RBC — Analyst report: docdro.id
Key points:
- 'Much awaited mechanism of action now published. It has been our view that a publication of the small molecule's mechanism of action (MOA) in a respectable, peer-reviewed journal (like the Am. J. Pathol),could add credibility to ProMetic's fibrosis program. We note the delay in the announcement is not unusual as well-respected journals often require a rigorous review process. We view the publication in a positive light for PLI, and thus, expect shares to trade somewhat higher today.
- Confirms multi-receptor approach. Investors were aware that the molecule targets multiple unspecified receptors in the fibrosis pathway,which are different than those impacted by nintedanib (VEGFR, FGFRand PDGFR). The paper - "A Newly Discovered Antifibrotic PathwayRegulated by Two Fatty Acid Receptors" - suggests 4050 is an agonist(promoter) and antagonist (inhibitor) of GPR40 and GPR84, respectively.The study also found that GPR40 is protective, while GPR84 is deleterious in fibrotic disease. When bound to each receptor in animal models, PBI-4050 reduced fibrotic effects in various organs.
- Target receptors suggest novelty. While it was important for 4050 to target receptors that are different than approved FDA IPF therapies (specifically nintedanib), we also believe it was important for the molecule to demonstrate a novel MOA in order to differentiate itself from emerging therapies in IPF. On initial take, the study appears to bethe first to explore GPR40 and GPR84 receptors in IPF.
- A refresher on the IPF space. At this time, we felt that it was important to provide investors with a refresher on the IPF space (p. 3 onwards). Overall, we believe the unique MOA undoubtedly contributed to 4050's Ph. II success as an add-on to nintedanib. We remind investors that this is an underserved market (patient survival just three to five years from initial diagnosis).
- We now await Ph. III initiation and other potential catalysts. We believe the publication was a step in the right direction as it not only provides credibility to the company's fibrosis program, but should also begin to increase investor conference in the management team. We believe the latter will become increasingly critical as there a few upcoming catalysts that would require management to deliver (i.e. PRV sale, plasminogen approval, sales/marketing ramp, further clinical progress).'
Jim |
