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Redsense Medical

AroCell

Alzinova

* Pre-revenue stage with no proven business model, currently generating no profits and negative cash flow, increasing investment risk.
* High dependence on a single product (ALZ-101) for future revenue, limiting revenue diversification.
* Vulnerability to regulatory interference typical in the pharmaceutical industry, potentially impacting development and commercialization timelines.
* Reliance on key personnel and continued dependence on capital markets for funding, increasing operational and financial risks.
* Binary outcome risk associated with clinical trials, where failure in upcoming Phase II/III trials could significantly impact the company's viability.

* Strong growth potential in the expanding Alzheimer's disease market, with ALZ-101 positioned to benefit from increased interest in disease-modifying treatments.
* Asset-light business model typical of pharmaceutical companies, allowing for efficient scaling once products are approved.
* Intellectual property protection and market exclusivity for ALZ-101, providing a competitive advantage for at least a decade post-approval.
* Potential for diversification through the AβCC peptide technology platform and second candidate ALZ-201, offering growth optionality.
* Product (ALZ-101) contributes to the greater good by aiming to improve Alzheimer's patients' health, aligning with ethical investment considerations.

* Lack of profitability across multiple metrics, including gross profit margin, operating margin, and return on equity.
* Absence of consistent revenue and earnings growth, potentially signaling challenges in market penetration or product demand.
* Poor cash flow conversion and lack of dividend payments, indicating limited ability to generate sustainable cash profits.
* High likelihood of needing to raise capital in the near future, potentially leading to shareholder dilution.

* Strong short-term liquidity with current assets 1.5 times greater than current liabilities, indicating robust working capital management.
* Sufficient cash and short-term investments to cover expected cash burn for more than two years, demonstrating financial resilience.

* Short tenure of top management team (less than five years), potentially limiting institutional knowledge and proven teamwork.
* History of postponing clinical trials, raising concerns about consistent delivery on promises and timely execution of strategic plans.
* Lack of long-term incentive programs and sustainability-related performance incentives for executives, potentially misaligning long-term interests.
* Limited gender diversity on the board, with only 1 out of 6 board seats held by a woman, potentially missing out on diverse perspectives.
* Pre-revenue status necessitating share dilution, coupled with weak commitment to sustainability reporting, which may concern some investors.

* Strong leadership with CEO Tord Labuda bringing extensive pharmaceutical industry experience and a clear long-term vision for Alzinova's innovative Alzheimer's treatment.
* Lean, decentralized organization promoting efficiency and accountability, with a consistent focus on innovation and cost-effective clinical development.
* Transparent and timely communication with investors, maintaining consistent long-term goals and strategies while being candid about challenges and shortcomings.
* Significant insider ownership (over 18%) and presence of a controlling owner with long-term commitment, aligning management interests with shareholders.
* Business-savvy board with diverse expertise relevant to the company's strategy, capable of effectively evaluating CEO performance and understanding the value creation process.

Yesterday, Biogen received a negative trend vote on the aducanumab (Aduhelm) Marketing Authorization application, following an oral explanation held at the November meeting of the EMA’s CHMP (Committee for Medicinal Products for Human Use). The CHMP will adopt a formal opinion at its December meeting (December 13-16, 2021). Our view, however, is that a rejection is the most likely outcome.
Even though we have argued that that external passive Aβ immunotherapies showing encouraging results validate the amyloid hypothesis, and thus further strengthen Alzinova&#8217;s approach, we want to reiterate that Alzinova’s vaccine candidate ALZ-101 is vastly differentiated from its peers. We believe that the candidate’s oligomer-specific vaccine approach could offer a superior administration-friendly and cost-effective alternative to other Alzheimer&#8217;s treatments. We recently published a research update where we provide a thorough deep-dive into the current Alzheimer&#8217;s treatment pipeline and what makes ALZ-101 stand out (<a href="https://s3-eu-west-1.amazonaws.com/rdey-cms-prod/app/uploads/2021/11/alzinova-research-update-01-11-21.pdf" target="_blank">here</a>).
We believe that the EMA’s pending decision should not alter investors&#8217; view of Alzinova, or the likelihood of ALZ-101 reaching the market. We maintain our Base Case valuation of SEK 22 per share.