Financials
Q126 results: R&D acceleration reflects expanding clinical execution
As a clinical-stage biotechnology company, Oryzon does not generate commercial revenues.
However, the company capitalises a portion of its R&D investments, recognised as other
income, which partially offsets reported R&D expenses. In Q126, other income increased
to €3.8m from €2.0m in Q125, reflecting the higher level of development activity during
the quarter.
The key feature of the quarter was the marked step-up in R&D expenditure, which rose
to €4.5m, almost doubling year-on-year from €2.4m in Q125 and coming in materially
above our prior estimate of c €3.0m. Of the total, €4.2m related to clinical development
activities, with the remaining €0.3m attributable to other R&D programmes. Consequently,
R&D represented 79.3% of total operating expenses, versus 70.5% in Q125.
While we had anticipated an increase in FY26 R&D spend following the company’s strategic
reset (see our March 2026 outlook note), the magnitude of the increase underlines the pace of clinical execution currently
underway. The Phase IIb EVOLUTION study evaluating vafidemstat for negative symptoms
of schizophrenia continues to expand recruitment across additional European sites,
while the Phase Ib RESTORE trial assessing iadademstat in sickle cell disease is also
ramping patient enrolment, with a clinical update expected by end-FY26. Against this
backdrop, we expect the elevated R&D run-rate to persist through the remainder of
FY26.
General and administrative expenses remained stable at €1.0m, unchanged year-on-year.
At the operating level, Oryzon reported a loss of €1.7m in Q126 versus a loss of €1.5m
in Q125, while the net loss narrowed to €1.2m from €1.7m in Q125.
Balance sheet: Cash runway extends into FY27
Oryzon exited Q126 with a net cash balance of €11.1m. This includes €22.1m in gross
cash and cash equivalents, €5.9m in long-term debt (credit institutions: €2.6m, others:
€3.3m) and €5.1m in short-term debt (credit institutions: €4.5m, others: €0.6m). The
balance sheet also included €4.1m in other short-term financial liabilities, of which
€3.5m relates to advance funding received under the €13.26m ($15m) non-dilutive Med4Cure
grant within the IPCEI framework. We exclude this amount from our net debt calculation
given its non-dilutive and programme-specific nature.
Reflecting the higher-than-expected R&D run-rate, we have updated our cash burn assumptions
and now forecast the company to be funded into FY27 (we previously estimated a cash
runway through to H127). Our model continues to assume a licensing agreement for vafidemstat
in FY27, which would provide a meaningful source of non-dilutive capital inflow.
Estimate revisions
Following the Q126 results, we have revised our FY26 R&D forecast upwards to €17.7m,
from €12.0m previously, reflecting the accelerated pace of clinical investment. Correspondingly,
we have raised our FY26 other income estimate to €16.8m from €13.2m previously, while
leaving G&A forecasts unchanged at €4.6m.
As a result, we now forecast an FY26 operating loss of €7.5m versus our prior estimate
of a loss of €6.3m. Looking ahead to FY27, and assuming a €50m licensing payment linked
to vafidemstat, we project operating profit of €42.4m, modestly below our previous
estimate of €44.4m.
In the case of a shift in licensing timelines, we estimate Oryzon may require c €30m
in additional financing during FY27 to sustain operations. Were this to be raised
entirely through equity issuance, we estimate the company would need to issue c 10.7m
additional shares, implying dilution of approximately 13.4% for existing shareholders.
