vitro ADMET profiling back and actually biochemical screening data came back last night. So I've had a good look through that. Very briefly, so we've got molecules that pass our in vitro assessment for blood-brain barrier penetration, and we've got some really very potent molecules inhibiting TYK2 from that. Now we almost certainly don't have a clinical candidate, right? There's more work to do, but I think it represents a very good starting point for that. And the objective of that collaboration was to really get us started down this route to some developed candidate for taking into CNS disease models. And then just finally, I'll talk about SRA-737. It's a small molecule checkpoint kinase inhibitor, completed Phase I/II trials. History was originally developed by us from Sierra UK. It's completed 2 Phase I/II trials as monotherapy and in combination with gemcitabine sponsored by Sierra Oncology. When Sierra was acquired by GSK, they handed back the assets other than momelotinib. SRA-737 was relicensed for about a year to a U.S. biotech. They returned it in December '24, and we took the program over in March '25 with improved economics. And so we're currently evaluating the potential licensing and development opportunities for 737. Just going to show you this data. I think this is quite old data from the clinical trial. But I think it really shows why 737 is potentially best-in-class Chk1 inhibitor. And what we're looking at, if you look at the monotherapy data, you'll see low-grade mainly side effects on the gastrointestinal tract, so nausea, vomiting, diarrhea, fatigue, very little effect on hematology. Some anemia was seen, but very low anemia of high grade. No neutropenia that's effect on neutrophils, no thrombocytopenia, that's effect on platelets. If you look at the Phase I or clinical data for other Chk1 inhibitors, you very often see hematological toxicities. And we believe that is because they are not selective enough, particularly against Chk2. So inhibiting Chk2, which as the name suggests is closely related structurally, that brings in hematological toxicities, which we don't see with SRA-737. And that means that you can combine it with chemotherapeutics. And you'll see in this one, even with low-dose gemcitabine, you do start to bring in hematological toxicities, as you'd expect from a chemotherapy. But because of the, I suppose, benign nature of SRA737, you're able to combine with these chemotherapies and still have very low incidence of high-grade hematological toxicities. So we think that is a real distinguishing feature of 737. Just this is against some old data from the clinical trial that Sierra sponsored, showing the meaningful tumor response amongst some patients when combined with low-dose gemcitabine. And this is really significant, obviously, to the patients who received this, but in taking this program forward that we've shown meaningful tumor responses amongst patients. I'm not going to go into this slide in any great detail, but the company who had the asset for a year did quite a lot of work, and they really validated the potential of SRA-737 in acute myeloid leukemia and myelodysplastic syndromes, AML and MDS. So these are blood cancers. And they were able to open an IND, so the right the ability to start a clinical trial in the U.S. in AML and MDS patients with SRA737. We've taken that on board now. And I'd just draw your attention to the third bullet point. I'm not going to get into this in any great detail, but these mutations to SRSF2 and U2AF1, these are splicing factors. They're essentially actionable predictive biomarkers. So you can screen patients for these mutations in advance, give them SRA-737 with a high expectation that they could respond to 737. And these are really the first predictive biomarkers for Chk1 inhibition that have emerged in the literature recently. So we're getting excited about AML. So with this open IND with the U.S. FDA to conduct a Phase I clinical study in combination with the standard of care. The previous license holder demonstrated profound synergy in preclinical studies between the standard of care and SRA-737, concentrations which are readily achievable in the clinic. A potential subgroup of patients who can be selected in advance with a high expectation of sensitivity to the agents. We've got enough capsules to conduct this planned study, and there's also a lot of the active pharmaceutical ingredient that again, the powder. We've got lots of that in store and advanced intermediates to generate more of that molecule. So we think it's a really great package of IP data assets, physical assets that a license partner could get into the clinic extremely rapidly. So this is the final slide, just to summarize SRA737 has demonstrated promising clinical activity. It's very well tolerated as a single agent, which means it can be combined with chemotherapy. Strong clinical validation for this class of molecules, the DNA damage response class. The molecule has excellent drug-like properties, low drug-drug interaction potential, a strong preclinical data set and this open IND to conduct a study in AML/MDS patients. There's also a lot of other preclinical data to support potential use and clinical data, I should say, in anogenital cancer combined with low-dose gemcitabine or in other tumors when combined with immuno-oncology agents such as anti-PD-L1 or other inhibitors of the DDR pathways such as PARP inhibitors. Okay. That's the final slide. We can move on.

