Expres2ion: Improving cash position

Dividend payout extends cash runway

ExpreS2ion Biotechnologies reversed cash burn in Q1 and increased its cash position. By the end of the quarter cash deposits were SEK 60m, SEK 2m above year-end level. More importantly, a dividend payout of SEK 22m in Q2 will further improve the cash runway, taking the company into 2025.

The cash accrual in Q1 was due to a grant payment in one of the ongoing explorative programs, possibly the VICI consortia. Strict cost control and a difficult comparison reduced underlying operational losses to SEK 13m from last year’s level at SEK 26m.

Clinical trial application possible in Q3

The struggle to bring its proprietary vaccine candidate, the breast cancer project ES2B-C001, to a clinical phase 1 trial is gaining ground. A clinical trial application (CTA) may be possible already in Q3, a major reward after an extensive period of investments in animal studies and manufacturing processes, which started already in 2020.

Assuming a swift reply from regulatory agencies, possibly the Danish Medicines Agency, the trial should be able to start recruiting breast cancer patients in the first half of 2025. We take a conservative stance with a 75 percent chance for this scenario to materialize.

EUR billion market opportunity

At its investor conference management pinned down a market estimate for the breast cancer vaccine candidate of EUR 2,8bn. The vaccine is designed to treat patients with overexpression of the Human Epidermal Growth Factor 2 (HER2), present in around 25 percent of all breast cancer cases.

The program is based on preclinical data in transgenic mice, while detailed data on the recent toxicology trials in Non-Human Primates have not yet been released.

Fair value after dilution lowered to SEK 2,2

In April ExpreS2ion announced a new share issue which will bring a further cash injection of SEK 60m, assuming full subscription at SEK 1.0 per share. On top of this, two new warrants were issued free of charge, one of which expires in Q4. The proceeds from the new share issues are primarily aimed for the start of the clinical trial with ES2B-C001.

Our updated projection of the diluted number of shares by end of 2025 is increased to 152 mln, up by 85 percent. We lower our fair value to SEK 2,2 (3,0), a 27 percent reduction given the progress in the ES2B-C001 program.