VIGL - Vigil Neuroscience: Interim Data Sheds Light On Possible Accelerated Pathway

2023-11-20 19:34:03 ET

Summary

• Positive interim results reported from phase 2 IGNITE study using iluzanebart for ALSP treatment from 6 patients.
• Additional results from phase 2 IGNITE study usung iluzanebart for the treatment of patients with ALSP from both 20 mg and 40 mg doses expected Q3 of 2024.
• Data from IGNITE study and ILLUMINATE study are going to be discussed with the FDA so that the company can possibly obtain Accelerated Approval pathway of iluzanebart for ALSP.
• Phase 1 topline data using VG-3927 in healthy volunteers expected by mid-2024; This drug being advanced to treat patients with Alzheimer's Disease.

Vigil Neuroscience ( VIGL ) has made great progress in being able to advance its pipeline. It just reported interim results from its phase 2 IGNITE study, which used its drug iluzanebart [formerly VGL101] for the treatment of patients with adult-onset leukoencephalopathy with axonal spheroids and pigmented glia [ALSP]. Such results showed that the drug had a good effect on improving biomarkers outcomes for MRI and NfL. In addition, to the potential for another biomarker potentially being able to predict ALSP disease outcome. Despite these positive interim results from 6 patients, the stock traded lower by 40% on the news. There is no reason for the stock to be trading lower in such a manner, which likely means this is a sell-on-the-news type of event.

There are two ways whereby the stock might be able to see a recovery. The first way is that with this interim data from IGNITE along with a historical study it is running known as ILLUMINATE, it believes it might have enough to generate discussions with the FDA to discuss the potential of a possible Accelerated Approval pathway. The second way would be with the release of additional data from this phase 2 IGNITE study, which is expected in Q3 of 2024. This is going to include additional patients given 20 mg doses of iluzanebart, along with a higher dose of 40 mg as well.

Iluzanebart Might Possibly Have Accelerated Pathway

The reason why I believe that investors might want to keep an eye on this biotech is because of the possibility of recovery here. The interim data from the phase 2 IGNITE study, using iluzanebart for the treatment of patients with ALSP, caused the stock to trade lower as I noted above. However, I don't believe that the selloff is justified and I will be going over why this might be the case. The first reason is there will be no modification at all, in that the IGNITE study is going to continue as planned with no changes being implemented. There was a favorable safety and tolerability profile observed for these patients who took 20 mg of iluzanebart for starters. Secondly, there were supportive changes observed with respect to Neurofilament Light Chain [NfL] and MRI measurements based on ventricular volume and gray matter volume. It was even shown that sCSF1R could support the notion that this might be a key biomarker of showing ALSP disease pathology. The second reason is because there is the possibility of a positive outcome of a discussion with the FDA.

With these recently reported 6-month interim data from the phase 2 IGNITE study, along with the ILLUMINATE study [natural history study] it intends to meet with the FDA to discuss the potential for an Accelerated Approval pathway. It is not guaranteed to obtain such a regulatory pathway, but an update of this magnitude, I believe, would have a positive impact on the stock price. The third and final reason why I believe that investors should keep an eye on this is because of additional data to be released from the IGNITE study. It is expected that additional results from this trial, including all patients treated with 20 mg and 40 mg of iluzanebart for ALSP over a 6-month period, will be released in Q3 of 2024. It is not guaranteed that increasing the dose to 40 mg will yield superior biomarker data or other pharmacological data, but indeed it is possible.

Financials

According to the 10-Q SEC Filing , Vigil Neuroscience had cash, cash equivalents and marketable securities of $133.6 million as of September 30th of 2023. It has plenty of cash and there is no near-term risk of dilution in my opinion. I state that because it believes that it has enough cash to fund its operations into Q1 of 2025. However, there are going to be two data releases expected towards the latter half of 2024. This is going to be the release of additional results from the phase 2 IGNITE study using iluzanebart for the treatment of patients with ALSP and also from the phase 1 study from healthy volunteers for VG-3927. VG-3927 is being advanced for the treatment of patients with Alzheimer's Disease [AD]. Such data is expected by mid-2024 and could be another point whereby Vigil Neuroscience could choose to raise cash.

Risks To Business

There are several risks that investors should be aware of before investing in Vigil Neuroscience. The first risk to consider would be with respect to the advancement of its drug iluzanebart, which is being advanced for the treatment of patients with ALSP in the phase 2 IGNITE study. That's because there is no guarantee that the next set of data from this particular study, including additional patients given the higher 40 mg dose of this drug, will end up increasing efficacy. Nor, that such a higher dose of iluzanebart will end up being safe. The second risk to consider would be with respect to the possible FDA discussion.

Vigil hopes to meet with the FDA and show it data from both IGNITE and ILLUMINATE, in hopes of discussing the potential for an Accelerated Approval pathway of iluzanebart for ALSP. There is no assurance that the meeting outcome will come out as intended, nor that the biotech will be allowed to obtain Accelerated Approval from the FDA using this drug for this indication. The third risk to consider would be with respect to the advancement of VG-3927, which is being advanced for the treatment of patients with Alzheimer's Disease. The hope is that the topline data to be released from the phase 1 healthy volunteers study ends up being safe and positive. However, there is no guarantee that this will be the case.

The stock is down by 70% over a one-year period and I believe a big reason why would be because of the Alzheimer's indication. Which brings up the fourth and final risk, which is the use of TREM2 agonism against Alzheimer's Disease. That's because TREM2 targeting of this particular indication might be viewed in a negative manner by the market and it might be due to what happened with a failed trial from another biotech. Denali Therapeutics ( DNLI ) and its partner Takeda Pharmaceuticals ( TAK ) decided to end development of a TREM2 targeting drug known as DNL919, which was being advanced for the treatment of patients with Alzheimer's Disease. It was noted that in its early-stage phase 1 study that there were safety signals observed at the highest dose tested for this drug to treat this patient population. Regardless, it was stated that the "therapeutic window was narrow" and both companies saw no path forward . Thus, they both decided to end development of DNL919 for Alzheimer's Disease thereafter. I think it's okay to be concerned with respect to the use of this drug against this indication. Especially, since the phase 1 healthy volunteer study using VG-3927 for AD was allowed to proceed forward with a partial clinical hold related to maximum exposure limit. I believe that this is why the stock has likely dropped, but I don't believe that such a drop is warranted until the phase 1 healthy volunteer data is released first. Should the phase 1 safety data show terrible signals in terms of safety, then I believe investors should be worried. Regardless, the company still has the other drug in its pipeline VGL101, which has a completely different mechanism of action than VG-3927.

Conclusion

Vigil Neuroscience has made great progress in advancing its pipeline. The interim data was only from 6 patients, but the drug was shown to be safe and tolerable, along with the fact that there were improvements in NfL and MRI biomarkers. I don't believe that the 40% drop in stock price is warranted, but there are a few ways in which it is possible for the stock to recover. These would be with respect to both ways I discussed above, which are the potential to discuss an Accelerated Approval pathway for iluzanebart for ALSP and then the additional data to be released from the phase 2 IGNITE study in Q3 of 2024. There is even going to be a healthy volunteers data release from a phase 1 study, using VG-3927 for the treatment of patients with Alzheimer's Disease. With the potential for an Accelerated Approval pathway discussion with the FDA, plus a few data readouts in 2024, I believe that investors might be able to benefit from any gains made.

For further details see: