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Tuesday, October 21, 2014

Neurotrope Tackles Alzheimer's Disease With Novel Mechanism

By Jason Napodano, CFA & David Bautz, PhD
  • Neurotrope, Inc. is developing therapeutics for neurodegenerative diseases such as Alzheimer’s Disease (AD).
  • The company’s lead compound, bryostatin-1, is a natural compound isolated from a tiny, ocean dwelling organism.
  • Bryostatin-1 activates protein kinase C (PKC) and represents a novel treatment option for AD that is supported by extensive preclinical data.
  • The company is also developing an AD diagnostic test with early results showing sensitivity (correctly diagnosing AD) ≥ 97% and specificity (correctly identifying individuals without AD) ≥ 96%.
  • Neurotrope has a basic market capitalization of only $14 million, with $10+ million in cash in the bank and data from a Phase 2a study coming in early 2015.
Please read the article on Seeking-Alpha >> LINK

Monday, October 20, 2014

Nuvo Research Sells U.S. Pennsaid Rights To Horizon

By David Bautz, PhD & Jason Napodano, CFA

On October 17, 2014 Nuvo Research (OTC: NRIFF) announced it completed the sale of the company’s Pennsaid 2% U.S. sales and marketing rights to Horizon Pharma (Nasdaq: HZNP) for a cash payment of $45 million (CAD$50 million). Horizon will begin commercialization of Pennsaid 2% on January 1, 2015. Nuvo continues to retain all rights to Pennsaid and Pennsaid 2% outside the U.S. and is intending to seek a marketing partner or partners for international territories. 

As part of the agreement with Horizon, Nuvo will be the exclusive supplier of Pennsaid 2% to Horizon for the U.S. market. Based on the level of sales that Horizon is able to generate for Pennsaid 2%, there could be some additional upside to Nuvo through the manufacturing mark-up. In the past we have forecasted that Pennsaid 2% peak U.S. sales are roughly $50 million. We believe Nuvo's manufacturing and supply agreement with Horizon equates to an additional low-single digit royalty on these sales at full scale.

This deal follows the announcement last month that Nuvo had settled the litigation with Mallinckrodt (NYSE: MNK) that included the return of all U.S. marketing and sales rights to Pennsaid and Pennsaid 2% along with a cash payment of $10 million USD. We believed that Nuvo would move quickly on licensing or selling the U.S. rights to Pennsaid 2% following the litigation settlement and had predicted that a deal was likely to bring in approximately $20-$30 million USD with royalties in the mid- to high-teens. Thus, our prediction was not too far from what Nuvo ended up with by selling the full rights unencumbered by royalties.

Nuvo exited the second quarter ending June 30, 2014 with $10.7 million CAD in the bank. We estimate burn for the third quarter 2014 was roughly $2.5 million CAD. Adding in the $10 million USD payment from Mallinckrodt and this new $45 million USD payment from Horizon, we now forecast that Nuvo is sitting on approximately $67 million CAD in cash. 

We remind investors that Nuvo will be reporting top-line results from the Phase 2 clinical trial of WF10 for the treatment of allergic rhinitis in the first quarter of 2015. The large amount of cash that the company now has will aid in funding the company’s continued development of WF10, including further studies into WF10’s mechanism of action and dosing studies to determine the minimum effective dose. We provided investors a brief update on WF10 in August 2014.

Since our last Zacks Report on Nuvo on Sep. 16, 2014, the stock has risen close to 50%. Even so, we still believe the stock is undervalued as the company currently has close to $5.00 per share in cash. The next catalyst will be release of the Phase 2 data for WF10, with positive results likely to send the stock significantly higher. We are maintaining our ‘Buy’ rating and a $7.50 price target.

Thursday, October 16, 2014

Amarantus Seeks Orphan Drug Designation For MANF In Rare Eye Disease

By Jason Napodano, CFA

On October 16, 2014, Amarantus Bioscience Holdings, Inc. (AMBS) announced it has filed an application with the U.S. FDA seeking Orphan Drug Designation (ODD) for MANF (mesencephalic-astrocyte-derived neurotrophic factor) in retinitis pigmentosa (RP), or as I tweeted earlier:

Below we attempt to make sense of this acronym soup for investors by providing a background of the scientific rationale on why Amarantus believes MANF has clinical utility in RP, what obtaining Orphan Drug Designation would mean to the company, and where they are in terms of development.

