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MYOS: UC Berkeley Study Results Should Help Open New, Large Market for Fortetropin

06/20/2019
By Brian Marckx, CFA

NASDAQ:MYOS

READ THE FULL MYOS RESEARCH REPORT

Yesterday, MYOS Rens Technology (NASDAQ:MYOS) announced topline results from a study conducted at the University of California, Berkeley which further supports the role of (their proprietary) Fortetropin in the promotion of muscle growth. This study focused specifically on older adults – namely those between the ages of 60 and 75 years – and measured the change in the ‘fractional synthetic rate’ (FSR) of muscle proteins. FSR, in this context, essentially describes the speed at which the body builds new muscle proteins (i.e. the ‘building blocks’ of muscles).

The randomized, double-blinded, placebo-controlled study included 20 subjects ages 60 to 75 years old. Subjects were randomized to consume either Fortetropin or (a macronutrient-matched) placebo for 21 days. Participants also ingested a (heavy water) tracer each day (which was used to measure the levels of Fortetropin and placebo in the muscles). Following the 21-day ingestion period, a biopsy was taken from each participant and FSR was measured.

The results announced yesterday relate to the difference between the Fortetropin and placebo groups in the proportion of three specific proteins; myofibril proteins, cytoplasmic proteins and mitochondrial proteins. These are key building blocks of skeletal muscle fiber. The biopsy results showed that the proportion of each of these three proteins increased (33/38 myofibril proteins, 36/44 cytoplasmic proteins and 15/19 mitochondrial proteins) more among the Fortetropin subjects as compared to those given the macronutrient-matched placebo. The difference was statistically significant.


View Exhibit I

While we look forward to the complete study results, which are anticipated to be submitted for publication and presented at an industry conference later this year, we think the topline data does provide substantive additional support to previous data (that dates back to 1997) that has similarly shown that Fortetropin can significantly increase muscle growth. But while most of the earlier clinical data comes from studies of relatively young subjects and had focused largely on reduction in serum myostatin levels (which has been shown to down-regulate muscle growth) and on increase in weight-lifting strength, this study is clearly aimed at potentially opening up a new market for MYOS’ Fortetropin products – namely for sarcopenia, or age-related muscle loss. The lack of currently available therapies to treat the condition means this could represent a highly receptive market for Fortetropin-based products.

Given the positive results of this UC Berkeley study, we expect we will hear more about MYOS’ plans to build further evidence around Fortetropin for older populations as well as their near-term plans for capitalizing on the related commercial opportunity. In fact, MYOS mentioned in yesterday’s press release that this study will “form the cornerstone of MYOS’ ‘Healthy Aging’ business unit.

Valuation
We have adjusted our DCF discount rate, from 15% to 14%, to reflect reduced failure-risk as a result of the positive topline data from this UC Berkeley study. The update moves our DCF-generated price target from $3.50/share to $3.75/share.

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