DJ Marinomed Biotech AG (MARI-AT): Budesolv hits key endpoints in Phase III allergy trial
goetzpartners securities Limited
Marinomed Biotech AG (MARI-AT): Budesolv hits key endpoints in Phase III
allergy trial
16-May-2019 / 14:03 GMT/BST
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*Published to the market and investors on 15th May 2019 @ 2.45pm (BST). *
*Marinomed Biotech AG (MARI-AT): Budesolv hits key endpoints in Phase III
allergy trial*
*Recommendation: OUTPERFORM*
*Target Price: EUR103.00 (increased from EUR98.00) *
*Current Price: EUR76.50 (CoB on 14th May 2019) *
*KEY TAKEAWAY*
Following the news on 23 April that Budesolv (dissolved budesonide) had met
the primary endpoint of the pivotal Phase III trial in allergic rhinitis
("AR", hay fever), showing non-inferiority to reference product Rhinocort Aqua
(budesonide suspension, marketed by J&J) after one week of treatment,
Marinomed today announced that the trial had also met the secondary endpoint
assessing faster onset of action, with Budesolv providing symptom relief after
the first dose. This was not the case for Rhinocort. In our view, this is a
very impressive result that has multiple implications, including: (1)
Potential for Budesolv to achieve our peak sales forecast of c.EUR760m; (2)
strong support for the original hypothesis that a steroid in solution has
higher bioavailability and hence superior efficacy compared to the same
steroid in suspension; (3) validation for the Marinosolv platform as a whole,
including for Tacrosolv, the second most advanced asset and that is expected
to enter a clinical trial in allergic conjunctivitis later this year. We
increase our target price ("TP") to EUR103 (from EUR98) and reiterate our
OUTPERFORM recommendation.
*Secondary endpoint early onset of action met: symptom relief within 4 hours*
Based on Marinomed's press release, the data from the pivotal, 75-patient
Phase III trial shows that Budesolv achieved at least the same efficacy as
Rhinocort Aqua at a dose of only 10ug per puff compared to 64ug for Rhinocort
after one week of treatment. This timepoint for the primary endpoint was
selected due to available data and experience with Rhinocort showing that it
takes several days for the product to show an effect. Budesolv markedly
improved the nasal symptoms of AR within four hours of patients receiving the
first dose, which was not the case for Rhinocort. Importantly, this effect was
also observed for allergic symptoms associated with asthma. Marinomed plans to
disclose detailed data for the Budesolv Phase III trial either in a
peer-reviewed journal or a medical conference.
*Peak sales in excess of EUR700m within reach, in our view*
In our opinion, the Phase III data strongly positions Budesolv to become a
large product within the c.$13bn AR market, of which intranasal
corticosteroids account for c.$5bn (c.5% annual growth). We forecast launch in
2021E and peak sales of c.EUR760m in 2036E, which assumes a market share of
around 5%. To put this figure into context, we note that Rhinocort Aqua
recorded sales of $250m in 2017 while market leader Flonase (marketed by GSK)
had sales of c.$1.6bn in the same year. Marinomed intends to sell Budesolv as
an OTC product. The company has been intensifying its partnership discussions
for the commercialisation of Budesolv and all options are currently on the
table. These include selling Budesolv through current distributors and finding
a global partner.
*Increasing TP to EUR103 per share, equating to nearly 30% upside*
We increase our TP to EUR103 (from EUR98) on raising the probability of
success for Budesolv in AR to 85% (from 75%) and reiterate our OUTPERFORM
recommendation. Based on our forecasts, Budesolv is Marinomed's most valuable
asset, accounting for 45% of our updated fair value. The marketed Carragelose
products collectively account for 28% of our valuation, Tacrosolv in allergic
conjunctivitis and dry eye disease for 22%, and net cash at YE2019E for the
remainder.
Kind regards,
Brigitte de Lima, PhD, CFA | Research Analyst
goetzpartners Healthcare Research Team | Research Team
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T +44 (0) 203 859 7725 | brigitte.delima@goetzpartners.com /
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