Annovis: Novel Approach To Dementia

Summary

• Annovis is a nano cap that went up recently after announcing positive interim data from its phase 2a trial.
• They will announce complete data by July.
• The company is very low in cash.
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Photo by gremlin/E+ via Getty Images

Annovis (NYSE:ANVS) is an early stage nanocap biopharma targeting a number of major neurodegenerative diseases through what looks like a novel mechanism of action based on well-researched theories. The company is developing drugs for Alzheimer's (AD) and Parkinson's disease (PD), as well as Alzheimer's in Down Syndrome (AD-DS), which is an orphan indication. Its lead asset is ANVS401, which according to the company is the only drug to improve axonal transport. If true, that is a novel approach; however, it does this by attacking multiple neurotoxic proteins, like APP/Aβ, tau/phospho-tau and α-synuclein. Some of these are well-researched targets of Alzheimer’s drug development.

The company’s pipeline looks like this:

Source

Two phase 2a clinical trials are being run, one AD trial run by Alzheimer’s Disease Cooperative Study (ADCS), and another AD and PD trial run by the company. If successful, they will validate its approach. The company has completed phase 1 trials demonstrating safety and tolerability.

Neurodegeneration and Annovis’ approach

Nearly 6 million Americans, or one in 50, have Alzheimer’s. Given the figure for the elderly population, that’s a very high percentage of the elderly who have the dreaded disease. There are 44 million Alzheimer’s patients worldwide. The number for Parkinson’s, the other type of major dementia, is somewhat smaller, but still huge at 1 million Americans and 10 million people worldwide. According to some estimates, the total cost for treatment for dementia patients worldwide could top $1.1 trillion in 2050. However, there has been little progress with finding treatment for the diseases. From 1998 to 2018, there were over 500 failed attempts at developing Alzheimer's drugs, primarily focused on amyloid plaque. None have been successful. Annovis claims that its new approach through axonal therapy may see better results.

ANVS401 attacks multiple neurotoxic proteins that result from acute and chronic injury to the brain. The company thinks that this concerted targeting of multiple neurotoxic proteins may improve axonal transport, which the company thinks is the key therapeutic target for treating dementia.

Source

In a proof of concept study, as shown above, the molecule was able to reduce the levels of 3 neurotoxic proteins to the levels of healthy volunteers. These 3 proteins, APP/Aβ, tau/p-tau and αSYN, together supposedly cause AD and PD.

Trial data

Recently, the company announced data from an interim analysis of a double-blind, placebo-controlled study of ANVS401. Patients' speed and coordination scores both improved following 25 days of ANVS401 treatment, with no serious adverse events.

Dr. Maria L. Maccecchini, CEO of Annovis Bio, said: "We set up this study to measure the toxic cascade leading to nerve cell death and loss of function and its reversal. The study was powered to investigate a difference of 20 to 25 percent in biomarker levels, not to demonstrate efficacy, making this data that much more significant."

In one test that measures speed of execution, the results were statistically significant (p=0.04), showing that while PD patients are slow in coding boxes, treatment with ANVS401 improves their performance. The statistical outcome difference was true whether the outcome was compared with baseline or with placebo.

In these same patients, another test that measures coordination showed an improvement in their movements and was almost statistically significant (p=0.07). The treated group had the same number of complications before and after one month of treatment, suggesting they were stable, while the placebo group had more complications, suggesting they got worse.

In all MDS-UPDRS tests performed, the placebo-treated group either stayed the same or performed worse than at baseline. Instead, the ANVS401-treated group either stayed the same or performed better than at baseline. MDS-UPDRS is a specific PD test that measures severity and progression of the disease.

Complete data from this phase 2a trial will be available by July.

Financials

ANXS has a market cap of $194mn, a stock price around $28, and a cash reserve of $8mn only. The company IPO-ed in 2019, and has had an impressive run up from $2 to $48 this year, based mainly on the data reported from this trial. The company has about 15% institutional ownership, but insiders own nearly 40% of the company. The low cash reserve is not reassuring; there is bound to be near term dilution if the company wants to survive.

Bottomline

This is a small company with a novel approach in treating dementia. It has had a tremendous run over the last few months, based mainly on the data here. They will probably announce a secondary offering sometime soon, which will take the stock down, creating an opportunity before topline data from the phase 2a trial in July.

Analyst’s 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 (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Comments

[TraderLawJF]

AD data expected this month? Still bullish?

[Suncitybill1]

The company filed a prospectus to sell $250,000,000 worth of common, warrants, or Preferred Stock on 2/1/2021. They always knew that they would need additional funds to pay for a Phase 3 trial. At the beginning of February, the stock moved up sharply; I presume that they are waiting for the average selling price for thirty days to be in the high twenties to complete the offering.
Last February, when I first purchased shares, it was one of the four companies with programs that looked like they had a real chance to break-thru on PD and Dementia. Two still look very promising, the third was bought out, and the fourth failed. Annovis Bio has management that has a large amount of their own money invested in the company.

[NAMAKAN]

The market cap seems far too low in comparison to the results of the catalysts. Should be at least 300 million..
...If they get decent phase 2 at least 500 million which would still be 1/3 of SAVA..

[biogenius]

I looked at the company and agree with most of what you said.
1. This company should be worth a lot more even if it is good for only PD and not AD.
2. This company needs cash.
3. I was impressed when the press release said the statistic outcome was positive for both the baseline and the placebo. However, when I look at slide 18 of the company presentation, I think the outcome comes from the fact that the placebo got worse. That should be expected except that the subjects were retested in only 25 days and I am not sure if the placebo subjects should deteriorate that fast. I am not saying that the result is invalid. I am just having second thoughts, that is all.

[nikit2h]

@biogenius "The statistical outcome difference was true whether the outcome was compared with baseline or with placebo."

[biogenius]

@nikit2h
I saw that and as I said, I was impressed. However, when I looked at that slide 18, the reason why the difference was significant is because the patients on placebo deteriorated a lot in 25 days. My point is that PD, as a neurodegenerative disease, tend not to deteriorate that fast. At least the people that I know with AD don't change that much in 25 days. I am not saying that the result is wrong, I am just putting a question mark in my head.