First Berlin Equity Research has initiated coverage on Spexis AG (ISIN: CH0106213793). Analyst Christian Orquera’s rating is BUY with a price target of EUR 1.80.

Abstract
Spexis AG is a biotech company with a clinical-stage product pipeline focused on rare diseases and oncology. Spexis is the result of the merger of the rare diseases specialist EnBiotix Inc and the listed cancer and infectious diseases biotech Polyphor AG. Spexis’ proprietary discovery technology generates drug candidates from a new class of drugs called macrocycles. At present, Spexis focuses on two inhaled drug candidates for the treatment of chronic, even lifelong infections in patients with the rare disease cystic fibrosis (CF). I) Murepavadin is a macrocyclic drug candidate which recently demonstrated safety in phase I trials in Europe. II) ColiFin?, the lead drug candidate for treating CF infection, was in-licensed with worldwide rights ex-Europe from PARI Pharma GmbH, a global specialist in nebulised therapies. The product has been approved in Europe since 2010 and is the market leader in the region. Spexis has obtained approval for its phase III protocol from the US registration agency FDA. The FDA has also granted ColiFin? orphan drug and fast-track designations and 12-year US market exclusivity. Preparations for the phase III study are underway, with the beginning of the pivotal study planned for H2 2023. We estimate ColiFin?’s sales potential in the US/Canada at >USD 250m. Spexis intends to build up its specialised sales force, in order to maximise ColiFin?’s value through effective marketing. Opinion leaders expect the product to become the leading treatment of infections in CF patients in the US. Given that the product has European approval with more than 15k administrations to date, the upcoming phase III study is substantially de-risked. In our view, the publication due in 2023 of positive headline results from the first part (COPILOT) of the phase III trial should add substantial value to Spexis and positively impact the share price. We initiate coverage of Spexis with a Buy rating and a CHF 1.80 price target.