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The race to find the "next-generation" drug as a symptomatic or disease modification treatment for Alzheimer's is in full swing. Various organizations are funding millions of dollars in research to come up with a way to stifle this chronic disease that is costing billions of dollars a year in treatment and care. As an investor, it is always important to be abreast of the latest research. One never knows when it might make a good investment.
We have a huge challenge in the United States with Alzheimer's. There are two factors that contribute to the increase of this disease. The first is the advancement of medicine as a whole. Diseases that had been terminal in the past, like HIV, are no longer terminal but now have become "chronic" in nature. This leads to longer life. Secondly, since Alzheimer's is a chronic condition that correlates with the older population, the baby boomers in the United States are now entering their golden years. Between the two, people are living longer. An older population also increases the probability that Alzheimer's will continue to increase naturally.
What is happening in Alzheimer's?
The transmission of memory between the cells takes place by neurotransmitters. When those neural cells are impaired, the signals cannot function anymore, which leads to memory loss and further degradation. As it progressively gets worse, it leads to shrinking of the tissue, which is actual shrinking of the brain. The burden of care increases aggressively with each step of the disease. This is where the cost of the disease gets so expensive.
Expenditure for those needing care because of the disease is about $200 million today and is expected to climb to $1.2 trillion by 2050. The symptomatic drug market is about $6 billion annually and consists of four approved drugs for the treatment of Alzheimer's:
- Aricept (Donepezil-generic) (Pfizer) (NYSE:PFE)
- Exelon (Novartis) (NYSE:NVS)
- Razadyne (Johnson & Johnson) (NYSE:JNJ)
- Namenda (Forest Laboratories) (NYSE:FRX)
The Pfizer drug dominates sales, with about $4 billion annually. These drugs are all "symptomatic treatment" in nature and do not work on reducing the progression of the disease. A better treatment will almost guarantee a billion-dollar market immediately.
Recent Research & Developments
Over the last few years, there has been something called the "amyloid theory," which theorizes Alzheimer's could be caused by a steady buildup of protein/plaque known as beta amyloid. With a huge symptomatic treatment market, other biotech firms are exploring disease modification treatment.
This beta-amyloid peptide is involved in memory with brain cells. The protein is in the cells for a very short period of time, as healthy cells are able to remove it quickly. When brain cells are in distress, they have problems removing the protein properly. This is how plaque buildup develops in the cells. Research has centered on removing the plaque is a means of cure/disease modification.
Bapineuzumab was developed by Johnson & Johnson to remove the plaque, but it failed to change any cognitive or functional performance compared to the placebo in its late-stage trial research. A similar drug, solanezumab, developed by Eli Lilly (NYSE:LLY) also failed late-term Phase 3 trials in 2012. These amyloid-blocking drugs offered little help for a cure which cost a lot of money to research.
Instead of disease modification, now companies like LLY with solanezumab and Roche (OTCQX:RHHBY) with a similar drug called crenezumab from its Genentech division are researching a "preventative treatment."
Even though the research on amyloid plaque removal did not result in a regression of the disease, this class of drugs is still being researched for use as a "preventative treatment."
There is a Dominantly Inherited Alzheimer Network Trials Unit, or DIAN-TU, trial that will test a number of drugs, including Roche's gantenerumab and Eli Lilly's solanezumab. The research conducted here is to find out whether these anti-amyloid beta drug treatments can prevent the formation of plaque, considered the foundation of Alzheimer's disease.
Roche also has another drug from its Genentech unit called crenezumab that will research whether early intervention can help prevent or slow the disease. This focus will be on a number of extended family members in the Antioquia region of Colombia that carry a gene that causes them to develop Alzheimer's early - some in their mid-30s.
As a preventative approach to the disease, this study in Columbia will cost about $100 million and will confirm or deny the amyloid theory of the cause of Alzheimer's. Even though targeting this amyloid plaque for removal has been successful over the last couple decades, none of the treatment has succeeded in improving patients' thinking or memory capabilities. This has been one of the big problems with Alzheimer's. The plaque removal in itself is not the answer to a symptomatic nor disease modification treatment.
Researchers have hypothesized that people with Alzheimer's have partly wrecked brains and that the removal of the plaque at that point was irrelevant, because the brain was irreparable.
Behind this type of research is a preventative answer to the disease. The idea is to identify an early treatment to prevent the plaque buildup in the first place. The drug not only targets the plaque but also free-floating citable forms of the protein, which causes toxicity in the cells.
The companies in this field of research: Johnson & Johnson, Eli Lilly and Roche, are all biotech firms with market caps in the tens of billions of dollars. The Alzheimer's industry will contribute to that huge revenue stream, but by no means dominates the companies.
Because the Alzheimer's market is so large, it is no wonder that the big movers and shakers in the biotech industry continue to pour money in the research. But there are smaller companies that are also researching different fields.
Prana Biotechnology (NASDAQ:PRAN) is a smaller company looking at disease modification for Alzheimer's.
The company has a product it has been researching called PBT2. While biotech companies have seen good results removing the amyloid plaque, robust cognitive outcomes have been disappointing. Prana claims in its studies that PBT2 has shown positive cognitive and biomarker changes.
PBT2 is not meant to be a "symptomatic treatment" like Aricept (Donepezil-generic). Prana believes PBT2 is the first treatment that targets the cause of the disease. The claim here is in "disease modification treatment" with the intent to help the patient reverse the process. I am unsure whether the initial results of these trials will be enough to say PBT2 works as a treatment to stop the progression of the disease.
