Alzheimer's Disease: Market Opportunity And Major Phase 3 Treatments To Know About

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Includes: AXON, BIIB, LLY, MRK, PFE
by: Slingshot Insights

Summary

Lilly’s (LLY) hotly anticipated Phase III data for Alzheimer’s Disease drug solanezumab has left many investors with questions about LLY and AD treatment in general.

There are currently no approved treatments for the underlying causes of AD. More than 5 million Americans have this debilitating disease. Pharmaceuticals companies are racing to market AD drugs.

Slingshot Insights will host an expert interview to better understand AD and some of the companies developing treatments. Free for SI members and SA readers with valid coupon.

By Killian McKee, Slingshot contributor

Eli Lilly & Co's (NYSE:LLY) upcoming Fall 2016 data for Alzheimer's disease drug solanezumab has many investors wondering what we can expect from the Phase III readout. More generally, LLY has reignited investor interest in the Alzheimer's treatment landscape. This week we will examine the disease and market size, and provide a brief overview of five companies with Phase III AD drugs in development: Eli Lilly, Biogen (NASDAQ:BIIB), Axovant Sciences (NYSE:AXON), Merck (NYSE:MRK), and French company AB Science, which is not traded on U.S. exchanges. Lastly, we will raise some questions (hopefully with your help) for a free, interactive interview with an Alzheimer's Key Opinion Leader hosted by Slingshot Insights.

What is the Market Size?

AD is the most common type of dementia and causes problems with memory, behavior, and thinking. AD is associated with the buildup of amyloid-beta ("Aβ") peptides in the hippocampus and cerebral cortex. Symptoms typically worsen over time and the disease is most prevalent in the elderly. There are currently around 5 million people in the United States with AD and the number increases annually in tandem with the aging population. Although there are currently no treatments for the root causes of Alzheimer's, the market for drugs treating symptoms of the disease (such as cognitive decline) is around $3 billion. This market could grow significantly if a disease-modifying treatment entered the space.

The AD Companies You Should Know

Although there are an abundant number of Phase I and II trials for AD, the number declines rapidly by Phase III. Let's overview Lilly, Biogen, Axovant, Merck, and AB Science to better understand five companies with AD Phase III trials underway.

LLY has been a hot discussion topic among pharma investors. solanezumab ( LY20602430) is the company's main candidate for treating AD. The drug is a humanized monoclonal antibody aimed against the Aβ peptide. LLY believes that sequestering the species of Aβ directly toxic to synaptic function in the brain should help improve AD. Phase 2 results demonstrated the drug was safe and well tolerated. Two Phase 3 trial results (EXPEDITION-1 and EXPEDITION-2) showed the drug did not meet its primary endpoints.

This inability to meet their initial endpoints left many investors concerned about the future of the drug. However, a pre database-lock analysis of EXPEDITION 1 suggested solanezumab reduced cognitive decline in patients suffering from mild AD. The statistically significant findings in a subgroup of patients in the EXPEDITION 2 led to a 3rd Phase 3 trial, creatively called EXPEDITION 3. EXPEDITION 3 results are expected in the Fall of 2016. This time however, the company once again changed the primary endpoint. Slingshot Insights' has a recorded expert interview discussing the endpoint change here. Investors should also be aware that solanezumab is also being tested in combination with Chugai Pharmaceuticals' drug gantenerumab to treat AD.

Pharma heavyweight BIIB's purchase of Swiss biotech company Neurimmune marked its entry into AD race. The company's main candidate is aducanumab, another monoclonal antibody targeting certain Aβ peptide structures. The antibody was originally derived from healthy, aged donors with the rationale that these donor's immune systems had successfully resisted AD and that these antibodies could be turned it therapeutic treatments. Phase 2 trials demonstrated results warranting a 2014 Phase 3 trial, and the 1 year data from 2015 suggested aducanumab dose dependently reduced the problematic AD amyloid structures in 6 different regions of the brain, nearing the positivity cut point. Final Data is not expected for several years.

AXON's AD drug is RVT-101. The drug targets the 5HT6 brain receptor AXON believes responsible for some of the synaptic problems AD patients exhibit. Investors have been concerned about the company ever since Pfizer (NYSE:PFE) shelved AD drug PF-05212377, which targeted the same receptor. Undeterred, AXON has continued its Phase 3 trials. Four 2015 Phase 2 studies demonstrated the drug was well tolerated and may have led to dose dependent improvement in mild AD. Phase 3 trials are expected to run until 2017.

MRK's AD drug verubecestat is a small molecule BACE inhibitor. These type of inhibitors are common in AD treatments and work under the rationale that Aβ peptides are interrupted by upstream interference with amyloid structures. Phase 1/2 results demonstrated that the drug was well tolerated and resulted in dose proportional increases in CSF exposure and in plasma. These results warranted the Phase 3 EPOCH trial, which started in 2012 and is expected to present data in 2018. The trial will test the efficacy of verubecestat across all severity levels of AD.

AB's masitinib is an oral inhibitor of the protein tyrosine kinase c-kit. Masitinib interferes with the movement, activity, and survival of mast cells, and for this reason has attracted attention for its potential to treat neurodegenerative disorders. Phase 2 trials demonstrated good tolerance and a reduction in cognitive decline. The drug is being evaluated in two Phase 3 trials; one is examining the ability of the drug to treat amyotrophic lateral sclerosis and the other AD. Additionally, masitinib is in late stage development for pancreatic cancer.

What's the Next Step?

Speaking to an expert familiar with AD and treatments for the disease. The crowded treatment landscape and the complexity of neurological diseases provides investors participating in the expert call with an excellent opportunity to get the insights they need to make more confident, diligent investment decisions. A neurologist with extended experience handling AD patients would be ideally qualified to discuss the aforementioned companies, other companies worth noting, and what investors need to know about AD generally speaking.

Questions for an AD Expert:

• What is your background treating neurodegenerative disorders? How many patients do you treat with Alzheimer's? How difficult is the disease to diagnose?

• What treatments do you currently use for AD when there are still no approved treatments for disease modification?

• Generally speaking, what types of treatments do you find most exciting for AD (amyloid related, neurotransmitters, etc)?

• Do you think PFE's recent 5HT6 inhibiting AD drug failure indicates a strong likelihood of failure for AXON's RVT-101? What about Lundbeck's recent failed idalopirdine trial?

• Are their specific AB peptide structures science suggests drugs should be targeting? What companies are targeting these AB peptides?

• What are your thoughts on LLY, AXON, BIIB, AB, and MRK's AD Phase 3 drug efforts? What other companies are you keeping an eye on? Why?

• What drug company are you most excited about with respect to treating AD? Why?

Add your own questions for the expert here.

Conclusion

Alzheimer's is a severe, debilitating disease with a large market and no treatments. Speaking to a neurologist with expertise in AD could help investors more effectively determine the companies most likely to succeed in bringing a treatment to market.

How to Participate in the Expert Call

Users interested in participating in the VRTX expert call can join the project and add their questions for the expert. The call will be free for current Slingshot Insights members and for Seeking Alpha readers who use the coupon code SeekingAlpha. Users can listen live or to a recording that will be available immediately after the call, on the project page.

Disclosure: I/we 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. I have no business relationship with any company whose stock is mentioned in this article.