Relief Therapeutics Holding AG (RLFTF)

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***MUST READ ARTICLE*** TRANSLATED IN ENGLISH IN THE COMMENTS

Mirabaud's pharmaceutical analyst advised against buying the Relief shares following the failure of a competitor's study. The Chairman of the Board of Directors gave his opinion. The shares of Relief Therapeutics lost almost a quarter of their value on Tuesday, and on Wednesday they fell by a similar amount. This seems to have been triggered by an article published by "Finanz und Wirtschaft" in advance of the expected recommendation of the Data Monitoring Committee. The committee is monitoring the conduct of the study with relief compound RLF-100 (aviptadil). It is being tested in the USA on hospitalized corona patients requiring ventilation. On Thursday, the committee voted to continue the study. Since then, the share price has made up a large part of the loss. Tuesday's FuW article was mainly based on the statements of Relief Chairman Ram Selvaraju. However, it also mentions a sell recommendation made the day before by Olav Zilian, a pharmaceutical analyst at Mirabaud Securities. Competition study cancelled Zilian sees the termination of a study with PhaseBio's active ingredient pemziviptadil, which he considers comparable, as a warning signal. The monitoring committee responsible for this product candidate had called for the study to be stopped because no efficacy was apparent in the first 25 patients. The Chairman of the Board of Directors of Relief Therapeutics, Ram Selvaraju, contradicts Zilian. It is impossible to conclude the outcome of the RLF-100 trial from the failure of the PhaseBio compound. Meanwhile he can also refer to the positive decision of the monitoring committee. This means that the chances of success are intact. But this does not completely convince Zilian. In the following, "Finanz und Wirtschaft" reports on the controversy that was conducted via e-mail. Both sides confirm that we are reproducing their arguments correctly here. Selvaraju from Geneva, a full-time managing director at broker H. C. Wainwright and himself an equity analyst for companies in the healthcare sector, makes three points. The first is the mechanism of action, the second is the multi-layered effect that RLF-100 may have, and the third is the study results already achieved and the outlook for the future.

1. mechanism of action The Chairman of the Board of Directors claims that the molecules of his company and PhaseBio have different mechanisms of action. The focus is on the relevant receptors on the cells, VPAC1 and VPAC2. According to PhaseBio, the active ingredient pemziviptadil docks selectively to the VPAC2 receptor. RLF-100 on the other hand binds rather strongly to both receptors, VPAC1 and VPAC2. Relief's hypothesis is that the ability to bind a VIP-analog molecule to VPAC1 is essential for influencing the course of disease in Covid-19 or other patients with respiratory problems. VIP means vasointestinal peptide, it was first detected in the digestive tract (hence the name), but it occurs in various places in the body. VPAC1 is important because these receptors are expressed on type 2 pneumocytes. They play a critical role in Covid-19, so it is not surprising that the Phase Bio trial failed due to the different mechanism of action. Zilian, however, doubts that the two peptide chains are actually different. RLF-100 corresponds to naturally occurring VIP (vaso-estinal peptide) and PhaseBio refers to its pemziviptadil as a fusion molecule between natural human VIP and a molecule that extends its half-life. In addition, RLF-100 binds to both receptors quite strongly, and PhaseBio does not refer to any data on its website that would support its claim. It is not known to what extent the PhaseBio compound binds primarily to VPAC2. Even if the specificity is strong, both receptors are expressed throughout the body, including in the lungs. Zilian concludes from this that theoretically the activation of VPAC2 could also have a positive effect on the course of Covid-19, especially since the VPAC2 receptor is also expressed in the airway cover tissue. However, no therapeutic effect was visible in the PhaseBio study.

2. effect on different levels Selvaraju points out that RLF-100 may influence several processes. Brazilian scientists have noted signs of an antiviral effect. Relief agents could therefore not only have an anti-inflammatory effect, but also slow down the reproduction of the virus. It could also protect the type 2 pneumocytes in the lungs. These cells produce the surfactant, a mucus that is needed for oxygen exchange in the lungs. Covid-19 viruses multiply in these pneumocytes and impair their function. Patients no longer receive sufficient oxygen. For Selvaraju, the possible protective mechanism of the relief agent could even be decisive for these type 2 pneumocytes. "These cells have many VPAC1 receptors." RLF-100 would dock here and thus occupy the places that the coronavirus also targets. The drug could thus prevent the virus from entering the cells.
This mechanism could also explain the difference to the Phase Bio active ingredient. Selvaraju admits that these hypotheses must first be confirmed by the ongoing studies. Zilian replies that this is all well and good, but he doubts that this is still relevant for the success of treatment in the advanced stage in which patients receive RFL-100. The cytokine storm - the overreaction of the immune system - is already imminent and a protein-containing layer in the lung branches becomes thicker and suffocates the patients. In intensive care, the focus at this stage is no longer on stopping the proliferation of viruses and supplying oxygen, but also on whether invasive mechanical ventilation is necessary to save lives. Selvaraju admits that the penetration of the virus into the cells may no longer be central at this stage. "But the effect of our drug on the production of the surfactant could still be crucial.

3. study results Selvaraju emphasizes that the relief compound has passed both the first and second interim analysis of the Phase IIb/III study without any problems. The PhaseBio product candidate did not even pass the first one. Furthermore, the data from the critically ill patients from the Expanded Access Program (EAP) are impressive. Four out of five of the 45 ventilated patients survived, compared to only 17% of the control group who received the standard treatment. For Zilian, however, the data from EAP is only suitable for hypothesizing. They did not represent scientific evidence, as this was not a blinded, placebo-controlled study. Blinded means that the doctors do not know to whom they are administering the active substance and to whom the placebo is administered. The Mirabaud analyst believes that the ongoing Phase IIb/III study would have been stopped if it had generated results as convincing as the EAP. Selvaraju argues that early termination of the study is a hurdle that is extremely difficult to overcome, especially at an advanced stage when publication of the study results is imminent. Relief expects them in January.

Zilian notes that the target number of patients has been increased from 144 to 165. This rather indicates a hedge against a weak data trend. The analyst sees this as an opportunity to achieve statistical significance later on with a trend that was initially not very pronounced. By increasing the number of participants, the statistical significance is increased. According to Selvaraju, the increase in the number of participants was suggested by the U.S. Food and Drug Administration (FDA) even before the first interim analysis. The Data Monitoring Board did not recommend any further increase. He sees the fact that Relief does not need to recruit thousands of patients, as is the case for some studies for the approved remdesivir, as an encouraging sign. The study objective - to demonstrate the reduction in mortality of Covid-19 patients, with acceptable side effects - was most likely not achieved prematurely. If the data had already been statistically significant, the monitoring committee would probably have recommended discontinuation on Thursday. However, it has requested the continuation of the study, expressing that after analyzing the data from two-thirds of the targeted number of participants, it considers the achievement of the study goal to be realistic. Relief does not need any further distribution partners Selvaraju also contradicts Zilian in his assessment of the necessary commercial strategy. The Mirabaud analyst had said he believed that Relief would need a larger pharmaceutical company to distribute the compound in addition to its partner NeuroRx. Of course, Relief would have to cede part of the revenues to an additional partner. But according to Selvaraju, no large commercial organization is necessary. RLF-100 is not a mass product, but is administered in intravenous form in hospitals. The inhalable form, for which a study will start in the coming weeks, is intended for home use. Relief already has well-established distribution channels for both, which it can use in case of approval. If governments in the U.S. or other countries ordered the drug, Relief would not incur any marketing or distribution costs.

https://www.fuw.ch/article/relief-wehrt-sich-gegen-verkaufsempfehlung/