Herantis Pharma progressed on multiple levels in 2019. With the main study of the Phase I/II cerebral dopamine neurotrophic factor (CDNF) study now complete in Parkinson’s disease (PD) (top-line safety and efficacy data are expected in Q120), positive trial data could validate the research efforts and enable future partnering opportunities. Advances have been made on the development of a non-invasive next-generation CDNF (xCDNF); three lead candidates have progressed into lead optimisation stage. The Phase II Adenovirus gene therapy for the treatment of LymphEdema (AdeLE) study evaluating Lymfactin in breast cancer-associated lymphedema (BCAL) has fully recruited (data expected H121). In H219 Herantis successfully completed a share offering (€4.17m gross raised) and a secondary listing on NASDAQ Stockholm. We value Herantis at €60.8m.
CDNF is a neuroprotective factor that Herantis hopes could have a diseasemodifying effect on patients with PD. Top-line efficacy and safety data from the ongoing Phase I/II trial testing CDNF in PD patients are expected in Q120. The current PD treatment armament focuses on symptoms and a product that modifies disease would be a game changer. Herantis’s second clinical asset, Lymfactin, has completed patient enrolment in the Phase II AdeLE trial in BCAL patients (data expected Q121). The non-invasive xCDNF has moved into lead-optimisation stage of preclinical development; although early days, it could improve CDNF’s profile given CDNF is dosed intracranially once a month as an infusion using an implanted drug-delivery device behind the ear.
In H219, Herantis issued 618,018 new shares (subscription price of €6.70), raising gross €4.17m and extending the cash runway to key value inflection points. In the near term, Herantis will continue to be cash consumptive and operate as a nonrevenue-generating biotech. We note most funding for the Phase I/II CDNF trial comes from an EU grant. Cash burn amounted to €2.7m in H119 (H118: €1.8m), implying a cash runway to 2021.
Our valuation is €60.8m (€9.1/share) versus €58.7m (€9.7/share) previously; it includes net cash of €1.2m (FY 2019 estimate) and is based on an rNPV of CDNF in PD (€3.5/share) and Lymfactin in BCAL (€5.4/share). We have rolled our model forward and updated for FX and an increased number of outstanding shares after the recent capital raise. For more details please see our initiation note.