Last close As at 05/08/2026
SEK6.71
▲ −0.16 (−2.33%)
Market capitalisation
SEK435m
Research: Healthcare
Following its previous announcement of secured financing commitments, Mendus has raised SEK227m through a rights issue and SEK90m through a directed issue to Flerie Invest. Post shareholders’ approval at the extraordinary general meeting (held 10 July 2023) and completion of the fund-raise (announced 28 July 2023), Mendus’ total outstanding shares will increase from 202.7m to 863.1m, from 10 August 2023. Mendus intends to utilise the proceeds from the issue to finance crucial inflection points, providing a cash runway to at least Q424. Incorporating the fund-raise and share dilution, we now value Mendus at SEK2,183m or SEK2.53 per share versus SEK1,851m or SEK9.19 per share previously.
Written by
Mendus |
Successful SEK317m equity raise |
Fund-raising update |
Pharma and biotech |
1 August 2023 |
Share price performance
Business description
Next events
Analysts
Mendus is a research client of Edison Investment Research Limited |
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Following its previous announcement of secured financing commitments, Mendus has raised SEK227m through a rights issue and SEK90m through a directed issue to Flerie Invest. Post shareholders’ approval at the extraordinary general meeting (held 10 July 2023) and completion of the fund-raise (announced 28 July 2023), Mendus’ total outstanding shares will increase from 202.7m to 863.1m, from 10 August 2023. Mendus intends to utilise the proceeds from the issue to finance crucial inflection points, providing a cash runway to at least Q424. Incorporating the fund-raise and share dilution, we now value Mendus at SEK2,183m or SEK2.53 per share versus SEK1,851m or SEK9.19 per share previously.
Year |
Revenue (SEKm) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/21 |
0.0 |
(133.4) |
(0.73) |
0.0 |
N/A |
N/A |
12/22 |
3.4 |
(138.8) |
(0.70) |
0.0 |
N/A |
N/A |
12/23e |
0.0 |
(133.6) |
(0.25) |
0.0 |
N/A |
N/A |
12/24e |
0.0 |
(137.6) |
(0.16) |
0.0 |
N/A |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Equity raise completed to fund past catalysts
Post the successful completion of its proposed equity raise, Mendus will issue 67,564,837 units through a rights issue, increasing the number of shares by 473m. At the subscription price of SEK3.36 per unit (or SEK0.48/share), this gives a capital raise of SEK227m. For the directed issue, Mendus has issued 187.5m shares at SEK0.48 per share. Both issues are accompanied by free warrants of TO3 series, which if fully exercised, might generate additional proceeds of around SEK91m. Management believes total gross proceeds of SEK317m should provide a cash runway to Q424, or Q325 if the warrants are exercised.
Multiple inflection points on the horizon
For vididencel, the Phase II trial (ADVANCE II) in acute myeloid leukaemia (AML) is in the long-term follow-up stage and Mendus is preparing for an additional Phase II trial assessing vididencel in combination with Onureg. Vididencel is also being assessed in an ongoing Phase I trial (ALISON) for ovarian cancer (OC). Further, Mendus is preparing for a Phase II proof-of-concept study to assess ilixadencel for the treatment of gastrointestinal stromal tumours (GIST) and other indications within the broader group of soft tissue sarcomas. While we recognise that the equity raise is dilutive in nature, the funding enables operations to proceed through key events, which may represent significant catalysts for Mendus and ultimately advance its pipeline.
Valuation: SEK2,183m or SEK2.53 per share
Our valuation for Mendus improves to SEK2,183m from SEK1,851m with the increase in net cash (balance) of SEK286m (vs net debt of SEK46m at end March 2023), reflecting the impact of the SEK317m fund-raise, along with a SEK15m loan from Van Herk in May 2023. Our per share valuation decreases to SEK2.53 from SEK9.19 previously with the increase in total shares outstanding (863.1m from 202.7m).