PBT2 selectively binds to and redistributes brain cell metals (copper and zinc) that have become imbalanced due to disease or the aging process. The results of this would prevent buildup of the Abeta (amyloid plaque), the byproduct of the imbalance. In a Phase 2a study for Alzheimer's over a 12-week period, the treatment significantly reduced the level of Abeta protein in the spinal fluid and improved cognitive Executive Function.
A cognitive executive function test is important, but it may not be enough information to be able to claim victory over the disease.
The company has an IMAGINE Phase 2b trial for mild Alzheimer's disease patients, who will be treated with 250 mg of the PBT2 or the placebo for 12 months. A further 12-month trial will look for the primary outcome effect of PBT2 on amyloid levels, and then its secondary outcome will be on cognitive and functional abilities.
As the testing goes on, what will work well for PRAN's success is the IMAGINE trial. Since it has already shown signs of efficacy in the shorter Phase 2a trial, the 12-month trial will be significant if cognitive efficacy and Abeta reduction persists.
Prana Biotechnology is a much smaller company than some of the bigger ones I have written on in this article, like Roche, Eli Lilly, and Pfizer. While those companies can absorb losses, this company has just over $300 million market cap and needs this drug to work. There are no guarantees that the next phase of the PBT2 trial will work, or that the drug will become a blockbuster. The company does have income, but I would still say it is in the research and development stage. This means it is spending more than it is bringing in presently.
While Prana claims PBT2 shows promise as the first drug for disease modification treatment in Alzheimer's patients, there is a smaller company that has had better projected results with its "cocktail treatment" for Alzheimer's. This company takes a different approach to treatment. It is a symptomatic treatment that also has the probability to be a disease modification treatment.
Anavex Life Sciences Corp. (NASDAQ:AVXL)
This is a little biotech firm with big hopes and dreams in the Alzheimer's field. I am sure this company is off most investors' radars.
Anavex has been researching a drug called "Anavex 2-73" that has shown reversal of memory loss and neural protection in several Alzheimer's disease models, including Tg2576, which I will talk about later.
It is not the drug itself that may catch the attention of investors and Big Pharma. Today, many treatments for various diseases are given in a "cocktail" with numerous drugs. Research at Anavex combined the top-selling Alzheimer's symptomatic treatment-- Aricept (generic-donepezil) with Anavex 2-73 and found there was an increase in memory function by up to 80%. This led to the patenting of the combination drug cocktail called ANAVEX PLUS.
The initial pre-human trial testing was done on rodents, but there is a group that looks at the difference between human and rodent brains. They were able to predict in several cases and dissipate the human trial outcome. This research has been used by many big names, such as Pfizer, Johnson & Johnson, Roche, and Abbvie-Merck team for research they have done on certain drugs.
There was a seven-point improvement in cognitive response in a three-month period, and a 5.5 point improvement after 26 weeks (as can be seen on this chart from the company's corporate presentation in early February). Why is this so encouraging? This test is strictly focused on symptomatic, not actual treatment to inhibit the disease. This cocktail has the ability to provide symptomatic relief, but also may be used for disease modification. There is no drug like that today. There is more potential to this drug than just symptomatic relief, though. The "cocktail" had a much higher response rate than Aricept (generic-donepezil) as a standalone.
The Science behind the Treatment
I have already mentioned the "amyloid theory" previously in this article, and treatment to remove this plaque has been developed as a disease modification treatment.
Anavex takes the stand that plaque buildup in the neural cell is likely a consequence of the disease, not the cause. For this reason, research for upstream treatment for disease modification is needed, and this is exactly what ANAVEX PLUS does.
I stated earlier that "distress" in the neural cells prevents them from removing the Abeta proteins. ANAVEX PLUS has a neuroprotective agent that works upstream in the cells to alleviate the "stress" of the cells, allowing them to do their job of getting rid of the Abeta in a timely manner.
The "distressed" cells take years to accumulate this plaque, and science has not yet come up with one answer as to why it accumulates. There could be a number of reasons. It could be genetic, it could be lifestyle, could be dialed diet-oriented, viral, disease-associated… etc.
The latest findings are that when the cells are in a severe Alzheimer's patient, they don't die; they just don't work properly. ANAVEX PLUS might also be able to rescue cells further along in the disease. Because of the failure of the amyloid plaque clearing treatments, recent theory has concluded that plaque clearing may not work in the advanced stages of the disease.
This gives ANAVEX PLUS, an upstream treatment to prevent the plaque buildup, a lot of potential.
Where's the company presently?
The company is at the stage now where it is getting ready to run human trials in a combined 1b/2a clinical study. This study will get underway the first half of 2014, and should be put in the place fairly quickly. The trial will run three months (this is the company's highest Delta so far), six months and on to 12 months. After this trial is over, the company will need to run one more trial before it would qualify for FDA approval.
If trial results from this first three months look promising, I would not be surprised if Big Pharma took notice of this little company.
Side effects have been very minimal. Only in the higher doses; the effects have been dizziness and slight headaches. This is really good news.
Anavex Life Sciences is a small company still in the research and development stage, it is not at the revenue producing stage, and this means the company is dependent upon raising capital to continue to do its research. If the company cannot adequately raise capital, it will have to shut down its research. As it progresses in the Phase 1b/2a clinical studies, it could start attracting dollars from Big Pharma if its results are favorable.
This gives investors an idea of what is happening in the Alzheimer's research area of medicine. I expect more research to continue to develop for the disease, because many organizations are looking to find a cure. This particular research industry is promising for breakthrough research, because any treatment that offers better results than what is been on the market for the last 20 years is almost a guaranteed $1 billion industry.
Disclosure: I am long PZE. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: I have no other positions in the of the stocks mentioned, but I am following PRAN and considering it as an investment in the next 60 days.