DnB idag:
NYKODE THERAPEUTICS
It’s all about the partners
Following the decision to discontinue the C-04 trial, we
expect limited value from data within the guided runway.
We continue to like the technology’s outlook and believe
partnerships could create material shareholder value
short- to mid-term. We reiterate our BUY, but have cut
our target price to NOK21 (31).
Q2 financials. Total operating expenses were USD12.4m (USD17.0m in Q2 2023), the
net loss was USD7.4m (USD-9.2m in Q2 2023), and cash and cash equivalents
amounted to USD136.5m (USD147.3m at end-Q1 2024).
C-04 trial discontinued. The company announced that it has decided to discontinue
the C-04 trial based on standard-of-care changes (the company experienced that after
full approval of Tivdak referrals to study sites were lower than expected). The company
was not able to execute its fast-to-market strategy due to the slow opening of study sites
and management’s misjudgement of the patient dynamics, and it has consequently
ended its efforts in this (relatively small) patient population. While this removes a key
near-term share price catalyst (interim C-04 data was guided for 2025), we believe this
was the right decision given the information management provided.
Potential from partnerships. Within the guided runway (H1 2026), we expect the
company to generate shareholder value through existing and potentially new
partnerships. We still believe the Genentech partnership is progressing well, despite the
relatively limited updates since 2020, and increased uncertainty due to its recent
reorganisation and departure of ‘Nykode-supporter’ Ira Mellman (who we believe was
especially important in the earlier stages of the collaboration). We also expect
Regeneron to select a lead candidate, and would not be surprised if the company strikes
a commercial deal in autoimmune diseases and a co-development/cocommercialisation agreement for VB10.16 (Merck is the most likely partner, in our view).
BUY reiterated, but target price cut to NOK21, reflecting the discontinuation of the
C-04 trial and uncertainty around the Genentech collaboration. We also model a (riskadjusted) deal within autoimmune diseases in 2025e.