NGENF - Trading Ideas On The Upcoming CTAD 2022 Conference

Summary

• The Clinical Trials on Alzheimer’s Conference will take place from November 29, 2022 to December 2, 2022.
• Representatives of several listed companies will present data, including Eisai, Anavex, BioVie, Athira Pharma, Cassava Sciences and NervGen.
• This conference will in any case be one to remember for the Eisai data alone, but I expect more interesting data may be published.
• I am giving my thoughts on possibly actionable ideas.

Introduction

Alzheimer’s conferences have in the past, more than once, shown to be either catalysts or exactly the opposite for companies’ stocks. With the amyloid-targeting field being hot again, and by a larger extent the Alzheimer’s field, I am setting out my thoughts on the upcoming CTAD 2022 conference in San Francisco. Several of the companies which I am following in the space will be presenting during that conference, and the stocks of some of these could be tradeable. I have not presented my thoughts on the reporting of stocks which I consider less likely to be tradeable, such as Vivoryon ( VIVRF ) and Annovis ( ANVS ).

Eisai – more data on the 27% slowing of cognitive decline

On September 28, 2022, Eisai ( OTCPK:ESALY ) announced topline results from its Phase 3 trial entitled Clarity AD. Clarity AD tested the effects of anti-amyloid antibody Lecanemab in 1,795 patients diagnosed with Alzheimer’s disease. The investor community responded very positively to these results. Seeking Alpha contributors Edmund Ingham , Lane Simonian , Keith Williams and Derek Pitman/Betsy Yang have given their thoughts on the matter. There has been skepticism as well, coming from among others Seeking Alpha contributor Derek Lowe , considering that such a difference may not even be noticeable by patients, family and caregivers.

The news was fairly short, and essentially came down to three points: Lecanemab was shown to slow down cognitive decline in Alzheimer’s by 27% on the CDR-SB: Clinical Dementia Rating-Sum of Boxes rating scale, all key secondary endpoints of the trial were met, and incidence of ARIA-E or amyloid-related imaging abnormalities in the form of brain edema/effusion was 12.5% in the Lecanemab group compared to 1.7% in the placebo group. ARIA is – so far - a typical side effect of anti-amyloid therapies, and can be considered a serious adverse event. Recent news suggested that a patient on the trial passed away after bleeding in the brain, which is very similar to the report of an ARIA-linked patient death having come out on Biogen’s Aduhelm a year ago.

Eisai announced that it would provide further data at CTAD 2022. I would assume there will be a massive amount of new information ahead of us, and am eagerly looking forward to that. As for the market’s reaction to that news, it was a rally in anti-amyloid stocks that I have not seen before. The market decided to forget that anti-amyloid antibodies have led to an abundance of failures in Alzheimer’s disease. Pretty much all of the companies that had an anti-amyloid antibody in their pipeline saw their market caps go up. ‘Big hitters’ riding on the coattails of Lecanemab’s news were Biogen ( BIIB ), Eisai’s partner, with a 42% gain since that news equivalent to $12 billion, Eli Lilly ( LLY ) with a 13% gain since that news representing a $40 billion market cap gain, and Roche ( RHHBY ) with a 5% gain since that news representing $19 billion.

I have covered Acumen ( ABOS ) which has since gone down 30% with a sell rating. Seeking Alpha contributor Edmund Ingham has covered Prothena – which saw insiders massively executing planned sales - yet did not go down. Both are companies with a Phase 1 drug in their pipeline, which had seen their market caps double on the back of Eisai’s news. Other smaller companies that had gone up on the news that are worthwhile mentioning were the following. Bioarctic (BIOABB:SS), the originator of Lecanemab which could be due milestone payments and royalties, went up 173% on the news but has come down a bit since then. AC Immune ( ACIU ), with several anti-tau and anti-amyloid-beta drug candidates in its pipeline, went up 30% on the news of which it has lost about 9% on a volatile trading trajectory. MorphoSys ( MOR ), the original developer of Roche’s gantenerumab, had originally gone up 23% on the news, but has since known a very volatile trajectory. The below chart, excluding Bioarctic as it wasn’t chartable, shows the other mentioned companies and their percentage gains since the Lecanemab news.

The question is whether any of these are tradeable going into CTAD 2022. My view here is that from a scientific point of view, Eisai will show good and consistent results coming from an anti-amyloid antibody, which obviously does some good in patients. I believe that Lecanemab therapy will not be found sufficient as a treatment for Alzheimer’s, but it is a start, also in the long-term future as an add-on to combination therapy. Even from the point of view of anti-amyloid antibodies, I believe the privately-held Alzheon may have a better drug in store.

Those who have read me before will have taken note that several other, and possibly far better, drug candidates are forthcoming. For now, there’s not much more the world has got for a potentially disease-modifying Alzheimer’s drug, and so the market reacts in abundant joy.

