We initiate coverage of SynAct Pharma, a phase II biotech targeting the USD 20 billion+ rheumatoid arthritis market with its lead candidate AP1189. The SynAct team have successfully taken compounds through Phase I and II together before and has skin in the game, sitting on more than 30% of the shares. While nearer-term upside is limited by the company’s need for new capital this year, our risk-adjusted DCF model suggests a base valuation of SEK 13 per share, which comparison with peers supports as SynAct trades at a discount to other Swedish Phase II biotechs.