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goetzpartners securities Limited
Probiodrug (PBD-NA): Phase IIb trial prep for PQ912 in AD continues:
03-Sep-2018 / 10:23 GMT/BST
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*Published to the market and investors on 3rd September 2018 @ 9.29am (London
time).*
*Probiodrug (PBD-NA): Phase IIb trial prep for PQ912 in AD continues*
*Recommendation: OUTPERFORM*
*Target Price: EUR71.00 *
*Current Price: EUR3.02 (COB on 31st August 2018)*
*KEY TAKEAWAY*
The key takeaways of Probiodrug's H1/2018 results were (1) additional details
about the US Phase IIb trial for PQ912 in early Alzheimer's disease ("AD"),
(2) a progress update for the EU Phase IIb trial, and (3) confirmation that
the company is financed until at least Q1/2019E, but potentially Q3, depending
on the level of investment into the PQ912 Phase IIb programme. Management
remains focused on raising funds and all options are on the table, including
debt, equity and a licensing deal with a pharma partner. We continue to
believe that PQ912's differentiated profile should lead to a deal later this
year, particularly following encouraging Phase II data for Eisai's / Biogen's
/ BioArctic's anti-amyloid beta ("Abeta") protofibril mAb BAN2401, which
showed an improvement in both clinical function and Abeta plaque reduction in
the brain. We see positive risk / reward for the shares, therefore we maintain
and reiterate both our OUTPERFORM recommendation and target price of EUR71.00
per share.
*US trial larger and longer than EU study, with focus on long-term cognition*
Probiodrug had previously stated that the US trial would take longer (up to 18
months) than the EU study (12 months on average) and include a more
comprehensive cognition endpoint. At the results, management (1) disclosed
that the US study will include c.460 patients (vs. 250 in the EU trial) for it
to be powered for statistical significance on the cognition-focused primary
endpoint CDR-SB, (2) provided timelines (first patient in: Q1/2019E, key
results: Q3/2022E), and (3) noted that it was expecting a decision on the NIH
funding submission in Q3/2018E. Importantly, both trials include EEG
evaluation, which captures synaptic function. This is a key measurement given
that synaptic impairment occurs earlier in AD disease progression than any
cognitive deficits. A positive read-out from the European trial could help
inform Phase III trial design prior to data from the US trial becoming
available, while positive results for both could form the basis of a
conditional approval.
*EU study in set-up phase for first patient screening by YE2018E*
The company continues to press ahead with the EU trial, as many of the key
steps are time-consuming but require limited capital. 50 clinical trials sites
have already been selected of which 30 have been assessed out of a total
target of 48. Probiodrug remains on track for the first patient visit to occur
at YE2018E, depending on the necessary funds being raised.
*Modest changes to estimates to reflect slightly higher opex*
Probiodrug reported a net loss of EUR4.1m in H1/2018 vs. EUR4.3m in H1/2017,
with a decline in R&D expenses more than offsetting a small increase in SG&A
and compensating for the lack of tax benefits. Net cash stood at EUR6.7m at
end June 2018. We now forecast a slightly higher net loss of EUR7.4m in
FY2018E (vs. EUR6.7m previously), but still below FY2017, and a cash burn of
c.EUR12.1m.
Kind regards,
Brigitte de Lima | Analyst
goetzpartners Healthcare Research Team | Research Team
goetzpartners securities Limited
The Stanley Building, 7 Pancras Square, London, N1C 4AG, England, UK.
T +44 (0) 203 859 7725 | brigitte.delima@goetzpartners.com /
healthcareresearch@goetzpartners.com
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(END) Dow Jones Newswires
September 03, 2018 05:23 ET (09:23 GMT)
