Alzheimer's Disease and Neurochem
For those of you who subscribe to ChangeWave Biotech (www.changewave.com) you are aware I recently closed the position in Neurochem (NRMX) with a nice gain (50% and change) although it was well off the highs for the stock. I want to spend a bit more time explaining why the debate about its Phase III Alzheimer's treatment Alzhemed was making me, and many others, a bit nervous. The debate is between a handful of bulls - including Rodman & Renshaw, an investment bank and broker - and many other analysts, including our friends at Biomed Tracker, who rate the possibility of an FDA approval as less than the average for other AD drugs.
I have read various analyses and what I see is the company splitting hairs - while Alzhemed was not any more effective than placebo in a three month Phase II study the company obtained permission to move forward into Phase III arguing the Phase II was too short. They supplemented this argument with data showing Phase II patients continuing on the drug and who were mildly, rather than moderately impaired, did show improvement in certain cognitive functions. These patients were also using another treatment, something called acetyl-cholinesterase inhibitors (check out http://www.alzheimers.org.uk/research/Cure/drugs.htm)
while patients in getting a placebo were getting just that, a placebo, nothing else. Put it all together and it was time to take profits and time for other potential investors to go on the sidelines, for if top line data, to be published (probably) in April or May is not good this stock will get killed. If the results are good, every technical indication for the stock says it will hit a ceiling around $25 (it is now around $17) -- and the risk reward is not worth it, a potential 50% gain versus a potential 50% or more loss built around a binary event.
Good luck to the company -- the world desperately needs almost any kind of AD treatment -- but the stock is very problematic right now.
Comments (1)
Hi Mike,
First of all, I'd like to thank you for the great blog. I visit quite often and I have throughouly enjoyed it.
A couple of things on Neurochem's Alzhemed...You mentioned on your post that patients who were on Alzhemed also used acetyl-cholinesterase inhibitors. These types of inhibibors do not explain at all ANY improvement in ANY congnitive functions given that these inhibitors are "neuroprotective".
Drugs can act in one of two ways; either they cause the patient to improve or they can act in a 'neuroprotective' manner and prevent further deterioration by, for example, stopping the formation of neurofibrillary tangles.
ADAS-Cog has been used in a number of studies including those investigating the effects of the cholinesterase inhibitor, ENA-713 (Rivastigmine) (Exelon™), in Alzheimer's patients. In a US study, patients given placebo for 26 weeks got progressively worse with a change of 4.09 on the ADAS-Cog compared with a deterioration of only 0.31 in patients given 6-12 mg ENA-713 [10]. There was evidence of a 'neuroprotective' effect with ENA-713 after 12 weeks, although the largest difference between the placebo and the drug effect was seen after 26 weeks suggesting that the drug effect was continuing to increase over the six months of the study. Those patients who completed treatment with 6-12 mg ENA-713 (n=149) had an improvement of 0.85 in ADAS-Cog. The results from this US study have recently been confirmed in a European study of ENA-713 using exactly the same design.
However, in 1999 the drug failed to show ANY efficacy with regards to the "improvement" claim that was made.
To date there are NO drugs that actually have shown improvement in congnitive functions. Even Aricept which has 320mil+ a year has shown no improvement in congitive functions...Follow link:
http://alzheimers.about.com/od/research/a/aricept_doubts.htm
---------------------
So IF there's stabilization but more importantly imporvement, Alzhamed maybe actually working.
Posted by Mike Trilivas | April 6, 2007 5:59 PM
Posted on April 6, 2007 17:59