EVAX

Business Context and Reporting Period

Company: Evaxion A/S (formerly Evaxion Biotech A/S)
Filing Type: Annual Report on Form 20-F
Reporting Period: Fiscal year ended December 31, 2025
Business Overview: Evaxion is a clinical-stage TechBio company developing novel vaccines for cancer and infectious diseases using its proprietary AI-Immunology™ platform. The company operates as a foreign private issuer under Danish law and lists its American Depositary Shares (ADSs) on the Nasdaq Capital Market under the symbol "EVAX".

Key Financial Metrics (Year Ended Dec 31, 2025)

Material Changes vs. Prior Period

• Revenue Growth: Revenue increased by 122% to $7.5 million, primarily driven by a $7.5 million cash payment from Merck & Co., Inc. (MSD) upon the exercise of an option to license the EVX-B3 vaccine candidate in September 2025.
• Reduced Net Loss: Net loss decreased by 27% to $7.7 million, reflecting higher revenue and a reduction in operating expenses.
• Liquidity Improvement: Cash and cash equivalents increased significantly from $6.0 million to $23.2 million, bolstered by a public offering in January 2025 (gross proceeds of $10.8 million) and At-The-Market (ATM) sales.
• Debt Restructuring: In July 2025, the company converted €3.5 million of its European Investment Bank (EIB) loan into equity via warrants, reducing liabilities and increasing equity by approximately $4.1 million.
• Capital Structure: The company executed a share capital reduction in January 2025 to cover losses and adjusted the ADS ratio from 1:10 to 1:50.

Guidance, Outlook, and Risks

Outlook and Milestones: Management projects sufficient cash to fund operations into the second half of 2027. Key 2026 milestones include presenting additional biomarker data for EVX-01, submitting a regulatory filing for the EVX-04 Phase 1 trial, and completing preclinical validation for EVX-B4.

Management Commentary: The company emphasizes its "TechBio" model, leveraging AI to identify vaccine targets. The licensing of EVX-B3 to MSD is highlighted as a validation of the AI-Immunology™ platform, with potential future milestone payments up to $592 million.

Key Risks:

• Capital Requirements: The company has incurred significant losses since inception and expects to continue doing so. It requires substantial additional financing to achieve its goals.
• Development Uncertainty: All product candidates are in preclinical or clinical stages. There is no guarantee that any candidate will receive regulatory approval or achieve commercial success.
• Partnership Dependence: The business model relies heavily on partnerships for late-stage development and commercialization. Failure to secure or maintain these partnerships could halt progress.
• Regulatory and Manufacturing: Risks include delays in clinical trials, regulatory rejection, and reliance on third-party manufacturers for clinical and commercial supplies.

Important Facts for Investor Verification

• Revenue Source Concentration: Verify the sustainability of revenue streams, as the majority of 2025 revenue ($7.5M) was a one-time upfront payment from a single partner (MSD).
• Cash Runway: Confirm the company's ability to extend its cash runway beyond the projected second half of 2027 through future financing or partnerships.
• EVX-01 Clinical Data: Review the durability and statistical significance of the EVX-01 Phase 2 data (75% Objective Response Rate) and the upcoming monotherapy extension results expected in H2 2026.
• Warrant Liability: Monitor the classification and fair value of investor warrants, which have historically been classified as liabilities due to foreign currency exercise prices, impacting net loss volatility.
• Intellectual Property: Assess the status of the patent portfolio, particularly regarding the settlement of the dispute with Statens Serum Institut (SSI) and the protection of the AI-Immunology™ platform.