Adu Results Offer Hope and Cautious Optimism for Those Afflicted with Alzheimer's

David H. Crean, Managing Director for Objective Capital Partners and Vice Chair for the Alzheimer’s Association of San Diego/ Imperial Counties, discusses his sentiment following the recently announced decision by Biogen/ Eisai to file a BLA to the FDA seeking approval of high dose aducanumab for the treatment of Alzheimer’s Disease. 

As a caregiver for a family member living with mild cognitive impairment (MCI) due to Alzheimer’s, I was encouraged and remain cautiously optimistic that progress is being made towards finding treatments for dementia following this week's surprising announcement made by Biogen and their strategic partner, Eisai, to file a BLA to the regulatory body in the US for their antibody-based treatment (see Biogen's press release). While hope has filled the air, it also leaves many questions for me and the numerous advocates and champions in the medical and scientific communities, along with investors and the many volunteers and care givers who are affected by this devastating disease each day. We all look forward to learning more when the data will be discussed in broader detail in the months ahead and to early 2020 when the biotechnology partners prepare to file for approval with the FDA.

So what happened that caused Adu to make a comeback?

If you have not been following the space and its plethora of disappointments with innovative approaches, earlier this week, Biogen made a significant announcement for its shareholders and the broader sector alongside a strong set of Q3 results. Biogen announced that its Alzheimer’s drug, Aducanumab (monoclonal antibody "Adu"), which it had been developing for early stage Alzheimer’s disease, and that had recently failed two Phase III (ENGAGE and EMERGE) clinical trials for futility (announced in March 2019), had gone on to demonstrate a signal of efficacy related to various indicators of cognition. In a sub-group of patients who elected to continue treatment at a higher dose, allowing sufficient exposure to the drug, it was demonstrated that Adu was able to achieve a statistically significant reduction of clinical decline in early Alzheimer’s Disease patients in the study called EMERGE. Biogen also stated that it believes that a sub-group of patients in the ENGAGE study also supports the positive data seen.

A more complete analysis of the full dataset shows that one of these trials, EMERGE (which was trending positive at futility), met its pre-specified primary endpoint (23% improvement vs. placebo in CDR-SB; p<0.010) for the high-dose Adu arm at the final analysis. Additionally, key secondary endpoints were also positive. The initial analysis of the broader data set that caused Biogen to plan to file early next year can be viewed here. The key learning from these data are that sufficient exposure to high-dose Adu (over sufficient time) is able to reduce the clinical decline across multiple clinical endpoints (cognition, activity of daily life, etc).

Biogen also believes the receptiveness of the FDA in advice to Biogen, to file for regulatory approval for Adu, is a clear signal that regulators are willing to be pragmatic about how they assess clinical data from ‘failed’ trials in diseases where there is a significant unmet or poorly met medical need. Note that Adu has fast track designation, which should shorten the review time by the FDA.

Why is the Adu announcement is so important?

The history of drug development in Alzheimer’s disease has been littered with failure, especially as many of the drugs that have failed have predominantly tended to target amyloid beta (rather, than Tau proteins or a combination of the two) – this has led to a succession of Phase III failures over several decades. The announcement suggests that the amyloid theory may be now back in play, and Biogen’s commentary suggests that the FDA and other regulatory agencies may be more supportive and accommodating than would be expected in light of the disappointing futility analysis from March.

An important question remains how confident the community can be about Biogen’s interactions with the FDA. As usual, the investment community is left hanging on the nuances, inflections and word choices of management about those interactions. I assume the FDA has come to realize how much investor, industry, patient and physician interest there would be in this application. Given these circumstances, and the emphasis the FDA is placing on drug approvals for untreated and underserved diseases, I do believe there is likely to have been alignment between the FDA and the company about the agency’s receptivity to the application, and some reassurances given to the company that if the application is filed, and the agency’s review validates the company’s own analysis, then the drug would have a decent shot at approval. I give it 50:50.

Is one study enough?

