We initiate coverage of InDex Pharmaceuticals, a deep value bet with significant upside from current price. InDex has failed to catch the attention of buy-and-hold investors since its IPO on October 11th. The guarantors got a lot of shares as the IPO was undersubscribed, which together with speculators willing to flip IPO issues have pressured the stock price, now down over 30% since the IPO. Investor concerns have focused on the Company’s spotty history, but we believe InDex is in fact very promising. With an improved study design where lessons from past failures have been applied, we see an 80% probability of Phase IIb success. Further, we believe concerns over the terminated partnering deal are overstated. The terminated deal with the Spanish specialty pharma company Almirall has created suspicion, but the termination was likely due to a strategic move, where Almirall repositioned itself as a specialty pharma company focusing on dermatology. These concerns have made InDex into a deep value play with very good odds. In valuing the opportunity, we have used a DCF model that generate a fair value of SEK 14 in our Base Case, offering over 130% upside from current price. Our Bull Case indicate a value of SEK 24 per share whereas our Bear (Worst) Case suggests a value of SEK 4 (0).