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With new approach to Alzheimer's, Peninsula company seals $225M deal with drug giant AbbVie

By Ron Leuty – Reporter, San Francisco Business Times
Oct 24, 2017, 4:00am

With a new collaboration and funding from AbbVie Inc., a young Peninsula company hopes to attack memory-robbing Alzheimer's disease in much the same way a new generation of cancer drugs are trying to eliminate tumor cells.

Alector LLC of South San Francisco will receive $205 million upfront and a potential equity investment of up to $20 million from AbbVie (NYSE: ABBV) as part of a deal to research, develop and eventually sell drugs targeting dementia, particularly in Alzheimer's patients, the companies said Tuesday.

As the baby boom generation adds significantly to the number of people with Alzheimer's — by some calculations, the number of Alzheimer's patients in the United States will triple by 2050 from 5 million to 16 million — drug companies have been stymied in developing drugs for the disease. Just last month, former Medivation Inc. CEO David Hung's latest company, Axovant Sciences Inc., said its late-stage clinical trial to treat patients with mild to moderate Alzheimer's failed.

But Alector thinks it can reactivate the immune system in the brains of people with Alzheimer's and other forms of dementia, Parkinson's Disease, multiple sclerosis and amyotrophic lateral sclerosis, or Lou Gehrig's disease. It borrows from discoveries in cancer, where companies are starting to unleash immunotherapy drugs that in various ways target certain proteins to rev up the immune system to uncloak and attack tumor cells.

More specifically, company cofounder and CEO Arnon Rosenthal said, Alector's drugs aim at stimulating, multiplying, moving and directing brain cells called microglia. Those cells account for roughly 15 percent of all brain cells, providing a first line of defense for the central nervous system against foreign invaders and acting as a sort of gray-matter garbage disposal.

The sorts of things that microglial cells should be dumping at the metaphorical curb are amyloid beta and tau, sticky proteins that clump together in the brains of Alzheimer's patients, disrupting the sharing of messages between neurons. Amyloid beta and tau have been the preferred targets of companies trying to disrupt Alzheimer's.

By stimulating microglia, Rosenthal said, Alector's drugs in preclinical models indicate that they can block Alzheimer's on their own or, potentially, in combination with antibody drugs that so far haven't demonstrated efficacy.

AbbVie has its own tau-targeting experimental Alzheimer's drug, ABBV-8E12, in the second of the three-phase clinical trial process.

"Even for targeted therapeutics, you need an active and robust immune system to get effective therapy," said Rosenthal, a cofounder of Rinat Neuroscience before that South San Francisco company was bought by Pfizer Inc. (NYSE: PFE) in 2006 for $500 million.

"We think there will be significant efficacy as a standalone (therapy)," Rosenthal said.

Forty-employee Alector, a graduate of the QB3@953 incubator and Johnson & Johnson's (NYSE: JNJ) JLabs in South San Francisco, expects to start its first human clinical trial within a year in frontotemporal dementia, where the loss of nerve cells causes behavioral changes in people in their 40s or younger.

Four other Alector drugs could follow into the clinic over the next two years, Rosenthal said.

In all, Alector, founded by Rosenthal, Columbia University associate professor Asa Abeliovich and serial entrepreneur and Dartmouth College bioengineering professor Tillman Gerngross, has raised more than $80 million in four years. Those investors include Orbimed and Polaris Ventures, Google-associated GV, Mission Bay Capital, Merck & Co. (NYSE: MRK), Amgen Inc. (NASDAQ: AMGN), Dementia Discovery Fund and AbbVie.

Alector's deal with AbbVie gives the Chicago-area company an option to global development and commercial rights to two targets. Alector will lead exploratory research, drug discovery and development for lead programs up to proof-of-concept studies. If AbbVie exercises its option, it will lead development and commercialization, but the companies will split drug profits, if drugs get to that point.

"The success of immuno-oncology helps us understand the field," Rosenthal said. "People understand that we are doing immuno-oncology in the brain."