IRLAB Therapeutics — Mesdopetam Phase IIb top-line data

IRLAB Therapeutics (OMX: IRLABA)

Currency in SEK

Last close As at 03/02/2023

SEK11.90

−0.02 (−0.17%)

Market capitalisation

SEK617m

Research: Healthcare

IRLAB Therapeutics — Mesdopetam Phase IIb top-line data

IRLAB Therapeutics has announced top-line data from its Phase IIb trial investigating mesdopetam as a treatment for Parkinson’s disease levodopa-induced dyskinesias (PD-LIDs). The drug did not meet the primary outcome of the study, change in daily hours of ‘ON time’ (the length of time a patient does not have symptoms) without troublesome dyskinesia compared to placebo with statistical significance. However, the results confirmed the safety and tolerability of mesdopetam and met the secondary efficacy endpoint in demonstrating significant anti-dyskinetic effects as measured by the Unified Dyskinesia Rating Scale (UDysRS), a clinically recognised scale for measuring dyskinesias. We believe the importance of the secondary endpoint should not be overlooked; FDA approval of Gocovri in PD-LID was based on two pivotal studies assessing changes in the UDysRS as the primary outcome, demonstrating its clinical relevance. IRLAB’s stock dropped c 60% following the news, which likely reflects market uncertainty over mesdopetam’s future clinical development. Based on this news, our valuation and estimates are under review.

Soo Romanoff

Written by

Soo Romanoff

Managing Director - Head of Content, Healthcare

IRLAB Therapeutics_resized

Healthcare

IRLAB Therapeutics

Mesdopetam Phase IIb top-line data

Clinical trial update

Pharma and biotech

18 January 2023

Price

SEK40.6

Market cap

SEK2,107m

SEK10.21/US$

Net cash (SEKm) at 30 September 2022
(ex-lease liabilities)

291.7

Shares in issue

51.9m

Free float

58%

Code

IRLABA

Primary exchange

Nasdaq Stockholm

Secondary exchange

N/A

Share price performance

Business description

Based in Sweden, IRLAB Therapeutics is focused on developing novel drugs for the treatment of neurodegenerative diseases utilising its ISP technology platform. Its two lead assets, mesdopetam (D3 antagonist) and pirepemat (PFC enhancer), are in late-stage clinical trials for the symptomatic treatment of Parkinson’s disease.

Analysts

Soo Romanoff

+44 (0)20 3077 5700

Dr Adam McCarter

+44 (0)20 3077 5700

IRLAB Therapeutics is a research client of Edison Investment Research Limited

IRLAB Therapeutics has announced top-line data from its Phase IIb trial investigating mesdopetam as a treatment for Parkinson’s disease levodopa-induced dyskinesias (PD-LIDs). The drug did not meet the primary outcome of the study, change in daily hours of ‘ON time’ (the length of time a patient does not have symptoms) without troublesome dyskinesia compared to placebo with statistical significance. However, the results confirmed the safety and tolerability of mesdopetam and met the secondary efficacy endpoint in demonstrating significant anti-dyskinetic effects as measured by the Unified Dyskinesia Rating Scale (UDysRS), a clinically recognised scale for measuring dyskinesias. We believe the importance of the secondary endpoint should not be overlooked; FDA approval of Gocovri in PD-LID was based on two pivotal studies assessing changes in the UDysRS as the primary outcome, demonstrating its clinical relevance. IRLAB’s stock dropped c 60% following the news, which likely reflects market uncertainty over mesdopetam’s future clinical development. Based on this news, our valuation and estimates are under review.

Year end

Revenue
(SEKm)

PBT*
(SEKm)

EPS*
(SEK)

DPS
(SEK)

P/E
(x)

Yield
(%)

12/20

0.4

(91.4)

(1.92)

0.0

N/A

N/A

12/21

207.9

91.1

1.76

0.0

23.1

N/A

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

While it is disappointing that the study did not meet its primary objective with statistical significance, encouragement can be taken from the trial meeting the UDysRS secondary efficacy measure. As measured by the UDysRS, mesdopetam (7.5mg) displayed positive anti-dyskinetic effects with onset of action after four weeks, at eight weeks and then continuing for the duration of the 12-week study. This effect was further supported by an improvement in observed disability associated with dyskinesia. Additionally, daily hours in OFF time were dose-dependent and a decrease compared to placebo was observed at the 7.5mg dose.

While we caution direct read-across between studies, it should be noted that the UDysRS measure was used as the primary efficacy endpoint in two pivotal Phase III studies (EASE LID and EASE LID 3) that led to the approval of Adamas Pharmaceutical’s Gocovri (amantadine), the only FDA-approved treatment for PD-LIDs. Unlike mesdopetam, Gocovri is associated with severe side effects, including peripheral edema, falls, suicidality and depression.

IRLAB has licensed the global rights for mesdopetam to Ipsen. As part of the agreement, IRLAB would fund the development of mesdopetam until the Phase IIb top-line results were reported, with Ipsen assuming full responsibility for any further development. We await further communication to understand the impact of the latest data and how it might define Ipsen’s future development strategy for mesdopetam.

General disclaimer and copyright

This report has been commissioned by IRLAB Therapeutics and prepared and issued by Edison, in consideration of a fee payable by IRLAB Therapeutics. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

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Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by IRLAB Therapeutics and prepared and issued by Edison, in consideration of a fee payable by IRLAB Therapeutics. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2023 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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