Several upcoming catalysts
CS1: Phase IIb initiation marks the next major value-inflection point
CS1 remains the cornerstone of the Cereno investment case and, in our view, the upcoming
Phase IIb initiation (expected to commence in June 2026) represents the company’s
most important near-term catalyst. Following encouraging Phase IIa data (presented
in September 2024) and subsequent analyses (in Q125) suggesting potential effects
on pathological vascular remodelling and right ventricular function, management’s
recent focus has been towards advancing the programme into a larger, controlled study
designed to evaluate CS1’s disease-modifying potential in PAH.
Importantly, the Phase IIb preparations are backed by extensive regulatory engagement
(Type C meeting with the FDA in April 2025, followed by clinical trial protocol submission
in November and regulatory clearance in December 2025) and the study has been designed
to capture treatment effects that may not be evident in shorter-duration PAH studies.
The trial will evaluate two dose levels of CS1 versus placebo over a 36-week core
treatment period, significantly longer than the typical 24-week timeframe employed
in most PAH studies. The total trial duration will be 60 weeks, including re-randomisation
at 36 weeks with the placebo group receiving CS1 and the treated patients either continuing
on CS1 or switching to placebo. We view the extended duration as strategically important,
given that structural vascular change and remodelling are likely to require longer
treatment exposure before translating into measurable clinical benefit. The re-randomisation
also allows a larger cohort of patients to be treated with CS1, enhancing the observable
treatment population.
The study will enrol 126 patients across 65 sites in the US, Europe and South America
and assess a broad range of efficacy, haemodynamic and functional endpoints, including
pulmonary vascular resistance, six-minute walk distance, cardiac function parameters
and patient-reported outcomes. The first sites will be activated in the US followed
by Europe and South America. While top-line data are not expected until H228, successful
trial initiation would represent an important de-risking event and further validate
the regulatory pathway for the programme.
We estimate the Phase IIb study will cost the company around SEK300m (c $32m) in clinical
trial-related expenses, before reading out in H228. Given the scale of the Phase IIb
study and management’s increasingly active business development efforts, we see enhanced
probability of a local or regional partnering transaction prior to the completion
of the Phase IIb study. Such an agreement could provide non-dilutive funding support
while validating the commercial potential of CS1 ahead of pivotal development.
For details on the competitive landscape and commercial opportunity in PAH, we direct
readers to our previous update note.
Upcoming EAP data to provide insight on long-term efficacy
While Phase IIb initiation remains the primary catalyst, investor attention is also
likely to focus on the forthcoming EAP update expected in June. Data reported in March 2026 reinforced CS1’s favourable long-term safety and tolerability profile, with no new
safety signals emerging during up to 15 months of treatment. We view this as particularly
encouraging given the fragile PAH patient population and the tolerability limitations
associated with several currently available therapies such as vasodilators (particularly
prostacyclins) and newer agents such as activin signalling inhibitors (eg Winrevair).
The EAP enrolled 10 patients (out of 21 patients who completed Phase IIa) of whom
six completed the full 12-month treatment period. Importantly no discontinuations
were attributed to CS1; withdrawals were linked to non-drug-related atrial fibrillation
events (two patients), withdrawal of consent (one) and loss to follow-up (one).
The next EAP update is expected to include longer-term efficacy observations and findings
from the Fluidda imaging sub-study. Although the small patient numbers limit statistical
interpretation, we believe the data could provide valuable insight into the durability
of response, a critical consideration for any therapy seeking to establish a disease-modifying
profile. Positive trends, particularly across haemodynamic, functional or imaging-based
measures, while not sufficient to establish efficacy could further strengthen confidence
heading into Phase IIb and support ongoing partnering discussions.
