Canadian Pharmaceutical Company Discovers Breakthrough Cardiovascular Treatment

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Clinical-stage life sciences company Cardiol Therapeutics (CRDL:TSX; CRDL:NASDAQ) announced topline results from ARCHER, the company's Phase II clinical study involving patients with acute myocarditis.

In the two primary endpoints — extracellular volume (ECV) and global longitudinal strain (GLS) — CardiolRx demonstrated a notable improvement in ECV (p = 0.0538) compared to placebo after 12 weeks of double-blind treatment, although no significant difference was observed in GLS among patients with preserved left ventricular (LV) function at baseline, the company noted in a release on August 6. The reduction in ECV was linked to improvements over placebo in several pre-specified cardiac magnetic resonance imaging (CMR) endpoints, including a significant decrease in LV mass.

"The results offer exciting new insights into the treatment of acute myocarditis and strongly support advancing the clinical development of this novel therapeutic approach for inflammatory cardiac conditions, including myocarditis and heart failure. I look forward to collaborating with my colleagues on the Steering Committee as we prepare for the presentation and publication of the comprehensive ARCHER trial data," said Dr. Dennis M. McNamara, professor of medicine at the University of Pittsburgh, director of the Center for Heart Failure Research at the University of Pittsburgh Medical Center, and chair of the ARCHER Steering Committee.

The ARCHER trial results offer compelling clinical proof of concept for CardiolRx and strongly support advancing its clinical development, along with CRD-38, in cardiomyopathies, heart failure, and myocarditis, Cardiol said in the release.

Consistent with findings from Cardiol's Phase II Maveric trial in recurrent pericarditis, CardiolRx was shown to be safe and well-tolerated. The ARCHER results have been submitted for presentation at an upcoming scientific meeting and will also be submitted for publication.

Dr. Leslie T. Cooper Jr., co-chair of the steering committee for the ARCHER trial, added that the trial was well-designed and executed. The findings reinforce the hypothesis that pharmaceutically manufactured cannabidiol can attenuate myocardial inflammation and edema. The results provide a sound rationale for advancing the clinical development of this novel therapy in conditions characterized by edema, fibrosis, and remodeling, including immune checkpoint inhibitor-induced myocarditis.

Analyst: Data Supports 'Positive' View

In an August 6 research note, H.C. Wainwright & Co. analyst Brandon Folkes highlighted the trial's strong support for further development of CardiolRx in treating inflammatory cardiac conditions, such as myocarditis, cardiomyopathies, and heart failure. Folkes pointed out that the safety profile was very clean, further validating the broader development programs for CardiolRx and CRD-38.

"We believe this morning's data further supports our positive view on CRDL stock, and enhances CardiolRx's attractiveness to a strategic partner," Folkes wrote, assigning a Buy rating to the stock with a US$9 price target, which represents more than a 566% increase from the US$1.35 per share at the time of writing.

 H.C. Wainwright & Co. analyst Brandon Folkes assigned a Buy rating to the stock with a US$9 price target.

"However, in our view, CRDL could also target orphan indications within the cardiology space, including immune checkpoint inhibitor-induced myocarditis, and self-commercialize those to drive shareholder value as well."

Folkes noted the FDA has no approved acute myocarditis drug therapies currently. "We view this morning's results as supportive of future development in the space," he wrote. "The company has a cash runway through 3Q26."

Folkes noted that CRDL’s current market cap of approximately US$112 million does not reflect the positive outcomes from the ARCHER trial, and he described Wednesday's announcement as a positive development. Success in the mentioned indications could unlock an additional US$500 million revenue opportunity for the company and potentially leverage the ARCHER trial data into broader cardiovascular indications.

Results Encouraging for Larger Trail

In an updated note for Leede Financial Inc. on August 6, Analyst Douglas Loe evaluated the orally active, ultra-pure synthetic cannabidiol formulation. Patient enrollment for the 12-week trial concluded in late FQ324, with final data analysis expected by FQ225, slightly delayed into FQ325.

