Biogen: A Deep Dive into the Promising Results of BAN2401 and Other Alzheimer Treatments

Biogen Announces Unexpectedly Positive Results from BAN2401's Phase 2 Trial

On July 5th, Biogen announced positive topline results for its phase 2 trial of BAN2401 in patients with early Alzheimer's Disease (AD). Management announced statistical significance on secondary endpoints at 18 months in slowing the progression of AD, as measured by ADCOMS, and on the reduction of amyloid beta accumulated in the brain on the highest treatment dose.

After the announcement, the stock shot up ~20% given the prior difficulties in achieving positive results in AD. Note that no drug is currently able to modify the underlying disease mechanisms. Additionally, BAN2401 was largely written off after missing its phase 2 primary endpoint last December. More broadly, further note that many investors were becoming less positive on the "amyloid hypothesis" in general after a slew of failed trials in the area. As a result, the positive news was unexpected and contributed to the pop in the stock price.

Background on Alzheimer's Disease

Before jumping into some of the details on the trial results and investor reactions, I should first give some background on the disease. If this is already familiar to you, skip this section.

We currently don't know the underlying cause of AD, but scientists are suspicious of two structures - amyloid beta, and tau. As a result, the two current hypotheses for treating AD involve these two structures. This article will focus on the amyloid hypothesis, which is what BAN2401 falls under.

Amyloid beta: Amyloid beta is a sticky substance that accumulates in the spaces between neurons, disrupting communication between the nerve cells and eventually killing them. Amyloid beta is a small part of a larger protein called amyloid precursor protein (APP). When activated, APP is cut into several smaller sections by other proteins called secretases. Amyloid beta is one of those fragments that are sometimes cut.

Amyloid stages of accumulation: Amyloid beta has several stages of accumulation: monomer, oligomers, fibrils, beta-sheets, and plaques. The stages disrupt communication between cells, which activates immune system, which then triggers inflammation and the death of the cell. However, it's not currently known which stage of accumulation is toxic to the nerve cells. Numerous drugs have been designed to impact different areas of this entire process. 

Amyloid Beta.png


Evidence for the amyloid beta hypothesis: The amyloid beta hypothesis has more attention and arguably more evidence than the tau hypothesis, despite my earlier comments about recent disappointments. One piece of evidence is that there are rare gene mutations that impact genes that are associated with amyloid beta production or accumulation. These genes give individuals an extremely high likelihood of developing AD. Another piece of evidence is that mice genetically engineered to have these mutations are likely to develop Alzheimer's-like symptoms, like forgetting the path through a maze. A third, and probably the most convincing piece of evidence, is that Biogen's aducanumab, which targets amyloid beta, has shown signs of success at slowing the progression of Alzheimer's (which will be detailed later).

Amyloid beta treatments: Most of the treatments for AD have examined protofibril targeting, oligomer targeting, BACE inhibitors, and prevention. The most relevant treatments here are protofibril and oligomer targeting as they've shown the most promise currently. I'll zoom in on these treatments next.

Protofibril/oligomer approaches: Recall that protofibrils are one of the intermediate steps between an amyloid beta monomer and a plaque. There is some evidence to support the idea that protofibrils/oligomers are the primary culprit for Alzheimer's. For example, there are some genetic mutations that predispose an individual to developing AD, and the gene mutations specifically increase oligomer formation.

However, there are some drawbacks to targeting protofibrils. Primarily, we currently lack a way of detecting protofibrils in the brain. As a result, it's very difficult to show that any drug that specifically targets protofibrils will reduce protofibril levels. Drugs must instead show a reduction in plaque. Another drawback is that amyloid related imaging abnormalities (ARIA) is a serious side effect, and leads to cerebral edema or small brain hemorrhages.

Drugs that target protofibrils are more likely to succeed if they can 1) show that the reduction in protofibrils leads to a reduction in plaques, and that the reduction of plaque is correlated with the slowed progression of Alzheimers, and 2) that there is a small incidence of ARIA.

Alzheimer's endpoints: Let's briefly talk about endpoints that are used for AD. An endpoint is the outcome that is being measured in a clinical trial. The endpoints are important to discuss here as clinical trials can depend on which endpoint was chosen, and as we'll soon see, this may have been a crucial determinant for the success of BAN2401 (which is also the subject of some debate).

ADAS-Cog is the traditional endpoint that has been used in AD studies. It looks at several categories including language, praxis, and memory. 

MMSE is a screening tool that's used for AD and can be quickly administered in a few minutes. 

