All patients included in phase 2a study

With the announcement on October 8 that all 200 plus male patients with androgenetic alopecia are on treatment, the readout of Follicum’s phase 2a study is getting closer. Treatment spans over a four months period, which imply that Last Patient Out will be in first half of February next year. Our impression is that the recruitment pace to the study has been swift after the break in March-May, when a third treatment center was added. As recently as August 18, the company stated that "more than half" of the patients were undergoing treatment. According to the Q3 report no drop-outs have occurred so far, which is a good sign.

Topline results expected “in springtime”

Management states that it expects to release a readout of the study “in springtime”, which seems to be a guidance towards Q2 rather than late Q1. Most of the raw data from the trial should be in the hands of the company by early March, but analyzing this sizable amount of information may drag out for a while, possible into Q2. It remains to be seen whether daily topical treatment with FOL-005 for a period of four months, a relatively short period to generate hair growth, is sufficient to show a good effect. In Follicum"s previous study, the treatment period lasted for three months with intradermal injection three times a week and the results in the highest dose managed almost to show a statistically significant increase in hair growth over baseline.

Cash refill secures readout

In a directed issue of 14 million new shares in early November Follicum received 33.6 million SEK after deduction of issue-related costs. This allows the company to bridge the study readout and, assuming a positive readout, operate in potential discussions with a partner. It will also allow the company to advance its preclinical program in diabetes. A positive outcome in the phase 2a study will put the company in an interesting position. Either it can look to partner before phase 2b or approach shareholders for a new share issue. Ahead of the results we stick to a SOTP valuation of 5.1 kronor per share, assuming a 65 percent probability of successful phase 2a and a subsequent initiation of a major phase 2b study.

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