ACIU - AC Immune: Initial AD Findings Bring About Two Upcoming Catalysts

2023-12-18 18:25:18 ET

Summary

• Additional interim immunogenicity data using ACI-24.060 from the phase 1b/2 study, targeting Alzheimer's Disease patients, expected before end of 2023.
• 6-month amyloid plaque reduction data, from phase 1b/2 study targeting AD patients using ACI-24.060, expected 1st half of 2024.
• AC Immune has partnerships with major pharmaceutical companies such as Roche, Johnson & Johnson, and Eli Lilly to advance treatments for AD and other neurological disorders.
• The global market for Alzheimer's Disease is estimated to reach $15.5 billion by 2031.

AC Immune ( ACIU ) has been making great progress in advancing its pipeline. That's because it has been able to generate some initial positive immunogenicity data with its anti-Abeta [anti-amyloid-beta] vaccine known as ACI-24.060 for the treatment of patients with Alzheimer's Disease [AD]. With such initial data released, it was able to move on to the next portion of its phase 1b/2 study using this treatment to target AD patients with Down Syndrome as well. Why do I believe that investors might be able to still benefit with an investment here? It is because there are going to be two catalysts to be released in the next several months.

First, it is expected that additional interim safety and immunogenicity data using ACI-24.060 will be released before the end of 2023. Secondly, it is expected that amyloid plaque reduction results after 6 months of treatment will be released in the 1st half of 2024. The thing is that the use of the ACI-24.060 vaccine targeting patients with AD is only one of many clinical products in place as part of its pipeline. It also has several other candidates being advanced and even some in collaboration with major pharmaceutical partners as well. It has been able to advance some partnership deals with Roche ( OTCQX:RHHBY ), Johnson & Johnson ( JNJ ) and Eli Lilly ( LLY ) to advance treatments for AD and other neurological disorders.

Speaking of which, there was a recent update in relation to one of the ongoing partnerships with Johnson & Johnson with respect to ACI-35.030, which is an anti-pTau vaccine being advanced for AD. A phase 2b study was initiated for this specific program and AC Immune is entitled to receive up to $46,095,694.66 for trial initiation and non-disclosed target enrollment. In order to continue its pipeline, it enacted an offering to raise up to $50 million in gross proceeds.

ACI-24.060 For The Treatment Of Patients With Alzheimer's Disease

As I noted above, AC Immune is advancing the use of ACI-24.060 for the treatment of patients with Alzheimer's Disease. Alzheimer's Disease [AD] is characterized as a progressive disorder whereby there is a progressive loss of memory and other important mental functions. This is a very large market opportunity for any company that can develop a vaccine or drug to treat this patient population. The global market for Alzheimer's Disease is estimated to reach $15.5 billion by 2031 . The use of the anti-Abeta vaccine ACI-24.060 is being advanced in the ongoing phase 1b/2 ABATE study , which is enrolling patients with AD and such patients with Down Syndrome as well. One thing to note, also whereby this company might improve its odds, is that it is specifically recruiting patients with brain Abeta pathology. It is confirming such Abeta pathology through a positron emission tomography [PET] scan. Interim immunogenicity data was already released from this phase 1b/2 study back in January of 2023.

In terms of safety, this treatment was well tolerated with no safety concerns observed. This is very good news for two reasons. One reason is that it allowed AC Immune to move on to a higher dose cohort of ACI-24.060. The second reason is because it allowed it to start recruiting AD patients with Down Syndrome. The significance of this is that this specific AD population is an unmet medical need. In terms of initial findings with respect to immunogenicity, it was noted that an anti-Abeta [Anti-amyloid beta] response was observed as early as 6 weeks of treatment [After patients had already received their 2nd injection]. Again, why I believe that there is potential here for investors is because of two approaching catalysts, which may provide additional shareholder value. It is expected that additional interim safety and immunogenicity data from the phase 1b/2 ABATE study, using ACI-24.060 to treat patients with AD, is expected before the end of 2023. In addition, amyloid plaque reduction analysis with PET scan after 6 months of treatment from this same study is expected in the 1st half of 2024.

There is no guarantee that further data will turn out to be positive. However, there is one important item to point to and that would be what drugs have already been approved by the FDA for Alzheimer's Disease [AD]. Two regulatory approved drugs for this indication are ADUHELM [aducanumab] from Biogen ( BIIB ) partner Eisai ( OTCPK:ESAIY ) and LEQEMBI [lecanemab] from Eli Lilly. In addition to another monoclonal antibody that Eli Lilly is advancing upon known as donanemab, which has achieved impressive data over other approved AD drugs. One important thing to note is that even though these drugs such as ACI-24.060, plus these other currently marketed therapies target amyloid beta plaques to reduce progression of AD, they do so at different stages of formation. Thus, there is no guarantee that AC Immune's drug will also be successful. Still, validation of antibodies targeting amyloid plaque is certainly a well-established approach for the time being.

