Pharma Equity Group (“PEG” or “the Company”) published its Year-End report for 2024 on the 20th of March 2025.
The following are key events that we have chosen to highlight in the report:
- Execution Strategy Refocused to Maximize Market Opportunities
- Submitted Trial Applications Marks Continued Clinical Development
- Ongoing Discussions with Potential Licensing Partners
- FY 2025 Guidance Indicates Revenue Generation and Reduced Operating Loss
- Robust Cost Control
- Receivable from Portinho S.A. – Court Decision not Expected During 2025
- Enhanced Financial Flexibility Through Premium-Priced Directed Share Issue
- Newly Appointed CEO with Extensive Expertise
New Execution Strategy Set to Accelerate the Road to Licensing Agreements
During the fourth quarter, the board approved a new execution strategy and a refined prioritization of clinical focus areas within the Company’s subsidiary, Reponex Pharmaceuticals A/S (“Reponex”). As part of PEG’s evaluation of Reponex’s clinical pipeline, several key commercial factors were assessed, including medical need, patient recruitment feasibility, regulatory pathways, probability of success, and resource allocation in terms of both human and financial capital. Based on these considerations, Reponex has prioritized the following development programs, which have demonstrated clinically relevant data and hold patent protection in key geographical markets, reinforcing the Company’s strategic positioning in the sector:
- RNX-051 for Colon Adenomas and Colon Cancer
- RNX-011 for the Treatment of Peritonitis
- RNX-041 for the Treatment of IBD (Pouchitis)
Recent Clinical Advancements
At the beginning of Q1-25, PEG submitted trial applications for RNX-011 to the authorities, aiming to initiate a Phase 2 clinical trial with two distinct treatment arms: a placebo group and a treatment group receiving RNX-011. The trial is set to enroll 32 patients, evenly distributed between the two arms. Furthermore, the Company expects to submit trial applications for RNX-051 in late Q1-25 or early Q2-25. This trial, conducted in collaboration with SUH Køge and its international research network, will be a larger, placebo-controlled Phase 2 study involving approx. 400 patients, focusing on individuals with colon adenomas. Regarding RNX-041, the drug candidate is actively included in Part 2 of the ongoing Phase 2 proof-of-concept clinical study for the treatment of pouchitis. The Company is actively pursuing strategic partnerships to support larger clinical trials, which could further accelerate the clinical development process.
While PEG has adopted a new execution strategy and refined the Company’s clinical priorities, PEG’s drug candidates for chronic leg ulcers (RNX-022, RNX-023) and Crohn’s Disease (RNX-041) remain of significant clinical and commercial interest. These programs will continue through strategic clinical and industrial collaborations.
Analyst Group assesses that the streamlined focus area strengthens PEG’s ability to allocate resources efficiently, prioritize high-potential drug candidates, and accelerate clinical progress. By concentrating efforts on targeted therapeutic areas, PEG enhances the Company’s prospects for securing strategic partnerships, optimizing trial outcomes, and ultimately increasing the likelihood of a successful commercialization through lucrative licensing agreements.
Guidance for FY 2025 – Ongoing Licensing Discussions are Expected to Convert to Revenue
The Company is currently in dialogue with potential licensing partners, and PEG anticipates entering license agreements by the end of Q3-25 and Q4-25. This is reflected in the estimated FY 2025 revenue of DKK 11m, primarily driven by forecasted upfront payments. Moreover, PEG projects a significant reduction in the cost base for 2025 compared to both 2023 and 2024, with cost-cutting measures and the conversion of fixed to variable costs playing a key role in lowering capital requirements. Overall, the Company expects a pre-tax loss (EBT) of DKK 4–7m, including revenue from licensing agreements. The total expected cash outflow for 2025 is approx. DKK 14.5m, representing a significant improvement from 2024, when operating cash flow (OCF) stood at DKK -22.8m. Analyst Group believes that the ongoing licensing discussions serve as key triggers for 2025, as PEG takes critical steps toward securing lucrative agreements and generating cash flow.
Solid Cost Control Supports Accelerated Development
During Q4-24, the Company’s operating costs totaled approx. DKK 4.2m (6.5), a decrease of 36% Y-Y and 19% Q-Q, a testament to the cost-cutting measures bearing fruit. Breaking down the OPEX more in detail during Q4-24, the R&D costs have decreased by 3% Y-Y and increased by 57% Q-Q, as the Company continues to progress with the development of the pipeline candidates. Furthermore, the administrative costs have witnessed a Y-Y and Q-Q decrease of 61% and 59%, respectively, a solid indication of robust cost control. Overall, the EBT for 2024 came in at DKK -26.2m, in line with the Company’s guidance for the full year (loss of DKK 24-29m).
It is worth noting that the current management has assessed that the capitalized development costs related to projects and patents did not meet the criteria set by IAS 38. Consequently, the Company has reduced Development Projects (intangible assets) from approx. DKK 13.6m to zero, a technical adjustment that lowers opening equity but does not impact financial results or taxes for 2023–2024.
Receivable from Portinho S.A.
