Alzheon Launches IPO to Fund Alzheimer's Drug

Drug Revenue

Alzheon, based in Framingham, Massachusetts, has filed with the U.S. Securities and Exchange Commission (SEC) to launch an initial public offering (IPO).

The company hopes to raise about $80 million, which will help fund two Phase III clinical trials for its ALZ-801 for Alzheimer’s disease. The drug is a version of tramiprosate, which blocks the formation of beta-amyloid, which is believed to be the primary driver of Alzheimer’s disease. However, the amyloid theory is coming under fire after numerous failed clinical trials of drugs that prevent or clear amyloid beta.

One of the most recent examples is Merck & Company’s failure of its APECS Phase III clinical trial of verubecestat (MK-8931) in Alzheimer’s. An external Data Monitoring Committee (eDMC) recommended ending the trial after interim safety analysis indicated there was little likelihood of the drug’s benefits outweighing the risks. Verubecestat is a BACE inhibitor, a precursor to beta-amyloid.

Alzheon licensed the drug from Montreal-based Neurochem, Inc. in 2013. The drug failed several of Neurochem’s clinical trials, but Alzheon has modified it, hoping to get it more quickly into the brain so it will have fewer side effects in the gut.

Brittany Meiling, with Endpoints News, writes, “In its S-1, the company tells investors that they met with the FDA and went over the data, pointing to a post hoc analysis of the data indicating that a 150 mg dose of the drug among APOE4/4 homozygous patients registered an impact on cognition and daily function, the gold standard that has defeated virtually everything thrown at it over the last 15 years.”

The U.S. Food and Drug Administration (FDA) apparently wasn’t overwhelmed by Alzheon’s arguments and data, since earlier data was based on a small subset of patients that didn’t prove the drug’s efficacy. The agency also indicated the company might need to conduct a second Phase III study to confirm any positive results they acquire from the first trial.

Meiling points out that this is a similar strategy taken by Axovant Sciences Ltd., which was a disaster, unfortunately a word often used in the context of Alzheimer’s drug trials. Axovant had acquired its Alzheimer’s drug from GlaxoSmithKline for $5 million. It had a favorable safety and tolerability profile, and in a Phase IIb trial, some efficacy over placebo, but GSK had abandoned it after four failed trials. Axovant decided to try the drug in a narrow patient population, but the study showed “essentially no difference between the intepirdine and placebo arms in change from baseline in activities of daily living.”

The company will be listed on the Nasdaq Global Market under ALZH. In addition to moving forward with a clinical trial for MK-8931, the company indicates it plans to expand its pipeline via licensing deals and acquisitions, which given the history of Alzheimer’s drugs, is a pretty good idea.

Meiling writes, “Back in 2016, Alzheon’s CEO Martin Tolar told Endpoints News the company would need more like $100 million to pay for two Phase III studies for its lead drug—and that would be a bargain compared to most late-stage Alzheimer’s programs. Tolar—the biggest shareholder with 44 percent of the stock—also needs the cash. He only had a little more than $6 million on hand at the end of December after burning through about $24 million. He’s committed to paying a royalty stream to FB Health, which out-licensed the rights to the drug, in the event they can win an approval.”

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