"ARCHER data deemed favorable by Cardiol and its collaborators on at least one primary endpoint, but abundant biomarker and cardiac function data are still pending," wrote the analyst, who rated the stock a Speculative Buy with a price target of US$11 per share. At the time of writing, the price was US$1.85, which would have represented a return of 495%.

The company's share price performance on August 6 (when the news was released), which dropped more than 20%, was somewhat unsurprising given the slight miss on achieving statistical significance in extracellular volume reduction, a measure of reduced myocardium inflammation/fibrosis, Loe said.

The top-line results from Cardiol Therapeutics' ARCHER study for Acute Myocarditis are quite promising, according to Roth Capital Partners Analyst Jason Wittes rated the stock a Buy with a US$10 price target in another August 6 research note, representing more than an 80% increase from the US$1.11 per share quoted at the time of writing.

"Our 12-month price target is US$10, based on a sum-of-the-parts valuation using a 3x sales multiple on risk-adjusted peak sales and a 9% WACC, consistent with industry norms," Wittes wrote. "We attribute US$9 to CardiolRx for recurrent pericarditis (assuming US$609M sales in 2033, 60% probability of success), US$1 to CardiolRx (assuming US$132 million sales in 2033, 40% probability of success) for acute myocarditis, and approximately $0 to forward-year cash."

Wittes noted that the results were encouraging for a larger trial, as no other study has demonstrated improvement in this area so far.

The Catalyst: Market Worth Billions

The company said the ARCHER trial is a Phase II multinational, randomized, double-blind, placebo-controlled study investigating the safety, tolerability, and impact of CardiolRx on myocardial recovery in patients with acute myocarditis. The study enrolled 109 patients from leading cardiovascular research centers in the United States, France, Brazil, and Israel. The two primary outcome measures, evaluated after 12 weeks of double-blind therapy, consist of cardiac magnetic resonance imaging parameters: extracellular volume and global longitudinal strain, which assess myocardial function and tissue characteristics associated with fibrosis and inflammation.

Acute myocarditis is an inflammatory condition of the heart muscle characterized by symptoms such as chest pain, shortness of breath, fatigue, rapid or irregular heartbeat, and light-headedness, Cardiol noted. It is a significant cause of acute and fulminant heart failure and a leading cause of sudden cardiac death in individuals under 35. Viral infection is the most common cause, but it can also result from bacterial infection, certain drugs, mRNA vaccines, and therapies used to treat cancers, including chemotherapeutic agents and immune checkpoint inhibitors.

There are no FDA-approved drug therapies for acute myocarditis. Hospitalized patients face an average seven-day stay and a 4% to 6% risk of in-hospital mortality, with average hospital charges estimated at US$110,000 in the United States, according to the company.

According to Precedence Research, the global market for cardiovascular drugs was valued at US$144.11 billion in 2023 and is expected to expand from US$149.99 billion in 2024 to US$207.78 billion by 2033, with a compound annual growth rate (CAGR) of 4% from 2024 to 2033.

"The cardiovascular drugs market is experiencing noteworthy growth, driven by the increasing prevalence of heart-related conditions such as arrhythmias, coronary artery disease, hypertension, and heart failure," Precedence researchers wrote. "The rising demand for effective treatments addressing different mechanisms of action (in the heart) is driving economic growth, making cardiovascular medicine a grounding of modern medicine."

The top cardiovascular disease drug in 2023, Eliquis by Bristol Myers Squibb and Pfizer, brought in nearly US$12 billion in sales in 2022.

Ownership and Share Structure

According to Refinitiv, about 4.7% of the company is held by insiders and management and 9% by institutions. The rest is retail.

Top shareholders include Tejara Capital Ltd. at 3.86%, Prewident David Elsley with 1.51%, Michael Willner with 1.05%, AdvisorShares Investments LLC at 1.04%, and Palos Management Inc. with 0.73%.

The company has 82.67 million shares outstanding with 78.77 free float traded shares. Its market cap is CA$122.39 million and it trades in a 52-week range of CA$1.09 and CA$3.57.