A little dated but still an interesting read!
We are always, always tempted by anything that promises hope to sufferers of Alzheimer’s Disease and their families… not just because we’re humanitarians and love people, and have seen the pain of this disease, but because Alzheimer’s treatment is by far the largest (mostly) unmet medical need in the US, both because the population of at-risk people is so high and because the current treatments are largely ineffective for most of those people, and a cure or drug that provides meaningful improvement to patients would be worth billions of dollars.
Unfortunately, it has become an axiom that “Alzheimer’s Disease drugs fail in Phase 3” — while roughly 90% of all drugs fail to get approved according to most estimates, the metric for this particular disease is a far more discouraging 99.6%... and many biotech and pharma companies have put billions of dollars into Alzheimer’s Disease research just to see their treatments fail in the last wave of clinical trials, either because those drugs turn out to not be effective in large cohorts like they were in smaller groups, or because nasty side effects turn up once you increase the size of the trial.
The FDA is focused on trying to encourage new Alzheimer’s Disease drugs, including policies that may speed up trials, but they’re also quite cognizant that any effective drug that gets approved, particularly if it’s an early-stage preventive drug, could be used in millions of people in pretty short order. Everyone over 60 is worried about Alzheimer’s Disease, and there are an estimated 5+ million people with the disease already… with many more likely coming as the baby boomers surge into their prime Alzheimer’s-risk years (the Alzheimer’s Association says one in ten folks over 65 will develop Alzheimer’s dementia).
So that’s the landscape we’ve lived in for decades now — there’s huge wealth to be made, and huge social benefit, in an effective treatment for Alzheimer’s Disease… but we’re still not 100% sure what causes it or what an effective treatment will look like, and the clinical trials depend on squishier data like psychological assessments that lend themselves to huge placebo effects. But that “huge wealth” part keeps investors looking and hoping… and it keeps newsletters hinting and promising.
And it’s one of those piles of hints that we’re looking at today — this time, it’s a pitch from Chris Wood in an ad for Casey’s Extraordinary Technology ($2,000/yr). Here’s how the ad gets us revved up:
“Until now, Alzheimer’s has had a 100% fatality rate. But a new brain-boosting drug called ‘Sig-1’ actually reverses it.
“Here’s how you can get an early-in on the tiny biotech company that has the exclusive rights to this groundbreaking drug and score 1,500%-plus gains…”
What, then is Sig-1, and what’s the company Wood is hinting at for 1,500%-plus gains? Here are some more clues:
The entry is the story of a woman named Betsy, who was diagnosed with Alzheimer’s Disease and enrolled in a clinical trail for this “Sig-1” ….
“… amazingly, after 9 months of participating in the study and taking “Sig-1,” she regained her ability to play the piano….
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“The results were miraculous.
“Her doctors were stunned…
“For the first time in an Alzheimer’s clinical trial, a patient had regained a skill that was lost to this horrific disease.
“Major media outlets called the results, ‘amazing,’ ‘game-changing,’ and ‘spectacular.’
“With the remarkable results showing the first major improvement in treating the deadly disease since the 1990s.
“Betsy’s friends and family were ecstatic…
“Wiping away tears of joy, her husband said, ‘I have her back.'”
And apparently it wasn’t just a few patients who regained their ability to play piano (or paint, or play golf, or whatever), the drug was at least benign for everyone… more from Wood:
“… this drug either slowed or reversed Alzheimer’s in every single patient in the trial.
“And more good news… clinical results showed ‘Sig-1’ to be safe and well-tolerated.
“Finally, with this revolutionary new Alzheimer’s drug… there is hope for a long-awaited cure.”
We’re told that this drug does something a bit different from the high-profile flops that we’ve seen in the Alzheimer’s arena in recent years…
“… in recent decades, scientists have focused their Alzheimer’s efforts on drugs that reduce the sticky plaque known as amyloid in the brain.
“A plaque which is believed to contribute to the development of Alzheimer’s by stopping the brain from functioning properly.
“And as the Financial Times reports, “Drug makers have spent billions of dollars developing new medicines designed to remove the plaques — even after a succession of high-profile failure…”
“Including recent failures in large Phase 3 studies done by Pfizer, Eli Lilly, Roche, and Merck.