So let's throw it open to the floor. Would anyone like to kick off and ask a question?

Calculation show that at the start of each year fixed cost just over GBP 900,000 and you said from the personnel cost of last year GBP [Technical Difficulty] I come up with a figure of GBP 900,000 a year [Technical Difficulty]?

It's probably not far off. I guess if you want an accurate answer, we can double check it and post it as an answer to an IMC question. But I'm just trying to think...

This is even before our new CMO or CEO or even to [Technical Difficulty] interest eligible for funding...

The company, yes, the company is. The company is eligible.

Yes.

So that is eligible?

So I mean, the company in general is I don't know whether cost gets split out. I'm pretty sure they don't. No. I mean it's the company generally rather than what we're trying to do with it.

I mean that just kind of preface my comments and I'm a very active member of John Reader expanded curve [indiscernible] that he must be terribly overstretched. 10 or 15 years ago, the whole intensity of SRA [Technical Difficulty] seems to be much less and there were 2 people involved. am I right to that John is terribly stretched Mr. Chairman. I could come on that in the risks that you outlined in the annual report, there was no mention what I see the key man risk of John. What happens if he has with [indiscernible] London. And that's why I was encouraged by your comment CMO, my previous comment, the GBP 900,000 give or take -- I mean am I right?

So we have -- I mean, we have insurance. So if I were to have an argument with a bus, the financial compensation. I think I work with consultants. So particularly with toxicology and for the chemistry, there are consultants who are very involved in the project, have all of the records that I have, we'll be able to pick up if I was to have this accident with the bus. And I think the other thing is just to say that everything is now -- the data is stored. The data is available, it could be picked up by somebody. So I think we have good contingency plans should the worst happen.

I mean I have to say from my perspective, CEO at this stage seems an unnecessary -- CMO seems to be something very worthwhile.

Yes. Well, and that is exactly where the priorities are.

We are pleased...

Sorry, sir, if I may just ask you to repeat questions because we can't hear the attendees in the room just moving forward.

We'll carry on finish this one. I mean yes, CMO is the higher priority of the 2 roles, absolutely. And broadly speaking, in terms of the skill set that will be brought, John, of course, is absolutely fantastic on discovery and has got us to where we currently are. Development as going forward and indeed planning for development is an entirely different set of skills. And whilst John has done a fantastic job thus far, probably if you're looking to plan an efficacy study, then you want somebody who's actually been there and done it directly.

You're quite right about the CMO. CMOs very expensive. I mean a full-time CMO. However, there are a lot of CMO consultants around out of industry one can utilize their services at a level that the company can afford. And the very best ones can make a huge difference in value in the sense of being able to -- if you do a Phase II clinical part. I'm [Technical Difficulty] not the disease, the type of disease, the patient population, the source of measure except one does and the intrinsic knowledge of where the patients are because the Phase II trial in multiple centers, networks with the clinical PIs, absolutely essential. One can use consultancy, one can regulate. So I do not think unless the world changes in terms of investment, we will be getting full-time FTE even to say few days because they are super expensive. But there's a lot of top-notch consent. And so I absolutely take your point we need to add -- we need to deep [Technical Difficulty] we need to expertise. And we need to be able to back [indiscernible].

First of all, I was glad to see votes against, John.

The company's policy going forward is obviously nondilutive what we've heard so far appear to be starting -- so what is the actual timeframe here because obviously, the toxicity [indiscernible] that I'm assuming that the cash funds will be running out and that's in 6 months' time according to that. So are there any proposals agenda that you [indiscernible] floor way forward as far as funds?

Yes. This is a question regarding future funding for the company. And the answer -- obviously, these are forward-looking statements, of course. But the answer is this is exactly why we have such a high priority for getting 737 and ideally 1802 partnered because those are each of them potentially sources of nondilutive funding coming into the company. And obviously, all things have to come together. But in terms of our priorities, we're very, very firmly fixed on getting those over the line.

