Last close As at 05/08/2026
SEK4.76
▲ −0.02 (−0.33%)
Market capitalisation
SEK1,484m
Research: Healthcare
The European Medicines Agency (EMA) has approved Cereno Scientific’s Clinical Trial Application (CTA) for CS014, a novel HDAC inhibitor with epigenetic effects. CS014 targets thrombosis prevention and is expected to do so without increased risk of bleeding, a key limitation of currently approved antithrombotics. Management has communicated that the drug product has been shipped to the trial sites and work on patient recruitment has begun. The Phase I trial will assess the safety and tolerability of the drug in healthy volunteers. This will be the company’s second asset to enter the clinic after its lead asset, CS1. Following this regulatory milestone, we have updated our probability of approval from 5% to 7.5%, resulting in a lift to our valuation for Cereno to SEK2.54bn or SEK9.0/share, from SEK2.46bn or SEK8.8/share, previously.
Written by
Cereno Scientific |
CS014 (second asset) crosses into the clinic |
Clinical update |
Pharma and biotech |
21 June 2024 |
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Cereno Scientific is a research client of Edison Investment Research Limited |
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The European Medicines Agency (EMA) has approved Cereno Scientific’s Clinical Trial Application (CTA) for CS014, a novel HDAC inhibitor with epigenetic effects. CS014 targets thrombosis prevention and is expected to do so without increased risk of bleeding, a key limitation of currently approved antithrombotics. Management has communicated that the drug product has been shipped to the trial sites and work on patient recruitment has begun. The Phase I trial will assess the safety and tolerability of the drug in healthy volunteers. This will be the company’s second asset to enter the clinic after its lead asset, CS1. Following this regulatory milestone, we have updated our probability of approval from 5% to 7.5%, resulting in a lift to our valuation for Cereno to SEK2.54bn or SEK9.0/share, from SEK2.46bn or SEK8.8/share, previously.
Year end |
Revenue (SEKm) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/22 |
0.0 |
(27.6) |
(0.20) |
0.0 |
N/A |
N/A |
12/23 |
0.0 |
(48.1) |
(0.20) |
0.0 |
N/A |
N/A |
12/24e |
0.0 |
(49.4) |
(0.18) |
0.0 |
N/A |
N/A |
12/25e |
0.0 |
(47.0) |
(0.17) |
0.0 |
N/A |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
CS014’s EMA approval strengthens clinical pipeline
CS014, a histone deacetylase inhibitor (HDACi) with epigenetic properties, aims to target thrombosis prevention, which accounts for over 50% of the global cardiovascular drugs market, while addressing the limitation of increased risk of bleeding associated with currently available antithrombotics. The regulatory announcement comes on the back of positive preclinical data, where the drug demonstrated encouraging antithrombotic activity by modulating platelet activity, local fibrinolysis and clot stability. Thrombosis prevention through HDAC inhibition is a novel approach and, should the drug demonstrate disease-modifying potential (akin to CS1), we expect the commercial potential could be significant.
Phase I expected to commence by mid-2024
While we await further details on the Phase I study design, we understand that the trial will be a one-week, open-label, dose-finding study, with single and multiple ascending dose groups. The study objective will be to evaluate the safety, tolerability, pharmacokinetics and pharmacodynamics of CS014 in healthy volunteers. Management have communicated that the drug product has been shipped to the trial sites and work on patient enrolment has commenced. We expect initial data from the Phase I study in H125. It is unclear which indications will be targeted, but we tentatively assume venous thromboembolism (VTE) and stroke prevention in atrial fibrillation (SPAF) in our model. This is subject to modification as more data become available.
Valuation: SEK2.54bn or SEK9.0 per share
Following the EMA clearance, we conservatively update our probability of success for CS014 to 7.5%, from 5%, resulting in our valuation increasing to SEK2.54bn or SEK9.0/share, from SEK2.46bn or SEK8.8/share. We expect the next major catalyst to be the Phase II topline results for CS1, expected in Q324.
