Acumen Pharmaceuticals: An Alzheimer’s ‘Lottery Ticket’ (NASDAQ:ABOS)

“Life is merely a series of moments and is in fact an unflinching serial killer, since it kills steadily each moment one after the other. Memory is the only survivor. “― Erik Pevernagie

Today, we take our first look at an early-stage developmental concern named Acumen Pharmaceuticals (NASDAQ:ABOS) that is focusing on development treatments for Alzheimer’s. We recently posted an article on a similarly focused firm called Cassava Sciences (SAVA) last week. We continue that theme today. An analysis follows below.

Company Overview:

Acumen Pharmaceuticals is a clinical-stage biopharmaceutical company based in Charlottesville, VA. The company is currently focused on advancing a targeted immunotherapy drug candidate ACU193 in its pipeline. This candidate is a humanized monoclonal antibody that is in Phase I clinical-stage to target soluble amyloid-beta oligomers. The stock currently trades just above five bucks a share and sports an approximate market capitalization of $215 million.

Pipeline:

At this point in time, Acumen Pharmaceuticals is basically a one trick pony. Its sole developmental asset is ACU193. The company notes that ‘In Alzheimer’s patients, three dominant pools of amyloid-beta (Aβ) species have been identified: Aβ monomers, Aβ oligomers (AβOs) and fibrillar Aβ aggregates that deposit into amyloid plaques. The most abundant species, Aβ monomers, as well as Aβ plaques, have been the main focus of Alzheimer’s drug development efforts throughout the past decade.’

Acumen’s focus however in on the development of AB oligomers as it believes scientific evidence now indicates these AβOs are the most toxic form of amyloid, leading to the memory and cognitive impairment and chronic neurodegeneration now known as the hallmark of Alzheimer’s disease. These AβOs are soluble protein aggregates that disrupt brain circuitry and prevent neurons from functioning properly.

ACU193 is the first immunotherapy drug candidate to enter the clinic that was developed to target these toxic AβOs. ACU193 works by preventing AβOs from binding to dendritic spines and helping preserve neuronal function. The company has initiated a Phase 1 trial called INTERCEPT-AD to evaluate ACU193 to treat patients with mild cognitive impairment or mild dementia associated with Alzheimer’s patients.

This study consists of two sections: Part A consists of a single-ascending dose with 4 cohorts consisting of 8 patients. Part B is a multiple-ascending dose with 3 cohorts and 10 patients per cohort. Results should be out sometime in the second half of 2023.

Analyst Commentary & Balance Sheet:

Over the past three months, five analyst firms including Credit Suisse and UBS have reiterated Buy/Outperform ratings on ABOS. Price targets proffered range from $15 to $22 a share.

Approximately five percent of the outstanding float is currently held short. There has been no insider activity in the stock so far in 2022. At the end of the third quarter, Acumen had $200 million worth of cash and marketable securities on its balance sheet which is expected to be sufficient to support clinical and operational goals through 2025

Verdict:

The company is aiming at a massive market. Alzheimer’s disease currently affects over 6 million people in the U.S. and over 30 million people worldwide. This market continues to increase as the population ages.

As I noted in my recent conclusion around Cassava Sciences:

Obviously, Alzheimer’s is a massive potential market. There is only one new approved drug for this horrid disease in the past few decades. That is Aduhelm (aducanumab) from Biogen (BIIB). This drug was approved amidst major controversy a year and a half ago. Aduhelm revenue has been much, much lower than originally projected (the drug did $1.6 million worth of sales in the third quarter) and the stock of Biogen is down by a quarter from where the shares spiked right after FDA approval.

Tens of billions of R&D dollars have been spent trying to develop Alzheimer’s candidates by drug makers large and small. Very little progress to date has been made with Roche (OTCQX:RHHBF) being amongst the latest to post disappointing trial results. Biogen did recently disclosed lecanemab, which it is developing with Eisai (OTCPK:ESALY), met the primary endpoint in the late-stage study to treat memory loss.

One day, a biopharma firm will eventually come up with an effective treatment for Alzheimer’s. Hopefully, that will happen on the near-term horizon not decades out in the future given how many families are impacted by this dreaded disease.”

Acumen finds itself in that very same boat as Cassava but it is in an even earlier stage of development. ACU193 may one day end up being an effective standalone or part of a combination treatment for Alzheimer’s. However, investors will not know whether this is even likely for far off on the horizon. Acumen’s sole differentiator is its focus on targeting AB oligomers. So, despite strong analyst firm support and a market capitalization near the net cash on the balance sheet, an investment in ABOS should be considered as no more than a ‘lottery ticket‘ until ACU193 advances further in development.

“Distance has the same effect on the mind as on the eye.”― Samuel Johnson

Editor’s Note: This article discusses one or more securities that do not trade on a major U.S. exchange. Please be aware of the risks associated with these stocks.