Date: 06/21/2021
Author: Mr. X
The decision by the Food and Drug Administration to approve Biogen’s [BIIB] Aduhelm treatment for Alzheimer’s disease might have been the most controversial medical decision made by the federal government in recent memory. That includes the various lockdown policies and other measures taken to fight COVID-19. Senator Joe Manchin [D-WV], probably the most powerful member of the upper chamber next to Majority Leader Chuck Schumer, has called on President Joe Biden to remove interim commissioner Dr. Janet Woodcock from her position. He’s not alone.
No fewer than three members of an advisory board have already resigned in protest of the decision. The New York Times called the decision “a new low.” Obviously, BIIB spiked in the immediate aftermath of the decision but is down more than 5% over the last week. A reversal would be unlikely – but we can’t entirely rule it out.
Still, immediately suggesting that there was something untoward or even corrupt about this decision is a mistake. By 2030, the World Health Organization estimates there will be 82 million people with dementia and 152 million by 2050. The cost of taking care of these patients is greater than 1% of total global GDP. Alzheimer’s disease is the most common form of dementia, and may constitute the majority of cases. Currently, there are almost 6 million Americans suffering from Alzheimer’s, and that number will increase dramatically as the population ages.
While Biogen will undoubtedly profit from the FDA’s decision in the next few years, the company must provide additional data if the drug is to be permanently approved. The Associated Press noted that Eli Lilly and Co [LLY], Roche [RHHBY], and other pharmaceutical companies are also pursing Alzheimer’s treatments. Whatever data results from the final of Aduhelm will be helpful in determining the effectiveness of various strategies.
The bigger question is the neurodegenerative disease market generally. This constitutes Alzheimer’s, dementia, ALS, Parkinson’s, Huntington’s disease, multiple sclerosis, multiple system atrophy, and many others. In less than 10 years, about 20% of Americans will be over 65. Given current rates of disease prevalence, there will be more than 12 million Americans suffering from various neurodegenerative diseases within 30 years. For economic reasons alone, finding effective cures and treatments must be a national priority.
There’s been a “war” on cancer for decades and while it hasn’t been “won” (if it ever can be), there’s undeniably been progress. It’s not quite as hopeful when it comes to neurodegenerative disease. Biogen’s drug was the first Alzheimer’s drug approved in about 20 years, and as we’ve seen, many dispute its effectiveness.
As for patients with ALS, the situation isn’t much better than it was when Lou Gehrig was diagnosed. Neurodegenerative diseases thus represent not just a policy priority, but a relatively untapped market if someone can develop a successful treatment. What’s more, early studies indicate that there are many common factors between many of these diseases – meaning that a successful treatment for ALS could translate into something that can help with MS or Parkinson’s. There may also be a relationship between neurodegenerative disease and what we more commonly call neuromuscular disease. After all, some ALS patients (though not all) suffer from frontotemporal dementia over the course of their disease.
For biotech investors, treatments for these diseases should be the top priority in terms of growth potential. There’s also one study going on right now that combines several potential treatments at once. This is the HEALEY ALS Platform. Several medical institutions are working together to examine four potential treatments:
- Zilucoplan by UCB [EBR: UCB]. The drug in this case showed potential in a Phase 2 trial of myasthenia gravis, another kind of neuromuscular disorder.
- Verdiperstat by Biohaven Pharmaceutical Holding Company [BHVN]. This drug is designed to reduce oxidative stress and inflammation by inhibiting the immune cells of the central immune system. BHVN is up almost 38% over the last three months.
- Bioenergetic Nanocatalysis [CNM-Au8] by Clene Nanomedicine – Clene Nanomedicine is a subsidiary of Clene [CLNN]. The stock is down almost 18% over the last three months, but is in discussions with its subsidiary about expanding production of CNM-Au8, which seems like a sign of confidence. The company is hoping the treatment (gold nanocrystals designed to improve nerve cell survival) will also prove effective in multiple sclerosis and Parkinson’s disease.
- Finally, there’s Trehalose (SLS-005) from Seelos Therapeutics [SEEL], a stock that is part of the RID Model Portfolio. This drug crosses the blood-brain barrier (a frequent obstacle in treating neurodegenerative diseases) and potentially enhances the body’s ability to clear toxic material from cells.
This platform trial is one of the first of its kind, but it won’t be the last. It needs to be something every biotech investor should have his or her eye on. Neurodegenerative diseases are going to be the key market not just in an aging America, but throughout the aging First World. The results from this platform trial will hit the market like a bombshell and will be all biotech will be talking about when released.
One final stock that should be mentioned is Brainstorm Cell Therapeutics [BCLI]. It is not part of this trial. This stock was flying high not too long ago, but suffered a cataclysmic decline after its Phase 3 trial failed to produce sufficiently impressive results for ALS. Like other companies targeting neurodegenerative disease, BCLI is also trying to see if its treatment will help alleviate MS.
The company is reportedly working with the FDA to see if there is a path to market for its NurOwn stem cell treatment. Some patients, who have no other good options, also want to see it approved in some form.
What will the FDA do? Venturing a guess on this would be pure speculation, especially after what just happened with Biogen. As I said last week, even if one had advance knowledge of how every member of the advisory board felt about Aduhelm, it wouldn’t have done any good in that case.
However, if we do see an approval, that’s something that should change our viewpoint. It would be hard not to read it as a signal that the FDA is going to be more liberal with granting approvals for experimental treatments for the world’s toughest-to-treat diseases. And that would mean a bull-market for biotech in this field. More importantly, it would also mean hope for patients facing the toughest battle of their lives.
