Amniotics has presented more details about the clinical study in lung transplantation which is planned for H2 2024. It will be an investigator-sponsored study in Sweden, which has two centres for lung transplantation (Malmö and Gothenburg), with six patients recruited and results available soon after (likely H1 2025). It will be similar to the preclinical experiment on pigs, but the lungs will not be circulated with PulmoStem before the transplantation. The patients will receive two injections. The study primarily investigates safety, as these are immunosuppressed and very fragile individuals. But other parameters, such as the grade of primary graft dysfunction, will also be measured. This will be a cost-effective study, as Amniotics only has to provide the drug material, which has already been produced in a sufficient quantity and is cryopreserved. Positive results would lead to a phase IIb in 2025. However, the trial initiation relies on additional funding to prolong the company’s runway.

Amniotic’s NK-cells program will develop both CAR-NK and non-CAR cells targeting cancer. CAR-T is a hot area with many big pharma deals, and no one wants to miss out on the opportunities in this sector. For example, AstraZeneca acquired Gracell for cUSD1bn in December to gain control of its clinical-stage CART-T program. NK-cell therapy might be the next big cell therapy area in cancer, but this likely lies some years in the future. The HyperTargIPS-NK aims to find a lead candidate ready for pre-clinical development.

Our previously stated base case was SEK0.04, including dilution from TO3. However, Amniotics is in a problematic financial situation as it depends on TO3 to fund this year’s activities into H1 2025, but the share trades below the strike price, meaning another source of funding needs to be found. The cash position of cSEK8m is expected to last until the end of March, with some still outstanding loans due by then. There is a clear risk that the company will not be able to continue its operations, represented by our bear case of 0. We judge it is not meaningful to show a base case before the funding issue is resolved.