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InDex Pharmaceuticals - 250 or 500mg is not the question! Taker is....

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What does the Ulcerative Colitis map look like from a Big Pharma/Biotech perspective and what is the opportunity for Index Pharmaceutical? It looks really fascinating! – And the stock market doesn’t seem to bother about it at all!

Cobitolimod 250 mg works for sure - that we know from phase 2b. Index is now approaching its independent monitoring committee decision, whether the remaining part of phase 3 should use 250 mg or 500 mg. The latter could mean some unexpected adverse events……but given the history of safety of the drug Cobitolimod, also 250 mg will probably do very well to achieve a good final result in the ph3. The risk remaining is, as always in UC, the placebo-result. Cobitolimod is, however irrespective of 250mg or 500 mg, likely to become an ulcerative colitis drug that will, with its safety and reasonable/good/very good efficacy, will compete well in the large UC market, either as a mono-drug and/or in combination with other UC drugs

Since my time as Board member in Index ending 2013 I have followed the field's development and can now conclude that there are at least 10-13 big pharma/biotechs that could take an active interest in Cobitolimod/Index Pharma over the coming periods.

I am more or less ruling out Pfizer and Abbvie as a result of thier positions/coming positions in the market with Xelejenz & Etrasimod respectively Humira, Rinvoq & Skyrizi. I am also more or less ruling out J&J with Remicade, Stellara & Simponi. However, there are at least 10 other big pharmas/biotechs that have interests in the UC market.

It is a market where only few of the patients get relief from a dreadful lifelong disease. As in cancer, it is a market where combinations of therapies will develop. A therapy with a new different mechanism of action and the safety of Cobitolimod will definitely have an important place in the market irrespective if it achieves a delta of 15% or 30% in the ongoing Conclude phase 3 study. The higher the better of course. Apart from Index there will most certainly also be an interest in the, at present starting, phase 3 study of French Abivax which timewise is 6-9 months after Index.

The Pharmas/Biotechs are listed below.

You can draw your own conclusions from the above table but Cobitolimod represents value for these companies. My guess is Takeda. Index is at present valued at an Enterprise Value of roughly 100 msek while Abivax has an Enterprise Value of 1900 msek. Abivax has many loans and has cash lasting to the end of Q1-23 while Index' has hardly no loans and cash lasting to at least early 2024

Both companies need further financing to finish their studies. However, compare the Enterprise Values to the 7500 msek Pfizer paid for Arena, an acquisition price or licensing economics of Index will most likely end up being somewhere very much higher than its miniscule value today. A share price of 4-5 kronor (today below 1kr) is clearly motivated before the coming financing. The latter may, on the other hand, be relatively small if a license deal is concluded in Japan and/or Europe during 2022/23.



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