- Company News
- Corporate Finance
- Equity Research
- In Media
- M&A Know-how
- Macro and markets
- Market Snapshots
Read the full report here (ENG):
Drug candidate and areas of use
Modus has developed a drug candidate, sevuparin, for sepsis, or blood poisoning. Sepsis is a deadly disease that in its most dangerous stage, septic shock, has a mortality rate of about 30 percent for sick patients. There are no approved specific drugs against the condition, which thus categorizes the condition as an area of great unmet medical need. In septic shock, the permeability of organs’ blood vessels increases to extreme levels, causing them to be flooded with body fluids. This in turn leads to organ failure with devastating consequences for the patient. Sevuparin is thought to prevent the permeability of blood vessels from increasing in shock, which would prevent organ failure and drastically reduce mortality in sepsis and septic shock. Sevuparin is based on heparin, a drug from the 1930s that inhibits the blood’s ability to clot. Thus, many of the candidate’s characteristics are already known, which reduces the development risk.
Good clinical data from earlier studies
Sevuparin has already undergone a phase 2 trial in sickle cell anemia, which showed no effect. Thus, comprehensive safety data is already available. Phase 1 has already been completed with sevuparin with successful results. In principle, the company is currently ready for a phase 2 trial. However, the management believes that an initial phase 1b trial on healthy volunteers with simulated illness is a safer way to go than to start the phase 2a trial immediately. This is because such a phase 1b trial can provide information about the optimal dosage.
Great potential with significant risks
Although the company is in principle ready for a phase 2 trial, it is listed on a stock exchange as a preclinical company. This can be partly explained by the fact that the patent-protected period is relatively short and runs until 2032. However, the company expects to receive an extension of the patent until 2036-2037. The relatively short patent period is due to previously unsuccessful studies in the sickle cell track that cost the company several years in terms of development time within the then indication. However, it is not uncommon for drugs to find new uses during research, especially when they have such broad mechanisms of action that sevuparin could potentially be targeted. Overall, Modus pre-money valuation is clearly lower than the average for research companies in phase 1/2.
Great potential with significant risks
odus as an investment, like many other companies in the sector, is associated with big risks. In addition to the patentsituation, additional financing will probably be needed before outlicensing the candidate or selling the company. Despite this, we estimate a fair value of SEK 234 million, pre-money. This can be put in relation to the current offer with a pre-money valuation of SEK 70 million.
Carlsquare AB, www.carlsquare.se, hereinafter referred to as Carlsquare, conducts business with regard to Corporate Finance and Equity Research in which areas it, among other things, publishes information about companies including analyzes. The information has been compiled from sources that Carlsquare considers to be reliable. However, Carlsquare cannot guarantee the accuracy of the information. Nothing written in the analysis should be regarded as a recommendation or invitation to invest in any financial instrument, option or the like. Opinions and conclusions expressed in the analysis are intended only for the recipient. The content may not be copied, reproduced or distributed to another person without the written approval of Carlsquare. Carlsquare shall not be held responsible for any direct or indirect damage caused by decisions made on the basis of information contained in this analysis. Investments in financial instruments provide opportunities for value increases and profits. All such investments are also subject to risks. Risks vary between different types of financial instruments and combinations of these. Historical returns should not be considered as an indication of future returns. The analysis is not directed to U.S. persons (as defined in Regulation S of the United States Securities Act and interpreted in the United States Investment Company Act 1940) nor may it be disseminated to such persons. The analysis is also not directed to such natural and legal persons where the distribution of the analysis to such persons would result in or entail a risk of a violation of Swedish or foreign law or constitution. The analysis is a so-called Commissioned Research Report where the analyzed Company has signed an agreement with Carlsquare for analysis coverage. The analyzes are published on an ongoing basis during the contract period and for a usual fixed remuneration. Carlsquare may or may not have a financial interest in the subject of this analysis. Carlsquare values the assurance of objectivity and independence and has established procedures for managing conflicts of interest for this purpose. The analysts Jonatan Andersson, Richard Ramanius and Ulf Boberg does not own and is not allowed to own shares in the