Investors in Melbourne-based digital cognitive assessment technology company Cogstate (ASX: CGS) received a serious dopamine hit today, after the company's partners received accelerated approval overnight for the Alzheimer's drug aducanumab, to be marketed as Aduhelm.
Shares in Cogstate jumped 60 per cent to reach $1.48 today, adding almost $100 million to the company's market capitalisation after the US Food and Drug Administration (FDA) gave the first green light to an Alzheimer's therapeutic since 2003.
The Australian company founded by Paul Maruff PhD is one of a handful worldwide that stand to benefit from the development, not to mention the millions of people who suffer from Alzheimer's.
As a novel therapy first discovered by Swiss scientists from biopharmaceutical company Neurimmune and the University of Zurich, aducanumab has been found to significantly reduce what are known as amyloid beta plaques in the brain; a defining feature of Alzheimer's.
Neurimmune licensed the drug to US-based Biogen in 2007, which then entered a development and commercialisation agreement seven years later with Japan's Eisai Co Ltd.
This is where Cogstate fits in. In September 2019 the Australian group entered an agreement with Eisai to launch Cogstate's cognitive screening tool in Japan, effectively dipping its toes into something that was to become much bigger.
By October last year, despite all the setbacks for health companies that weren't focused on COVID-19, the alliance was taken to the next level with an exclusive agreement for worldwide distribution of Cogstate's digital brain health diagnosis solutions in healthcare and other markets aside from clinical trials.
In three separate studies of a total of 3,482 patients, Aduhelm was found to reduce amyloid beta plaques on the brain by 59 to 71 per cent, but now Biogen is required to conduct a new randomised, controlled clinical trial to verify the drug's clinical benefit.
This will ultimately determine whether the drug is actually able to slow cognitive decline. If a clinical benefit is not found, the FDA may need to withdraw approval of the drug.
Therapeutic treatment approvals always come with inherent risk. ASX observers need only observe the case of stem cell treatment company Mesoblast (ASX: MSB) about how quickly bullish perceptions can turn from the stroke of an FDA pen, but the recent milestone makes Cogstate much better positioned than before.
"Since executing the agreement in October, Eisai and Cogstate have progressed commercial plans for launching digital brain health assessment solutions using Cogstate technologies, including both a direct-to-consumer self-check as well as a medical device, Cognigram to aid healthcare professionals in clinical diagnosis decisions," the company stated in its update today.
"It is expected that such digital cognitive assessments will play an important role in supporting the type of large-scale cognitive assessment that will be necessary in the launch of disease modifying therapies, such as Aduhelm."
The latest milestone also adds continuity and more financial certainty to the Cogstate-Eisai relationship, as under the 10-year deal the Japanese partner had a right to terminate the agreement after year five under certain conditions.
"Following the approval of Aduhelm by the FDA, Eisai no longer have that right to accelerated termination of the Cogstate-Eisai agreement," Cogstate reported.
"Therefore, in addition to the minimum contractual royalty payments over commercial years 1-5 of US$10 million, Eisai are now also contractually obliged to make the minimum royalty payments to Cogstate over commercial years 6-10, being an additional aggregate payment of US$20 million over that period."
In the US alone an estimated 6.2 million people suffer from Alzheimer's. Here in Australia, the number of cases is not known but last year there were between 400,000 and 459,000 Australians with dementia, with Dementia Australia (DA) estimating Alzheimer's disease accounting for up to 70% of diagnosed cases
There are currently only four drugs prescribed to treat Alzheimer's in Australia, of which three (Donepezil, Galantamine and Rivastigmine) are inhibitors that prevent the breakdown of acetylcholine in the brain, while the fourth (Memantine) blocks the functioning of N-methyl-D-aspartate (NMDA) receptors and reduces the levels of glutamate in the brain.
According to the Australian Institute of Health and Welfare (AIHW), some 572,000 prescriptions for anti-dementia medicines were dispensed to 60,000 people aged 30 and over in Australia with an Alzheimer's disease diagnosis in 2017-18.
Patrizia Cavazzoni MD, director of the FDA's Center for Drug Evaluation and Research, highlighted Aduhelm is the first novel therapy approved for Alzheimer's disease in 18 years.
"Perhaps more significantly, Aduhelm is the first treatment directed at the underlying pathophysiology of Alzheimer's disease, the presence of amyloid beta plaques in the brain," Cavazzoni said.
"The clinical trials for Aduhelm were the first to show that a reduction in these plaques - a hallmark finding in the brain of patients with Alzheimer's - is expected to lead to a reduction in the clinical decline of this devastating form of dementia."
Cavazzoni said Aduhelm "consistently and very convincingly" reduced the level of amyloid plaques in the prain in a dose- and time-dependent fashion.
"It is expected that the reduction in amyloid plaque will result in a reduction in clinical decline," she said
"Alzheimer's disease is a devastating illness that can have a profound impact on the lives of people diagnosed with the disease as well as their loved ones.
"Currently available therapies only treat symptoms of the disease; this treatment option is the first therapy to target and affect the underlying disease process of Alzheimer's. As we have learned from the fight against cancer, the accelerated approval pathway can bring therapies to patients faster while spurring more research and innovation."
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