CS014 marches into the clinic
Cereno filed the CTA for CS014 In April 2024 and we see the EMA approval to initiate clinical studies as a positive step in furthering the company’s development efforts. CS014 is the second clinical asset in Cereno’s pipeline and, like lead asset CS1, is an HDACi, with epigenetic properties. The drug is aimed at thrombosis (blood clots) prevention, but is expected to do so without the increased risk of bleeding, a key limitation of the currently approved antithrombotics. Thrombosis is a major complication of cardiovascular disease (CVD), and is a leading cause of heart attack and stroke, which account for 85% of all CVD deaths. The global antithrombotic market was valued at c $29bn in 2022, and BCC Research projects it to reach c $46bn by 2028. The current thrombosis prevention and treatment landscape consists of anticoagulants (which slow down the formation of clots), antiplatelets (which prevent platelets in the blood from fusing together to form clots) and thrombolytics (which break down clots that have formed already). Interestingly, two of the bestselling CVD drugs, Eliquis/apixaban (Bristol Myers Squibb/Pfizer; $12.2bn revenue in 2023) and Xarelto/rivaroxaban (Bayer/J&J; €4.1bn revenues in 2023) are oral anticoagulants, highlighting the market potential for thrombosis treatments.
As mentioned above, CS014 plans to target thrombosis through a novel HDAC inhibition mechanism, while preventing the risk of excessive bleeding. A lower risk of bleeding may also support dose optimisation, which could potentially improve outcomes for patients. CS014’s potential is backed by robust preclinical data, where the drug demonstrated its ability to prevent thrombosis (both venous and arterial) through inhibition of platelet activity (reducing platelet accumulation and clotting) and increased fibrinolytic capacity (removal of fibrin), without increased risk of bleeding (refer to our initiation note on Cereno for more details on the preclinical studies).
Following the regulatory go-ahead, we understand that Cereno has shipped the drug to the clinical trial sites and the contract research organisation has initiated the work on patient recruitment. The study will be a one-week, open-label, two-stage study (single ascending and multiple ascending dose groups), investigating the safety, tolerability, pharmacokinetics and pharmacodynamics of CS014 in healthy volunteers. We expect further details on the study design and clinical plan in the coming weeks and expect initial data to be announced in H125.
Valuation
Following the regulatory clearance, we have upgraded our probability of success estimate for CS014 to 7.5%, from 5% previously, resulting our valuation adjusting to SEK2.54bn or SEK9.0/share, from SEK2.46bn or SEK8.8/share previously. All other assumptions remain unchanged and are listed below. Note that our assumptions are subject to modification as more data (particularly on target indications) are provided by the company.
■
Target population: we assume initial target indications of venous thromboembolism (prevalence of 0.1%) and stroke prevention in atrial fibrillation (prevalence of 0.5%). We assume a target population of around four million people across the US and Europe. We expect CS014 to be positioned as first-line treatment, with a peak penetration of 10%.
■
Pricing: we assume list prices of $6,000 per patient in the US (gross/net discount of 50%) and $1,500 in Europe (no discount to list price).
■
Trial timeline and R&D costs: we assume the Phase I trial commences by mid-2024. We assume Cereno would fund clinical development to the end of the Phase II trial, estimated to be in 2027. We assume the Phase III trial is undertaken under an out-licensing partnership from 2027. We assume US launch in 2031 and Europe in 2032. We expect total R&D expenses of c $10m for Phase I and Phase II studies and assume that the asset will be out-licensed thereafter for subsequent development and commercialisation. We estimate peak sales of c $1.9bn, achieved in 2042.
■
Out-licensing assumptions: We assume that CS014 will be out-licensed following completion of Phase II studies and have modelled a partnering agreement in 2027, with total deal value of US$1bn, including an upfront payment of US$100m. We also assume a 15% royalty rate on sales.
Exhibit 1 presents a breakdown of our overall valuation of Cereno.
Exhibit 1: Cereno valuation
Asset |
Indication |
Development phase |
Launch |
Peak sales ($m) |
Peak sales year |
NPV (SEKm) |
Probability |
rNPV |
rNPV/share (SEK) |
CS1 |
PAH |
Phase II |
2029 |
2,113 |
2038 |
8,694.3 |
25% |
2,173.6 |
7.7 |
CS014 |
Thrombosis |
Phase I |
2031 |
1,863 |
2042 |
3,816.4 |
7.5% |
286.2 |
1.0 |
Total |
12,510.7 |
2,459.8 |
8.8 |
||||||
Pro forma net cash at 31 March 2024* |
77.4 |
0.3 |
|||||||
Valuation |
2,537.2 |
9.0 |
|||||||
Source: Edison Investment Research. Note: *Includes SEK73.6m in net proceeds from the post-period TO3 warrants exercise. The per share valuation is based on shares outstanding of 281m (post warrants exercise).