Eisai will obviously get center stage on the first day of CTAD 2022. This will be their presentation.

From an investor’s point of view, I can understand Eisai’s and to an extent Biogen’s gains, but I do not share the market’s opinion on the others. As one will remember from Biogen’s Aduhelm, too many hurdles will need to be overcome for an anti-amyloid antibody to be successfully commercialized, and this comes on top of other trials which may be successful with less side effects, some of which I have already reported on . The combined added value for the above companies is close to $80 billion, on the coattails of one drug that may not have a discernable effect on patients’ lives, pricing or potential Medicare coverage of which is unknown, and which comes with side effects. My view is that the market got overly excited here. Back in July 2021, the market got excited by the upcoming news on nine-month data from Cassava Sciences’ simufilam ( SAVA ). On that good news, the stock had sold off. Subsequent short action and fraud allegations made it impossible for the stock to recover. Sales on good news that has been awaited are typical to trading, and potential investors should be aware of that. My best guess would be Prothena and Eli Lilly could be due for a correction in the near future.

Roche – Gantenerumab’s topline Phase III readout from two trials

At CTAD 2022, Roche will present topline results for its Phase III Graduate trial with its anti-amyloid antibody Gantenerumab. Roche has always been very committed to tackling Alzheimer’s and other neurodegenerative diseases, which was again highlighted at this year’s AAIC conference where it presented 41 abstracts. In light of recent events, the company has been somewhat out of the spotlight when it comes to its neurodegenerative pipeline. Roche has two Phase 3 trials running at the same time, and readout out of those trials has been considered ‘the hottest remaining catalyst of 2022’. Roche also has another Phase 3 trial for Gantenerumab running, which it initiated earlier this year. This is what Roche will present on November 30, 2022.

From a scientific point of view, Lecanemab and Gantenerumab do not exactly target the same amyloid proteins. I have explained in my coverage of Acumen why that may be more important than some may think, as some amyloid proteins may be more pathogenic than others. Gantenerumab acts more like Biogen’s Aduhelm. Gantenerumab’s past is somewhat checkered, but it did receive Breakthrough Therapy Designation on the basis of its earlier data. The long version of that past can be found on the Alzforum website, out of which I mostly conclude that right dosing is crucial, and that the higher dosage could show some efficacy. Roche had terminated earlier trials with Gantenerumab entitled Scarlet RoAD and Marguerite RoAD, after failing interim analyses, but did initiate open label extension studies. Those had shown that treatment with the high dose lowered amyloid in 37% and 51% of patients to below the threshold at years 1 and 2 of treatment respectively, with ARIA being seen in about one-third of patients.

The Phase 3 Graduate 1 and 2 studies were initiated in 2017 for prodromal or mild, amyloid-confirmed Alzheimer’s disease patients, with the CDR-SB rating scale as primary endpoint. Data will be presented at CTAD 2022, whether or not it's in the form of a pooled analysis, but it is possible that Roche already announces them beforehand.

My view at this point is that Roche has had a nice ride on the basis of the Lecanemab news, but that the jury is still out on gantenerumab. Eisai may have also set a new bar. If gantenerumab does better than a 27% slowing of cognitive decline, meeting all key endpoints, or as to the incidence of ARIA, Roche’s news could be interpreted positively. So far, I am not seeing that possibility emerging clearly from the data that has been presented so far.

Biogen – Aduhelm data

On June 7, 2021, the FDA has granted provisional approval to aducanumab, commercialized under the name Aduhelm. That approval was granted on the basis of the reduction of amyloid, as a surrogate endpoint, without proven efficacy on cognition. Aduhelm has been associated with ARIA-E and ARIA-H, i.e. cerebral oedema and intracerebral hemorrhage, with the incidence of ARIA-E in the high-dose group at 35.2% being significantly higher than that of Lecanemab. Biogen is allowed to do a trial post approval, which it did not seem to be in a hurry to start with, and which may only have results in some years. Meanwhile the FDA can still withdraw approval, but it does not seem to be inclined to do so at this time. That conditional approval is marred by controversy, as some advisors to the FDA had spoken up against the approval, three have resigned from the FDA’s advisory board, key opinion leaders and well-respected clinics such as Cleveland Clinic and Mount Sinai decided not to administer the drug, and as the drug came with a massive yearly $56,000 price tag which was soon after cut in half . In the beginning of 2022, it has been decided that Medicare for the drug and other amyloid-targeting therapies would be limited to patients on trial, effectively denying intervention to any patients outside the trial. Biogen’s sales are absolutely lackluster, and Biogen wound down its Aduhelm marketing to the minimum in light of this. It even recently terminated a related trial meant to provide real-world data on use of the drug. Aduhelm will be featured in one oral communication where it will be compared with Lecanemab, and one poster presentation, as shown below.

