Pila Pharma

Pila Pharma AB (“Pila Pharma” or “the Company”) announced on 26 January that the Company’s preclinical studies in obesity have been completed. The studies showed that body weight in the obese rats included in the study was not affected, however, the final results of the study are not yet complete, and it remains unknown whether the rats were exposed to Pila Pharma’s candidate XEN-D0501. In connection with the study outcome, Pila Pharma also announced that the Company has entered into an agreement with a new clinical contract research organization (CRO) to prepare and submit an application for a clinical trial in obesity.

Analyst Group’s view on the study results and the clinical path forward

Pila Pharma’s intention in the preclinical study was to use a formulation that the Company has previously applied successfully in preclinical rat studies. Ahead of study initiation, the formulation was changed to one that is well established at the CRO for the preclinical studies, Gubra, as the obese rats did not tolerate the original formulation. The decision to change formulation introduced uncertainty regarding the expected drug exposure, as the selected formulation has not previously been used in combination with XEN-D0501. The formulation potentially resulted in lower bioavailability, which was addressed in the study design by administering relatively high dose levels of XEN-D0501. In addition, sampling was conducted at the end of the study to verify actual systemic exposure; however, the results of this analysis are not yet finalized. Consequently, it is not yet possible to determine whether the lack of weight-loss effects is attributable to insufficient efficacy or insufficient exposure.

In connection with the study outcome, Pila Pharma also announced that the Company has signed an agreement with a new clinical CRO to prepare and submit an application for a clinical study in obesity. The application is expected to be submitted by the end of Q1-26. We expect Pila Pharma to continue clinical development if the preclinical study indicates that the rats were not exposed to the drug. In addition, it cannot be excluded that the Company proceeds with clinical development in obesity even if the final preclinical results indicate limited efficacy. Given that XEN-D0501 already has extensive safety data from previous studies, such a clinical study is expected to be able to obtain regulatory approval in obesity, although the risk profile would increase if the preclinical results ultimately indicated lack of efficacy.

In our initiation analysis of Pila Pharma, we have assumed that the Company will pursue two parallel development tracks in obesity and type 2 diabetes, with two Phase IIa studies estimated to commence in H1-26. We estimate the cost of these two clinical studies at approximately SEK 17m each. Following an oversubscribed share issue in August 2025 that provided Pila Pharma with an estimated net proceed of approximately SEK 27m, and considering estimated costs during H2-25, cash at year-end 2025 is estimated at approximately SEK 16m. Consequently, additional financing is expected to be required to advance clinical development.

The Company has outstanding TO2 warrants with a subscription period of 5–15 February 2026. The subscription price will amount to 70% of the volume-weighted average share price during a 10-trading-day period prior to the start of the subscription period on 5 February, but not lower than SEK 1.50 and not higher than SEK 3.00 per share. Full subscription would provide a capital injection of SEK 45–90m. If Pila Pharma is not provided with sufficient capital to continue clinical development within obesity and/or type 2 diabetes, further external financing to fund continued clinical development cannot be excluded.

Pila Pharma currently intends to pursue drug development within three different indications, with obesity representing one of these. The Company has conducted two Phase IIa studies in type 2 diabetes, which demonstrated a favorable safety profile as well as effects on glucose tolerance and insulin response during glucose challenge. Pila Pharma’s share price is currently down approximately 36% since publication of the preclinical study results on January 26, which we view as an overreaction given that the Company is developing the candidate across additional indications beyond obesity and that it remains unclear whether the outcome reflects lack of efficacy or lack of exposure due to the formulation change.

In summary, the preclinical obesity studies showed no effect on body weight. However, as exposure data are not yet finalized, it is currently not possible to conclude whether the outcome is driven by limited efficacy or insufficient systemic drug exposure following the formulation change. Against this backdrop, the decision to nevertheless proceed with preparations for a clinical application together with a new CRO represents a clear strategic choice, whereby the path toward clinical development continues, while the risk profile increases if the final preclinical results later indicate limited efficacy in the study. In light of the above, we will await complete preclinical study data before making eventual updates to our financial forecasts for Pila Pharma.

Analyst Group will return with an updated equity research report on Pila Pharma in connection with the H2-report. Our full initiation analysis on Pila Pharma, published on January 14th, can be read here.