AC Immune’s Alzheimer’s Setback, And Other News: The Good, Bad And Ugly Of Biopharma (NASDAQ:ACIU)

AC Immune suffers setback on Alzheimer’s front

AC Immune SA (ACIU) recently reported topline data from a Phase 2 trial of semorinemab in early Alzheimer’s disease. The data failed to meet its primary efficacy point as well as two secondary endpoints. The company is currently carrying out Second Phase 2 LAURIET study of semorinemab in patients with moderate AD.

The primary endpoint of the trial pertained to reduction in decline on Clinical Dementia Rating-Sum of Boxes compared to placebo. The trial also failed to meet two secondary endpoints consisting of Alzheimer’s Disease Assessment Scale-Cognitive Subscale 13 and Alzheimer’s Disease Cooperative Study Group – Activities of Daily Living Inventory.

The Phase 2 TAURIEL trial is a 73-week, double-blind, placebo-controlled study. The main aim of the trial is to determine if the drug candidate can inhibit the rate of clinical decline in early AD. Prof. Andrea Pfeifer, CEO of AC Immune said, “We believe the full data analysis of this first-of-its-kind study will yield information about this promising target that will advance our understanding and inform future efforts to successfully develop effective therapeutics for neurodegenerative diseases.”

However, AC Immune has robust development pipeline of various anti-Tau clinical candidates. Its ACI-35.030 works by generating a polyclonal antibody response which focuses on epitopes that deviate from the epitope targeted by the monoclonal semorinemab. This is the first anti-phospho-Tau vaccine to progress to Phase 2 clinical development.

AC Immune’s ACI-3024 is a first-in-class small molecule that penetrates through cell membranes to permit for the control of intracellular Tau aggregates. Another product candidate Tau-PET tracer is a prospective critical tool to aid development of anti-Tau approaches. PI-2620 is currently a part of a longitudinal Phase 2 study in patients with AD and a Phase 1 study (test/retest) in patients with progressive supranuclear palsy.

AC Immune is a clinical-stage biopharmaceutical company. It is mainly invested in developing precision medicine for neurodegenerative diseases. The company uses its two proprietary platforms for development purpose. These platforms are SupraAntigen and Morphomer. The main use of these platforms is with regard to designing, discovering and developing small molecule and biological therapeutics. These technological platforms are used for developing diagnostic products for neurodegenerative diseases caused by misfolding proteins.

AC Immune has robust development pipeline with three diagnostic and nine therapeutic product candidates. Six of these are in clinical trial stage. The company collaborates with major pharma companies such as Janssen Pharmaceuticals and the Roche Group for various projects.

Analysis: AC Immune’s SupraAntigen and Morphomer platforms target a global market of ~55 million patients. The company’s market capital reduced nearly 50% on negative trial results reported 9/23/2020, and currently is $359.15 million at a price of $4.76, near 52 week low in a range of $4.07 to $13. Majority of the 76.74 million shares are held by PE/VC firms and the public with ~39% and ~30% respectively. Hedge funds, institutions and insiders hold ~14%, ~12% and 4.43% respectively. Wall Street analysts are bullish on average with a score of 4.25/5 and a price target of $12.21. The company had revenue of $114.74 million in fiscal 2019, but estimates for 2020 and 2021 are lesser at $15.83 million and $49.22 million respectively. Cash balance is $277.02 million while cash burn and revenue cost for the TTM was $18.8 million and $57.2 million respectively.

Investment Thesis: The stock is currently trading at deep discount after Alzheimer drug candidate debacle. However, the company has decided to continue with another mid-stage trial and the results are due early next year. AC Immune also has well diversified development pipeline to fall back upon.

Galera Therapeutics provides positive update of GC4419 in pancreatic cancer

Galera Therapeutics Inc. (GRTX) announced interim data from its trial of GC4419 in combination with stereotactic body radiation therapy in patients with locally advanced pancreatic cancer. The interim data includes all patients followed for a minimum of three months and 19 for more than one year, with data through August 24, 2020.

