OSE Immunotherapeutics — Full Lusvertikimab results reflect potential in UC

The CoTikiS trial was a multicentre, randomised, double-blind, placebo-controlled, parallel-group study designed to assess Lusvertikimab in UC patients. The study included participants with moderate to severe UC, who were either unresponsive or had inadequate response to the standard of care and other biologics. Participants were randomised to receive a dose of either 850mg or 450mg, or placebo, and the primary endpoint was based on MMS improvements, a FDA-recognised outcome measure (Exhibit 1). The MMS is a nine-point scale measuring disease activity in patients with UC, based on three parameters – stool frequency, rectal bleeding and endoscopic sub-scores – with each component assigned a score between zero and three, where higher scores correspond to greater disease severity.

134 patients were analysed in the Phase II study in the period up to week 10 (850mg group: n=50; 450mg group: n=35; placebo group: n=49). 120 patients treated with Lusvertikimab participated in the 24-week open-label extension.

While the topline results were first published in July 2024, OSE shared the full results in November 2024, including the final analysis of the primary endpoint at week 10. The primary endpoint was met with statistical significance at both tested doses. While the placebo group reported a 1.5-point improvement on the MMS from baseline, the higher dose group of 850mg recorded a 2.4-point improvement, while the 450mg dose cohort saw a 2.7-point improvement. The pooled cohort recorded a 2.5-point improvement from baseline. On a placebo-adjusted basis, these results translated to a 0.9-point difference versus placebo (p=0.036) in the 850mg group, and notably, a higher 1.16-point difference versus placebo (p=0.019) in the 450mg cohort. For the pooled cohort (n=85), a 1.00-point difference versus placebo (p=0.01) was recorded at week 10 (Exhibit 2).

Importantly, the trial also reported encouraging results on key secondary endpoints. One of the key secondary endpoint measures was clinical remission, defined by an MMS of ≤2 points, including a rectal bleeding score of zero. The results showed that, compared to 4% for the placebo group, 13% of patients in the 850mg group (odds ratio, OR, 3.26), and 22% of patients in the 450mg group (OR 6.19), achieved clinical remission, again showing superior result at the lower of the two tested doses (Exhibit 3). Data from the lower dose cohort compares favourably to results from the Phase III induction trial data for AbbVie’s second-generation biologic Skyrizi, which received FDA approval in June 2024 for moderate to severe UC. This study evaluated 975 patients (2:1 active arm to placebo) and reported a clinical remission rate of 20.3% for the candidate versus 6.2% for placebo following a 12-week treatment period. However, we caution that while this data provides directional guidance, one cannot draw firm conclusions given the possible differences in patient populations, trial design, treatment dosage and duration.

For CoTikiS, clinically meaningful benefits were also observed across measures of endoscopic improvement and endoscopic remission, as well as in measures on the UC endoscopic index of severity (UCEIS) (Exhibit 4). As with the primary endpoint measure and the clinical remission data, the 450mg group appeared to outperform the 850mg group. We note that an early interim futility analysis (including c 30% of patients) had proposed an interruption of the 450mg group, and as such, the 850mg group was initially considered for the primary analysis. However, in the final analysis the futility of the 450mg group was not confirmed, and the Statistical Analysis Plan (SAP) Addendum confirmed the inclusion of 450mg group. The two groups were pooled to assess the global treatment effect on the primary efficacy measure.

In terms of safety, Lusvertikimab exhibited a desirable safety and tolerability profile throughout the 24-week label extension period (up to week 34), bolstering its data package. Importantly, there were no differences observed between the two tested doses and placebo in terms of serious adverse events, adverse events leading to discontinuation, severe drug-related adverse events, opportunistic infections or infusion reactions during the induction period.

Collectively, we view these full results as favourable for the potential of Lusvertikimab to address moderate to severe UC. This latest update indicated that OSE will look to advance the programme with a development partner, which we anticipate could materialise in 2025.

UC is a form of inflammatory bowel disease, associated with inflammation around the lining of the large intestines (colon) and rectum. Symptoms include abdominal pain, cramping, bloating, blood in the stool and diarrhoea. The condition most commonly affects people between 15–30 years of age and can range from mild to severe. The prevalence of UC was estimated to be five million cases globally (as of 2023). The US prevalence is estimated to be between 600–990k. According to a report by Market Research Future, the global UC treatment market was valued at US$7.2bn in 2022, and projected to reach US$10.8bn by 2032, at a CAGR of 5.1%.

Standard UC treatment regimens include aminosalicylates (5-ASA drugs) in the first-line setting, which work more effectively where cases are mild to moderate. For patients not benefiting from 5-ASA drugs, other treatment options include corticosteroids (such as prednisone), immunomodulators (such as methotrexate and azathioprine), biologics and JAK inhibitors. Biologics typically work by inhibiting or blocking proteins/cytokines that cause inflammation, and since the first biologics approval in the indication in the late-1990s (Remicade, approved in 1998), they have become the standard of care in moderate to severe UC. Three separate categories of biologics are currently approved for the condition:

While anti-TNFs were the first biologics to receive the regulatory green light in UC, recent years have seen second-generation biologics, such as interleukin (IL) antagonists, gain prominence. As noted previously, the most recently approved biologic for UC is Skyrizi (an IL-23 antagonist), which received FDA approval in June 2024 in moderate to severe UC.

While available biologics continue to be an effective treatment option for UC, a portion of patients remain either unresponsive or eventually develop resistance to the treatments. Reports note that treatment efficacy tends to plateau over time, with less than 50% of patients achieving remission over one year. In our view, this highlights the need for alternative treatments with novel mechanisms of action.

OSE’s Lusvertikimab targets IL-7 and its receptor IL-7R, a cytokine implicated in UC and other inflammatory bowel diseases, and, to our knowledge, is the most clinically advanced IL-7R antagonist in clinical development, targeting CD127 (a cytokine that modulates the proliferation, apoptosis and activation of CD4 and CD8 T-cells). Reported scientific data suggests that high expression of IL-7R is associated with poor responses to other biological treatments, such as anti-TNF therapies and could, therefore, offer a solution as a potentially more effective treatment compared to other biologics.

We expect the release of the additional positive data on the primary and secondary endpoints of the Phase II CoTikiS trial to support OSE’s discussions with potential partners for Lusvertikimab’s next phase of development in UC. We therefore increase our probability of success for the programme to 35%, from 17% previously. This results in our overall valuation of OSE rising to €541.2m or €24.8/share, from €465.7m or €21.3/share previously.

Based on our cash burn projection, we estimate the current cash reserves to be sufficient for the company to fund operations into 2027, in line with management guidance. We note that this does not consider further licensing or milestone-related inflows from partners, which should widen the runway further.