Ahead of that, An overview of the different anti-amyloid antibodies Aduhelm, Lecanemab and Gantenerumab can be found here . My feeling here is, just as had happened previously, that eventually the investor positivity surround this newly gained interest in amyloid-targeting therapies will die a slow death. One may recall how Biogen’s shares had surged on the Aduhelm-approval data, to then sell off dramatically. One could blame a biotech bear market for that, but as it happens, contrary to the biotech realm, big pharma had shown quite resilient to broader market tendencies.

I had given Biogen a Buy rating on April 27, 2022. Since then, the company’ stock has moved up 36%. That percentage largely exceeds my valuation expectations, but it’s also on the back of unexpected news. I’m not ready to give the company a Sell rating just yet.

Anavex – topline Phase 3 data for Anavex 2-73

Anavex ( AVXL ) is the fourth of the big four trial readouts in Alzheimer’s disease that investors have been awaiting this year. Topline data will be reported on a Phase 2b/3 trial of Anavex 2-73 in Alzheimer’s. Anavex 2-73 is a SIGMAR1 agonist. I have covered Anavex on September 19, 2022, and the company has been covered more frequently by Seeking Alpha contributor Lane Simonian . On October 17, 2022, Anavex has announced that it would present a late breaking oral communication at CTAD 2022. That presentation will take place on December 1, 2022, and looks as follows.

I have taken a stake in Anavex ahead of that data, which I did not take prior to the press release of October 17, 2022. I consider Anavex a high-risk bet. For me, the threshold is where Eisai’s Lecanemab has placed it, and I believe Anavex 2-73 stands chances to outperform Lecanemab on an efficacy level. Additionally, Anavex 2-73 does not seem to come with side effects. But contrary to others, I have a hard time making much of the data that has been released so far.

With a market cap of $966 million, there is still significant upside to the stock in case of success, as I had explained in my coverage. Of note, Anavex’s Phase 3 trial does not run in the US which a Seeking Alpha contributor had given his thoughts on here . Also, the company recently changed the trial’s primary endpoint from ‘Change from baseline to week 48 with ANAVEX2-73 in cognition according to the Alzheimer Disease Assessment Scale-Cognition (ADAS-Cog)’ to ‘Reduction in cognitive decline assessed from baseline over 48 weeks with ANAVEX2-73 compared to placebo using the Alzheimer Disease Assessment Scale-Cognition (ADAS-Cog)’. Whether or not change has been made to allow a more perfect comparison with Eisai’s Lecanemab is unclear. On the basis of that change, I am considering the chances of Anavex 2-73 surprising the market and showing an improvement in cognition more unlikely than I had done before, but showing improvement in cognition may not be necessary to be successful in Alzheimer’s disease at this time. Finally, it is not impossible that Anavex releases topline data ahead of the CTAD 2022 conference, and Anavex should also be presenting further data in the coming months from a Phase 2 open label extension study for Parkinson’s Disease Dementia and a separate Phase 2/3 trial for pediatric Rett syndrome.

BioVie – NE3107 data supporting cognition improvement in a small open-label study

I have covered BioVie ( BIVI ) at more than one occasion over the past half year, and the company’s stock has gone up about 120% since I first covered it. I’d like to think of BioVie’s NE3107 as similar to INmune Bio’s ( INMB ) XPro, which I consider my high-conviction idea . BioVie is repurposing a drug candidate that had originally been designed as an anti-diabetes drug, but which the company claims has shown remarkable effects in reducing inflammation without compromising the immune system. BioVie has stressed repeatedly that it had been lucky with this drug. The company has recently announced remarkably good and actually quite extensive data from a small open label study in Alzheimer’s disease, suggesting an improvement in cognition in the overall study population. In my latest coverage, I have set out striking similarities with data released by Cassava Sciences, which could make sense as both drug candidates seem to reduce inflammation.

On December 2, 2022, BioVie will present the following oral communication on CTAD 2022:

Additionally, the company will present two poster presentations:

That is again quite a lot of data to look forward to. I consider the neuroimaging data as well as biomarker assessments as most interesting. If the company would have little to tell, it seems unlikely that it would be presenting three times at the same conference. I am particularly interested on NE3107’s effort on glutathione, a powerful antioxidant which has once been called a ‘molecular whistleblower for Alzheimer’s disease.’

As announced in my articles, at a market cap of $122 million, there is still tremendous upside for this stock. BioVie will report data on its Phase 2 trial in Parkinson’s disease later this year. It has a Phase 3 trial in Alzheimer’s midway, which it intends to report on in the middle of 2023. Obviously, as a drug targeting the highly relevant neuroinflammatory aspect across neurodegenerative diseases, the market may be mispricing the potential here completely. It is my strong belief that these times will not continue for long anymore.

Athira Pharma

I have covered Athira Pharma before , with my latest article’s title suggesting Fosgonimeton may outperform Lecanemab in Alzheimer's. That is a bold stance to take, but I believe it is vouched for. Athira’s drug works on the HGF/MET pathway. The company has plenty of cash, and has been punished for having correctly reported a trial which it considered to be of guidance to its currently ongoing and potentially pivotal Phase 2/3 trial. It results from that trial that Fosgonimeton does not work together well with standard of care, but that Fosgonimeton’s monotherapy arm showed clear potential efficacy on the ADAS-Cog rating scale. That potential efficacy, even in the worst possible scenario, seems to still clearly exceed the level of slowing of cognitive decline as shown by lecanemab. That data comes from a placebo-controlled randomized trial, and is confirmed by Neurofilament Light biomarker data . Athira will now present the following at CTAD 2022:

Athira Pharma has now successfully redesigned its Phase 3 trial, with a nod from the FDA after an efficacy analysis. Meanwhile the past months have seen considerable insider buying, with the latest being

At a market cap of $118 million and with a cash position as of June 30, 2022 of $282.2 million, I believe the company’s shares come as a bargain. The above presentation at CTAD 2022 could have some immediate upside on the stock, but I’m not expecting major things from it either. I would rather believe the potential upside will come from a slow move towards the data readout in the middle of next year.

Cassava Sciences

Cassava Sciences needs no introduction. The company has been covered abundantly on Seeking Alpha. Cassava Sciences’ drug simufilam targets filamin-A, which the company claims is misfolded in Alzheimer’s disease. The company is unfortunately marred by controversy, mostly since the filing of a Citizen Petition which had been incorrectly presented as a whistleblower action, but was actually initiated by scientists who had shorted the company’s stock. After that initial short action, shares of the company have remained low compared to previous levels.

Cassava Sciences will present the following poster presentation during CTAD 2022.

Four scientists who have continuously expressed concerns on Cassava Sciences’ data, and have started the website Cassavafraud , will also be presenting at CTAD 2022 with the following poster.

Looking at some recent tweets by two scientists on that team, the poster may relate to concerns over Cassava Sciences:

Cassava Sciences has a market cap of $1.34 billion. In July 2021, its market cap had been above $4 billion. I feel things can go either way here, but did want to make the remark that investors on the short side may have something in the works.

NervGen

I have covered NervGen, a Canadian company which had not seen coverage on Seeking Alpha beforehand, on September 28, 2022. The company has one lead asset, NVG-291, which it calls a pipeline in an product. This asset is in a Phase 1b/2a ascending-dose study for spinal cord injury, at this point the company’s lead indication. Preclinical work is pretty amazing, and the company claims the drug may show – considerable – effect in Alzheimer’s and multiple sclerosis as well. Quite unexpectly, to me at least, NervGen will present results from a Phase 1 study in individuals with mild cognitive impairment or mild dementia due to Alzheimer’s disease on December 2, 2022. Some data are out already; NVG-291 is reported to be safe, and some data is out already as presented at AAIC 2022.

NervGen faces two main issues for me: the announced Nasdaq uplisting takes a while, and NVG-291 faces a clinical hold pertaining to men, as it had shown adverse effects in male rats but not in male dogs. The company has an $80 million market cap (CAD $110 million), so there is room for upside, but at the same time the trial is early-stage. I am not expecting much from the above readout.

Conclusion

I have set out above some ideas which I consider potentially tradeable for the upcoming CTAD 2022 conference.

I expect anti-amyloid therapies such as Eisai’/Biogen’s lecanemab, Biogen’s Aduhelm or Roche’s gantenerumab, to draw most attention during that conference. My view is that the stocks of some companies with amyloid-targeting antibodies may have been overbought over the past weeks, and that CTAD 2022 could serve as a sell the news event.

Anavex may surprise the market either positively or negatively, with its Phase 2b/3 trial readout for Anavex 2-73. Good news here could see the stock go up on heavy buying.

BioVie’s neuroimaging and biomarker data may be able to give further confirmation to the company’s recent readout of cognition data in a small open-label Phase 2 trial, in view of its upcoming Phase 3 readout scheduled for mid-2023.

Athira Pharma’s Fosgonimeton may have a unique mechanism of action which may outperform Eisai’s Lecanemab, and is presenting a poster connecting biomarker and cognition data. The company has a potentially pivotal trial readout in Alzheimer’s scheduled to be read out mid-2023 as well.

Cassava Sciences will be presenting a poster as well, as will well-known investors and scientists, some of which are publicly short the company’s stock.

Finally, NervGen will present further data from its Phase 1 trial in Alzheimer’s disease.

For further details see: