PMN.TO: A Pole Position in Neurodegenerative Disease

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By John Vandermosten, CFA

OTC:PMN.TO | OTC:ARFXF

The Alzheimer’s Disease (AD) space has been on a wild ride over the last year with Biogen fishtailing like a Mustang on a wet Los Angeles freeway. During Phase II interim analysis Biogen’s AD drug BAN2401 initially appeared to be ineffective, but later data supported the launch of a Phase III trial for it earlier this year. Then, the company concluded that their other leading candidate for AD, aducanumab, would not reach its primary endpoint after reviewing preliminary data. Both of aducanumab’s Phase III trials were subsequently halted in March 2019. Following the analysis of a more complete dataset over the following months led to the drug’s resurrection in October with results sufficient to justify a new drug application (NDA). It’s hard to know what will happen next.

While aducanumab may have seen its fortunes improve, there has been a lack of traction for many of the other participants developing β-amyloid (βA) AD therapies. This includes Roche’s crenezumab, Amgen and Novartis’ umibecestat and Merck’s verubecestat among many others. This environment has caused investors to tap the brakes on new investment in this elusive objective. Some see putting forward hundreds of millions of dollars in a βA approach as being more toxic than the misfolded oligomers we need to target!

These difficulties bring into relief the largest obstacles faced by biotech investors in drug development. New medicines take too long, cost too much and face success rates that are often too low to attract sufficient capital. Investors have many options and they are always seeking the highest reward for the lowest risk based on the latest information. While the conventional structure of drug development has not adapted to this new reality, there are efforts being made by more nimble participants in the industry that we think will characterize successful and profitable drug development companies of the future.

This uncertain environment has forced small and agile firms in the neurodegenerative space to pivot their portfolio to offer an asset whose value is being recognized. The constraints on capital availability have forced companies to adjust the reward to risk profile of investment in drug development. This is done by providing a framework that can efficiently establish whether funds are warranted by using multiple biomarkers in enriched populations to measure safety and efficacy.

These evolving perspectives also recognize the need for safe and effective compounds to be selective for the desired target. Selectivity confers a wealth of benefits including reduced off-target effects, lower side effects and the ability to use higher levels of drug to achieve greater efficacy.

ProMIS Neurosciences (OTC:PMN.TO) (OTC:ARFXF) has embraced these concepts and been able to adapt its portfolio to conform to the current environment. The management team has used its discovery platform to design antibodies that can selectively bind to the toxic, misfolded molecule, identify biomarkers and specific disease populations that can quickly demonstrate proof of concept and present the highest externally valued asset in its portfolio to prospective partners. They have also combined these features to offer an approach to rapidly and inexpensively determine if an asset merits additional investment.

Quick & Cheap Go / No Go Decision

Investors are familiar with failure rates in the drug development space, which are even more acute for AD. We at Zacks frequently highlight the low success rate where only one of ten clinical compounds are ultimately approved by regulatory authorities1,2,3,4,5. However, as costs to the healthcare system have increased, pricing has become less certain and investors have been exhausted by the string of AD defeats. This requires a new approach. If the potential benefit of a drug can be maintained while reducing the cost and time required to prove it, we have just increased the value of the target we want to pursue. This change will increase the availability of investment capital for promising compounds. A mechanism to enable the quick go or no go decision before engaging in an expensive registrational trial is the use of biomarkers in enriched6 populations.

It is estimated that almost $900 million was spent on aducanumab prior to the stop then restart of the program and hundreds of millions of other dollars were spent on competing AD programs that failed. Investors need a quick and cheap way to determine whether or not a drug is a good bet. By focusing on enriched populations and using proven biomarkers, it is possible to get an early read on drug efficacy and safety for some of the most difficult neurodegenerative diseases. ProMIS estimates that a $5 to $10 million investment supporting a six to twelve month trial, proof of concept could be determined for AD, MSA, FTD or ALS.

Fluid Based Biomarkers

Patients, physicians and other stakeholders seek therapies that extend life, improve or cure a condition while simultaneously limiting side effects. Many times the course of a disease takes years to become apparent and present morbidities. This is why we design trials that have endpoints that attempt to measure the ultimate effect of a drug on a specific population. However, there are financial and time constraints to this approach and there are insufficient resources to always pursue this course. Therefore, for some of the most difficult diseases that develop over the longest period of time, there must be alternatives to efficiently evaluate the efficacy of promising new therapies.

