Original-Research: MagForce AG (von GBC AG): GBC Management Interview

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Original-Research: MagForce AG - von GBC AG

Einstufung von GBC AG zu MagForce AG

Unternehmen: MagForce AG
ISIN: DE000A0HGQF5

Anlass der Studie: GBC Management Interview
Empfehlung: GBC Management Interview
Letzte Ratingänderung:
Analyst: Cosmin Filker

In the past fiscal year 2021, MagForce AG made progress in both business
segments. Of particular note here is the approval granted by the FDA for
the start of Stage 2b for the treatment of prostate cancer patients. This
means that the pivotal study could be concluded as early as summer 2022. In
parallel, the treatment capacities for the indication glioblastoma are to
be expanded in Europe. GBC analyst Cosmin Filker spoke to MagForce CEO Dr
Ben Lipps about the latest development:

Cosmin Filker: In December 2021, you reported that patient recruitment for
Stage 2b is successfully underway. What is the current status on this?

Dr Ben Lipps: Yes, that is correct. We are thrilled, that the first men
have been enrolled and the patient recruitment is proceeding well.

Let me elaborate on this: In November we received FDA approval to initiate
Stage 2b with the final study protocol. This was a necessary pre-condition
to also receive the green light from the ethics committees ('Institutional
Review Board', IRB) in the respective states to proceed with the study at
each center.

In preparation for Stage 2b, we already pre-identified eligible patients in
the areas around the treatment centers owned and operated by MagForce so
that we could start the trial immediately. With both FDA and IRB approvals
having been granted, those pre-selected candidates are currently being
invited into the clinics for updated testing and preparations and for
official recruitment into the study. In addition, we are of course
continuing screening activities. We are looking to enroll men with
intermediate risk prostate cancer that has progressed to a stage where a
clinical review and treatment change is required.

We were very pleased that the strong interest in enrollment, which we also
saw during the previous stages of the study from prostate cancer patients
and their attending physicians remains strong. This reflects the high
medical need in this indication and continues to encourage our confidence
in the potential of a well-tolerated and effective treatment option for
prostate cancer. Our approach could significantly change the way prostate
cancer is treated, as it allows for a less invasive, less aggressive
treatment modality that could cure the cancer or, at a minimum, reduce a
patient's chances of needing a more definitive treatment in the future.

Cosmin Filker: When can the first results be expected and do you still
consider the timetable, according to which the completion of the study is
expected for summer of 2022, to be up-to-date?

Dr Ben Lipps: Indeed, based on the current plan and conditions set out by
the FDA, we target to finish patient treatments in late summer 2022. In
parallel, we will submit interim data packages at 15 and 30 patients
treated for FDA review, whilst treatments continue. These packages will be
updated and submitted for approval after trial completion.

As studies such as ours require face to face interaction, the spread of the
new COVID-19 virus variants and a surge in diagnosed cases over the winter
months also had an effect on our recruitment. Fortunately, the structure we
implemented in the U.S., where our centers for the focal treatment of
prostate cancer are set-up as stand-alone units, independently from
hospitals, enables us to conduct the clinical registration study despite
COVID-19. Because cancer does not halt in the face of the pandemic - and
neither do we.

To further mitigate any pandemic impacts and accelerate the process, we
have contracted additional urological practices - so-called reference
centers - in proximity to our study sites in Florida, Texas and Washington.
Two of this practices are already actively screening patients with the
onboarding process for the third practice currently underway. All reference
centers run own Active Surveillance programs and will screen their
respective patient base for eligible subjects, i.e. men diagnosed with low-
intermediate risk and intermediate-high risk prostate cancer for which a
clinical review and treatment change is required. Following screening, the
patients will be referred to MagForce, and we will be handling the study
recruitment and treatment process.

So, all in all, we are confident that we can proceed in a swift and timely
manner with the patient treatments of Stage 2b.

Cosmin Filker: Once FDA approval is granted, how soon could you start
commercial treatments?

Dr Ben Lipps: We expect to start commercialization immediately upon FDA
approval. This might seem ambitious at first glance, but the way we have
set-up our study was specifically aimed at supporting a seamless
transition. To avoid delays between approval and start of commercial
treatments, we decided to conduct the clinical study at centers owned and
operated by MagForce. This way the Focal Cancer Treatment Centers are
already established and operational once the study concludes with staff
well-versed in the therapy and treatment.

Our strategy is to continue to operate those stand-alone Focal Cancer
Treatment Centers as this will allow MagForce USA to bill for the entire
procedure, including the instillation of the nanoparticles. Operating
proprietary treatment sites enables MagForce to more efficiently utilize
its devices and significantly increase revenue per patient. This should
enable us to generate up to threefold revenues compared to just selling the
NanoTherm particles. In addition to our current locations in San Antonio,
Texas; Seattle, Washington; and Sarasota, Florida, which will be our
immediate commercial locations, we plan to have additional proprietary
treatment centers in place still in 2022. In subsequent years, we will
continue to open up Focal Cancer Treatment Centers in strategic locations
in the U.S. in order to treat patients locally.

It is estimated that there were 209,500 new cases of prostate cancer in
2020 in the USA alone and despite advances in diagnosis and treatment
options, an estimated 31,000 deaths occurred according to the American
Society of Clinical Oncology. Our focal ablation approach targets patients
who have progressed to intermediate prostate cancer stages and are under
active surveillance. By destroying smaller cancer lesions, it is
anticipated that patients will be able to remain in Active Surveillance
programs and avoid, for as long as possible, definitive therapies such as
surgery or whole gland radiation with their well-known side effects. The
addressable market in the USA alone is worth USD 4.1 billion per year
considering the revenue from the entire procedure.

