Elicera Therapeutics: On the right path
Research Update
2025-01-28
10:30
Redeye revisits some assumptions related to financing and likelihood of approval following the progress with the CARMA study and the recent share price development, leading to a raised valuation.
Fredrik Thor
Last week, it was announced that the first patient in Elicera’s phase I/II study (CARMA) with its CAR-T therapy ELC-301, targeting B-cell lymphoma, had been successfully treated – with a complete response and “very mild side effects” after one-month follow-up.
We assume that the company will present data from the first cohort later in H1 and consequently, data from the subsequent doses and dose expansion phase later in 2025 and 2026. In other words, there are several more important readouts in the coming quarters.
Following the positive development with the study initiation and the first results from the CARMA study, we nudge our likelihood of approval up to 10% (previously 8%). Furthermore, we have a more optimistic view of the upcoming warrant program and have made some changes to our WACC (to 17%), leading to a new base case of SEK3.8 (2.5) per share, mostly due to lower assumed dilution, with bear and bull cases at 0.5 and 8.5 respectively.
| Key Financials | |||||
|---|---|---|---|---|---|
| SEKm | 2022 | 2023 | 2024e | 2025e | 2026e |
| Total Revenue | 1.3 | 11.2 | 7.2 | 3.6 | 73.9 |
| Revenue Growth | nm. | 777% | -35.7% | -50.0% | 1945% |
| EBITDA | -19.4 | -17.1 | -17.9 | -16.9 | 52.3 |
| EBIT | -19.4 | -17.1 | -17.9 | -16.9 | 52.3 |
Case
Quality research at a discount
We recognise, despite its early stage, the high quality in Elicera’s iTANK platform and research, which aims to broaden and enhance the use of CAR-T therapies and serves as the foundation for its leading drug candidate, ELC-301, plus two preclinical platforms (ELC-201 and ELC 401). Our DCF model and peer analysis suggest that the share’s current valuation is undemanding, partly due to an overhang from a recent rights issue but also affected by the current sentiment for early-stage biotech companies. The company’s cash runway extends into mid-2026, providing sufficient funds for it to reach an important readout in the ongoing phase I/IIa study of ELC-301 in diffuse large B-cell lymphoma – which, if positive, could be the foundation for the company to land a licensing agreement – two significant catalysts for the share.
Evidence
iTANK platform offers plenty of optionality
Elicera’s CAR-T drug candidates, ELC-301 and ELC-401, utilise the iTANK platform and offer an optimised version of the fourth-generation CAR T-cells. They have been genetically modified with a transgene that codes for a neutrophil-activating protein (NAP) rather than single cytokines, which is a strong immune stimulator. Today’s CAR-T therapies focus on blood cancers, with no currently approved CAR-T therapies targeting a solid tumour.
Supportive Analysis
A pre-clinical study (Jin et al) published in 2022 evaluated the efficacy of Elicera’s CAR(NAP) T -cells in murine models with subcutaneous pancreatic ductal adenocarcinomas, neuroblastomas, and colon carcinomas. The study found that CAR(NAP) T- cells slowed tumour growth and improved survival rates compared to with conventional mouse CAR- T cells, irrespective of the target antigen, tumour type, or mouse model. In tumours with heterogeneous antigen expression, NAP secretion was associated with the development of an immunologically hot tumour microenvironment, promoting dendritic cell maturation and bystander immune responses, as evidenced by epitope spreading and increased infiltration of cytotoxic CD8+ T- cells targeting tumour-associated antigens beyond the CAR-specific target. The study also noted that CAR T- cells with NAP did not increase off-tumour toxicity or compromise CAR- T cell efficacy, which the authors suggested indicates potential advantages for future clinical applications
Challenge
Inherent high risk due to early clinical stage
As with all early-stage biotech companies, Elicera faces significant development risks, and we estimate the likelihood of approval for its clinical candidates to be between 10% and 12%. On a positive note, we like that Elicera has multiple opportunities for success through two immuno-oncology modalities: CAR-T therapies and oncolytic viruses. Additionally, the company could non-exclusively outlicense its iTANK platform to other pharmaceutical companies
Dependent on partnerships
As is typical for biotech companies, Elicera will depend on future partnerships to bring its clinical candidates to market, as we do not consider it feasible for the company to finance pivotal trials in-house. Given the company’s low valuation, it would also be difficult to raise a significant sum at the moment.
Valuation
Undemanding valuation - but progress is key
We base our valuation of Elicera on a risk-adjusted DCF model of its current pipeline where we apply a WACC of 17% and an estimate period between 2024e-2043e. We have a base case of SEK3.8 per share, with respective bull and bear cases of 8.5 and 0.5 per share. We think that the current valuation is undemanding for a clinical stage company with an attractive platform, and the implicit expectations in the share price are very low on a fundamental level, but also note that it reflects the tough sentiment around early-stage biotech companies. Given the early stage of the company’s drug candidates, the risk is high (10-12% likelihood of success), and clinical progress and successfully navigating potential financing needs will be key for the share price going forward.
Disclosures and disclaimers