IP Group shares slide after Istesso clinical trial fails

(Sharecast News) - IP Group said on Monday that its portfolio company Istesso has reported results from a phase 2b study of its investigational rheumatoid arthritis (RA) drug, leramistat, which did not meet its primary endpoint of improved ACR20 response versus placebo. The FTSE 250 company said it did, however, demonstrate statistically significant reductions in bone erosions, alongside improvements in disability and fatigue.

It said the 12-week, randomised, double-blind, placebo-controlled trial assessed leramistat in adults with moderate-to-severe RA who had an inadequate response to methotrexate.

Istesso highlighted that the findings reinforce leramistat's novel mechanism of action and its potential to promote tissue repair when used alongside disease-modifying anti-rheumatic drugs (DMARDs).

The firm also noted that the treatment significantly slowed or halted the progression of bone erosions, which contribute to long-term disability in RA patients.

Safety data from the study indicated no new concerns, with adverse event rates comparable between the leramistat and placebo groups.

Most reported adverse events were mild and resolved without intervention.

Istesso was planning to publish full study results and conduct further phase two trials to assess leramistat's potential in RA and other chronic conditions.

It is sufficiently funded to continue development.

IP Group holds a 56.5% undiluted stake in Istesso, and said it expected to provide an update on its valuation in its 2024 results, set for release next month.

"We are encouraged that these results are consistent with leramistat's unique mechanism of action which supports and augments tissue repair," said chief executive officer Greg Smith.

"In addition, the impact on disability and fatigue, from which a large proportion of RA patients continue to suffer despite the widespread availability of current medications, is also highly promising."

Smith said Istesso would carry out additional work to evaluate leramistat's potential to address those unmet needs, and to promote adaptive tissue repair in RA and other chronic conditions, potentially in combination with existing therapies.

"Based on these data, we continue to believe in the market opportunity for leramistat to improve patients' health and deliver significant value for shareholders."

At 0848 GMT, shares in IP Group were down 5.97% at 45.89p.

Reporting by Josh White for Sharecast.com.