VIGL - Vigil Neuroscience: Interesting Early Data Wait For Phase 2

2023-09-18 14:38:55 ET

Summary

• Vigil Neuroscience is developing medicines for neurodegenerative diseases by restoring microglial function.
• Their lead candidate, VGL101, is a monoclonal antibody agonist of TREM2, a microglial receptor protein involved in regulating microglial activation and phagocytosis.
• VGL101 has shown favorable safety and tolerability in phase 1 trials, with proof-of-target engagement and pharmacologic activity. Phase 2 data is expected in Q4.

We briefly covered Vigil Neuroscience ( VIGL ) in 2021. However, that was right around when it IPO-ed, and a lot has happened since, so I will take a fresh look at this developer of medicines for neurodegenerative diseases by restoring microglial function.

Microglia has a central involvement in the pathogenesis of neurodegenerative diseases. Microglia are the resident immune cells of the brain and the central nervous system ((CNS)). They monitor the brain environment for pathogens, debris, and abnormalities. In neurodegenerative diseases, such as Alzheimer's, Parkinson's, and multiple sclerosis, dysfunctional microglia are often implicated in the chronic neuroinflammation observed. Understanding and modulating microglial responses is crucial for managing this inflammation.

Lead candidate VGL101 is a fully human monoclonal antibody agonist of TREM2, or the Triggering Receptor Expressed on Myeloid cells 2, a microglial receptor protein. Here's the pipeline:

TREM2 plays a significant role in neurodegenerative diseases, particularly in Alzheimer's disease ((AD)) and other disorders characterized by protein accumulation and neuroinflammation. TREM2 is involved in regulating microglial activation and phagocytosis, the process by which microglia engulf and remove cellular debris and abnormal protein aggregates. In neurodegenerative diseases, such as Alzheimer's and frontotemporal dementia, there is an accumulation of abnormal protein aggregates, such as beta-amyloid plaques and tau tangles. TREM2 has been shown to enhance microglial phagocytosis of these aggregates, thereby contributing to their clearance. TREM2 is also involved in microglial survival, as well as in promoting anti-inflammatory pathway signaling in the microglia.

The lead indication is ALSP, where VLG-101 is in a phase 2 trial. According to the NIH :

Adult-onset leukoencephalopathy with axonal spheroids and pigmented glia (ALSP) is a rare neurodegenerative disorder characterized by cerebral white matter abnormalities, myelin loss, and axonal swellings. ALSP is caused by mutations in the colony-stimulating factor 1 receptor gene.

There are 10k US patients for ALSP. There are no approved treatments and no experimental therapies either.

In preclinical testing, VGL101 was able to restore functionality of human microglia with compromised CSF1R. CSF1R (Colony Stimulating Factor 1 Receptor), also known as CSF1 receptor, is a protein receptor found on the surface of various immune cells, including microglia. It plays a crucial role in the regulation of microglial function and maintenance. Microglia depend on CSF1R activation by its ligands for survival and function. In preclinical tests, in a CSF1R Ligand Depletion Model (lab situation where the CSF1R ligands were depleted), VGL101 was able to restore functionality and improve survival by reducing apoptosis (cell death).

Last week, the company presented complete phase 1 data from VGL101. Data showed a favorable safety and tolerability profile as well as proof-of-target engagement in SAD/MAD (single ascending / multiple ascending dose) cohorts up to 60 mg/kg. Highlights :

• VGL101 demonstrated a favorable safety and tolerability profile in SAD and MAD cohorts at doses up to 60 mg/kg.

• VGL101 showed linear and predictable pharmacokinetic characteristics and an observed half-life that supports monthly dosing.

• The Phase 1 cerebrospinal fluid ((CSF)) biomarker data demonstrated pharmacologic activity across multiple measures:

• Demonstrated proof-of-target engagement based on dose-dependent, robust, and durable reductions in soluble TREM2 (sTREM2) following repeat dosing.

• Increased soluble CSF1R (sCSF1R) and osteopontin levels were durable following repeat dosing indicating that VGL101 impacted microglial activity downstream of TREM2 target engagement.

So far so good; the company will present 6-month interim phase 2 IGNITE study proof of concept data from 6 patients who received 20 mg/kg of VGL101 in Q4.

A second asset, VGL-3927, an oral small molecule TREM2 agonist, will begin phase 1 clinical trials targeting Alzheimer's Disease shortly. This is the big prize, however, it comes with caveats; the FDA has put a partial clinical hold on the molecule. The hold basically tells them to continue dosing in healthy volunteers but has put limits on the maximum exposure limit of the molecule. The company believes the limit is well beyond the preclinically predicted efficacious dose of VG-3927, and thus this partial clinical hold has no bearing on at least initial dosing.

This is not such a bad thing at all, relatively speaking. To be noted, Denali's competing TREM2 agonist DNLI919 was recently abandoned after the FDA put a full clinical hold on it, citing safety concerns. Hematologic effects were observed at the highest dose tested, which, though moderate and reversible, were enough to make the FDA stop the trial. It seems though that the "totality" of the data and not just these possibly avoidable side effects led to the abandonment. This is something to bear in mind for VIGL investors.

Financials

VIGL has a market cap of $205mn and a cash balance of $150mn. R&D expenses for the second quarter ended June 30, 2023, were $14.9 million, while G&A expenses for the second quarter ended June 30, 2023, were $7.0 million. At that rate, they have a cash runway of some 5-6 quarters, or into 2025.

VIGL stock is largely held by PE/VC firms. Key holders are Atlas, Vida, and Northpond. Atlas is the original backer of the company and has a partner as the Chairman of the Board. Insiders regularly purchase stocks, which is a positive sign.

Risks

VIGL is a very early-stage company built with Amgen's assets, and until IGNITE produces proof of concept, there is no proof of concept. The TREM2 approach has been hurt by Denali's failure, and one wonders what implications, if any, it will have on VIGL. The FDA will be quite lenient with a rare disease target and has even given a fast track to VGL101 for ALSP. But when it comes to Alzheimer's, both the FDA and the market will be super cynical.

Bottom line

VIGL has an interesting approach and in its own small area, it has tried to cover all bases, with both an mAb and a small molecule, and with early preclinical and clinical data that were positive. They have been cautious, working against a rare indication first before going for the big prize. I like the stock so far, and I will keep a close watch on its future.

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