The proximate major trigger is the biodistribution study of laquinimod, which investigates whether laquinimod eye drops reach the internal and posterior parts of the eye. While a phase I study has been successfully concluded, potential partners are uncertain about whether the active pharmaceutical ingredient reaches the back of the eye, which is difficult to accomplish with an eye drop. The biodistribution thus study de-risks a phase II study. Active Biotech’s management is optimistic about reaching a deal upon positive results. Preliminary results from September 2024 showed that laquinimod entered the vitreous part of the eye (the substance that fills the eyeball) at effective concentrations. The myelofibrosis studies in the US and Europe have taken longer to start than expected. The first patients have not yet been recruited, but Active Biotech expects this to occur in the coming month or months as both studies are open for recruitment. The study in late-stage multiple myeloma has completed recruitment, and Active Biotech expects the final results from this study within a few months. We do not include multiple myeloma in our valuation, but the results can be valuable if they provide clues about effects in multiple myeloma, a similar disease.

Unexpectedly, the share price remained above SEK0.15 and even rose to around SEK0.25 during the subscription period despite a strike price of SEK0.05. This led to a subscription rate of 188% and the company exercising the over-allotment option. In total, SEK43.3m was raised before costs (ca SEK2m) which will fund the company through 2025. The number of shares increased from ca 360m to 1230m. The cash position is SEK36m, which we believe should fund the company during 2025.

Using a new rating model, our WACC increases to 16.5% (15%). We have added one year to the development of tasquinimod in myelofibrosis, now with an estimated launch year of 2032 (2031). This results in a base case of SEK0.34 (SEK0.4).