This was a randomized, placebo-controlled, double-blind phase IIa study, enrolling a total of 18 patients. It started in 2017 and was divided into two parts that ran sequential. The first part (part 1) enrolled nine adult PWS patients. In this study, we learned that 0.5 mg daily of tesomet/tesofensine is highly efficacious in providing weight loss and reducing hyperphagia. We also learned that this patient group metabolize tesofensine (the active substance in tesomet) at a slower pace than other obese groups, suggesting a lower dose.
In the second part (part 2), nine adolescent PWS patients were enrolled. Part 2 comprised a three-month, double-blind part followed by two three-month, open-label extension (OLE) parts. In the double-blind part, the tesofensine dose was lowered to a quarter of the dose evaluated in part 1. Tesomet was safe and well-tolerated but didn’t reach the plasma levels enough to be efficacious. In OLE, eight patients opted to continue to the first part (OLE1) at a dose of 0.125 mg tesomet/tesofensine. In the second part (OLE2), three patients received 0.25 mg tesomet/tesofensine.
During OLE1, tesomet demonstrated a small positive effect on body weight and BMI when the patients were shifted from placebo to active drug. This is important data, as it demonstrates efficacy not from baseline but from a shift in treatment arms.
The three adolescent patients that went into the OLE2 also experienced a positive effect on weight loss and BMI (Body mass index). Furthermore, the hyperphagia was also reduced in OLE when patients were dosed at 0.25 tesomet/tesofensine. The average hyperphagia score was 3.4 (the hyperphagia score goes from 0 (no hyperphagia) to 36 (worst hyperphagia possible)). This score represented a reduction of 69% from baseline.
Drug development in ultra-rare orphan disorders is a challenging task. The small number of patients enrolled in the trial don’t support statistical evaluation. Despite the small patient population, the study design has entailed the opportunity to follow the patients for a long time (up to nine months for one patient). The results are dose-dependent and consistent.
In our view, the main conclusions from this trial is that:
Regarding the third bullet, we argue that a dosing regimen around 0.25 mg tesomet/tesofensine is optimal in terms of efficacy, safety, and tolerability. Furthermore, we argue that there is a clear rationale in future trials to allow for an adaptive dosing regimen. An adaptative study design in one or more treatment arms could increase the spectrum and flexibility of the therapeutic window.
The stock price closed at some +14 percent following yesterday’s news. It is well deserved in our view but still far away from reflecting the true value in Saniona’s pipeline. Following yesterday’s news, our confidence in the projects where tesofensine is included is stronger than ever.
The most important catalyst for the stock in the next few months is a successful capital raise. Saniona is undercapitalized at present, hence the immense gap to our Base Case. We argue that a capital raise, let's say in the form of a directed rights issue to well renowned investor’s, of minimum SEK 50 million (hopefully more) would be a major relief for the stock.
As Saniona moves closer towards a pivotal program with tesomet, and a study design can get presented, we will review the case and provide an update. It will happen no later than in Q4’19. Until then, we update our Base Case indicatively to SEK 95 per share, effective immediately. We calculate our per share valuation based on the current number of outstanding shares and a future share issue at roughly the same size as the latest that took place in the summer. This is to reflect the capital need within the next six months.
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