Can I make just a brief observation first and then -- I'm a very [indiscernible] shareholder. To me, we've had of promises and pipe with almost 0 meaningful income and no tangible value created despite the mantra to maximize shareholder value. So rather we [Technical Difficulty] creation experience with [indiscernible] salaries over many years in a period of a steadily declare [Technical Difficulty] absence of meaningful share purchases to stabilize [Technical Difficulty] demonstrates a lack of confidence of their confidence in the company. And just to me questions investors should continue to a business which is to -- turn scientific promise, no doubt that into measurable financial progress. Certainly with regard to the share purchases, I do appreciate that obviously there are periods regulatory circuit. But given the share price has been so low -- also the majority of your holdings are in share options, which will be granted over many years. And as I understand it, those share options are all out of the money. But the last share options were issued at a price of 30, I think I might be saying in December of last year. But the share price sits under half that. So does that encourage you to want to invest and show confidence at least in the company.

Well, you've raised a whole host of issues, many of which are unfortunately a lot to do with the sector, not necessarily just the company. But I would gently point out to you that I have repeatedly bought shares in this company. So frankly, I'm not impressed by the criticism. I have got -- and moving on from that, there isn't -- as you rightly say, there isn't always an opportunity to buy shares. There is a very fine line, and we have advisers in the room who will be very quick to tell me that there is a very fine line between investing in the company and seeking to manipulate the share price, which is not something, of course, which we can do or will do. So we are -- we believe we are working extremely hard for all shareholders, not least ourselves. But as you rightly say, we also being shareholders, are not wildly excited about where the share price is at the moment. So we're moving things forward. And we are very committed or might argue overly committed in terms of share portfolio to this company and to holding shares in it. And speaking personally, all I can say is that the quality of my old age will be materially affected by the exits that Sareum achieves. So we are entirely incentivized to make that as positive as possible.

[indiscernible].

Some of them are, but I have gone into the market repeatedly and hold shares.

I have a similar amount of shares [indiscernible] I similar amount of shares to be [indiscernible] don't see to push the share price in the other direction?

Well, as I say, you must be very, very careful in the way that you describe that because we are not able that we would be fitted for a very nice arrow suit if we start manipulating the share price through share purchase or otherwise. And before anybody on the Board can buy a single share, it has to be cleared through all the advisers. So this is not a sort of -- this is not a trivial matter. We -- and when I have been able to, I have bought shares. We can't just go sort of dancing into the market. We're not employed as fund managers. The value in this company will come from getting the fundamentals of the drugs right and move them forward so that, that value is recognized in the external market and hence, I hope, in the share price.

[indiscernible].

That happens after the year has ended, which hasn't ended yet.

You mentioned the remuneration of directors. So this really -- Clive and I are the 2 members of the Remuneration Committee. We look every year at the benchmarking data for young companies of an appropriate size and at similar size. The 2 nonexecutive directors remuneration is well within the first quartile so the nonexecs I myself and Clive would certainly not be higher than this if we pay nonexecs in companies of an appropriate or the substitute. The 2 executives are paid around about the median, but actually a little longer left the median. So again, they're not -- in terms of base salary, they're not in the upper quartiles. So we deliberately look from a shareholder perspective i.e. normally and we try to give remuneration down. Now to the previous question, we could say fine, okay, we'll take them. like that, you lose job maybe. And we just -- we said how important John is for the company. So we try to strike a balance between retention, which is important and keeping the salary cost down. That's base salary. In terms of bonuses, we are -- to be honest, we did -- Clive and I get continual pushback, I guess, in terms of how stingy we are in recommending bonuses. So we do not pay every year large bonuses. And if you look at the bonus levels again by the benchmarking data for young companies, the bonuses that we pay are actually not higher in comparison. We chose to pay a bonus for 2024 because, in fact, the ethic required to run a clinical trial, a Phase I trial successfully on time, within budget in Australia, which was the major value driver at the time in our view for the company. You're right, [indiscernible] hasn't given it that much, but [indiscernible] would have failed in the trial, it would have been much less. We felt that, that merited a bonus and the bonus given for 2024 was if memory serves 25% of the base salary. That is a low bonus for this industry. Whether we pay a bonus for 2025, we will look at the same criteria, it will have to be something truly exceptional for an executive to get a bonus because that's how we look at it. So you raised an important point. We do need to keep salary costs down. The remuneration committee tries hard as possible. And I do not think that if you look at other companies, you would say that we're paying ourselves where -- I don't know whether that helps or whether you -- well, you mentioned the remuneration of the directors.

