F-1: Evaxion Biotech Seeks Up to $12.5 Million in New Offering to Advance AI-Driven Vaccine Pipeline

Evaxion Biotech is offering up to 5,252,100 American Depositary Shares and pre-funded warrants to raise capital for its AI-driven vaccine development programs.

Summary

• Evaxion Biotech is conducting a best efforts offering of up to 5,252,100 American Depositary Shares (ADSs) and pre-funded warrants to purchase up to 5,252,100 ADSs.
• The offering price will be determined through negotiation between Evaxion, the Placement Agent, and investors.
• Pre-funded warrants are offered to purchasers who would otherwise exceed 4.99% or 9.99% ownership limits.
• The exercise price of each pre-funded warrant will be DKK 10, equal to $1.42 per ADS, but not less than the USD equivalent to DKK 10 at the time of exercise.
• The offering will terminate on a date in 2024, and there is no minimum offering amount required for closing.
• Evaxion's ADSs are listed on the Nasdaq Capital Market under the symbol EVAX, with a closing price of $2.38 per ADS on November 12, 2024.
• Lake Street Capital Markets, LLC is acting as the exclusive Placement Agent for the offering.
• The Placement Agent will receive a cash fee equal to 7.0% of the gross proceeds and reimbursement of legal fees up to $100,000.
• Evaxion estimates total offering expenses, excluding the Placement Agent fee, to be approximately $0.7 million.
• The company intends to use the net proceeds to advance its preclinical and clinical pipeline, and for continuing operating expenses and working capital.
• As of September 30, 2024, Evaxion had $4.6 million in cash and cash equivalents, not including the $3.2 million upfront payment from the MSD agreement received in October 2024.

Sentiment

Score: 6

Explanation: The document presents a mix of positive and negative aspects. The company has promising technology and partnerships, but faces significant financial and regulatory risks. The sentiment is cautiously optimistic, reflecting the potential of the company's technology but also the challenges it faces.

Positives

• The company has a strong focus on establishing partnerships to develop novel vaccine candidates.
• The company has a clinical-stage cancer pipeline of novel personalized therapeutic vaccines.
• The company has a preclinical prophylactic vaccine pipeline for bacterial and viral diseases.
• The company's AI-Immunology platform has been preclinically and clinically validated.
• The company's AI-Immunology platform is adaptable and scalable to other disease areas.
• The company's AI-Immunology platform has the potential to significantly reduce development costs and risks.
• The company has a significantly expanded partnership with MSD, with potential milestones of USD 592 million per product.
• The company has a strong multidisciplinary capability set spanning the full value chain from target discovery to early clinical development.
• The company has a state of art wet-lab and animal facility for rapidly validating AI predictions.
• The company has a modular AI platform architecture that allows for improvements in individual building blocks to lead to improvements in all the AI prediction models.

Negatives

• The company has incurred significant losses since its inception and anticipates continuing to incur significant losses.
• The company will require substantial additional financing to achieve its goals.
• The company is a clinical stage company with only two product candidates in early stages of clinical trials.
• The company's business model is based upon partnering and there is no guarantee that they will be able to secure needed partnerships.
• The company may encounter difficulties in managing its development and expansion.
• The company's product candidates may not work as intended, may cause undesirable side effects or may have other properties that could delay or prevent their regulatory approval.
• The company may encounter difficulties in manufacturing, particularly with respect to the scaling-up of manufacturing capabilities.
• The company may be involved in lawsuits to protect or enforce its intellectual property.
• The company received a delisting notice from Nasdaq Capital Markets, which they have appealed.

