The sales for Q2 came in at SEK0m (SEK0m) as expected. Moreover, operating expenses amounted to SEK-13.6m (SEK-8.4m) compared to our estimate of SEK-11.8m. The operating expenses mainly consisted of R&D expenses related to the phase II study (SEK-12.3m). Lastly, EBIT came in at SEK-13.7m (SEK-13.6m) compared to our EBIT estimate of SEK-11-9m. In our view, the income statement did not include any major surprises.

The second half of 2024 will be significantly interesting for WntResearch. We expect the company to release interim data of its phase II study, including around 30-40 patients, during the second half of 2024e. The data will be vital for continuing the phase II trial, where the results must at least reiterate the findings from the company’s ad hoc observations in 2022 in our view. In addition, a clinically meaningful effect must be demonstrated on CT assessments of tumours and lymph nodes. However, as WntResearch only has one drug candidate, Foxy-5, there is a risk that upcoming data, if not good enough, would be devastating for the company. We argue that such a scenario would result in a liquidation of the company.

The minor estimate changes we have made based on the report do not affect our valuation of WntResearch. However, as the share price has increased c35% since we released our initial coverage report in June, it significantly impacts our capital raising assumption (a lower dilution to raise SEK30m compared to our previous projection). The change results in an updated base case of SEK18 (16). Moreover, our new bull case is 65 (56), followed by a bear case of SEK3 (5).