Redeye raises its Base Case slightly following the positive conclusion of the phase I trial with laquinimod.

Active Biotech

* Active Biotech is a pre-revenue company that generates negative cash-flow.

* The company is dependent on capital markets and key individuals. 

* The programmes are high-risk due to binary outcomes of clinical trials.

* Having a patented product on a regulated market usually means stable incomes once approved and running.

* Possibility of receiving upfront, milestone payments and royalties without further investments on the part of the company.

* Patents provide a clear moat.

* The cash position lasts less than a year.

* The company scores no points on financials.

* Limited track record of successful value creation, with previous programs failing and being repurposed.
* Inability to generate attractive returns on capital or pay dividends due to lack of income, relying on annual rights issues for funding.
* Lack of gender diversity on the board of directors, potentially limiting diverse perspectives in decision-making.
* Insufficient insider ownership, with management and board holding less than 10% of shares, potentially misaligning interests with shareholders.
* Board composition lacks sufficient business-savvy directors, with a majority having scientific backgrounds rather than entrepreneurial experience.

* Experienced CEO with deep industry knowledge and commitment to long-term value creation through innovative drug development and strategic partnerships.
* Lean, virtual business model promoting self-direction and accountability, with a well-defined strategic plan for each program.
* Transparent and candid management communication, focusing on long-term business value and providing timely updates.
* Reasonable executive compensation structure with evenly distributed pay and alignment to long-term shareholder value creation.
* Strong board independence, with directors capable of challenging management and conducting regular CEO evaluations.