Note that our valuation for Cereno does not include its third asset, CS585, which is currently in preclinical development and may add to the upside potential on clinical progression. Unlike the other two assets in the portfolio, which are HDAC inhibitors, CS585 is a novel, selective prostacyclin (IP) receptor agonist. While the precise indication for the candidate is yet to be determined, preclinical data support its positioning as a treatment for indications such as pulmonary hypertension (PH) and thrombosis prevention without increased risk of bleeding.
The company recently presented preclinical data for CS585 at the European Hematology Association (EHA) conference, which indicated CS585’s superior selectivity towards the IP receptors in the regulation of platelet activation and thrombosis (vs the FDA-approved IP agonists iloprost and selexipag) using ex-vivo (human blood) and in-vivo (mouse) models. Note that in April 2024, Cereno secured extended patent protection (Notice of Allowance) in Europe for CS585. We expect the selection of a clinical indication within the broader CVD area for CS585 by end-2024, with clinical entry possible in 2025.
As explained in our prior note, following the SEK73.6m cash inflow for the conversion of the TO3 warrants in April 2024, we calculate the company’s pro forma net cash balance to be SEK77.4m (gross cash balance of SEK122.8m net of SEK45.4m of debt outstanding). Provided the remaining SEK45m tranche from the SEK90m debt facility is also drawn down in H224, we expect the pro forma gross liquidity (SEK167.8m) to be sufficient to fund operations through Q225 (excluding debt repayments). We continue to estimate the need for the company to raise SEK150m by Q225 to fund further operations as well as service the SEK90m debt repayment due in May 2025, which we reflect as illustrative debt in our model. We assume licensing deals in 2026 for CS1 and 2027 for CS014, with the partner taking over development activity. However, if these deals do not materialise and the company takes on self-development of its clinical programmes, we estimate it would need to raise SEK200m per year starting in FY26, until the commercial launch of CS1 in 2029 (a total of SEK750m between FY25 and FY28). If the company uses equity issues for this funding, we estimate that it would need to issue c 171.4m shares (assuming the current share price of SEK4.38), which would result in our per share valuation diluting to SEK7.3 per share, from SEK9.0 per share currently.
Exhibit 2: Financial summary
Accounts: K3, year end 31 December, SEK000s |
|
2021 |
2022 |
2023 |
2024e |
2025e |
PROFIT & LOSS |
|
|
|
|
|
|
Net sales |
|
0 |
0 |
0 |
0 |
0 |
Capitalised work for own account |
|
44,805 |
57,538 |
49,277 |
79,615 |
87,007 |
Total revenues |
|
44,805 |
57,538 |
49,277 |
79,615 |
87,007 |
Cost of sales |
|
0 |
0 |
0 |
0 |
0 |
Gross profit |
|
44,805 |
57,538 |
49,277 |
79,615 |
87,007 |
Total operating expenses |
|
(59,811) |
(85,037) |
(93,927) |
(122,276) |
(131,777) |
R&D and other expenses |
|
(57,797) |
(76,620) |
(71,152) |
(102,576) |
(111,107) |
Of which - R&D expenses |
|
(44,805) |
(57,538) |
(49,277) |
(79,615) |
(87,007) |
Of which - other expenses |
|
(12,815) |
(18,899) |
(21,658) |
(22,741) |
(23,878) |
Personnel costs |
|
(1,789) |
(7,514) |
(18,763) |
(19,700) |
(20,670) |
Other operating items |
|
(226) |
(903) |
(4,012) |
0 |
0 |
Operating income (reported) |
|
(15,006) |
(27,499) |
(44,650) |
(42,661) |
(44,770) |
EBITDA (normalised) |