Financials and valuation
In May 2023 Mendus drew down the remaining SEK15.0m shareholder loan (6% interest) from Van Herk Investments, utilising the full SEK50m financing facility. As part of the new loan agreement, the end dates of the previous loans (the initial SEK10.0m two-year loan and subsequent SEK25.0m one-year loan), have been amended and the entirety of the SEK50m loan is now due by end-FY23. For further financing requirements, Mendus recently completed a SEK317m fund-raise through a rights issue and a directed issue, and we have therefore adjusted our estimates for future fund requirements. As the new fund-raise has extended the company’s cash runway to Q424, we do not expect Mendus to require additional funds until 2024, so we have reduced our illustrative debt estimates to SEK40m and zero for FY23 and FY24 respectively (previously SEK165m and SEK195m). Post FY24, we expect Mendus to raise an additional SEK150m and SEK100m in FY25 and FY26 respectively via other sources (currently shown as illustrative debt).
While our long-term forecasts remain unchanged, our valuation increases to SEK2,183m from SEK1,851m due to a material increase in the net cash balance to SEK286m as a result of the latest equity issue of SEK317m (versus net debt of SEK46m at end-March 2023). We have also incorporated the SEK15m loan raised from Van Herk in May 2023. As a result, our per share valuation drops to SEK2.53 from SEK9.19 as the total number of shares outstanding will increase by over 4x to 863.1m from 202.7m.
Exhibit 1: Mendus rNPV valuation
Product |
Indication |
Launch |
Peak sales (US$m) |
NPV |
Probability of success |
rNPV |
rNPV/share |
Vididencel (DCP-001) |
AML |
2027 |
680 |
3,296 |
20.0% |
936 |
1.08 |
OC |
2031 |
760 |
2,104 |
15.0% |
726 |
0.84 |
|
Ilixadencel |
GIST |
2029 |
230 |
1,564 |
15.0% |
235 |
0.27 |
Pro forma net cash as on 28 July 2023 |
286.0 |
100.0% |
286.0 |
0.33 |
|||
Valuation |
|
|
|
7,251 |
|
2,183 |
2.53 |
Source: Edison Investment Research
Exhibit 2: Financial summary
Accounts: IFRS, year-end 31 December (SEK000s) |
2021 |
2022 |
2023e |
2024e |
Income statement |
|
|
|
|
Total revenue |
31 |
3,375 |
0 |
0 |
Cost of sales |
0 |
0 |
0 |
0 |
Gross profit |
31 |
3,375 |
0 |
0 |
SG&A (expenses) |
(42,498) |
(44,737) |
(45,184) |
(46,540) |
R&D costs |
(85,796) |
(87,049) |
(82,270) |
(84,373) |
Other income/(expense) |
(845) |
(1,134) |
0 |
0 |
Exceptionals and adjustments |
0 |
0 |
0 |
0 |
Reported EBITDA |
(129,108) |
(129,545) |
(127,455) |
(130,913) |
Depreciation and amortisation |
(992) |
(4,139) |
(4,131) |
(4,939) |
Reported Operating Profit/(loss) |
(130,100) |
(133,684) |
(131,586) |
(135,851) |
Finance income/(expense) |
(3,310) |
(5,101) |
(2,026) |
(1,732) |
Other income/(expense) |
0 |
0 |
0 |
0 |
Exceptionals and adjustments |
0 |
0 |
0 |
0 |
Reported PBT |
(133,410) |
(138,785) |
(133,611) |
(137,583) |
Adjusted PBT |
(133,410) |
(138,785) |
(133,611) |
(137,583) |
Income tax expense |
0 |
0 |
0 |
0 |
Reported net income |
(133,410) |
(138,785) |
(133,611) |
(137,583) |
|
|
|
|
|
Basic average number of shares (m) |
184.0 |
198.3 |
531.3 |
863.1 |
Basic EPS (SEK) |
(0.73) |
(0.70) |
(0.25) |
(0.16) |
Diluted EPS (SEK) |
(0.73) |
(0.70) |
(0.25) |
(0.16) |
|
|
|
|
|
Balance sheet |
|
|
|
|
Property, plant and equipment |
2,109 |
13,899 |
14,588 |
15,191 |
Intangible assets |
532,441 |
532,441 |
532,441 |
