The combined net proceeds of SEK108m from a rights issue and direct placement completed in Q119 ensure NeuroVive Pharmaceutical’s operations will be funded well into 2020. Potential near-term share price catalysts include initial results from the KL1333 Phase Ia/b, a non-dilutive financing solution to enable the start of the NeuroSTAT Phase II clinical trial, the publication of in vivo data for NV354 and the an out-licensing of NV556. Our updated valuation is slightly higher at SEK1.55bn or SEK8.3/share.
The company reported a Q119 operating loss of SEK13.8m versus SEK13.0m a year ago and in line with our expectations. Q119 R&D costs were SEK6.1m, but we expect this to increase now that the KL1333 Phase Ia/b trial is underway. Q119 personnel costs of SEK3.5m were in line with Q118. Following the rights issue (SEK82.0m net) completed in February 2019 and the direct issue (SEK26.0m net) in March 2019, NeuroVive’s cash position was SEK113.3m at the end of Q119, which should fund the company’s operations well into 2020.
The initial results from the Phase Ia/b study testing KL1333, in development for mitochondrial diseases, should be the key catalyst achievable with the new funds. The trial has already enrolled the first healthy volunteer and initial data are expected in H219. In addition, following the FDA’s approval of an investigation new drug application (IND) for NeuroSTAT, NeuroVive plans to initiate a proof-ofconcept Phase II trial in traumatic brain injury (TBI), where there is no specific, approved therapeutic treatment. The company will require additional funding to initiate the trial and this could come from non-dilutive funding or a partnership. NV354 (selected compound from the NVP015 programme) is one of the preclinical projects also gaining pace and could enter the clinic in 2020.
Our updated, risk-adjusted NPV valuation of NeuroVive is marginally higher at SEK1.55bn or SEK8.3/share. This is due to rolling our model forward and a positive forex effect. We leave our financial forecasts and R&D assumptions virtually unchanged, as described in our initiation report and last outlook note.