First Berlin Equity Research has published a research update on Sernova Corp. (ISIN: CA81732W1041). Analyst Christian Orquera reiterated his BUY rating and decreased the price target from CAD 3.80 to CAD 1.90.

Abstract
Sernova has presented interim data from the phase 1/2 clinical trial of its Cell Pouch for treating type 1 diabetes (T1D) at the 2024 European Association for the Study of Diabetes (EASD) Annual Meeting in Madrid, Spain. All six patients in Cohort A achieved sustained insulin independence following islet transplantation, with the first patient maintaining insulin independence for over four years before the Cell Pouch was removed due to unrelated health issues. Importantly, the removed device demonstrated safety, with no signs of fibrosis, tissue degradation, or structural changes over the long term. This makes Sernova’s Cell Pouch the only device that can harbour functioning islets (capable of producing insulin, glucagon, and somatostatin) that have remained healthy and active for more than five years after initial transplantation into the Cell Pouch. Unfortunately, there were delays in Cohort B due to immunosuppression issues in the first six patients. The company now plans to report interim results by YE 2024 following the first implantation in a recently enrolled patient and final data towards the end of Q1/25 or beginning of Q2/25; three additional patients will also be enrolled over the next few months. In addition, the company is on track to file an IND for the Cell Pouch in the indication hypothyroidism towards year-end. Following recent developments at Sernova (i.e. focus on 1G and 2G of T1D and hypothyroidism programmes, delay in closing a non-dilutive strategic deal), we have updated our SOTP valuation model and now see fair value for the share at CAD1.90 (previously CAD3.80). We maintain our Buy rating.