CDR-SB is a newer endpoint that involves a trained person interviewing the patient an informant that then rates the patient in numerous categories. CDR-SB is seen as more sensitive than ADAS-Cog and MMSE, and is being used in aducanumab, elenbecestat, crenezumab, and gantenerumab clinical trials (which will be detailed later).

ADCOMS is the newest endpoint and was developed by Eisai as a more sensitive endpoint in detecting a treatment effect in early AD. Investors have debated whether the endpoint is truly more sensitive than CDR-SB, as several have noted that it appears to be equally sensitive. The composite score takes elements from ADAS-Cog, MMSE, and CDR (with more of the components coming from CDR). This discussion is important as ADCOMS was used as an endpoint in BAN2401, and it's currently unclear how the FDA views ADCOMS and if it is sufficient for a submission.

Let's pause here and discuss BAN2401.


The Promising (and Controversial) Results of BAN2401 

BAN2401 results were promising because it showed statistical significance in the slowing of the disease progression as measured by ADCOMS. The only other trial that has shown a similar level of promise was aducanumab, a drug that targets oligomers from Biogen. Safety levels also appeared tolerable with <10% ARIA incident rate in any treatment arm, and <15% in ApoE4 patients (patients that are likely to develop ARIA) at the highest dose. 

However, there are numerous concerns, specifically around the study design, that have made some investors skeptical:

- Biogen changed the statistical measure from Bayesian in the interim readout in December to traditional, and it is thought by some that a traditional statistical analysis may have had a lower bar for success.

- Numerous investors believe that the magnitude of the effect may not be significant enough as the study was only statistically significant at 18 months. Several believe that the effect is likely to be smaller than the observed effect in the aducanumab results. If the effect is not large enough, it will be more difficult to receive approval.

- There were several questions on the validity of using ADCOMS as an endpoint, which is a novel endpoint that does not have the track record of other endpoints.

- Other elements of the study design were non-traditional as well. For example, Biogen used a dose-enriching randomization scheme where they moved more patients into the heaviest dose as the trial progressed. 

There have been several counterpoints and numerous investors do not believe these concerns eliminate the promise of the drug:

- Several investors and AD experts have voiced the opinion that the sensitive ADCOMS endpoint is a legitimate endpoint, and may not be too dissimilar to the CDR-SB endpoint (which is being used in several other phase 3 trials). 

- The dose-enriching randomization scheme could actually have a stronger read-through on potential phase 3 trials, since that would be designed to have the most patients in the largest and most effective dose.

- Regardless of the details around the study design, this will be an additional datapoint that adds validity to the amyloid hypothesis. Results strengthen the case for aducanumab as well, potentially giving Biogen two promising Alzheimer's assets.

Potential size: While potentially premature, analysts have started to size the potential revenue opportunity. Given the prevalence and lack of effective treatments, if BAN2401 receives approval, it would become the immediate treatment for Alzheimer's Disease and would see wide use. However, compliance may see some headwinds as it is an IV infusion, has risk of ARIA, and only slows the progression of the disease. All in, analysts have begun to size the drug opportunity at somewhere between $5 - $10 billion in revenue, which would represent 40% - 80% of 2017 revenue. With this revenue size in mind, Biogen stock could still see significant upside if the company can continue to show progress towards a drug approval.


More details at AAIC: The company will give further details at the AAIC on 7/25 at 4:30PM ET. The most common and important questions I've seen from investors are the following:

- Was there a correlation between plaque levels and clinical efficacy?

- What was the size of the impact and change in ADCOMS score?

- What is the pathway to FDA approval from here; does BAN2401 need more trials?

Other Datapoints that Could be Relevant for BAN2401 (and Vice Versa)

As mentioned previously, oligomer targeting is also an adjacent approach to the protofibril strategy employed by BAN2401. There's two drugs to watch here: aducanumab and crenezumab.

Aducanumab is the other asset from Biogen that has shown promising clinical trial results. Aducanumab is an antibody that preferentially binds to several different kinds of oligomers. Clinical trial results have shown that with a strong dose, and over a long period of time (at 52 weeks), patients can see significant plaque removal over time, and a dose-proportional reduction in disease progress as measured by several endpoints, including CDR-SB. 

Going forward, aducanumab is in two pivotal trials that will be closely watched by investors. It's important to note that earlier in the year, Biogen announced that they would be expanding the trial size, which was met with some investor skepticism. However, the counterargument is that many trials are increased in size in order to maintain 90% power. Higher power gives the trial an increased likelihood that it could detect a statistically significant difference, even if the benefit is smaller than expected. This is especially important in Alzheimer's studies, and has been done in other successful trials such as Tecfidera's and Plegridy's clinical trials. 

