Biomotion Sciences Inc. Warrant

Company Overview

Business Model: Silexion Therapeutics Corp is a clinical-stage, oncology-focused biotechnology company dedicated to the discovery and development of proprietary treatments for KRAS-driven cancers. The company's core approach involves silencing the KRAS oncogene using RNA-interference therapeutics. Its lead product candidate, SIL204, is comprised of locally administered small interfering RNAs (siRNA) in a solution, intended as a first-line treatment for locally advanced pancreatic cancer (LAPC) patients in combination with standard-of-care chemotherapy.

Market Position: The KRAS oncogene is a significant driver in various human cancers, including pancreatic (92%), colorectal (49%), and non-squamous non-small cell lung cancer (35%). LAPC accounts for approximately 30% of pancreatic cancers, with a short median survival time of about 17 months. KRAS G12D and KRAS G12V mutations represent over 70% of KRAS cases in pancreatic cancer. Silexion Therapeutics Corp's previous first-generation product, siG12D-LODER (Loder), showed a trend for a 9.3-month overall survival advantage in KRAS G12D/V mutation patients in a Phase 2 trial (median OS 22.7 months vs. 13.4 months for SoC, HR=0.59, p=0.39). SIL204 is a second-generation siRNA product with demonstrated broad activity against multiple KRAS mutations (G12D, G12V, G12C, G12R, Q61H, G13D) in pre-clinical studies, showing improved stability and potential for systemic delivery.

Recent Strategic Developments: On August 15, 2024, Silexion Therapeutics Corp (formerly Biomotion Sciences) completed a Business Combination with Moringa Acquisition Corp and Silexion Therapeutics Ltd. The company subsequently changed its name to Silexion Therapeutics Corp, and its ordinary shares and warrants commenced trading on the Nasdaq Global Market on August 16, 2024. The company plans to initiate toxicology studies for SIL204 in 2025, with a regulatory submission anticipated in Q1 2026 to commence a Phase 2/3 prospective, randomized, controlled, multinational, open-label trial in LAPC subjects with KRAS G12D/V mutations in H1 2026. The study is designed to be adaptive and initially plans to enroll approximately 388 subjects. The company also expects to apply for Orphan Drug Designation in the U.S. and EU in 2026.

Geographic Footprint: The company's principal executive offices and primary operational activities, including research and development facilities, are located in Ramat-Gan, Israel. All long-lived assets are situated in Israel.

Financial Performance

Operating Expense Analysis (U.S. dollars in thousands)

Profitability Metrics:

• Net Loss for the year attributable to equity holders: $16,443 (2024), $4,942 (2023)
• Net Loss for the year attributable to non-controlling interests: $76 (2024), $166 (2023)
• Loss per ordinary share, basic and diluted: $26.36 (2024), $44.23 (2023)
• Weighted average number of ordinary shares outstanding: 623,846 (2024), 111,726 (2023)

Investment in Growth:

• R&D Expenditure: $5,815 (2024), $3,708 (2023)
  • Payroll and related expenses: $1,231 (2024), $895 (2023)
  • Share-based compensation expenses: $2,424 (2024), $78 (2023)
  • Subcontractors and consultants: $1,890 (2024), $2,467 (2023)
  • Loder development: $0.2 million (2024), $0.8 million (2023). Aggregate since inception: $18.4 million (as of December 31, 2024).
  • SIL204 development: $5.6 million (2024), $2.9 million (2023). Aggregate since inception: $9.1 million (as of December 31, 2024).
• Capital Expenditures: $(22) (2024), $(12) (2023) for purchase of property and equipment.

Business Segment Analysis

Research and Development of Innovative Treatments

Financial Performance:

• The company operates as a single operating segment focused on the research and development of innovative treatments for pancreatic cancer based on siRNAs. Performance is reviewed on a consolidated basis.
• Operating Loss: $12,571 thousand (2024), $4,681 thousand (2023)
• Net Loss: $16,519 thousand (2024), $5,108 thousand (2023)
• Key Growth Drivers: Investment in R&D, particularly for SIL204 development, which increased to $5.6 million in 2024 from $2.9 million in 2023.

