The commentary below was submitten by Dr. Daniel Chain, Chief Executive Officer of Intellect Neurosciences. BioMedReports reached out for his thoughts and comments after Lilly (NYSE: LLY) announced on Tuesday that it was ending its large clinical trials of the Alzheimer's drug Semagacestat.
Researchers and investors were dismayed by what the New York Times best described as the setback for Lilly: "The study seemed to raise questions about a leading hypothesis of the cause of Alzheimer’s and how to treat it. The idea, known as the amyloid hypothesis, says the disease occurs when a toxic protein, beta amyloid, accumulates in the brain. The idea is that if beta amyloid levels are reduced, the disease might be slowed, halted or even prevented if treatment starts early enough."
Since the news, a number of companies who are developing Alzheimer's drug have seen their shares hit, but perhaps none more painfully than Intellect Neurosciences (ILNS.OB).
The micro-cap company, which was profiled in a special report in July, is trading for mere pennies. It's founder and Chairman, Dr. Daniel Chain, is the inventor and patent holder for the technology platform on which most of the leading drug candidates (most visibily Bapineuzumab) are based. Until our report, no one really knew that ILNS held such a big stake in the race to find an answer to the Alzheimer's puzzle and the stock barely traded.
In recent days, Intellect Neurosciences has issued a number of very positive news releases including news about a U.S. Patent Allowance for Alzheimer's Vaccine With Potential to Delay Onset or Prevent Alzheimer's Disease as well as a European Patent and Trademark Related to Potential Treatment for Memory Loss and Dementia and an announcement yesterday that ILNS has locked the database of the Company's Phase 1b clinical trial for its lead Alzheimer's candidate, OXIGON(TM) (OX1). But even after the major clean-up of ILNS' debt and finances, the dark storm shadows cast by Lilly's failure have driven the stock price to near all-time lows.
Simply put, ILNS has become an even greater value play than when we first featured the company a month ago. In fact, we believe the stock price has no business being down at these levels.
We think of it this way: Even if ILNS were played this as one of our FDA extreme trades, given the number of expected catalysts and news from the numerous Phase I, II and III drug studies in which the company has royalty and licensing stakes, even skeptics would expect prices to rise significantly higher from here. Still, one can see that there is so much more to the company and it's proposition to investors, especially given the wide-open $250 billion market potential that Alzheimer's Disease offers. Dr. Chain explains:
In contrast to many biopharmaceutical companies focused on Alzheimer’s disease (AD), Intellect Neurosciences is developing multiple therapeutic approaches and technologies aimed at slowing down, arresting or preventing this devastating disease. The Company’s impressive pipeline includes preclinical and clinical stage products and its licenses to some of the world’s largest pharmaceutical companies cover late-clinical stage products under development. Each of the Company’s programs utilizes a separate and distinct therapeutic approach. Intellect’s patent and technology portfolio is the result of more than a decade of intense cutting edge research, including collaborations with scientists at leading academic institutions in the United States and abroad. Major experts in the Alzheimer’s fields serve as advisors to the Company, providing insight and expert opinions through their participation on the Company’s scientific and medical advisory boards, thus ensuring that the Company holds the pulse on latest developments in the field.
The Company’s overall approach is to reduce toxic amyloid beta that accumulates in the brains of Alzheimer’s patients and/or block its neurotoxicity. I remain firmly convinced, based on years of research and evidence from genetic, epidiemological, transgenic models and clinical data that the accumulation of soluble amyloid beta in the brain results in a neurodegenerative process that ultimately leads to AD. My opinion is shared by the vast majority of scientists and clinicians involved in Alzheimer’s research and I am unaware of any clinical or other data that casts doubt on my strong belief.
Unfortunately, there have been numerous false starts by other companies attempting to develop novel therapies to prevent the buildup of amyloid beta in the brain. The latest culprit was Eli Lilly who until recently was developing Semagacesta. This week it was reported that Semagacesta impaired Alzheimer’s patients in Phase 3 clinical trials and also caused skin cancer. An understanding of the background and the drug’s mechanism of action affecting the function of a physiologically important protein may be helpful to avoid casting the baby out with the bathwater when judging the merits of Intellect’s differentiated approach.
Amyloid beta lowering agents fall into three general categories: 1) Blocking the metabolism of the Amyloid Precursor Protein (APP) using protease (“beta or gamma secretase”) inhibitors; 2) stabilizing soluble amyloid beta to prevent formation of toxic clumps and 3) immunotherapy approaches to promote clearance of amyloid beta away from sites of damage in the brain.
Intellect’s approach is based on the principle that amyloid beta lowering agents must not interfere with the metabolism or functions of APP, which is widely distributed in the body. Numerous physiological functions are attributed to APP. It is present at the connections between nerve cells, on the surface of blood platelets involved in clotting and wound healing, in kidneys and in various tissues. The metabolism of APP to produce amyloid beta fragments is a normal physiological function that occurs throughout life. What is abnormal, however, is the accumulation of beta amyloid in the brain either because of over production or failure of natural clearance mechanisms, such as slowing of production or flow of the cerebrospinal fluid that carries nutrients to the brain and debris away from the brain. The abnormal accumulation of amyloid beta occurs in individuals susceptible by age, genetics or other risk factors, such as traumatic brain injury. For these reasons, Intellect is focused on methods to lower amyloid beta either by stabilizing the soluble forms of amyloid beta before they form toxic clumps or promoting clearance in other ways, such as using highly specific antibodies.
Our ANTISENILIN platform is a technology that is based on using monoclonal antibodies to target unique molecular signatures present at the ends of beta amyloid and that are absent from APP. Similarly, our RECALL-VAX technology is a method to immunize individuals so that they produce antibodies that only recognize amyloid beta and not APP. Our clinical candidate, OX1, binds to a different set of molecular signatures in amyloid beta and helps stabilize the non-toxic form. In addition, OX1 prevents oxidative stress and inflammation that would otherwise occur when amyloid beta interacts with certain types of receptor proteins on the surface of nerve cells in the brain. This dual mechanism facilitates clearance of amyloid and blocks its neurotoxicity. In contrast to Semagacestat, none of Intellect’s approaches affect the metabolism or function of APP.
We believe that the use of secretase (protein splitting enzymes) inhibitors, especially against gamma secretase, is flawed and potentially dangerous for several reasons:
1) Secretases usually act on more than one type of protein and therefore affect more than one metabolic process. For example, in addition to splitting APP, gamma secretase is critical in the related processing of the Notch protein, which is important for cell-cell communication. It involves gene regulation mechanisms that control multiple cell differentiation processes during embryonic and adult life. Notch signaling is dysregulated in many cancers and faulty notch signaling is implicated in many diseases, including Leukoencephalopathy and Multiple Sclerosis. Thus, inhibitors of gamma secretase may have harmful effects and are problematic as potential treatments for Alzheimer’s disease. Prior to the Semagacestat Phase 3 trials, a report published by Goldman Sachs in 2008 (Alzheimer’s Disease: Drug market poised for expansion”) described several side-effects associated with gamma secretase inhibitors, including diarrhea, ulcers, QTCs prolongation, skin rashes, high levels of white blood cells and anemia.
2) Several secretases exist that contain structural similarities at the “active site” where catalysis occurs. Consequently, it is difficult to achieve absolute specificity to block just one enzyme with chemical inhibitors, especially where several similar isoforms of the same enzyme exist in different tissues.
3) Secretase inhibitors slow formation of amyloid beta but do not clear beta amyloid after it is produced or reduce its toxicity.
4.) The physiological impact of the partially fragmented APP protein is unknown. I liken it to sap seeping from the trunk of a half sawn tree.
Intellect’s recent announcement concerning the data base lock of our Phase 1b trial in which OX1 was tested for safety and tolerability in 36 elderly healthy volunteers follows the success of an earlier Phase Ia trial in which 54 such subjects were exposed to increasing doses of OX1. The absence of any serious side effects (SAEs), even at high pharmacological doses, and other preliminary safety and pharmacology data suggests that the drug is safe and well tolerated in people, though definitive conclusions await ongoing analysis of the audited data, which is due in draft form in October. Previously we conducted chronic testing across species, including non-human primates. These data, combined with testing in various animal models of AD and other neurodegenerative conditions, provide encouragement to test for potential efficacy of OX1 in patients. Companies with drug candidates in Phase 2 clinical trials for AD are highly valued by investors because Phase 2 candidates often trigger collaborations with major pharmaceutical companies that bear the costs of commercialization and pay license fees, milestone payments and royalties. We plan to conduct a short, cost efficient Phase 2 trial as soon as financial resources are available. Several pharma companies with whom we recently interacted are eager to see the results of our planned trial.
It is noteworthy that the development costs for OX1 have been offset in part by grants from the National Institute of Aging, the Institute for the Study of Aging and the BIRD Foundation. We believe that these organizations support this work in view of the striking pharmacological properties of OX1, which acts in the brains of AD patients without interfering with the metabolism or function APP.
Disclosure: Long ILNS.OB
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