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I noted earlier that Alector (NASDAQ:ALEC) is doing very interesting medicine. The immune defence system of the central nervous system consists of microglia. Like everywhere else in the immune system, in the act of immune protection, microglia also release cytotoxic and inflammatory materials that may actively cause neurodegeneration. It has been discovered that certain immune-specific genes present in the microglia may be responsible for disease etiology. Alector targets these genes in order to modify CNS diseases. I am not aware of any other company that takes exactly this approach.
This approach is attractively desrisked because the lead asset is in a phase 3 program. Lead candidate AL001 (latozinemab) is in phase 3 targeting Frontotemporal Dementia with a granulin mutation (FTD-GRN) and a second phase 2 program with a C9orf72 mutation (FTD-C9orf72). AL001 is an mAb delivered intravenously, with the aim of increasing the level of progranulin (PGRN) in FTD-GRN patients. Lack of PGRN, caused by a genetic mutation, is responsible for neuronal ceroid lipofuscinosis, characterized by childhood dementia, vision loss, and epilepsy. In clinical studies, AL001 was able to increase the level of PGRN back to normal in FTD-GRN patients.
What interests me is how this translates to clinical improvement. As I noted earlier:
Translating these biomarker endpoints to clinical benefit, a measure called CDR plus NACC FTLD-SB scale was used to assess cognitive, functional, behavioral and language impairments over time. This is also the primary endpoint of the ongoing phase 3 trial [readout in 2023]. The score increased 6.4 points from baseline in the matched (control) cohort, while it increased only 3.4 points in the drug cohort. How significant this difference is hasn’t been discussed by the company.
Moreover, this approach has been validated by GlaxoSmithKline’s (GSK) $2.2bn deal with Alector, $700mn of it in upfront payment. GSK has, for long, been trying to expand its R&D efforts after miserably bungling covid-19. Its big pharma funds will now help Alector move its pipeline along, in parallel now rather than sequentially. So if you compare their old and new pipelines, you can see a number of new items, all GSK-partnered. As noted at FierceBiotech:
Alector also saw this interest firsthand in July, when the company signed a $2.2 billion deal with GSK to develop next-generation drugs for neurodegenerative diseases, including Parkinson’s and Alzheimer’s.
The company is also trying to move away from biomarker based studies to those with clinical endpoints, because, as CEO Arnon Rosenthal says, “biomarkers are not enough, … Alector has to prove its drugs can clear up the devastating symptoms of the diseases they’re targeting.”
Just last month, the company presented phase 2 data from its FTD-C9orf72 program, which not only showed elevation of progranulin in both plasma and cerebrospinal fluid, but also slowed down annualized disease progression by 54%:
The results presented include 12-month data from up to 10 symptomatic FTD-C9orf72 patients treated with 60 mg/kg of latozinemab every four weeks in an open-label study designed to primarily assess the safety and tolerability of chronic dosing. The study also includes exploratory clinical outcomes assessments and biomarkers. Highlights from the presentation included the following observations:
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Latozinemab was generally well tolerated when administered monthly for a year or more, consistent with other study cohorts.
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Latozinemab elevated progranulin in both plasma and cerebrospinal fluid (CSF) in FTD-C9orf72 patients for the duration of treatment.
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Clinical outcome assessments using the CDR® plus NACC FTLD-SB scale, a standard FTD clinical rating instrument that assesses cognitive, functional, behavioral and language impairments over time, found that when compared to a matched control cohort from the ALLFTD consortium, treatment with latozinemab in FTD-C9orf72 patients resulted in a trend toward a delay of approximately 54 percent in annualized disease progression.
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Mean levels of neurofilament light chain (NFL), a marker of axonal damage, remained stable over the course of treatment in both plasma and CSF in latozinemab-treated FTD-C9orf72 patients.
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Mean levels of glial fibrillary acidic protein (GFAP), a biomarker of astrogliosis that is an indicator of disease and/or injury to the central nervous system, decreased over 12 months in both plasma and CSF in latozinemab-treated FTD-C9orf72 patients.
To be noted, decrease in annualized disease progression measured using the CDR® plus NACC FTLD-SB scale is the primary endpoint in the ongoing phase 3 trial in FTD-GRN.
Financials
ALEC has a market cap of $1.01bn and pro forma cash reserve of over $900m, which includes a $200mn payment they received from GSK in January. Total research and development expenses for the quarter ended December 31, 2021, were $52.8 million while total general and administrative expenses were $16.9 million. For the entire year, the numbers were $189.4 million for R&D and $55.0 million for G&A. At that rate, the company has a runway of at least two years, while keeping in mind that their plans to run programs parallelly will vastly increase their expenses.
Bottom line
There’s not much more to ALEC right now, except a downgrade from Stifel. I do not put a lot of stock in the downgrade because I have not understood why, if enrollment delay is due to GRN screening in FTD patients, the analyst “doubts the success rate for AL001 as they expect a lower-than-expected presence of GRN mutations in FTD.” Considering their two big pharma partners, interesting new approach in neurodegenerative diseases, cash balance and late stage program, I am going to take an active interest in ALEC stock.
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