Arecor Therapeutics (AREC) Investor Update summary

Strategic business review and decision rationale

• Announced the cessation of Tetris Pharma operations and return of Ogluo rights to Xeris Biopharma after a strategic review and mutual agreement.

• Rising supply chain costs and fixed selling prices for Ogluo in the UK and Europe significantly reduced margins, making breakeven unviable and continued investment unattractive.

• Revenue outlook for non-Ogluo products in 2025 and beyond was materially reduced after a partner lost a key NHS tender.

• Explored options to partner or sell Ogluo rights, but increased costs and fixed pricing made this unviable for potential partners.

• Goodwill and intangibles of about £3 million will be fully impaired in 2024.

Operational and financial implications

• Committed to supplying Ogluo to patients in the UK and Germany through existing inventory, with sell-through expected into the second half of 2025.

• Inventory sell-through will primarily return cash to the business for reinvestment in core areas.

• Orderly wind-down will involve modest one-off restructuring costs, with staff retained as needed for ongoing supply.

Strategic focus and future outlook

• Refocusing resources and capital on proprietary insulin portfolio, especially AT278, and oral peptide delivery platform.

• Strategic co-development partnering discussions for AT278 are progressing rapidly.

• Oral GLP-1 program continues to show promising data, with a non-clinical PK study planned for the first half of 2025.

• The Arestat™ technology platform and partnered portfolio will remain key revenue drivers.

• Confident in the business's prospects and board fully supports the decision to close Tetris Pharma.