The finalization of OncoZenge’s binding agreement with Molteni Farmaceutici represents a significant milestone for the company and an important validation of BupiZenge’s commercial potential. This agreement, which grants Molteni exclusive commercialization rights in Europe, builds upon the initial non-binding agreement announced in January and now provides greater clarity on financial terms, milestone payments, and royalty structures. Compared to the preliminary agreement, OncoZenge has managed to secure improved commercial milestones and royalties, underscoring both the management's negotiating strength and Molteni’s confidence in the market opportunity for BupiZenge.

From a financial perspective, the binding agreement includes structured milestone payments totaling EUR4.3m, which are contingent on various commercial and sales targets. While the initial EUR250,000 upfront payment remains modest, additional payments tied to the successful completion of the phase III trial, first commercial sales, and cumulative sales milestones provide a clear long-term financial roadmap. Additionally, the tiered royalty structure—starting at 15% and scaling up to 20% for sales exceeding EUR60m—indicates OncoZenge’s ability to retain a significant share of future revenue, ensuring meaningful long-term upside potential.

The improved financial term in the finalized agreement suggests that Molteni has strengthened its commitment following the due diligence process. This is in contrast to the uncertainties we noted earlier, particularly in light of OncoZenge’s previously discontinued partnership with Pharmanovia. The shift from a non-binding to a binding agreement confirms Molteni’s belief in BupiZenge’s market potential and provides a degree of stability for OncoZenge’s commercialization strategy.

On the operational front, OncoZenge and Molteni are now set to proceed with refining their manufacturing capabilities, as well as finalizing the study plan for the European phase III trial. The two companies will also collaborate on regulatory strategy and commercial launch planning, ensuring a cohesive go-to-market approach. Molteni’s comprehensive in-house capabilities in manufacturing, research and development, regulatory affairs, supply chain management, and commercial operations, adds confidence to its role as a capable partner. This is further strengthened by its expertise in pain management and established distribution network across Europe.

The upfront payment in the agreement would not have been enough to fund the upcoming phase III trial. Encouragingly, the recent investment agreement with Yangtian Pharma provides a crucial capital injection, mitigating immediate concerns over liquidity while enabling OncoZenge to maintain its strategic focus. The SEK30.2m investment, structured through four tranches based on operative milestones in 2025/2026, not only supports the upcoming clinical trial but also strengthens OncoZenge’s position as it moves toward commercialization.

Looking ahead, we believe that the key catalysts for OncoZenge include securing necessary agreements with contract development and manufacturing organizations (CDMOs) and contract research organizations (CROs), initiating and completing the phase III trial, and executing a successful market launch in partnership with Molteni. These developments will also see the company realizing the tranches from its investment agreement with Yangtian. The company’s ability to effectively utilize its funding and efficiently execute its development plan will be critical in determining how proficiently it can reach the commercial stage and generate shareholder value.

Overall, we view this binding agreement as a positive step for OncoZenge. The finalized deal not only reinforces the market potential for BupiZenge but also validates the company's ability to navigate the challenging biotech licensing landscape. The improved terms compared to the non-binding agreement, coupled with the strengthened finances through the recent investment agreement, indicate a more secure path forward. The next phase will be execution-focused, with attention turning toward regulatory interactions, trial progression and manufacturing readiness—allof which will be key determinants of OncoZenge’s success in realizing the full commercial potential of BupiZenge.