Redeye returns with an update following Alzecure's Q2 report and recent activities in the company. We largely reiterate our fundamental view but make some adjustments following the outcome of Alzecure's rights issue.

<strong>No surprises in the report</strong>

Alzecure’s Q2 contained few surprises, as expected, with operating expenses amounting to SEK-8.9m and a cash position at SEK44m. The company continues to have relatively stable OPEX, and given its relatively focused strategy ahead, we don't expect costs to increase significantly going forward.

AlzeCure Pharma

* Pre-revenue company with negative cash flow, indicating high risk and potential for shareholder dilution.
* Dependency on regulatory approvals and capital markets, introducing volatility and uncertainty to the business model.
* Reliance on key personnel for research and development, potentially jeopardizing long-term success if talent is lost.
* High risk of core business failure due to early clinical stage status, presenting a binary outcome situation for investors.

* Meaningful reinvestment opportunities with a wide array of drug candidates across numerous indications, suggesting strong growth potential.
* Benefits from secular tailwinds in neurological disorders and pain conditions, indicating long-term market demand.
* Products contribute to the greater good by bringing new therapies to patients, aligning with ethical investment considerations.

* Lack of profitability across various metrics including gross profit margin, operating margin, and return on equity and assets.

* Current assets are 1.5 times greater than current liabilities, indicating strong short-term liquidity and ability to cover immediate financial obligations.

* Pre-revenue and reliance on capital raises, leading to shareholder dilution.
* Limited insider ownership, with management and board members holding modest stakes, potentially reducing alignment with shareholder interests.
* Uncertainty in consistently delivering on ambitious goals, given the inherent challenges and risks associated with drug development.

* Strong leadership with CEO Martin Jönsson demonstrating a clear long-term vision, deep industry knowledge, and a focus on innovation in neurology and pain management.
* Lean, decentralized organization with a committed management team, including co-founder Johan Sandin as CSO, fostering stability and shared strategic vision.
* Well-defined strategic plan centered on licensing out drug development projects, balancing early-stage R&D focus with potential revenue generation.
* Board of directors with diverse expertise in pharmaceutical and biotech industries, aligning closely with the company's strategic focus and value creation process.

SEKm	2022	2023	2024e	2025e
Revenues	0.0	0.0	0.0	56.2
EBIT	-56.4	-44.3	-46.5	-9.2
EBIT Margin	nm.	nm.	nm.	nm.
Net Income	-56.2	-43.2	-46.5	-9.2

Report in line with expectations

Alzecure presented new data

Some adjustments after rights issue

Key financials