‘4050 May Be A Miracle IPF Treatment
Investment Thesis. PLI offers an attractive risk/return opportunity owing to: 1) the base revenue provided by resin sales to licensees; 2) the signed partners who bring financial and commercial support to develop plasma products; and 3) the blue sky provided by additional partnership/licensing deals and the Small Molecule Therapeutics business.
Event
ProMetic announced positive early results from its open label Phase II trial in patients with Idiopathic Pulmonary Fibrosis (IPF). Most notably, trial patients have so far seen a slight improvement in lung capacity. The two commercial IPF drugs only slow the decline in lung function.
Highlights
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Trial Specifics | The IPF trial is a Phase II open-label study with 40 enrolled patients enrolled across six sites in Canada. The end-points of this trial are to first demonstrate safety and tolerability in IPF patients and to then assess the clinical efficacy of ‘4050 as a monotherapy and in combination with the two commercial drugs ESBRIET (pirfenidone) and OFEV (nintedanib). The results announced today are from the first 30 patients that have completed 12 weeks of treatment.
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Understanding the Results | IPF is a lung disease that results in scarring (fibrosis) of the lungs. The scarring progressively worsens and it becomes hard to take a deep breath and the lungs cannot take in enough oxygen. Forced Vital Capacity (FVC) is the total amount of air a person can exhale during a breath and commonly used to assess and monitor lung function. As such, IPF patients experience steep declines in FVC as the disease progresses.
o Lung Capacity Improvement | Patients treated with ‘4050 have seen a ~10mL improvement in FVC. By contrast, the two approved IPF drugs in the market only slowed the decline in lung capacity by -25–30 mL during the same time period (Figure 1). Therefore, an improvement in FVC is an impressive and unique outcome that would position ‘4050 as the lead drug.
o Potentially Better Adverse Event Profile | So far, none of the ‘4050 patients have experienced a decline in FVC >10% or death. In the ESBRIET Phase III trial, 7.5% of all patients (placebo and treatment groups) showed a >10% decline in FVC or death within the first 12 weeks. Of these, 2.5% were in the ESBRIET treatment group. Additionally, PLI reported that ‘4050 is safe and well tolerated in IPF patients when used alone or in combination with either ESBRIET or OFEV.
o Early Efficacy Alone or in Combination with One Approved Drug | Although no data was provided to support this point yet, PLI highlighted that early efficacy of ‘4050 was shown alone or in combination with one of the approved drugs. Recall that pre-clinical data demonstrated ‘4050 was shown to reduce fibrosis markers more than pirfenidone (ESBRIET). When run in combination, the two drugs together worked better than either alone, suggesting synergistic effects. As such, we assume the clinical results to date are supportive pre-clinical findings.
Valuation & Conclusion
The results are still very early and not sufficient to establish statistical significance. As such, investors should take this as directionally very positive. PLI may have two shots on goal with this indication as a monotherapy or combination therapy. More data should be disclosed during the Analyst Day on November 21. We maintain our Buy recommendation and $6.00 target price.