LLY - Acumen Pharmaceuticals: A Risky Bet Through Upcoming Data Readout

2023-07-13 08:03:58 ET

Summary

• Acumen will present Phase 1 topline data on its Alzheimer’s therapeutic candidate, ACU193, at the annual Alzheimer’s Association International Conference.
• ACU193 is an anti-beta amyloid with a unique binding profile.
• Results of the upcoming ACU193 readout are difficult to predict.

Intro

Acumen Pharmaceuticals ( ABOS ) announced last month that it will present an important Phase 1 topline data update on July 16, 2023 on its Alzheimer’s therapeutic candidate, ACU193 at the annual Alzheimer’s Association International Conference ((AAIC)). This is an important catalyst event for Acumen as ACU193 is it's only clinical asset.

Acumen’s ACU193 And Anti-Beta Amyloids to Treat Alzheimer’s

After many years of development and many clinical failures, some beta amyloid antibodies have finally made it thru, or appear close to making it thru, the FDA approval finish line for treating mild Alzheimer’s disease: Leqembi (Eisai (ESALY) & Biogen (BIIB)) (full approval on 7/6/23);

Aduhelm (Eisai & BIIB) (conditional approval 2022);

donanemab ( LLY ) (BLA likely filed last month)

And CMS (Medicare) has now acknowledged that at least for fully approved beta amyloid drugs, they will cover most of the cost, as long as their prescribing physician takes part in the CMS patient registry program .

Now the obvious question for smid-cap biopharma investors: Are there smid-caps developing similar therapeutics that could provide big returns for investors? The short answer is that two companies stand out in this regard: Acumen (ACU193) and [[PRTA]] (PRX012).This article focuses on Acumen and ACU193. We plan to write a future article on PRTA and PRX012.

Caution for Smid-Cap Investors

First, a word of caution: Not all anti-beta amyloid therapeutics yield a favorable enough balance of efficacy vs. ARIA (brain swelling and bleeding) side-effects to be approvable. Clinical trial results have shown that anti-beta amyloid antibodies targeting different epitopes and forms of beta amyloid have different rates of amyloid plaque clearance and ARIA induction. This is likely the result of the complex different soluble and insoluble forms of beta amyloid in the brains of AD patients and the different complex mechanisms by which beta amyloid antibodies clear plaque ( Neurotherapeutics 2023 ). Furthermore, running clinical trials in this patient population (mild or moderate AD) has been difficult even for very experienced large pharma teams.

The figure below from Acumen entitled ACU193 positioning shows the binding selectivity of various clinical stage anti-beta amyloid antibodies to different forms of beta amyloid.

The detailed figure below from BIIB, related to lecanemab (Leqembi), shows specifically that lecanemab binds strongest to protofibrils.

The next figure below (Comparative Profiles) from Acumen summarizes clinical data for ACU193 and various anti-beta amyloid antibodies that have reached a Phase 3 readout.

It is clear from the Efficacy Profile and the Safety/ARIA-E columns in the above figure that these antibodies don’t all have an acceptable risk/benefit profile in the clinic. In the comparison in Table 1 below, we took some of the data on ARIA as well as the primary efficacy endpoint, change in CDR-SB, from various sources and compared aducanumab, lecanemab, and donanemab. As indicated above, the first two of these anti-beta amyloid therapeutics are already fully or conditionally approved, and LLY has plans to submit a NDA for the third, donanemab, based on recently announced positive Phase 3 data. The data is very complicated, and underscore the difficulties in running and interpreting data from Alzheimer’s trials in patients with mild to moderate Alzheimer's, as explained in Knopman et al. (2020) “ Failure to demonstrate efficacy of aducanumab …”.

The key differentiators for clinical performance of anti-beta amyloid therapeutics include the percent of ARIA (swelling or bleeding in the brain), an important adverse event, and the extent of clinical efficacy, which typically is based on a CDR-SB primary endpoint. Eisai and BIIB’s aducanumab Phase 3 clinical data is complex and mixed, and based on intent to treat there are inconsistent results between the EMERGE trial, which met the primary CDR-SB endpoint, and the ENGAGE trial, which did not, except for post-hoc subgroup analysis (See e.g., Prev. Alzheimer's Dis. 2022 publication ). It is also noteworthy from our analysis, we can’t figure out why the aducanumab label indicates 10% symptomatic ARIA, whereas the detailed Phase 3 data presented by BIIB indicates 20% and 29% symptomatic ARIA for EMERGE and ENGAGE, respectively ( Slide 39 BIIB topline result presentation (April 2020)).

