Initiator Pharma has released the initial findings from its phase IIa clinical trial involving the experimental drug IP2018. This trial, which employed a randomized, double-blind, placebo-controlled, 3-way crossover design, focused on assessing the effectiveness and safety of low and high doses of IP2018 compared to a placebo. The study targeted young individuals suffering from both depression and erectile dysfunction (ED). The primary objective was to examine the impact of IP2018 on penile rigidity and tumescence using the RigiScan device and visual sexual stimulation. Secondary outcome measures included safety evaluations and pharmacokinetics. A total of 24 male patients diagnosed with mild to moderate depression and ED, as determined by Hamilton depression scale scores of 7 to 23 and International Index of Erectile Function (IIEF-5) scores of 12 to 18, respectively, participated in the trial.

The results of the study revealed promising and clinically significant efficacy data for the treatment of ED, providing support for a new therapeutic approach for this particular patient population. The high dose of IP2018, administered orally as a single dose, exhibited a statistically significant increase in penile tumescence (p=0.04) and duration of rigidity (p=0.025), sufficient for successful intercourse. Thus, the positive effect of IP2018 on erectile function was evident and dependent on the dosage. It is worth noting that dose-dependent efficacy is commonly observed in early- to mid-stage clinical trials, as the optimal dosing regimen for a candidate is not yet fully understood. This aspect will be considered and adjusted in future clinical studies, which we believe may involve testing multiple higher dosages to determine the optimal level. Additionally, no safety concerns were reported, indicating that the higher dose of IP2018 should be tolerable without any issues.

These results mark a significant milestone for Initiator Pharma and lay the groundwork for further development of IP2018. While the complete data from the trial is not yet available, the positive outcomes serve as a proof-of-concept (PoC), reducing the risks associated with the asset and justifying the continued exploration of IP2018 as a treatment for psychogenic ED. Therefore, the next logical step for the candidate would likely be a phase IIb study conducted in natural settings, similar to the ongoing phase IIb trial involving pudafensine (IPED2015). Consequently, we have revised our probability of success (PoS) for the phase II stage of IP2018 from 23% to 38%, as this figure aligns more closely with the PoS typically seen for an ED candidate in phase IIb. As a result, our overall likelihood of approval (LoA) for IP2018 has increased from 11% to 18%.

Overall, we are encouraged by these results, which further strengthen our belief in IP2018 and the rationale for using monoamine modulators as therapeutic agents in ED and depression. We will provide a more thorough analysis of the results after full data from the study is released by the company. For now, we raise our base case valuation of Initiator Pharma to SEK16 (13.5).