Cereno Scientific — CS1 takes another step towards Phase IIb

Cereno Scientific (OMX: CRNO-B)

Last close As at 22/04/2025

SEK8.09

0.47 (6.17%)

Market capitalisation

SEK2,142m

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Research: Healthcare

Cereno Scientific — CS1 takes another step towards Phase IIb

Cereno Scientific has successfully completed its planned Type C meeting with the FDA for lead asset CS1. The minutes from the meeting will be available after 30 days, but Cereno has indicated that the regulators looked to be in alignment with the Phase IIb study design and planned steps for clinical development. Note that unlike Type A and Type B meetings, Type C meetings are not strictly required, although they offer the opportunity to engage with the regulators to ensure alignment with study objectives, design and endpoints, which supports the likelihood of a successful outcome. Following receipt of the official minutes of the meeting and outcome of the subsequent IND, management plans to commence the Phase IIb trial in H126. As indicated in our previous note, we expect Cereno to self-sponsor Phase IIb, before seeking a licensing partner for the Phase III registrational study and subsequent commercialisation.

Jyoti Prakash

Written by

Jyoti Prakash, CFA

Director, healthcare

Healthcare

23 April 2025

Price SEK7.62
Market cap SEK2,141m

Net cash/(debt) at 31 December 2024

SEK(62.8)m

Shares in issue

281.0m
Free float 93.0%
Code CRNO B
Primary exchange NGM
Secondary exchange N/A
Price Performance

Business description

Cereno Scientific is a clinical-stage biotech based in Sweden, focused on the development of innovative, effective and safe treatments for indications with high unmet needs. Lead asset CS1 is an HDAC inhibitor that acts as an epigenetic modulator. Cereno reported positive top-line results from the Phase IIa study in pulmonary arterial hypertension in September 2024. Second asset CS014, a proprietary NCE and HDACi, is being developed for idiopathic pulmonary fibrosis, and preclinical asset CS585 is likely to target rare thrombosis-related indications.

Analysts

Jyoti Prakash, CFA
+44 (0)20 3077 5700
Arron Aatkar, PhD
+44 (0)20 3077 5700

Cereno Scientific is a research client of Edison Investment Research Limited

Note: PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

Year end Revenue (SEKm) PBT (SEKm) EPS (SEK) DPS (SEK) P/E (x) Yield (%)
12/23 0.0 (46.4) (0.20) 0.00 N/A N/A
12/24 0.0 (98.1) (0.35) 0.00 N/A N/A
12/25e 0.0 (89.2) (0.32) 0.00 N/A N/A
12/26e 0.0 (80.0) (0.28) 0.00 N/A N/A

CS1 is a histone deacetylase inhibitor (HDACi) being developed as a potentially disease-modifying treatment for the rare condition, pulmonary arterial hypertension (PAH). Afflicting c 100,000 people in the US and Europe, PAH has average survival of seven to 10 years. Given the small patient populations, treatments for rare diseases often received incentives like research grants, tax credits, lower regulatory fees and longer market exclusivity. More recently, the new FDA Commissioner Marty Makary proposed an accelerated approval pathway for drugs targeting rare diseases based on ‘plausible mechanism’ of action, on a conditional basis, without requiring randomised control trials. If ratified, this should materially lower time to market for such treatments, which should benefit Cereno.

Compared to other drugs for PAH (eg Winrevair), CS1 offers more convenient oral administration and a relatively benign safety profile. Top-line data from the Phase IIa study, showed the drug’s favourable tolerability and positive impact on exploratory clinical efficacy parameters. More detailed analysis, presented in March 2025, provided further support of CS1’s ability to reverse vascular remodelling. Disease modification is the holy grail for therapeutics under development, particularly for progressive conditions like PAH. In this context, the latest data release from Cereno’s Phase IIa CS1-003 trial was particularly encouraging, although we advise that this relates to a small cohort of c 21 patients.

Based on the Type C meeting, management believes the FDA is in alignment with the Phase IIb study design and plans, and further validation of this is expected with the release of the meeting minutes in May 2025. We believe this, along with the four-month follow-up data from the expanded access programme in June 2025, will be key upcoming catalysts for Cereno. If the observations are supportive, management plans to commence the Phase IIb trial in H126 and we assume this will be self-sponsored. However, should Cereno receive interest from a prospective partner and have shareholder support, a licensing deal prior to the Phase IIb initiation is also a possibility. This would require an adjustment to our projections.

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