DNB Markets: Isofol Medical - DSMB recommends 440 patients

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Late on Friday, the DSMB gave its much-anticipated recommendation based on the interim analysis. Its recommendation to complete the ongoing phase III study with the 440 recruited patients surprised us, as we expected it to recommend expanding the study. In our view, this news does not diminish the chance of regulatory approval but does signal a somewhat higher commercial risk. Also, visibility on timelines is now clearer, with the results of the study expected in H1 2022 and sales in 2023. We reiterate our SEK21–37 fair value.

DSMB recommends Isofol Medical to complete study with 440 patients. Late on Friday, the independent data safety monitoring board (DSMB) issued its much-anticipated recommendation based on the interim analysis. The recommendation to not expand the study and recruit an additional 220 patients (totalling 660 patients), but rather complete the study with the 440 already recruited patients surprised us. We assumed the number of evaluable PFS events among the 330 patients evaluated by the DSMB in the interim analysis would have been too few to draw any clear conclusion, prompting a recommendation to expand the study to demonstrate statistical significance on PFS. While it is difficult for us to make an assessment, the DSMB has clearly deemed the 440 patients sufficient to meet the regulatory requirements.

Recommendation signals increased commercial risk but shortens time to market. The aim of expansion would have been to strengthen the results of the study to achieve statistical significance on PFS. Without the additional 220 patients, the chance of reaching statistical significance on this secondary endpoint is low; and, while this does not diminish the chance of regulatory approval, it does signal a somewhat higher commercial risk in our view. With this recommendation, visibility on timelines has improved and we now expect results in H1 2022 and arfolitixorin to hit the market in 2023.

SEK21–37 fair value reiterated. As expected, the recommendation provided no new information on ORR or PFS, so we maintain our likelihood of approval of c23%. While the phase III study is financed in its current form, we still expect the company to raise additional capital in 2021.

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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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