IRLAB Therapeutics — Mesdopetam remains in Ipsen’s portfolio

IRLAB Therapeutics (OMX: IRLAB-A)

Last close As at 21/11/2024

SEK12.70

−0.20 (−1.55%)

Market capitalisation

SEK658m

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Research: Healthcare

IRLAB Therapeutics — Mesdopetam remains in Ipsen’s portfolio

IRLAB has commented on statements in Ipsen’s 2022 Universal Registration Document regarding the clinical development of mesdopetam, a D3 antagonist under clinical development for the symptomatic treatment of Parkinson’s disease (PD). Published on 6 April 2023, the document stated that the development and commercialisation rights for mesdopetam had been transferred back to IRLAB, but this is not correct. IRLAB has now communicated that, as of May 2023, discussions with Ipsen on the future development path for mesdopetam are ongoing, and management believes that the drug will soon be ready for Phase III clinical trials.

Soo Romanoff

Written by

Soo Romanoff

Managing Director - Head of Content, Healthcare

IRLAB Therapeutics_resized

Healthcare

IRLAB Therapeutics

Mesdopetam remains in Ipsen’s portfolio

4 May 2023

Price

SEK9.18

Market cap

SEK476m

Net cash (SEKm) at 31 December 2022 (ex-lease liabilities)

252.8

Shares in issue

51.9m

Free float

58%

Code

IRLABA

Primary exchange

Nasdaq Stockholm

Secondary exchange

N/A

Share price performance

Business description

Based in Sweden, IRLAB Therapeutics is focused on developing novel drugs for the treatment of neurodegenerative diseases utilising its ISP technology platform. Its two lead assets, mesdopetam (D3 antagonist) and pirepemat (PFC enhancer), are in late-stage clinical trials for the symptomatic treatment of Parkinson’s disease.

Analysts

Soo Romanoff

+44 (0)20 3077 5700

Dr Arron Aatkar

+44 (0)20 3077 5700

IRLAB Therapeutics is a research client of Edison Investment Research Limited

IRLAB has commented on statements in Ipsen’s 2022 Universal Registration Document regarding the clinical development of mesdopetam, a D3 antagonist under clinical development for the symptomatic treatment of Parkinson’s disease (PD). Published on 6 April 2023, the document stated that the development and commercialisation rights for mesdopetam had been transferred back to IRLAB, but this is not correct. IRLAB has now communicated that, as of May 2023, discussions with Ipsen on the future development path for mesdopetam are ongoing, and management believes that the drug will soon be ready for Phase III clinical trials.

Operational update

Year end

Revenue
(SEKm)

PBT*
(SEKm)

EPS*
(SEK)

DPS
(SEK)

P/E
(x)

Yield
(%)

12/21

207.9

91.1

1.76

0.0

N/A

N/A

12/22

61.3

(113.1)

(2.18)

0.0

N/A

N/A

12/23e

0.2

(160.0)

(3.08)

0.0

N/A

N/A

12/24e

0.2

(168.4)

(3.25)

0.0

N/A

N/A

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

As a reminder, in January 2023, IRLAB shared top-line data from the Phase IIb trial assessing mesdopetam for the treatment of levodopa-induced dyskinesias (PD-LIDs). While the study did not meet the primary endpoint (change in daily hours of ‘ON time’ without troublesome dyskinesia compared to placebo) with statistical significance, it did meet the secondary efficacy endpoint (demonstrating significant anti-dyskinetic effects measured by the Unified Dyskinesia Rating Scale, UDysRS). We believe the fact that the trial met the secondary endpoint is encouraging, given the FDA approved Gocovri in PD-LIDs on the basis of UDysRS changes, demonstrating the clinical relevance of the scale.

The global rights to mesdopetam were licensed to Ipsen in July 2021 for an upfront payment of $28m, up to $335m on achievement of certain development, regulatory events and commercial sales milestones, and tiered low double-digit royalties on worldwide net sales. IRLAB was to fund the development of the drug until the top-line results of the Phase IIb trial, after which Ipsen would assume responsibility for all further clinical development and global commercialisation efforts. Although future plans for mesdopetam have not yet been disclosed, we note that Ipsen begun preparatory Phase III activities in September 2022.

Ipsen’s 2022 Universal Registration Document stated that IRLAB had been informed that Ipsen had decided not to exercise its right to proceed with further clinical development of mesdopetam, and that the development and commercialisation rights had been transferred back to IRLAB. However, IRLAB has commented that this is not accurate, and that it has not received termination of the licence agreement, nor any transfer of the mesdopetam project. In May 2023, IRLAB and Ipsen have been engaged in discussions to mutually agree on the path forward to give mesdopetam the best possible prospects of reaching registration. We believe this is promising for the clinical development of the drug and note IRLAB’s assessment that mesdopetam will soon be ready for Phase III studies.

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20 Red Lion Street

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London │ New York │ Frankfurt

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London, WC1R 4PS

United Kingdom

General disclaimer and copyright

This report has been commissioned by and prepared and issued by Edison, in consideration of a fee payable by . Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2023 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

London │ New York │ Frankfurt

20 Red Lion Street

London, WC1R 4PS

United Kingdom

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