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Nanexa: Q3 Report - ABG

NEX-18 study pause still top of mind
Big Pharma evaluation deal weighs up a tough quarter
Share price implications

The main development in Q3 was the pause of the NEX-18 study following the finding of moderate injection site skin reactions (see our note). While the timeline for re-starting the study remains uncertain the company announced in October that pre-clinical work in pigs to determine the cause and methods for minimizing the skin reactions will be completed in Q1’22, suggesting that the Ph 1 study results could now be expected in H2’22 at the earliest, depending on the outcome of the investigation. Our assessment that the skin reactions are more likely to be due to the effects of retained azacitidine at the injection site rather than something inherent to the PharmaShell technology was strengthened by the announcement in October that Nanexa had signed an additional evaluation agreement with an un-named “big Pharmaceutical company” with whom the company have previously collaborated. We cannot be sure but believe this is likely to be with AstraZeneca. Although still at an early stage, the progression of the collaboration in the face of the clinical setback could be seen as a positive validation of the PharmaShell technology.

Clarity on the situation for NEX-18 will be key for Nanexa’s equity story to get underway again, with an update expected in Q1’22 when the complementary pre-clinical work is completed. Until then the company will now prioritise the planned Ph 1 study start with NEX-20 in H2’22 with further potential updates on collaborations and selection of the NEX-21 candidate in H1’22 providing additional possible triggers for the share. We expect a neutral response today to a largely uneventful report.
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