Let's Start With A Background On MANF

For an uber-detailed review of MANF, we encourage investors to view the company's 41-page White Paper on the molecule. What investors need to know is that MANF is an evolutionary conserved neurotrophic factor expressed in response to endoplasmic reticulum (ER) stress. Increase in endogenous MANF occurs in response to cerebral ischemia and epileptic insults in the hippocampus and in the cerebral cortex (Lindholm P, et al, 2008). MANF is expressed in many human tissues and by virtue of its autocrine / paracrine growth factor function may display anti-apoptotic activities in a broad range of neuronal and non-neuronal target tissues. For example, MANF has been shown to offer selective neuroprotection of dopaminergic neurons (Petrova PS, et al, 2004) by modulating GABAergic transmission in the substantia nigra (Zhou C, et al, 2005). This lead to initial animal work studying the molecule in Parkinson's Disease (Voutilainen M, et al, 2009). Animal research has also shown the potential utility of MANF in improving neurological and motor activity post stroke (Airavaara M, et al, 2010).

 ...Initial Data In Ocular Disease, Retinitis Pigmentosa...

In August 2013, the company announced positive preclinical data for MANF in Retinitis Pigmentosa (RP). Before we get into the data, here's a quick background on RP:
Retinitis Pigmentosa is a rare inherited, degenerative eye disease that causes severe vision impairment. Onset can be rapid and often leads to blindness. The disease is characterized by loss of the light sensing photoreceptor cells that line the back of the eye. In fact, diagnosis of RP relies upon documentation of progressive loss in photoreceptor cell function by electroretinography (ERG) and visual field testing. Usually the rod photoreceptors (responsible for night vision) are affected first, which is why loss of night vision (nyctalopia) is usually the first symptom. Loss of daytime vision, mediated by the cone photoreceptors, is usually preserved until the late stages of the disease. 
There is no cure for RP. Current treatment options include a combination of nutritional supplements and retinal implants. For example, the progression of the disease can be reduced by the daily intake of 15,000 IU (equivalent to 4.5 mg) of Vitamin A (Berson, E.L., 1993). In fact, recent studies have shown that proper vitamin A supplementation can postpone blindness by up to 10 years (Berson, E.L., 2007). Retinal implants, such as the Argus II Prosthesis System, have recently received approval in the U.S. The device may help adults with RP who have lost the ability to perceive shapes and movement to be more mobile and to perform day-to-day activities.
Back in August 2013, an abstract (#2581) was presented by Wen et al from the University of Miami's Bascom Palmer Eye Institute at the Association for Research in Vision and Ophthalmology annual conference held back in May 2012. The abstract was titled, "Mesencephalic Astrocyte-derived Neurotrophic Factor Protects Rod and Cone Photoreceptors from Degeneration in Transgenic Rats Carrying the S334ter Rhodopsin Mutation."

The purpose of the study was to examine the neuroprotective effects of MANF on photoreceptors. In the study, recombinant human MANF (6 µg) was intravitreally injected to the left eyes of transgenic (S334ter) rats. The right eyes were injected with a phosphate buffered saline (PBS) control. Eyes were collected 12 days later and examined by light microscopy. To examine the effect of MANF on cone photoreceptors, MANF (6 µg) was injected intravitreally to the left eyes of the transgenic rats, and the right eyes were injected with PBS as controls. Retinas were collected ten days later and cone outer segments were stained with Alexa-488 conjugated peanut agglutinin (PNA). Flat-mounted retinas were examined by confocal microscopy.

Results with MANF suggest significant protection of rod photoreceptors. For example, in MANF-treated retinas, three to four rows of nuclei remained in the outer nuclear layer (ONL), as compare to only one row of nuclei in PBS-treated fellow eyes. The thickness of ONL in MANF-treated retinas (superior region) (17.47±3.96 µm, mean±SD, n=5) is significantly greater than that in PBS-treated retinas (7.07±1.12, n=5) (P < 0.001, student t-test). Loss of cone outer segments was characterized by many PNA-negative areas distributed across the retina in PBS treated retinas, as reported previously. In RdCVF treated eye, however, the PNA negative areas became much smaller or in many cases completely disappeared. Quantitative analysis showed that PNA-positive cells are significantly more in MANF treated retinas (569.5±46.5/0.1 mm2, mean±SD, n=6) than in PBS-treated retinas (398.7±25.4, n=6) (P< 0.001, student t-test).

Transgenic S334ter rats were created to model retinal degeneration. They are commonly used for preclinical testing in RP and macular degeneration. The data presented at ARVO above demonstrates that intravitreal injection of recombinant human MANF protein protects both rod and cone photoreceptors from degeneration, thus offering potential utility in RP, along with other degenerative eye disease such as macular degeneration. Two additional models showing the utility of MANF in RP have also been presented, a photoreceptor-specific transcription factor model called Crx-tvrm65 and a protein complex model called Rd1-RP. Both models demonstrated reduced TUNEL+ cells and preserved ONL thickness in the eye.

