|Bapineuzumab and Intellect Neurosciences Attracting Attention|
|Wednesday, 21 July 2010 07:54|
The race to find a cure to Alzheimer's is heating up. This past weekend, the New York Times ran a multi-page special report on a new type of drug study that will, in the boldest effort yet, test the leading hypothesis about how to slow or stop the terrifying brain disease.
A micro-cap company trading for mere pennies, Intellect Neurosciences, Inc. (ILNS.OB), has been getting increased attention because it's founder and Chairman and Chief Executive Officer, Dr. Daniel Chain, is the inventor and patent holder for the technology platform on which all of the leading drug candidates (most visibily Bapineuzumab) are based. See the "big picture" diagram here.
Thus far, the U.S. Food and Drug Administration has approved only two types of medications for Alzheimer's and both only seek to treat the cognitive symptoms of the disease, not the disease itself and until last week, no one really knew that ILNS held such a big stake in the race to find an answer to the Alzheimer's puzzle.
Last week in Hawaii, the Alzheimer's Association convened an International Conference (ICAD) to look at the latest research on diagnosing, treating and preventing the disease. During and following that conference, at least two other Big Pharma and one biotech company approached representatives of Intellect Neurosciences, Inc. (ILNS.OB) about the company's ANTISENILIN®, proprietary anti-beta amyloid monoclonal antibody technology.
According to our sources on Wall Street, the company and it's major shareholders are now looking at various options including the possibility of engaging a major investment bank to see how best to deal with the growing interest in the company and its science.
"One big pharma is particuarly interested in buying out the company, but there is also a biotech company with money who may be interested in partnering with the company to develop their OXIGON® drug candidate," said one source who spoke off the record, but is very familiar with the new developments.
In addition, we've learned that at least two investment banks have been approached about an engagement to "look at various scenarios" involving the company and it's proprietary platform. The scenarios include a sale of the company, a publicly traded spin-off, and/or additional licensing opportunities.
While officials at the company would not comment, one industry observer says interest from Big Pharma makes sense. "If you look at the current valuation of the company, the royalties it is due from multiple Phase I, II and III trials, as well as their own pipeline it's clear that any big pharmaceutical company who wants a big horse in the race could simply come in and steal the company at these price levels. It would save them a great deal of time and energy, not to mention money. It also makes sense that the company would be interested in possibly spinning off their drug development candidate, especially if the share and ownership structure benefits the current company and it's shareholders."
That spin-off scenario would not be unlike the 2008 move by CytRx Corporation (Nasdaq: CYTR) which spun off their own majority-owned subsidiary, RXi Pharmaceuticals Corporation (NasdaqCM: RXII). That move gave CYTR the opportunity to raise money for their RNA interference division and the share structure of the new company was much more attractive to investors. It also gave shareholders an ownership stake in the new company.
OXIGON® is being developed by ILNS as a promising potential disease-modifying drug for Alzheimer's disease based on its unique combination of pharmacological properties. The drug has the potential to protect the brain and other tissues against oxidative stress and in addition appears to stabilize the less toxic soluble forms of beta-amyloid preventing aggregation into more toxic forms. As we reported previously, it appears that Dr. Chain may have kept the best flavor (of the various anti-beta amyloid monoclonal antibodies which he has licensed to Big Pharme) for himself and that certainly makes ILNS an attractive target on multiple levels.Shares of ILNS.OB closed in positive territory yesterday, and technical analysis of the chart appears to indicate a nice set-up ready for a run higher from these levels. Once again, I feel strongly that the upside here is far greater than the downside, particularly if you study the price action and its historic levels.
Bapineuzumab, in Phase 3 clinical trials, is being co-developed by Pfizer, Wyeth, Elan and Johnson & Johnson, and Ponezumab, in Phase 2 trials, is also being developed by Pfizer. Both drug candidates are based on the use of antibodies that uniquely bind molecular signatures at the ends of beta amyloid formed when the Aβ toxin is generated. This is the fundamental principle of Intellect's ANTISENILIN(R) technology, which is intended to promote the clearance of amyloid protein away from sites of damage in the brain while minimizing the potential for adverse effects that may result from less specific binding.
Disclosure: Long ILNS