Nail fungus is a very common disease that occurs in about 10 percent of the population. Older people are most affected and the disease is caused by filamentous fungi, so-called dermatophytes, which can also give rise to other fungal infections such as athlete's foot and ringworm.
Since fungi thrive in high humidity, it is common for nail fungus to develop on the feet. People who wear shoes that are too tight or use socks that cause their feet to sweat may be at risk. Diabetics and patients with a weakened immune system are also at increased risk of developing nail fungus.
Spreading common
Nail fungus is most common on toenails, but can also occur on the fingers. The infection starts on the side of the nail and then works its way inward. At first, the nail may become yellow and discolored, which in itself cannot be considered a serious complication. However, it is not uncommon for nail fungus to remain untreated for a long time, which can make the nail more brittle and thicker, and eventually break and come off completely. A long-term infection can also spread to the surrounding skin and nails.
Treatment discontinuation is common
Many people who suffer from nail fungus do not treat it and it is also common for treatment to be started and then discontinued without being completed. Often this is because the patient is not satisfied with the treatment given.
Treatments for nail fungus can be roughly divided into two categories. The first is various topical (external) preparations with a good side effect profile but which are not very effective in killing the fungus. The second category is terbinafine in tablet form, a treatment that is effective, but is associated with risks of serious liver damage. In a study conducted in 2017, seven out of ten doctors stated that they avoided prescribing terbinafine tablets precisely because of concerns that the treatment would affect the patient's liver.
Great need for new treatments
There is thus a great need for better topical treatments without the risk of liver damage and systemic side effects. This is where Moberg Pharma drug candidate MOB-015 comes into the picture. Terbinafine is used in a topical treatment, with a patented technology that has been shown to deliver 40 times higher levels of the substance in the nail bed compared to the use of tablets. At the same time, the concentration of terbinafine in the blood is 1000 times lower compared to the tablets, which eliminates the risk of systemic side effects. Compared to other topical treatments, Moberg Pharma's data has shown that MOB-015 reaches a completely new level, with a mycological cure (proportion of fungus-free patients) of between 70 and 84 percent. This can be compared to a mycological cure of between 30 and 54 percent for other topical preparations.
Market growth driven by cosmetic reasons
Globally, the market for nail fungus treatment is expected to grow by 7,6 percent annually and is expected to reach a value of approximately USD 2026 billion by 6,7, according to a recently published market report. An aging population and increased awareness of the disease are expected to drive growth, along with an increased desire to preserve the aesthetic appearance of the nails. Moberg Pharma is more cautious in its assessment of the market size, but nevertheless sees an annual sales potential for MOB-015 of 250 – 500 million USD.
Drawing on previous experiences in upcoming launches
Moberg Pharma is currently working on the final steps before bringing the candidate to market. The company is preparing a registration application for Europe and is planning an additional Phase III clinical study that is needed for approval and launch of MOB-015 in the US.
Ahead of upcoming launches, the company has greatly benefited from previous experiences with Kerasal Nail, which the company took to a market leading position in the US and was also launched in more than 30 markets around the world via partners. Kerasal Nail and Moberg's other products on the market were divested in 2019 for SEK 1,4 billion. This enabled a large extra dividend to shareholders and full focus on the company's pipeline of late-stage drug candidates, the potential of which significantly exceeds that of the divested portfolio. As with Kerasal Nail, the business model for MOB-015 includes direct sales with a focus on the US, distribution with partners and out-licensing in other markets.
Important license agreements have been concluded with strong partners
Agreements are already in place for several important markets. Last year, a license agreement was signed with Bayer regarding the European market and with Taisho for commercialization in Japan. Upon successful launch, both agreements are expected to generate up to SEK 500 million each in milestone payments in addition to royalties and payment for delivered products.
Fully guaranteed rights issue to go to market
Ahead of the commercialization of MOB-015, Moberg Pharma is now conducting a fully guaranteed rights issue of SEK 150 million. The proceeds will be used to complete a registration application for Europe and to conduct an additional phase III study for the US market.
Spins off and separates BUPI into a fully funded subsidiary
In connection with the rights issue, Moberg Pharma is also making a so-called Lex ASEA distribution of the project BUPI, a new treatment for oral mucositis under the brand name BupiZenge which is entering phase III. The spin-off highlights the value of BUPI, which will in future be run by a dedicated team and with its own financing. BUPI will be run in the subsidiary OncoZenge which is planned to be listed on Nasdaq First North Growth Market in the first quarter of 2021. Own financing of SEK 70 million has already been secured from experienced investors in the area, including the investment company Linc AB.
How the issue proceeds in Moberg Pharma's issue will be used
Upon full subscription, Moberg Pharma will receive SEK 150 million before issue costs. The issue proceeds are intended to be used as follows:
- Preparation of the registration application for MOB-015 in Europe – 45 percent
- Clinical work for MOB-015 – 45 percent
- Other costs for the company's operations – 10 percent
Also read BioStock's interview with Moberg Pharma's CEO Anna Ljung here. (Published November 19)
[divider]THE OFFER IN SUMMARY[/divider]
| LIST | Nasdaq Stockholm |
| UNIT RIGHTS | Existing shareholders in Moberg Pharma will be allocated seven (7) unit rights per one (1) existing share. Six (6) unit rights entitle them to subscribe for one (1) unit in the rights issue. |
| ISSUANCE VOLUME | A total of 23 units will be issued. Each unit consists of one (175) common share and one (576) free warrant, which means that a maximum of 1 new common shares and 1 warrants will be issued. |
| PREFERENCE RIGHTS AND VOTING DAY | The record date for the right to subscribe for units supported by unit rights is set to December 3, 2020, which means that the last day for trading in the Moberg Pharma share including the right to subscribe for units supported by unit rights is set to December 1, 2020. |
| DRAWING COURSE | The subscription price is SEK 6,47 per unit, which corresponds to a subscription price of SEK 6,47 per share. |
| SUBSCRIPTIONS TIME | December 7 – 21, 2020. |
| TRADE WITH UNIT RIGHTS | December 7 – 17, 2020. |
| TRADING WITH BTU | December 7, 2020 – January 14, 2021. |
| STOCK OPTION | Two (2) warrants entitle the holder to subscribe for one (1) ordinary share in the Company during the period from March 16, 2022 to March 29, 2022 at a subscription price that is the higher of (i) SEK 6,47 (the subscription price in the rights issue), or (ii) 70% of the average volume-weighted price paid for the Company's share on Nasdaq Stockholm during the period from February 28, 2022 to March 11, 2022. Upon full exercise of all warrants, the Company's share capital will increase by a maximum of SEK 1. |
| DILUTION | For shareholders who do not participate in the rights issue, a dilution effect of a maximum of approximately 63 percent will arise upon full subscription in the rights issue and full exercise of all warrants. However, shareholders have the opportunity to partially compensate themselves financially for this dilution by selling their unit rights. |
| SUBSCRIPTIONS | The rights issue is 100 percent guaranteed. It is covered to approximately 42 percent by subscription commitments from, among others, the board members. Peter Wolpert, Mattias Klintemar and Fredrik Granstrom and by the management in the form of Anna Ljung, Mark Beveridge and Torbjörn Wärnheim and by major shareholders in the form of The Baltic Sea Foundation as well as external underwriters, such as Nyenburgh Investment Partners and Faro Capital AB. 58 percent of the rights issue is guaranteed by external guarantors. |
[divider]DOCUMENTS & INFO[/divider]
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