“But ‘Sig-1’ uses a different approach to treating Alzheimer’s from these big pharmaceuticals…
“Instead of targeting amyloid plaque, it looks to restore the balance and healthy processes of a cell.
“Because as people age, a special protein that is located in many different types of cells stops working as well as it used to.
“And in people with Alzheimer’s, it stops working almost completely.
“‘Sig-1’ acts like a chemical switch and turns the special protein back on, which removes the abnormal proteins that scientists think could cause Alzheimer’s from within a cell.
“The result… a significant slowing – and even a reversal – of the long-term effects of Alzheimer’s.”
So that’s the big picture — this drug doesn’t go after those plaques, but does something different… and it’s not so hard to guess that Sig-1 refers to Sigma(1) receptors, which will mean something to those of you primed in neuropharmacology (I’m not, in case that’s unclear).
So what else do we learn about this stock or this treatment? More clues…
“Right now, this tiny biotech is in the process of planning its Phase 3 clinical trial for ‘Sig-1’… the final stage the drug must go through in order to be get FDA approval….
“Setting this company on a course to capture a sizable share of the projected $20 billion Alzheimer’s drug market in short order… and potentially bringing you gains of well over 1,500%.”
Then he gets more specific with his “dream of a fortune” forecast:
“… it would only take this tiny biotech to capture a mere 10% market share of the projected $20 billion Alzheimer’s drug market to become a $2 billion a year blockbuster.
“And with a conservative sales multiple of 2 – well below the usual industry multiples of 2.5x to more than 5x – you’re still talking about a potential $4 billion market cap for this company, which could jump the stock price to over $96 per share.
“With today’s stock price for this tiny company falling below $5.50 per share, that’s a monster 1,500%-plus potential gain for this tiny biotech.
“Which could turn a small $10,000 investment into over $160,000.”
And, apparently, it’s not just Alzheimer’s Disease that this “tiny company” is addressing — they are also showing promise and receiving research grants for Sig-1 treatments for Parkinson’s Disease, Epilepsy, Multiple Sclerosis, and Rett Syndrome… and the company actually is entering or about to enter Phase 2 clinical trials for Epilepsy and Rett Syndrome, which gives them, we’re told, another catalyst well before Alzheimer’s Disease trial results start to come in…
“The Next Major Catalyst for this Tiny Biotech Could Occur as Early as December 2017
“With cash on hand of over $23 million and no long-term debt, this company has a solid financial foundation to continue its research and development for years to come…
“With enough cash to take it through two significant value-driving catalysts that are funded and ready to begin…
“A Phase 2, 12-week trial for Parkinson’s disease… with expected results as early as December 2017…
“A Phase 2, 12-week trial for Rett syndrome… with expected results in late 2017/early 2018…”
OK, so we’ve really loaded up with clues there for you… any guess as to who this is? You in the back? Yes, you’re right! This is indeed, once again, the oft-teased Alzheimer’s Disease darling Anavex Life Sciences (AVXL).
Anavex is developing several drugs, but the lead candidate is currently Anavex 2-73 for Alzheimer’s Disease… and those stories about the elderly woman returning to the piano, and the painter regaining her skill, are from the Phase 2a trial they did in Australia starting in the fall of 2015 — it got a lot of press at the time, and that trial is continuing (a 104-week followup should be available by the end of the year), but the next big possible news is Anavex actually launching the next clinical trial, which they say will be a pivotal phase 2/3 trial with hundreds of patients.
Anavex, in part because of its fairly rare combination of promising early stage results and small market cap, is both a perennial teaser target and a lightning rod for investor debate. It has come up in the pages of Gumshoe more times than I can count. The first pitch I saw for it was in 2010, back when it was a $75 million OTC stock, and teaser pitches have come through for the shares an average of at least once a year or so since then (though most of them have been from Agora Financial, with Michael Robinson and Ray Blanco being probably the biggest boosters).
Before today’s piece, I’d say the most irresponsible and dramatic one was Ray Blanco’s pitch for Anavex in the Fall of 2015 that implied the stock would be surging to new wealth-creating heights starting on a specific date just a few weeks after the Phase 2a trial for Anavex’s lead drug was enrolled (his attention helped to drive the shares up from a $100 million market cap to, briefly, over $400 million… though it was right back down at $100 million or so a week or two later).
