First Berlin Equity Research has published a research update on Rakovina Therapeutics Inc. (ISIN: CA75103L1013). Analyst Alexander Rihane downgraded the stock to ADD and decreased the price target from CAD 4.00 to CAD 0.25.

Abstract
Rakovina Therapeutics has made solid scientific progress across its AI-powered preclinical pipeline since our Initiating Coverage report in April 2025. Beyond the core pipeline, Rakovina also presented initial formulation data from its new NanoPalm drug-delivery collaboration. The standout is the kt-5000 programme, a differentiated dual ATR/mTOR inhibitor, which advanced from lead identification to potent dual-target inhibition, strong CNS penetration and first in-vivo tumour efficacy. The lead compound outperformed AstraZeneca’s clinical ATR inhibitor ceralasertib in delaying tumour growth, while repeat dosing showed no haematological toxicity. Brain/plasma exposure approaching 100% for one candidate further strengthens the programme’s differentiation and partnering potential. However, progress in the kt-2000 PARP1 programme fell short of our expectations. Its first AI-designed lead showed strong selectivity and better metabolic stability than the first-generation PARP inhibitor olaparib. But its pharmacokinetic profile remains inferior to AstraZeneca’s next-generation candidate AZD9574, requiring further optimisation of systemic exposure and CNS activity. While kt-2000 indicates that Rakovina’s AI discovery platform is viable, it has yet to produce the differentiated lead we had anticipated and has been overtaken by kt-5000 as the main value driver. The mixed results have led us to change our view of which programme Rakovina will license out (before: PARP1, now ATR/mTOR) and which programme will see funding of phase 1 & 2 studies for (before: ATR/mTOR, now PARP1). We expect the company to enter a licensing deal for its kt-5000 asset in 2028E, resulting in an upfront payment of CAD 30m. To finance higher operating expenses in the lead-up to a licensing deal, we have modelled several capital increases in 2026E and 2027E. Delays in Rakovina’s timeline and a substantially lower share price since our initiation have raised our dilution estimates. Our new estimates bring the fully diluted pro-forma share count to 168m (74% dilution of current shareholders). Our updated sum-of-the-parts model yields a new price target of CAD 0.25 (previously: CAD 4.0). We change our rating to Add.