I don't think that was the question.

No. But I think the question was more the lack of buying shares on the open market. So after the Riverfort -- came to ask to invest if we did put our money into business. I think what we're asking here is for you guys to pass through the same if you're currently able to.

Well, just to point out, so did we. So did we at that stage? You could argue that since October 10, your lack of action has [indiscernible] share price unfortunately in the wrong direction.

Matt, do you go first?

Yes, just to give some context. I think -- which is on NASDAQ, which has [indiscernible] more advanced and they've got a program...

But I think just to give context, the directors have bought in substantially over the last few months. I think the point remains that if you have commitment and belief [Technical Difficulty] that's exactly what exactly what I would do in proposition. So it doesn't drive a lot of confidence. I think that's the point here. If you're not willing to put that money to do the same thing. There is...

Yes, point taken, Matt, but do be careful with correlation versus causation. You're describing a company that you yourself said is further along than we are. So that would suggest that there is an intrinsic reason for being greater value in the company rather than...

If we can move on -- for clarity, John, on the slides where we are with 1901 -- fixed after 4 weeks. So obviously quite early in that. You're saying that we started as of today, the study of -- things. You're looking that the Q1 finalizing [indiscernible] the actual toxicity by the end of -- they're all very fine time lines given investment period coming up. And if we work on the worst-case scenario, we don't get formulation right to the end of Q1, we get up to the end of H2. You see that as the worst-case scenario. So I think one of the things for shareholders was the lack of communication on where we were actually started the toxicity. Just one peace of mind like to think the human one will be completed before the end of this year and we move forward. Do you expect the formulation to take 3 months before you actually start the toxicity study?

Sorry, you said the human...

The 5-day, I'm expecting the data from that will be fairly imminent. So get into the reformulation immediately in the new year.

Right. So the PK study that starts today is not in humans.

Sorry, John, do you want to repeat the question? So for the benefit of people online, it was a question about the time lines of the ongoing PK and tox studies...

Yes. So the PK study that started today is in the preclinical species that will be used in the toxicology study. I would say it's a realistic time lines, okay? And this is -- every year, we have comments about the communication and lack of communication. I personally struggle a great deal with the amount of detail that we do give out, things like -- so a 5-day PK study does not take 5 days, takes considerably longer. A 16-week toxicology study does not take 16 weeks. It takes considerably longer. And I personally find the level of detail that we give in communications sometimes problematic, okay? However, we hear you communication.

I would like you to put across is because sort of our communications on the lovely billboard that we have from the LSE, which is quite childish sometimes. And it would be good that the board actually feed that information out generally. So it's understood where we are because the way I've seen it at the moment is that there's lots of things that are ambiguous as you complete those spaces provided you can under the market conditions, put that out to the market, so we know where we are rather than just sitting there waiting. And I think that alone would encourage the SP without you guys having to invest or whatever. I think the lack of communication does have an effect on the SP.

Yes. That's all I'm asking. I mean the danger of that is exactly what happened, okay? We make announcements that we started the toxicology study. It went wrong. We have to announce that.

Yes, of course -- and those things happen.

And when you make the announcement of starting a toxicology study, the share price goes up [ 3% ] and when you make the announcement that you have to stop this money, the share price goes down 20%...

[Technical Difficulty] I just feel that you could be a little bit more clearer and more informative as these things progress.

Well, as John said, as we've said various times before, we hear -- we are -- we have them in the room, of course, but we are surrounded by advisers as to what should or shouldn't be said as we go. And the only thing worth paying money to have advisers around you is not to listen to them when they advise. So we do pay attention to their advice as well. Time has gone away with us, I'm afraid. We haven't had a chance to get on to pre-submitted questions. So I apologize to people online. We will, as we said previously, produce answers and post them on the website in the next few days. I would just like to wrap by thanking you all for making the effort to come. It's always good to have a full room in-person. I hope that you feel happier post the announcements in the AGM than you were yesterday. And let's all have a very good Christmas and look forward to 2026. Thank you all.

Thank you to the Board of Sareum. Thank you very much indeed. We'll now redirect those online to provide their...