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Implanted Cell Device Reaches 5 Year Milestone
Research Report

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This pouch, loaded with pancreatic islet cells, is being evaluated in patients with insulin-dependent Type 1 diabetes, noted a Ventum Capital Markets report.

Sernova Corp.'s (SVA:TSX.V; SEOVF:OTCMKTS; XETRA:PSH) new Phase 1/2 study data showed its Cell Pouch has a "good efficacy and safety profile," reported Ventum Capital Markets analyst Stefan Quenneville in a Sept. 12 research note. Interim trial results were presented at the recent 2024 EASD (European Association for the Study of Diabetes) Annual Meeting.

"We view the company's update as encouraging," Quenneville wrote.

Offering 733% Upside

The analyst maintained his Buy rating and gave the company a target price of CA$2.50.

Given Sernova's price at the time of the report of about CA$0.30 per share, the target implies a 733% return on investment.

Efficacy and Safety Demonstrated

In this Phase 1/2 trial, Sernova's Cell Pouch, containing human donor islets, is being evaluated in patients with insulin-dependent Type 1 diabetes. Cohort A patients were implanted with an eight-chamber Cell Pouch, and Cohort B patients received a larger, 10-chamber Cell Pouch. Both cohorts were treated with concurrent immunosuppression as well.

Interim data show all six patients in Cohort A achieved and sustained insulin independence. In the first patient the device remained implanted for five years, and for four of them the patient had insulin independence with blood sugar levels in the nondiabetic range.

"The Cell Pouch is the most advanced encapsulation device in development," Quenneville wrote.

This patient, however, had to have the Cell Pouch removed due to a nondiabetic medical problem. After its removal, the contents were studied histologically.

The histological data showed healthy, well-vascularized, and functioning islets in all eight chambers, representing "a good efficacy and safety profile five years post-implantation," Quenneville wrote. "This represents the longest-lasting implanted encapsulation device containing functioning islets without fibrosis."

Problem Among Cohort B

Of the Cohort B patients, only one achieved insulin independence. Five experienced engraftment of the transplanted islets due to problems with their immunosuppressive regimens, Quenneville reported.

Because of this, Sernova intends to add and evaluate a third cohort, implanted with the larger pouch and given an "optimized immunosuppressive regimen that it believes will confer an improved efficacy/side effect profile," the analyst described. Enrollment of this third cohort is expected to start around year-end 2024. Thus, commercialization will be pushed back.

With a New CEO

In other news, Jonathan Rigby, previously the executive chairman of Sernova, recently became its chief executive officer via appointment. With 30 years of experience in leadership in the biotech and medtech industries, Rigby has led companies through significant equity capital raises and initial public offerings, for instance.

"Mr. Rigby's skill set and track record give us confidence in the company's ability to develop its best-in-class Type 1 diabetes Cell Pouch data and, importantly, raise the capital it requires to continue pursuing its Type 1 diabetes program and other key initiatives," wrote Quenneville.

Well-Positioned Financially

The analyst also reported that Sernova recently closed its nonbrokered private placement, oversubscribed by CA$1.2 million (CA$1.2M) and generating gross proceeds of CA$5.2M.  

"The equity raise provides Sernova with a much-needed cash injection and, on about a CA$3M per quarter burn rate, extends the company's cash runway through Q1/25," Quenneville wrote.


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Important Disclosures:

  1. Sernova Corp. has a consulting relationship with Street Smart an affiliate of Streetwise Reports. Street Smart Clients pay a monthly consulting fee between US$8,000 and US$20,000.
  2. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Sernova Corp.
  3. Doresa Banning wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor/employee. 
  4.  This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company. 
  5. This article does not constitute medical advice. Officers, employees and contributors to Streetwise Reports are not licensed medical professionals. Readers should always contact their healthcare professionals for medical advice.

For additional disclosures, please click here.

Disclosures for Ventum Capital, Sernova Corp., September 12, 2024

Analyst Certification I, Stefan Quenneville, hereby certify that all of the views expressed in this report accurately reflect my personal views about the subject securities or issuers. I also certify that no part of my compensation was, is, or will be, directly or indirectly related to the specific recommendations or views expressed in this report. I am the research analyst primarily responsible for preparing this report.

Research Disclosures 

Ventum Financial Corp. and/or its affiliates have received compensation for investment banking services for the subject company over the preceding 12- month period.

Ventum Financial Corp. and/or its affiliates expect to receive or intend to seek compensation for investment banking services from the subject company.

General Disclosure The affiliates of Ventum Financial Corp. are Ventum Financial (US) Corp., Ventum Financial Services Corp., and Ventum Capital Corp. Analysts are compensated through a combined base salary and bonus payout system. The bonus payout is amongst other factors determined by revenue generated directly or indirectly from various departments including Investment Banking. Evaluation is largely on an activity-based system that includes some of the following criteria: reports generated, timeliness, performance of recommendations, knowledge of industry, quality of research and investment guidance, and client feedback. Analysts and all other Research staff are not directly compensated for specific Investment Banking transactions. None of the material, nor its content, nor any copy of it, may be altered in any way, transmitted to, copied or distributed to any other party, without the prior express written permission of Ventum Financial Corp. Ventum Financial Corp.’s policies and procedures regarding dissemination of research, stock rating and target price changes can be reviewed on our corporate website at www.ventumfinancial.com (Research: Research and Conflict Disclosure).

Participants of all Canadian Marketplaces. Members: Canadian Investment Regulatory Organization, Canadian Investor Protection Fund and AdvantageBC International Business Centre - Vancouver. Estimates and projections contained herein are our own and are based on assumptions which we believe to be reasonable. Information presented herein, while obtained from sources we believe to be reliable, is not guaranteed either as to accuracy or completeness, nor in providing it does Ventum Financial Corp. assume any responsibility or liability. This information is given as of the date appearing on this report, and Ventum Financial Corp. assumes no obligation to update the information or advise on further developments relating to securities. Ventum Financial Corp. and its aೀiliates, as well as their respective partners, directors, shareholders, and employees may have a position in the securities mentioned herein and may make purchases and/or sales from time to time. Ventum Financial Corp. may act, or may have acted in the past, as a ೃnancial advisor, ೃscal agent or underwriter for certain of the companies mentioned herein and may receive, or may have received, a remuneration for their services from those companies. This report is not to be construed as an oೀer to sell, or the solicitation of an oೀer to buy, securities and is intended for distribution only in those jurisdictions where Ventum Financial Corp. is registered as an advisor or a dealer in securities. Any distribution or dissemination of this report in any other jurisdiction is strictly prohibited. Ventum Financial Corp. is a Canadian broker-dealer and is not subject to the standards or requirements of MiFID II. Readers of Ventum Financial Corp. research in the applicable jurisdictions should make their own eೀorts to ensure MiFID II compliance. For further disclosure information, reader is referred to the disclosure section of our website.





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