Dear Shareholders,
As we begin 2026, I would like to wish all our shareholders, partners and supporters a very Happy New Year.
This is the first in what will become a regular series of letters to our investor community. While we will, of course, continue to communicate through formal regulatory announcements, these updates are intended to provide a more direct and accessible way for us to share context, perspective and progress as Sareum moves forward.
The start of a new year is always a good moment to reflect on what has been achieved and to look ahead to what’s coming next. We made solid progress across the pipeline, particularly with our lead programme, SDC-1801, which has completed Phase 1 clinical development, and for which Phase 2 enabling studies are underway. We also, as you know, experienced a setback with the development of SDC-1801 when we were forced to discontinue the 16-week GLP preclinical toxicology study.
This was no doubt as frustrating to Sareum’s shareholders as it has been for the management team. But early stage, innovative drug discovery is rarely straightforward, and the experience has provided invaluable learnings. With this difficult experience behind us, we believe 2026 has the potential to be an important year for the Company.
Our lead programme, SDC-1801, remains a key focus. The successful completion of the Phase 1 clinical trial demonstrated a favourable safety and tolerability profile, with pharmacokinetics supportive of once-daily dosing and encouraging pharmacodynamic biomarker reductions. These data continue to support our confidence in the potential of SDC-1801 as a treatment for autoimmune diseases, with an initial focus on psoriasis.
While the discontinuation of the 16-week GLP toxicology study last year was frustrating, subsequent analysis confirmed that the unexpected findings occurred more frequently in control-group animals and were unrelated to SDC-1801. We have since appointed a new, experienced global contract research organisation and are preparing to restart the Phase 2-enabling toxicology programme as early as possible in Q1 2026. Ahead of this, a short pharmacokinetic study has evaluated different formulations to help optimise the full toxicology study. In parallel, work to optimise the capsule formulation is progressing, with the aim of improving drug release and reducing the number of capsules required in future clinical studies.
Beyond SDC-1801, we continue to review how best to progress our wider portfolio. Translational studies for SDC-1802 have been completed, with the strongest cancer responses observed in certain haematological cancers with significant unmet medical need. We are assessing the most appropriate route to take this programme forward, with partnering likely to be the preferred option.
In oncology, we were pleased to secure the licence for SRA737 on significantly improved economic terms in 2025. Under the new agreement, Sareum now receives 63.5% of all future revenues, compared with 27.5% previously, at no cost to the Company. SRA737 has demonstrated good tolerability as a monotherapy and promising activity in combination with low-dose gemcitabine in anogenital cancers, and we continue to explore the most effective routes to progress this asset and create value from it.
We also expanded the scope of our research with the launch of a TYK2 neuroscience collaboration with Receptor.AI. This programme builds on earlier work from our SKIL platform and is focused on discovering blood–brain barrier-penetrant, isoform-selective TYK2/JAK1 inhibitors for potential use in neuro-inflammatory conditions such as multiple sclerosis and Parkinson’s disease. A first batch of compounds has already been designed, synthesised and entered early-stage testing and design is underway for a further batch to broaden our choices going forward.
From a financial perspective, we ended the 2025 financial year with a strengthened cash position following successful fundraises and the receipt of R&D tax credits. This allows us to continue progressing our core activities while prioritising non-dilutive funding routes wherever possible.
Looking ahead, our priorities remain clear: to complete the Phase 2-enabling work for SDC-1801, progress partnering discussions for SDC-1802 and SRA737, and advance our CNS discovery programme. We also continue to review the optimal structure of the Company to ensure we are well positioned to deliver on these goals.
Thank you for your continued support of Sareum. We look forward to keeping you updated as the year progresses.
Dr Stephen Parker,
Executive Chairman,
Sareum Holdings plc