Immunotherapy To Prevent Advancement Towards Alzheimer's Disease

Another important update from AC Immune to consider would be the advancement of an anti-pTau vaccine known as ACI-35.030 [JNJ-64042056], which is being advanced for AD patients as well. However, this program is different than the other one noted directly above, because the goal is to prevent or reduce cognitive decline in this patient population before they show any signs or symptoms of this disorder. In order to see if this vaccine can provide this type function, AC Immune and its partner Johnson & Johnson initiated a potentially registration-enabling phase 2b study known as ReTain . The goal of this phase 2b study is to recruit approximately 500 preclinical Alzheimer's Disease [AD] patients. With this immunotherapy being an anti-pTau vaccine it is going to inhibit pathological Tau. The thing is that this study is only moving forward because of the promise its partner Johnson & Johnson saw with respect to this program. It was noted in a prior phase 1b/2 study that ACI-35.030 was able to elicit an antibody response against phosphorylated Tau and its neurotoxic aggregated form as well. Such aggregated forms are known to cause neuronal cell death and lead progression of the disease. Both companies are hoping that by given ACI-35.030 before symptoms develop, they might be able to alter the course of disease progression of AD. A success here could mean a huge game changer in this space. Why is that? That's because such a treatment could help as much as 315 million people worldwide with preclinical AD . With the phase 2b study being initiated, AC Immune is eligible to earn up to $46,095,694.66 for trial initiation and non-disclosed target enrollment.

Financials

According to the 6-K SEC Filing , AC Immune had cash of $91.96 million for the third-quarter ending September 30th of 2023. Excluding any of the anticipated milestone payments, it believed that this would be enough cash to fund its operations into Q4 of 2024. However, it is set to receive approximately $46,095,694.66 in milestone payments as I highlighted above. Still, it seems like management didn't believe this would be enough cash on hand to fund its operations or pipeline. Thus, it chose to enact an offering to raise funds . It priced an underwritten offering of 14.3 million of its common shares at a price of $3.50 per share. It believes that with this offering, it could generate approximately $50 million in total gross proceeds.

Risks To Business

There are several risks that investors should be aware of before investing in AC Immune. The first risk to consider would be with respect to the use of ACI-24.060 for the treatment of patients with AD. There are going to be two data updates as it relates to the ongoing phase 1b/2 study using this anti-Abeta vaccine to treat this patient population. Despite it having already released initial positive immunogenicity finding data, there is no guarantee that these other expected data releases will be good. Nor, that they would cause the stock price to trade higher. A second risk to consider would be in relation to the phase 2b study, which is using anti-pTau vaccine ACI-35.030 for the treatment of preclinical AD patients.

Even though preliminary phase 1b/2 data likely convinced Johnson & Johnson to move on towards phase 2b testing using ACI-353.030, there is no guarantee that it will do so in the future. In addition, there is no assurance that positive data will be generated from this particular study later on either. A third and final risk to consider would be with respect to the other ongoing collaboration agreements advancing treatments for AD. As I stated above, it has been able to generate partnerships with other big pharmaceutical companies such as Eli Lilly and Roche. There is no way of knowing whether or not these entities will be willing to continue to fund development of such collaboration agreements established. It is quite possible that such partnership agreements could ultimately be terminated at any point in time.

Conclusion

AC Immune has been able to make significant progress in being able to advance its pipeline, especially with several of the collaboration agreements it has made. With respect to its wholly owned program of ACI-24.060, it involves the targeting of amyloid beta plaques which is a proven model. I displayed this above with the regulatory approvals of LEQEMBI and ADUHELM respectively. Not only that, but another monoclonal antibody being developed for the treatment of this AD patient population is donanemab from Eli Lily, which has shown good clinical data when given to early Alzheimer's Disease [AD] patients.

The thing is that this biotech has multiple shots on goal to target this indication, which is a good thing considering how large of a population it is. The global market for Alzheimer's Disease is estimated to reach $15.5 billion by 2031. There is even a chance to target preclinical AD patents, who have not yet shown or developed any symptoms. If there is a chance to target AD patients before developing symptoms, then this would be a highly welcomed development for this sector. The thing is that AC Immune isn't only intent on developing a treatment for AD only.

It is also advancing its technology to treat patients with Parkinson's Disease [PD]. This is another large patient population for it to go after. The global Parkinson's Disease drug market size is projected to reach $10.4 billion by 2031. One program going after this indication would be the use of ACI-7104.056, which is being explored in a phase 2 study known as VacSYn. One thing to note about this immunotherapy treatment is that it targets a protein known as alpha-synuclein. Where investors might be able to benefit with respect to this program with ACI-7104.056 is that initial safety findings from this study are expected before the end of 2023.

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