AFT Pharmaceuticals - Pascomer falls short of FDA mandated threshold

AFT Pharmaceuticals announced that its Pascomer Phase II clinical trial has failed to meet its primary endpoint of a two-point improvement on the Investigator’s Global Assessment (IGA) scale. Pascomer is AFT’s topical rapamycin formulation being evaluated as a treatment of facial angiofibromas (FA) associated with tuberous sclerosis complex (TSC). As a result, AFT’s US development partner and licensee, Timber Pharmaceuticals, has terminated its agreement with the company. Despite this setback, AFT maintains that the study showed ‘statistically significant benefits’ against the clinically relevant Facial Angiofibroma Severity Index (FASI) and a less rigorous one-point improvement on the IGA scale and plans to undertake further development activities on its own. Our estimates do not capture AFT’s research and development (R&D) programmes and this announcement therefore does not impact our valuation of the company (NZ$680.8m or NZ$6.50/share).