Synairgen : 2022 Annual Report

Breakthrough Science for

Severe Viral Lung Infections

Annual Report and Accounts 2022

LSE: SNG www.synairgen.com

Breakthrough science for severe viral lung infections

We are a specialist respiratory biotech company whose primary focus is developing our investigative inhaled IFN-β therapeutic (SNG001) for the treatment and prevention of severe viral lung infections as potentially the first host-directed, broad- spectrum antiviral treatment delivered directly into the lungs.

Strategic report

Highlights	2
Chairman's Statement	3
Strategic Report	4

Governance

Board of Directors	16
Corporate Governance Statement	18
Directors' Remuneration Report	22
Report of the Audit Committee	27
Directors' Report	29
Statement of Directors' Responsibilities	31

Financial statements

Independent Auditor's Report	32
to the members of Synairgen plc
Consolidated Statement of Comprehensive Income	39
Consolidated Statement of Changes in Equity	40
Consolidated Statement of Financial Position	41
Consolidated Statement of Cash Flows	42
Notes to the Consolidated Financial Statements	43
Parent Company Balance Sheet	61
Parent Company Statement of Changes in Equity	62
Notes to the Parent Company Financial Statements	63

Other information

Glossary	69
Corporate Directory	IBC

1

Annual report and accounts 2022 Synairgen plc

Strategic report

Governance

Financial statements Other information

Highlights (including post period-end)

Operational

Financial

• Completed further analysis of data accumulated from the more than 750 patients dosed to date with SNG001. Findings included:
  -- Developmentof stratification criteria to target specific patient populations in future clinical trials;
  -- SNG001 reduced the risk of several recognised Long COVID symptoms;
  -- Evidence of accelerated viral clearance of rhinovirus from the lung in COPD patients; and
  -- Further demonstration of the well-tolerated safety profile of SNG001.
• Announced data from the US NIH-ledACTIV-2 Phase 2 trial for SNG001 in COVID-19 which showed an encouraging reduction in hospitalisation with SNG001 versus placebo in home-based patients.
• Published data from the Phase 3 SPRINTER trial for SNG001 in hospitalised COVID-19in the European Respiratory Journal Open Research in December 2022. Data from the trial, which did not meet primary or key secondary endpoints, included the observation of an encouraging signal in the reduction in progression to severe disease or death for patients treated with SNG001.
• Gained a deeper understanding of the extent of the mechanism of action of SNG001 as a host-directed,variant-agnostic antiviral agent:
• • Potent antiviral activity was shown in vitro against SARS- CoV-2 Alpha, Beta, Delta, Gamma and Omicron Variants of Concern, addition to our existing in vitro studies which showed potent antiviral activity against a wide variety of seasonal respiratory and pandemic viruses including
    RSV, rhinovirus, various influenza strains including H5N1 and MERS-CoV.
• Undertook a thorough evaluation of clinical development options to map out a route to conducting a Phase 3 registrational programme required for a regulatory submission.
• • Identified a clinical development plan for SNG001 designed to address the unmet need in targeted, high-risk patient populations that appear to be most responsive to SNG001 in previous clinical trials, for example elderly patients and those with certain co- morbidities. In addition, we plan to assess SNG001 in immunocompromised patients who are particularly vulnerable to respiratory viral infections, ventilated patients with confirmed viral pneumonia, and also those who appear unable to clear virus and become long-term "shedders" and mutation hosts.
  • Plan will start with a series of focused, investigator- led/Synairgen-sponsored studies, using existing resources, which are intended to lead towards a Phase 3 registrational programme.
  • Preparation is underway for these focused trials to initiate in H2 2023.

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• Loss from operations for the year ended 31 December 2022 of £20.3 million (2021: £57.9 million), with
  R&D expenditure decreasing to £14.9 million (2021: £52.9 million).
• Cash and deposit balances of £19.7 million at
  31 December 2022 (31 December 2021: £33.8 million).

Synairgen plc Annual report and accounts 2022

Chairman's Statement

The Group's work in 2022 has shown that
" there is a significant unmet need in the
broader respiratory antiviral area, in
addition to the need to find potential
treatment solutions for future viral
pandemics. Respiratory virus infections	"
remain a leading cause of death globally.

Strategic report

Governance

2022 started with high hopes for the success of our Phase 3 clinical trial of SNG001 for the treatment of COVID-19 in hospitalised patients. Unfortunately, the trial did not meet its primary endpoints which was most likely due to improvements in standards of care and is further discussed in this report. However, the data did provide significant insights into the patient groups that appeared to benefit most from SNG001. This has enabled Synairgen to refocus on SNG001's potential both in the hospital and the home environment as a broad-spectrum antiviral for those most at risk of severe respiratory problems. This obviously includes COVID-19, however the Group's work in 2022 has shown that there is a significant unmet need in the broader respiratory antiviral area, in addition to the need to find potential treatment solutions for future viral pandemics. Respiratory virus infections remain a leading cause of death globally.

Working closely with our partners, including academic institutions, diagnostic and medical device companies, advisors, and our strong team of researchers, scientists and regulatory experts, and building on the substantial body of trial evidence we have for SNG001, the team spent much of the year advancing the clinical development plans to pursue this goal. These are in the process of being

discussed with potential trial sites and investigators with a view to commencing later this year.

I would like to take this opportunity to thank the Board of Directors for their unwavering support during this challenging time. Their guidance and expertise have been invaluable in helping us navigate both the challenges and analysis of the opportunities. I would also like to note the retirement of Theo Harold and Iain Buchanan, both of whom have made significant contributions to Synairgen. At the same time, we are pleased to welcome Amanda Radford and Flic Gabbay to our Board of Directors. Their experience and insight will be instrumental in helping us achieve our goals.

I am proud of the dedication and hard work of our entire team in a particularly challenging year, and I am excited for our future progress in developing this novel treatment for a wide range of viral respiratory diseases.

Simon Shaw

Chairman

26 April 2023

Financial statements Other information

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Annual report and accounts 2022 Synairgen plc