AlzeCure Pharma

* Pre-revenue company with negative cash flow, indicating high risk and potential for shareholder dilution.
* Dependency on regulatory approvals and capital markets, introducing volatility and uncertainty to the business model.
* Reliance on key personnel for research and development, potentially jeopardizing long-term success if talent is lost.
* High risk of core business failure due to early clinical stage status, presenting a binary outcome situation for investors.

* Meaningful reinvestment opportunities with a wide array of drug candidates across numerous indications, suggesting strong growth potential.
* Benefits from secular tailwinds in neurological disorders and pain conditions, indicating long-term market demand.
* Products contribute to the greater good by bringing new therapies to patients, aligning with ethical investment considerations.

* Current assets are 1.5 times greater than current liabilities.

* Insider ownership is good but could be higher.
* Uncertainty in consistently delivering on ambitious goals, given the inherent challenges and risks associated with drug development.

* Strong leadership with CEO Martin Jönsson demonstrating a clear long-term vision, deep industry knowledge, and a focus on innovation in neurology and pain management.
* Lean, decentralized organization with a committed management team, including co-founder Johan Sandin as CSO, fostering stability and shared strategic vision.
* Well-defined strategic plan centered on licensing out drug development projects, balancing early-stage R&D focus with potential revenue generation.
* Board of directors with diverse expertise in pharmaceutical and biotech industries, aligning closely with the company's strategic focus and value creation process. Jan Lundberg, former global head of research at AstraZeneca and former global head of R&D at Eli Lilly, is a meritable board member to say the least.

In the first quarter, operating profit came in at SEK -23.0 mn (-13.9). As expected, Alzecure reported no revenues. 
Free cash flow during the quarter amounted to SEK – 18.3 mn (-10.3). The cash position at quarter-end was SEK 94.2 mn (172.2).
Compared to previous couple of quarters, the burn-rate is stable at around SEK -20 mn per quarter. It strengthens our guidance of a cash position slightly above SEK 30 mn at the end of the current year.
The stock performance in Alzecure has not been excellent in 2021, while the company has had a good start so far. We attribute this to a general depressed sentiment for biotech stocks at the moment and a relatively calm news flow in the first four months. Some triggers that could turn this around are:
&#8211; An increase in risk appetite for early-stage biotech 
&#8211; In terms of new flows, a partner deal serves as a biotech-joker but is what we believe could really move the stock upwards. We elaborated on the prospects for a partner deal in our most recent update (<a href="https://www.redeye.se/research/806294/alzecure-pharma-further-pipeline-advancement-expected">link</a>)
In addition, at current levels, we believe the stock in itself is a catalyst. We argue that it wouldn’t take a lot for the stock to head north. Alzecure now has an enterprise value (EV) of some SEK 150 million. The EV should be seen in the light of Alzecure being a platform case with a deep scientific understanding of validated mechanisms in the nervous system that could have one of its assets in the phase 2 stage by the end of the year.
Other than that, business as usual is what counts. We look forward to continuous pipeline advancement and that the company delivers on its outlined milestones, which is what the company has done very well in 2020 and so far in 2021.
<img class="alignnone wp-image-811276" src="https://res.cloudinary.com/redeye/w_742,h_310,c_fill,dpr_2.0/cms/app/uploads/2021/05/bild1.png" alt="" width="742" height="310" />
Today&#8217;s report doesn’t entail any estimate changes, why we reiterate our Base Case of SEK 19 per share.