One of the ways to get an early read on efficacy is to use biomarkers. Research shows that biomarkers improve study success rates when used to stratify populations. Fluid based biomarkers can show if a drug’s mechanism of action is working as expected and help avoid expensive and invasive alternative approaches such as imaging and biopsy. A successful fluid based biomarker can save time, make clinical process more efficient and provide an earlier signal for an investigational drug.

Several biomarkers have been identified that can identify desired activity including glial fibrillary acidic protein (GFAP) to detect astrocyte activation, YKL-40 for neuroinflammation, neurogranin and SNAP25 for synaptic loss and neurofilament light chain (NfL) to measure neuronal loss. These biomarkers are cost effective approaches that can rapidly demonstrate whether or not disease modification is taking place. Programs that focus on enriched populations have the best chance to rapidly show a statistically significant biomarker response. ProMIS has identified trials for anti-α-synuclein in multiple system atrophy (MSA), anti-βA for AD in Down Syndrome and anti-TDP43 in amyotrophic lateral sclerosis (ALS) that can efficiently produce relevant data. Instead of trials taking years before an interim analysis suggests efficacy, biomarkers in enriched populations may provide a signal in as little as six months.

Understand Root Cause

One of the reasons so many AD drugs have failed can be attributed to the lack of understanding of the root cause of the disease. The research community has learned a lot since the early 2000s when many of the Phase III compounds that have failed were first placed into the clinical development process. While there was research available demonstrating that toxic oligomers were damaging to neurons decades ago, it has taken some time to put this information into context. ProMIS has undergone the painstaking process of verifying the toxicity of misfolded oligomers and that PMN310 specifically binds to the toxic misfolded form. Now that the root cause has been validated and there is a therapy to selectively target it, PMN310 is on track to be best in class.

To date, there have been no clinical trials performed that specifically focus on toxic oligomers while sparing the normal forms of βA and if PMN310 is able to enter the clinic, it will be the first to show this selectivity. This is in contrast to other approaches, which have been very broad, targeting all forms of the βA protein. Below we show a familiar slide of some of the other contenders and their affinity for multiple forms of the βA protein.

Exhibit I – Dot Blot Illustrating Binding Affinity of Familiar AD Candidates7

Selectivity/Specificity

Many of the βA candidates advanced to Phase III lacked specificity for the species of βA that is shown to cause damage to neurons. The lack of selectivity creates a variety of problems from increased side effects, such as ARIA-E to insufficient levels of drug available to target the root cause. Normal forms of these target proteins are important for normal physiological function. For example, the normal tetramer form of α-synuclein plays an important role in DNA repair and the normal form of Tau is critical for stabilizing microtubules. If these important forms are sequestered, it could produce negative health effects.

Exhibit II – Different Forms of Protein Can Either Hurt or Help8

Partnering

ProMIS holds an impressive portfolio of epitope-specific antibody candidates for βA, tau, α-synuclein and TDP43. While interest in βA rises and falls with clinical trial successes and failures, interest in TDP43 and α-synuclein has been steadily growing as the importance of these proteins in ALS, frontotemporal dementia (FTD), Parkinson’s Disease (PD), Lewy Body Dementia (LBD) and MSA have become better understood. Management has noted that they are in discussions with five to ten prospective partners that either want to enhance the strength of or fill a hole in their neurodegenerative disease portfolio.

The biotech’s most advanced asset, PMN310, targets misfolded forms of βA; however, interest in βA-focused therapies has been in flux this year due to wildly changing sentiments. To adapt, ProMIS is now revving up its α-synuclein and TDP43 programs seeking partnerships and upfront funds to advance them to the next stage. Upfront funds will be used to support the internal development of PMN310. We see this as a wise approach given the upside potential in AD, lack of alternative therapies and a large untreated population of near six million in the US and over 30 million worldwide.

ProMIS Can Do It

ProMIS is fortunate to have not only the important features that we see as necessary for success in drug development, but also the management expertise to combine these assets in a way that we think will favorably influence future efforts. The company’s proprietary discovery platforms use vast computing power to determine the most likely unique epitopes that appear on target misfolded forms of proteins. With the identity of the unique epitope, a monoclonal antibody can be raised to bind to it. Other drug development platforms are not able to create monoclonal antibodies with this level of specificity because they screen thousands of compounds hoping one of them will work. ProMIS has also identified a biomarker that will allow a quick determination whether or not their drug is working. The NfL diagnostic, potentially in combination with others, is able to detect small quantities of the cytoskeletal proteins that remain after the destruction of neurons. The marker appears in cerebrospinal fluid (CSF) or the blood and its concentration is stable over time and is applicable to neurodegenerative diseases ranging from AD to MSA.