532,441 |
Right of use assets |
361 |
26,216 |
26,216 |
26,216 |
Other non-current assets |
843 |
618 |
618 |
618 |
Total non-current assets |
535,754 |
573,174 |
573,863 |
574,466 |
Cash and equivalents |
155,313 |
41,851 |
219,326 |
81,139 |
Prepaid expenses and accrued income |
10,214 |
1,919 |
1,919 |
1,919 |
Other current assets |
19,702 |
3,442 |
3,442 |
3,442 |
Total current assets |
185,229 |
47,212 |
224,687 |
86,500 |
Non-current loans and borrowings* |
36,666 |
22,844 |
22,844 |
22,844 |
Non-current lease liabilities |
0 |
23,706 |
23,706 |
23,706 |
Total non-current liabilities |
36,666 |
46,550 |
46,550 |
46,550 |
Trade and other payables |
11,610 |
7,411 |
7,411 |
7,411 |
Current loans and borrowings |
0 |
29,198 |
19,198 |
19,198 |
Short-term lease liabilities |
309 |
2,413 |
2,413 |
2,413 |
Other current liabilities |
15,657 |
20,375 |
20,375 |
20,375 |
Total current liabilities |
27,576 |
59,397 |
49,397 |
49,397 |
Equity attributable to company |
656,743 |
514,440 |
702,604 |
565,020 |
|
|
|
|
|
Cashflow statement |
|
|
|
|
Operating Profit/(loss) |
(130,100) |
(133,684) |
(131,586) |
(135,851) |
Depreciation and amortisation |
1,851 |
4,139 |
3,311 |
3,477 |
Other adjustments |
0 |
0 |
0 |
0 |
Movements in working capital |
(10,089) |
27,030 |
0 |
0 |
Interest paid / received |
(140) |
(1,135) |
(2,026) |
(1,732) |
Income taxes paid |
0 |
0 |
0 |
0 |
Cash from operations (CFO) |
(138,031) |
(109,331) |
(130,300) |
(134,107) |
Capex |
(1,361) |
(12,324) |
(4,000) |
(4,080) |
Acquisitions & disposals net |
0 |
0 |
0 |
0 |
Other investing activities |
0 |
0 |
0 |
0 |
Cash used in investing activities (CFIA) |
(1,361) |
(12,324) |
(4,000) |
(4,080) |
Net proceeds from issue of shares |
128,949 |
0 |
321,775 |
0 |
Movements in debt |
(1,922) |
10,925 |
40,000 |
0 |
Other financing activities |
0 |
(2,731) |
(50,000) |
0 |
Cash flow from financing activities |
127,027 |
8,194 |
311,775 |
0 |
Increase/(decrease) in cash and equivalents |
(12,330) |
(113,462) |
177,475 |
(138,187) |
Cash and equivalents at beginning of period |
167,643 |
155,313 |
41,851 |
219,326 |
Cash and equivalents at end of period |
155,313 |
41,851 |
219,326 |
81,139 |
Net (debt)/cash |
118,647 |
(10,191) |
177,284 |
39,097 |
Source: Mendus company accounts, Edison Investment Research. Note: *Includes the Van Herk Investments shareholder loan and the Negma Group convertible debt facility which we assume will both be fully drawn down.
|
|
Research: Healthcare
Paradigm has shared its June 2023 quarterly update. In Q423, net cash outflow from operating activities was A$17.1m (up from A$10.3m in Q323) or A$45.2m for FY23. R&D costs were A$16.1m (versus A$9.0m in Q3) or A$47.0m for FY23, and were attributed to recruitment initiatives and new site identification for the PARA_OA_002 trial, analytical activities for the PARA_OA_008 trial as well as the canine model studies of naturally occurring osteoarthritis (OA), and clinical activities assessing iPPS for mucopolysaccharidosis (MPS) types I and VI. The full year figures were partially offset by a A$7.4m R&D tax incentive rebate (reported in Q223). Paradigm reported a cash balance of A$56.4m at end-June 2023 (versus A$73.2m at end-March 2023). Assuming the cash burn rate remains at the FY23 level of A$45m, the company should have sufficient funds to bring it through near-term key inflection points, as described below.