Phase 1/2 trial is a randomized, double-blind, multicenter, placebo-controlled pilot dose escalation study. It intends to assess the safety and efficacy of GC4419 in combination with SBRT, compared with SBRT and placebo, in patients with LAPC. Once induction chemotherapy was completed, patients were randomized in 1:1 ratio and were administered five-fraction SBRT and 90 mg of GC4419 or placebo control by intravenous infusion one hour prior to each SBRT fraction.

The interim analysis showed that median overall survival did not materialize in the intent to treat population at the cutoff date in the GC4419 arm while for the placebo arm, it was at 38.7 weeks. Mel Sorensen, M.D., President and CEO of Galera said, “We’re encouraged by the favorable overall survival benefit in this difficult-to-treat cancer observed in the interim data in this trial, which is the first trial evaluating the anti-cancer activity of one of Galera’s dismutase mimetics in combination with SBRT.”

Galera plans to use the data derived from the trial to inform further development of GC4711 for use in combination with SBRT. GC4711 is the company’s second superoxide dismutase mimetic clinical candidate. Galera also intents to start a follow on Phase 2 study in pancreatic cancer with GC4711 in combination with SBRT in the first half of 2021. It is also assessing the anti-cancer properties of the drug candidate in patients with non-small cell lung cancer.

Analysis: Galera has a market capitalization of $238.37 million with the stock priced $8.78, near lower levels of a 52 week range between $5.58 and $19.5. Disappointing data on the lead candidate in pancreatic cancer (estimated 2025 market of $4.05 billion) caused an over 8% slide, but Wall Street analysts are very bullish with an average score of 4.5/5 and a price target of $19. Majority of the shares are held by PE/VC firms at 58.49%, followed by institutions at 19.78% and the public at 14.45%. Hedge funds hold 6.07% while insiders hold 1.22%. The company had a cash burn of $64.6 in the TTM, and cash balance is $104.41 million.

Investment Thesis: While the company does not have any product in the market yet, it has a number of important catalysts such as topline data from ROMAN Phase 3 trial coming up in the near future.

Forma Therapeutics reports positive topline data from Phase 2 Olutasidenib trial

Forma Therapeutics Holdings Inc. (FMTX) announced positive topline data from a planned interim analysis of a Phase 2 clinical trial of Olutasidenib. The drug candidate showed a positive tolerability profile as a monotherapy. It also met the primary efficacy endpoint for the trial.

The Phase 1/2 study is a multicenter, open-label, multi-cohort trial. It is designed to assess the safety, efficacy and pharmacokinetics/pharmacodynamics of the drug candidate in patients with AML or myelodysplastic syndrome with an IDH1 mutation. Patrick Kelly, MD, chief medical officer of Forma Therapeutics said, “The safety profile and the duration of the response we’re seeing supports the potential for olutasidenib to become a leading therapy for R/R IDH1m AML patients.”

The data showed the composite complete remission or complete remission plus complete remission with partial hematologic recovery rate was at 33.3 percent. Safety data was in line with the information reported from Phase 1 clinical trial. The most common adverse events reported included increased white blood cell count, fever, decline in red blood cell count and nausea.

Olutasidenib is an oral, potent and small molecule investigational agent. It works by selectively binding to and controlling mutated IDH1 enzymes. IDH1 is a natural enzyme and forms part of the normal metabolism of all cells. However its activities upon mutation can trigger blood malignancies and solid tumors.

Analysis: Forma’s candidate targets a global AML market estimated at $3.56 billion by 2027 and MDS market estimated at $2.4 billion by 2022. Wall Street analysts are very bullish on the company with an average score of 4.5/5 and a price target of $56.25. The current price is $44.67, above midpoint in a 52 week range between $31.45 and $52.75, putting the market capitalization at $1.94 billion. Forma has a cash balance of $414.3 million, while cash burn and revenue cost in the TTM were $29.2 million and $98.3 million respectively, suggesting a runway through 2023.

Investment Thesis: Forma is a newcomer on the stock exchange and has strong potential ahead on account of its development pipeline and inertia.

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Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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