First Berlin – Cyxone AB Research Update (30/10/2018)

First Berlin Equity Research on 30/10/2018 initiated coverage on Cyxone AB (ISIN: SE0007815428 / Bloomberg: CYXO SS). Analyst Christian Orquera placed a BUY rating on the stock, with a SEK13.50 price target.

Abstract
Cyxone AB is a biotech company with a development stage product pipeline focusing on autoimmune diseases. The company's proprietary discovery technology is generating drug candidates which belong to a new class of drugs called Cyclotides. At present, Cyxone has two oral drugs, one in late preclinical and one in phase II clinical trials. Both have potential to significantly improve treatment of autoimmune diseases. T20K, the most advanced oral Cyclotide-based drug candidate for multiple sclerosis (MS), is set to start recruitment of patients for a phase I clinical trial before year- end. If successfully developed and approved, we see sales potential for the product in excess of SEK12.7bn (USD1.4bn). Rabeximod, the recently acquired lead drug candidate for rheumatoid arthritis (RA), has shown robust and statistically significant efficacy in a phase IIa trial. Preparations for a phase IIb trial are underway. We estimate sales potential for the product at SEK8.5bn (USD951m). In our view, positive results from the phase IIb trial should add substantial value to Cyxone and have a positive impact on the share price. We initiate coverage of Cyxone with a Buy rating and a SEK13.50 price target.