DNB Markets - Isofol Medical: 440 or 660, that is the question…

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Isofol Medical’s Q4 report was overall in line with our expectations. The phase III trial in mCRC is at a fork in the road, awaiting the DSMB’s recommendation on which path to take. While we expect an expansion by 220 to 660 patients (to demonstrate statistical significance on PFS), a decision to stop at 440 would not diminish the chances of regulatory approval, but signal somewhat higher commercial risk, in our view. However, not expanding the study would mean arfolitixorin reaching the market more rapidly. We have raised our fair value to SEK21–37 (14–28) on the back of estimate changes.

Q4 review. Isofol Medical reported a Q4 operating loss of cSEK49m, fairly in line with our estimated loss of cSEK45m. However, the composition differed slightly, with operating income and R&D expenses higher than we expected. The deviation in operating income is explained by a higher than expected upfront payment as part of the Canada deal, while the deviation in opex relates to higher activity in R&D. We see no issue with the latter as the money was spent driving forward clinical development. The end-Q4 cash position was cSEK116m.

DSMB decision expected in Q1. The ongoing phase III trial with its adaptive design is at a fork in the road, awaiting the independent Data Safety Monitoring Board’s (DSMB) recommendation. There has been a slight pandemic-related delay, but we still expect news in Q1. Of the three possible outcomes: 1) a recommendation to close the study due to futility; 2) superiority (440 patients sufficient); and 3) trending in statistical significance in progression free survival (PFS) (expand study by 220 patients). Of these, we consider the third option the most likely. As we highlighted before, the DSMB will not provide any information other than its recommendation on which path to take, and, if the study is expanded, we see a need for Isofol Medical to raise additional capital in H1 2021.

Timelines depend on potential expansion. If our assumption that the DSMB will recommend an extension proves correct, this will add around eight months to development, implying top-line data in H1 2022 and launch in 2024. If the study is not expanded, we would expect top-line results in H2 2021 and launch in 2023.

Fair value raised to SEK21–37 (14–28). We have made some adjustments to our long-term cost and milestone estimates, and in turn raised our fair value.

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Best regards 


David Martinsson | Markets | Equity Research | Healthcare

DNB Bank ASA, Filial Sverige
Visiting address: Regeringsgatan 59 | Stockholm | Sweden

Patrik Ling | DNB Markets | Equity Research | Senior Analyst Healthcare

Regeringsgatan 59 | Stockholm | Sweden



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