Myriad Options on Alzheimers Disease

Myriad Genetics (MYGN) has a diversified portfolio, which includes genetic testing as well as therapeutics. While the genetic testing part of the business continues to grow well, the run up in the stock over the past two years reflects hopes that the company's r-flurbiprofen (Flurizan) for Alzheimers Disease [AD] could be a huge blockbuster.

Here is the science, for what it's worth. R-flurbiprofen (like other anti-inflammatory compounds) lowers toxic Aβ42 production by selectively modulating γ-secretase activity to shift cleavage of amyloid precursor protein [APP] away from Aβ42 production toward shorter, less toxic peptide fragments. This would inhibit the cascade of amyloid accumulation, plaque formation, and neurodegeneration that are the hallmarks of dementia.

Myriad's Phase II trials showed that treatment with R-flurbiprofen (Flurizan) did not help individuals with mild or moderate AD when results for all 207 participants were considered as a whole. However Myriad saw some encouraging signs when data for just the 128 participants with mild Alzheimer's were analyzed separately. Based on these preliminary results, Myriad conducted a Phase III trial on patients with mild AD, the results of which should be announced shortly.

But, some data released yesterday (May 12, 2008) with other drugs gives us a hint of what may lie ahead for Flurizan. In a nearly four-year study, published in the Archives of Neurology, with anti-inflammatory agents Aleve or Celebrex, it was found that the drugs did nothing to ward off the mental decline associated with the onset of AD. The study divided 2,117 people aged 70 or older with a family history of Alzheimer's into three groups. One group received naproxen twice daily in the form of Bayer's Aleve, another Pfizer Inc.'s (PFE) Celebrex, and a third group took a placebo. Not only did the results not show any benefit, but Aleve, known generically as naproxen, may have had a slightly negative impact. Patients who took two daily doses of Aleve scored slightly lower on tests of mental functioning compared to the groups taking a placebo or celecoxib.

While this study does not mirror the Myriad study, it still gives valuable hints on the possible outcome. There were some hopes that anti-inflammatory compounds may have a role to play on the treatment of AD. It seems that is premature.

Disclosure: I have been short MYGN since it was $55/share. I will go long when it hits $25 a share. It was $41.68/share at close of trading Monday.

Comments

[Mudphud]

Some of the scientific info in this post is wrong. The naproxen and celebrex trial were designed to test the affect of COX inhibition on alzheimer's disease, since naproxen and celebrex do NOT inhibit gamma secretase.

The Archives of Neurology article cited in this post say it best:
"It may be that the ADAPT findings relate specifically to celecoxib or naproxen, perhaps because these drugs are not among those NSAIDs that have been shown in vitro and in vivo in mouse models to lower production of the 42-residue form of amyloid β (Aβ42)21; that is, the epidemiological findings could be due to the effects of other NSAIDs, such as the commonly used ibuprofen, that do lower Aβ42. More speculatively, the ADAPT findings may represent early detrimental effects following initiation of treatment in people who have subclinical neuropathology. That is, NSAIDs might exert protective effects only if given several years before the time when symptoms would otherwise develop. Such a difference in effect has been suggested by results of both the Rotterdam22 and Cache County23 observational studies, which showed apparent protective effects with more distant, but not recent, use of NSAIDs."

[Ketan Desai]

To Mudphud (I guess that is an acronym for MD PhD):

Your point about naproxen and celecoxib and their ineffectiveness in mouse models is true. However, as you point out in the part of the article that you pasted, ibuprofen does lower Aβ42. But ibuprofen, as cited by the authors of the ADAPT study, was not effective in a trial (Goodwin JS, Regan M. Cognitive dysfunction associated with naproxen and ibuprofen in the elderly. Arthritis Rheum. 1982;25(8):1013-1015).

Other studies have also shown ineffectiveness of NSAIDS (Karplus TM, Saag KG. Nonsteroidal anti-inflammatory drugs and cognitive function: do they have a beneficial or deleterious effect? Drug Saf. 1998;19(6):427-433).

To be fair, I must also point out that some studies have shown a beneficial effect (Rozzini R, Ferrucci L, Losonczy K; et al. Protective effect of chronic NSAID use on cognitive decline in older persons. J Am Geriatr Soc. 1996;44(9):1025-1029.)

However - from a commercial point of view, and therefore from a stock point of view, two things remain:

1. What is the effect of Flurizan? The phase II data was less than stellar, and I make it very clear in my article that the ADAPT study is not identical but gives hints.
2. If other anti-inflammatories have the same effect as Flurizan, why would anyone take Flurizan when cheap generics would have the same effect?

