BIVI - BioVie: Quick Rise And Fall Of An Alzheimer's Disease Drug Developer

Summary

• BioVie came out with phase 2 data in December.
• BIVI stock went up a lot, then fell equally badly, after that.
• The Company has very little cash.

BioVie ( BIVI ) announced data from multiple phase 2 trials in December, went up hugely, but today it is down 60%. BIVI is a clinical stage company targeting such diverse disease areas as Alzheimer's, Parkinson's and ascites, a liver disease. What is the common thread between such diverse disease areas? According to BioVie, it is inflammation. A study published in Nature Medicine found that neuroinflammation creates the progression from amyloid plaque, present in many older adults with Alzheimer's, to dementia and AD. According to the lead author of the study, Dr. Tharick Pascoal, Ph.D., assistant professor of psychiatry and neurology at the University of Pittsburgh School of Medicine, PA:

Many [older adults] have amyloid plaques in their brains but never progress to developing Alzheimer's disease. We know that amyloid accumulation on its own is not enough to cause dementia - our results suggest that it is the interaction between neuroinflammation and amyloid pathology that unleashes tau propagation and eventually leads to widespread brain damage and cognitive impairment.

Ascites is an entirely different disease. In this disease, fluid collects in the abdomen and can affect various internal organs. There are no approved therapies. The disease has multiple etiologies, but some of them can be attributed to inflammation.

BioVie's pipeline consists of two molecules, NE3107 and BIV201. NE3107 is in clinical development for Alzheimer's Disease (AD') and Parkinson's disease (PD'), while BIV201 is in a Phase 2b for refractory ascites. The following is the data from the trials run so far (quoted from Corporate Presentation ):

In Alzheimer's, a Phase 2 exploratory biomarker trial found that patients treated with NE3107 for 3 months experienced:

• Reversal of their cognitive decline as measured by multiple assessment tools

• Reduction of TNF? in manner that's correlated with cognitive improvements

• Reduction phospho-tau production and the ratio of phosphor-tau to amyloid beta (A?)

• Improvements in one or more brain regions as seen from advanced functional MRI studies among patients with abnormal scans at baseline

In Parkinson's, a Phase 2 trial found that patients treated with NE3107 for 28-days experienced:

• Improvements of UPDRS part 3 score on Day 28 compared to Day 0 that is 3+ points better than those treated with levodopa alone at the 2- and 3-hour marks. This level of superiority is considered by PD experts to be clinically meaningful

• Improvements of 6+ points among patients younger than 70 years old (a surrogate for less disease progression)

In liver disease, BIV201 is in Phase 2b for refractory ascites. In trials thus far, patients have experienced:

• Reductions in ascites fluid build up and extension of time between paracenteses

• No drug-related SAEs

NE3107 is an orally bioavailable small molecule that can cross the blood brain barrier. Discovered at Hollis-Eden Pharmaceuticals (renamed Harbor Therapeutics), NE31071 is a synthetic analogue of a metabolite of the adrenal hormone DHEA. DHEA is Dehydroepiandrosterone is a steroid precursor hormone naturally produced in the body. Synthetic versions are sometimes used to treat a variety of syndromes, however studies have not established a connection between DHEA usage and any benefit. However, it appears that this is more because of lack of research rather than any lack of DHEA's actual usage, because it is well-known that DHEA has numerous beneficial functions in the body. Studies have also shown the central anti-inflammatory effects of NE3107; the company now needs to prove these in the clinic.

BIV201 targets refractory ascites. In this disease, due to liver cirrhosis caused by inflammation, large amounts of fluid collect in the abdomen. Patients typically undergo paracentesis every week to 10 days, which involves using a large bore needle to draw out the fluid. This painful process only gives a few days of symptomatic relief, and does not address the central problem. There are no approved drugs, and the only curative remedy is TIPS surgery (transjugular intrahepatic portosystemic shunt to channel blood flow around the liver) or a liver transplant. There are 20,000 US patients and a total addressable market of $670mn.

BIV201 is simply a liquid formulation of terlipressin which is used in some ascites patients. Its main advantage is convenience of delivery.

Financials

BIVI has a market cap of $202mn and a cash balance of $46mn. The company spent some $11mn in R&D and $4.5mn in G&A. At that rate, they have cash left for 3 more quarters starting from Dec 31. Thus, the company is not in a comfortable financial situation.

Bottomline

Anything to do with Alzheimer's is a big deal these days in biopharma, and even a hint of positive data can take a stock up, like we saw here. However, it is telling that the stock has settled down to more or less where it was before the data drop, and that too in just a month after the spike. I note a number of very in-depth articles on the science and so on, but frankly, I did not want to "get into" that sort of in-depth discussion. I took a very cursory view here, and my view broadly depended on two things - the rise and subsequent fall in the stock price, and the precarious cash position. There's another angle, as well - the stock is very, very heavily insider owned, and I am naturally wary of such stocks. Given all that, I, admittedly, avoided wasting my time delving into the trial claims and so on. Perhaps, if the company can secure funds and get its stock price moving, I will take another, more thorough look. Right now, I am firmly on the sidelines, which is a position I am comfortable with for most biopharma stocks developing therapies for Alzheimer's.

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