First Berlin – Cyxone AB Research Update (26/06/2020)

First Berlin Equity Research has published a research update on Cyxone AB (ISIN: SE0007815428). Analyst Christian Orquera reiterated his BUY rating and decreased the price target from SEK 13.50 to SEK 12.70.

Abstract
Cyxone published Q1/20 results and provided an update on the R&D pipeline. Preparations for the next steps with the two main R&D programmes, Rabeximod for rheumatoid arthritis (RA) and T20K for multiple sclerosis (MS) have progressed, although with some delay. Management's decision to order fresh active material to produce Rabeximod pushes back the initiation of the Phase IIb trial to Q1/21 (previously: H1/20). The company is also conducting additional tests to optimise the T20K Phase Ib trial design. Although time-consuming, we view these actions as vital to maximise the upcoming trials' chances of success. On 1. June, Dr Tara Heitner took over as new CEO from Mr Skanung (CFO) who acted as interim CEO. Dr Heitner has extensive experience from previous board and senior management positions in the pharma and biotech field. We view this step as positive. She will provide Cyxone with a sharper business development focus, and we expect that the drug candidates will benefit from her experience in terms of future successful closing of partnering deals. On 10 June, Cyxone added a therapeutic programme against COVID-19 to its pipeline. The new programme is a collaboration with the inventor, Dr Kalev Kask. The company has so far disclosed only limited information on this early-stage programme and so we have not included it in our valuation. We have updated our SOTP pipeline valuation model to take account of the new development timelines of the two lead programmes. We arrive at a new price target of SEK 12.70 (old: SEK 13.50). We reiterate our Buy rating.