So that other readers can make their own minds, I'm pasting a link to the cited article:

archneur.ama-assn.org/...

[RichardSchweitzer]

You might also look at the work of CLN

[RichardSchweitzer]

sorry, that should have been ELN of which I am long

[Ksaales]

1. The effect of Flurizan is that it works in mild patients (2 out of 3 endpoints statistically significant in the phase 2 study) but there is no evidence of an effect in moderate patients. This is consistent with the quoted observation that "NSAIDs might exert protective effects only if given several years before the time when symptoms would otherwise develop." Earlier treatment is likely to be better than later treatment for a disease modifying drug. It is important to remember that the phase 2 study was a phase 2 study: designed to determine the appropriate dose and patient population and provide PRELIMINARY evidence of a drug effect. It accomplished all three of these objectives.
2. The dose of Flurizan that shows the effect seen in the phase 2 study is 1600 mg/day. This dose of Ibuprofen and the other NSAIDS that have been shown to have an effect on abeta42 would not be tolerable for any reasonable amount of time. In addition, the mouse model and cell model data show that Flurizan is more potent than any of the NSAIDS that also modulate gamma secretase, so it is likely that even higher doses would be needed for Ibuprofen and other NSAIDS. It is only because Flurizan is not a significant inhibitor of Cox that it is able to be given at such high doses over such a long period of time.

I agree with the first comment by Mudphud. This statement is completely misleading: "While this study does not mirror the Myriad study, it still gives valuable hints on the possible outcome. There were some hopes that anti-inflammatory compounds may have a role to play on the treatment of AD. It seems that is premature." This implies that Flurizan is working through an anti-inflammatory effect rather than a modulation of gamma secretase which these two compounds do not have. Only a subset of NSAIDS have this activity.

I am also optimistic about Bapineuzumab, however the phase 2 data is not yet available, so it's easy to be optimistic. It is also important to realize that the safety issues of this compound may be substantial, and again, having no data makes it easier to remain optimistic.

[Ketan Desai]

To Ksaales:

Gamma secretase is not the only MOA of NSAIDS in AD (see below from an article published in NEJM). That is why I stand by my statement that "this study gives hints on the possible outcome".

The neuropathologic features of Alzheimer's disease include the accumulation of microglia around plaques, a local cytokine-mediated acute-phase response, and activation of the complement cascade (1,2). This inflammatory response may damage neurons and exacerbate the pathologic processes underlying the disease (3). Nonsteroidal antiinflammatory drugs (NSAIDs) may influence this inflammatory response by inhibiting cyclooxygenase-1 and cyclooxygenase-2 and by activating the peroxisome proliferator (PPAR) nuclear transcription factor (4,5,6). In addition, cyclooxygenase-mediate... oxidation is important in the calcium-dependent glutamate-signaling pathway that involves N-methyl-D-aspartate. In this way, NSAIDs may be able to protect neurons directly by reducing cellular responses to glutamate (7).

1. Aisen PS. Inflammation and Alzheimer's disease: mechanisms and therapeutic strategies. Gerontology 1997;43:143-149.
2. Aisen PS. Inflammation and Alzheimer disease. Mol Chem Neuropathol 1996;28:83-88.
3. McGeer PL, McGeer EG. The inflammatory response system of brain: implications for therapy of Alzheimer and other neurodegenerative diseases. Brain Res Brain Res Rev 1995;21:195-218.
4. Lehmann JM, Lenhard JM, Oliver BB, Ringold GM, Kliewer SA. Peroxisome proliferator-activated receptors alpha and gamma are activated by indomethacin and other non-steroidal anti-inflammatory drugs. J Biol Chem 1997;272:3406-3410.
5. Ricote M, Li AC, Willson TM, Kelly CJ, Glass CK. The peroxisome proliferator-activated receptor-gamma is a negative regulator of macrophage activation. Nature 1998;391:79-82.
6. Leveugle B, Fillit H. Proteoglycans and the acute-phase response in Alzheimer's disease brain. Mol Neurobiol 1994;9:25-32.
7. Breitner JC. Inflammatory processes and antiinflammatory drugs in Alzheimer's disease: a current appraisal. Neurobiol Aging 1996;17:789-794.

[Ksaales]

Gamma secretase modulation is not the only theoretical MOA of NSAIDS in AD, however it may be the only one that works. Flurizan does not claim an anti-inflammatory mechanism, particularly one through COX, so attempting to discredit Flurizan by touting evidence against an anti-inflammatory mechanism is twisting the evidence to support your short position.

