Sequana Medical — SAHARA results pave the way for DSR 2.0

Sequana Medical (BRU: SEQUA)

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2.95

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Research: Healthcare

Sequana Medical — SAHARA results pave the way for DSR 2.0

Sequana Medical reported positive top-line results from its SAHARA Phase IIa study of DSR 1.0, involving 10 evaluable patients with diuretic-resistant heart failure. Results from these patients, who had completed the 16-week follow-up period (the second phase of the study, see our recent outlook note for details on study phases and design) following intensive DSR therapy, were largely consistent with the interim data reported in July. These patients reported a mean 33% reduction in NT-proBNP at this time point versus baseline (indicating improved cardio-renal status) and stable renal function (no significant change in eGFR versus baseline). Importantly, the need for loop diuretics medication was substantially reduced for many (at least six to 15) months following the first phase (intensive DSR therapy) of SAHARA, with nine out of 10 patients having had a reduction of more than 90% of their required dosing. Sequana is now advancing its second-generation DSR 2.0 product, designed to provide improved therapeutic and safety profiles and a longer dwell time. It has successfully dosed the first patient with DSR 2.0 in the Canadian Phase I study (YUKON), and aims to start the multi-centre randomised US MOJAVE Phase I/IIa study in DSR 2.0 in H123.

Written by

Pooya Hemami

Analyst - Healthcare

Healthcare

Sequana Medical

SAHARA results pave the way for DSR 2.0

SAHARA results

Pharma and biotech

18 November 2022

Price

€6.62

Market cap

€157m

Net cash (€m) at 30 June 2022

16.2

Shares in issue

23.75m

Free float

45%

Code

SEQUA

Primary exchange

Euronext

Secondary exchange

N/A

Share price performance

Business description

Based in Belgium, Sequana Medical develops products to treat diuretic-resistant fluid overload, a frequent complication of liver disease and heart failure. Its proprietary alfapump and DSR approaches aim to provide significant clinical and quality-of-life benefits in these fluid overload conditions.

Analyst

Pooya Hemami, CFA

+1 646 653 7026

Sequana Medical is a research client of Edison Investment Research Limited

Sequana Medical reported positive top-line results from its SAHARA Phase IIa study of DSR 1.0, involving 10 evaluable patients with diuretic-resistant heart failure. Results from these patients, who had completed the 16-week follow-up period (the second phase of the study, see our recent outlook note for details on study phases and design) following intensive DSR therapy, were largely consistent with the interim data reported in July. These patients reported a mean 33% reduction in NT-proBNP at this time point versus baseline (indicating improved cardio-renal status) and stable renal function (no significant change in eGFR versus baseline). Importantly, the need for loop diuretics medication was substantially reduced for many (at least six to 15) months following the first phase (intensive DSR therapy) of SAHARA, with nine out of 10 patients having had a reduction of more than 90% of their required dosing. Sequana is now advancing its second-generation DSR 2.0 product, designed to provide improved therapeutic and safety profiles and a longer dwell time. It has successfully dosed the first patient with DSR 2.0 in the Canadian Phase I study (YUKON), and aims to start the multi-centre randomised US MOJAVE Phase I/IIa study in DSR 2.0 in H123.

Year

end

Revenue
(€m)

PBT*
(€m)

EPS*
(€)

DPS
(€)

P/E
(x)

Yield
(%)

12/20

1.0

(19.0)

(1.25)

0.0

N/A

N/A

12/21

0.4

(24.4)

(1.36)

0.0

N/A

N/A

12/22e

0.8

(26.3)

(1.12)

0.0

N/A

N/A

12/23e

0.8

(25.4)

(1.07)

0.0

N/A

N/A

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

The YUKON single-arm open-label study will provide a single treatment of DSR 2.0 in patients on peritoneal dialysis, with results expected to help determine DSR 2.0 dosing for the MOJAVE study. An additional Phase I DSR 2.0 study, CHIHUAHUA, will enrol patients in Mexico. Both studies are designed to enrol up to 10 patients each, and are intended to support the US Investigational New Drug (IND) application for MOJAVE, which the company expects to submit in Q123. They replace the previously planned DSR 2.0 extension arm of SAHARA. Sequana anticipates receiving IND approval and starting MOJAVE in H123.

The MOJAVE study will have two study cohorts. In the safety cohort, three heart failure patients will receive DSR 2.0 via a peritoneal catheter on top of usual care for up to four weeks. An independent data safety monitoring board will then determine whether the study can proceed to the efficacy cohort. The efficacy cohort is then designed to enrol 30 diuretic-resistant chronic heart failure patients with persistent congestion, with 20 patients randomised to DSR 2.0 administered via a peritoneal catheter on top of usual care for congestive heart failure for up to four weeks, and 10 patients randomised to usual care alone. There will also be a three-month safety follow-up period after the four weeks of DSR therapy. Sequana expects to report interim data from MOJAVE in H223, and top-line results in mid-2024. If results are positive, we believe the company could be in an enviable position to seek favourable terms for commercial partnership or licensing transactions.

General disclaimer and copyright

This report has been commissioned by Sequana Medical and prepared and issued by Edison, in consideration of a fee payable by Sequana Medical. 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.

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Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

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1185 Avenue of the Americas

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Sydney +61 (0)2 8249 8342

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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

General disclaimer and copyright

This report has been commissioned by Sequana Medical and prepared and issued by Edison, in consideration of a fee payable by Sequana Medical. 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 2022 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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