The Call
Moberg Pharma- it's not "over," it's just not good, and now I'm the 2nd biggest asshole in the room
The consensus even amongst some of my closest friends I’ve come to know through investing, who’re all uniquely and wildly intelligent, is that now’s probably the time to capitulate. Moberg Pharma has warned that their blinded data was below their expectations of clinical cure, and that commercialization efforts in the US could be materially impacted. The upside of a rich right tail outcome with a very strong label is gone. It’s over.
To help cast asside thoughts that maybe something went really weird with the control group and that we’re not all being trolled by blinded data:
Here’s some numbers from my friend
to justify this to you, who was much more intelligent than I was to appropriately handicap this modified clinical trial in order to avoid having such an ugly day. He may have even avoided it entirely. The dude’s blessed with hard earned skills and talent. The ratio was 2:1 on MOB-015 to control, so you’d expect to see about 33% of the blinded subset of patients to be control with most people having completed the trial. So, it’s almost certainly not this.But more importantly and thinking after having calmed down, I’m left after this call and PR wondering if this product can clear the hurdle of approval and if a company would want to license it for the US in spite of the ugly label that it’s going to have.
Here’s the meat of the potatoes of the announcement, you can listen to the call here
They did not tell you on this call that the trial is going to fail to show statistical significance to placebo. They just said it was “worse than their expectations” and that “the risk to fail to achieve commercialization in the US has significantly increased.”
If you’re not already aware, Moberg’s chosen bar was to beat Jublia with this abbreviated application period. That was their expectation. Beat Jublia and do so with something of a margin on the clinical values. So, making just one more presumption here is that the blinded clinical cure rate is simply worse than Jublia’s is. That’s not the biggest leap to make.
So, yes, since you likely haven’t beaten Jublia’s standard with a highly abbreviated protocol, you’re already working down from a near 100% rate of successful commercialization. Yet while eerything in that statement is true, it still gives no real context or clue to what the risk here even is. Maybe management will relentlessly dump their small pittance of risk if it’s truly doomsday, but who knows. They did make it clear that this wasn’t them saying they think the product will fail to achieve FDA approval. They state that explicitly in the PR, but it’s not at all how that came across.
Thanks, Moberg.
But did you know that there are actually much, much worse prescription nail topicals than Jublia cleared by the FDA available for sale and they actually sell pretty well? Hell, even the scam products like Krystal Flush sell well enough to justify spending money on TV commercials. But put MOB-015 on even footing, and it is probably not a worse topical than Jublia.
This being said, what their PR today really means is we just compared two different drugs in two different ways of use and came back with bad news that cutting dosing down by 66% doesn’t actually work super well with their product. The consequences of this just so happens that our label, if we do get one, is going to be ugly, and no one realistically should only be applying this daily for just 8 weeks.
To be better in every way to the current premier topical with a highly abbreviated application period was what they were aiming for with this trial. Moberg missed that goal.
I want to say that it’s weird they even tried this after Anna kept insisting that they were just very, very conservative Swedish people. That trial construction wasn’t conservative behavior. You were shooting for the moon on a clinical trial that costed millions and millions of dollars for a new label and missed in a way this drug had never been tested. That’s not conservative behavior at all. And to make matters worse, depending on how you interpret the last pieces of clinical data and the significance of complete cure under the context of a transient whitening of the nail, this was all for naught. From my camp this was totally pointless, and you could have replicated the prior outcome with improved clinical cure only by titrating by the later weeks or simply given a longer washout period after 48 weeks.
My point here is that while Moberg ramping up their own shop in the US probably makes even less sense today than it did before: not beating JUBLIA does not mean that no one will try to sell it in the US or that it can’t get approved.
IF Moberg crosses over the hurdle of FDA approval, there can still be a US license. The data isn’t going to stop a buyer from trying to make some money just because the label is ugly.
Is it really fair to presume that every other US pharmaceutical company wouldn’t have a go at licensing this if approved? Why would that behavior ever make sense? Why is that not meeting an expected outcome to being worse on paper than Jublia when you were trying to undercut the dosing by 66%?
Allderma isn’t in Sweden saying what the complete cure rate is to consumers from the EMA data. They just say that it kills mild to moderate nagelsvamp about 70-80% of the time when applied daily. Which is true. In the OTC markets, no even cares about the clinical terminology of complete cure. This is evident in the launch and now Moberg lives in an interesting spot where it’s the market leader in OTC market and that only really took one (read one) month of advertising to do that... whether that remains even close to true in RX markets remains to be seen. The clinical definition of complete cure in the context of that P3 is just total brain rot of what’s even important. If this product was permanently changing the aesthetic of the nail, I’d be singing a different tune. But that’s not what’s happened in the prior P3’s.
This type of outcome where Moberg gives up on the US because they don’t think their asset is good enough to justify trying to launch a podiatry business comes along with all the glory of Moberg giving up on their aspirations to sell that product directly to podiatrists in the US. It doesn’t even give them ample opportunity to try to spend all their money, and it can operate purely as a licensed asset. Hell, you could fire almost everyone once the licenses are going. Just get ChatGPT to write the PR’s and distributions the majority of funds.
To Anna, Amir, and Anders
Your borderline unethical hat-trick to evergreen this into the 2040’s may or may not have died today with this continuous and needless changing to the structure of these clinical trials. Of course, I have no way of knowing this (I’m not a patent lawyer versed in pharmaceuticals) and because your strategy was to gatekeep the asset under this transient whitening feature, I simply have no clue if the outcome being spectacular matters at all for that endeavor. To most people your patent runs out in the early 2030’s. Is that true for you? I don’t actually know. Does that explain the lack of urgency you feel here? I don’t know that either.
It wasn’t a small jump you took here. The washout period changing from P2 to P3 was also horrible, and I feel bad that I didn’t put an emphasis on these changes to the structure of not only this trial, but every trial you’ve ran. This may be forgivable if you can salvage the US market
But worst of all, waiting to roll this out to patients in Europe until 2026 is just so disrespectful.
You’re giving the whole of Europe the middle finger by dancing away time rationalized under the poor timing launch based off the seasonality of a product that YOU have made clear should be applied daily for around 48 weeks (damn, that’s nearly the whole of all the seasons).
How much are people buying upfront in Sweden? Are they shopping for their whole supply at once? Do you think at all that the millions and millions of patients in Europe care that you might miss the “Q1 stocking window”? They already don’t have an adequate alternative, why do you think they still have nail fungus? Wouldn’t you rather treat some patients versus treating zero? To hell with making a perfect year for Bayer.
TAKE CARE OF YOUR PATIENTS AND THEY WILL TAKE CARE OF YOU AND EVERYONE ELSE.
“Poor timing” is launching in Europe in 2026 when the EMA was ready for you in 2023. Not missing the Q1 stocking window in 2025 and using that as a justification to wait an entire year.
is anything more certain in microcap bio (and mining) than management status quo ?
Genuinely thank you for all your work. You have been great sourcing and analysing this. Patient answering a lot of questions (including the dumb ones). Maybe price will rebound a bit and some can get out with minor losses.
Onto the next one