Mrkt BUZZ Modus: Executing on an ambitious timeline

Read the full Mrkt BUZZ below:

Mrkt BUZZ Modus December 6th 2021

Modus Therapeutics continues to take important steps in its clinical journey. The first patient was dosed in the important Phase Ib LPS provocation study. We are impressed by the high efficacy of the Company’s activities, as the planned start of the study was set against an ambitious timeline. In our opinion, this is a sign of strength and indicates that the Company will work hard for its owners to keep the plan on track. Data from the study is expected to be presented as early as April 2022 and may first indicate sevuparin’s potential efficacy while generating additional safety data relevant to future patient studies. The news that the study is now underway is an important milestone.

Strong signal of hard work

Modus Therapeutics develops innovative treatments for diseases/conditions with high unmet medical need. The Company’s drug candidate, sevuparin, is being developed for sepsis/septic shock and can be one of the first approved drugs for this severe condition. As the proposed development plan below indicates, good recognition could be achieved in 2028, assuming clinical activities are successful. Bola-get communicated on December 1 that the first patient in the Phase Ib LPS provocation clinical trial has been dosed. We were cautiously optimistic that the Company would start and dose the first patient before the end of the year. Our experience in drug discovery is that delays are expected, which can be costly for companies, as delayed projects often require more funding, which can be challenging and dependent on several external factors. This week’s news suggests that Modus strives hard to meet its set milestones and ambitious timelines.

Phase Ib study may provide an early indication of efficacy

The study is a provocation study in which the effects of sevuparin will be evaluated in healthy volunteer patients injected with the bacterial toxin lipopolysaccharide (LPS). Partly in the skin (local inflammation) and partly in the blood (systemic inflammation). Provocation with LPS is a well-established model used to characterise the early stages of septic inflammation by eliciting measurable symptoms. We assess that the risk in this study is low. Our initial coverage shows that the Company’s probability of advancing to Phase II (i.e., completing the Phase I study) is just over 80 percent. The primary objective of the study is to evaluate:

(I) the impact of sevuparin on dose selection for future clinical trials

(II) Evaluate the safety profile of the candidate with conventional heparin.

Based on previous studies with sevuparin, we consider the risk of unexpected side effects or adverse safety profile to be very low, if close to zero. In our opinion and investors, what is interesting are the conclusions that can be drawn regarding the efficacy of sevuparin in patients with provocation. Should interesting data supporting the effects of sevuparin be reported, the likelihood of a good dose selection in the planned phase IIa study increases.

The outcome of the study is expected in the second quarter 2022

It is our understanding that, to date, the Company has not encountered any delays in the production of sevuparin for future Phase 2 studies. Patient recruitment and study con-duct are being performed in the Netherlands by the Center for Human Drug Research. Pandemic development with potential restrictions could affect the timeline of the study. Still, no signs of recruitment problems have been seen at this stage of the study, and the situation is continuously monitored.

The Company expects to have top-line data in the second quarter of 2022. We expect data to be presented in April where there are three possible outcomes worth mentioning:

(I) Good safety profile with no significant side effects with early efficacy signals (Positive)

(II) Good safety profile with no significant adverse events with stronger efficacy signals and other interesting findings from the patient data. (Very positive/interesting)

(III) Unsuccessful study. Either due to a severe side effect profile or for some reason, data is generated that makes the Company not consider it worth-while to pursue the project. (Highly unfavourable, but also highly unlikely)

A positive outcome should, in our view, be a trigger for the stock. This is because the risk in the project and the Company is reduced while important information is generated for the large, pivotal phase IIa study. Of particular interest is whether the study can support that sevuparin may affect a number of parameters on the symptoms seen in “true” sepsis.

Read our initial coverage report here.

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