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Specialty Pharma 'Advances Pipeline' Ahead of Commercializing Lead Skin Therapy
Research Report

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LifeSci Capital reviewed the key takeaways from this Israeli firm's day-long research and development presentation.

In a Jan. 25 research note, analyst Patrick Dolezal reported the highlights from Foamix Pharmaceuticals Ltd.'s (FOMX:NASDAQ) R&D Day on Jan. 24, which included a discussion with key opinion leaders (KOLs) about acne and rosacea treatments and an update on the company's progress with its pipeline. Foamix's area of focus is developing and commercializing topical drugs for skin conditions.

As for the KOLs' input, Dr. Hillary Baldwin, medical director of the Acne Treatment and Research Center in New Jersey, discussed acne, emphasizing it is a "multifaceted disease state" requiring several therapies—specifically 2.5 different treatments per patient on average, Dolezal noted.

She contended topical retinoids are slow to be effective. Because in patients with moderate to severe acne they do not work well enough or quickly enough, she often supplements that therapy with a tetracycline.

Dr. Jonathan Weiss of Gwinnett Dermatology addressed rosacea, noting its diagnostic features and the three scenarios of how it occurs—one time, chronically with relapses, or chronically and constantly.

He indicated his rosacea treatment regimen of choice is a full dose of oral antibiotics along with a topical agent. Patients who respond then receive a topical therapy with or without a sub-antimicrobial doxycycline. In nonresponders, he repeats the first step for two to three months and then moves to the second.

In the part of the R&D Day focused on Foamix's products, Baldwin talked about the FMX101 Phase 3 data. She said improvement in the number of lesions in the third treatment week was positive and should encourage patient compliance. She added the hyperpigmentation that occurred was beneficial and due to lesions clearing.

Foamix relayed FMX103 study data around tolerability and quality of life metrics. For instance, after 12 weeks on FMX103, at least half of the patients reported "an absence of six or seven of the surveyed tolerability characteristics, which compares favorably to scores at baseline," Dolezal relayed. He added, "Overall findings continue to point to a differentiated product profile, and we see great importance in the various tolerability, quality of life and patient satisfaction characteristics reported."

Matt Wiley, Foamix's new chief commercial officer, discussed commercialization of FMX101. He presented the results of a survey about the product given to 10 payers with an aggregate of more than 230 million subscribers. Most survey respondents "adopted a favorable view of the product profile of FMX101," indicating it "represents a novel product versus a 'me too' therapy," Dolezal relayed. They estimated the net-to-plan cost would be $200–400. "Foamix is still determining how FMX101 will be priced, though we view these early discussions favorably," wrote Dolezal.

Nearing commercialization, Foamix developed a plan for educating the medical community on the benefits of FMX101 and described its contents. The message, with three parts, will highlight the importance of the foam being used, use microbiology to show FMX101's potency and address antibiotic resistance concerns, and detail the penetration of minocycline in certain areas.

Looking forward, Foamix intends to advance other pipeline assets, including FCD105, an acne foam; FMX109, a different acne foam; and FMX110, a rosacea gel. The first large Phase 2 study Foamix will pursue will evaluate FCD105 for acne in 400 patients and should begin in Q2/19.

Nearer-term catalysts, however, are the release of Phase 3 long-term FMX103 safety data for moderate to severe rosacea and the launch of an FMX109 proof-of-concept trial in acne. Both are anticipated in Q1/19.

LifeSci Capital has an Outperform rating and a $16 per share price target on Foamix, whose current share price is about $3.68.

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Disclosures from LifeSci Capital, Foamix Pharmaceuticals, Company Update, January 25, 2019

Analyst Certification: The research analyst denoted by an "AC" on the cover of this report certifies (or, where multiple research analysts are primarily responsible for this report, the research analyst denoted by an "AC" on the cover or within the document individually certifies), with respect to each security or subject company that the research analyst covers in this research, that: (1) all of the views expressed in this report accurately reflect his or her personal views about any and all of the subject securities or subject companies, and (2) no part of any of the research analyst's compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed by the research analyst(s) in this report.

DISCLOSURES
Neither LSC nor any of its affiliates beneficially own 1% or more of any class of common equity securities of the subject company/companies.
This research contains the views, opinions and recommendations of LifeSci Capital, LLC (“LSC”) research analysts.
Additionally, LSC expects to receive or intends to seek compensation for investment banking services from the subject company/companies in the next three months.
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