Cosmin Filker: Last year you signed a cooperation agreement with a Spanish
clinic, so the European roll-out for glioblastoma treatment could gain
momentum. When will the market entry take place here and which countries
are still in focus?

Dr Ben Lipps: The collaboration, you are referring to, is the partnership
with Complejo Hospitalario Integral Privado - or CHIP - in Málaga, headed
by the General Director Toni Serra together with the treating neurosurgeon
Prof. Miguel Angel Arraez. We signed it in September last year. Spain is
one of our initial target countries and the center's strategic location
will allow access to our therapy for a large number of patients from
Andalusia, further regions of Spain but also for patients from other
countries abroad.

The private clinic CHIP will be equipped with MagForce's 'plug-and-treat'
solution - a mobile container fully operational with a pre-installed
NanoActivator device. As you may know, as of May 2021, all European-based
medical device manufacturers must comply with the requirements of the new
Medical Device Regulation ('MDR'), which will subsequently require new MDR
certification for each of the devices that are part of our
NanoTherm Therapy system. We expect to be among the first companies to
deploy devices under the new MDR certificate in the first half of 2022.
Subject to all inspections and permissions by local authorities being
granted, we expect commercial treatments to start in the second half of
2022.

To add to Germany, Spain and our very active center in Poland, our next
focus country will be Italy. There we also received high interest through
clinics who would like to start with the NanoTherm Therapy system.
Additionally, we saw a significant rise in patient inquiries from Italy, as
a result of pursuit for further therapy options to treat glioblastoma.

However, we have to note that especially in Europe and the indication
glioblastoma, the pandemic continues to have a negative impact on our work.
The situation in hospitals remains tense and patients still avoid going to
the clinics as long as they can for fear of a Covid-19 infection,
unfortunately. We are, of course, continuing discussions with other
potential locations. In Austria and Germany as well as Italy, advanced
negotiations with potential partners are ongoing. However, the respective
hospitals have more pressing problems at the moment. Nevertheless, I hope
and believe it is quite realistic that we will be able to announce further
cooperation agreements this year.

Beyond further partnerships we are always looking at utilizing existing
capacities in the best possible way. This includes agreements with public
and private clinics in the surrounding areas of our partner hospitals. The
model could be, in a nutshell, that the local clinics instill patients with
our NanoTherm particles and then transfer them to the next treatment center
with a NanoTherm device. This way, with one device per region, considerably
more patients can receive treatment, without the need to install additional
devices.

Cosmin Filker: Can you briefly outline the topic of reimbursement by
insurance providers? Currently, so-called Investigator-Initiated Trials
(IIT) are taking place.

Dr Ben Lipps: Reimbursement by healthcare systems of course is an important
factor and remains a top priority for us. We are continuously working with
experts on solutions for efficient reimbursement processes, both for
patients treated in Germany and abroad.

In Germany for example, private patients are currently reimbursed, while
public insurances usually cover the treatment costs on a case-by-case
request. All patient data collected and filed with our European registry
will be used to support budget negotiations with health insurance
providers.

The Investigator Initiated Trials, or short IIT, you are referring to, are
trials initiated and managed by the hospitals themselves, meaning they are
responsible for the legal and regulatory aspects of the trial. While
MagForce is not directly involved as a sponsor, we of course support our
partners in every way and also benefit from the results.

Both in Poland and Spain, those IITs will support patient reimbursement.
The trial at SPSK4 in Lublin is currently underway and has produced
encouraging interim data that was presented at two prestigious conferences
last year: the 45th Congress of Polish Neurosurgeons in Cracow, Poland and
the Congress of Neurological Surgeons 2021 in Austin, Texas, USA.

The data will be used to apply to the Agency for Health Technology
Assessment and Tariff System in Poland for the reimbursement of NanoTherm
therapy as a supplementary treatment.

Cosmin Filker: Finally, a question for investors with a long-term
investment horizon. Where do you see MagForce AG in five years' time?

Dr Ben Lipps: In five years' time, MagForce will have a fully set-up
commercial operation in the US for prostate cancer with full reimbursement.
We envision to have a number of strategically positioned centers across the
US to provide broad access to patients. By 2027 MagForce should have some
30 centers in the country. Depending on how many shifts are run at each
center, they could generate 10m USD of revenues each on average. This would
result in US revenues of approx. 300m USD at an EBITDA margin of approx. 60
percent.

In Europe the roll-out will have continued for the treatment of
glioblastoma, also providing good geographical coverage with reimbursement
set up in most relevant countries and patient treatments far exceeding the
approximate break-even point. In addition, MagForce will likely have
started to look at further cancer indications by then, including bringing
the prostate cancer treatment over to Europe as well as the glioblastoma
treatment to the US.

Cosmin Filker: Dr Lipps, thank you for the interview.

Die vollständige Analyse können Sie hier downloaden:
http://www.more-ir.de/d/23348.pdf

Kontakt für Rückfragen
GBC AG
Halderstraße 27
86150 Augsburg
0821 / 241133 0
research@gbc-ag.de
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Offenlegung möglicher Interessenskonflikte nach § 85 WpHG und Art. 20 MAR. Beim oben analysierten Unternehmen ist folgender möglicher Interessenkonflikt gegeben: (5a,5b,11); Einen Katalog möglicher Interessenkonflikte finden Sie unter:
http://www.gbc-ag.de/de/Offenlegung
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Date (time) of completion: 09/02/2022 (12:30 pm)
Date (time) of first distribution: 09/02/2022 (1:30 pm)

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Quelle: dpa-AFX