Steady progress approaching pivotal-stage readiness

Mendus is advancing the vididencel programme in AML closer to being pivotal-stage ready. It had a strong start to the year, with positive endorsements from the FDA and EMA on plans for the registrational trial design (including patient population, the control arm and primary and secondary endpoints). Further, the Q1 update confirmed that Mendus’s alliance with NorthX Biologics is progressing as anticipated, with large-scale good manufacturing practice (GMP) production on track for H225. In parallel, the CADENCE trial, assessing vididencel in combination with oral azacitidine (the current standard of care in AML maintenance), enrolled the first patient in February 2025. The data collected from the initial stage of CADENCE will support the safety dossier of vididencel and preparations for the registrational trial.

Beyond AML, vididencel in OC

The programme evaluating vididencel in OC is also progressing according to plan. Following an encouraging interim update in December 2024, Mendus has communicated that the next update from the ALISON trial will be presented at the American Society of Clinical Oncology (ASCO) meeting in May 2025.

Valuation: SEK1.94bn or SEK38.4 per share

Following the Q125 results, our valuation for Mendus is relatively unchanged at SEK1.94bn or SEK38.4/share (SEK1.90bn or SEK37.8/share previously). The adjustment is due to the effect of rolling forward our model, offset by lower net cash.

Pipeline overview

The strategic priority in Mendus’s clinical development pipeline (Exhibit 1) remains the programme evaluating vididencel, an off-the-shelf cellular immunotherapy derived from the company’s proprietary DCOne cell line, as a potential maintenance treatment for AML.

Vididencel

For the lead AML programme, the latest update from the clinic was the encouraging data from the ADVANCE II trial in December 2024. ADVANCE II included patients who had previously responded to induction chemotherapy and achieved complete remission, but still had measurable residual disease (MRD+), which is associated with higher rates of relapse. The most recent results built on prior readouts by confirming the long-term efficacy of the candidate in immune-responsive patients.

The CADENCE trial (expected n=140) is now underway, assessing vididencel in combination with the standard of care in MRD+ and MRD- patients. We note that since ALLG is responsible for the trial, Mendus has limited control over how it runs, though the data from CADENCE will contribute to the registrational dossier for vididencel in AML. The subsequent global registrational Phase III trial will involve 100–120 sites in the EU, US and Australasia. It will investigate vididencel in combination with oral azacitidine in MRD+ patients, aiming to include a total of 150–200 participants. With the company’s plans to be pivotal-stage ready from H225, and after the encouraging regulatory endorsements, the registrational trial remains on track to commence from 2026.

Mendus is also considering exploring the potential of vididencel in other blood-borne tumour applications. These include a potential synergy between vididencel, azacitidine, and venetoclax in AML, as well as possible additional potential in chronic myeloid leukaemia. While preclinical data support these potential applications, we believe that the pursuit of such programmes may be contingent on the company securing a suitable strategic partnership.

Beyond the blood-borne tumour space, Mendus’s ALISON trial is assessing vididencel as a potential maintenance therapy in OC. ALISON is a single-centre Phase I study conducted by the University Medical Center Groningen (UMCG). The most recent clinical update for the programme was in December 2024, and highlighted the vididencel’s potential as an active immunotherapy to elicit effective anti-tumour responses in patients with high-grade serous ovarian carcinoma. The next update will be at ASCO 2025 in May, potentially representing a near-term catalyst. In our view, while the OC programme is not a strategic priority, early data supportive of vididencel’s potential application in OC may provide an opportunity to maximise the value proposition for the candidate in the longer term.

In April 2025, Mendus and UMCG presented data on the use of the company’s DCOne platform to expand functional tumour-infiltrating lymphocytes (TILs) from OC tissue samples. This has the potential to improve the production of TILs for the treatment of OC. This update indicated that the DCOne platform is versatile and may be used to improve the quantity and quality of TILs, a potential treatment for solid tumours, which could open up additional value. We await further updates from Mendus and UMCG regarding developments on this front.

Ilixadencel

The company’s second clinical candidate, ilixadencel, is backed by encouraging preclinical and clinical data in solid tumours. It was being assessed by Institut Bergonié (in combination with regorafenib and avelumab) in soft tissue sarcomas as part of a Phase I/II basket trial, but the collaboration was terminated in December 2024. The reason for termination stemmed from Bayer’s decision to no longer supply regorafenib, and was not reflective of ilixadencel. Management is now considering other options for the candidate, and will likely focus on partnering and/or licensing opportunities.

Financials and valuation

As a clinical-stage company, no revenues were reported in Q125, however, Mendus recorded other income of SEK1.34m from its Oncode-PACT grant funding for Q125. Mendus reported an operating loss of SEK30.2m (vs SEK35.3m in Q124), with the 17% y-o-y decrease due to lower R&D expenses. R&D expenses in Q125 were SEK21.7m (vs SEK29.0m in Q124), consisting mainly of costs for the DCOne platform as well as the vididencel and ilixadencel programmes. This decrease was primarily due to the lower R&D cost related to the NorthX Biologics technology transfer recognised in the income statement. Based on the difference in prepaid expenses recognised in the balance sheet, we calculate this expense to be SEK8.3m (vs an average of c SEK15m per quarter in 2024). We expect that this is only related to timing differences, and expect the disparity to reverse in the coming quarters, with no impact on our overall R&D estimates for FY25. General and administrative expenses for Q125 were SEK9.2m, broadly in line with the Q124 figure of SEK9.0m, with the costs mainly attributable to the finance department, corporate management and costs related to financing and investor relations activities. The cash outflow from operating activities stood at SEK15.2m, approximately half the Q124 figure of SEK30.6m, due to working capital benefits.

Following the Q125 results, we have made only minor changes to our FY25 estimates. We now assume other income of SEK5m for FY25, based on the Q125 run-rate. We keep our estimates for R&D expenses and general and administrative expenses unchanged. Our revised FY25 operating loss estimate is SEK119m (vs SEK124m previously). For FY26, our operating profit estimate is unchanged at SEK779m (assuming a licensing deal for vididencel in 2026).

At end-Q125, Mendus reported a net cash position of SEK83.9m, consisting of SEK84.7m in gross cash adjusted for SEK0.9m in debt. Based on our cash burn projections, we estimate that this provides a runway into Q126, consistent with management guidance, and importantly, past being pivotal-stage ready for the lead vididencel programme in AML.

Other than the minor adjustments mentioned above, we keep our long-term assumptions unchanged for Mendus’s current clinical-stage programmes. For a more detailed discussion of our assumptions, we direct readers to our February update note. We have rolled forward our model and adjusted our valuation for the latest net cash figure. As a result, our valuation improves slightly to SEK1.94bn or SEK38.4 per share (from SEK1.90bn or SEK37.8 per share previously). Exhibit 2 presents a breakdown of our risk-adjusted net present value (rNPV).

As noted above, we estimate that the company has sufficient operational headroom into Q126. Given the exact timing of a potential partnering deal in 2026 is uncertain, we expect Mendus would need to raise c SEK50m in Q126, which we reflect as illustrative debt in our model. Should such a deal not materialise and the company takes over self-development of vididencel in AML, we estimate that it would need to raise c SEK200m per year between FY26 and FY28, prior to the market launch in FY29. If Mendus were to raise these funds through an equity fundraise (a total of SEK600m between FY25 and FY28), it would need to issue c 98.4m shares (assuming the current trading price of SEK6.1), which would dilute our per-share valuation to SEK17.0, from SEK38.4 currently (shares outstanding would increase to 148.9m).