First Berlin Equity Research has published a research update on Spexis AG (ISIN: CH0106213793). Analyst Christian Orquera reiterated his BUY rating and maintained his CHF 1.80 price target.

Abstract
Spexis AG reported FY/22 results which, adjusted for non-cash goodwill impairment of CHF 3.4m, were roughly as expected. Adjusted EBIT amounted to CHF -15.2m (FBe: CHF -15.4m; FY/21: CHF -4.2m). The YE cash position was CHF 1.8m (FBe: CHF 1.7m). Importantly, Spexis has secured a financing commitment of USD 4.5m from the life sciences investor SPRIM Global Investments (SGI) through interest-bearing debt, additional equity investment and warrants coverage. This is good news; these funds will enable the initiation of ColiFin’s COPILOT phase III clinical study in Europe comparing once-a-day (QD) dosing against the original twice-a-day (BID) dosing in 38 cystic fibrosis (CF) patients. Preparations are underway and the first patient is due to be enrolled in Q3 2023. Considering COPILOT’s small size, preliminary trial results will likely be available in early 2024. COPILOT is the first of two ColiFin phase III studies for US approval. If the data shows QD’s safety and positive signs of efficacy, the company will immediately start preparations for the COPA study with the preferred QD administration. Management will now intensify its efforts to secure the remaining funding of the total required amount of >CHF 60m for the phase III development trials (COPILOT + COPA). In February, Spexis announced a non-binding partnership with SGI which will fund up to 50% of all ColiFin’s phase III development costs through a debt facility coupled with a small equity investment. However, management still needs to finance the other 50% either through an investor, strategic partnership funds or a combination of both. In addition, due to Spexis‘ strategic realignment, Dr Juergen Froehlich (Chief Medical Officer) switched as part-time external CMO consultant since April, and Stephan Wehselau (COO) left the company at the end of June. Despite these changes, the company still has a seasoned management team in place. We continue to see Spexis, particularly the lead drug candidate ColiFin, as a highly attractive investment opportunity. If approved, opinion leaders expect the product to become the leading treatment of chronic infections in CF patients in the US. We estimate ColiFin sales potential for US/Canada at >USD 250m. Based on unchanged estimates, we reiterate our Buy recommendation and CHF 1.80 price target.