Investerare

Cereno Scientific has bolstered its liquidity position through a SEK25m loan facility secured from new Danish investors Venusat and SAJ Finans. Concurrently, the company executed an addendum to its November 2024 financing agreement with Fenja Capital and Arena Investors, enabling early access to the SEK50m conditional second tranche, previously contingent on regulatory and financial milestones related to CS1. Additionally, management confirmed that SEK25m of the SEK75m convertible debt from the original facility has been converted into equity, a move we view as positive given the expected reduction in interest expenses and overall debt burden. While we will incorporate revised forecasts in future updates, we note that the SEK50m tranche was already included in our FY25 projections. As a result, our cash runway estimate shifts only modestly, into Q226 from Q126 previously, closer to upcoming regulatory and clinical milestones related to CS1 and CS014, the company’s two potentially disease-modifying HDAC inhibitors.

Cereno Scientific has announced encouraging four-month follow-up data from its Expanded Access Program (EAP) for CS1, a first-in-class HDAC inhibitor being developed to treat pulmonary arterial hypertension (PAH). While details have not been disclosed, management has noted that the data, collected from a 10-patient cohort who continued CS1 treatment following the successful Phase IIa trial, align closely with earlier results, reinforcing the drug’s safety and tolerability, as well as early efficacy signals. Top-line results from the full 12-month follow-up are expected in Q126, and we believe these, along with data from the Fluidda sub-study, will help build understanding of long-term usage of CS1 as the company prepares for the Phase IIb study, to commence in H126. Our estimates remain unchanged following this announcement, as we await the full 12-month results in Q126.

In Q125, Cereno made tangible progress across both its clinical programmes. The period opened with new data for lead asset CS1 indicating disease-modifying signals, and was capped by FDA endorsement of the Phase IIb plan (May 2025). The next step will be an IND application for Phase IIb and we anticipate data from the extended access programme (EAP, expected by mid-2025) to bolster the regulatory dossier. With Phase I now complete for second asset CS014 and a top-line readout in June, we expect a catalyst-rich period ahead for Cereno. The SEK77m gross cash and anticipated SEK50m from the November 2024 bridge loan should provide a runway into 2026. We expect Cereno to begin partnering talks in advance of trial initiation in H126. We raise our probability of success for CS1 to 45% (from 40%) based on recent developments. We upgrade our valuation to SEK4.5bn (SEK16.0/share) from SEK4.0bn (SEK14.2/share) previously.

Cereno Scientific has successfully completed its planned Type C meeting with the FDA for lead asset CS1. The minutes from the meeting will be available after 30 days, but Cereno has indicated that the regulators looked to be in alignment with the Phase IIb study design and planned steps for clinical development. Note that unlike Type A and Type B meetings, Type C meetings are not strictly required, although they offer the opportunity to engage with the regulators to ensure alignment with study objectives, design and endpoints, which supports the likelihood of a successful outcome. Following receipt of the official minutes of the meeting and outcome of the subsequent IND, management plans to commence the Phase IIb trial in H126. As indicated in our previous note, we expect Cereno to self-sponsor Phase IIb, before seeking a licensing partner for the Phase III registrational study and subsequent commercialisation.

Cereno Scientific has announced that its second clinical stage asset, CS014, has completed the Phase I safety study, with the conclusion of the second, multiple ascending dose (MAD) part of the trial (which commenced in November 2024). This follows the successful completion of the single ascending dose (SAD) part of the study in February 2025. With the focus now on data management and analysis, management expects to announce top-line results in June 2025. CS014 is Cereno’s second histone deacetylase inhibitor (HDACi), a proprietary new chemical entity (NCE), which has demonstrated anti-thrombotic, anti-fibrotic and reverse remodelling properties in preclinical studies. It is currently being developed for idiopathic pulmonary fibrosis (IPF), a rare, progressive disease with no curative treatments and an average survival of three to five years. Phase II is expected to commence in H126.

FY24 was a period of operational progress for the company, and newsflow entering 2025 has been supportive of its plans. We view the latest observations from the CS1 Phase IIa study, showing disease-modifying signals, as positive and expect these to bolster conversations at the upcoming Type C meeting with the FDA. We note the company’s decision to pursue an additional Phase IIb trial and assume this will be self-sponsored. This should allow Cereno to validate early observations for the Phase IIa study and optimise deal terms with a licensing partner for the subsequent Phase III development. We are also encouraged by CS014’s steady progress through the Phase I trial and view H225 to be a crucial period for the programme. We adjust our estimates for the recent developments, with our valuation shifting slightly to SEK14.2/share, from SEK14.3/share previously.

Cereno Scientific’s second pipeline asset, CS014, continues to make steady progress through the clinic, with the company successfully completing the single ascending dose (SAD) part of the Phase I study which commenced in June 2024. The SAD part focused on evaluating the safety, tolerability and pharmacokinetics (PK) of CS014 in 30 healthy volunteers; results showcased a favourable safety profile. The second, multiple ascending dose (MAD) part of the study, which commenced in November 2024, is ongoing and management expects results in mid-2025, in line with previous guidance. CS014 is the company’s second histone deacetylase inhibitor (HDACi) and has demonstrated anti-fibrotic, reverse remodelling and anti-thrombotic properties in preclinical studies. The target indication for CS014 is idiopathic pulmonary fibrosis (IPF), a rare, progressive disease, with no curative treatments and an average survival of three to five years. Management intends to commence Phase II in H126.