Q2 INTERIM REPORT OCT – DEC 2025

Hamlet BioPharma remains pre-revenue (Net sales SEK 0) and reported continued losses in Q2 Oct–Dec 2025 (Group Q2 EBITDA -KSEK 13,026; EBIT -KSEK 15,579; net loss -KSEK 15,431) and a first-half net loss of -KSEK 27,588, with cash of KSEK 16,638 and an equity/assets ratio ~84%. Operationally significant milestones materially derisk the pipeline: the FDA provided written pivotal‑study feedback supporting a Phase III pathway for Alpha1H in low‑risk NMIBC, a Phase II non‑antibiotic cystitis study (anakinra) was published in Nature Microbiology, and Hamlet signed a partnership with ImmunoForge for delivery of the NZX anti‑tuberculosis peptide; recent rights issue raised ~SEK 30m with warrants potentially adding ~SEK 110m. These clinical and regulatory developments are positive for valuation, but the company remains cash‑consumptive and will likely need further financing to execute pivotal studies.

Analysis

Market structure: Hamlet BioPharma (HAMLET B, Spotlight) is a potential winner if Alpha1H pivots to a pivotal Phase III path (FDA feedback lowers regulatory binary). Winners also include delivery/partnering specialists (ImmunoForge, CDMOs) and larger pharma seeking non‑antibiotic anti‑infectives. Losers are legacy antibiotic incumbents over time if host‑directed therapies scale, but displacement will be multi‑year given established antibiotic supply chains and reimbursement dynamics.

Risk assessment: Key tail risks are (1) Phase III failure or FDA non-acceptance of the finalized protocol, (2) clinical safety surprises for host‑directed immunotherapies, and (3) financing shortfall — cash ~SEK16.6M with H1 operating cash burn ~SEK23.7M (annualized ~SEK47M) implies ~4 months runway at current burn. Near term (30–90 days) financing outcomes and warrant exercises (potential ~SEK110M) are the pivotal binary; medium term (6–18 months) is trial start and partnering; long term (1–3 yrs) is commercialization risk/reward.

Trade implications: Take a tactical, size‑limited approach: small-cap equity upside but high dilution/financing risk argues 2–3% portfolio long HAMLET B with a hard stop if cash <SEK10M or warrants not exercised by Q2 2026. Hedge by shorting a Swedish small‑cap biotech basket equal to ~25–50% of the position notional, or buy 12–18 month call spreads on large pharma (e.g., GSK) as merger/partnering hedge. Use options where listed; otherwise prefer equity + pair hedge.

Contrarian angles: Consensus underestimates financing and governance risk (parent Linnane controls 73.7% votes) and overestimates near‑term revenue; conversely the market may underprice the TB peptide upside after the ImmunoForge deal. Historical parallels (small biotech post‑Phase II + FDA guidance) show 3x rallies on positive partnering but 90%+ drawdowns on failed follow‑ups — maintain strict position sizing and milestone‑based pyramiding.

Key Decisions for Investors

• Establish a 2–3% long position in Hamlet BioPharma (HAMLET B, Spotlight) within 30 days; set a stop‑loss at -40% and plan to trim half at +100% and exit at +200% within 12–24 months, contingent on (a) confirmation of warrant exercises or new financing ≥SEK50M and (b) public announcement of the finalized Phase III protocol.
• Implement a hedged pair: long HAMLET B sized 2% portfolio and short 0.5–1.0% notional in a Spotlight/Swedish small‑cap biotech basket (or equivalent ETF) to neutralize sector beta while keeping idiosyncratic upside.
• Buy 12–18 month call spreads (bullish but limited cost) on large-cap pharma with infectious‑disease franchises (e.g., GSK) sized 0.5–1% portfolio as a takeover/partnering hedge; strike selection OTM to limit premium (aim for 30–40% delta equivalent).
• Do not increase exposure above 3% unless: (i) cash runway >SEK50M post‑financing or full warrant conversion confirmed, or (ii) a non‑dilutive licensing deal announced; reduce to zero if cash <SEK10M or if FDA signals major protocol redesign within 90 days.