ExpreS2ion Biotech: Breast cancer on stage

Cash burn lower than expected in Q4

ExpreS2ion Biotechnologies maintained cash burn at a low level in the fourth quarter of last year. Year-end cash position amounted to SEK 58m after a quarterly cash burn of SEK 20m compared to our burn-rate estimate of SEK 25m.

Management expects cash to have a runway into 2025, which imply a further decline in cash burn from an already low level. Assuming a strict cost control it is our opinion that cash runway will take the company into 2025 by a small margin, including preparations of a future clinical trial.

Breast cancer vaccine status

ES2B-C001 is the company’s most advanced proprietary program. It is a protein-based vaccine candidate for prevention and cure of HER2 positive breast cancer, an aggressive form of breast cancer making up around 20 percent of all breast cancer cases.

The ES2B-C001 program was put on hold last year due to financing restrictions but is now progressing towards a clinical study in 2025. Currently the program is investigating safety in non-human primates, and we expect a conclusion in first half of this year.

Funding of vaccine study in humans

Looking into 2024 we expect that the progress of ES2B-C001 to be the guiding star for the share price. The Q4 report did provide additional information over earlier reports as to the timeline of the program. We assume that a clinical trial application can be filed in the second half of this year with a potential study start in 2025.

One of the caveats is the funding of the study which we believe will be costly compared to a phase 1 study of a traditional small molecule drug candidate, partly because of vaccine manufacturing costs. A share issue in 2024 may be avoided by teaming up with a partner and sharing the costs of a phase 1 study.

Fair value raised after AstraZeneca acquisition

A major asset in ExpreS2ion Bio is its 34 percent stake in AdaptVac, a Danish-based technology platform and vaccine developer. The platform is based on the formulation of proteins vaccine on capsid virus-like particles (cVLP). One of the market leaders in VLP-based vaccine development, Icosavax, was recently acquired by AstraZeneca for USD 838m, an impressive sum of money.

Pending further information on the financing of ExpreS2ion’s planned clinical program we expect the share price to be volatile. On the back of the AstraZeneca acquisition and imminent ES2B-C001 animal data, we raise our fair value to SEK 3,0 (2,2).