Exhibit III – NfL Measures the Rate of Neuronal Death Associated with Several Diseases9

Strategy

With the ever changing environment in AD and βA-based therapies, ProMIS has adapted its drug development approach to leverage its entire portfolio. The company’s discovery platform has generated candidates targeting a broad spectrum of neurodegenerative diseases including AD, ALS, PD, MSA and LBD. It has the ability to predict unique epitopes for any disease with a root cause of misfolded proteins. Management has been discussing partnership opportunities with several pharmaceutical companies that want to accelerate their neurodegenerative portfolios to be more competitive with peers. These partnership are expected to provide capital which will advance both collaborative and internal programs.

Exhibit IV – Status of ProMIS’ Highly Selective Antibodies10

The target receiving the most interest is α-synuclein, which is implicated in PD, MSA and LBD. Alternate discussions have revolved around TDP43 and other misfolded proteins that may also provide development funds and upfront monies. ProMIS recognizes the value of its most advanced PMN310 program and plans to develop it internally. The team anticipates using upfront funds from partnering one of the other programs or licensing the predictive abilities of the ProMIS and Collective Coordinates algorithms to internally fund PMN310 development. The fully owned and controlled study would enroll Down Syndrome patients that will screen for high levels of NfL, but are not yet showing signs of dementia. This approach maintains full ownership of the most advanced and valuable asset for ProMIS shareholders.

Summary

We think ProMIS has one of the most exciting and innovative platforms in the biotechnology space. The discovery algorithms allow the company to predict unique epitopes that appear on different conformations of proteins allowing the creation of antibodies that can bind with specificity to that exclusive identifier. This is in stark contrast to traditional drug development which tests thousands of random compounds hoping one will demonstrate activity. ProMIS also has a stable of assets that can potentially address the most important neurodegenerative diseases that we face. These diseases do not have cures and there is a significant unmet need. As the platform and portfolio become better understood, we see large pharmaceutical peers becoming more interested and taking a stake in the company. ProMIS’ winning strategy is to offer a variety of neurodegenerative targets for investment and maintain full ownership of PMN310 for shareholders while employing an efficient and cost effective approach to proof of concept. We are eager to watch ProMIS accelerate past peers and secure victory in neurodegenerative disease.

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1. Arch Intern Med. 2008;168(6):632-642, Adams et al. New Drug Development: Estimating entry from human clinical trials, Federal Trade Comm. July 2003

2. Hay, Michael; et al. Clinical Development Success Rates 2006 – 2015. Biotechnology Innovation Organization, Biomedtracker, Amplion. June 2016

3. DiMasi, Joseph A., Ronald W. Hansen, and Henry G. Grabowski. 2003. The Price of Innovation: New Estimates of Drug Development Costs. Journal of Health

4. Wong, Chi; Sian, Kien; Lo, Andrew. Estimation of Clinical Trial Success Rates and Related Parameters. Biostatistics (2018) 00, 00, pp. 1–14

doi:10.1093/biostatistics/kxx069. 2018

5. DiMasi, Joseph A., Ronald W. Hansen, and Henry G. Grabowski. 2003. The Price of Innovation: New Estimates of Drug Development Costs. Journal of Health Economics 22: 151–85.

6. Enrichment is the prospective use of any patient characteristic to select a study population in which detection of a drug effect (if one is in fact present) is more likely than it would be in an unselected population.

7. Source: ProMIS August 2019 Corporate Slide Deck. https://promisneurosciences.com/wp-content/uploads/2019/08/ProMIS.-Corporate.Overview.Aug_.2019.pdf

8. Source: ProMIS August 2019 Corporate Slide Deck. https://promisneurosciences.com/wp-content/uploads/2019/08/ProMIS.-Corporate.Overview.Aug_.2019.pdf

9. Source: ProMIS August 2019 Corporate Slide Deck. https://promisneurosciences.com/wp-content/uploads/2019/08/ProMIS.-Corporate.Overview.Aug_.2019.pdf

10. Source: ProMIS August 2019 Corporate Slide Deck. https://promisneurosciences.com/wp-content/uploads/2019/08/ProMIS.-Corporate.Overview.Aug_.2019.pdf

11. Almost all individuals with Down syndrome have βA brain deposits by age 40; the majority will show AD symptoms in their 50s and 60s and ultimately develop dementia.

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