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Amyloidoses are rare diseases characterized by the uncontrolled production of bundles of misfolded amyloid proteins, which accumulate in tissues causing organ failure and ultimately death. Amyloid light chain (AL) amyloidosis, the most common form, affects an estimated 15,000 people in the US and Europe, with 1,200-1,300 new cases diagnosed each year. Prothena (NASDAQ:PRTA) is developing a powerful antibody that may be the first disease-modifying treatment for amyloidosis.

The therapeutic options for amyloidosis are limited and for the most part ineffective. There are currently no drugs available that address the amyloid deposits, so prospects for patients with this disease are grim. The current standard of care consists of treatment with chemotherapies such as GlaxoSmithKline's (NYSE:GSK) Alkeran (melphalan). Celgene (NASDAQ:CELG) is developing its blockbuster Revlimid (lenalidomide) and Millennium/Takeda (OTCPK:TKPYY) is testing Velcade (bortezomib) for treating amyloidosis. The problem with all of these drugs is that they target the formation of new amyloid deposits without doing anything to alter the underlying disease or address existing deposits.

Patients with amyloidosis desperately need innovative, disease-altering therapies. Fortunately, there are a few companies working in this area. Bellus Health (BLU.CA), formerly known as Neurochem, is developing Kiacta (eprodisate), an oral drug designed to slow the deterioration of kidney function due to amyloidosis by preventing fibril formation and deposition. The most promising development program on the horizon, in my opinion, belongs to Prothena . Prothena's flagship drug, NEOD001 is an therapeutic antibody designed to treat amyloidosis. NEOD001 has the potential both to stop the deposition of new amyloid deposits and to clear existing deposits so that the patient can actually get better, rather than just progress more slowly.

Without treatment a patient with AL amyloidosis survives on average 10 to 14 months from diagnosis and a mere 3.3 years with treatment. Currently marketed drugs target the mutant blood plasma cells that produce the abnormal amyloid protein, but eventually lose their effectiveness, and do nothing to address the amyloid already deposited in organs. The standard first-line treatment for AL amyloidosis is high dose melphalan (HDM) followed by peripheral stem cell treatment (SCT) using the patient's own cells. However, only 20% of AL patients are candidates for SCT. While the combination can reverse amyloidosis progression for a number of years, high toxicity and associated mortality are significant drawbacks of HDM/SCT.

The most promising AL treatment candidate currently in development is Prothena's NEOD001, a monoclonal antibody against an amyloid peptide. NEOD001 acts in a couple of different ways: it binds soluble amyloid-causing proteins, changing their structure and preventing them from being deposited and also binds to a small part of the amyloid protein that is exposed on the misfolded version that gives rise to fibrils. The binding of the antibody leads to the elimination of amyloid deposits from cells and tissues. After binding and eliminating amyloid deposits, the antibody is recycled where it is able to attach to and clear more protein molecules. Administering the murine version of the NEOD001 antibody in mice prolongs the life span of animals with clinical features of amyloidosis and shrinks the size of induced AL amyloidomas. The drug is currently undergoing Phase I clinical trials to evaluate its safety and tolerability and to determine a recommended dose for testing in Phase II trials.

Importantly, Prothena is in an excellent financial position to bring NEOD001 out of proof-of-concept and into clinical trials which should catalyze the company's growth. Prothena is a spin-off of Elan, a neuroscience based pharmaceutical company based in Dublin. Prothena experienced a net loss of $9.0 million in the first quarter of 2013, which has decreased since a $10.8 million loss in the first quarter of 2012. Although these losses are significant, the majority of these expenses are related to R&D and are consistent with a development stage biotech company with drugs in early pre-clinical studies. More significantly, the company has $120 million in cash reserves and no outstanding debt. There are currently 17.7 million shares outstanding.

I believe that NEOD001 has the potential to be a highly effective disease-altering treatment because of its unique ability to target and clear accumulated amyloid from the body, without the toxic side effects of the current treatment agents. With Prothena's clean balance sheet and strong cash position, they are well positioned to bring NEOD001 through proof-of-concept.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Source: Prothena May Have The First Disease-Modifying Therapy For Amyloidosis