We all know the story of David vs. Goliath. So can the Davids of the pharmaceutical industry duplicate the young Israelite’s success and help take down a mammoth disease desperate for effective treatments?
Of course, it’s going take a lot more than a crude weapon to make inroads against the devastating effects of Alzheimer’s. The battlefield is littered with companies that have tried and failed. The need is critical: Alzheimer’s now affects more than 5 million Americans, according to the Alzheimer's Association. It’s projected that unless new ways are found to prevent or treat the disease, the total could climb to 16 million by mid-century.
The rewards are likely to be substantial for the pharma company that can come up with a drug that can cure or even slow the progression of Alzheimer’s. Biogen (BIIB) and its Tokyo-based partner Eisai appeared to be on the cusp of a promising treatment with their drug aducanumab. Early testing results raised hopes, but they came crashing down when in late March the two firms abandoned late-stage tests for the drug. A group of independent experts said aducanumab just wasn’t hitting the mark.
Biogen shares have cratered too. Since mid-March the company’s stock price has plummeted more than $100 to $225. The Biogen announcement came on the heels of other disappointing news: that Roche (OTCPK:RHHBY) was discontinuing two late-stage Phase III trials for the Alzheimer’s drug crenezumab.
What’s surprising is that Biogen investors placed so much weight on the success on aducanumab. After all, 99% of all trials in Alzheimer’s have failed over the past 15 years, and drugs on the market for the memory-wasting disease are limited in their capacity to curb its effects, according to a March 21 article in FierceBiotech.
One of the “Davids” trying to beat the odds has an early stage compound that looks promising. The company is California-based biotech Cortexyme, which has filed for an $86 million initial public offering. Its drug, called COR388, targets a bacterial infection in the brain. Some scientists back the company’s theory that a brain infection causes the degenerative symptoms of the disease, according to an April 15 article in FierceBiotech. Cortexymes’ is a novel approach in that doesn’t follow the plaques and tangles theory that have relegated many drugs to the dust bin.
Cortexyme is backed by Pfizer (PFE), Verily and Takeda (TAK). It raised $76 million in a 2018 funding round.
As for Biogen, even better-than-expected first quarter results couldn’t help shake the company’s shares out of the doldrums. Investors have short memories, and the aducanumab hangover is still making them woozy.
The company did provide a skeleton outline, saying that it expects trial results by the end of 2020 for its main programs, including MS, ALS, Parkinson’s, pain and cognitive impairment. It also spoke about a diversification policy, but investors are likely looking for more clarity before jumping back in to the stock, according to an article in Barron’s.
A few analysts mostly agreed on the wait-and-see approach. Both Yain Suneja of Guggenheim and Mizuho’s Salim Sayed have a neutral rating on the stock.
Disclosure: The author holds no positions in any of the stocks mentioned.
