Analysis ExpreS2ion Biotech: Ever-changing landscape

Detta är en betald analys på uppdrag av ExpreS2ion Biotech Holding utförd av Analysguiden.

Bavarian Nordic payment to AdaptVac in 2023
Recruitment of elderly subjects in the 4 000-patient registrational phase 3 study with ABNCoV2, initiated in September last year, has been slower than anticipated. Vaccination rates are running low in Europe, probably contributing to a slow progress.

A first read-out from the study is now expected in mid-2023. According to Bavarian Nordic’s annual report, following a positive readout and filing this year, it expects to pay up to DKK 300m to AdaptVac in 2023.

New share issue resolves financing of ES2B-C001
ExpreS2ion Biotechnologies has seen R&D costs rising to SEK 36m in the last quarter of 2022, up from SEK 1,6m in the first quarter of 2022. With the proposed new share and warrant issue of around 200 MSEK, the company can continue to drive investments in the vaccine candidate ES2B-C001 and transform into a pipeline driven organization. We expect first patient in a future phase 1 trial with ES2B-C001 to be treated in mid-2024, a minor delay compared to our previous assumptions.

FDA proposes new vaccination procedures
On January 26 an FDA advisory committee meeting was held discussing Covid-19 vaccination procedures. The experts invited to the meeting voted in favor of the idea that both primary and booster vaccinations should be carried out with the same vaccine composition. The panel and the FDA officers preferred the recently launched bivalent mRNA vaccines over the monovalent versions, which were introduced in 2021 and now likely to be phased out.

Such a decision should not directly impact the ongoing Bavarian Nordic phase 3 program with ABNCoV2. However, it remains to be understood if new Covid-19 procedures in the US will raise hurdles for approval of next-generation Covid-19 vaccines.

Major dilution from new rights issue
The proposed new share issue at a price of SEK 4,90 per share with a subsequent warrant issue will more than double the number of shares in 2023, assuming full subscription. Given the dilution and a lowered projected number of Covid-19 vaccinations in 2025-28 in EU and US, we cut fair value of ExpreS2ion Biotechnologies to SEK 12 (25).

Topline phase 3 data on ABNCoV2 and 12-month durability data in phase 2, together with the advancement of the ES2B-C001 program, make up potential near-term share price triggers in 2023.