Edison Investment Research - Pharnext SA (ALPHA) Pharnext - Improving FY23 financial footing

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Edison Investment Research

Sean Conroy

Pharnext - Improving FY23 financial footing

Pharnext’s FY22 results covered an eventful period marked by efforts to bolster its financial position to see it through to top-line readouts of its potentially first-in-class Phase III asset, PXT3003. FY22 also saw Pharnext strengthen its ties with Neovacs (following a strategic €20.7m debt funding agreement in September 2022 and a €24m debt commitment in January 2023), culminating in a revised legal framework with Neovacs’s CEO Hugo Brugière at the helm. The FY22 operating costs were higher than our estimates, particularly admin expenses (€7.4m vs our estimate of €5.2m), resulting in an EBITDA loss of €27.2m. The end-FY22 gross cash balance was €0.6m, which should be supported by the €4m available for drawdown from the original Neovacs agreement in 2023. We estimate that Pharnext will need to raise another €22m in FY23 (potentially from the January Neovacs facility). Our revised valuation is €213.9m (from €217m). Our per-share valuation re-adjusts to €309.6/share based on the post 1:10,000 consolidation shares outstanding (691k at 10 May 2023).

22/05/2023 1 EN

Underlying

Pharnext SA

Pharnext SA is a France-based biopharmaceutical company. The Company is focused on discovering, developing and licensing new therapeutic solutions (Pleodrugs) and companion tests for unmet medical needs (large and niche markets) by using the Pleotherapy approach. Pharnext SA runs all its own activities, from research through to clinical development (no further than the end of Phase II trials), and then licenses the Pleodrugs to industrial partners. The Company's prime focus is on neurodegenerative diseases and metabolic diseases.

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FR0011191287 Euronext Paris France

Provider

Edison Investment Research

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisors and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.

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Analysts

Sean Conroy

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Pharnext - Improving FY23 financial footing

Pharnext - Termination of coverage

Pharnext - Potential licensing deals could add confidence

The Pebble Group - Two distinct businesses in one

MotorK - Strong pipeline and cash target reaffirmed

Newron Pharmaceuticals - Evenamide notches up another win (study 008A)

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