Translation: Original published in Finnish on 12/10/2024 at 8:10 pm EET.

Faron reported more detailed interim results of the BEXMAB study at the annual meeting of the American Society of Hematology (ASH). The topline results were already known from an earlier press release, which we commented on here. The company is on track for the important final read-out in March, as tolerability and overall response rate have remained at good levels. We reiterate our Accumulate recommendation for Faron with a target price of EUR 2.8.

Treatment overall response rate remained high, consistent with previous read-outs

The Phase I/II BEXMAB trial is designed to evaluate the safety and preliminary efficacy of bexmarilimab in combination with standard-of-care azacitidine therapy. The study now reports on an analysis of 20/32 patients with myelodysplastic syndrome (MDS) who no longer respond to HMA medication (so-called r/r MDS). At this stage, 80% (16/20) of patients have achieved an overall response rate (ORR). As a single figure, we think this is at a good level. The majority of responses, 10, are bone marrow responses (mCR), 6 of which are associated with a hematological improvement. This is important because the combination of responses has predictive value for life expectancy. In summary, 12/20 patients had a response (CR/mCR+HI/PR/HI) with predictive value for life expectancy. We believe this compares favorably to previous and ongoing r/r MDS trials and provides a foundation for the next Phase III study and partnering negotiations.

Four patients received bone marrow transplants - role of bexmarilimab as bridge therapy still open

The estimated life expectancy of patients was 13.4 months, in line with previous interim read-outs. In previous studies, life expectancy with standard-of-care treatment (azacitidine) has been 5-6 months. We remind you that direct comparisons of figures can easily lead to erroneous conclusions, as there may be differences in, e.g., patient selection between studies, which may reduce comparability at this stage. Faron also included patients who received a bone marrow transplant in its life expectancy estimate. Bexmarilimab may have helped these patients before the bone marrow transplant, but after the transplant, life expectancy is likely to be determined by the bone marrow transplant, not by bexmarilimab. In summary, the results are positive at this stage, but we do not believe it is yet appropriate to draw firm conclusions about efficacy in terms of life expectancy. More robust research on life expectancy will be available at the end of Q3'25, according to Faron.

Mixed estimate revisions

Faron reiterated in a previous press release that it expects to complete patient enrollment for BEXMAB in January 2025 and to report final read-out by the end of Q1'25. The expected progress of the study, combined with the continued high treatment response rate, has increased confidence in the successful completion of the current phase. We therefore increase our estimate for the current trial probability of success to 80% (was 70%). Similarly, the solid tumors and blood cancer r/r AML projects announced at the Capital Markets Day will be delayed in our estimates based on the communicated timelines.

Valuation picture unchanged - March final as the next major step

The net effect of the forecast changes on the present value of the share is neutral. Our DCF model still gives the stock a value of EUR 2.8. The next major event will be the final read-out at the end of Q1'25, around which the announcement of a partnership agreement or the next round of funding may be timed.