Product Portfolio:

• Lead product candidate: SIL204, a second-generation siRNA product for locally advanced pancreatic cancer.
• Previous product: siG12D-LODER (Loder), a first-generation siRNA product.

Market Dynamics:

• Focus on KRAS-driven cancers, specifically pancreatic cancer, where KRAS mutations are highly prevalent.
• Targeting LAPC patients with KRAS G12D/V mutations.

Capital Allocation Strategy

Shareholder Returns:

• No cash dividends have been paid to date, and the company has no intention to pay dividends for the foreseeable future.
• No share repurchases were conducted during Q4 2024.

Balance Sheet Position (as of December 31, U.S. dollars in thousands):

• Cash and Equivalents: $1,187 (2024), $4,595 (2023)
• Total Liabilities: $6,852 (2024), $2,255 (2023)
• Net Cash Position: $(5,665) (2024) (Total Liabilities exceeding Cash & Equivalents), $(1,660) (2023)
• Accumulated deficit: $(43,254) (2024), $(26,811) (2023)
• Subsequent to the reporting period, the company raised approximately $4,260 in net proceeds from a public offering in January 2025 and approximately $3,276 in gross proceeds from an induced warrant exercise transaction in January 2025, while also retiring an $880 promissory note in March 2025.

Cash Flow Generation (U.S. dollars in thousands):

• Operating Cash Flow: $(8,396) (2024), $(4,529) (2023)
• Cash and cash equivalents and restricted cash at end of year: $1,270 (2024), $4,645 (2023)
• Interest paid: $27 (2024), $0 (2023)
• Interest received: $28 (2024), $153 (2023)

Operational Excellence

Production & Service Model: The company relies on third-party contract manufacturing organizations (CMOs) for the production of drug substance and drug products required for its clinical trials. SIL204 is currently manufactured under Good Manufacturing Practice (GMP) production standards for clinical trial use.

Supply Chain Architecture: Key Suppliers & Partners:

• Contract Manufacturing Organizations: Third-party entities responsible for drug substance and drug product manufacturing for clinical trials.

Facility Network:

• Office & R&D: Leases 464 square meters of office space in Ramat-Gan, Israel. The current lease term extends from November 1, 2024, to October 31, 2026, with an option to extend until October 31, 2028. Monthly rent is approximately $12,839.

Competitive Intelligence

Market Structure & Dynamics

Industry Characteristics: The biotechnology and pharmaceutical industries are characterized by intense competition, rapid technological advancements, and significant R&D investment.

Direct Competitors

Primary Competitors:

• Companies targeting KRAS mutations: Amgen Inc., Bristol-Myers Squibb Company (via Mirati Therapeutics, Inc.), Revolution Medicines, Inc., AstraZeneca (with Usynova), BioNTech, Roche, Merck/Moderna, Boehringer, and Gilead.
• Companies working on RNAi therapeutics: Alnylam, Tekmira Pharmaceuticals Corporation, Arrowhead Research Corporation, Silence Therapeutics plc, RXi Pharmaceuticals Corporation, Quark Pharmaceuticals, Inc., and Marina Biotech, Inc.
• Companies developing antisense-based drugs: Ionis Pharmaceuticals, Inc.

Risk Assessment Framework

Strategic & Market Risks

Market Dynamics:

• Unproven Therapeutic Approach: The company's RNAi therapeutics approach for oncology is unproven, carrying inherent development risks.
• Early-Stage Development: Product candidates are in early stages of development, and their efficacy and safety are not yet fully established.
• Undesirable Side Effects: Product candidates may cause undesirable side effects, which could delay or prevent regulatory approval or commercialization.

Operational & Execution Risks

Supply Chain Vulnerabilities:

• Third-Party Reliance: The company relies on third parties for preclinical and clinical studies and manufacturing, introducing dependency risks.
• Lack of Commercial Production Experience: The company has no experience producing product candidates at commercial levels.

