Company overview

Saniona: Tesomet Potential Reinforced

Redeye Research Note timeStamp 2020/11/24

Redeye is especially encouraged to see that the safety looks good after the nearly year-long study and that the efficacy signals observed in the double-blinded are reinforced. The phase 2 results in hypothalamic obesity (HO) strongly merits further development and that tesomet holds the potential as a potential efficacious treatment in this indication, in our view. To reflect our increased confidence in this program, we raise our Base Case with immediate effect.

Background
Yesterday, Saniona reported top-line results with tesomet in HO from the Open-Label Extension (OLE) part (24+24 weeks). Saniona reported positive results from the 24-weeks double-blinded (DB) part in April 2020.

Some datasets shared yesterday after the nearly year-long study (DB+OLE) include:

– Side effects observed in OLE were generally mild and transient
– Only one serious adverse event, which resolved spontaneously
– No clinically meaningful differences in heart rate or blood pressure
– All study participants (n=18) completed the study

– From an efficacy standpoint, such as body weight and waist circumference, the improvements appear to maintain at 24+24 weeks

 

Reflections
Generally, we don’t draw any major implications from OLE data. However, as tesomet is an intended (perhaps) life-long treatment, it is highly encouraging to see that the efficacy trends maintain and with a continuous favorable safety profile. Combined, it strongly merits further development into the pivotal stage, we argue.

 

Impact on Valuation
Together with some other minor adjustments, we raise the likelihood of approval (LoA) to 45% in HO for tesomet, effective immediately. It increases our Base Case to SEK 70 per share. It could potentially be the first in a four-step approach in this indication where step 2, 3, and 4 are:

– Outcome on the pending communication with the FDA to clarify how only to make tesomet accessible to the appropriate patients
– Establish the study design as accepted by regulators and initiate a supportive phase 2b study
– In the fourth step, we will dig deeper into the commercial potential with tesomet in HO

A successful outcome in steps 2 and 3 could raise our LoA by at least another 5%.

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