Q&A

Cereno Scientific is a clinical-stage biotech developing treatments for rare cardiovascular and pulmonary diseases; it has no revenue, so it does not make money yet, and partnering is a major value driver. Its two clinical-stage assets, CS1 and CS014, are histone deacetylase (HDAC) inhibitors that use epigenetic modulation to target the underlying disease biology. CS1 is in development for pulmonary arterial hypertension (PAH) and CS014 for pulmonary hypertension associated with interstitial lung disease (PH-ILD). CS1 has moved into mid-stage development in the global Phase IIb EPIMODE study, and a third asset, CS585, remains preclinical. As a clinical-stage company, Cereno is funded by external capital. Management has been actively engaging with potential partners, while our assumptions build in a post Phase IIb licensing agreement for CS1 in 2029.

Cereno Scientific is valued at SEK7.0bn, or SEK21.5 per share, on our risk-adjusted net present value (rNPV) model of its two clinical-stage programmes, CS1 and CS014. The model uses phase-appropriate probabilities of success and a flat 12.5% discount rate; the preclinical CS585 is excluded. Following Q226, the valuation rose modestly from SEK6.8bn, while the per-share value declined from SEK21.7 because of dilution from the SEK60m raise. At our September 2026 update, we kept a 50% probability of success for CS1 and 15% for CS014. The model assumes a $2bn global licensing deal for CS1 after Phase IIb in 2029, including a $150m upfront payment and a flat 15% royalty rate, and successful EPIMODE execution remains central to realising those partnering economics. An earlier global, regional or local transaction would warrant a revision of our forecasts.

CS1 is the main driver of the Cereno Scientific investment case. At our September 2026 update, we retained a 50% probability of success for CS1 in pulmonary arterial hypertension (PAH), with peak sales potential of $2.8bn; for CS014 in PH-ILD, we maintained c $2.4bn peak sales potential, and we regard our 15% probability of success as relatively conservative. The main risks are the usual clinical, regulatory and financing risks of a biopharma company. We view the EPIMODE Phase IIb study as the first larger, randomised, placebo-controlled test of the preliminary efficacy signals seen in the CS1 Phase IIa study, and recruitment execution remains the primary near-term variable. Strong uptake of Merck's Winrevair (sotatercept) in PAH is validating the commercial opportunity and demand for therapies targeting the underlying disease biology, although we believe these developments raise the efficacy bar for CS1. Financing remains a key consideration, with current funding headroom into late Q426.

The next catalysts for Cereno Scientific centre on recruitment into the EPIMODE Phase IIb study of CS1, where we maintain our expectation of top-line data in Q428. Initial patient randomisation slipped slightly beyond the targeted mid-September start, which we view as manageable given a requirement of c 126 patients across c 68 sites, fewer than two per site on average. For CS014, the full IND package is due to be submitted to the FDA in Q426. We see FDA acceptance as the key near-term de-risking event, because it determines whether CS014 can move directly into Phase IIb, targeted for Q327, without a Phase IIa study. Management has not ruled out a partnering transaction during 2026, although we remain cautious about assigning value to partnering interest ahead of a transaction.