The most important event since our Q3 update was the successful completion of laquinimod's phase I trial. During the fourth quarter, Active Biotech was also granted a US patent related to use of laquinimod as treatment of eye diseases associated with excessive vascularization that lasts until 2040. There has also been some progress with tasquinimod. Active Biotech (through partners) is investigating tasquinimod in three indications. It is or will be testing tasquinimod in clinical trials in multiple myeloma and myelofibrosis. MD Anderson is also performing preclinical tests with tasquinimod in myelofibrosis. Furthermore, Active Biotech is performing pre-clinical testing in myelodysplastic syndrome together with the University Hospital in Dresden. Tasquinimod is believed to work as an inhibitor of S100A9, which is an alarmin that activates inflammation. New data were presented at ASH in Q4 2022, which showed that tasquinimod reprogrammed mesenchymal stromal cells (MSCs) in the bone marrow to support haematopoiesis (i.e. the formation of blood) and reduced inflammatory signalling.  Malfunctioning MSCs are believed to be the cause of myelodysplastic syndrome. This supports further development of tasquinimod in this indication and is further confirmation of its mechanism of action.

The company had no revenues in Q4. Operating costs were slightly higher than the previous quarter at SEK 15.2m (the Q3 figure was 13.3m). The cash position at the end of the quarter was SEK42m.

According to the financial discussion of the Q4 report, Active Biotech can fund continued operations through 2023. This would mean slightly less spending compared to 2022 (that had operating costs of -SEK57.9m)). This assumes that external financing for laquinimod's phase II trial can be found. Active Biotech has a slim organization with 9 employees, so fixed costs are low.

Redeye raises its Base Case slightly to 3.0 (2.8) compared with our Q3 update due to an increase in the LOA of laquinimod to 24% (22%). We have also made some minor alterations to our cost forecasts, but these do not have an impact on the Base Case. Our Bull Case is SEK 4.4 while our Bear Case is SEK 1.7.