fbpx

Written by 08:00 Analys, Research

NANEXA: Solid progress in development into 2023, with funding needs on the horizon

After positive pre-clinical results in rats with NEX-22 (for treatment of type 2 diabetes) in Q1, we now see results from phase I for NEX-20 (for multiple myeloma) by end of June, initiation of phase I with NEX-22 later in 2023, and NEX-18 (long-acting injectable azacitidine for myelodysplastic syndrome) in 2024, as the primary catalysts for a continued revaluation. In addition, two unnamed partner projects are moving into pre-clinical phase in Q2’23. However, the cash is just enough for the rest of the year, which means that we will likely see a raise in H2’23. Our updated rNPV model, now taking a raise of another year’s runway into account, supports a fair value of SEK 6.6-7.2 (6.6-8.2) per share, with further upside as the company continues to de-risk the portfolio with progress in clinical development.

Johan Widmark | 2023-05-05 08:00 

This commissioned research report is for informational purposes only and is to be considered marketing communication. This research report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and Emergers is not subject to any prohibition on dealing ahead of the dissemination of investment research. This research does not constitute investment advice and is not a solicitation to buy shares. For more information, please refer to disclaimer.  


Phase I results for NEX-20 before end Q2

As announced in Q1, Nanexa had a positive outcome in the first preclinical study, a one-month study in rats, with NEX-22 for treatment of type 2 diabetes. The results show a controlled release of liraglutide for 28 days, compared to 2 days for a formulation with liraglutide (Victoza) without the PharmaShell coating.

Besides the success for NEX-22, the results also have implications for Nanexa’s collaboration with Novo Nordisk, as well as other potential peptide drug substances for which the PharmaShell platform can be used to produce long-acting formulations. In addition, phase I with NEX-20 (a PharmaShell-coated a one-month depot preparation of lenalidomide for treatment of multiple myeloma) is proceeding according to plan and is expected to be completed before end of Q2’23.  

Revising our model and adjusting for another raise on the horizon

Revenue in Q1’23 amounted to SEK 8.2m, where SEK 2m was from evaluation agreements for PharmaShell. SEK 5.6 was a periodization of the prepaid USD 4m fee from Novo Nordisk. With OPEX at SEK 18.8m, cash flow amounted to SEK -20.7m in Q1, meaning that the cash position of SEK 60.5m gives the Company some three quarters of runway, but not more. 

This highlights the need to secure additional funding during the summer semester. Since license and further exclusivity agreements seem premature, it will most likely be in the form of a rights issue. But with a strategic industry giant such as Novo Nordisk as Nanexa’s largest shareholder, chances to secure continued financing should be good.

After the progress in pre-clinical trials with NEX-22 and the forthcoming completion of phase I with NEX-20, we’ve updated our valuation model and probabilities. Combined with a rights issue of some 30m shares to raise another year of runway (SEK 80m) at an estimated 25% discount, we now find support for a fair value of SEK 6.6-7.2 (6.6-8.2) per share. After the results of phase I with NEX-20 at the end of Q2, we now look forward to initiation of Phase I with NEX-22 later in 2023 and NEX-18 (long-acting injectable azacitidine for myelodysplastic syndrome) most likely in 2024.

DISCLAIMER

This commissioned research report is for informational purposes only and is to be considered marketing communication. This research does not constitute investment advice and is not a solicitation to buy shares. Information provided here or on Emergers’ website emergers.se is not intended to be financial advice. This research shall not be construed as a recommendation or solicitation to invest in the companies described. Emergers cannot be held liable for either direct or indirect damages caused by decisions made on the basis of information in this analysis. Investors are encouraged to seek additional information as well as consult a financial advisor prior to any investment decision.

This material is not intended to be financial advice. This material has been commissioned by the Company in question and prepared and issued by Emergers, in consideration of a fee payable by the Company. Emergers charges a standard fee for the production and broad dissemination of a detailed note following by regular update notes. Fees are paid upfront in cash without recourse. Emergers may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained herein represent those of the research analyst at Emergers at the time of publication. The company has been given the opportunity to influence factual statements before publication, but forecasts, conclusions and valuation reasoning are Emergers’ own. Forward-looking information or statements contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Emergers shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained in this material.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Emergers’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in this material may not be eligible for sale in all jurisdictions or to certain categories of investors. Investors are encouraged to seek additional information as well as consult a financial advisor prior to any investment decision.

Investment in securities mentioned: Emergers has a restrictive policy relating to personal dealing and conflicts of interest. Emergers does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Emergers may have a position in any or related securities mentioned in this report, subject to Emergers’ policies on personal dealing and conflicts of interest.

Copyright: Copyright 2023 Incirrata AB (Emergers)

United Kingdom
This document is prepared and provided by Emergers for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the ”FPO”) (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States
Emergers relies upon the ”publishers’ exclusion” from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Emergers does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Read Less Read More

For new research on growth stocks, sign up to our newsletter