|
(14,992) |
(27,485) |
(44,636) |
(42,646) |
(44,770) |
Finance income/(expense) |
|
(1,245) |
(149) |
(3,456) |
(6,761) |
(2,206) |
Exceptionals and adjustments |
|
0 |
0 |
0 |
0 |
0 |
Profit before tax (reported) |
|
(16,251) |
(27,649) |
(48,106) |
(49,422) |
(46,976) |
Profit before tax (normalised) |
|
(16,251) |
(27,649) |
(46,436) |
(49,422) |
(46,976) |
Income tax expense (includes exceptionals) |
|
(4) |
(6) |
0 |
0 |
0 |
Net income (reported) |
|
(16,255) |
(27,654) |
(48,106) |
(49,422) |
(46,976) |
Net income (normalised) |
|
(16,255) |
(27,654) |
(46,436) |
(49,422) |
(46,976) |
End of period number of shares, '000 |
|
105,262 |
137,515 |
233,775 |
281,702 |
281,702 |
Basic EPS (SEK) |
|
(0.15) |
(0.20) |
(0.21) |
(0.18) |
(0.17) |
Adjusted EPS (SEK) |
|
(0.15) |
(0.20) |
(0.20) |
(0.18) |
(0.17) |
BALANCE SHEET |
|
|
|
|
|
|
Intangible Assets |
|
89,449 |
146,987 |
196,264 |
275,879 |
362,886 |
Fixtures, tools and installation |
|
43 |
29 |
14 |
0 |
0 |
Other long-term receivables |
|
8 |
10 |
9 |
9 |
9 |
Total non-current assets |
|
89,500 |
147,025 |
196,287 |
275,888 |
362,895 |
Other receivables |
|
1,363 |
1,248 |
1,124 |
1,305 |
1,336 |
Prepaid expenses and accrued income |
|
240 |
335 |
407 |
407 |
407 |
Cash and bank balance |
|
89,635 |
67,046 |
87,169 |
78,657 |
5,343 |
Total current assets |
|
91,238 |
68,629 |
88,699 |
80,368 |
7,086 |
Accounts Payable |
|
2,884 |
9,411 |
6,930 |
9,022 |
9,723 |
Other Current Liabilities |
|
2,589 |
4,331 |
16,231 |
16,231 |
16,231 |
Short-term Debt |
|
4,800 |
0 |
0 |
0 |
0 |
Total current liabilities |
|
10,273 |
13,742 |
23,162 |
25,254 |
25,955 |
Long-term Debt |
|
0 |
0 |
45,000 |
90,000 |
150,000 |
Other debt |
|
400 |
400 |
400 |
400 |
400 |
Total non-current liabilities |
|
400 |
400 |
45,400 |
90,400 |
150,400 |
Equity attributable to company |
|
170,065 |
201,511 |
216,424 |
240,602 |
193,627 |
CASH FLOW STATEMENT |
|
|
|
|
|
|
Net profit |
|
(16,255) |
(27,654) |
(48,106) |
(49,422) |
(46,976) |
Depreciation |
|
14 |
14 |
14 |
14 |
0 |
Translation difference |
|
(321) |
(90) |
34 |
0 |
0 |
Accrued costs |
|
1,230 |
450 |
777 |
0 |
0 |
Share based payments |
|
0 |
0 |
1,671 |
0 |
0 |
Taxes paid |
|
(1) |
(4) |
0 |
0 |
0 |
Movements in working capital |
|
2,196 |
8,669 |
8,695 |
1,911 |
670 |
Cash from operations (CFO) |
|
(13,137) |
(18,615) |
(36,915) |
(47,497) |
(46,306) |
Purchase of intangible assets |
|
(44,805) |
(57,538) |
(49,277) |
(79,615) |
(87,007) |
Purchase of PPE |
|
0 |
0 |
0 |
0 |
0 |
Other investing activities |
|
0 |
0 |
0 |
0 |
0 |
Cash used in investing activities (CFIA) |
|
(44,805) |
(57,538) |
(49,277) |
(79,615) |
(87,007) |
Loans received |
|
0 |
0 |
45,000 |
45,000 |
150,000 |
Loan repayments |
|
(5,000) |
(5,000) |
0 |
0 |
(90,000) |
Equity issued |
|
91,398 |
58,791 |
61,315 |
73,600 |
0 |
Other Financing Cash Flows |
|
(4,825) |
(226) |
0 |
0 |
0 |
Cash from financing activities (CFF) |
|
81,573 |
53,564 |
106,315 |
118,600 |
60,000 |
Cash and equivalents at beginning of period |
|
66,004 |
89,635 |
67,046 |
87,169 |
78,657 |
Increase/(decrease) in cash and equivalents |
|
23,630 |
(22,589) |
20,123 |
(8,512) |
(73,313) |
Effect of FX on cash and equivalents |
|
0 |
0 |
0 |
0 |
0 |
Cash and equivalents at end of period |
|
89,635 |
67,046 |
87,169 |
78,657 |
5,343 |
Net (debt)/cash |
|
84,435 |
66,646 |
41,769 |
(11,743) |
(145,057) |
Source: Company reports, Edison Investment Research
|
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