Negative reaction despite undramatic quarter - Q3 review

There was relatively little news flow in Q3 and costs were broadly in line with our overall expectation. However, the shares fell sharply following the report – we believe possibly reflecting a short delay to the Vetbiolix study, for which we now expect data in early 2027, versus late 2026 previously. The reaction appears excessive to us. We make no material changes to our estimates and maintain our fair value range of SEK3.6–4.6 per share.

No major surprises in Q3. Opex amounted to SEK18.0m, while operating cash flow was somewhat better Q/Q at SEK-14.7m (SEK-18.3m in Q2). We expect opex to increase somewhat in the coming quarters as preparations intensify for the next development phase of MIV-711 in OI and Perthes disease. However, Medivir’s financial position remains solid in our view, with end-Q3 cash of SEK247.9m – we estimate this is sufficient to fund operations until at least 2029, while management indicates a potential cash runway into 2030.

Pipeline progress. The Q3 report provided limited pipeline updates, mainly stating that projects are progressing according to plan. However, the company disclosed that 40 of 45 dogs had been recruited for the ongoing Vetbiolix study at end-Q3, suggesting to us that full recruitment could be imminent. Given the 90-day follow-up period, we now expect top-line results in Q1 2027, compared with Q4 2026 previously.

Estimate changes. We only make small changes to our 2026 cost assumption.

Story intact. We see no changes to the underlying fundamentals of the equity story, with the company’s key assets progressing according to plan. However, the share price has been weak recently, reflecting continued broader weakness in the Swedish micro-cap biotech sector and, possibly the delay to the Vetbiolix study, we believe.