Magforce AG (DE:MF6G) has announced it has completed treatment of the first 10-patient cohort in the pivotal prostate cancer study required by the US FDA for approval. Importantly, it has reported that the procedure for instilling its NanoTherm particles has now been standardised and the study can enrol up to 110 additional patients to establish efficacy in thermally ablating prostate cancer lesions. Management has reported initial findings from this first cohort that indicate treatment side effects have been minimal and in line with that of biopsies; achieving a tolerable treatment will be key to attaining both approval and reimbursement. We still anticipate US approval and launch in Q420 but highlight both prudent trial execution and punctual commercial roll-out are essential in achieving this goal. We retain our financial forecasts and valuation of MagForce at €261.5m or €9.5/share.
We believe the most potential for growth resides in the opportunity for MagForce’s NanoTherm therapy in the US, as both urologists and payers will value a treatment that could extend the time prostate cancer patients can remain within active surveillance programmes. The single-arm trial aims to recruit up to 120 patients with prostate cancer (Gleason score of 7) under active surveillance and will assess NanoTherm as focal treatment for prostate lesions. In lieu of a control arm in the study, we assume it will be compared to historical standard-of-care treatment outcomes to determine its benefit (similar to the glioblastoma trial). Although this might be sufficient to achieve regulatory approval, payers might require a clearer measure of patient benefit before agreeing reimbursement; management has guided that, in its initial engagement with the Centres for Medicare & Medicaid, it has indicated costs similar to brachytherapy and tolerability in line with a biopsy could warrant similar reimbursement (c $7k).
Business description
MagForce is a German firm with the first Europe-approved nanotechnology-based therapy to treat brain tumours. NanoTherm consists of a nanoparticle instillation into the tumour, activated by an alternating magnetic field, producing heat and thermally destroying or sensitising the tumour.