[Ketan Desai]

To Ksaales:

So Flurizan does not claim to have any anti-inflammatory properties? Do a google search on Flubiprofen, which is what Flurizan is. To use your own language, ignoring facts........

www.pharmacology2000.c...

[Ksaales]

Flurizan is not Flurbiprofen.
Flurizan is R-flurbiprofen - the single enantiomer of the racemate NSAID flurbiprofen. Flurbiprofen has substantial anti-inflammatory activity through COX (because of S-flurbiprofen), R-flurbiprofen does not.

www.pubmedcentral.nih....

[Ketan Desai]

To Ksaales:

There are so many holes in your repertoire, I don't know where to start.

1. When you provide data, provide the primary data. The link you provided DOES NOT show Flurizan has no effect on Cox.

2. As your ref states, RF is converted to SF in the human body - even if to a small extent. And SF is a Cox inhibitor.

3. You make the common mistake in assuming that the only mode of action of NSAIDS is Cox inhibition. Not so. For example, read Immunology Today, Volume 19, Issue 4, 1 April 1998, Pages 169-172
Inhibition of leukocyte adhesion: an alternative mechanism of action for anti-inflammatory drugs. And from your own article:

Inhibition of the two isoforms of cyclooxygenase (COX1 and COX2) is the primary (but not only) pharmacological action of NSAIDs that results in their anti-inflammatory properties (38). Some NSAIDs activate the peroxisome proliferator γ nuclear transcription factor; this activation may have anti-inflammatory consequences relevant to AD (39, 40).

So, your whole contention of no Cox means no anti-inflammatory activity holds no water. SHOW ME A REPORT THAT DEMONSTRATES THAT FLURIZAN HAS NO ANTI-INFLAMMATORY ACTIVITY IN ALL INFLAMMATORY MODELS, NOT JUST COX.

4. Even the article you cite says: Our recent finding that ibuprofen, indomethacin, and sulindac lowered Aβ42 production independently of their effects on COX suggests that this property could contribute to their apparent protective efficacy in AD (15). See my previous comment on Ibuprofen, which did not show efficacy in a clinical study. So, Ibuprofen lowered Aβ42 production, but did not show efficacy in clinical trials. And you expect different results from Flurizan?

5. From your own citation: R-flurbiprofen is also reported to inhibit NF-κB. Inhibition of NF-κB has been postulated to reduce the inflammatory response in AD (45). AND YOU SAY FLURIZAN HAS NO ANTI-INFLAMMATORY ACTIVITY? DO YOU KNOW ANYTHING ABOUT INFLAMMATION?

6. The data will be out soon - we will see who is right.

Goodbye.

[User 193167]

*ahem...

Gents, it's not a $41, $25 or $55 stock. For whatever reason, this discussion has failed to even recognize that they will sell ~$220M of diagnostic tests at ~85% margins this year!

The price is suppressed BECAUSE of the likely failure of Flurizan. The Street says 10% chance. If it fails, the burn goes down and the stock heads right up to $50+ (not a 12-month forecast). If it succeeds, the "run up over the last 2 years" (I still can't understand that statement given the PROFITABLE DIAGNOSTICS BUSINESS) will pale to the $70+ 12-mo price that would follow.

Think about this: when the stock pops after the top-line announcement, it will probably go up as the disaster scenario has clearly been priced in already. Then the shorts will be stuck covering thereby supporting the a new plateau.

And to those who haven't read the rest of the story...

Management has said that if 1) Flurizan fails and 2) the stock doesn't head north once the burn is gone, the Board has said there will be strong consideration (metrics and timing unannounced) for splitting the two businesses. They already did the tax analysis and it should be free to the shareholders. No doubt that scenario would result in a $50+ Myriad Diagnostics and a $6 Myriad Pharma companies.

Als, check out how many of the management team exercised when the stock hovered around $36. Then check out that when it bumped up ~$5, it was because T. Rowe and Fidelity INCREASED their positions.

____
**A Scientific point...
The drug is the only profen that can be tolerated anywhere near the dose that shows an effect. Don't get me wrong, I'm not bullish on Flurizan. But that wasn't mentioned above.

[Ketan Desai]

You make good points User19367. I note that you are not too optimistic on Flurizan, but are on the company, sentiments I share. Where we differ if whether the street is pricing in failure or success for Flurizan. If the trial is positive, and the stock pops up $10, I will still be able to cover my shorts and come out ahead. If they break the company up, I will certainly buy the diagnostic business.

