The right issue was subscribed to 56%, meaning that underwriters covered the remaining 44%. After issuing costs of SEK5.7m, Amniotics will net SEK19.3m. Of this amount, SEK7.5m was intended to repay loans. However, the company has prolonged the loan to Buntel AB (former Modelio Equity) of 4,2 MSEK plus interest. This leaves the company with a cash position of SEK18m or a net cash position of SEK14m (which we use in our valuation) after the rights issue in our pro forma model.

Amniotics has wisely chosen to further develop PulmoStem to prevent complications after lung transplantation (PGD) instead of lung infections. This is an indication with much less competition and a high unmet need. Amniotics has gained much knowledge about the indication through the CAMP collaboration with the university hospital of Skåne, and the planned study builds on this work. In November, the company obtained a positive statement from the European Medicines Agency (EMA) for an orphan designation in lung transplantation (primary graft dysfunction), which will be converted into a full designation in a few months, which further validates the project and provides some advantages (see our last note).

We recently updated our valuation model after the rights issue making lung transplantation the main indication. Our fully diluted base case (including all potential shares from TO3) is SEK0.04, with a bull and bear case of SEK0.07 and 0, respectively. The cash position was SEK18m as of Q3, with potentially SEK23m coming in from TO3 in Q1 2024.