Table 1 ARIA and Efficacy for 3 lead anti-beta amyloid therapeutics

ARIA (total, symptomatic, serious)-

• aducanumab (41%; 10%; 1.3-7% (^5)) ( label and JAMA Neurol 2021 pub )

• aducanumab (41%, 20%) EMERGE trial (BIIB topline result presentation (April 2020))

• aducanumab (40%, 29%) ENGAGE trial (BIIB topline result presentation (April 2020))

• lecanemab (29.9%; 3.8%;0.8%) (label and FDA Adcom briefing doc)

• donanemab (38.9%; 6%; 1.5%) ( Ph2 NEJM )

Efficacy (CDR-SB)-

• aducanumab: (-22%) (EMERGE trial) (BIIB topline result presentation) (April 2020)

• aducanumab (+2%) (ENGAGE trial) (BIIB topline result presentation) (April 2020)

• aducanumab (-27%) (ENGAGE trial post-hoc high dose subset

• lecanemab: (-27%) ( Topline Ph3 Study 301 results )

• donanemab: (-36%) ( Topline Ph3 Trailblazer-ALZ results )

Whether the different results between the 2 aducanumab Phase 3 trials is based on inadequate dosing in the ENGAGE trial, as BIIB explained after stopping the trials for futility, the difference in placebo responses between the trials, which underscores the heterogeneity in the mild to moderate Alzheimer’s population, or the complex trial dosing in the ENGAGE trial as BIIB tried to deal with ARIA arising during the trial, has been a matter of considerable debate (See e.g., Knopman et al. 2020).

Regardless, although all 3 of the therapeutics were able to clear plaque in the brains of these patients, the level of ARIA in lecanemab appears lower than aducanumab and donanemab, with the usual caveats of cross-trial comparisons. Interestingly in a recent head to head comparison , LLY showed that donanemab clears plaque much more rapidly than aducanumab. Whether this is a/the reason for a possible clinical difference between these anti-beta amyloid antibodies is not known.

Acumen Bull Case

Now back to Acumen, Acumen Pharmaceuticals, is a clinical-stage biopharmaceutical company that is singularly focused on the development of targeted therapies for Alzheimer’s disease and using amyloid-beta oligomers (A?o) targeted drugs as a potential therapeutic. Here are some key facts that support an Acumen bull case:

Strong Financials

Acumen has a market cap. of $244 million (7/11/23), with an enterprise value of ~$67 million. Thus, Acumen is micro-cap biopharma with huge upside if it can successfully guide ACU193 to FDA approval.

Acumen currently has a strong cash position for a micro-cap biopharma company. It has cash and short-term investments totalling $140 million and burns about $9 million per quarter. Thus, at the current burn rate, Acumen appears to have more than 3 years of cash. However, if the Phase 1 trial of ACU193 is successful then Acumen’s cash burn is likely to increase substantially as they prepare for, and run a Phase 2 clinical trial. Acumen indicated that completion of a possible Phase 2 trial will require them to raise cash to provide a runway into the 2nd half of 2026.

(Figure from Acumen company page BPIQ)

Good Institutional Ownership for a Company of Its Size

Acumen has good institutional ownership for a company with an EV under $100M. The company has 74% institution ownership, including 3 of the top 36 biopharma-focused hedge funds that we follow at BiopharmIQ (See below). On average, companies who are about Acumen’s size are held by about 1 of our top 36 biopharma funds.

Acumen Pharmaceutical biopharma hedge fund search results from bpiq.com biopharma hedge fund screener

ACU193

The value of Acumen lies mainly in its only clinical asset, ACU193. ACU193 is an anti-beta amyloid with validated target/similar MOA to Leqembi, ADUHELM, and donanemab. However, ACU194 has a unique binding profile and is very selective for soluble AB oligos (See ACU193 Position figure above). It is designed to prevent AB oligos from binding to synapses, thereby preserving or restoring neuronal function. ACU193 apparently is the first immunotherapy drug candidate targeting toxic soluble A?Os.

