The report offered few surprises and Herantis is continuing to keep a slim cost profile. The company presented a profit for the period of EUR2.1m, mainly due to a decision from Business Finland to waive of an R&D loan of EUR4.5m. Operating expenses landed at EUR-2.5m and operating cash flow at EUR-2.9m. According to the H2 webinar, the company has a cash runway into Q2 2025. In late 2023, the company conducted a rights issue that led to gross proceeds of around EUR4.5m, where takers included the EIC, from which Herantis previously received a grant.

In October, Herantis Pharma announced positive top-line data in the primary- and secondary endpoints from its phase Ia trial (n=60) with HER-096 in healthy volunteers. The goal of the trial was to evaluate the safety, tolerability, and blood-brain barrier penetration of HER-096 as well as to look at exploratory biomarkers. The company stated, "The clinical trial demonstrated favorable safety and tolerability, fast uptake of HER-096, and significant HER-096 concentrations in the cerebrospinal fluid (CSF) after a single subcutaneous injection.” We have further learned that the PK profile was well aligned with preclinical data, as well as the concentration of CSF (“cerebrospinal fluid”) in the brain, which was within the range of a therapeutic concentration – significant progress in our view. Safety was also deemed suitable, with some mild local reactions at the injection site for both active- and placebo groups. The company will also further analyze the exploratory biomarker data. Overall, our perception is that the data is robust and warrants further clinical development.

The next step is a MAD (“multiple ascending dose”) phase Ib trial, expected to treat the first patient during H2 2024. As it is expected to be a relatively short trial focusing on safety and biomarker evaluation, the company expects a readout by the end of 2025. The company is also interacting with the scientific community and potential partners. We reiterate our stance that the blood-brain-barrier data, combined with good safety and tolerability, will be compelling and generate increased interest in the company. The company's strategy is to out-license HER-096 before a phase II trial. We see a potential licensing deal and phase II data as the key mid-term catalysts for the company.
 

We reiterate our valuation as we have accounted for the newsflow already, most notably the positive phase I data (we raised phase I POS to 80%) and recent financing. We still pencil in a capital raise in late 2024/early 2025, assuming that Herantis will conclude the phase Ib trial before a potential partnership. We thus reiterate our base case of 2.9EUR per share.