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Research: Healthcare
Despite the recent setback with the INITIUM trial (first-line treatment of patients with unresectable or metastatic malignant melanoma), Ultimovacs has reinstated its commitment to press on with its clinical development of its cancer vaccine, UV1, across other target indications. The principal near-term focus will be on the anticipated results of Phase II FOCUS (head and neck cancer) and DOVACC (ovarian cancer) trials in Q324 and H125, respectively, and will inform its subsequent strategic direction. To remain funded to these milestones, the company has enforced stringent cost control measures, including activity level adjustments, reprioritisation of operations and a 40% workforce reduction, to support runway extension to Q425 (the company estimates its cash burn will be NOK15m/quarter).
Written by
Ultimovacs |
Steadfast commitment to UV1 progression |
Strategy update |
Pharma and biotech |
18 April 2024 |
Share price performance
Business description
Analysts
Ultimovacs is a research client of Edison Investment Research Limited |
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Despite the recent setback with the INITIUM trial (first-line treatment of patients with unresectable or metastatic malignant melanoma), Ultimovacs has reinstated its commitment to press on with its clinical development of its cancer vaccine, UV1, across other target indications. The principal near-term focus will be on the anticipated results of Phase II FOCUS (head and neck cancer) and DOVACC (ovarian cancer) trials in Q324 and H125, respectively, and will inform its subsequent strategic direction. To remain funded to these milestones, the company has enforced stringent cost control measures, including activity level adjustments, reprioritisation of operations and a 40% workforce reduction, to support runway extension to Q425 (the company estimates its cash burn will be NOK15m/quarter).
Year |
Revenue (NOKm) |
PBT* |
EPS** |
DPS |
P/E |
Yield |
12/22 |
0.0 |
(167.8) |
(4.90) |
0.0 |
N/A |
N/A |
12/23 |
0.0 |
(189.2) |
(5.50) |
0.0 |
N/A |
N/A |
Note: *PBT is reported. **EPS is fully diluted.
As per the announcement, Ultimovacs has implemented austerity measures to support the clinical progression of UV1, its cancer vaccine. Measures include a notable decrease in its workforce and activity level, which should extend the company’s cash runway to Q425, based on the company’s estimated quarterly cash burn rate of NOK15m. We view these as necessary adjustments, in light of the INITIUM trial (initially announced in March 2024) results and subsequent equity value erosion. As a reminder, median progression-free survival was not reached in either the control arm (ipilimumab and nivolumab, IPI-NIVO) or the experimental arm (UV1 plus IPI-NIVO), and the experimental arm was found to have no added benefit to IPI-NIVO alone in terms of either overall survival or objective response rate. The company has decided not to undertake any further development work for this indication.
We maintain, however, that opportunity remains for the other cancer indications being explored, and we remind readers that melanoma is just one of five indications being explored in Ultimovacs’ broad Phase II programme for UV1. For example the results for NIPU in mesothelioma demonstrated a reduced risk of death by 27% with UV1 plus IPI-NIVO compared to IPI-NIVO alone and continues to hold future potential for the company. We believe this highlights the importance of the company’s broad data-driven clinical development plans, as trial results are expected to differ across different cancer indications, and potentially with different combinations of immunotherapies (for example, the FOCUS trial will test UV1 with pembrolizumab vs IPI-NIVO in the INITIUM and NIPU trials).
Looking ahead, we believe that the results from FOCUS (Q324) and DOVACC (H125) could potentially represent significant inflection points and sentiment boosters for Ultimovacs. Further on the horizon is the LUNGVAC trial in non-small cell lung cancer, although we note that clinical study progression in this indication may be contingent on the company raising additional funds (given that topline readouts were guided for H126). While patient enrolment has been completed for FOCUS, we expect an update on patient enrolment for DOVACC and LUNGVAC with the company’s Q124 report (expected 7 May 2024).
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Research: Healthcare
OSE has announced that its licence agreement with AbbVie has cleared antitrust review and has become effective. As previously noted, this is expected to support OSE’s runway extension into 2026, past key milestones and readouts for in-house assets Tedopi (non-small cell lung cancer, US Phase III trials expected to commence in Q224) and Lusvertikimab (ulcerative colitis, Phase II readouts expected in mid-2024). Following the Federal Communications Commission (FCC) mandatory waiting period, OSE is expected to receive the negotiated US$48m upfront payment from AbbVie imminently, as part of its global licence and collaboration agreement for its pre-clinical asset OSE-230, a novel monoclonal antibody being developed for the treatment of chronic and severe inflammation. OSE is also entitled to receive up to US$665m in incremental (milestone) payments as part of the deal.