Following the recent finalization of the binding partnership agreement with Molteni Farmaceutici, OncoZenge has now announced an exclusive licensing agreement with Avernus Pharma. We argue that this marks another strategically important step in the company’s global commercialization strategy for BupiZenge as the deal expands OncoZenge’s geographic reach into the Gulf Cooperation Council (GCC) region. While not being one of the key commercial regions for BupiZenge, we see it as a promising and underserved market in terms of supportive oncology care, requiring minimal near-term financial commitments from the company.

Under the agreement, Avernus will assume responsibility for regulatory filings in the GCC and invest in marketing and distribution infrastructure. OncoZenge, in turn, will provide regulatory support and ensure product supply. Commercial milestone payments of up to USD130,000 are relatively modest, especially when compared to the licensing deal signed with Molteni Farmaceutici for European rights. Furthermore, the press release does not mention any specifics regarding potential royalty payments. However, it’s important to view this deal as complementary to the Molteni agreement: while the Molteni partnership secures OncoZenge’s access to the highly regulated and commercially critical European market—with high royalties (up to 20%) and more substantial milestones—the Avernus deal opens up access to emerging markets, diversifying risk and expanding BupiZenge’s long-term revenue potential.

Avernus Pharma General Trading LLC is a UAE-based specialty pharmaceutical company with a growing presence in the GCC region, primarily focused on oncology and specialty care. The company has a staff of more than 130 employees and over 1,200 customers and is the marketing arm of the ZAS Group, which has more than 60 healthcare and retail facilities across the UAE. Although not as established or vertically integrated as Molteni, Avernus brings valuable regional knowledge and commercial infrastructure within a market where regulatory dynamics and local relationships are essential for market entry. Its willingness to take on regulatory efforts and commercial investments also reduces OncoZenge’s burden, which is particularly beneficial given the company’s current focus on late-stage development and limited cash flow. With both deals now in place, OncoZenge is better positioned to leverage its future phase III trial outcomes and scale BupiZenge's commercial rollout once a potential approval is secured.

Furthermore, OncoZenge also announced earlier today that it has now received the initial EUR250,000 (SEK2.8m) milestone payment from Molteni Farmaceutici. It provides a modest but meaningful cash inflow that is set to be reflected in the Q1 2025 financials. While the amount is not large-scale, it signals that the partnership is active and progressing as planned, which is important for investor confidence ahead of the upcoming phase III trial. We view this as a welcome confirmation of the company's strategic progress.

Overall, we are encouraged by these news, signaling further validation of BupiZenge’s market potential and strengthening the company’s near-term outlook. For now, we do not make any adjustments to our valuation. We reiterate our base case of SEK11.5 per share (bull: 26, bear:3.5).