Financial & Regulatory Risks

Market & Financial Risks:

• Financial Viability: The company has incurred significant net losses ($16.5 million in 2024, $5.1 million in 2023) and has an accumulated deficit of $43.3 million as of December 31, 2024. Its independent registered public accounting firm has expressed substantial doubt about its ability to continue as a going concern.
• Cash Runway: Cash and cash equivalents of $1.2 million as of December 31, 2024, are estimated to be sufficient only into Q4 2025. Regulatory & Compliance Risks:
• Lengthy Approval Process: Regulatory approval processes are lengthy, complex, and unpredictable.
• Ongoing Regulatory Scrutiny: Products will be subject to continuous regulatory scrutiny post-approval.

Geopolitical & External Risks

Geopolitical Exposure:

• Geographic Dependencies: Executive offices and R&D facilities are located in Israel, exposing operations to armed conflicts in the Middle East (e.g., Hamas, Hezbollah, Houthi, Iran).
• Regional Conflicts: Iran launched missile strikes against Israel on April 13, 2024, and October 1, 2024. A ceasefire between Israel and Lebanon was brokered in November 2024. Cybersecurity:
• The company maintains an information security program, and no material risks from known cybersecurity threats have been identified to date. The audit committee oversees cybersecurity risks.

Innovation & Technology Leadership

Research & Development Focus: Core Technology Areas:

• RNA-interference Therapeutics: The company's platform is focused on silencing the KRAS oncogene using RNA-interference therapeutics.
• Lead Product Candidate: SIL204, targeting KRAS-driven cancers, particularly LAPC.
• Innovation Pipeline: Plans to initiate toxicology studies for SIL204 in 2025, followed by a Phase 2/3 clinical trial in H1 2026.

Intellectual Property Portfolio:

• Patent Strategy: The company is seeking patent protection for SIL204 under International Patent Application No. PCT/IL2023/051276, filed December 14, 2023.
• Patent Expiration: The minimum expiration date for any patent issued from this application is December 14, 2043, with potential for extension up to five years to December 14, 2048.
• Publication: The application was published on June 20, 2024, as International Patent Publication No. WO 2024/127405.

Leadership & Governance

Executive Leadership Team

Board Composition: The Board of Directors consists of seven members. Ilan Hadar serves as Chairman. Independent directors include Dror J. Abramov, Ruth Alon, Ilan Levin, Avner Lushi, Shlomo Noy, and Amnon Peled (appointed December 2024).

• Audit Committee: Composed of Dror J. Abramov (chair and "audit committee financial expert"), Ruth Alon, and Dr. Amnon Peled.
• Compensation Committee: Composed of Dror J. Abramov, Amon Peled, and Ruth Alon (chair).
• Corporate Governance and Nominating Committee: Composed of Dror J. Abramov, Ilan Levin, Amnon Peled, and Ruth Alon.

Human Capital Strategy

Workforce Composition:

• Total Employees: As of the Annual Report date, the company has eleven full-time and three part-time employees.
• Geographic Distribution: All employees are based in Israel.

Regulatory Environment & Compliance

Regulatory Framework: Industry-Specific Regulations:

• Pharmaceutical Regulation: The company is subject to intensive regulation in the U.S. by the FDA (under the FDCA and PHSA) and in foreign countries by authorities such as the EMA and MHRA.
• Clinical Testing Regulations: In Israel, clinical testing requires authorization from ethics committees and the Ministry of Health.

Legal Proceedings:

• The company is not currently subject to any material legal proceedings.

Tax Strategy & Considerations

Tax Profile:

• Effective Tax Rate: Income tax expense was $10 thousand in 2024 and $32 thousand in 2023.
• Geographic Tax Planning: The parent company, a Cayman Islands exempted company, has a 0% corporate tax rate. The Israeli subsidiary (Silexion Therapeutics Ltd.) is subject to a 23% corporate tax rate (2024, 2023). The Chinese Subsidiary has a 25% corporate tax rate.
• Tax Loss Carryforwards: As of December 31, 2024, Silexion Therapeutics Ltd. had approximately $25,216 thousand in tax loss carryforwards, with a full valuation allowance recorded against them.