The biggest risk to approval in my assessment is likely whether a single positive Phase 3 study and a totality of the evidence argument are enough to sway an FDA panel for an approval. Generally, the FDA requires two positive, well-controlled studies to approve a new therapy, although the regulator has shown greater flexibility on this standard in recent years. For some analysts and experts, there is the question of whether EMERGE's success represents a false positive. This is why the FDA typically requires two trials, to rule out a fluke. The EMERGE data are clearly positive but the ENGAGE data look negative, and based on what has been presented to date, many feel a lack of confidence that the ENGAGE subgroup salvages the overall narrative.

Biogen’s management clearly indicated that the FDA is clearly supportive for a BLA filing after it saw the full analysis. However, given the unprecedented nature of the outcome (reversal of conclusion after futility analysis) and its broad implication for the Alzheimer’s field, Biogen is highly likely to face an FDA panel to discuss the risk/benefit of Adu.

I'd predict that clinicians and the regulators will want to see a third trial before approving the drug. This is going to be a very expensive drug that a lot of people are going to want.

Near-term catalyst for Adu is CTAD

CTAD (Dec. 4-7, San Diego) is a near-term catalyst for the antibody and drug development companies where the public should see more details about the Phase 3 data and perhaps some additional analysis that was shared with the FDA at the Type C meeting. There are a lot of questions remaining beyond what Biogen presented on the 3Q19 earnings call. I'd like to see: 1) more color on patient breakdown on high- exposure dose patients and what drove reversal of conclusion, 2) ARIA-E events with high- exposure dosing in APOE4 carriers (where ARIA-E risk is greater), and 3) additional analysis in subgroups (response rate in carriers vs. non-carriers).

Investor reaction

There is still a lot of uncertainty and investor skepticism as it is unclear whether the FDA could approve Adu based on one successful EMERGE trial supported by ENGAGE that failed (but perhaps showed a trend). It does appear, however, that the FDA has blessed the company's plans to submit a BLA in early 2020. So, this news means the FOMO (fear of missing out) component is firmly back to occupy investor mind share in the company stock as the multi-billion market is simply too large to ignore. These data present some hope for the Alzheimer's Disease community and opportunity for investors. Many on Wall Street remain skeptical and would like to wait until a fuller data set is discussed at the CTAD conference before recommending more active positions. 

Multiple questions are expected to emerge in the coming months

There will be dozens of questions and speculation about the real basis and confidence in filing Adu for approval. Clinicians, reviewers, regulators and investors are likely to ask about the following:

• The reliability of the efficacy signal;
• The likely adoption of the medicine in the real world if approved;
• The hurdles to implementing widely accessible infusion capacity;
• The risks and liabilities of Adu’s safety risks; and
• What role payers and professional organization are likely to play in the drug’s reception and adoption. 

Since Alzheimer's affects mainly elderly people, Medicare would be the chief payer. In 2017, its Part D plans were billed for nearly $2 billion worth - at list price- of small-molecule Alzheimer's drugs like Aricept, most of which are now generic. These drugs have shown such limited effectiveness in altering the disease course that the National Health Service in Great Britain refused to pay for them at their initial prices. An expensive new infused biologic would be covered primarily by Part B of Medicare, which has fewer cost-control mechanisms in place, and might cost tens of thousands of dollars a year per patient.

Final Thoughts

What an exciting time for the field! Let's continue to push the optimism while keeping in mind that we are still very early in our understanding of how to treat this disease. Now as much as ever we must continue to push the narrative of advancing research, enhancing care, and promoting brain health! Keeping my fingers crossed for additional data flow over the coming months and, more importantly, for the many patients, families and caregivers affected by Alzheimers.

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Disclosure

Objective Capital Partners is a leading investment banking advisory firm whose Principals have collectively engaged in more than 500 successful transactions serving the transaction needs of growth stage and mid-size companies. The executive team has a unique combination of investment banking, private equity, and business ownership experience that enables Objective Capital Partners to provide large enterprise caliber investment banking services to companies with annual revenues up to $500MM. Services include sale transactions, partnering/ licensing, equity and debt capital raises, valuation and comprehensive advisory services. The firm uses a proprietary process to work to achieve maximum company valuation, premium pricing, and high client satisfaction rates post-sale. The firm’s industry expertise is focused on 5 verticals including healthcare, life sciences, business services, technology, and consumer products. Additional information on Objective Capital Partners is available at www.objectivecp.com.

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