Cardiol/CRDL
Research Report

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Cardiol Therapeutics (CRDL:TSX; CRDL:NASDAQ), an Ontario-based developer of small-molecule drugs for cardiovascular diseases, has reported headline Phase II data from its 109-patient acute myocarditis study, known as the ARCHER trial, Douglas Loe noted in an updated research note for Leede Financial Inc. on August 6.

This trial tested the company's orally active, ultra-pure synthetic cannabidiol formulation, CardiolRx, for this specific condition. Patient enrollment for the 12-week trial concluded in late FQ324, and we were expecting the final data analysis by FQ225, which was only slightly delayed into FQ325.

"ARCHER data deemed favorable by Cardiol nad 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 $11 per share.

Patients Showed Measurable Improvement

The trial had two primary endpoints: one was nearly met, though not quite to a statistically significant level (cardiac MR-assessed change in extracellular volume), and the other was not met (global longitudinal strain, also assessed by cardiac MR), which was unlikely to be met based on patient enrollment characteristics, Loe wrote.

In the press release about the ARCHER update, Cardiol indicated that patients treated with CardiolRx showed measurable improvement in extracellular volume on cardiac MR images after three months of treatment compared to placebo patients, with a p-value close to statistical significance (0.054, near the 0.05 threshold, suggesting clear efficacy trends for CardiolRx).

Analyst: Slight Miss on Achieving Statistical Significance

The company's share price performance on Wednesday, which sank 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.

Capital markets rarely show tolerance for missing statistical significance, even when considering factors like the small magnitude of the miss (extremely small in ARCHER), trial size (109 patients in ARCHER is not trivial, but not powered to the level needed for a pivotal Phase III registration study), target indication (acute myocarditis, where efficacy assessment involves interpretation of radiographic images rather than hard endpoints like survival in oncology or microbial load in infectious diseases), or the nature of standard-of-care (there is no approved pharmacopeia for myocarditis other than off-label use of glucocorticoids or antihypertensive agents), the analyst note.