This time around there’s no promise of a specific date from Chris Wood in his ad for Extraordinary Technology, just that the December results of their less-important clinical trials will generate more attention toward the end of this year, and that enrolling their Phase 3 Alzheimer’s Disease trial will get investors excited (especially if the Phase 2 results from Epilepsy and Rett Syndrome provide more positive safety news)… but at least we’re not looking at a single do-or-die date.
Still, $23 million is not very much money when you’re talking about running a Phase 3 trial for Alzheimer’s Disease (it’s actually closer to $25 million as of June, they sold some more stock last quarter). The Phase 2a study that showed those exciting results included just 32 patients, the next planned study, a pivotal Phase 2/3 trial, is expected to have perhaps 300 patients according to the notes I saw on the company website… and it’s hard to imagine a company getting broad approval, even with the FDA’s interest in advancing Alzheimer’s drugs, without a real 1,000+ patient Phase 3 trial or two after that.
The company has an investor presentation here that was last updated in June, and they do indicate that they’ll have some “potential for clinical read-out by end 2017/early 2018”, presumably on their Phase 2 trials in Rett Syndrome and Parkinson’s (those will have data fairly quickly because they’re 12-week trials — though their latest quarterly press release indicated that those potential “read-outs” are 2018 events, not 2017). There will also be another wave of updates on the Phase 2a Alzheimer’s study — the study that included those headline patients who regained the ability to play the piano and paint. That cohort has been followed for another year, so there will be 104-week extension data available at some point… if it follows the schedule of their past release, then that data would likely be reported by December (the 57-week data was reported last December).
It all sounds quite hopeful, and I certainly join pretty much everyone in hoping that this early-stage promise turns into a safe and effective drug someday… but I’m perhaps more skeptical than most about Anavex because that Alzheimer’s hope has been teased for such a long time and development has been so frustratingly slow. I am not at all an expert on the pharmacology or the neurology here, and can’t tell you where the real opportunities or pitfalls might be for Anavex 2-73, but this is what I wrote back when Ray Blanco was pitching the stock in the Fall of 2015:
“If past Alzheimer’s drug hopes are any indication, there are four scenarios I could guess at: A, it could collapse on the next news release or sometime in the current trial because of bad news; B, it could consume a couple hundred million dollars running a big phase 3 trial and fail to show good results because of poor safety or lacking efficacy, and see the share price drop on bad news and capital raisings over several years; C, it could attract a suitor if they get “phase 3 ready” and get bought out or partnered to cut costs, driving the shares up further; or D, it could, maybe sometime early in the 2020s after another 5 years of clinical trials, eventually get approved and be the cure everyone’s looking for. My guess is “B” … but, as I noted above, I may be too cynical on this one and it has certainly gotten some folks excited so far this year.”
No scary safety concerns have come up to my knowledge, so “A” has been avoided thus far (though, I hesitate to remind you, only a few dozen people have ever been treated with Anavex 2-73, so we’re far from assured of safety — let alone the elusive “effectiveness” hurdle that has thwarted so many drugs)… but my assessment as a non-expert who rarely dabbles in biotech stocks is still more or less the same. The possible gains for Anavex stock if they have great results in the larger Alzheimer’s trial they’re currently planning, are incredible… but the possible gains should be incredible if you’re talking about an arena where the probability of success is very low. If you want to wager on Alzheimer’s Disease drugs just keep that in mind: Risk high, reward high.
Maybe those of us who are cautious about Anavex are overstating the importance of the historically high failure rate of Alzheimer’s drugs or the continuing debate about the nature of the disease itself, and maybe Anavex will have that special angle on this disease that allows them to unlock something remarkable… that’s always the hope of a biotech drug candidate, though the risk-reward calculation is amplified for Alzheimer’s drugs. I don’t have the scientific expertise to give me any hope for an edge in making a call on Anavex — perhaps Chris Wood does, I don’t know — so I’ll stay out of the game. If you’ve got an opinion or some insight on this company or this drug, please feel free to shout it out with a comment below. Thanks for reading!