Currently, it's unclear whether management will provide an interim readout in these trials. The negative is that an interim readout does get a statistical hit. On the other hand, with an interim readout, management could potentially stop an expense phase 3 trial if results are not looking good. If they do provide a readout, it's possible that we see the readout in 2020. 

Is there readthrough from this interim report on BAN2401? Yes, but it is debatable to what degree. Both antibodies target different structures, and are therefore not completely comparable. However, like BAN2401, aducanumab results will provide evidence for or against the amyloid hypothesis as both drugs attempt to remove amyloid beta in order to slow progression of AD. This works in reverse as well - BAN2401 results can potentially increase or decrease investor perception of the likelihood of success for aducanumab, thereby making the presentation at AAIC of even more importance.

Crenezumab, by Roche,  is another drug to watch with phase 3 trial readouts coming potentially next year. Crenezumab targets protofibrils as well as oligomers. The drug failed in its first set of trials, but did show some clinical efficacy. For its pivotal trial, Roche will be significantly increasing its dosage size by about 4x to match the efficacy of BAN2401, and therefore could see even stronger results. There will likely be an interim readout in 2019, which will provide some read-through on BAN2401 and aducanumab.

The marathon to a successful Alzheimer's Disease drug could turn into a sprint soon. The drugmakers see the big revenue opportunity for the first disease-modifying drug on the market. If BAN2401 results look strong at AAIC, Roche may decide to invest more heavily in crenezumab, which could put pressure on Biogen to speed their efforts up as well.


Monitor Other Alzheimer's Disease Treatments

As I mentioned previously, there are a few other treatments as well that are being worked on by the drugmakers. One such treatment is BACE. BACE is short for beta secretase - the enzyme that cuts APP and creates amyloid beta. The thought is that inhibiting BACE could lead to a reduction in amyloid beta, which could then slow the progression of Alzheimer's. However, while prior clinical trials have shown a reduction in amyloid beta and in plaque levels, they've failed to show a change in clinical endpoints. As a result, this approach largely has been written off by investors.

However, Biogen and Eisai have one phase 2 trial within this category with elenbecestat that has shown some positive results. In early June, Eisai noted that the results for elenbecestat "demonstrated a statistically significant difference in amyloid beta" and "a numerical slowing of decline in functional clinical scales of a potentially clinically important difference was also observed, although this effect was not statistically significant." Biogen and Eisei will be presenting more detailed results at AAIC, leaving investors with another trial to closely examine from the conference. While the results were not statistically significant, it does provide some validation for the BACE approach, which is perhaps not fully dead yet.

The other category of approaches are aimed at preventing Alzheimer's by targeting beta amyloid before the clinical phase. This approach appears to make more sense given that genetic evidence suggests that amyloid beta formation is related to the initiation of Alzheimer's. It's also thought by some that approaches targeting plaque are largely already too late into the process.

Given the early stage that these drugs operate in, trials are long and expensive. Biogen has no trials in prevention, but Amgen, Roche, JNJ, Novartis, and Eli Lilly are all eyeing or are currently in phase 2 trials. We will potentially get initial readouts on the first trial as soon as 2020.

Finally, as I mentioned previously, the tau hypothesis currently has less attention and evidence supporting it. However, drugmakers are testing several approaches targeting tau. Biogen notably has a tau-targeting antibody called BIIB076. While the tau hypothesis is beyond the scope of this article, investors should be monitoring developments here as well. We may potentially begin to get readouts on tau trials from competitors as early as next year.


To Fully Understand the Odds of Success, Watch Several Drugs in the Alzheimer Space

In sum, the results from BAN2401's P2 trial has been somewhat controversial, but is in totality a net positive for the company. The concerns have primarily focused on trial design, statistical method, and endpoint. In totality though, investors have taken this as a net positive, and it appears that Biogen now owns two drugs with a potential path to market in a lucrative field. Going forward, investors will need to see more detailed results at the AAIC on July 24th, and they will be looking for answers on effect size and whether there is a correlation between amyloid removal and clinical efficacy.

Beyond BAN2401, there are a few other areas to watch as well. Aducanumab is obviously one to watch for Biogen. If Biogen chooses to have a readout, we could get results in 2020. Roche's crenezumab is an adjacent treatment that could also further validate the BAN2401 approach. Look for their interim readout in 2019. Finally, watch for elenbecestat's results as well at the AAIC, which if promising, could also provide a boost to Biogen stock.