[knows_AD]

Some of you do need to get your facts straight. The original post shows why one needs to actually understand the science before investing in biotech/pharma. The mechsnim of aciton of FLurizan is not as an anti-inflammatory, it is a selective Abeta42 lowering agnet and Abeta42 is the prime target in AD. Read a few of the articles cited onthe Myriad web cite please..... Epidemiologic data shows an associaton with NSAID use but until recently does not ditinguish between individual drugs. A new article VLad et al neurology 2008 does provide some new insight suggesting that ibuprofen an ABeta42 loweirng NSAID is most stongly associated with benefit. Keep in mind that all epi studies support a prophylactic rather then therapeutic effect. Therapeutic trials with NSAIDs have all been thouroughly negative, BUT none have tested an Abeta42 loweirng NSAID. THe pahse 2 data form myriad on Flurizan an ABETa42 lowering compound that is not an NSAID and is very safe shows eveidnce for disease modifying effects. Current drugs for AD are bandaids and providing at best some transient symptomatic relief. Oh and they are 3 billion dollar market. If the phase II flurizan data holds a sizable percentage of those on drug will have amuch slower rate of deceline or no deceline in mutliple fucnitons for at least two years. Sales of $500 million? Try $5 billion. there is nothing else out there that will be safe and have evidence for diseasee modificaiton for quite some time. (Immunotherapy ain't going to be safe and wont be aqble to be used on millions of patients for a long time. Indeed what is the largest numberr of people treated with any immunotherapy 10,000+ per year maybe with one drug).

[User 193167]

knows_ad:

There are a couple of challenges to your market analysis of ~$5B in sales:

First, there are ~430,000 new diagnoses of AD per year in the US. BUT only ~20% are mild. Yes, it's true that the prevalence is massive (~5 million). Unfortunately, is the prevalence too comprised of only ~20% milds but also the vast majority are not actual diagnoses, just estimated numbers.

Aside from the numbers, remember that AD is a subjective diagnosis that is only 90% accurate. But even if lots of Dr's attempt to mis-classify the patients to mild, this isn't an easy market.

My model (yes, there are indeed medical scientists who are also Street capable) leads me to believe that if it hits the metrics in both the US and EU Phase III trials, the drug is a shoe-in for FDA approval. Given MYGN's ability to deploy a neuro/geron sales force directly and rent one via partnership for GPs/interns, US sales won't break $500M for at least 10 quarters and the EU won't contribute more than 10% to the top line in year 3 of US approval.

It's a ~$75-92 stock depending on when you ask the question relative to the US and EU trials and whether all of the end-points (yes, there are more than one!) are met with high significance. Betting your dollar to the neutral at worst or owning two names after a split-up to possibly double your money in 12-24 months is a very good bet.

Disclaimers: 1 1) own the stock, 2) know and have interviewed the management team, 3) understand the science, and 4) have ZERO conflict of interest in my opinion either as an employee, an analyst, a banker, a child of the CEO, or anything else that I could gain other than the stock going as I believe it will.

[Flytrapguy]

Bravo for the excellent discussion.

There is a very large retrospective study on 100,000+ veterans that was just published that shows that ibuprofen, an Ab42 lowering drug, does indeed appear to be protective in Alzheimer's disease. See: Neurology. 2008 May 6;70(19):1672-7 "Protective effects of NSAIDs on the development of Alzheimer disease. Vlad SC, Miller DR, Kowall NW, Felson DT.

From the abstract: "...RESULTS: We identified 49,349 cases and 196,850 controls. Compared with no NSAID use, the adjusted odds ratios for AD among NSAID users decreased from 0.98 for <or=1 year of use (95% CI 0.95-1.00) to 0.76 for >5 years of use (0.68-0.85). For users of ibuprofen, it decreased from 1.03 (1.00-1.06) to 0.56 (0.42-0.75)."

This is not a clinical trial. However, it is the largest study to date that has examined the relationship between NSAIDs use and Alzheimer's disease.

[knows_AD]

User 193167

One reason that people don't get a timely diagnosis is that they know nothing can be done. For example in primary care setting some are loathe to give or get the diagnosis because it means taking away the car keys. That will change in the event that a new therapy can slow decline. Such a paradigm shift will result in earlier diagnosis and this will rapidly penetrate into people with MCI of the AD type...Thus the market will be bigger then you think. I am personally not very comfortable with slowing decline of those with more advanced AD but until we find a miracle drug (don't hold ones breath) ther eiwll be intense pressure on phycians to give any new drug to AD patients with more advanced disease. All one has to do is look at use of Aricpet and memantine to see that these drugs at least inthe US are given to many patients beyond there intial indications based on trials

[Uptick]

Is there any timeline for the release of the phase III results? I have read in several places that June will be the month. Can we expect early, mid or late June?