Risks

• The company may not be able to regain compliance with Nasdaq listing requirements, which could result in delisting.
• The company has a limited operating history and no vaccine has been approved using its technology.
• The company is dependent upon successfully concluding partnerships to advance its product candidates.
• The company will require substantial additional financing to achieve its goals, and a failure to obtain this capital could force them to delay or cease operations.
• The company may encounter difficulties in managing its development and expansion.
• The company's product candidates may not be successful in nonclinical studies or clinical trials, receive regulatory approval or be successfully commercialized.
• The company may encounter substantial delays in its clinical studies.
• The company faces significant competition in an environment of rapid technological and scientific change.
• The company's product candidates may not work as intended, may cause undesirable side effects or may have other properties that could delay or prevent their regulatory approval.
• The company relies on third parties to manufacture preclinical, clinical and commercial supplies of its products, product candidates and their components.
• The company may be involved in lawsuits to protect or enforce its intellectual property.

Future Outlook

The company's focus for 2025 will be a continuation of the multi-partner approach to value realization via execution upon its business development strategy, continuation of the ongoing EVX-01 phase 2 trial, the ongoing strengthening of its AI-Immunology platform and further advancement of its research activities, including progressing its ERV based precision vaccine concept towards clinical development. Finally, the focus is of course on advancing existing partnerships including bringing the MSD collaboration to option exercise.

Management Comments

• The company believes it is the first in the world to demonstrate a correlation between the predictive power of AI and clinical response in patients.
• The company's purpose is saving and improving lives with AI-Immunology.
• The company is excited about the commercial potential of EVX-01.
• The company is thrilled about the interest they are seeing from potential partners in both the establishment of new vaccine discovery and development collaborations as well as in their existing pipeline assets.
• The company is excited about their significantly expanded vaccine collaboration with MSD and the financial and strategic value it brings.

Industry Context

The document highlights the competitive landscape in the biotechnology and pharmaceutical industries, particularly in the areas of immuno-oncology and infectious diseases. It emphasizes the need for innovative approaches, such as AI-driven drug discovery, to address unmet medical needs and overcome challenges like drug resistance. The document also notes the growing market for bacterial vaccines and the potential for AI to accelerate vaccine development.

Comparison to Industry Standards

• The document benchmarks Evaxion's PIONEER model against state-of-the-art public tools, demonstrating superior performance in identifying neoantigens.
• The document compares the overall response rate of 67% in the EVX-01 Phase 1/2a trial to a historical overall response rate of 40% with anti-PD-1 treatment alone.
• The document notes that the observed immunogenicity rate of 79% in the EVX-01 Phase 2 trial compares very favorably to what is seen with other approaches.
• The document mentions that the company's EVX-01 manufacturing process has a turnaround time of approximately seven weeks, which is significantly shorter than other patient-specific, peptide-based cancer vaccines.
• The document highlights that the company's EDEN model outperforms reverse vaccinology by identifying additional potential vaccine antigens.
• The document notes that the company's EVX-B1 vaccine candidate has demonstrated highly significant levels of protection in two different challenge models and high IgG titers, suggesting good overall immunogenicity.

Management Changes

Legal Proceedings

• In April 2022, SSI initiated a legal proceeding against the company claiming sole ownership of a patent application, but the lawsuit was lifted in June 2024 on a walk-away basis with no compensation by Evaxion to SSI.

Stakeholder Impact

• Shareholders may experience dilution due to the offering.
• Shareholders may be impacted by the company's ability to secure partnerships and advance its pipeline.
• Employees may be impacted by the company's ability to secure funding and continue operations.
• Customers (potential patients) may benefit from the development of new and effective vaccines.
• Suppliers and creditors may be impacted by the company's financial performance and ability to meet its obligations.

Next Steps

• The company will continue the ongoing EVX-01 phase 2 trial.
• The company will continue strengthening its AI-Immunology platform.
• The company will further advance its research activities, including progressing its ERV based precision vaccine concept towards clinical development.
• The company will advance existing partnerships including bringing the MSD collaboration to option exercise.

Key Dates

Keywords

AI-Immunology, vaccine, cancer, infectious disease, neoantigen, ERV, PIONEER, ObsERV, EDEN, RAVEN, AI-DeeP, clinical trial, partnership, MSD, Nasdaq, ADS, pre-funded warrants