At the end of Q4-24, the receivable from Portinho S.A. remained valued at DKK 58m on the balance sheet, consistent with the previous quarter. As noted in earlier reports, PEG filed a summons with the Maritime and Commercial High Court in Q2-24 against Portinho S.A. to recover approx. EUR 9.6m plus interest. PEG states in the Q4 report that a decision in this case is not expected in 2025. Additionally, arbitration proceedings against Interpatium, the real estate developer on Madeira Island, are ongoing before the Danish Institute of Arbitration (DIA) concerning the sale of shares in Portinho.
Enhanced Financial Flexibility Through Directed Share Issue
At the beginning of the fourth quarter, PEG successfully strengthened the Company’s financial position through a directed share issue, generating gross proceeds of approx. DKK 51.1m. This includes the conversion of convertible debt amounting to DKK 12.6m, which, as a non-cash transaction, resulted in a net cash inflow of DKK 38.5m. Of this amount, the Company allocated DKK 25.8m to reduce financial debt, further reinforcing the Company’s balance sheet, leaving a net cash proceed of DKK 12.7m post-debt reduction.
Notably, the shares were issued at a price of DKK 0.25 per share, representing a 19% premium to the closing price on October 3rd, a strong indication of investor confidence in PEG’s future prospects. The capital injection not only strengthens PEG’s financial resilience but also enhances the Company’s strategic flexibility, positioning the Company to actively pursue potential licensing agreements and advance the clinical development pipeline.
In early 2025, PEG strengthened the Company’s financial flexibility further through loans and loan commitments totaling approx. DKK 13m. Given the Company’s expected burn rate, this provides a runway exceeding 12 months. The financial headroom is expected to improve further throughout 2025 via convertible loans or similar financing, with ongoing discussions underway with both existing and new investors for short- and long-term funding.
PEG has shown an operational burn rate of approx. DKK -6.7m (-3.8) during Q4-24, equivalent to DKK -2.2m/month, marking an increase from the previous quarter’s monthly burn rate of DKK -1.5m. The increase is driven by changes in working capital and higher interest expenses. With a more streamlined strategy, an improved financial position following the directed share issue, a strong focus on efficiency measures, and expected licensing revenues in 2025, Analyst Group believes PEG is well-positioned to execute the Company’s strategy and advance toward licensing agreements.
Executive Management and Organizational Changes
Following the end of the quarter, the Company announced the appointment of Christian Henrik Tange as the new CEO of PEG, effective April 1st, 2025. Tange brings over 25 years of experience in financial transformation and transactions, including IPOs, equity and debt financing, and M&As across both listed and private companies in Europe and the US. With an extensive network of Nordic, European, American, and Chinese investors, Tange has successfully raised over DKK 500 million for various companies. He has held key positions in international firms and possesses deep expertise in making companies attractive to investors. Among his previous roles, he served as CFO and Investment Manager at Karolinska Development, a Nasdaq Stockholm-listed investment company. Most recently, he was CEO of Capiital, where he specialized in refining corporate strategies and operations, as well as providing tailored advisory, funding, and M&A services.
The current CEO, Thomas Kaas Selsø, will step down from his position on March 31, 2025, to focus on his consulting business. He will continue to support PEG as a consultant, specializing in accounting, finance, and reporting.
In conjunction with these changes, Sebastian Bo Jakobsen has been appointed CEO of PEG’s subsidiary, Reponex. Jakobsen, who holds a master’s degree in cognitive science from Aarhus University, has been with Reponex as Manager of Scientific Development since September 2022. This appointment aims to provide a focused approach to Reponex’s clinical development activities and to intensify efforts in establishing strategic collaborations with potential licensing partners.
Analyst Group assesses that both Christian and Sebastian appear to be strong candidates for their respective roles, possessing qualifications well-suited to the Company’s strategic objectives. Christian’s extensive background in financial transformation and transactions, combined with his broad investor network and prior experience in the pharma industry, represents key strengths in driving PEG’s next phase of financing and, ultimately, licensing agreements for the Company’s pipeline candidates. Having been with Reponex since Q3-22, Sebastian has developed a deep understanding of the current drug candidates, a crucial asset in successfully executing the new strategy and advancing clinical development.
In summary, PEG enters 2025 with ongoing discussions with potential licensing partners, a key driver for unlocking the Company’s hidden value. Simultaneously, PEG has strengthened the Company’s financial position following a directed share issue executed at a 19% premium, alongside a refined execution strategy focused on the most commercially promising market opportunities. Pipeline candidates RNX-051, RNX-011, and RNX-041 constitute the core priorities, supported by a more cost-efficient approach and expected revenues toward the end of 2025 stemming from licensing agreements, which Analyst Group believes will serve as key triggers that could further accelerate value realization in 2025.
With a newly appointed executive management team bringing expertise in securing funding, driving strategic initiatives, and accelerating clinical advancements, PEG is well-positioned to advance the Company’s pipeline and secure licensing agreements. Building on the foundation established under the previous leadership, the strengthened management structure enables PEG to transition more swiftly from early-stage discussions with potential licensing partners to formalized commercial agreements, paving the way for significant long-term value creation.
We will return with an updated equity research report of PEG.