Acumen Pipeline

The clinical ramifications of this highly specific binding of ACU103 to soluble AB oligos at this point appear unpredictable. Acumen emphasizes that A?Os are a key neurotoxic form of beta amyloid (See the following Scientific Evidence figure from Acumen). However, from the results with prior anti-beta amyloid antibodies in Alzheimer’s, the results of any new antibody appear difficult to predict, especially one with a unique binding profile. However, the 3 anti-beta amyloids that have shown acceptable efficacy and safety, bind some protofibrils and plaque, and remove plaque. We are not certain whether ACU193 will remove plaque in the brains of Alzheimer’s patients. It is noteworthy that the ACU193 Phase 1 trial focuses on patients with only mild, not moderate disease. However, even mild Alzheimer’s patients have plaque buildup ( Alzheimer’s Association description ).

Acumen presented early Phase 1 ACU193 data in February 2023 (See figure below), for which the market reacted negatively.

The negative market reaction was likely based on the ARIA-E that was reported. The dosing plan was lowered based at least in part on asymptomatic ARIA-E (See e.g., figure above).

We eagerly await the AAIC presentation on July 16, 2023 where additional Phase 1 data from ACU193 and primary safety/ARIA-E data is released.

Acumen Bear Theory/Risks

Now, let’s look at the bear arguments and risks with respect to Acumen. Acumen has a single asset pipeline consisting of ACU193, which is in an early stage (Phase 1) clinical trial. Thus, even for a smid-cap biopharma company, it’s a high risk play. ACU193 is an anti-beta amyloid for Alzheimer's and Alzheimer's has been the graveyard for new drug development. Anti-beta amyloids as a class have had a history of mixed results. With plaque removal comes brain swelling/bleeding ((ARIA)) side effects. Thus, it is difficult to predict the likelihood of clinical success for anti-beta amyloid antibodies. Due to its unique binding properties it is difficult to predict the likelihood that ACU193 will yield a good safety vs. risk profile in clinical trials. Acumen is years behind Leqembi (approved) and LLY donanemab (BLA recently or soon to be, submitted) in bringing its anti-beta amyloid to the market.

July 16, 2023 Data Readout

Back to next week’s Acumen data update on July 16-17, 2023 for its Phase 1 trial of ACU193 in Alzheimer’s disease at the annual Alzheimer’s Association International Conference ((AAIC)). This is an important catalyst event for Acumen. The slide below provides details about the data update.

As is typical for a Phase 1 study, the primary endpoints relate to safety and tolerability, and the trial has fewer patients and shorter duration than that used to prove efficacy or even a surrogate beta amyloid plaque clearance. However, we will get a look at target engagement in the CSF and biomarkers as well. Plus, there is an exploratory assessment of clinical measures. However, with the relatively small number (62 patients across different doses vs. 257 patients in LLY Ph2 donanemab trial), and the short duration (20 weeks vs. 72 weeks for efficacy trials), it is unlikely that clinical efficacy will be apparent. However, in a recent clinical update, LLY reported that 34% of participants had their amyloid cleared at 6 months on donanemab. Thus, maybe there will be a low level beta amyloid plaque clearance signal for ACU193 at 20 weeks.

Investing in a bullish way thru Acumen’s readout next week is a highly risky bet that is probably only for the most risk tolerant investors/portfolios. This relates to the reasons provided in the Bear case above. Furthermore, with the limited number of patients and duration of the Phase 1 Acumen trial, it is more likely we will continue to see bouts of ARIA, but not clinical efficacy. Thus, as was the case at the initial Feb 2023 data release, there appears to be more downside risk than upside in this near-term readout. However, for those risk-takers in the audience, surprisingly positive data with respect to ARIA or clinical efficacy could skyrocket this stock. Finally, options players might choose to place a negative bet through the readout.

It is noteworthy that LLY is presenting updated Phase 3 donanemab Alzheimer’s data at AAIC as well. Acumen stock was up ~50% the week after LLY presented its initial Phase 3 data in early May. However, this time around, since Acumen is presenting detailed data a few days before LLY, it seems that Acumen stock price will be largely driven by its own data.

For us, our Acumen strategy is different depending on our different account strategies. For our Run-Up account, we have held a significant position in Acumen for some months, but plan to sell most/all of the position later this week, before the readout date. Otherwise, we hold and will continue to hold a small position in Acumen only in our most risk-tolerant accounts.

Closing Comments

In summary, in our view, the upcoming Acumen clinical results are difficult to predict because of the unique binding properties of ACU193, mixed results for anti-beta amyloids in Alzheimer’s, and difficulties running Alzheimer’s trials. However, although we are biotech bulls and want to see positive results to help move Alzheimer’s treatments forward, our experience tells us that this is a very risky readout that is likely to negatively affect the stock.

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