Xenetic Biosciences — Third Quarter 2026 Earnings Summary

Financial Performance:

• Royalty revenue for the three months ended September 30, 2026, decreased approximately 29% to approximately $0.7 million, compared to approximately $1.0 million in the same period in 2025, primarily due to positive royalty adjustments recognized in Q3 2025 under the sublicense agreement with Takeda Pharmaceutical Co. Ltd.
• Research and development expenses decreased approximately 31% to approximately $0.5 million for the quarter ended September 30, 2026, compared to approximately $0.8 million in the prior-year period, driven by lower manufacturing development costs.
• General and administrative expenses increased approximately 138% to approximately $1.9 million for the quarter ended September 30, 2026, compared to approximately $0.8 million in the comparable quarter of 2025, primarily due to higher legal and financial advisory expenses associated with the proposed transaction.
• Net loss for the quarter ended September 30, 2026, was approximately $1.7 million, or $0.72 per basic and diluted share, compared to a net loss of approximately $0.5 million, or $0.33 per basic and diluted share, in the same period in 2025.
• Cash and cash equivalents totaled approximately $5.8 million as of September 30, 2026, down from approximately $7.9 million as of December 31, 2025.

Guidance and Future Outlook:

• The proposed share exchange transaction with Santersus AG is expected to close in the first quarter of 2027, subject to stockholder approval, Nasdaq listing approval, and SEC registration statement effectiveness.
• Initial efficacy data from the investigator-initiated Phase I study evaluating systemic DNase I combined with anti-CD19 CAR T-cell therapy in patients with large B-cell lymphoma is expected in the second quarter of 2027.
• The combined company is expected to have multiple development programs and potential catalysts, including an ongoing pivotal sepsis study, planned advancement in lupus, and an anticipated oncology clinical readout in 2027.
• The combined entity is expected to continue trading on the Nasdaq Capital Market under the new ticker symbol "SNTS" as Santersus Bio, Inc.

Business Segments and Product Lines:

• Initiated clinical evaluation of DNase I in combination with CAR T-cell therapy (NCT07361224) in an investigator-initiated Phase I study at Tel Aviv Sourasky University Medical Center in collaboration with PeriNess Ltd.
• Advanced pre-clinical development strategy examining the reversal of therapy resistance created by extracellular chromatin and neutrophil extracellular traps (NETs) released during CAR T-cell killing using DNase I.
• Ongoing generation of translational data demonstrating DNase I enhanced antitumor activity across four CAR targets in preclinical models of leukemia, lymphoma, multiple myeloma, and glioblastoma.
• The joint pipeline includes four first-in-class programs targeting NETs, including pivotal-stage programs in sepsis and systemic lupus erythematosus (SLE), both of which have received FDA Breakthrough Device Designation.
• The combined platform integrates NucleoCapture® and Xenetic's DNase platform to address NETs through distinct mechanisms.

Market and Competitive Landscape:

• The proposed transaction aims to create a multi-indication clinical-stage company focused on targeting NETs across multiple high-value therapeutic indications.
• Santersus brings an established clinical-stage platform and two FDA Breakthrough Device Designations to the combined entity.
• Xenetic's proprietary DNase technology is designed to improve outcomes of existing immunotherapies by targeting NETs involved in cancer progression.

Risks and Challenges:

• Risks include the failure to satisfy closing conditions for the Proposed Transaction, including the failure to obtain stockholder approval or timely governmental approvals.
• Uncertainties exist regarding the timing of consummation, the ability to manage operating expenses and transaction costs, and potential adverse reactions to business relationships.
• Risks associated with Xenetic's platform technologies, clinical development delays, and the inability to obtain sufficient additional capital to advance product candidates.
• Potential risks include the combined company's inability to maintain compliance with Nasdaq listing requirements, which could necessitate a reverse stock split.
• Actual results may differ materially from forward-looking statements due to factors such as adjustments to the exchange ratio, market price volatility, and failure to realize anticipated benefits of the transaction.

Management Commentary and Tone:

• James Parslow, Interim CEO and CFO, described the period as "defining" and stated the transaction has the potential to "fundamentally transform the Company's clinical development profile and long-term value proposition."
• Management highlighted the complementary nature of NucleoCapture® and Xenetic's DNase platform as a differentiated opportunity to expand therapeutic reach.
• The Board of Directors of both Xenetic and Santersus has unanimously approved the Proposed Transaction and recommends that Xenetic stockholders vote in favor of it.

Other Key Points:

• Xenetic entered into a definitive share exchange agreement to acquire all outstanding share capital of Santersus AG in an all-stock transaction, subject to Xenetic stockholder approval.
• The combined company is expected to be listed on Nasdaq under the new name Santersus Bio, Inc. and ticker symbol "SNTS."
• The transaction involves the issuance of newly issued shares of Xenetic in exchange for Santersus shares.
• Xenetic will file a Proxy Statement and Registration Statement on Form S-1 with the SEC regarding the transaction.