“Dear reporters and investors” started the notice from Japanese pharmaceutical firm Eisai announcing it would present, along with Biogen, the results of a clinical trial for BAN2401 at the Alzheimer’s Association International Conference. Our Biotech Analyst Salim Syed found it interesting that press was prioritized over investors. He was not alone in thinking that courting reporters maybe meant there was finally some breakthrough news that an Alzheimer’s treatment is showing promise.

In the run-up to the July 26 conference, the stock shot up $30 to $383 and Salim was invited on CNBC to share in the speculation. Then the announcement was made. The trial exceeded expectations in reducing cognitive decline in patients! And the stock plummeted about $40.

So what happened? And what does it say about the ups and downs of developing drugs to treat the degenerative disease afflicting more than five million Americans?  Salim provides some perspective.

First, where does Alzheimer’s disease stem from?

The prevailing theory is that Alzheimer’s results from the buildup of a kind of plaque – beta amyloid plaques – on the brain. APOE is a protein made by the APOE gene that is believed to work to keep this plaque clear from the brain. APOE4 is the gene variant that is believed to be not as effective in this process, so some would call it a harder-to-treat patient population.

What is BAN2401 supposed to do?

BAN2401 is an antibody that binds to this beta-amyloid plaque (or more specifically one version of it called protofibrils). By binding to the plaque, it essentially “tags” it, so that the immune system can then clear it from the brain.

Why did the stock react so poorly to the news?

Alzheimer’s is tricky, and although the headline benefit of 30% over placebo was above the 20% that investors wanted, there were a couple things in the dataset that caused debate and concern among investors that the drug may not be working as well as the headline number suggested. First, there was an APOE4 imbalance between trial arms (group of patients receiving a specific treatment, or no treatment)…so again, the notion here is that if one arm has at an advantage, does it essentially widen the delta between arms more than what we would have seen otherwise? Second, one of the middle dose arms that resulted in removal of beta-amyloid plaque performed more like placebo on the cognitive / functional measure, called ADCOMS, used in the trial. 

Could BAN2401 be a cure for Alzheimer’s?

A common misconception in the current development of Alzheimer’s drugs is that a cure is in the works. The prevailing hypothesis in the scientific community (the “beta amyloid” hypothesis) suggests that if you get rid of the toxic, beta amyloid plaques in the brain, you will treat the disease. “Treat” in this context means slowing down or halting cognitive deterioration associated with the disease, but not reversing it; at least we haven’t seen that happen yet. With that being said, we know more about this disease today than we did even 5 years ago, and it’s an area of focus for many constituents ranging from biopharmaceutical companies, to patient advocacy groups, and the FDA / US Government. 

Which drugs are currently leading in the market for a potential treatment?

Other than BAN2401, the leading drug in the biopharma space is Aducanumab, a therapeutic antibody currently in Phase 3 clinical trials. Eisai and Biogen partnered for joint development of the antibody. Roche / AC Immune’s Crenezumab, also a beta-amyloid targeting compound, is also in Phase 3 trials.

Will the drugs essentially accomplish the same outcome?

BAN2401 and Aducanumab are not the same antibody. Both target beta-amyloid protein, but do so differently. BAN2401 targets the structural epitope and protofibril beta-amyloid, while Aducanumab targets the N-terminus and fibrillar and oligomeric plaque. While these differences in antibodies may seem small, they can potentially to lead differences in efficacy and safety.

What’s next in the development phase of the drugs?

We will get detailed subgroup data on BAN2401 at the CTAD medical conference at the end of October 2018. But more importantly, investors will be tuning in at the end of 2019 / early 2020 to see the results for BIIB/Eisai’s Aducanumab Phase 3 trials. And around the same time, we could potentially get one of the two Phase 3 trials for Roche/AC Immune’s Crenezumab.

Do you believe a cure for Alzheimer’s will be found?

Nothing is impossible. At this point scientists and patients don’t need a cure though in order to have a win in the fight against this disease. We just a need a new drug that targets the pathology of the disease and slows down its progression. The drug that most Alzheimer’s patients used today is called Aricept. It was approved over 2 decades ago. So for many, it’s about time to find the next thing.