...Recent Presentation At Ocular Disorders 2014...

In October 2014, animal data on the use of MANF in ocular disorders was presented by Roman Urfer, PhD, at the Targeting Ocular Disorders (TOD) conference in Boston, MA. The presentation, "MANF - A Novel Neurotrophic Factor for the Treatment of Retinal Disorders," demonstrated that MANF provided positive protective functional effects in animal models of central retinal vein occlusion (CRVO), as well as central retinal artery occlusion (CRAO) and glaucoma.

The study was designed to evaluate the efficacy of MANF intravitreal injection after an optic nerve ischemia/reperfusion injury in albino rats, as well as gain a better understanding of the MANF dose/effect relationship. Data presented at the conference show that a single intravitreal administration of MANF in rats with ischemia-related optic nerve damage resulted in a statistically significant protective effect of MANF on retinal function, compared to control animals, as measured by B-wave amplitude electroretinogram (ERG) at day 7. Note the positive control was Allergan's Alphagan, a franchise that generated roughly $500 million in global sales in 2013.

The study also showed that MANF effects in the retina mirror the dose-effect relationship observed for MANF in models of Parkinson's disease. Additionally, MANF dose levels were significantly lower than the equivalent dose used in the recent rabbit ocular tolerability study, thereby establishing a preliminary safety margin for MANF in the treatment of optic nerve ischemia.

Targeting Orphan Indications

According to the American Society of Retina Specialists, RP affects about 80,000 Americans. Therefore, RP qualifies as a potential Orphan Drug indication under the U.S. FDA's Orphan Drug Act. Qualifying as a potential Orphan Drug provides Amarantus with certain exclusivity and tax advantages. Under the law, companies that develop such a drug (a drug for a disorder affecting fewer than 200,000 people in the U.S.) may sell it without competition for seven years, as well as gain certain clinical trial tax incentives. Orphan designation also qualifies the drug developer for a waiver of the prescription drug user fee. All the above makes MANF an attractive development candidate for a larger pharmaceutical company seeking in-licensing opportunities in rare ocular diseases.

We remind investors that Amarantus has obtained an exclusive license to the use of MANF in RP from the Bascom Palmer Eye Institute in December 2013. The company expanded this license in August 2014 to cover both MANF and CDNF for retinal diseases. 

Another potential orphan indication for MANF is in Wolfram’s Syndrome (WS), an ultra-rare disorder resulting from pituitary gland dysfunction and a shortage of insulin in the body. Symptoms include high blood sugar levels (diabetes mellitus) and progressive vision loss due to degeneration of the nerves that carry information from the eyes to the brain (optic atrophy). Hearing loss is another common manifestation of the disease. Amarantus believes that conducting small clinical studies and generating proof-of-concept data in WS may facilitate partnering opportunities in Type-1 diabetes. But we believe potential applications with MANF in ocular manifestations of the disease make MANF a very attractive potential candidate for WS as well. The company secured additional intellectual property around MANF in WS from the University of Massachusetts Medical School in December 2013. In June 2014, Amarantus entered into research collaboration with the Washington University School of Medicine to evaluate the efficacy of MANF to treatment WS-induced blindness in animals. 


Central retinal vein occlusion (CRVO) affects approximately 100,000 patients in the United States, and 140,000 patients in Europe, thus making it also an Orphan indication. It is also a rapidly growing market, predicted to grow at approximately 16-18% per year. Regardless of the specific indication, it is clear that ocular diseases have become the leading area of focus for Amarantus with MANF. The market exclusivity and strong pricing power conferred by the granting of a U.S. FDA Orphan Drug Destination make things attractive from a partnering standpoint. Companies that are marketing drugs targeting ocular diseases include Regeneron, Novartis/Alcon, Pfizer, Roche, and Bayer. We expect the U.S. FDA to respond to Amarantus ODD application in early 2015.

Beyond Orphan indications, MANF may also show utility in Glaucoma. Glaucoma affects approximately 4 million people in the U.S. alone. It's a $3 billion market. Data presented at AVRO and TOD provide the basis for moving MANF into human clinical studies in 2015. The company is currently wrapping up translational development and preclinical toxicology work on MANF prior to filing the first investigational new drug (IND) application to being human clinical studies next year. If Phase 1 clinical studies go well with MANF in RP, we expect the company to expand research into new indications and seek a larger development and commercialization partner in 2016.