Initiating coverage


Nuevolution: A NUE Hope (For Drug Discovery)

Redeye is hereby initiating coverage of Nuevolution, a Scandinavian biopharma company on a mission to improve drug discovery. The company utilize their proprietary DNA-encoded drug discovery platform Chemetics to develop small molecule drugs for hard-to-drug disease targets. Increased interest in the technology is likely to contribute positively to industry players, and Nuevolution is well positioned to ride the tailwinds going forward. The company runs a deal-driven business model, having generated over SEK 525 million in revenues to date. Technological advances, increased interest in the platform, pipeline progress, and management’s deal prowess give good arguments for further value creation. The portfolio include early-stage, pre-clinical, and (soon) clinical assets, as well as research collaborations. Lead candidate RORγt inverse agonist is licensed to Almirall and we expect the project to enter Phase I by early 2018. We see further near-term catalyst potential in the BET BRD1 and Amgen-projects. With a NPV approach we arrive at a fair value of SEK 23 per share, about 35% upside from current price. Coming catalysts could provide an upward valuation in the near-term. Bull- and Bear-Case are SEK 31 and SEK 15 per share, respectively.

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