Nanexa: Phase I results position NEX-22 for licensing opportunities and a head start in long-acting GLP-1 - Emergers

The positive results in Nanexa’s Phase I study for NEX-22, a once-monthly depot formulation of the GLP-1 analog liraglutide for type 2 diabetes, have significantly improved Nanexa’s chances of securing a much-needed license deal. Now, plan A is to find a licensee for the Chinese market to fund further development, with hopes of a US/EU license deal after the completion of Phase Ib/II. With our updated model estimate of 45% likelihood of success in the next phase, 70% in Phase III and 95% approval, we now find support for an rNPV for NEX-22 alone of SEK 730m or SEK 5.4 per share (up from SEK 205m/SEK 1.5 per share). On the other hand, we’ve lowered the probability of a license deal with Novo Nordisk from 30% to 20% following their $285m license agreement with Ascendis for a once-monthly GLP-1 drug. All in all, this means that we now find support for an rNPV of SEK 6.4-11.3 (2.6-9.9) per share, noting that the wide valuation range has narrowed to center around NEX-22. This however, does not factor in another rights issue, which is the likely scenario if a license deal does not materialize within the next 6 months.